TORONTO, ONTARIO--(Marketwire - April 26, 2012) - Aquila Resources Inc. (News - Market indicators)(OTCQX:AQARF)(FRANKFURT:JM4A) ("Aquila" or the "Company") is pleased to announce the highlights of the National Instrument 43-101 compliant Preliminary Economic Assessment (the "PEA") of the Back Forty Gold Zinc Project located in the Upper Peninsula of Michigan, USA. The study outlines the construction and operation of an estimated 7 year open pit mining operation of approximately 1 million tonnes of ore per year, as well as the construction of a mill, housing a sulfide flotation circuit, an oxide leach circuit, and related infrastructure. Aquila currently holds a 49% interest in the project. HudBay Minerals Inc. (TSX:HBM)(NYSE:HBM) has 51% of the project and can increase its ownership interest to 65%.

Project Economics

The high grade open pit deposit provides substantial leverage to gold and zinc prices. Revenue by metal is 48% gold and 26% zinc, 18% copper and 8% silver. Using the base case metal price assumptions below the project achieves payback of capital occurs in the third year of full production. The following table outlines a price/sensitivity analysis based on the assumptions set out in the PEA.

Project Resource

The potential economic viability of the Back Forty deposit was evaluated using measured, indicated and inferred mineral resources and a discounted pre-tax cash flow analysis. The mine plan evaluated in the PEA assessed the mining of only the near surface portion of the resource by open pit methods. Potential underground mining of deeper resources was not addressed in the PEA.

The portion of the measured mineral resources, indicated mineral resources and inferred mineral resources used for evaluation in the PEA is shown in the following table. This includes allowances for dilution and mining losses based on an assumed mining production schedule and pre-tax cash flow analysis using the Golder Associates mineral resource estimate dated November 29, 2010. The open pit mine design avoided regulated wetland disturbances, and was designed to be backfilled and reclaimed.

Project Summary

The PEA outlined the scope for the project and a summary of the key operating and cost parameters of the project are as follows:

• Proposed life of mine is approximately 7 years at a full production rate of 3,000 tonnes per day
• Net payable gross revenue of $786.8 million is from copper and zinc concentrates and gold-silver alloy dore
• Average unit operating costs of $36.79 per tonne mined and processed over life of the project
• Total life of mine capital of $272.3 million, includes $224.7 million for initial project capital required to build the mine, site infrastructure, sulfide flotation and oxide leach plant and purchase of new mining equipment to achieve commercial production
• The project has a pre-tax cash flow of $211.8 million and a Net Present Value (8%) of $73.6 million, 18.2% Internal Rate of Return using 3 year historical metal prices
• Over the Life of Mine (LOM), Back Forty is expected to produce 77,200 tonnes of copper concentrate, 323,500 tonnes of zinc concentrate and 295,300 ounces of gold and 2,561,700 ounces of silver contained in gold-silver alloy dore product and within the copper concentrate

Project Recommendations

Key recommendations of the report are to complete an updated resource estimate which would include drilling results from 78 holes drilled since November 2010, and will include modeling and interpretation of each mineralized domain. Additional metallurgical test work is also recommended using samples from each mineralized domain that will more accurately reflect expected production grades outlined in the PEA. Positive results from this work would support the preparation of a feasibility study for the project which will be funded by HudBay under the terms of the Operating Agreement (see press release dated March 21, 2012).

Opportunities for improvement of the project economics include:

• Incorporating additional mineral resources in the mine plan and design
• Increased definition and exploitation of separate mineral domains within the open pit
• Extending the mine life through definition of additional resources at depth and discovery of new resources in the immediate project area
• Further geotechnical investigation to evaluate potential reduction in stripping quantities
• Trade off study of owner operated fleet versus contract mining

Environmental Issues - Permitting and Community Impact

The PEA reviewed key social and environmental issues relating to the project including the proximity to the Menominee River, tailings, waste management and reclamation, water discharge, wetlands protection, archeological studies, as well as listed species and habitat protection. The report notes that environmental baseline investigations were initiated in 2007 to meet regulatory requirements and for permitting requirements. The PEA outlines the engagement of the local communities and Native American tribes. Closure plans include the back filling of the open pit, reclamation and ongoing site monitoring. The PEA notes that permitting applications will be ready for submission in 2012.

Aquila's CEO, Thomas O. Quigley, commented "The PEA provides a solid basis for the further evaluation and advancement of the Back Forty Project towards a producing mine. The project continues to provide our shareholders with excellent leverage and exposure to potential production of gold, zinc, copper and silver, and we look forward to the next level of evaluation and development."

This Technical Report conforms to the CIM Mineral Resource and Mineral Reserves definitions referred to in National Instrument (NI) 43-101, Standards of Disclosure for Mineral Projects.

The PEA will be posted on Aquila Resources Inc. company documents at www.SEDAR.com within 45 days.

About The Back Forty Project

The Back Forty Project, located in Menominee County in the Upper Peninsula of Michigan, is an advanced stage exploration project delineating a zinc and gold-rich volcanogenic massive sulfide deposit under an Operating Agreement between Aquila and HudBay Minerals Inc. (NYSE:HBM)(TSX:HBM). The Back Forty deposit is comprised of massive sulfide, stringer, gossan, and gold-only mineralization, each with high-grade components. Massive sulfide has been traced along strike for nearly 1 kilometer and to a vertical depth of 700 meters. The limit of strong hydrothermal alteration associated with the Back Forty massive sulfide has not been identified and is indicative of a very large mineralized system. For more information on the Back Forty Project, please refer to the Back Forty Project section on our website www.aquilaresources.com.

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 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 an 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 our website at 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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