Mr. Barry Hildred reports

AQUILA RESOURCES RELEASES FINAL DRILL RESULTS FROM ITS 2016 BACK FORTY EXPLORATION PROGRAM INCLUDING 6 METERS* OF 5.01 G/T GOLD AND 27.34 G/T SILVER

Aquila Resources Inc. has released the final drill results of its recently completed 2016 exploration program consisting of 1,786 metres of drilling in 10 holes. The exploration program focused on targeting potential extensions of known mineralized zones as well as new targets proximal to the Back Forty deposit. The final drill results include assay results from two holes that the company announced on Sept. 27, 2016, indicating the discovery of a new mineralized zone at Back Forty.

"Our 2016 exploration program produced very encouraging results," said Barry Hildred, chief executive officer of Aquila Resources. "Drilling resulted in the discovery of a new, zinc-rich mineral zone that is consistent with the polymetallic mineralization of Back Forty's Main zone. This discovery provides the potential to add to Back Forty's mine life. We will explore this potential more fully with our exploration program slated for 2017."

Drill results highlights:

• Drill holes LK-16-510 through LK-16-513 tested possible extensions of the Pinwheel zone massive sulphide and associated precious metal mineralization to the northeast.
• Drill holes LK-16-514 through LK-16-519 tested geophysical targets and possible extensions of the Pinwheel zone to the southwest of the deposit.
• Drill hole LK-16-511 intercepted 3.2 metres of 1.78 grams per tonne gold (Au) and 20.48 g/t silver (Ag).*
• LK-16-511 encountered 1.2 metres of 2.29 g/t Au.*
• LK-16-514 intercepted six metres of 5.01 g/t Au and 27.34 g/t Ag.*
• LK-16-517 returned 6.8 metres of 0.31 g/t Au and 3 per cent zinc (Zn), and a separate zone of 0.5 metre of 4.7 per cent lead (Pb) and 304 g/t Ag.*
• LK-16-515 and LK-16-516 (reported on Sept. 27, 2016) encountered 8.4 metres of 4.9 per cent Zn and 9.35 metres of 6.7 per cent zinc (Zn) in massive and semi-massive sulphide.*

Summary and significance of drilling results

The 2016 drilling campaign identified new zinc-rich massive and semi-massive sulphide zones to the southwest of the Back Forty deposit. A discrete zone of massive sulphide in LK-16-515, 516 and 517 remains open along strike to the northeast and southwest as well as at depth. This new zone lies approximately 400 metres southwest of the proposed open pit, and may eventually prove to be continuous with underground resources extending southwest from the pit. Additionally, strong geophysical trends have identified targets for an additional 500 metres to the southwest.

Separate zinc- and silver-mineralized horizons were also encountered deeper in LK-16-515 as well as in LK-16-518. These horizons were hosted by siliceous, tuffaceous sediments similar to the Tuff zone and deeper mineralization under the Back Forty deposit. Future drilling will target extensions of these horizons and will test potential continuity with these zones.

Gold and silver mineralization was encountered in LK-16-514 at two separate horizons approximately 60 metres apart. The orientation of these intercepts is currently unknown, but the high grades, including visible gold in the lower interval, warrant follow-up drilling. This area occupies an apparent gap between known Pinwheel massive sulphide mineralization and the newly discovered zone of mineralization in LK-16-515, 516 and 517.

Drill holes LK-16-511, 512 and 513 were step-out holes testing the potential extension of the Pinwheel massive sulphide northeast of the proposed open pit. They encountered significant but narrow zones of precious metal mineralization, but no extensions of massive sulphide. LK-16-510, testing a geophysical target 325 metres northeast of the open pit, did not return significant values.

All of the 10 holes from this drilling program as well as strategic historic drill holes were surveyed with downhole, pulse electromagnetic techniques.

Significant assays from the above drill holes are summarized in the associated table.

                From      To   Interval*      Au       Ag     Cu       Pb       Zn
Drill hole       (m)     (m)         (m)   (g/t)    (g/t)    (%)      (%)      (%)

LK-16-510                                                    no significant values
LK-16-511     107.10  110.30        3.20    1.78    20.48   0.06     0.04     0.13
LK-16-512      56.00   57.20        1.20    2.29     2.93   0.01     0.01    0.004
              141.57  142.67        1.10    1.76    13.02   0.02     0.03     0.06
LK-16-513                                                    no significant values
LK-16-514      56.00   62.00        6.00    5.01    27.34   0.02     0.00     0.01
Including      60.70   62.00        1.30   14.62    87.70   0.09     0.01     0.01
               125.2   127.1        1.90   10.01   155.76   0.17     1.07     0.11
LK-16-515**    25.00   27.50        2.50    2.94     6.87   0.03     0.03     0.01
               63.00   74.21       11.21    1.88    19.52   0.18     0.15     3.97
Including      63.00   65.78        2.78    4.63    39.28   0.17     0.37     1.14
Including      65.78   74.21        8.43    0.97    13.00   0.18     0.08     4.90
Including      72.34   74.21        1.87    0.45     8.32   0.11     0.06     9.73
              156.50  161.00        4.50    0.29    37.28   0.01     0.61     2.07

  
                 From       To   Interval*     Au      Ag     Cu    Pb      Zn
Drill hole        (m)      (m)         (m)  (g/t)   (g/t)    (%)   (%)     (%)

LK-16-516**     76.18    89.20       13.02   0.81   23.64   0.08  0.42    4.92
Including        77.5    86.85        9.35   0.84   10.70   0.09  0.10    6.70
Including          80    86.85        6.85   0.80   11.92   0.08  0.11    7.72
Including       83.15    86.85        3.70   0.60   10.71   0.06  0.11    9.79
LK-16-517       90.50    97.28        6.78   0.31    5.02   0.04  0.06    2.99
               127.90   128.40        0.50   0.59  304.00   0.06  4.71    0.01
LK-16-518       87.50    88.10        0.60   0.32   44.21   0.01  0.30    2.10
               172.00   187.68       15.68   0.10   18.61   0.01  0.26    0.76
Including      173.50   174.20        0.70   0.21   52.66   0.03  0.57    3.72
Including      183.10   184.00        0.90   0.11   72.58   0.01  1.26    3.17
Including      187.00   187.68        0.68   0.08   91.74   0.05  1.45    3.27
LK-16-519                                                no significant values

Notes
* Interval is drilled thickness, true thickness is unknown, but is estimated 
to be approximately 80 per cent of drilled thickness in LK-16-515, LK-16-516 
and LK-16-517. 
** Results previously reported.

Quality assurance and quality control

Exploration core drilling was NQ3 size. The core was logged and mineralized intersections were marked for sampling and assaying by geologists either employed or contracted by Aquila Resources. The marked intersections were sampled by Aquila employed geotechnicians. Samples were sawn in half using a diamond core saw and one-half of the core was placed in a sample bags and tagged with unique sample numbers, while the remaining half was returned to the core box for storage. Each bagged core sample was transported to Minerals Processing Corp.'s (of which Aquila's vice-president, exploration, is a part owner) ISO/IEC 17025-certified sample prep lab in Carney, Mich., where it was dried, crushed and pulverized and a 250-gram sample was prepared and split, with one split for assaying at Bureau Veritas Mineral Laboratories USA -- Inspectorate America Corp., an ISO-certified assaying/geochemistry facility in Sparks, Nev. Strict sampling and quality assurance/quality control protocol is followed, including the insertion of standards and blanks in the sample stream on a regular basis. Sample intervals are typically 1.5 metres in length. Analytical methods for gold are fire assay with atomic absorption finish and gravimetric finish for samples greater than three g/t gold. All other elements are analyzed by inductively coupled plasma with silver overlimits (greater than 300 g/t) analyzed by fire assay/gravimetric finish and base metal overlimits analyzed by atomic absorption spectroscopy.

Assay integrity is monitored internally with a quality control program, which includes the use of assay sample standards, blanks, duplicates and repeats, and externally through national and international programs. This news release provides core lengths and estimates of drilled thickness. True widths are estimates. Where metal assays are provided for intersections they are either a single assay of a sample of the entire intersection length or a composite of assays calculated from interval-weighted assays over the intersection length.

Qualified person

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 National Instrument 43-101. Mr. Quigley is a registered professional geologist in Minnesota, a member of the Society for Mining, Metallurgy and Engineering (SME), the Society of Economic Geologists (SEG), and sits on the board of the Michigan Geologic Survey. Information regarding data verification is provided in Aquila's annual information form dated March 30, 2016.

About Aquila Resources

Aquila's flagship Back Forty project is a volcanogenic massive sulphide (VMS) deposit located along the mineral-rich Penokean volcanic belt in Michigan's Upper Peninsula. In its updated preliminary economic assessment filed in September, 2014, Back Forty demonstrated strong economics with a pretax net present value of $282-million ($210.8-million after tax) and a pretax internal rate of return of 38.8 per cent (32 per cent after tax) based on mining 16.1 million tonnes of measured, indicated and inferred resources over the 16-year life of mine, of which 12.5 million tonnes will be open pit and 3.6 million tonnes will be underground.

We seek Safe Harbor.