Aquiline keeps hitting high-grade silver at Navidad (July 02, 2007)

Vancouver — Aquiline Resources (AQI-T, AQLNF-O) is riding a wave of good news. Two weeks after the British Columbia Court of Appeal upheld the decision awarding it ownership of the desirable Navidad silver project, the company is releasing another set of high-grade results from the Argentinean project.

Recent drilling has focused on Barite Hill, an area south of the main deposit. Hole 457 intersected 33.1 metres grading 533 grams silver per tonne, including 9.1 metres of 1,531 grams silver. Subsequent hole 458 returned 585 grams silver over 21.8 metres, and hole 460 cut 52.7 metres of 369 grams silver.

Aquiline moved up 10 on the news to close at $10.48.

The dozen new holes extend the high-grade mineralized zone through Barite Hill, roughly 1 km from the Galena Hill zone that previously marked the southern border of the resource. Navidad’s strike length is now outlined to over 5 km. The drill effort at Barite Hill comprises over 6,000 metres in 27 holes.

Mineralization at Barite Hill occurs in a mudstone layer below the volcanic latite horizon that hosts the bulk of the resource at Navidad. The silver is usually accompanied by 0.2% to 0.5% copper, but is mostly free of lead, unlike the mineralization in the rest of the property where lead grades are as high as 2%.

The northwest sector of the property hosts one of the main deposits on the project. A February 2006 resource estimate tabled an indicated resource of 13 million tonnes at Calcite Hill grading 99 grams silver, 0.08% copper, and 0.68% lead using a 50-gram silver-equivalent cutoff grade. The Calcite Northwest Extension zone holds another 6.2 million indicated tonnes grading 72 grams silver.

Since the estimate was calculated, Aquiline has conducted significant infill and stepout drilling. Hole 324 in Calcite Hill intersected 535 grams silver and 0.44% lead over 32.6 metres roughly 110 metres down-hole, and hole 328 returned 428 grams silver and 0.72% lead over 42.9 metres.

Southeast along the trend lies Navidad Hill, where some of the strongest results of late include 565 grams silver and 0.6% lead over 71.9 metres from surface and 40.1 metres grading 501 grams silver and 0.07% lead, both from surface. The next mineralized zone along the Navidad trend is Galena Hill, which in 2006 was estimated to contain indicated resources of 55.7 million tonnes grading 103 grams silver and 2% lead.

Since taking over operatorship of the project in November 2006, Aquiline has drilled close to 18,000 metres, bringing total drilling on the property to almost 80,000 metres. IMA Exploration (IMR-V, IMR-X) controlled the property before Aquiline, until IMA lost it in a legal battle that reached its apparent resolution in early June.

IMA staked the Navidad property in late 2002. At the time, both IMA and Aquiline were in talks with Newmont Mining (NMC-T, NEM-N) about the sale of the nearby Calcatreu project. Included in the Calcatreu data given to IMA and Aquiline were 1,000 stream-sediment sample results taken over a 12,000-sq.-km area. Both companies signed confidentiality agreements concerning the data.

Aquiline offered to buy Calcatreu from Newmont for $2 million in late 2002, at which time neither company had examined the sediment sample results. A month later, an IMA geologist did look at the results, and noticed silver anomalies more than 2 km away from Calcatreu. IMA staked the ground 10 days later.

Aquiline examined the data six months later, after Newmont accepted its $2-million offer for Calcatreu. It also decided to stake the Navidad area, but found IMA already there. Aquiline sued IMA on March 5, 2004, charging IMA used the confidential stream samples to stake Navidad.

In her July 2006 decision, B.C. Supreme Court Justice Mary Koenigsberg found IMA’s use of the sediment data was unauthorized, and ordered IMA to hand the project over to Aquiline. IMA appealed, but lost. Aquiline is required to reimburse IMA the $18.5 million spent on exploration before Aquiline’s victory.