May 25, 2006 - Aguila American Resources Ltd. (TSX-V: AGL) is pleased to report that after consolidating and securing strategic ground for the Angostura Gold Property, including finalizing agreements with the local communities, Aguila American is now in a position to continue geological work immediately (as outlined in our May 4th News Release). In June an exploration program that will include trenching and diamond drilling is being initiated.
The Angostura Property covers approximately 4,100 hectares and consists of two exploration concessions and 5 claims, which cover the main portion of the Angostura Gold Property. The project area is located in southern Peru in the Department of Apurimac, approximately 430 kilometers southeast of Lima and 80 kilometers southwest of the city of Cuzco, and can be reached along paved highways and gravel roads. The area is mountainous and elevations on the property vary between approximately 3,300 meters and 4,400 meters.
Gold mineralization on the Angostura Property is hosted within an elongated ENE trending silica-rich, iron-manganese structure in limestones. This zone is structurally related to an E-W trending, south dipping regional fault. The oxide mineralization is characterized by massive and partial replacement of a collapsed limestone breccia structure.
This low temperature gold system is silica-rich and generally with contributing silver. Previous geological work defined two main exposed gold mineralized zones (Zones 1 and 2). Zone 1 strikes ENE and dips steeply. It has an average width of 30 meters and is exposed 150 meters along strike.
Mineralized Zone 2 can be traced on surface over a strike length of approximately 200 meters with an ENE trend and a moderate to steep dip to the north. Previous geological work done by Aguila, which included 47 trenches and outcrop mapping, defined a width of 75 meters for Zone 2 with an approximate average grade of 3.64 g/t gold (based on samples taken from trenches T-12, 13,14,15,16
The mineralized silicified collapsed breccia has been observed to have continuity along a strike length of 4.8 km, and remains open on both ends. Mineralization found outside of Zones 1 and 2 has true widths of more than 20 meters as observed in trenches. Oxide mineralization has been located close to the Angostura Creek (approximately 3,380 meters above sea level) up to approximately 3,925 meters in elevation.
Approximately 40% of gold deposits in northern Carlin (Nevada) are found in collapsed breccias in limestones. This genetic model envisages early decarbonatization by acidic hydrothermal fluids focused along faults, followed by collapse of limestones, gold precipitation, and late-stage silicification and baritization. A very similar genetic model may apply to the gold mineralization at Angostura.
Selected gold sample result highlights include the following:
Location Sampled width (m) g/t gold
Trench T-1W 6.00 1.21
Trench T-3W 3.50 3.19
Trench T-6AW 3.30 2.60
Trench-11W 8.00 2.37
Trench T-12W 8.00 3.48
Trench T-13W 5.00 1.86
Trench T-BE 2.40 2.69
Trench T-4E 8.40 2.77
Trench T-13E 5.00 1.63
Trench T-15E 3.00 5.45
Trench T-16E 17.50 5.24
Trench T-17E 3.00 8.19
Note: The above trench sample widths do not represent the real width of the mineralized structure. The whole length of each trench was sampled and in most cases mineralization remained open at the ends.
The Angostura Property has excellent geological potential. The property has never been drilled before. The gold mineralized silicified collapsed breccia has the potential to contain a large bulk tonnage gold deposit that requires drilling. Using the available geological data, including analytical results, a potential mineralization may be as follows:
Length of Structure (Continuity based on mapping and trenching) = 4,800 meters Width of Structure (based on outcrop mapping) = 20 meters
Depth of Mineralization (based on elevation difference of mineralized outcrops) = 300 meters A specific gravity (as used at the near Santa Rosa Mine) = 2.5
A potential tonnage can then be estimated for the mineralized silicified collapse breccia to be in the range of 36 to 72 million tonnes. The lower tonnage is based on a strike length of 2,400 meters.
The range of gold grades may be estimated using the trench analytical results. Thus, gold values may range from 0.03 up to 8 g/t gold.
The above potential figures are provided as a reference of the blue sky potential only. Drilling will ultimately determine if a resource may be identified. The Company is very excited about what has been found to date.
It must be noted that this potential quantity and grade is conceptual in nature, as such, there has been insufficient exploration to define a mineral resource. It is uncertain if further exploration will result in the targets being delineated as a mineral resource. The basis on which a potential tonnage and grade has been determined for the silicified collapse breccia, includes a number of assumptions that are covered above.
The Qualified Person for this news release is Victor Jaramillo, M.Sc.A., of Discover Geological Consultants of Vancouver, Mr. Victor Jaramillo, President of Discover Geological Consultants is a Professional Geoscientist, registered with the Association of Professional Engineers and Geoscientists of British Columbia. Mr. Jaramillo is also a Fellow of the Geological Association of Canada, a Fellow of the Society of Economic Geologists, a member of the Geological Society of Nevada and a member of the Geological Society of America.
ON BEHALF OF THE BOARD
John Huguet, Director