Use a downspiral single flute HSS bit with Edge Creme cutting fluid. It will easily cut through 1/8" aluminum. The downspiral keeps the chips out of your router and face. The downspiral also pulls the Edge Creme cutting fluid into the cut. Make a template out of MDF and use a template guide on your router. You will cut this in a single pass. Clean up the cut as needed with a file and deburring tool. Cheap and simple using the tools and skills you already possess.
Example of the router bit to use: http://www.sentineldoor.com/MJ_HIT45RB4
Edge Creme: http://www.lpslabs.com/product-details/631
Example of the router bit to use: http://www.sentineldoor.com/MJ_HIT45RB4
Edge Creme: http://www.lpslabs.com/product-details/631
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