Aquiline Resources Inc.

Aquiline Resources Inc.

March 15, 2007 13:11 ET

Aquiline Releases Calcatreu Feasibility Study

TORONTO, ONTARIO--(CCNMatthews - March 15, 2007) - Aquiline (TSX:AQI) is pleased to release the Feasibility Study for its wholly owned Calcatreu Gold Project in Rio Negro Province, Argentina. The study was compiled by the Snowden Group's Brisbane office which also completed the mine design work and financial analysis. Ausenco Limited, a mining engineering and construction firm based in Australia that specializes in the design, construction and commissioning of midsize mineral extraction plants completed the processing component of the study. Other companies involved were Vector Engineering (geotechnical and tailings entrapments), Golder Associates Ltd, Canada (slope stability and acid rain drainage) and Ambiental S.A. of Argentina (social and environmental issues). The Study has been titled an Initial Feasibility Study due to issues surrounding the prohibited use of cyanide in mineral extraction processes within Rio Negro Province. Ausenco explored various non-cyanide extraction methods as part of its mandate but their metallurgical work indicates that cyanidation will be required to generate high recoveries of both gold and silver. The Study will be available in its entirety on SEDAR and on the Company's website.

At both three year and six month trailing average precious metals prices, Calcatreu demonstrates positive economics based on a 2,000 tonne per day open pit mining operation which will produce an average of approximately 97,000 ounces gold equivalent per year at a cash cost of US$280.83 per ounce of gold over four and a half year mine life. This is in spite of a substantial increase in capital costs since late 2004 when Micon carried out a Scoping Study. Only open pit indicated resources were utilized in the Study and the cut-off date for these resources was August 2004 when there were 250 holes completed at Calcatreu. The current drill inventory is now 415 holes and a 5,000 meter drill program is in progress focused on developing satellite pit resources. The principal deposits in the Study - Vein 49 and Nelson - are also open at depth and Micon's Scoping Study included a conceptual underground component as well as incorporating low grade heap leach resources into the model; Snowden's study does not include these resources.

Highlights from the Study are:

- Conventional open pit mining with nominal rate of 750,000 tonnes per annum.

- Potential mining inventory of 3.5 Mt of ore at 3.86 g/t Au and 33.22g/t Ag for 435,000 ounces gold and 3,739,000 ounces silver

- Gold and silver recoveries at 90% and 74% respectively

- Total capital cost of $79.15 M

- Operational cost of $41.50 per tonne of ore

- Cash cost of US $280.83 per ounce of gold (base case)

- Internal rate of return (IRR) of 14% (based on a base case gold price of US$500/oz and a silver price of US$8/oz)

Geology and Resource

Calcatreu consists of the contiguous Vein 49 / Nelson deposits that are located in southwestern Rio Negro Province of Argentina, approximately 45 km south of the town of Jacobacci.

Vein 49 / Nelson are low sulfidation epithermal deposits of the quartz-adularia type. Gold occurs free and in electrum; the silver to gold ratio is approximately 9 to 1. The mineralization is hosted within typically brecciated quartz veins and stockwork zones that are emplaced in Jurassic-age andesite wall rock. Surrounding the quartz veins are argillic alteration halos that are frequently accompanied by silicification of the andesites. These wall rock halos generally have low gold concentrations of less than 0.5 g/t but locally can exceed 1.0 g/t. Generally the mineralized system contains very low quantities of sulfides in the form of pyrite and lesser galena and sphalerite. There are no significant occurrences of copper, arsenic, or bismuth sulfides. The depth of oxidation, deeper in the vein than in the wall rock, varies from 29 to 120 metres with an average depth of about 75 metres. Calcatreu has a similar geologic setting to Anglo Gold's Cerro Vanguardia Mine (4.5 million oz Au) located in Santa Cruz, Argentina.

Current Indicated Resources for the Calcatreu Project are calculated at 6,155,000 tonnes with 3.04 g/t Au and 28.1 g/t Ag (602,540 ounces Au; 5,569,300 ounces Ag); while the Inferred Resources are 1,867,000 tonnes with gold and silver grades of 2.01 g/t Au and 19.4 g/t Ag (125,920 ounces gold; 1,166,400 ounces silver). In addition to the areas where mineralization is still open to depth, excellent exploration potential remains in the immediate vicinity of the proposed plant site. Additional potential to expand the resource base for the general Calcatreu project can be found in three principal sources:

- Underground potential below the proposed open pit at Vein 49.

- Sub-parallel secondary veins proximal to Vein 49 / Nelson.

- Resources within regional trucking distance of the proposed plant complex.

Aquiline is the region's largest landholder, with 369,446 hectares under management. These claims cover an area it has named the Gastre Fault district, which stretches from the Calcatreu Gold Project in Rio Negro to the Navidad Silver Project in the neighbouring province of Chubut.

Financial Analysis

The base case economic analysis for the study was done using average metal prices of $500/oz gold and $8/oz silver, which approximate the three year trailing average prices for these metals. The sensitivity analysis shows the financial outcome is highly sensitive to the key revenue factors of grade, gold price and recovery.

Gold price @ $500/oz Gold price @ $624/oz Au
& $8.00/oz Ag & $12.38/oz Ag
-------------------- -----------------------

IRR 14% 74%

NPV at 8% discount rate US $6,070,000 US $54,680,000

NPV at 0% discount rate US $16,260,000 US $73,540,000

"We are pleased with the results" says Martin Walter, Aquiline's Executive Vice President, "the Study validates what we've always known, that Calcatreu is a gold deposit worthy of commercial development, especially at today's gold and silver prices. Our immediate priorities now are to expand the project's mine life by discovering additional nearby mineralized deposits and work towards a solution that will allow the project to proceed to production in the near term using the best process options".

The Study was supervised by Mr. Martin Walter MBA, and Mr. Kevin Bullock who is a Professional Engineer (P.Eng) and a register member of the Professional Engineers of Ontario.

This press release contains forward looking statements.


This press release includes certain "forward-looking statements". All statements regarding the ability of the Company to identify areas with potential for the development of additional resources at Calcatreu, the ability of the Company to correctly identify the trend of mineralization for the Viuda de Castro drilling target are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. All statements that are not historical facts, including without limitation statements regarding future estimates, plans, objectives, assumptions or expectations of future performance, are "forward-looking statements". We caution you that such "forward looking statements" involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements. Such risks and uncertainties include unpredictable results of exploration activities, uncertainties inherent in the estimation of mineral resources, fluctuations in the costs of goods and services, problems associated with production operations, changes in legal, social or political conditions in the jurisdictions where the Company operates, lack of appropriate funding and other risk factors, as discussed in the Company's filings with Canadian securities regulatory agencies. The Company expressly disclaims any obligation to update any forward-looking statements.

Contact Information

  • Aquiline Resources Inc.
    Marc C. Henderson
    President & CEO
    (416) 599-4133
    Aquiline Resources Inc.
    Martin J. Walter
    Director & Executive Vice President
    (416) 599-4133