Mr. Nick DeMare reports

AGUILA PROVIDES CORPORATE UPDATE

Aguila American Gold Ltd. is providing this corporate update with respect to its properties in Peru. After detailed consideration, a decision has been made to record an impairment charge against the carrying values of the company's properties in Peru. There is significant uncertainty with respect to the company's ability to maintain the assets and, accordingly, a decision has been made that these assets in Peru will not be the focus of the company. The company will be seeking other investment opportunities outside of Peru.

In this regard, the board of directors has approved an alteration to the company's share structure by consolidating all of the company's issued and outstanding common shares on the basis of one new common share for 10 old common shares. The share consolidation will reduce the 23,249,949 shares of the company currently issued and outstanding to approximately 2,324,994 shares. No fractional shares will be issued. Any fraction of a share will be rounded down to the nearest whole number of common shares. The above share consolidation is subject to TSX Venture Exchange approval and will be effected upon receipt of such approval.

Management believes that the share consolidation is necessary to provide the company with a share structure that will better attract capital financing and that will provide for future growth opportunities.