Armadillo to Acquire Brazilian Mineral Claims with Gold Potential

VANCOUVER, Oct. 21 /CNW/ - (TSX.V: ARO) Les Kjosness, President & CEO, is pleased to announce the Company has signed a letter of intent dated October 18, 2010 with Rusheen Handels AG, a private company based in Zurich ("RH"), to acquire approximately 50% of the issued Units of Amazonia Capital E Participacoes Ltd. a private Company based in Brazil ("Amazonia") (the "Purchase"). Amazonia is ninety nine percent owned by Raheen Handels AG and one percent by Kym Keeves of Brazil. Amazonia is the registered holder of approximately 860,000 hectares of processos minerais (exploration concessions) in northern Brazil. The property encompasses 116 concessions in the states of Amazonas, Mato Grosso and Rondonia and was originally staked by John Young for RH. Most of the concessions have been staked over Archaen to Lower Proterozoic greenstone belts which are considered to be prospective for gold. Small-scale garimpeiros (artisanal miners) are active in and around all of the concession areas. Gold production by garimpeiros in northern Mato Grosso from the end of the 1970‟s to 2000 is reported by the National Department of Mineral Production to have totaled 123t (Tobias da Silva, 2008).

The Company is to pay $350,000 on signing the letter of intent and at closing issue 12,500,000 shares of the Company. There is a finder's fee of 750,000 shares. The Company will assume 100% of Amazonia expenses and has to date advanced $350,000 for property taxes.

RH has granted the Company an option to acquire the second 50% of Amazonia for another 12,500,000 shares within three months of the closing of the Purchase (the "Option"). On exercise of the Option, there will be a second finder's fee of 750,000 shares.

Armadillo, an exploration Company primarily in the precious and specific base metals (copper, iron, zinc) will remain primarily interested in the same resources.

A financing of $3,500,000.00 to begin the exploration of the new property in Brazil and sustain continued exploration of the present properties in Canada will be arranged in the near future after the market settles and a price for the shares and warrants can be properly determined.

The agreement is totally arm's length and is subject to the acceptance by the TSX Venture Exchange and Shareholder approval as noted in TSX Regulatory Policy 5.2:

"Contents of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested Shareholder approval. The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed at all.
Investors are cautioned that, except as disclosed in the[Management Information Circular and/of Filing Statement] to be prepared in connection with the transaction, any information released or received with respect to the [COB or RTO] may not be accurate or complete and should not be relied upon. Trading in the securities of Armadillo Resources Ltd. should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release"

On behalf of the Board,
"Les Kjosness"
President and Director

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

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For further information:

Les Kjosness: 604-408-6500
Kirsti Mattson: 604-202-2484 media