Mr. Barry Hildred reports

AQUILA RESOURCES ANNOUNCES START OF WINTER DRILLING PROGRAM

Aquila Resources Inc. has started a 4,600-metre winter drilling program designed to expand known resources at its zinc- and gold-rich Back Forty project located in Michigan's Upper Peninsula, and convert current inferred resources into measured and indicated categories.

The drill program will consist of two diamond drills. One drill will focus on infill and stepout drilling on the known resource at Back Forty. The other drill will target geophysical targets peripheral to the Back Forty deposit as well as expansion drilling on the new mineralized zone discovered in 2016 (see Aquila's press release dated Sept. 27, 2016).

The focus of the infill and stepout program is to expand known resources associated with potential underground mining as well as to convert inferred resources into measured and indicated categories. Drilling will target the southwest extension of the Pinwheel massive sulphide zone as well as main zone and deep zone massive sulphide and gold mineralization.

Exploration drilling will target strong electromagnetic and gravity anomalies south of the Back Forty deposit and will further define and expand the new zone of massive sulphide discovered in 2016.

In addition to the planned drilling program, recently drilled geotechnical holes at Back Forty have intercepted inferred resources of the Pinwheel massive sulphide zone. These drill holes are currently in the process of being sampled and assayed.

Initial results from the planned drill program and the recently drilled geotechnical holes are expected in April, 2017.

The winter drilling program is consistent with the financing objectives of Aquila's recently completed private placement.

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. Information regarding data verification is provided in Aquila's annual information form dated March 30, 2016.

About Aquila Resources Inc.

Aquila Resources is a development-stage company with strategic assets in the Great Lakes region. The company's experienced management team is currently focused on advancing permitting activities for its 100-per-cent-owned gold- and zinc-rich Back Forty project in Michigan.

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 NPV (net present value) of $282-million ($210.8-million after tax) and a pretax IRR (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.

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