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JOINT NEWS RELEASE
RED HILL ENERGY TO COMMENCE DRILLING PROGRAM AT 819.7
million tonne CHANDGANA KHAVTGAI COAL PROJECT, MONGOLIA
Vancouver, British
Columbia, April 1, 2010: Red Hill Energy Inc. ("Red Hill")
(TSX-V:RH) and Prophecy Resource Corp.
("Prophecy")(TSX-V:PCY, OTC: PCYRF, Frankfurt: 3P1) announced
today that it has awarded a contract to commence a ten drill hole, 2,200
metre resource expansion drilling program in early May, 2010 at its
Chandgana Khavtgai Coal Project located in the Nyalga Coal Basin central
eastern Mongolia.
This is the largest
exploration program performed to date by Red Hill with the full support
of Prophecy Resource Corp, Red Hill's proposed merger partner. (Please
see joint Prophecy and Red Hill March 4, 2010 news)
Red Hill's 100% owned
Nyalga Coal Basin projects (Khavtgai & Tal) host a combined total of
819.7 million tonnes (330 Measured & 489. 7 Indicated) with 409
million tonnes Inferred thermal coal. The projects have a life of mine
strip ratio of 2.1 to 1, with coal seams averaging 25 to 60 meters in
thickness and low ash (< 15%) and sulphur (< 1%) contents.
The Nyagla Coal basin
contains over 4.5 billion tonnes of thermal coal, which makes it one of
the largest thermal coal basins in Mongolia.
The primary goals of the
programs are:
1. Convert over 95% of the 409 million
tonne Inferred Resource to Measured and Indicated;
2. Test the eastern portion of the
Chandgana Khavtgai resource, where geophysical surveys indicate the
boundary may extend farther eastward than previously modeled,
resulting in significant additional resources;
3. Retrieve several hundred metres of
coal core samples for additional detailed coal quality analysis;
A NI 43-101 technical
report with an updated resource statement will follow by early Fall 2010.
Red Hill Energy also has a
100% interest in the 208.8 million tonne Ulaan Ovoo thermal coal project
which the company is preparing for production by late 2010. The project
is located within 10 km of the Russian border, northern Mongolia and is
120km (75 miles) east of the Central Mongolian Railroad linking the
project to the vast coal markets of Russia and Asia. The average seam
thickness of the resource is 53.9 metres. Combined, Red Hill Energy's
Mongolian coal resource consists of 1.0285 billion tonnes Measured &
Indicated and 475.9 million tonnes Inferred.
The information concerning
Red Hill Energy's coal projects as described in this news release, has
been reviewed and approved by Mel Klohn, PGeo, a Director of Red Hill
Energy and a Qualified Person under National Instrument 43-101.
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 has a full-time office in Mongolia's capital,
Ulaanbaatar. Red Hill also owns a 100% interest in the Thor Rare Earth
Property and the Red Lithium Property, both located in Nevada, USA.
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 be lieve
the expectations expressed in such forward-looking statements are based
on reasonable assumptions, such 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 risks 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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