Please find below Red Hill Energy's Letter to Shareholders:
Dear Fellow Shareholder,
With the final days of 2008 upon us and a brand new year set to begin I felt this an opportune time to give recap to the year just passed and more importantly, my opinions on the year ahead.
2008 a Year of Progress:
2008 has been a year of stage setting for future growth and despite the very unfortunate collective declines to our market cap and share price I feel that the big advancements we made in 2008 may bring rewards for all Red Hill shareholders in 2009.
By March of 2008, National Instrument 43-101 Reports on Red Hill Energy's coal projects had confirmed a collective resource of high quality thermal coal from two Mongolian coal basins of 503.5 million tonnes measured, 504 million tonnes indicated and 441.1 million tonnes inferred.
By April of 2008 we received results from a preliminary non National Instrument 43-101 commissioned report indicating very favorable economic and transportation assessment scenarios from our Ulaan Ovoo property. This led us to commission a full Prefeasibility Study on the Ulaan Ovoo Project to Minarco-Mine Consult of Australia. Work on this extensive study continues and I anticipate making full disclosure of the study's results in the 1st quarter of 2009.
In June we arranged a non-brokered private placement of 3,500,000 Units at a price of $0.65 per Unit for proceeds of $2,275,000
And finally in September we announced that a Detailed Environmental Impact Assessment (DEIA) and Environmental Protection Plan (EPP) for our Ulaan Ovoo Coal Project had been approved by the Mongolian Ministry of Nature and the Environment. The Ulaan Ovoo Project is now fully compliant with all necessary environmental legislation.
Mongolia, Open for Business:
From a macroeconomic perspective, if one is to look for a silver lining in recent economic slowdowns in Mongolia, including increased budget deficit forecasts, it would be that the Mongolian government is now as motivated as it has ever been to get its vast undeveloped mineral deposits into production. On December 4th, 2008 the Mongolian Government led by Prime Minister Sanjaa Bayar voted to adopt a resolution that authorizes the Mongolian Government to negotiate a draft Investment Agreement for the World Class Rio Tinto / Ivanhoe Oyu Tolgoi copper/gold porphyry deposit and present it to Parliament before February 1, 2009. Within the resolution is a proposal that the government seek assistance from internationally recognized experts in concluding the agreement.
2009 and Beyond:
I am particularly encouraged by the Government's apparent willingness to want to finalize an Investment Agreement with Rio Tinto and Ivanhoe with a sense of renewed urgency. I feel that this will set a precedent for all agreements that follow including our own.
With the renewed confidence of the Mongolian Government, Mining License, and Environmental Approvals and soon to be Prefeasibility Study in hand, we will be ready to commence discussions and negotiations on our coal assets.
As the economic theorists continue to publish their conflicting opinions as to when the resource markets will turn in our favor I am reminded that good companies with high quality projects will always manage to make opportunity for themselves.
I thank you for your confidence and welcome you to contact us to discuss any aspect of the Company. We can be reached at 604.642.2625, email info@redhillenergy.com. Or visit us online at www.redhillenergy.com.
On that note I send you best wishes for a healthy, prosperous and happy new year from all of us at Red Hill Energy.
On behalf of the Board of Directors
Yours sincerely,
Ranjeet Sundher
President Red Hill Energy