JOINT NEWS
RELEASE
RED HILL AND
PROPHECY ANNOUNCE COMPLETION OF MERGER, NEW COMPANY TO TRADE ON MONDAY
UNDER 'PCYV'
Vancouver,
British Columbia, April 14, 2010: Red Hill Energy Inc. ("Red
Hill") (TSX-V:RH)
and Prophecy Resource Corp. ("Prophecy")(TSX-V:PCY, OTC: PCYRF,
Frankfurt: 3P1) are pleased to announce that the merger of Red Hill and
Prophecy (see joint Red Hill / Prophecy news, January 21, 2010) will be
completed on April 16, 2010 (the "Closing Date").
As the
first step in the plan of arrangement (the "Arrangement") set
forth in the Arrangement Agreement dated March 3, 2010, Red Hill intends
to transfer $1,000,000 and its non-coal assets, principally the Red
Lithium Property near Clayton Valley, Nevada, the Thor Rare Earth
Property in Nevada and the Banbury Property in British Columbia, to Elissa Resources Ltd., ("Elissa")
in exchange for Elissa common shares.
Red Hill
will then create a new class of common shares called "Class A
Shares". Prophecy will be amalgamated with a wholly-owned
subsidiary of Red Hill, and the common shares of Prophecy will be
voluntarily delisted from the TSX Venture Exchange (the
"TSX-V"). Each one Red Hill share will be exchanged for 0.92 of
a Class A Share and 0.25 of a Elissa common
shares, and each Prophecy share will be exchanged for one Class A Share. In
addition, each Red Hill stock option and warrant, including the Red Hill
Placement Warrants, will entitle the holder to receive 0.92 Class A Share
and each Prophecy stock option or warrant, including the Placement
Warrants, will be exchanged for an option or warrant to acquire one Class
A Share.
Following
the Arrangement, Red Hill has agreed to change its name to "Prophecy
Resource Corp." ("New Prophecy") and will have a
total of approximately 96,672,974 Class A Shares issued and outstanding,
as well as options and warrants entitling holders to purchase
approximately 30,088,865 Class A Shares, comprising 6,996,600 options at
exercise prices ranging from $0.25 to $1.03 and having expiry dates
ranging from February 14, 2012 to March 24, 2015 and 23,092,265 warrants
at exercise prices ranging from $0.10 to $1.36 and having expiry dates
ranging from May 31, 2010 to March 31, 2012.
As a result
of the Arrangement, the Red Hill and Prophecy securityholders will be
Class A securityholders of New Prophecy. As part of the Arrangement, the
Class A Shares of New Prophecy will be renamed as new common shares.
Elissa will
have 16,455,758 common shares issued and outstanding, all of which will
be held by former Red Hill shareholders and no options or warrants
outstanding.
The last
day of trading of the common shares of Red Hill and the common shares of
Prophecy on the TSX-V will be Thursday, April 15, 2010. At the open on
Friday, April 16, 2010, each of Red Hill and Prophecy will be halted for
trading with the common shares of Prophecy delisting from the TSX-V at
the close of business. On Monday April, 19, 2010, the shares of New
Prophecy will be listed and posted for trading under the symbol PCY.V.
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