Mr. Barry Hildred reports

AQUILA RESOURCES RELEASES INITIAL RESULTS FROM ITS SPRING DRILLING PROGRAM; RESULTS INCLUDE 11 METERS OF 20% ZINC IN HOLE GT-11 AND 6.27 METERS OF 28.3 GRAMS PER TONNE OF GOLD IN HOLE GT-12

Aquila Resources Inc. today released the first round of drill results from its continuing drill program at the Back Forty project in Michigan's Upper Peninsula. Ten drill holes have been completed to date, and assay results are presented in the attached tables. The holes were targeting the Pinwheel, Deep zone and main zone massive sulphide outside of the proposed open pit, and were a combination of infill, stepout and geotechnical drilling.

Highlights from the drilling completed to date include:

• 1.3 grams per tonne gold, 13 grams per tonne silver, 0.66 per cent copper and 9.9 per cent zinc over 4.99 metres in GT-09;
• 0.74 gram per tonne Au and 9.3 per cent Zn over nine metres, and 1.6 grams per tonne Au, 32 grams per tonne Ag, 1.6 per cent Cu over 20.9 metres in GT-10;
• 3.6 grams per tonne Au, 35 grams per tonne Ag and 10.07 per cent Zn over 7.69 metres, and 0.96 gram per tonne Au, 29 grams per tonne Ag, 0.33 per cent Cu and 20 per cent Zn over 11.4 metres in GT-11;
• 1.176 grams per tonne Au and 5.19 per cent Zn over 42.07 metres, and 11.65 grams per tonne Au and 50 grams per tonne Ag over 21.4 metres in GT-12;
• 1.33 grams per tonne Au, 15 grams per tonne Ag and 0.99 per cent Cu over 45 metres in LK-17-523.

"These are impressive grades and thicknesses of mineralization encountered peripheral to, and underneath, the proposed open pit at Back Forty," stated Tom Quigley VP of Exploration. "The results illustrate the strong, polymetallic nature of the Back Forty deposit and will be incorporated into future resource calculations related to the evaluation of potential underground developments at the project."

Drilling is continuing at the project, including drill testing of geophysical targets south of the known deposit and follow-up drilling on the newly discovered 2016 zone of massive sulphide mineralization (see the press release dated Sept. 27, 2016).

Significant intercepts from the first round of drilling are tabulated and described below.

                   From        To     Interval (1)          Au        Ag        Cu        Pb        Zn
Drill hole           (m)       (m)             (m)        (g/t)     (g/t)       (%)       (%)       (%)

GT-08             19.64     24.50            4.86         1.88       214      1.12      0.20      0.03
                  63.00     78.70           15.70         0.88        21      0.54      0.02      0.36
GT-09             55.50     57.00            1.50        9.379       126      0.16      0.65      0.04
                  59.51     64.50            4.99        1.319        13      0.66      0.17      9.99
                  76.50     89.30           12.80        2.241         9      0.30      0.04      0.16
GT-10             50.20     59.24            9.04        0.740         8      0.20      0.33      9.31
Including         76.68     78.75            2.07        2.905        38      0.14      0.30      0.03
                 114.23    128.00           13.77        1.381        14      0.04      0.08      3.82
Including        114.23    117.70            3.47        1.651        13      0.07      0.05      6.93
                 159.60    190.00           30.40        1.497        29      1.23      0.01      0.32
Including        159.60    180.50           20.90        1.605        32      1.58      0.01      0.37
GT-11             42.31     50.00            7.69        3.627        35      0.12      0.12     10.07
                  57.80     69.20           11.40        0.962        29      0.33      0.01     20.01
                  80.50     82.57            2.07        6.643        15      0.10      0.22      0.08
GT-12            337.00    379.07           42.07        1.176        15      0.17      0.05      5.19
Including        342.00    365.50           23.50        0.725        11      0.08      0.02      7.50
                 378.00    399.40           21.40       11.655        50      0.44      0.41      1.29
Including        379.07    385.34            6.27       28.333        60      0.51      0.64      3.24
LK-17-521         61.10     62.75            1.65        0.381        77      0.06      1.18      3.02
                  68.52     74.49            5.97        0.719        53      0.18      0.37      2.21
                 133.00    145.75           12.75        0.949        10      0.29      0.04      0.07
LK-17-522        134.65    150.05           15.40        0.943        10      0.26      0.05      0.80
Including        134.65    137.00            2.35        0.975        35      0.29      0.17      4.10
LK-17-523         51.00    165.00          114.00        1.006        14      0.61      0.01      1.80
Including         67.50     99.00           31.50        0.681         9      0.28      0.01      4.55
                 120.00    165.00           45.00        1.333        15      0.99      0.01      0.39
Including        133.00    137.50            4.50        2.126        22      2.07      0.00      0.24
LK-17-524         45.50    100.58           55.08        1.304        13      0.49      0.04      0.29
LK-17-525        142.88    143.55            0.67        0.838        32      0.04      0.46     22.42
                 147.30    163.36           16.06        0.921        12      0.46      0.20      1.81
Including        147.30    154.50            7.20        0.766        19      0.59      0.43      3.62
                 166.00    170.63            4.63        1.830         8      0.21      0.06      0.13

(1) Interval is drilled thickness and does not represent true thickness. Estimated true thicknesses
for individual holes are: GT-08 -- 90 per cent, GT-09 -- 95 per cent, GT-10 -- 48 per cent to 62 per
cent, GT-11 -- 67 per cent, GT-12 -- 73 per cent, LK-17-521 -- 63 per cent, LK-17-522 -- 60 per cent,
LK-17-523 -- 35 per cent, LK-17-524 -- 74 per cent and LK-17-525 -- 65 per cent.

Drill holes LK-17-521, LK-17-522, LK-17-523, LK-524, LK-17-525, GT-08, GT-09, GT-10 and GT-11 were testing the extension of the Pinwheel zone massive sulphide to the west and southwest of the proposed open pit. The drilling was designed to infill and step out along the extension of the Pinwheel zone (LK holes) as well as to assess the rock quality and stability of both the mineralized zones and host rocks (GT holes).

Gt-12 was a geotechnical hole drilled southwest of the proposed open pit and was directed at rock quality assessment for potential underground development associated with the main zone massive sulphide and related stringer mineralization located approximately 200 metres below the open pit.

Quality assurance and quality control (QA/QC)

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 of exploration is a part owner) ISO/IEC 17025-certified sample prep lab and assay laboratory 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. Some samples were assayed at the Minerals Processing lab, including pulp duplicates, and overlimits for gold and sulphur. Strict sampling and QA/QC protocol are 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 grams per tonne gold. All other elements are analyzed by inductively coupled plasma, with silver overlimits (greater than 300 grams per tonne) analyzed by fire assay/gravimetric finish and base metal overlimits analyzed by atomic absorption spectrometry. Sulphur overlimits were analyzed by LECO furnace.

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

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 National Instrument 43-101.

About Aquila Resources Inc.

Aquila Resources is a permitting-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 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.