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Preparations Underway for Mongolian
Coal Production
Red Hill Negotiates Purchase
of Ulaan Ovoo N.S.R.
VANCOUVER, B.C. - March 18, 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 provide an update on recent activities underway to
expedite production from Red Hill's 100% owned Ulaan Ovoo thermal coal
project ("the Project") in northern Mongolia. The preparations
are being conducted by Red Hill with the full support of Prophecy, Red
Hill's proposed merger partner. (Please see joint Prophecy and Red Hill
March 4, 2010 news)
Red Hill Energy has engaged
Wardrop Engineering Inc., a leading international mining engineering
company, to conduct a Preliminary Economic Assessment ("PEA")
on the 208 million tonne Ulaan Ovoo coal project (174.5 Measured, 35.9
Indicated and 34.3 Inferred). The new study will incorporate project
economics based on current substantial increases in international coal
prices since the project's Pre-feasibility Study was completed over 10
months ago. The PEA will also emphasize an immediate production scenario
that will utilize truck transport on existing roads to the central
railroad thereby deferring the construction of a 120km spur line. Wardrop
personnel are currently in Mongolia undertaking the PEA.
Red Hill Energy is in discussions
with international mining contractors, including those with extensive
experience operating inside Mongolia. Red Hill and Prophecy intend to finalize
mine plans and a turn-key contract to bring the Project into production
this year. Specific details will be provided in a forthcoming Red
Hill-Prophecy news release.
Red
Hill is also pleased to have entered into a royalty purchase agreement
with Dunview Services Limited, a private British Virgin Islands company,
whereby Red Hill will acquire a 2% net smelter returns royalty held by
Dunview over the mining licenses forming part of the Ulaan Ovoo project
for the payment of US$130,000 in cash and 2,000,000 Class A Shares. The
completion of the royalty purchase is conditional upon the completion of
the merger with Prophecy. The royalty purchase is subject to regulatory
approval, including the approval of the TSX Venture Exchange.
Arnold
Armstrong, Chairman and CEO of Red Hill, stated that: "We intend to
transform Red Hill from a junior company to a producer in 2010, and together
with Prophecy we will have a strong pipeline of resource projects from
which to build a company with a diversified revenue generating
base."
Additional
project information is available at www.redhillenergy.com and
www.prophecyresource.com
Prophecy
Resource Corp.
John
Lee - Chairman and CEO
For
further information:
John
Lee
Telephone
1.800.851.1528
Email:
john@prophecyresource.com
www.prophecyresource.com
Red
Hill Energy Inc.
G.
Arnold Armstrong - Chairman and CEO
For
further information:
Paul
McKenzie (President):
Telephone
604.642.COAL (2625)
Email:
info@redhillenergy.com
www.redhillenergy.com
This
news release includes certain statements that may be deemed
"forward-looking statements". All statements in this release,
other than statements of historical facts, including, without limitation,
statements regarding potential mineralization, the estimation of mineral
resources, the realization of mineral resource estimates, interpretation
of prior exploration and potential exploration results, the timing and
success of exploration activities generally, the timing and results of
future resource estimates, permitting time lines, metal prices and
currency exchange rates, availability of capital, government regulation
of exploration operations, environmental risks, reclamation, title, and
future plans and objectives of the companies are forward-looking statements
that involve various risks and uncertainties. . Although Red Hill and
Prophecy believe the expectations expressed in such forward-looking
statements are based on reasonable assumptions, s uch statements are not
guarantees of future performance and actual results or developments may
differ materially from those in the forward-looking statements.
Forward-looking statements are based on a number of material factors and
assumptions. Factors that could cause actual results to differ materially
from those in forward-looking statements include unsuccessful exploration
results, changes in project parameters as plans continue to be refined,
results of future resource estimates, future metal prices, availability
of capital and financing on acceptable terms, general economic, market or
business conditions, risks associated with operating in foreign
jurisdictions, uninsured risks, regulatory changes, defects in title,
availability of personnel, materials and equipment on a timely basis,
accidents or equipment breakdowns, delays in receiving government
approvals, unanticipated environmental impacts on operations and costs to
remedy same, and other exploration or other ris ks detailed herein and
from time to time in the filings made by the companies with securities regulators.
Readers are cautioned that mineral resources that are not mineral
reserves do not have demonstrated economic viability. Mineral exploration
and development of mines is an inherently risky business. Accordingly the
actual events may differ materially from those projected in the
forward-looking statements. For more information on Red Hill and Prophecy
and the risks and challenges of their businesses, investors should review
their filings that are available at www.sedar.com
"Neither
The TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release."
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