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We refer to the joint takeover offer by Baosteel Resources Australia Pty Ltd (ABN 66 154 815 362) (Baosteel) and Aurizon Operations Limited (ABN 47 564 947 264) (Aurizon) (together, the Bidders) to acquire 100% of the ordinary shares in Aquila Resources Limited (ABN 81 092 002 769) (Aquila) that they do not already own for A$3.40 per share (the Offer).

The Bidders are pleased to announce that Mr. Charles Bass, a co-founder of Aquila who holds a relevant interest in approximately 10.7% of Aquila's issued ordinary shares, has informed them that he currently intends to ACCEPT the Offer in respect of all those shares, in the absence of a superior offer. Mr. Bass expects to complete his acceptance by the end of the first week of July. However, he reserves the right to revisit this.

Mr. Bass has authorised the Bidders to release his formal statement of intention, which is provided as an attachment to this announcement. Mr. Bass’ statement comes following the release of Aquila’s target’s statement on 20 June 2014, in which Aquila’s Independent Board Committee recommended Aquila shareholders ACCEPT the Offer (in due course, in the absence of a superior proposal). Mr. Tony Poli (who has a relevant interest in approximately 28.92% of Aquila's issued ordinary shares) has stated that he currently intends to ACCEPT the Offer in due course in the absence of a superior proposal. However, Mr. Poli reserved his right to revisit this.

The Bidders consider that these statements of intention from Aquila’s co-founders demonstrate the compelling nature of the Bidders’ all cash Offer, especially in the context of a declining iron ore market. Upon Mr. Bass and Mr. Poli accepting the Offer (in accordance with their current statements of intention), the Bidders will have a relevant interest in Aquila of over 50%, and the minimum acceptance condition of the Offer will be satisfied.

The Bidders encourage Aquila shareholders to ACCEPT the Offer as soon as possible.

The Offer is open now for acceptance and the Bidders encourage you to ACCEPT now.

For professional investors[1] holding at least 147,059[2] Aquila shares the Bidders have established an Institutional Acceptance Facility (IAF). Those shareholders may request the IAF participation forms from the facility operator by email to custodian@computershare.com or phone on 1800 095 862 (callers within Australia) and +61 3 9415 5401 (callers outside Australia), or from the Financial Advisers of the Bidders (details of which are below).

The Offer remains the only offer available for all Aquila shares today.

The Bidders will not increase the Offer Price.

The Bidders will not extend the Offer Period[3], which is scheduled to close at 7.00pm (Sydney time) on 11 July 2014, unless all remaining Defeating Conditions of the Offer are fulfilled or waived by them prior to that time.

ENDS For further information regarding the Offer, please contact the Bidders' advisers:

1 As defined in the Corporations Act.

2 Being the number of Aquila shares with an aggregate value of at least A$500,000, assuming a share price of A$3.40.

3 Subject to any automatic extension under the Corporations Act.