Aquila Announces Updated Mineral Resource Estimate for Back Forty

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TORONTO, ONTARIO--(Marketwire - Feb 4, 2013) -

Aquila Resources Inc. (AQA.TO)(AQARF)(JM4A.F) ("Aquila" or the "Company") is pleased to provide an updated mineral resource estimate for the Back Forty Project in the Upper Peninsula of Michigan. Aquila holds a 49% joint venture interest in Back Forty and Hudbay Minerals Inc. (HBM.TO)(HBM) holds a 51% interest and is the current operator. The updated mineral resource estimate includes data from an additional 78 drill holes. The open pit measured and indicated resource is 9.65 million tonnes with improved metal grades over the previous mineral resource estimate, which was prepared in 2010. The estimate also defined 5.49 million measured and indicated tonnes and 2.18 million inferred tonnes of underground resource not evaluated in the preliminary economic assessment ("PEA") that was completed in April 2012 (see "Preliminary Economic Assessment Technical Report on the Back Forty Deposit, Menominee County, Michigan, U.S.A." dated April 26, 2012, available at www.sedar.com). The mine plan in the PEA contemplated that 7.54 million tonnes of the measured and indicated resource would be mined, after applying dilution and recovery allowances.

Aquila''s president and CEO Tom Quigley stated, "We are very pleased with the new resource estimation. The combined open pit and underground resource provides significant tonnage with improved grades for evaluation in future economic studies. We now have an updated geologic model of the deposit that represents our increased understanding of the complexities and robustness of the resource, which will be increasingly useful to us as we evaluate future plans for Back Forty."

Updated Resource Estimate Highlights*

* Mineral resources are not mineral reserves and do not have demonstrated economic viability. NSR cut-off values were based on metal price assumptions of US$0.96 per pound zinc, US$3.65 per pound copper, US$1.01 per pound lead, US$1456.36 per troy ounce gold and US$27.78 per troy ounce silver. Metallurgical recoveries were determined and applied for each of the metallurgical domains determined for the deposit.

** Cut off values were determined for each of the metallurgical domains contained in the optimized open pit were based on NSR values. Average cut-off value for the open pit resource contained within an optimized pit shell was US$27.75. See "Mineral Resource Estimate Disclosure."

*** Cut off values were determined for each of the metallurgical domains based on NSR values. Average cut-off value for the underground resources outside of the optimized pit shell was US$66.45. See "Mineral Resource Estimate Disclosure."

The updated resource was compiled by Tetra Tech of Golden, Colorado with input by Aquila''s technical team, and incorporated the results of an additional 78 drill holes from the previously calculated resource prepared in 2010. In addition to incorporating recent drilling, the updated resource includes a new geological model of the deposit with increased detail on the geologic boundaries of the Back Forty deposit from both a geological and geo-metallurgical standpoint.

The updated mineral resource expanded on and incorporated parameters derived from the April 26, 2012 PEA that utilized the 2010 mineral resource. The PEA contemplated mining 7,536,000 tonnes of mineral resources from an open pit. The updated open pit mineral resource consists of 9,647,498 tonnes of measured and indicated resources utilizing a NSR cut off averaging US$27.75 per tonne. The updated resource also quantifies mineralization outside of the open pit shell utilizing an underground NSR cut off averaging US$66.45 per tonne.

The updated mineral resource is independent of the PEA completed in April 2012, and economic parameters developed in that PEA have not been evaluated to reflect the new updated resource.

Breakdown of Resource by Metallurgical Type

The mineral resources estimated in this update consist of flotation metallurgical type mineralization producing base metal concentrates and hydrometallurgical or leaching metallurgical type mineralization producing a gold silver dore product. A breakdown of these metallurgical types is shown below.

Mineral Resource Estimate Disclosure

Ordinary Kriging Estimation: Ordinary kriging (OK) by Datamine® was used to estimate the Back Forty resources. The estimate was constrained to be within interpreted geologic domain wireframes. Specific gravity was assigned to lithologic zones by regression equations using sulfur and iron content. Gold, silver, lead and zinc values were capped at levels based on interpreted composite statistics and cumulative frequency plots. Variography was used to define anisotropy of mineralization and search parameters within each lithologic zone. Mineral classification of measured, indicated and inferred was defined by a strategy of three kriging passes using increasing search ranges.

Mineralization offering reasonable prospects for economic extraction by open pit were determined using the Lerchs-Grossman optimizing algorithm which evaluates the profitability of each resource block based on its NSR value. Optimization parameters were based on cost parameters derived in the April PEA as well as updated metallurgical recoveries and updated metal prices. Metal grades were estimated using an ordinary kriging estimator for each mineral domain.

Block model grade estimates were validated by comparison with nearest neighbor and inverse distance squared methodogies and visual comparison of composites and drill hole data with resource block data.

Open Pit Cut Off: Cut off values based on metallurgical type for the open pit mineral resources were US$25 for flotation and US$39 for hydrometallurgical or leaching. Average cut off values for the open pit mineral resources were US$27.75.

Outside of Pit (Underground) Cutoff: Cut off values based on metallurgical type for the underground mineral resources were US$65.50 for the flotation and US$79.50 for the hydrometallurgical type. Average cut off values for an underground mining scenario were US$66.45.

Net Smelter Return Estimation: The Back Forty is a poly-metallic deposit with each metal contributing to the value of the mineralization. The mineral resources are therefore reported by utilizing a calculated net smelter return ("NSR"). The NSR calculations were based on the metal grades and metallurgical type designation. Key inputs for the NSR estimation include metal prices, metallurgical parameters (process recovery and product specification by metallurgical type) and concentrate and dore terms (which took into account cost estimates including smelter terms, refining costs, penalties, transportation, insurance, and marketing).

NSR values for the 2013 resource were calculated in a similar manner as they were in the PEA dated April 26, 2012. Notable changes in the NSR calculation include updated metal prices utilizing a three year trailing average, and updated metallurgical recoveries and concentrate/dore specs. The NSR Value takes into consideration values from lead as opposed to copper in two mineral domains (Tuff Zone massive sulfide and associated stringer zone) as well as value from copper in a mineral domain where only gold and silver were previously considered (Pinwheel Gossan).

Updated Metallurgical Recoveries: Metallurgical recoveries were estimated for a total of 13 metallurgical domains. Six of these domains reflect sulfide-rich flotation ores and seven represent sulfur- poor, gold-silver leach ores. The estimated recoveries were developed utilizing both past and recent metallurgical testing and reflect the best estimate of recovered metals for each individual and discrete metallurgical domain. These recoveries do not take into account ''blending'' certain metallurgical zones in an open pit mining scenario. However, the detailed metallurgical domaining of the deposit and associated recoveries allows for development of a more selective mining plan with respect to both open pit and underground mining scenarios.

Resource Disclosure: Because the updated mineral resource estimate does not constitute a material change, a 43-101 technical report will not be completed. Additional details about the updated resource will be available on the Company''s website. Mineral resources for the deposit were classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves by Rex Bryan, Ph.D., an appropriate independent qualified person for the purpose of National Instrument 43-101.

About Aquila Resources Inc.

Aquila Resources Inc. (AQA.TO)(AQARF)(JM4A.F) is a mineral exploration Company focused on the discovery and development of high grade base and precious metal projects in highly prospective regions of North America. The Company is led by an experienced management team that has identified significant ore deposits over the last 30 years. For more information please visit www.AquilaResources.com.

Thomas O. Quigley is the Qualified Person for Aquila Resources as described in National Instrument 43- 101 and is responsible for the contents of this release.

This press release contains certain forward-looking statements. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to international operations; risks related to joint venture operations; actual results of current exploration activities; changes in project parameters as plans continue to be refined, future prices of resources; possible variations in reserves, grade or recovery rates, accidents, labor disputes and other risks of the mining industry; and delays in obtaining governmental approvals or financing or in the completion of development or construction activities. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward- looking statements.

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