Mr. Barry Hildred reports

AQUILA RESOURCES FILES 2013 YEAR-END FINANCIAL RESULTS AND PROVIDES CORPORATE UPDATE

Aquila Resources Inc. has filed its fourth quarter and year-end corporate and financial results for the periods ended Dec. 31, 2013. Full copies of Aquila's financial statements and management's discussion and analysis for the year ended Dec. 31, 2013, are available on the company's website and on SEDAR.

"Our focus in 2013 was to regain control of the Back Forty project while recapitalizing the company in order to fund future development. In 2014, we will look to optimize the project's potential, by completing a revised PEA [preliminary economic assessment] to better define the significant upside potential of the deposit, and ramp up our permitting activities," said Barry Hildred, chief executive officer of Aquila.

"Today, armed with a 100-per-cent interest in Back Forty, an infusion of capital and a strengthened leadership team, we are well positioned to restart Back Forty's development," said Mark Burridge, Aquila's chairman.

2013 corporate highlights

• On Nov. 7, 2013, Aquila announced several proposed transactions, which were subsequently closed on Jan. 16, 2014. The transactions consisted of:
  • A business combination whereby Aquila acquired all of the outstanding shares of REBgold Corp. in exchange for the company's shares on a 1-for-1 basis;
  • An agreement with Baker Steel Capital Managers LLP (REBgold's largest shareholder), on behalf of investment funds managed or controlled by it, whereby Baker Steel invested $4.5-million in the combined entity as part of a $4.85-million private placement financing;
  • A binding agreement with Hudbay that resulted in Aquila acquiring its 51-per-cent interest in the Back Forty project, effectively giving the company 100-per-cent ownership of the project.
• In February, 2013, an updated National Instrument 43-101-compliant resource estimate for the Back Forty project was completed. The updated mineral resource expanded on and incorporated parameters derived from a 2012 PEA that used the 2010 mineral resource estimate. The updated resource estimate, which will provide the basis for future economic evaluations of Back Forty, delineated:
  • An open-pit measured and indicated resource of 9.65 million tonnes at 2.07 grams per tonne gold and 2.47 per cent zinc, an increase of 28 per cent;
  • An underground measured and indicated resource of 5.49 million tonnes at 1.97 g/t Au and 4.1 per cent Zn;
  • An underground inferred resource of 2.18 million tonnes at 2.03 g/t Au and 2.15 per cent Zn.
• On June 26, 2013, Aquila completed a private placement for net proceeds of $579,752, by issuing 5.89 million units consisting of a common share and a half warrant at a price per unit of 10 cents.
• In 2013, Aquila suspended financing on non-core projects and focused on cost containment. The company retained ownership of three projects in the Great Lakes region: the now 100-per-cent-owned flagship Back Forty project; a development-stage, high-grade, polymetallic VMS (volcanogenic massive sulphide) deposit in the state of Michigan; and the Reef gold project and the Bend copper-gold project.
• In March, 2013, Aquila strengthened its management team by appointing Mr. Hildred as CEO of the company. Mr. Hildred is an experienced capital markets executive able to guide Aquila through the next phase of development at Back Forty.

Outlook

Aquila's focus in 2014 will be on recommencing development of the Back Forty project. Key milestones for 2014 include:

• Completing a series of trade-off studies and developing an NI 43-101 updated PEA for the Back Forty project with Tetra Tech WEI Inc. The trade-off studies will look at a number of mine plan scenarios and will choose the optimal development path for Back Forty. The company expects that the results of this study will be available in the second quarter of 2014;
• Commencing a small exploration program on previously identified near-mine targets in the third quarter of 2014. A number of geophysical anomalies have been identified peripheral to the known mineralization at Back Forty, and detailed ground geophysics and diamond drilling are planned to test these high-priority targets;
• Subject to market conditions and available capital, ramp-up activities related to the permit application for Back Forty with the Michigan Department of Environmental Quality in the second half of 2014:
  • To date, the company has completed a number of the required test programs and background studies necessary to support its permit submission. Aquila continues to use the services of Foth Infrastructure and Environment LLC, based in Green Bay, and is targeting a submission date in the first half of 2015.

We seek Safe Harbor.