Hudbay Minerals

  TORONTO, ONTARIO, Apr 26 (MARKET WIRE) --
Aquila Resources Inc. (TSX:AQA)(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.


----------------------------------------------------------------------------
                                                    3 Year                  
                          -15% Change to  Historical Price   +15% Change to 
                               Base Case         Base Case        Base Case 
----------------------------------------------------------------------------
Gold            US$ (oz)           1,124             1,332            1,520 
----------------------------------------------------------------------------
Silver          US$ (oz)           26.29             25.05            28.81 
----------------------------------------------------------------------------
Copper          US$ (oz)            2.92              3.44             3.96 
----------------------------------------------------------------------------
Zinc            US$ (oz)            0.80              0.94             1.08 
----------------------------------------------------------------------------
Pre-tax        Cashflow       85,779,000       211,794,000      355,958,000 
----------------------------------------------------------------------------
                  NPV 8%       2,858,000        73,574,000      142,958,000 
----------------------------------------------------------------------------
                    IRR              8.4%             18.2%            26.2%
----------------------------------------------------------------------------
      (i) Three year historic average (April 1, 2009 to March 31, 2012)     


    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.


----------------------------------------------------------------------------
               Metallurgical  Tonnes      Au      Ag      Cu      Pb      Zn
Category(1)             Type (000's)   (g/t)   (g/t)     (%)     (%)     (%)
----------------------------------------------------------------------------
Measured           Flotation   5,237    1.90    15.1    0.25    0.12    3.41
----------------------------------------------------------------------------
Measured               Oxide     965    2.85    31.0    0.10    0.12    0.35
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Indicated          Flotation     506    1.71    42.7    1.34    0.07    0.64
----------------------------------------------------------------------------
Indicated              Oxide     149    3.72    44.4    0.34    0.06    0.13
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Inferred           Flotation     588    1.31    37.5    1.18    0.05    0.60
----------------------------------------------------------------------------
Inferred               Oxide      91    3.86    45.0    0.64    0.03    0.09
----------------------------------------------------------------------------
(1) This preliminary economic assessment is preliminary in nature and       
includes inferred resources that are considered too speculative geologically
to have the economic considerations applied to them that would enable them  
to be categorized as mineral reserves, and there is no certainty that the   
preliminary economic assessment will be realized. Mineral resources that are
not mineral reserves do not have demonstrated economic viability            


    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 Qualified Persons involved in the preparation of the report are:        
Brian Connolly, P.Eng. Principal Mining Engineer, SRK Consulting (Canada)   
Inc.                                                                        
Douglas K. Maxwell, P.Eng., Lead Process Engineer, Lyntek Inc.              
Gregory Greenough, H. BSc., P.Geo. Senior Resource Geologist, Golder        
Associates Ltd.                                                             
Stephen Donohue, P.H. Director of the Mining Sector Services, Foth          
Infrastructure & Environment, LLC.                                          
Thomas O. Quigley, P.Geo. President and Chief Executive Officer, Aquila     
Resources Inc.                                                              
Robert Carter, P.Eng. Manager, Project Evaluation, Hudbay Minerals Inc.     


    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.

    Shares Outstanding: 90,945,168

    The Toronto Stock Exchange neither approves nor disapproves the
information contained in this News Release.

Contacts:
Aquila Resources Inc. (Toronto)
Robin Dunbar
CFO
416-203-1404
rdunbar@aquilaresources.com

Aquila Resources Inc. (U.S.)
Thomas O. Quigley
President
906-352-4024
tquigley@aquilaresources.com
www.AquilaResources.com

Copyright 2012, Market Wire, All rights reserved.