Apella Resources Inc.

Apella Resources Inc.

May 16, 2011 12:44 ET

Apella Resources Inc.: Drill Program Update, Iron-T Vanadium-Iron-Titanium Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 16, 2011) - Apella Resources Inc. (TSX VENTURE:APA)(OTCQX:APAFF)(FRANKFURT:NWN) is pleased to announce that as of May 10, 2011, Apella has successfully completed the first 16 diamond drill holes (2,443 metres) of its Phase 4 exploration/development program on its Iron-T Vanadium-Iron-Titanium Project; located 10 km southeast of Matagami, Quebec. The Phase 4 diamond drilling program is continuing according to schedule.

Twelve of the first sixteen holes completed to date, totalling 1803 meters, are considered development drill holes. They have been located on four transversal sections across the main mineralized zone already outlined by previous drilling. These new infill holes, drilled at 50m intervals now connect several peripheral zones of mineralization, to Apella's main Genesis deposit on the Iron-T. The peripheral zones of mineralization were not included in SGS's August, 2010 NI-43-101 resource estimate. It is anticipated, that with this infill drilling Apella will meet its objective of joining these additional zones to its main Genesis orebody and simultaneously increasing the tonnage significantly. Apella's 2010 drill holes into these peripheral zones returned significant grades and intersects of mineralization. The four sections are covering the eastern extension of the main Genesis deposit.

One hole of the current Phase 4 drill holes (MA-11-57) has been set-up on the eastern end of another mineralized zone referred to as "II Zone" which runs parallel to the Genesis zone, about 50 m North. This hole also represents part of the current, systematic development drilling, planned for the main Genesis zone. It forms part of the overall objective of increasing tonnage quickly and substantially, and bringing the Genesis deposit to a measured and indicated status as soon as possible.

Another of the current drill holes (MA-11-56), 150 m in length, was set-up on top of a hill coinciding with a strong magnetic anomaly interpreted as the western extension of the Main Deposit. On the slopes of this hill, several outcrops discovered in 2010 by Apella, show disseminated oxides. This hole is located about 1 km west of the western most hole (MA-10-37) drilled by Apella in 2010, a hole which confirmed the extension of the main deposit in a NWN direction, exactly as anticipated by Apella.

All current drill holes bored to date have shown alternations of the gabbro with disseminated to massive layers of magnetic oxides, which Apella finds very encouraging. An interesting fact is the observed disseminated oxide layers are much thicker than the semi-massive to massive layers. This indicates that the mineralization should provide significant thickness enhancing compatibility for open pit mining.

The drilling has now been moved to the western extension of the Iron-T Project in order to evaluate at depth a 5 km long magnetic axis which was confirmed by the 2010 surface magnetic survey. This magnetic axis is oriented NW exactly as also detected in early airborne magnetic surveys flown between 1948 and 2007. Although these significant magnetic signatures were clearly visible, this magnetic axis has never been drill tested or even mapped until now. Six drill holes totalling 900 m in length are planned for the evaluation of the associated magnetic layers. It is expected that these layers may add a significant resource of Vanadium-Iron-Titanium mineralization to the overall Iron-T Project. Achieving additional tonnage outside the main deposit in the Genesis Zone will also demonstrate the consistency of the mineralization at depth along the 22.5km strike length of the Iron-T Project. Drill holes have been set-up at about 1000 m intervals along this extension and drilling will continue for the next two weeks.

In other news, all the 2009-2010 drill holes have now been surveyed by the firm Corriveau J.L. and Associates Inc. from Val d'Or, Quebec. Most of those holes have also been verified for vertical and/or lateral deviations with a gyro-sonde. This work has been carried out as part of the new and revised resource calculations and NI-43-101 presently being completed by SGS-Geostat.

All drill core is logged in Apella's core shack in Matagami, Quebec. Once logged, the intersections retained for analysis are sawn, bagged and shipped to the ALS-Chemex laboratory in Val d'Or, Quebec for processing. Blanks and standard samples are inserted in the batches at random. Roger Moar, P.Geo and QP is logging the core and supervising the field operations. Apella's 2011 Phase 4 program is being carried out under the supervision and auspices of Apella's Chief Geologist Dr. Christian Derosier, P.Geo and QP.

Apella Resources has completed three previous drill programs, Phases 1, 2 and 3 on the Iron T Project. Based on Phases 1 & 2 Apella has already identified a minimum of 11.63 million tons of inferred tonnage. From the results to date it is quite clear that the Iron-T Deposit is very similar to other igneous-layered intrusion type deposits such as in the Lac Dore and Bushveld complexes. Those complexes currently host the two largest vanadium deposits in the world.

One of the key competitive advantages associated with Apella's Iron-T and Lac Dore assets is their potential to host and produce significant amounts of vanadium, iron, and titanium ore. This reduces the risk associated with deposits of a single commodity type. It should allow the operator to remain sustainable in less stable metal markets, as opposed to being reliant on one single source of revenue, like vanadium alone. In addition, there is further security in the fact that all three of the commodities associated with Apella's assets are primary targets (co-products). Thus, the supply of the vanadium from Apella's assets would not simply be a by-product susceptible to the rise and fall of primary commodity being mined, such as vanadium presently being derived from the uranium sector. This type of triple metal (specifically vanadium-iron-titanium) deposit is an anomaly in itself within the North American mining sector. Comparable world deposits that are currently in production are situated in South Africa, Russia and China; areas which are subject to geopolitical issues, power interruptions, water shortages and labour strife.

Apella Resources has set ambitious tonnage targets for identifying economically mineable resources on its Iron-T and Lac Dore Projects which it believes are attainable. Apella's confidence is based on the airborne and ground geophysical data that is now available and it's highly successful drill results to date. Apella's Iron-T and Lac Dore projects are vertical structures, as opposed to the thin, flat-lying structure of the world-leading Bushveld deposits in South Africa. These vertical structures provide a significant advantage over the world-leading Bushveld complex; the ability to utilize the much cheaper open pit mining process.

Apella will report on the upgraded resource calculations and metallurgy for the Iron-T Project as soon as it becomes available from SGS-Geostat.

This press release has been reviewed by Dr. Christian Derosier, P. Geo., Consulting Geologist and Qualified Person for the Iron-T project under National Instrument 43-101.

Additional information is contained on the Company's website at www.apellaresources.com.


Patrick D. O'Brien, ICD.D – Chairman

S.E.C. Exemption 12(g) 3-2(b) File No. 82-3822, Standard & Poors Listed, Dun & Bradstreet Listed.

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