AQUILA · PDF filewith Orion Mine Finance: •Acquisition of 75% of Aquila’s life of mine silver ... President of TMX Equicom + 20 years of capital markets experience

TSX: AQA | INVESTOR PRESENTATION

AQUILA RESOURCESAdvancing the gold- and zinc-rich Back Forty Project

TSX: AQA

Investor Presentation | January 2016


Disclaimer

2

This presentation contains certain forward-looking statements within the meaning of applicable Canadian securities legislation. 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" and similar expressions suggesting

future outcomes or statements regarding an outlook.

Forward-looking statements relate to any matters that are not historical facts and statements of our beliefs, intentions and expectations about developments,

results and events which will or may occur in the future, which out limitation, statement with respect to: (i) the economic analysis contained in the PEA; (ii) the

development plan of the PEA and results thereof; (iii) capital expenditure programs; (iv) the quality or quantity of the mineral resources subject to estimates by

Aquila; and (v) work plans to be conducted by Aquila.

These and other forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the

ability of Aquila to control or predict, that may cause their actual results, performance or achievements to be materially different from those expressed or implied

thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out herein. Aquila expressly disclaims any obligation to

update forward-looking information except as required by applicable law. Such forward-looking information represents Aquila’s best judgment based on

information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised

not to place undue reliance on forward-looking statements or information. Furthermore, mineral resources that are not mineral reserves do not have

demonstrated economic viability.

Thomas O. Quigley, Vice President of Exploration for Aquila Resources, is the Qualified Person for the Company as described in National Instrument 43-101 and isresponsible for the contents of this presentation.

TSX: AQA | INVESTOR PRESENTATION 3

• Focused on high-grade polymetallic assets in the Great Lakes Region

• Flagship Back Forty demonstrates strong economics

• Strong balance sheet post close of $20.75M financing by Orion

• Upside potential to improve economics and expand deposit

• Potential to unlock value with near-term permitting and feasibility study milestones

3

Investment Highlights


$282.2MPre-tax NPV

38.8%Pre-tax IRR


Orion Transaction | Highlights

Funding drives next phase of project development

• Closed multi-level financing agreement with Orion Mine Finance:

• Acquisition of 75% of Aquila’s life of mine silver production for US$17.25 million

• $3.5 million equity financing

• Each $0.13 Unit consists of one common share and one-half of a warrant

• Pay an additional US$4.00 per ounce of silver delivered under the streaming agreement

• Repurchased existing royalties at Back Forty• Net smelter return (NSR) royalty from Hudbay

for US$1 million in cash and issue $225,000 worth of common shares

• Distributable net income (DNI) royalty from Vale Exploration USA for $4 million in cash

$20.75MMulti-level financing agreement

4


• Strategic focus on high-grade assets

• Back Forty, Bend Copper-Gold, and Reef Gold located along the Penokean Volcanic Belt

• Flagship Back Forty is a gold- and zinc-rich deposit

• Expected to be a low-cost producer located in Michigan’s Upper Peninsula

• $70M invested to-date

• Region marked by permitting and acquisition activity

Focus on the Great Lakes Region

Region with World-Class Potential

Lake Superior

BENDREEF

BACK FORTY

Upper Peninsula

MichiganWisconsin

IllinoisIndiana

Ohio

LakeMichigan

PENOKEAN VOLCANIC BELT

OTHER MININGPROJECTS

MIDCONTINENTRIFT SYSTEM

Copperwood Project White Pine Mine Eagle Nickel/Copper Mine

Flambeau Mine Crandon Deposit


Back Forty | PEA Economics

Strong PEA Results Validate Decision to Acquire 100% Interest in Back Forty

6

• New PEA includes 2013 resource estimate

• Contemplates mining 16.1Mt over 16 years • 12.5Mt open-pit• 3.6Mt underground

• Average OPEX of $29.25/tonne for open-pit & $66.20/tonne for underground

• Total estimated initial capital cost of $261M • $177M direct pre-production CAPEX; • $44M contingency; and,• $40M of indirect and owner’s costs.

• Potential to develop reduced-CAPEX high-grade initial phase operation

Pre-Tax After-TaxNPV @ 6%

$282.2M $210.8M

IRR

38.8% 32.0%

Payback Period

1.4 years 1.8 years

PEA Metal Prices: Gold: $1,293/oz; Zinc: $0.96/lb; Silver: $20.46/oz; Copper: $3.18/lb; Lead: $0.96/lb

The PEA is preliminary in nature and includes inferred mineral 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. There is no certainty that the preliminary economic assessment will be realized.


Back Forty | Production Highlights

Diverse Revenue Streams

7

Production Parameters

Mine Life 16 years

Throughput 5,350 tpd

Total Payable Production

Gold 532K oz

Zinc 721M lbs

Copper 74M lbs

Silver 4,645K oz

Lead 21M lbs

Payable Metals Mix

Gold | 40%

Zinc| 40%

Copper| 14%

Silver | 5 % Lead | 1%


Back Forty | Recovery Rates

Solid Recovery Rates Contribute to Strong Project Economics

8

Average Metallurgical Recovery*Ore Type Recovery %

Flotation Only

Cu**

82.5%

Pb**

72.9%

Zn**

91.0%

Au 50.5%

Ag 46.6%

LeachOnly

Au 90.1%Ag 45.3%

The Project will support 4 product streams:

Gold – Silver doréZinc concentrate Copper concentrate Lead concentrate

*As calculated from 2014 PEA (Base Case). **Values are weighted averages of ore types where the specified metal is recovered


Economically Viable Against Commodity Price Fluctuations

9

Back Forty | Sensitivity Analysis

Base Case-15%

Base Case Base Case+ 15%

Gold $1,099/oz $1,293/oz $1,487/oz

Silver $17.39/oz $20.46/oz $23.53/oz

Zinc $0.82/lb $0.96/lb $1.10/lb

Copper $2.70/lb $3.18/lb $3.66/lb

Lead $0.82/lb $0.96/lb $1.10/lb

Pre-Tax

NPV @ 6% $122.3M $282.2M $440.6M

IRR 23.7% 38.8% 52.0%

Payback Period 2.8 years 1.4 years 0.9 years

After-Tax

NPV @6% $95.2M $210.8M $324.8M

IRR 20.2% 32.0% 42%

Payback Period 3.1 years 1.8 years 1.2 years


~90% of Resources are in M&I Category

Back Forty | Mineral Resources*

*Mineral resources are not mineral reserves and do not have demonstrated economic viability. NSR cut-off values for the 2013 resource estimate 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. 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. Refer to the February 4, 2013 press release for full cautionary language and disclosures.

Category Tonnes Au (g/t) Ag

(g/t) Cu (%) Pb (%)

Zn

(%) Au (oz) Content

Zn (lbs)

Content

Measured 6,700,000 2.16 27.30 0.47 0.18 3.95 465,000 583,000,000

Indicated 8,430,000 1.92 22.24 0.22 0.26 2.36 520,000 439,000,000

M&I 15,130,000 2.03 24.48 0.33 0.22 3.06 985,000 1,022,000,000

Inferred 2,340,000 2.07 26.53 0.36 0.33 2.20 156,000 113,000,000

TSX: AQA | INVESTOR PRESENTATION 11TSX: AQA | INVESTOR PRESENTATION

Maximize Capital Return in Early Years of Production

$129.4MPre-tax NPV

38.6%Pre-tax IRR

$100.8MInitial Capital Cost

Project Potential

Low-CAPEX , High-grade Initial Phase Operation

• Focus on mining near-surface, high-grade zones

• Benefits include:• Attractive economic returns• Mitigation against start-up risks• Significant optionality over the long-

term

• Feasibility study will better define economics


Potential to Extend Mine Life and Improve Project Economics

• Potential to expand underground resource

• Ore body open at depth in two directions

• VMS deposits occur in clusters

• Focus is on identified gossans

• Q4 2015 - 1,000 metre near-mine drill program produced encouraging assay results

Project Potential | Exploration



Back Forty | Near-Surface Mineralization

Deposit Open at Depth Creates Upside Potential

2014 PEA Underground Resource (diluted and

extracted)2,734,002 tonnes (M +I)

911,334 tonnes

(Inferred)

2014 PEA Open Pit Resource (diluted)

12,256,000 tonnes M+I244,000 tonnes inferred

Approx. 200 meters

Pit Shell #32 (brown) and Underground Mining Shapes (blue) from 2014 PEA


Unlocking Shareholder Value

Short-term*

Milestone Timing Status

Orion financing agreement Q1 2015 Completed

Submission of permit application Q4 2015 Completed

Start of feasibility study Q4 2015 Ongoing

Near-mine exploration program Q4 2015 Ongoing

Metallurgical test work H1 2016 In progress

Completion of feasibility study H2 2016 In progress

Upcoming Catalysts

Longer-term

Mine development

Exploration/development of Aquila’s second generation assets

Generating value from REBgold’sassets

*Activities are dependent on financing and macro-economic conditions



Expanded Management Team

15

Management Directors Barry Hildred, CEO - Current Chairman of Aldridge Minerals. Founder and Former President of TMX Equicom + 20 years of capital markets experience.

Edward Munden, Interim Chairman - Currently a Director and Co-Founder of private investment company and a Director of Mustang Minerals. Co-founded a NASDAQ-traded energy company and held senior positions until it was sold in 2001, +35 years of experience in energy, mining and technology industry.

Andrew Boushy, Vice President , P.Eng - 25+ years of experience in project delivery, engineering design, strategic planning, contract management, construction and operational improvement. Previously with Ausenco Canada, Mining and Minerals, Xstrata Nickel, Kinross Gold, Hatch Africa and the Nuclear Waste Management Organization.

Barry Hildred (refer to Management column)

Stephanie Malec, CFO – 15+ years of experience combining accounting, financial reporting, public markets and mining sector work. Previously with Malbex Resources, Starfield Resources, Dundee Precious Metals, Falconbridge and PriceWaterhouseCoopers

Peter M.D. Bradshaw - Currently a Director with First Point Minerals, 45 years of international mineral exploration experience in over 30 countries with Barringer Research, Placer Dome and Orvana Minerals.

Tom Quigley, VP Exploration P. Geo - Former President and CEO of Aquila Resources Inc. & current President of Minerals Processing Corporation. Qualified Person for Aquila Resources.

Kevin Drover – President & CEO of Aurcana Corporation since 2014. 40+ years of experience in management, operations and project development with mining companies with assets around the world, including Kinross Gold, Benz Mining, Oracle Mining and Glencairn Gold.

Stephen Fabian – Currently a Principal and Director of Genus Capital Fund, listed on the LSE as the Baker Steel Resource Trust. Founder of South American Ferro Metals and formerly held positions with County NatWest and Rock Capital Partners. +25 years of experience in the mining and finance industry.

Andrew W. Dunn – Currently Managing Partner of Canadian Shield Capital and Senior Advisor of Atlas Partners. Previously spent 27 years at Deloitte, and served as Vice Chair of Deloitte Canada and Chair of its Client Cabinet

Committed to un-locking Back Forty’s Potential


Capital Structure

16

MAJOR INSTITUTIONAL SHAREHOLDERS

Hudbay Minerals 16%

Ruffer 14%

Orion 14%

Baker Steel 8%

CURRENT CAPITAL STRUCTURE

TSX AQA

Share Price (As of Jan. 8 2016) $ 0.17

Avg. 3-mth volume 59,543

52-week range $0.10 - $0.24

Market Cap. $ 37.6M

Shares O/S 220.9M

Year End December 31

Strong Shareholder Support & Investor Backing

CURRENT OWNERSHIP STRUCTURE

Retail 40% Insiders & Institutional

60%


• Focused on high-grade polymetallic assets in the Great Lakes Region

• Flagship Back Forty demonstrates strong economics

• Strong balance sheet post close of $20.75M financing by Orion

• Upside potential to improve economics and expand deposit

• Potential to unlock value with near-term permitting and feasibility study milestones

17

Investment Highlights


$282.2MPre-tax NPV

38.8%Pre-tax IRR


Contact Information

Barry Hildred, CEO

Aquila Resources

416. 477. 6985

www.aquilaresources.com

18

Joe Racanelli

Investor Relations | NATIONAL Equicom

416. 586. 1943

[email protected]


Appendix



Back Forty | Permitting Status

• Mine Permit application submitted to Michigan Department of Environmental Quality• Application supported by Foth Infrastructure & Environment LLC and previous

work completed by Hudbay

• Application requests permits for• Nonferrous Metallic Minerals Mining• National Pollutant Discharge• Elimination System• Wetlands Protection

• Application Aquila’s underscores commitment to mining responsibly and complying with Michigan’s regulations

Permit Precedents in Place

20


Back Forty | Infrastructure

Power Supply

• 4.5km power transmission line will be built from an existing 138kV transmission line northeast of the property

• New power substation planned at the southeast corner of the project will provide power for the plant facility and mine site with 13.8kV distribution voltage

Roads/Access • Improvements to existing near and on-site roads, construction of new haulage roads• Rail line is situated ~13km east of the project site• Ports for ocean going vessels in Escanaba and Menominee, within 50 miles of project

Labour • Skilled local workforce readily available

Well-Developed Infrastructure

21


Bend Copper-Gold Project• 100%-owned VMS occurrence located in the Penokean Volcanic Belt

• >14,000 meters of historical drilling delineating a non-43-101 compliant resource*

• 2.7 M tonnes grading 2.4% copper, 1.4 g/t gold and 13.7 g/t silver in copper zone

• 1.12 M tonnes grading 4.7 g/t gold and .31% copper in gold zone

• Aquila drilling in 2012 indicates major expansion

Reef Gold Project • 100%-owned, high- grade gold mineralization potentially amenable to low-cost, open-pit mining

• Historic drilling delineated a non-43-101 compliant resource* of 140,564 contained gold ounces (412,410 tonnes @ 10.6 g/t)

• Phase III drill program to expand and define resource

• Aquila drilling shows broad zones of gently-dipping mineralization open in all directions

*The Company is not treating the historical estimates as current mineral resources or mineral reserves and the historical estimates should not be relied upon or understood to indicate the existence of reserves or resources.

Attractive Pipeline of Future Projects

Second Generation Assets


Zinc | Declining Supply to Create Global Deficit

15891

16037

15000

17500

2018

Total Refined Supply Total Consumption

Supply vs. Demand*

146kt Global zinc deficit in 2018

*Source: BMO Capital Markets

• Demand continues to grow 3% - 5%annually

• Increasing in line with globaleconomic growth

• Almost 50% is used in galvanizingsteel

• 10% - 14% of global production is set tocome offline within next 2-3 years

• No significant new deposits discoveredsince 1990s

• New zinc start-ups will be delayed due tocurrent capital constraints

23

(kt)


Other Assets from Merger with REBgold

• Potential to earn 50% - 80% interest on properties in Finland from Joint Venture with Belvedere Resources:

• Kiimala

• Seven drilled gold occurrences occurring from surface, further exploration targets have been identified

• Rantasalmi

• Multi-million ounce target potential

• Three gold deposits identified that have high-grade and bulk tonnage potential

• Mineralization open at depth and strike

• REBgold’s proprietary bioleaching technology

• Utilizes bacteria in the extraction of precious and base metals from complex refractory ores and concentrates

24

Portfolio of Assets Generate Further Shareholder Value


Milestone Payments to Hudbay Minerals

25

Amount Timeline

$3 Million • Payable upon completion of financing tied to start of construction at Back Forty

• Up to 50% payable in Aquila shares

$2 Million • Payable 90 days after start of commercial production



• First milestone payment due January 2024• 1% NSR was repurchased from Hudbay in April 2015 concurrent

with Orion transaction

Based on purchase of Hudbay’s 51% interest in Back Forty

Documents

AQUILA · PDF filewith Orion Mine Finance: •Acquisition of 75% of Aquila’s life of mine silver ... President of TMX Equicom + 20 years of capital markets experience