Mr. Richard Fifer reports

PETAQUILLA SIGNS PREPAID FORWARD GOLD PURCHASE AGREEMENT

Petaquilla Minerals Ltd. has entered into a definitive forward gold purchase agreement with Deutsche Bank AG, London branch. Subject to satisfaction of all closing conditions, Deutsche Bank will finance a $45-million (U.S.) prepaid gold forward facility.

The facility is a forward contract to deliver 68,243 ounces of gold over a five-year term. The schedule of gold payments is as follows: during the first eight months of the term, 562 ounces per month; for the next 11 months of the term, 1,125 ounces per month; for the 24 months, 1,503 ounces per month; for the final 17 months of the term, 900 ounces per month. The 68,243 ounces of gold that have been committed under this gold facility represent approximately 6.3 per cent of the company's total gold resources at its wholly owned Molejon gold project in Panama.

Certain components within the agreement, such as gold pricing valuations, will be finalized at the time of prepayment, which is anticipated to occur on Aug. 25, 2010. As such, a subsequent news release regarding the agreement will be issued upon the date of prepayment with the minimum and maximum gold prices per ounce expressed. There is no interest payable to the bank during the term of the facility. The company will pay upfront structuring and finders' fees in the aggregate sum of $2.25-million.

Richard Fifer, chairman of the board, commented: "We are very pleased to have entered into this gold forward facility with one of the world's most reputable leaders in the global commodities market. This facility allows the company and its shareholders to preserve the benefit of higher gold prices in the future."

Execution of this gold-linked facility constitutes the first phase of the company's strategy to completely redeem its outstanding notes, which will no longer be senior secured debt once the new facility is funded as agreed to by the existing noteholders. The net proceeds of the facility will be used principally to redeem a portion of the company's outstanding notes plus any accrued interest up to the date of redemption, in the combined amount of approximately $42-million (U.S.).

Other leading international financial institutions have expressed interest and are currently assessing the potential of participating in the refinancing of the remaining portion of the company's notes. The company is in the process of arranging for the complete redemption of its notes and will be updating shareholders when arrangements have been made.

The lower payments that will now be due to the company's noteholders will allow for an increase in funds to be directed towards the exploration of the Oro Del Norte region where significant gold mineralization has been discovered as detailed in the company's news release in Stockwatch of Aug. 9, 2010, as well as increasing exploration efforts on the company's entire 842 square kilometres of concession lands. Engineering work on the heap leach project to harvest the low-grade material will also now be accelerated.

The resource evaluations in this press release were prepared under the guidance of John Kapetas, PGeo, a qualified person as defined by National Instrument 43-101 and vice-president exploration and resources development for the company.