Aquila Resources Limited (?Aquila? or the ?Company?) is pleased to announce that the Company?s Board of Directors has approved the Scheme Booklet for the proposed demerger of certain of the Company?s exploration interests into a new company, Aquila Exploration Limited (?AEL?), as announced to the ASX on 23 May 2008.

The Scheme Booklet has today been lodged with the Australian Securities and Investments Commission for its review.  Subject to the approval of the Federal Court of Australia, it is anticipated that:

?                The Scheme Booklet will be distributed to Aquila shareholders for consideration in mid-September.

?                Subject to appropriate orders from the Court, shareholder meetings will be held late in October 2008.

?                The Record Date for determining entitlements to shares in AEL, is anticipated to be mid November 2008.

?                The listing of AEL is currently expected to occur in early December 2008, subject to the obtaining of the required Court, regulatory and shareholder approvals.

Aquila is also pleased to announce that it has mandated both Citigroup Global Markets Australia Pty Limited and Macquarie Capital Advisers Limited to advise the Company on strategic options to enhance shareholder value following the implementation of the demerger.

Tony Poli

Executive Chairman

For further information regarding this announcement, please contact Tony Poli.

Telephone:           (08) 9423 0111

Facsimile:             (08) 9423 0133

Email address:     mail@aquilaresources..com.au

Visit us at:              www.aquilaresources.com.au

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Issued by

Purple Communications

Level 3, 28 Kings Park Road, WEST PERTH WA 6005

Ph: 08 9485 1254     Fax: 08 6263 0455

purple@purplecom.com.au