Aquiline Resources Inc.
TSX : AQI

Aquiline Resources Inc.

October 19, 2006 09:59 ET

Aquiline to Operate Navidad Project; Appeal Date Set

TORONTO, ONTARIO--(CCNMatthews - Oct. 19, 2006) - Aquiline Resources Inc. ("Aquiline" or the "Company") (TSX:AQI) announces that it has reached agreement with IMA Exploration Inc. ("IMA") to give effect to the July 14, 2006 judgment of the Supreme Court of British Columbia (Vancouver Registry Action No. S041353) pursuant to which Aquiline was awarded ownership of the Navidad Project in Chubut Province, Argentina. IMA has appealed the judgment which is now scheduled to be heard over three days commencing April 10, 2007 in the British Columbia Court of Appeal in Vancouver, British Columbia. As part of the timetable agreed by the parties, IMA must provide its Factum detailing the grounds for its appeal by November 24, 2006.

During the appeal period, Aquiline will operate the Navidad Project under the terms of an Interim Project Development Agreement (the "Agreement") that has been executed by the parties. The key terms of the Agreement are as follows:

- The shares (the "Shares") of IMA's wholly owned subsidiaries Inversiones Mineras Argentinas Inc. and Inversiones Mineras Argentinas S.A. (the "Subsidiaries") will be held in trust pending the completion of the appeal process. The boards of these companies will be replaced with nominees of Aquiline and the ongoing development of the Navidad Project will be funded by Aquiline through the Subsidiaries, with Aquiline acting as trustee. Aquiline will have sole operational control of the Navidad Project. IMA representatives will have observer status and will be kept apprised of Aquiline's exploration and development plans.

- The parties have agreed that IMA's reimbursable costs for Navidad are $18.5 million, a figure which excludes legal costs which may be set off against IMA's reimbursable costs in the event that Aquiline is determined to be the ultimate owner of the Navidad Project in the court action.

- Aquiline will have 21 days to complete due diligence investigations in respect of the Subsidiaries and may elect to require a transfer of the Navidad Claims and related assets instead of a transfer of the Shares.

- On completion of the trust transfer of the Shares or if applicable, the Navidad Claims and related assets, Aquiline will deposit $7.5 million into escrow to partially secure payment of IMA's reimbursable costs.

- Aquiline has agreed to spend up to $11 million to further the development of the Navidad Project during the appeal period (being the difference between $18.5 million and the $7.5 million held in escrow).

- A standstill clause provides that neither party will attempt to acquire the other, solicit proxies in the other, or encourage any third parties in such an endeavour for the duration of the appeal period.

In commenting on the agreement, Marc Henderson, President and CEO of Aquiline stated "We are pleased to finally bring clarity to this situation so that we can proceed to accelerate the development of this world-class project for the benefit of Aquiline shareholders and all other stakeholders. Given the tenor of the trial court judgment, we see little risk in IMA's appeal and are pleased the British Columbia Court of Appeal has agreed to hear the matter on such an expedited basis. We look forward to a resumption of activity at Navidad and will make public our plans in this regard at the earliest possible opportunity".

In an unrelated development, Aquiline announces that all of the $2.00 per share warrants issued in connection with the private placement of October 11, 2005 have been exercised and the Company received proceeds of $5,146,312. A further 2,573,156 Secondary Warrants were issued to the holders of these warrants pursuant to the "step-up" feature of the $2.00 Primary Warrant. The new warrants are exercisable at a price of $3.00 per share until October 11, 2007.

FORWARD-LOOKING STATEMENTS

This press release includes certain "forward-looking statements". All statements regarding Aquiline's ultimate success in the litigation with IMA Exploration Inc. 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.

Shares Outstanding: 46,907,139

Contact Information

  • Aquiline Resources Inc.
    Marc C. Henderson
    President & CEO
    (416) 599-4133
    or
    Aquiline Resources Inc.
    Sarah Vaughan-Jackson
    Communications Manager
    (416) 599-4133
    Website: www.aquiline.com