Aquila Resources Inc.
FRANKFURT : JM4A
TSX : AQA
OTCQX : AQARF

Aquila Resources Inc.

August 08, 2011 06:00 ET

Aquila Drilling at U.S. Gold Projects

TORONTO, ONTARIO--(Marketwire - Aug. 8, 2011) - AQUILA RESOURCES INC. (TSX:AQA)(OTCQX:AQARF)(FRANKFURT:JM4A) ("Aquila" or the "Company") is pleased to provide an update on exploration activity at its 100% owned gold projects the Reef Gold Project in central Wisconsin, and the Peninsula Gold Project in the Upper Peninsula of Michigan. Drilling is underway at both projects with encouraging results. With continued success and the acquisition of additional gold properties, the Company is considering alternatives for reorganizing its gold assets to maximize their value to Aquila shareholders. Notable highlights from results to date include visible gold in surface float at the Reef Project, and visible gold in drill core from Peninsula.

The projects represent part of a new initiative for Aquila to add precious metal assets distinct from the Back Forty Project, which is currently operating under a joint venture with HudBay Minerals Inc. (TSX:HBM)(NYSE:HBM) ("HudBay"). HudBay currently has a 51% interest in the Back Forty Project with the option to increase their interest to 65% by completing a feasibility study and submitting all required mine permit applications to the State of Michigan. The Back Forty Project hosts a National Instrument ("NI") 43-101 compliant mineral resource containing 900,000 ounces of gold, 961 million pounds of zinc, 11.4 million ounces of silver and 79 million pounds of copper (see NI 43-101 Technical Report dated November 29, 2010 posted at www.sedar.com). The Back Forty Project is in a prefeasibility stage of evaluation with a target of June 2012 for completion of a feasibility study and submission of mine permit applications. A project update for Back Forty Project will be released shortly.

"We see a tremendous opportunity to be a first mover in areas that we have identified as being highly prospective for gold in the continental U.S. and these acquisitions will complement our interest in the Back Forty Project and the prospective portfolio of projects in our Exploration Alliance with HudBay," commented Aquila's President and CEO, Tom Quigley.

Reef Gold Project

Overview

The Reef Gold Project, located in Marathon County, Wisconsin, consists of approximately 600 acres of mineral and surface interests covering an area of gold mineralization discovered in the 1970s by Noranda Exploration. Noranda identified eight zones of high grade gold mineralization in a widely spaced, 50-hole drilling campaign, and quoted a non 43-101 compliant resource of 454,600 tons of 10.6 grams per ton (g/t) gold, open at depth and along strike. Drilling by Noranda encountered mineralized quartz stockwork/breccia zones ranging from approximately 1 to 12 meters thick. Aquila believes the mineral resource estimate is relevant and is based on a reliable historical report. The Company has acquired and verified Reef drill core for geological characteristics and gold content.

Aquila has located 24 historic drill collars on site and is currently re-logging and re-sampling the corresponding historic drill core which it has acquired. In addition to confirming high grade quartz stockwork/breccia zone mineralization identified by Noranda, a number of broad zones of lower grade mineralization in sheared host rocks and near surface, intensely weathered saprolite, have been identified. Results from five of the re-sampled holes are presented below.

Hole # From
(m)
To
(m)
Interval
(m)*
Gold
g/t
RF 8715 34.09 44.91 10.82 1.96
including 34.09 37.16 3.08 5.38
77.90 80.95 3.05 2.19
122.99 131.01 8.02 7.56
including 125.95 129.63 3.69 13.04
RF 8936 130.82 145.06 14.23 1.86
including 132.16 139.22 7.06 2.65
RF 8820 24.08 27.43 3.35 3.89
RF 8819 36.88 54.26 17.37 2.92
including 38.71 43.28 4.57 9.92
RF 8602 46.57 104.09 57.52 1.18
including 91.75 103.63 11.89 4.05

*Drilled thickness, not true thickness

In addition to drilling, Noranda completed ground geophysical and soil geochemical surveys, identifying a number of anomalous responses in the area of known mineralization as well as a broad area surrounding the Reef mineralization. Soil geochemistry in particular was effective in identifying sub-cropping mineralization, with anomalous gold values ranging from 50 to greater than 2,000 parts per billion gold in a 550 by 600 meter area, corresponding with mineralized zones identified in drilling. Significantly, an additional 15 areas of anomalous gold in soils were identified in an area extending along strike, and up to a mile to the west and northwest of the known Reef mineralization, suggesting potential for additional zones peripheral to the Reef itself.

Further supporting the potential for additional mineralized zones, prospecting by Aquila geologists throughout the Reef area has identified numerous boulders of quartz-rich float derived from underlying bedrock – including a number of rusty, weathered quartz boulders with abundant visible gold. Metallic screen assay results from boulder sampling are presented below.

Sample # Sample Description Gold g/t
10001 Rusty quartz boulder with visible gold 2.90
10002 Rusty quartz boulder with visible gold 83.96
10003 Rusty quartz boulder with visible gold 112.44
10004 Small rusty quartz boulder with visible gold 22.85
10005 Angular rusty quartz float 88.41
10031 Fragments of rusty quartz float 21.95
10032 Angular and granular quartz float 0.06
10033 Slightly rusty quartz float 0.10
10034 Angular quartz float less
than
0.005
10035 Very rusty quartz float 0.07
10055 Slightly rusty quartz boulder with visible gold 121.80
10056 Slightly rusty quartz boulder with visible gold 80.66
10057 Slightly rusty quartz boulder with visible gold 161.77
10058 Slightly rusty quartz boulder with visible gold 379.56
10059 Slightly rusty quartz boulder with visible gold 74.75
10060 Slightly rusty quartz boulder with visible gold 127.35
10061 Slightly rusty quartz boulder with visible gold 43.01

Photographs of gold samples, locations of sampling, mineralized trends and drill hole locations will be available on the Company's website at www.aquilaresources.com.

Current Drilling Program at Reef

Drilling at the Reef Project commenced on June 15, 2011, and 11 drill holes have been completed targeting near-surface, up- and down-dip projections of mineralized quartz stockwork/breccia zones along the southern margin of the Reef trend. An initial fence of drill holes was completed in an area with limited historic drilling and abundant mineralized gold bearing quartz float. The seven hole drill fence encountered a deep saprolite zone of intensely weathered bedrock ranging from 7 to 33 meters, overlying intensely sheared gabbroic and volcanic rocks, and shallow-dipping quartz stockwork/breccia zones. A parallel fence of six holes, 35 meters northwest of the first fence is in progress to test and define continuity and trends of shearing and quartz veining. An additional 1,400 meters of drilling is planned at the Reef Project as a part of Phase One drilling. Assays are pending from the program.

Peninsula Gold Project

Drilling at the 100% Aquila owned Peninsula Gold Project 115 km north of the Back Forty Project has also commenced and 11 holes have been completed to date with drilling ongoing as a part of a 2,800 meter program. This program is following up on 20 wide-spaced holes drilled during the fall of last year, which defined a mineralized shear zone consisting of intense quartz-carbonate veining and brecciation over a strike length of approximately 300 meters and to a depth of approximately 70 meters below surface. Highlights of the 2010 drilling campaign include 16.7 meters of 9.5 g/t gold in PEN-10-11, and 4.5 meters of 35.9 g/t gold in PEN-10-20. The 2011 drilling campaign is focused on further delineating and expanding the mineralized structure down dip and along strike, as well as increasing the density of drilling to facilitate a planned NI 43-101 resource estimate. Preliminary assessment of the drill core of the first 11 holes has confirmed that the structure exists at depth and along strike and shows similar characteristics to those reported in 2010, including visible gold reported in one hole. Assays from the drilling are pending.

The Peninsula Project is one of several gold prospects within the Marquette Greenstone Belt acquired by Aquila in November of last year (see press release dated November 1, 2010). The Peninsula has seen small scale mining and prospecting activity in the early 1900s and limited exploration in the 1980s through 1990 by Callahan Mining Corporation, who concurrently operated the Ropes Gold Mine located two miles northeast of the project.

Quality Assurance and Quality Control

Exploration core drilling was NQ size at the Peninsula Project and HQ size at the Reef Project. The core was logged and intersections were marked for sampling and assaying by geologists and geo-technicians employed by Aquila Resources Inc. The marked intersections or intervals were sawn in half by a diamond saw and one-half of the core was placed in sample bags and tagged with unique sample numbers, while the remaining half was returned to the core box for storage. Each bagged core sample was transported to Minerals Processing Corporation's sample prep lab in Carney, Michigan, where it was dried, crushed and pulverized and a 250-gram sample was prepared and split, with one split for assaying at Inspectorate Labs in Sparks, Nevada. Strict sampling and QA/QC protocol are followed, including the insertion of standards and blanks in the sample stream on a regular basis. Sample intervals are typically 1.5 meters. Analytical method for gold is fire assay with atomic adsorption finish and gravimetric finish for samples greater than 3.0 g/t gold. All other elements are analyzed by ICP with silver over limits (>200 g/t) analyzed by fire assay/gravimetric finish and base metal over limits analyzed by AAS.

Assaying integrity is monitored internally with a quality control program, which includes the use of assay sample standards, blanks, duplicates and repeats, and externally through national and international programs. This news release provides core lengths and estimates of vertical thickness only. True widths are not provided. Where metal assays are provided for intersections they are either a single assay of a sample of the entire intersection length or a composite of assays calculated from interval weighted assays over the intersection length.

Thomas O. Quigley is the Qualified Person for Aquila as described in National Instrument 43-101 responsible for contents of this release.

This press release contains certain forward-looking statements. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to international operations; risks related to joint venture operations; actual results of current exploration activities; changes in project parameters as plans continue to be refined, future prices of resources; possible variations in reserves, grade or recovery rates, accidents, labour disputes and other risks of the mining industry; and delays in obtaining governmental approvals or financing or in the completion of development or construction activities. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

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