Petaquilla expanding Molejon enroute to production

Vancouver – Drilling by Petaquilla Minerals (PTQ-T, PTQMF-O) at its Molejon gold project in north-central Panama has turned up new zones of mineralization.

The program of infill, mine planning and step-out drilling identified a new eastern zone based on several holes. Results from the new area include:

• Hole MO-06-87 A 15.7-metre interval (from 19-metres depth) graded 1.43 grams gold per tonne in a quartz breccia unit;
• Hole MO-06-90 Testing of a feldspar porphyry and breccia sequence returned 9 metres (from 11-metres depth) of 1.52 grams gold; and
• Hole MO-06-92 A 15.2-metre section (from 30.7-metres depth) averaged 1.25 grams gold in quartz breccias.

A new discovery was also made a couple of hundred metres south-southeast of the initial discovery hole (MO-95-244) during road construction. Hole MO-06-112 cut 6 metres (from surface) of 1.46 grams gold in saprolite, followed by 3.2 metres (from 26.8-metres depth) of 2 grams gold in quartz breccias and andesite porphyry. Another hole on the discovery, MO-06-121, intersected 12 metres of quartz breccia grading 1.46 grams gold.

Other portions of the drill program continue to indicate expansion potential to the Northwest zone. Testing between the Main and Northwest zones intersected some gold mineralization but did not show any broad continuity of the area.

Meanwhile, drilling on the Main zone is proving up the feldspar-quartz porphyry as one of the better host rocks on the project, evidenced by recent results of 5.5 metres of 8.74 grams gold in hole MO-06-84A and 1.5-metre intersection of 6.73 grams gold in hole MO-06-119.

Petaquilla continues to advance Molejon towards planned production in mid-2007. Construction of the gold plant is progressing and the ball mills are expected onsite by late-November. A resource revision is being conducted to update last year’s estimate of 11.2 million inferred tonnes grading 2.5 grams gold, equating to about 893,000 ozs. of contained gold using a 0.5 gram gold cut-off grade.

The company recently split itself into two entities, Petaquilla Minerals holding the gold assets and Petaquilla Copper spun off to hold the large copper project located adjacent to the Molejon deposit. Petaquilla Copper is expected to receive its TSX listing soon.

Petaquilla has also been working on its agreement with Chinese metals producer Jinchuan Group to finance a planned buyout of Petaquilla copper project partners Inmet Mining (IMN-T, IEMMF-O) and Teck Cominco (TCK.B-T, TCK-N), which holds a 48% interest and an option for 26% respectively. Jinchuan is expected to take an equity position in Petaquilla Copper, participate in project financing and construction, and establish an offtake agreement for copper concentrate production.

Shares of Petaquilla Minerals closed up a few pennies at the $2.50-level following the latest Molejon drill results. The company posts a $222-million market capitalization based on its 88.9 million shares outstanding.