Wednesday, 2 May 2012

Aguila Gold samples 33.9 grams gold over one metre at Angostura

Aguila American Gold (CVE:AGL) announced Wednesday it has completed a sampling program at its flagship Angostura gold project in southern Peru, highlighting results of 33.9 grams gold over one metre.

The company also said it has contracted more core drilling services as it advances towards potential resource definition at the

Aguila’s initial target for an NI 43-101 compliant resource is one million ounces, with half in the inferred category and the other half in the indicated category.

The Angostura property is a highly prospective gold property, containing eight titled concessions that cover 4,869 hectares.

Aguila said the trenching, geochemical sampling and mapping program covered an extensive zone of alteration and the sampling of three artisanal mine workings located along the strike of the mineralized Ferrobamba limestone contact at the Angostura project.

Previously reported trenching results on the project showed grades as high as six grams per ton (g/t), including 75 metres at an average grade of 3.67 grams per megaton (g/Mt) gold.

The latest results includes results from Zone 2, the Feliciano Bedia workings, the working from Pit E which is 900 metres east north east of Zone 2, and from 3 workings located 600 metres west southwest of Zone 2 on the west side of the Angostura River within the Angostura Primera concession.

Sampling returned highs of up to 33.9 g/t gold (Au) over one metre, with a weighted average of 11.4 g/t Au over 9.2 metres of
selective channel sampling spaced at various intervals along a working 29 metres in length.

The working appeared to be open above, below and to the east, when sampled in December of 2011, and generally followed an east-west trending structure in the Ferrobamba-Formation (recrystallized limestone).

The hanging and footwalls, where exposed, consist of recrystallized limestone with variable amounts of oxidized sulphides. The
tunnel was sampled near the working face from a channel, chiselled across the roof of the tunnel. The first sample was taken at a point 28 metres from the mouth, then at 24.5 metres, 21 metres, 16 metres and at 12 metres from the south.

The second mine working, known as Pit E, reported three entrances and samples from this zone.

The two accessible parts of Pit E were sampled by chiselled channels and cut channel sampling methods yielding silver assays as high as 589 g/t over one metre with the weighted average of 242 g/t over 14.4 metres of selective channel sampling, while noting that Pit E is some 900 metres east and 400 metres higher in elevation then the Feliciano Bedia working and in a separate zone of a potentially, very large, mineralized system.

The third mine working is within the surface property of Giber Sotomayor located west of the Angostura River.

The objective was to sample the abandoned mine workings where sample assays yielded gold values as high as 6.96 g/t Au over one metre and a weighted average of 2.07 g/t Au over 16.6 metres of selective channel sampling.

In addition to announcing the sampling results, Aguila said it has engaged More Core Diamond Drilling Services Ltd. to perform 7,000 metres of core diamond drilling at the Angostura project.

The company said it selected More Core for its extensive experience in core drilling on very steep terrain with equipment capable of delivering a larger diameter drill core product, while meeting the Aguila’s negotiated mandate of an absolute minimum amount of surface disturbance.

The equipment, due to be shipped next week, is also readily convertible for underground core drilling and available to the company as it advances towards potential resource definition depending on results from this initial surface core drilling campaign.

In March, Aguila said it expects to attain its key drilling permit in May after more than a decade of holding the asset.

The gold miner inked an agreement in March with the Peruvian community of Mollepina, representing a key step forward for Aguila American's flagship project. Aguila said the initial term for the agreement is two years, under which the company has also agreed to maximize local employment and help enhance the community’s basic infrastructure.

The deal represented the final requirements to submit Aguila's 8,255 metre drill plan for the property, with the receipt of a drill
permit expected early this month. The community agreement was borne from a long process that started after the Mollepina community began mining illegally at Angostura in 2008.

Aguila launched proceedings to remove these miners, and through this process, developed a "sustainable relationship" allowing the community to mine legally as artisanal miners.

Under the collaborative deal, the company also agreed to assist in the formalization process of Mollepina's artisan miners on the Delicia concession, where it has given them 10 hectares for their exclusive use.

Aguila said that the artisan miner agreement grants it a one percent royalty of total sales and the right to purchase artisan miners’ production at market value.

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