Mr. Barry Hildred reports

AQUILA RESOURCES ANNOUNCES FILING OF TECHNICAL REPORT; FINAL TECHNICAL REPORT INCLUDES UPDATED ECONOMICS; $282.2M PRE-TAX NPV AND 38.8% PRE-TAX IRR

Aquila Resources Inc. has filed a technical report in respect of the company's preliminary economic assessment on the Back Forty project.

PEA highlights

In preparation of the final National Instrument 43-101-compliant technical report, the company has provided updated economics for Back Forty.

              KEY ECONOMIC HIGHLIGHTS

                           Pretax         After tax

Net present value
at 6 per cent      $282.2-million    $210.8-million
Internal rate
of return                   38.8%             32.0%
Payback period          1.4 years         1.8 years

The PEA includes inferred resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA results will be realized.

There are no updates to the capital or operating expenditures from the figures stated in the July 23, 2014, press release.

Sensitivity analysis

Taking into consideration the updated economics, a new sensitivity analysis was performed to test the economic viability of Back Forty against possible fluctuations in commodity prices. A table illustrating project sensitivity is attached.

              SENSITIVITY ANALYSIS

                  Base case  Base case  Base case
                       -15%                  +15%

Gold (per ounce)     $1,099     $1,293     $1,487
Silver (per
ounce)               $17.39     $20.46     $23.53
Zinc (per pound)      $0.82      $0.96      $1.10
Copper (per
pound)                $2.70      $3.18      $3.66
Lead (per pound)      $0.82      $0.96      $1.10
Pretax
NPV at 6 per
cent (in
millions)            $122.3     $282.2     $440.6
IRR                   23.7%      38.8%      52.0%
Payback period    2.8 years  1.4 years   0.9 year
After-tax
NPV at 6 per
cent (in
millions)             $95.2     $210.8     $324.8
IRR                   20.2%      32.0%      42.0%
Payback period    3.1 years  1.8 years  1.2 years

Project potential

An alternative mine plan, which considers a low-capex, high-grade initial-phase operation, was evaluated in the PEA and provides some flexibility in the development of the project. This option would focus on mining near-surface, high-grade zones by way of three small open pits in order to maximize capital return in the early years of production. This approach has the potential to provide attractive economic returns, mitigate certain start-up risks and allow for significant optionality in the long-term development of the project. Following the five-year initial-phase operation, Aquila could commence a second-phase operation, which would consider an expanded pit and/or inclusion of the underground resource.

This opportunity would be fully evaluated during the feasibility stage of project development and could be pursued depending on future macroeconomic conditions.

KEY ECONOMIC HIGHLIGHTS OF INITIAL-PHASE OPERATION

                           Pretax         After tax

NPV at 6 per cent  $129.4-million    $103.3-million
IRR                         38.6%             35.2%
Payback period          2.1 years         2.2 years

Qualified persons

The technical report was prepared under the supervision of Tetra Tech Inc., specifically Rex Bryan, SME; Wenchang Ni, PEng; Daniel Sweeney, PEng; Arun Vathavooran, PhD, CEng, MIMMM, SME; Dharshan Kesavanathan, PEng; Mike McLaughlin, PEng; Sabry Abdel Hafez, PEng; and Andrew Carter, EurIng, CEng, MIMMM, MSAIMM, SME. All of the aforementioned individuals are qualified persons as defined in National Instrument 43-101.

The environmental components of the technical report were prepared under the supervision of Andrea K. Martin, PE, from Foth Infrastructure & Environment LLC. Ms. Martin is considered a qualified person as defined under NI 43-101.

The scientific and technical information in this news release was reviewed and approved by Thomas O. Quigley, vice-president of exploration and senior technical adviser for the Back Forty project. By virtue of his education, experience and professional association, Mr. Quigley is considered a qualified person as defined under NI 43-101. Information regarding data verification is provided in Aquila's annual information form dated March 31, 2014.

We seek Safe Harbor.