Aquila Resources Inc.

Aquila Resources Inc.

February 16, 2012 06:00 ET

Alliance Exploration Budget Set At US$4.2 Million; Five Drills Mobilized To Bend Copper-Gold Deposit

TORONTO, ONTARIO--(Marketwire - Feb. 16, 2012) - Aquila Resources Inc. (TSX:AQA)(OTCQX:AQARF)(FRANKFURT:JM4A) ("Aquila" or the "Company) provides investors with an update on the Company's Strategic Exploration Alliance ("the Alliance") with HudBay Minerals Inc. (TSX:HBM)(NYSE:HBM) ("HudBay"). The Alliance is an agreement between the Company and HudBay to explore for base metal projects throughout the Great Lakes area and other regions by mutual consent. HudBay will fund the first US$2 million in expenditures on each qualifying project, at which time a 50/50 joint venture will be formed. The Alliance enables Aquila to utilize its strong technical and operating expertise in the region to target highly prospective projects utilizing funding from HudBay.

Strategic Alliance Update

Aquila and HudBay have recently approved a US$4.2 million budget for 2012 to be used for exploration activities on four properties, including Turner Peridotite, Sturgeon Falls Sill and the Bend Copper-Gold deposit. VTEM surveys have been completed at both Turner and Sturgeon Falls and a number of drill targets have been identified. The Alliance plans to begin drilling the targets this year. HudBay has also committed to pay the Company US$250,000 to identify five additional Alliance properties. A number of properties are currently under review and will be submitted to the Alliance within the next year.

Bend Deposit Update

The primary focus of the Alliance in the coming months will be to advance the Bend Copper-Gold deposit, which remains open in all directions and host the potential for a high-grade underground mining operation (see press release dated December 6, 2011). Four drill rigs are currently active at the project site with initial drill core being logged and prepped for assay analysis.

The overall objective at Bend will be to evaluate the potential of the deposit and establish an initial NI 43-101 compliant resource estimate based on 6,000 meters of diamond drilling in 2012. The Company also plans on conducting pulse EM surveys to form a better understanding of the continuity and potential extensions of mineralization at Bend.

The Bend deposit is located 35 miles southeast of the former producing Flambeau mine and is located in the world-class Penokean Volcanic belt, which hosts 15 known volcanogenic massive sulfide (VMS) occurrences totaling 120 million tonnes of mineralization.

Historical resource evaluations at Bend (non NI 43-101 compliant) by the Jump River Joint Venture ("JRJV") between Asarco LLC and Lehman & Associates in 1992 estimated the deposit contains 3 million tonnes grading 2.4% copper, 1.4 g/t gold and 13.7 g/t silver. In addition, a separate gold zone containing 1.23 million tonnes of 4.7 g/t gold and .31% copper was delineated in historic technical reports (non NI 43-101 compliant) and also remains open in all directions. The Company believes the mineral resource estimates to be relevant and accurate. The report is on file with the Bureau of Land Management.

The historic resource estimate was classified using USGS "geologic resource" standards and therefore is non-compliant to NI 43-101 Mineral Resources and Mineral Reserves Standards, and should therefore not be relied upon.

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About The Aquila/HudBay Exploration Alliance

The Alliance is an exploration agreement between Aquila and HudBay to explore for base metal projects in designated areas throughout North America. The targets qualifying as alliance targets will be fully funded by HudBay for the first US$2 million in expenditures, at which time a 50/50 joint venture will be established. HudBay will have the right to earn an additional 15% interest in alliance joint ventures by funding the projects through feasibility and permit application. The strategic Exploration Alliance will enable Aquila to target high potential base metal projects without initial dilution to its shareholders. For more information on the Aquila Alliance with HudBay, please refer to the Aquila Alliance section of our website.

The Alliance excludes the Back Forty JV which is covered by a separate agreement with HudBay.

About Aquila Resources Inc.

Aquila Resources Inc. (TSX:AQA)(OTCQX:AQARF)(FRANKFURT:JM4A) 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 rapidly expanding its presence and moving towards an interest in production on its flagship Back Forty Project through a joint venture with HudBay Minerals Inc. (TSX:HBM)(NYSE:HBM). The Company has also positioned itself for future growth by acquiring new base metal deposits under a Strategic Exploration Alliance with HudBay as well as through the acquisition of 100% owned precious metal exploration properties. Leading the way is an experienced management and technical team that have identified significant high-grade base and precious metal properties. For more information, please visit

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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