Aquila Announces Acquisition of Reef Gold Project
TORONTO, ONTARIO -- (Marketwire) -- 03/07/11 -- AQUILA RESOURCES INC. (TSX: AQA)(FRANKFURT: JM4A) ('Aquila' or the 'Company'), is pleased to announce the acquisition of the Reef Gold Project ('Reef') located in Marathon County, Wisconsin. The Reef hosts a high grade ( 10 g/t gold) historical resource which is open in all directions with the potential for significant expansion. The acquisition of Reef is part of a broader strategy to accumulate 100% owned high quality gold assets in the Great Lakes region.
The Reef area was the focus of historic exploration by Noranda Exploration and others in the 1970's and 1980's. Noranda identified several zones of gold mineralization in the Reef area and calculated a non NI 43-101 compliant historic resource estimate of 454,600 tons of 10.6 g/t gold and 0.28% copper. In the resource estimate, mineralization at the Reef Project consists mostly of pyrrhotite, pyrite, and chalcopyrite with native gold, electrum, and telluride minerals within quartz-sulfide veins and vein selvages. Other, minor sulfides include sphalerite, chalcocite, cubanite, and rare molybdenite. Using a cut off of 3.4 g/t gold individual lenses have an average true thickness of 2.4 meters with reported grades ranging from 3.4 g/t to 47 g/t.
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's review of historic drilling information has determined that projections of the mineralized zones to surface, at depth, and along strike leave significant room for resource expansion. A 2500 meter, 17 hole drilling program is planned to define the extent of mineralization. The initial focus of drilling will target extensions of previously identified gold zones to surface where oxidation and weathering may have produced enrichment and elevated gold grades.
Aquila has acquired 356 acres of mineral rights and 276 acres of privately held surface rights at Reef covering the extent of previous drilling and potential extensions of mineralization. The mineral rights acquired by Aquila enable it to acquire a 100% interest in the property which is subject only to the land owners 2% production royalty. The first year land payment is $32,217 with future payments at the option of Aquila based on an approximate cost of $50 per acre. Aquila has now completed a VTEM airborne geophysical survey over the project area to guide further exploration and evaluate the excellent potential for additional gold and base metal mineralization.
The State of Wisconsin hosts several significant unmined ore deposits. Aquila is aware of the significant permitting challenges in the state - in particular the delays that historically prevented the commissioning of some of these deposits. Aquila remains committed not only to finding projects with robust economics but also to environmentally responsible practices in strict conformance with all local, state and federal laws and guidelines. Aquila will continue to practice a good neighbor policy and is committed to working with local communities to protect their diverse interests in addition to providing local jobs, taxes and other social and economic development opportunities.
Reef is located approximately 160 km from the Back Forty Project which is being developed and explored under a Joint Venture between Aquila and HudBay Minerals (TSX: HBM)(NYSE: HBM). Aquila is acquiring and funding Reef as part of its initiative to acquire and develop significant 100% owned gold assets. Aquila is also acquiring and exploring for base metal assets in the Great Lake region with HudBay under an Exploration Alliance. Two projects have been acquired to date that are prospective for high grade nickel-copper 'Eagle type' mineralization (see Aquila press release dated February 16, 2011). Under the Exploration Alliance, funding of up to $2 million per alliance project in initial expenditures will be provided by HudBay to earn a 50% interest.
Silver Creek Drill Results
Aquila also announced results of a six hole drilling program at the Silver Creek prospect in the Marquette Greenstone Belt in the Upper Peninsula of Michigan. Significant intercepts include:
-- 45.5 meters of 0.49 g/t gold including 8.45 meters of 1.22 g/t gold and
1.95 meters of 2.93 g/t gold in SC-11-01.
-- 14.5 meters of 0.24 g/t gold in SC-11-04
-- 18.45 meters of 0.28 g/t gold in SC-11-05
The Silver Creek area is located along the Dead River Shear Zone, a broad zone of shearing, carbonate alteration and gold mineralization in the northern portion of the Marquette Greenstone Belt that hosts numerous gold occurrences. About 1500 meters of follow up drilling is scheduled for the Silver Creek area as well as Silver Creek West (2 kilometers west of Silver Creek) where prior drilling by Callahan Mining Corp. estimated a non 43-101 compliant historic resource of greater than 1 million tons of 1.3 g/t gold at surface.
Quality Assurance and Quality Control
Exploration core drilling by Aquila Resources was NQ size. The core was logged and mineralized intersections were marked for sampling and assaying by geologists and geo-technicians employed by Aquila Resources Inc. and the HudBay Aquila Joint Venture. 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 (greater than 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 who is responsible for contents of this release.
More information about Aquila and the Back Forty Project, including updated drilling information, can be found on the Company's website at www.aquilaresources.com
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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Contacts:
Aquila Resources Inc. (Toronto)
Robin Dunbar
CFO
416-203-1404
rdunbar@aquilaresources.com
Aquila Resources Inc. (U.S.)
Thomas O. Quigley
President
906-753-9602
tquigley@aquilaresources.com