Aquiline raises funds for Calcatreu in Argentina

An unsecured debt financing will provide Aquiline Resources (AQI-V) with enough funds to buy the Calcatreu gold project in Argentina.

In late January, Aquiline agreed to pay US$2 million to Newmont Mining (NEM-N) in exchange for the property. An initial payment of US$100,000 is needed to seal the deal, and the remaining amount must be paid in stages over three years.

Calcatreu is considered prospective for low-sulphidation epithermal gold deposits similar to the El Disquite project of Meridian Gold (MNG-T) and the Cerro Vanguardia mine of AngloGold (AU-N). In the late 1990s, Normandy Mining of Australia identified 11 quartz-vein systems on the property, including Vein 49, which yielded upwards of 27 metres grading 3.8 grams gold and 14 grams silver per tonne in trenching and upwards of 40.8 metres grading 2.85 grams gold and 32 grams silver in drilling.

Aquiline is required to spend US$500,000 on exploration over the option period.

Newmont retains a 2.5% net smelter return royalty and a back-in right for a 60% interest, though the right excludes the three claims in which the 49 vein system is found. Should it exercise its right, the company must spend three times what Aquiline had spent on exploration.

The proposed private placement comprises US$150,000 worth of convertible debentures bearing interest of 9.75% annually and maturing at the end of 2005. The deal is related to an earlier one in which Acquiline agreed to sell 1.5 million units at 25 apiece, for gross proceeds of $375,000. A unit consists of a share and a half- warrant, with a full warrant entitling the holder to buy a share at 35 for two years following the deal’s closing.