MENOMINEE COUNTY, MI -- A Canadian exploratory mining company just cleared a major hurdle on its path to build a controversial open pit gold, zinc and copper mine next to a major river along the Michigan-Wisconsin border.

On Friday, Sept. 2, the Michigan Department of Environmental Quality gave a preliminary nod to mining and pollution discharge permits for the Back Forty Project mine, which would be located about 15 miles northwest of Stephenson in Menominee County. Final permit approvals are still pending.

Aquila Resources of Toronto has been exploring a mineral-rich deposit but has run into tribal and environmental opposition in the Upper Peninsula and Wisconsin over concerns the mine would impinge on tribal archeological sites and undermine efforts to restore endangered fish species.

The River Alliance of Wisconsin, the Front 40 citizens group and the Wisconsin Resources Protection Council oppose the mine over fears that pollution could contaminate the adjacent Menominee River, a major Lake Michigan tributary flowing into Green Bay which is the focus of state and federal downstream fishery projects aimed at restoring lake sturgeon populations.

Several Michigan endangered or threatened species also occupy the property.

Joan Delabreau, Menominee Indian Tribe of Wisconsin chairwoman, said she was "sickened" by the DEQ draft decision to permit a mine on historic burial grounds.

Aquila says tribal burial mounds, while on company land, aren't where the pit would be. Regardless, Delabreau said the Menominee tribe "has and will continue to fight to protect any land within our ancestral territory that contains the remains of our Ancestors and our cultural resources."

Nonetheless, the DEQ says Aquila's application meets the requirements for approval under Michigan's mining law, Part 632 of the Natural Resources and Environmental Protection Act. The law requires mining operations be protective of natural resources, the environment, public health and safety.

Aquila submitted its permit application last November. Formal approval of mining, water and air pollution discharge permits for the mine will follow a public hearing and comment period this fall. Final decisions are due in December.

The DEQ is still reviewing the mine's potential impact on wetlands. The mine pit would destroy some regulated wetlands, according to state documents.

Aquila is still negotiating with the Department of Natural Resources on a land exchange that would allow them to assemble parcels needed for the mine.

Aquila's stock price on the Toronto Stock Exchange (TSX:AQA) jumped nearly 30 percent after news about the permit decision broke on Friday. The state made the announcement about 10 a.m. heading into Labor Day weekend.

The Back Forty mine is Aquila's primary investment. The junior company bought controlling interest in the venture deposit from HudBay Minerals in 2013. Aquila is also exploring two other potential gold mines in Wisconsin.

In Michigan, Aquila thinks it can pull 532,000 ounces of gold, 721 million pounds of zinc, 74 millions pounds of copper, 4.6 million ounces of silver and 21 million pounds of lead from the ground at a total cost of $261 million.

As of last year, Aquila said it has spent 10 years and $70 million on the project.

The company's current market capitalization is about $88 million.

Aquila CEO Barry Hildred called the DEQ nod a milestone that underscores "Michigan's commitment to responsible and sustainable resource development that benefits all stakeholders."

If approved, Aquila's Back Forty would be the first Michigan gold mine in decades.

The state's last gold mine, the Ropes Mine, opened in the early 1880s but only lasted about 14 years. The mine briefly reopened between 1985 and 1987.

According to "Michigan Gold: Mining in the Upper Peninsula" by author Daniel Fountain, more than 40 gold mines and prospects developed in the late 1800s, but most gold prospecting ended by the early 1900s. Since then, prospecting has been limited to pan or sluice sifting in rivers and streams.

Exploration hasn't found any other mineable gold deposits in Michigan, said Joe Maki, U.P. district geologist and mining specialist for the DEQ. "There's nothing out there that shows any promise right now, other than this project."

Maki characterized last week's permitting decisions as "tentative." Aquila must yet gain final permitting, submit engineering and mine design plans and prove the company has the financial means to follow through with the project.

Those steps could still take years.

"We're going to know pretty well in advance if this project is going to fly or not," he said. "The jury hasn't even been assembled yet on this one."

If it does fly, Aquila says the mine could employ up to 250 people. Aquila claims the mine would generate $20 million in total annual tax revenue for federal, state and local governments and approximately $13 million in state royalties.

Aquila's operation would include an 700-foot deep, 83-acre open pit mine, about five miles of roads, and surface buildings for fuel storage, equipment washing, water supply and distribution, wastewater treatment and power supply.

The mine would tap the mineral-rich Penokean Volcanic Belt. Conventional drilling and blasting would extract sulfide ore from rock. Metals would be extracted from the ore through a process that generates acidic leachate.

The company must sink monitoring wells and build surface water quality monitoring stations at nearby water bodies and construct runoff and sediment erosion controls at the mine. Aquila estimates the mine would need more than 30 million cubic meters of wastewater storage for mining leachate.

To keep Menominee River water separate from the mine pit, Aquila plans to built a 1,300-plus foot wall between the pit and the river.

Aquila would mine for seven years before capping the pit, razing the buildings and recovering the site with vegetation.

Two decades of environmental monitoring would follow.

A two-month public comment window just opened on the project, but Maki said the DEQ wants something other than statements of support or opposition.

"We need detail on how their proposal is not going to meet discharge regulations for water and air," he said. "You show us how we missed something."

"Don't just tell us 'we don't want it because it's going to kill the sturgeon,'" he said. "You tell us how that's going to occur."

"We hope to get somebody that has (gone into the documents), looked closely and considered something we haven't," he said.

A public hearing will be held at Stephenson High School on Oct. 6 at 6 p.m. The state is taking written comment until Nov. 3. The DEQ must issue a final mining permit decision on or before Dec. 1, 2016, but that date could be extended if the public raises concerns that require more information from Aquila.