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1 ASX RELEASE 3 May 2012 For personal use only Wilpeena PCI Coal Project Maiden Resource Statement Highlights: Maiden Resource Statement for the Wilpeena PCI Coal Project with the following JORC classification: A total Resource of 286Mt Indicated Resource of 28.8Mt of Rangal Coal Measures Inferred Resource of 164.1Mt of Rangal Coal Measures Initial quality testing indicates the Rangal Coal Measures will produce a PCI product Additional Inferred Resource of 93Mt of Burngrove Coal Measures PCI and thermal products Aquila Resources Limited (ASX:AQA the Company or Aquila ) is pleased to announce a maiden Resource Statement for the Wilpeena PCI Coal Project ( Wilpeena or the Project ) (100% Aquila owned). The Project is located in the Bowen Basin in central Queensland (see Figure 1 and 2). The Project is situated within EPC 959 (Wilpeena) held by Argos (Qld) Pty Ltd ( Argos ) (a 100% owned subsidiary of Aquila). The project area lies north west of EPC1013 (Walton), a tenement on which the Company has also recently announced a maiden Resource to the ASX. Regional infrastructure including the Capricorn Highway and the Blackwater rail system run through Blackwater, approximately 50km from the Project. Figure 1: Wilpeena PCI Coal Project with local transportation infrastructure. Brisbane: Level 18, 10 Eagle Street, Brisbane QLD 4000 Telephone (61) Facsimile (61) Thabazimbi: C/O Platina and Lood Avenue, Thabazimbi 0380, South Africa Telephone (27) Facsimile (27) Northern Cape: Stand 585 Opwag, Groblershoop, Northern Cape, South Africa Telephone (27) Facsimile (27) Indonesia: Level 2 Zone B Wisma Raharja, JI. TB Simatupang Kav 1, Jakarta Telephone (62) Facsimile (62)

2 Exploration Program The Project lies along a geological strike which hosts other mines and projects within the Bowen Basin. The tenement consists of 13 sub-blocks over an area of about 42 square kilometers. Coal has been intersected over the Southern 10 sub-blocks. Figure 2: Wilpeena tenement with other local mines and projects. A total of 32 holes have been drilled on the tenement (see Figure 4) with 18 of these suitable for modelling purposes. Five of the modelled holes have had coal quality work undertaken. Drill holes have intersected five coal seams that have been interpreted as a normal succession of Rangal Coal Measures with an additional three seams interpreted as Burngrove Coal Measures. Drilling has established that the area represents a faulted anticlinal structure, with most of the strata dipping to the East from sub-crops present in the centre of the tenement. Thrust faulting has caused a repeat section in one borehole and further faulting has been interpreted. The surface topography also dips to the East towards the Mackenzie River. The Rangal Coal Measure seams were intercepted across several holes in the tenement, namely the Aries, Castor, Pollux, and Pisces seams. Significant coal seam intersections were recorded in the Aries Seam which is split into two sections, the Upper (average thickness 0.60m) and Lower (average 2.42m), Castor (avg 1.17m), the Pollux (avg 1.50m) and the Pisces seam (avg 3.02m). Figure 3: Wilpeena Core from the Pollux seam WIL008CR. 2

3 Laboratory testing confirms that raw seam ash levels range from 16.6% to 33.8% adb with an average of 24.7%. The volatile matter content is low, ranging from 13% to 20% (dafb). Washability tests indicate that the Rangals coals are low ash, high yield products which is likely to see a PCI type product suitable for export with <10.0% ash. Thermal products (<15% ash) are also likely from the lower Burngrove seams. Weathering in the area is of a medium depth and all coal located above the weathering profile has been excluded from the Resource estimate. The prospective Resources are shallow to moderate depth. All seams sub-crop between 21m and 53m and extend to depths of between 92m and 186m within the tenement. Figure 4: Wilpeena 3D model highlighting seam locations and drill holes. Resource Statement The Resource Statement has been prepared over the Southern portion of the tenement (see Table 1). It has been prepared with the knowledge and under the requirements of both the JORC Code and the Australian Guidelines for Estimating and Reporting of Inventory Coal, Coal Resources and Coal Reserves (see Appendix A, for the Resource estimation parameters). In the Rangal Coal Measures, a total of 28.8Mt has been defined as an Indicated Resource. In addition, there is another 164.1Mt of Inferred Resource resulting in a total Resource of 193.0Mt. The three Burngrove Coal Measures seams have an average thickness of 0.88m, 1.64m and 1.67m and are at shallow depths, which may prove suitable for open-cut mining. The exploration borehole spacing has been determined for all reported seams and is the same for the Burngrove Coal Measures and Rangal Coal Measures. Due to limited coal quality data, the Burngrove Coal Measures Resource is classified as Inferred. All coal categories combine to give a total Resource of 286.0Mt. 3

4 Table 1: Wilpeena Resource Statement Million Tonnes (Mt) Million Tonnes Rangal C. M. Burngrove C. M. Total Indicated Inferred Total Future Work The next exploration program at Wilpeena will be undertaken to further delineate the Resource and determine detailed coal quality. In particular, drilling will occur in the northern 3 sub-blocks where the resource has not been quantified. The exploration program will target infill drilling in the south and more broad scale drilling in the north to better outline the nature of the stratigraphy, collect quality data in the most prospective coal seams and improve the level of confidence in the Resource. Tony Poli Executive Chairman For further information regarding this announcement, please contact Tony Poli. Telephone: (08) Facsimile: (08) address: mail@aquilaresources.com.au Visit us at: The information in this announcement that relates to the Resource Statement has been based on information compiled by Mr Rod Doyle, who is a full-time employee of Aquila Resources Limited. He is a qualified Geologist (BSc Geology UOW 1978 and MAppSc UNSW 1988) with some 30 years of experience in coal geology, coal mining and resource evaluation. He is a member of the Australasian Institute of Mining and Metallurgy and qualifies as a Competent Person under the JORC Code. Mr Doyle holds shares in Aquila Resources Limited. Mr Doyle consents to the inclusion in the announcement of the matters based on the information in the form and context in which it appears. Appendix A below presents comments specific to the JORC Code s Table 1. 4

5 Appendix A Estimation Parameters - JORC Table 1 Comments Sampling Techniques and Data Sampling Techniques. All coal seams are sub-surface, core sampling for coal quality work took place via 4C (100mm) coring methods. Drilling Techniques. Blade bits and hammers are used to construct open holes (sections) and core barrels are used to recover coal core to industry established standards. Drill Sample Recovery. Industry standard techniques are used for sampling. In open holes representative samples are taken and all core is logged. Core was obtained by either HQ and 4C (100mm) diameter coring techniques both triple tube operations providing excellent recovery. Recovery standards are high and typically attain 100%. Re-drills are required if target coal seams fail to obtain 95% recovery rates. Logging. All holes are geologically logged. All holes are geophysically logged with a suite of tools being used. Geophysical logs are analysed extensively and used to confirm and correct geological logs. The geophysical suite of logs includes verticality logs all holes are planned to be vertical. Redrills are required if the hole is greater than 10% off verticality. Core photography is undertaken on all core and chips. Chips are also sampled. Sub-sampling Techniques and Sample Preparation. All coal core (including roof and floor dilution sample) is sampled and placed into labelled bags to ensure proper Chain of Custody. It is then transported to the laboratory for testing purposes. The laboratory continues with the Chain of Custody requirements. Quality of Assay Data and Laboratory Tests. The sample selection is determined in-house at Aquila and reviewed by external coal quality consultants. The latter also develop the procedures for the coal testing. Australian Standards are used for all laboratory testing. One single lab has been undertaking the analysis. They use systematic QA/QC procedures for all work and recently have become NATA registered. Results are reviewed both externally and in-house to ensure the accuracy of the data. The laboratory is NATA registered has been inspected by Aquila personnel. Verification of sampling and assaying. Pilot holes are used to assist with minimising coring distances. All holes are geophysically logged and verification of seam details is made. Assessments of coal intersections are undertaken by both Aquila geologists and external contract geologists. Geophysics allows confirmation of the presence of coal seams. Core photography provides evidence of samples taken. Sample sheets are developed in-house and reviewed externally with a final check by the laboratory, prior to testing. An external expert provides the specific testing programme to be undertaken for coal. Location of Data Points. All boreholes are set out using GPS technology and then formally surveyed by external professional contract surveyors. Any significant variation between the two measurements is investigated. The holes are located with a high degree of precision in three dimensions. Work is undertaken to Australian Standards. Data Spacing and Distribution. Initial broad scale exploration may be up to 2000m apart, but overall bores are nominally spaced at 250, 500m or 1000m depending on target seams and the evolutionary stage of the exploration programme. Ongoing exploration will continue to see the spacing reduced and the resource confidence levels improved. Orientation of Data in Relation to Geological Structure. All holes are aimed to be vertical to minimise any bias in obtaining information. Verticality surveys are also undertaken. At Wilpeena dips of the seam are known to be moderate in places and this could cause some bias when it comes to seam thickness. Audits or Reviews. Data integrity of all data; geological, survey, geophysical and laboratory information is reviewed before importing into Aquila s data base system. Aquila is in the process of converting to GBIS for storage of data base information. Reporting of Exploration Results Mineral Tenement and Land Tenure Status. Wilpeena is an Exploration Permit for Coal EPC959. It is held 100% by the Aquila Resources Limited Group. Exploration done by other Parties. Since 2006 Aquila Resources has undertaken the majority of exploration on the tenement. However, there has been historic information that has contributed to an understanding generated for this resource report. Geology. The area lies within the Bowen Basin. The regional geology of the area is reasonable well known while the geology of the tenements is becoming better known, although geological structure still requires further determination. Coal seams are well known members of the Rangal and Burngrove Coal Measures. Data Aggregation Methods. No weighting has been attributed to any results used in reporting these resources. For the purposes of the resource definition an open cut process has been considered for all resource recovery. A minimum thickness of 0.30m has been used for all seams. Relationship between Mineralisation Widths and Intercept Lengths. The vertical bores have seams which dip and suggests that there could be a minor error over estimate of seam thickness measurements. Further work will help to resolve this more precisely. Diagrams. Location maps of the tenement and boreholes with resource polygons are the diagrams used here. The formal report has diagrams covering all suggested requirements. Balanced Reporting. In the formal Resource Report all Coal Quality data is reported in both Raw and Washed data sets with the aim to give an overall view of the nature of coal present in the tenements. Other Substantive Exploration Data. To date no gas data has been collected by Aquila Resources on this tenements. Although it is known that gas companies have also been exploring the area for gas at greater depths. Further Work. A 2D trial seismic line is planned to obtain data capture parameters. Future exploration drilling is proposed to firm up further resources and improve coal quality understanding as well as resource confidence levels. Estimation and Reporting of Mineral Resources Database Integrity. Data recorded in the field is checked using Log Check, software designed to ensure data accuracy before being placed into Aquila s database. Data validation and checks are undertaken both internally and by external consultants. Geological Interpretation. Geological interpretation of seam continuity is at a stage where confidence is growing. The numerous coal seams intersected and the bore holes present suggest that confidence in the overall stratigraphy could be improved. The nature of geological structures is at a low level of confidence. 5

6 Dimensions. The tenement is battle axe in shape and covers an area of about 42km 2, approx. 10km long by 4km long with the riser. Coal resources have been defined from most (although not all) coal seams present. Coal seams generally range in thickness from greater than 0.40m up to 4.15m. Depths ranging from 20m to approximately 200m. Estimation and Modelling Techniques. Modelling has been undertaken using Gemcom s Minex software by people trained in its use. Extrapolation of data does not extend past confidence levels described in the Australian Guidelines for Estimating and Reporting of Inventory Coal, Coal Resources and Coal Reserves. Moisture. At this stage there is insufficient moisture levels taken to have confidence to determine precise In-Situ Moisture values. For this reason a comparatively conservative value of 1.55 has been used across the board for all resource calculations. During the next exploration programme data will be obtained to improve this for overall confidence in coal quality across the tenement. Cut-off Parameters. A minimum seam thickness cut off for all seams has been 0.30m. The suggested product for these coals is PCI/thermal, but further work will define if any coking coal can be recovered from the coal seams present. All seams have sub/outcrop within the tenements and dip to the east. Resources have been terminated on a boundary 20m inside the tenement and by data in the north east of the tenement. Mining Factors or Assumptions. All seams are considered suitable for open cut operations. However, underground mining operations may also be considered as more information comes to hand and as the seams get deeper. The Fairhill Formation is inferred to underlie the Burngrove Coal Measures, but has not been considered in this assessment. Metallurgical Factors or Assumptions. At this stage it is unknown if coking coal will be mined from this tenement. Bulk Density. No assumptions have been made regarding bulk density. Classification. As well as the JORC code the Australian Guidelines for Estimating and Reporting of Inventory Coal, Coal Resources and Coal Reserves has been adhered to in defining resource categories. Audits or Reviews. A formal/external audit of this resource will be undertaken during 2012/2013. Discussion of Relative Accuracy/Confidence. Based on the data available the degree of accuracy of this statement is moderate. The process for calculation has used; Standards, Guidelines and the JORC Code along with best practice where available to define the resource estimates provided. Estimation and Reporting of Ore Reserves No reserves have been determined at this stage of investigations. 6