Red Hill Energy Inc.: NI 43-101 Report and Assays Completed on the Chandgana Khavtgai Project Confirms Large, High Quality Thermal Coal Discovery in Mongoliaadmin
March 26, 2008) – Red Hill Energy reported today that further to the December 21, 2007 news release, a National Instrument 43-101 report and assay results have been received by the company on its very significant Chandgana Khavtgai coal project. All three of Red Hill Energy’s coal resources are now National Instrument 43-101 compliant as to tonnage and quality.
The National Instrument 43-101 report on Red Hill’s 100% owned Mongolian coal discovery, Chandgana Khavtgai, has been received by the Company and is filed on www.SEDAR.com where interested parties can review it in its entirety. Chandgana Khavtai is located in the historic Nyalga Coal Basin in east central Mongolia.
In addition to Chandgana Khavtai, Red Hill Energy also controls a second, smaller, 100% owned coal project in the Nyalaga Basin called Chandgana Tal 9 kilometres northeast of Chandgana Khavtgai. The Nyalga Coal Basin is linked by a 160 km, well-maintained paved highway to a short feeder railroad connecting to the central Mongolian railroad. The National Instrument 43-101 report on Chandgana Khavtai was prepared by Mr. Christopher M. Kravits of Utah, United States, and is coauthored by Mr. Eric Robeck, Red Hill Energy’s V.P. of Coal Exploration and Development.
Coal resources were estimated by correlating the coal seams between drill holes. The coal seam thicknesses were selected according to Canadian Geological Survey Paper 88-21 as referenced by NI 43-101. The resulting coal thickness data were computer modeled using a proprietary modeling algorithm called ABOS. The modeled thicknesses were clipped to license boundaries, geologic limits, and the minimum coal seam thickness allowed by Paper 88-21. The modeled coal thickness was converted to a volume, and then converted to tonnes using the average laboratory-determined coal density. The assurance of existence areas (measured, indicated and inferred) were determined according to NI 43-101 and used to provide a breakdown of the resource.
The total Chandgana Khavtgai resource from Mr. Kravits’ report is as follows: 187.7 million tonnes are measured and 469.2 million tonnes are indicated, for a total resource of 656.9 million tonnes. An additional 405.2 million tonnes are categorized as inferred.
Specifics on coal resource quantities from all three of Red Hill’s 100% owned coal projects can be viewed in the following table. All values represent millions of tonnes.
Assay results from Chandgana Khavtgai confirm a high quality, very desirable thermal coal, similar in quality to Chandgana Tal’s previously reported assays. Specific quality details from each of Red Hill Energy’s three resource projects can be viewed in the following table. Also included are the very low stripping ratios and significant average coal seam thicknesses from each project.
Mongolia’s historic Nyalga Coal Basin is controlled almost entirely by Red Hill Energy and CVRD of Brazil. Both of Red Hill’s 100% owned Chandgana coal projects are contiguous to and share the same massive coal seam as CVRD’s 100% owned, major Mongolian coal project. CVRD of Brazil is the world’s largest mining company.
Combined, Red Hill’s Chandgana projects host 798.2 million tonnes of measured and indicated high quality thermal coal with an additional 405.2 million tonnes inferred.
The coal quality found in the Nyalga Coal Basin is a likely candidate for thermal power generation as well as conversion to gas or liquid fuels. Coal of comparable quality is currently being profitably mined in Mongolia, Russia and China.
Red Hill’s coal projects are all amenable to low cost surface mining operations and are accessible to the world’s largest coal consuming nations. In all three resource projects, the coal seam outcrops, offering easy access to the projects’ primarily single, massive coal seams. The Nyalga Coal Basin is linked by road to Mongolia’s capital Ulaanbaatar (300 km to the west) and to the Mongolian Railroad (160 km to the west), providing direct rail access to China to the south and Russia to the north. Ulaan Ovoo, Red Hill’s northernmost project, is within 120 km of the railroad and is also linked by a good quality road.
A Transportation and Economic assessment of the Ulaan Ovoo Project is nearing completion and is currently being evaluated by Red Hill Energy. The study outlines short and long term demand for Ulaan Ovoo coal, updates anticipated mine production and operation costs, and transportation costs for several marketing scenarios. Details will be outlined by Red Hill Energy in a forthcoming news release.
Mr. Christopher M. Kravits is the Qualified Person for the Chandgana Khavtgai resource area study. He received a BA from Slippery Rock University (USA) and an MS from Southern Illinois University-Carbondale (USA). He has 31 years of experience in the coal industry and is a certified and licensed professional geologist. Mr. Kravits has managed coal exploration projects, evaluated coal resources and has been responsible for or supported coal resource acquisition, mine geology and coal quality, environmental and marketing functions.
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
Forward-Looking Statements: Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading “Risk Factors” and elsewhere in the Corporation’s periodic filings with Canadian Securities Regulators. Such information contained herein represents management’s best judgment as of the date hereof based on information currently available. The companies do not assume the obligation to update any forward-looking statement.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Paul McKenzie Red Hill Energy Inc. Director (604) 642-COAL (2625) Email: email@example.com
Source: Red Hill Energy Inc.