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Judge Denies Wetlands Permit For Back Forty Mine Project

Issue Date: January 6, 2021

A judge has decided to deny a wetlands permit to Aquila Resources for it's Back Forty Mine Project in the Upper Peninsula. Dale Burie, President of the Coalition to SAVE the Menominee River in a a press release said:

"The Coalition to SAVE the Menominee River, Inc. is very pleased with Administrative Law Judge Daniel Pulter's decision in our Contested Case to deny Aquila Resources' Wetlands Permit. His decision validates many of the objections the Coalition raised with respect to the Permit.

"One of our big arguments was that the application should never have been considered administratively complete by EGLE because the wetland impacts were not reliably identified, which deprived the public of its right to review and comment. Judge Pulter agreed.

"Another issue we raised was that Aquila did not properly assess the alternatives to avoid wetland impacts. Again, the Judge agreed.

"And, on the big question of whether EGLE could issue a permit with conditions that would have allowed Aquila to submit new and updated modeling to support the wetland impacts, the Judge said such conditional permits are not allowed.

"The decision itself is over 70 pages long, and our attorney is still assessing what it all means. We do understand that the next step, should any of the parties so choose, would be to seek review from the Environmental Permit Review Commission. That request would have to be made within 21 days."

The Michigan Department of Environment, Great Lakes and Energy (EGIR) had granted a wetlands permit to Aquila for the mine. The Company is now evaluating their alternative.

On Jan. 5, Aquila Resources Inc. announced that on Jan. 4, 2021, an Administrative Law Judge ("Judge") for the Michigan Office of Administrative Hearings and Rules issued a decision denying the prior issuance of a wetland/stream/floodplain permit ("Wetlands Permit") for its Back Forty Project in Michigan.

By way of background, petitioners earlier filed an administrative contested case challenge to the issuance of the Wetlands Permit by the Michigan Department of Environment, Great Lakes, and Energy ("EGLE"). The Wetlands Permit was issued by EGLE on June 4, 2018 following years of environmental baseline work and a thorough review process including comment periods and public hearings. The Judge convened an evidentiary hearing in June 2019, which ended in January 2020. In his Jan. 4, 2021 decision, the Judge determined that Aquila's groundwater model does not provide a reliable identification of wetland impacts and therefore found the permit application to be administratively incomplete. The Judge also determined that Aquila did not provide a complete assessment of potential alternatives to its proposed plan.

The Company strongly disagrees with the Judge's decision, which is based in significant part on what the Company believes is a misunderstanding of the information concerning the potential for indirect wetlands impacts associated with the Back Forty Project. The decision establishes a permitting approach that markedly departs from wetland permits issued for other mining projects in the Great Lakes region. Aquila worked for several years with EGLE staff during the permitting process to address the complex technical issues associated with estimating potential indirect wetland impacts, landing on an approach that complied with federal U.S. Army Corps guidelines for estimating and permitting such impacts for mining projects.

The Wetlands Permit was issued with specific conditions that must be satisfied prior to the commencement of construction and operations, including a condition that required EGLE to accept an updated groundwater model. During the 31 months since the Wetlands Permit was issued, Aquila has been working constructively with EGLE to satisfy the conditions, and the Company planned to complete the updated groundwater model in 2021. The Company will continue to work with EGLE and believes it will successfully resolve the issues cited in the Judge's decision.

Barry Hildred, President & CEO of Aquila, commented, "Obviously, we are disappointed by the Judge's decision. The Company is evaluating its alternatives, which include the submission of an updated permit application or appealing the decision to the EGLE environmental review panel. Aquila has worked diligently to limit impacts to surrounding wetlands and is only directly impacting 11.2 acres of regulated wetlands. Having reviewed the decision, we believe that Aquila will be able to resolve the cited issues and remain confident that Back Forty will be a safe, disciplined operation that promotes and supports local community socio-economic development and is protective of the environment."


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