Red Hill Energy Inc.
P R E SS R E
L E A S E
Trading Symbol:RH.TSX.V
RED HILL COMMISSIONS A
FULL PRE-FEASIBILITY STUDY ON THE ULAAN OVOO PROJECT TO MINARCO-MINECONSULT
OF AUSTRALIA
Vancouver,
British Columbia, June 18, 2008: Red Hill Energy (TSX-V symbol RH)
announced today that it has entered engaged Minarco-MineConsult (MMC),
based in Sydney, Australia, to prepare a comprehensive pre-feasibility
study on Red Hill's fully-owned Ulaan Ovoo coal project in northern
Mongolia.
The
pre-feasibility study will substantially enhance data generated during a
prior scoping study prepared by Behre Dolbear Inc. (USA) and several
detailed transportation and economic studies prepared earlier this year by
a Mongolia university. It will significantly extend these earlier
studies by examining in detail the following key items:
- Geology
and Reserves
-
Market Analysis
-
Mining Engineering
-
Transportation and Infrastructure
-
Hydrology
-
Economic Analysis
-
Environment
-
Labour and Community Relations
The
study will prepare detailed mine plans for each year of operation and will
expedite Red Hill's production plans at Ulaan Ovoo. The study
will rely on MMC's experience with the latest mining technology to
determine the most profitable mining and transportation scenarios.
The study will consider all aspects of the coal's journey from
the ground to the East Asian markets and will include an extensive section
on rail transport and costs that will expand transportation studies begun
last year.
Red
Hill Energy's President Ranjeet Sundher stated that:
"We
are pleased to have a firm as qualified and regionally experienced as
Minarco to work with. The completion of this extensive study will go
a long way towards our production and partnership goals."
"Ulaan
Ovoo's size, product quality, proximity to rail & major world markets
as well as its abundant water source and anticipated ease of mining bodes
well for the viability of the project."
Ulaan
Ovoo contains 208.8 million tonnes of high quality thermal coal (174.5
Measured, 34.3 Indicated) with an additional 35.9 million tonnes inferred.
The project has been granted a 30-year mining license by the
Mongolian government with a 40 year extension option. It is situated
approximately 17 kilometres (km) south of the Russian/Mongolian border and
is located within 120 km of either Russia's (north) or Mongolia's (east)
central (main) railroads. The railroads offer transportation options
to the world's 3 largest coal importing markets including Japan, Taiwan and
South Korea. Ulaan Ovoo's coal quality is particularly
desired in these markets due to its low ash, low sulfur, low nitrogen, high
volatile matter and its high calorific value averaging 5,092 kcal/kg
or 9,165 BTU/lb (on an as-received moisture basis)
These
markets can be accessed via either of Russia's massive coal exporting
centers, Vladivostok or Vanino. On the other hand China's vast
coal markets and Mongolia's main domestic coal market are accessible by
rail to the south. Mongolia's Zelter River is in immediate proximity
to Ulaan Ovoo and assures the project of abundant water. Ulaan Ovoo
coal is carried primarily in a single, near surface coal seam averaging
approximately 60 meters in thickness. The stripping ratio on the first 120
million tonnes of Ulaan Ovoo coal averages less than 1.4:1 which at 6
million tonne annual production would support a 20-year mine life.
Seven exploration licenses 100% controlled by Red Hill Energy are in
adjacent and/or surrounding basins and may lead to a significant increase
to the resource base.
The
study will be performed by MMC's team of professional geoscientists and
engineers, several of whom have extensive prior experience in Mongolia and
China. MMC will prepare the study in compliance with NI 43-101
requirements and has designated a Qualified Person as its principal
signatory. The final pre-feasibility study is anticipated
within four months.
Red
Hill Energy's total 100% owned, high quality thermal coal resources in
Mongolia, located in 2 coal basins, presently stands at over 1
billion tonnes (503.5 Measured, 503.6 Indicated) with an additional 444.9
million tonnes inferred. Red Hill's Chandgana coal projects are
located in east/central Mongolia 160 km east of Mongolia's central
railroad. CVRD of Brazil also controls an independent and very
large coal project in this basin which is contiguous to Red Hill's resource
properties.
Full
details of the above disclosure, including the Qualified Person, is
available in the Company's press releases of April 9 and March 26, 2008,
October 25, 2007 and November 9, 2006.
Minarco-MineConsult,
part of the Runge Group, is a premier international consulting and
engineering firm, with specialist expertise in mining engineering, geology,
and environmental economics. Their main office is located in Sydney,
Australia, with satellite offices in Beijing and Jakarta. MMC's core
business is technical mine planning with particular expertise in coal
mining. They have organized a team of over 300 professionals in over 12
countries, working in each of the global mining exchanges. MMC has
recently completed coal projects in Mongolia and is familiar with the
country's vast untapped resources and market potential.
ABOUT
RED HILL ENERGY INC.
Red
Hill Energy Inc. is a junior resource company trading on the TSX-Venture
Exchange under the trading symbol RH. The Company is advancing over one
billion tonnes of 100% owned coal from two Mongolian coal basins towards
production. Red Hill also has multiple uranium properties and several
gold and copper exploration projects located throughout Mongolia. Red
Hill has a strategic alliance with Mega Uranium Ltd. to jointly develop its
uranium assets and has a full-time office in Mongolia's capital,
Ulaanbaatar.
Red
Hill Energy Inc.
G.
Arnold Armstrong - Chairman and CEO
Ranjeet
Sundher - President
For
further information:
Paul
McKenzie (Director): Telephone 604.642.COAL (2625)
Email:info@redhillenergy.com
www.redhillenergy.com
European
Investor Inquiries can be directed to:
Nick
Fuller
Fuller
& Associates Ltd. of London, UK
Tel:
+44 (0) 20 7256 5204
The TSX Venture Exchange
does not accept responsibility for the adequacy or accuracy of this
release.
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