Mr. Barry Hildred reports

MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY DETERMINES AQUILA'S PERMIT APPLICATION FOR ITS BACK FORTY PROJECT IS ADMINISTRATIVELY COMPLETE

Aquila Resources Inc. has received notice from the Michigan Department of Environmental Quality (DEQ) stating that it has performed an initial review of the mine permit application for the company's Back Forty project under the requirements of Part 632, Non-ferrous Metallic Mineral Mining, of the Natural Resources and Environmental Protection Act, 1994 PA 451, and the DEQ has determined the application is administratively complete. The DEQ will now proceed with the technical review of the application. This determination is not meant to be a finding of the adequacy or accuracy of the information submitted.

Consistent with Michigan's permitting process, Aquila's application requests specific permits for non-ferrous metallic minerals mining, national pollutant discharge elimination system, wetlands protection and air.

Aquila anticipates that the development, construction and operation of Back Forty will result in investment benefits and the creation of temporary and permanent jobs, as well as economic spinoffs for Michigan's upper peninsula and local counties.

We seek Safe Harbor.