FEB 8, 2008:� Toronto, ON and Vancouver, BC - Aquiline Resources Inc. (TSX: AQI) ("Aquiline") and Silverstone Resources Corp. (TSX-V: SST) ("Silverstone") are pleased to announce that Silverstone has agreed to purchase a CDN$17.5 million convertible debenture (the "Debenture") from Aquiline, which represents the first step of a potentially larger silver transaction.� The Debenture must be converted into, at Silverstone's option, either common shares of Aquiline ("Common Shares") at a conversion price of CDN$12.00 per Common Share, or a contract (the "Contract") granting Silverstone the right to purchase 12.5% of the life of mine payable silver from the Loma de La Plata zone (the "Property"), which is one of seven zones comprising the Navidad project, or if unavailable, from the other zones of the Navidad project.� See "Transaction Structure" below for further information.
The initial Aquiline drill holes at Loma de La Plata were completed in May, 2007 and by the release of Aquiline's resource update on November 15, 2007 the new high grade, near surface deposit had grown to contain 9.1 million tonnes at an average grade of 225 g/t silver and 0.09% lead or 66 million contained silver ounces in the Indicated category plus 17.3 million tonnes grading 159 g/t silver and 0.11% lead or 89 million contained silver ounces in Inferred resources (Snowden Mining Industry Consultants, 2007).� The Loma �resource is contained within the larger Navidad resource of 127.7 million Measured and Indicated tonnes grading 110 g/t silver and 1.06% lead �(453 million oz Ag M+I ) and 49.0 million Inferred tonnes grading 97 g/t silver and 0.5% lead (153 million oz Ag I).� Drilling is ongoing at Navidad with three rigs, two of which are focused on new discoveries and resource expansion.
The transaction is expected to close on the date of this press release and the proceeds of CDN$17.5 million will be used to satisfy a payment to IMA Exploration Inc. that is required for the transfer of title to the Navidad property to Aquiline.
Darren Pylot, President and Chief Executive Officer of Silverstone commented, "Silverstone is extremely happy to be associated with such a world class deposit and looks forward to working with Aquiline in bringing the property to production." At Aquiline's request, Silverstone will provide technical assistance to Aquiline, at Aquiline's expense and on terms to be negotiated.� Several of Silverstone's management personnel, employees and consultants have a track record of developing mining projects in Mexico and South America, including Argentina.
Blaise Yerly, Chairman of Aquiline, commented "We are pleased to have secured significant funding for Navidad in a unique structure that will result in minimal dilution to shareholders.� Silverstone has demonstrated an ability to execute this model successfully and profitably and is a partner who we believe will add strategic value as the project makes the transition from exploration to development."
Transaction Structure
Silverstone may elect to convert the Debenture into Common Shares at any time until the Conversion Deadline, which is 30 days after the earlier of: (a) 23 months from the date of the Debenture; and (b) the completion of a feasibility study on the Property, the decision of Aquiline to proceed with a mine and receipt of all necessary permits to proceed with construction of a mine (the "Maturity Date").
The election to convert the Debenture into the Contract may only be made after the Maturity Date and up to the Conversion Deadline.� Silverstone and Aquiline shall negotiate a definitive Contract within 120 days from the purchase of the Debenture and the Contract will be subject to Exchange approval.� The Contract will provide Silverstone with the right to purchase 12.5% of the life of mine payable silver from the Property with a minimum of one million ounces of silver per year from the Property, or if unavailable, from other Navidad project production, for a minimum 12.5 year period.� Upon conversion to the Contract, the CDN$17.5 million face value of the Debenture will form part of an upfront payment by Silverstone of US$50 million to secure the silver, structured as follows:
- US$17,599,750 (CDN$17.5 million), the Debenture face value
- US$14,900,250 on the Maturity Date
- US$17.5 million in four equal instalments of US$4.375 million starting three months after construction commences to 12 months after construction commences
In addition to this upfront payment, Silverstone will pay the lesser of US$4.00 per ounce of silver and the prevailing market price per ounce of silver on the London Metal Exchange at the time production is delivered.
The Debenture carries a coupon of 150,000 warrants in lieu of interest, with each warrant entitling Silverstone to purchase one Common Share at an exercise price of CDN$13.00 per Common Share for a period expiring six months after the Conversion Deadline.
Silverstone will also have a right of first offer with respect to the sale of any additional future silver production streams by Aquiline on any Aquiline project.
Fees and Conditions
PI Financial Corporation will receive a finder's fee from Aquiline of 6% in cash of the Debenture principal amount (CDN$1.05 million) and 87,500 warrants with the same terms as those granted to Silverstone.�
Closing of the transaction is subject to receipt of all necessary approvals, including approval of the TSX Venture Exchange and approval of the Toronto Stock Exchange.
Under the guidelines of the National Instrument 43-101, the Qualified Person for Aquiline's� Navidad Project is Mr. John J. Chulick who is a registered geologist in the State of California.�� Mr. Chulick has reviewed the technical content of this release.
ABOUT SILVERSTONE
Silverstone is a growth oriented silver mining company with 100% of its revenue from silver production.� Silverstone expects to have 2008 silver sales of approximately 2 million ounces and increasing to more than 3 million ounces in 2009. More information is available online at www.silverstonecorp.com.
ABOUT AQUILINE RESOURCES
Aquiline Resources Inc. is an exploration and development company advancing one of the world's largest undeveloped silver deposits (Navidad), as well as a gold deposit (Calcatreu), both in Argentina.� Calcatreu is currently being explored with the objective of expanding the resource to one million gold-equivalent ounces.
FORWARD-LOOKING STATEMENTS
This press release includes certain "forward-looking statements".� All statements, expressed or implied, regarding the proposed transaction between Aquiline and Silverstone and in respect of the future development of the Navidad property, are forward-looking statements that involve various risks and uncertainties, as disclosed under the heading "Risk Factors" and elsewhere in Aquiline and Silverstone documents filed from time to time with applicable regulatory authorities.� There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.