Hillsborough Resources Limited

Hillsborough Resources Limited

January 17, 2008 12:26 ET

Hillsborough Announces Increase of Debenture Financing From $7 Million to $10 Million

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 17, 2008) - Hillsborough Resources Limited (TSX:HLB) is pleased to announce that it has modified and increased its previously-announced debenture financing such that it is now seeking to raise $10,000,000 in unsecured, five year, 10% convertible debentures. Under the terms of the new financing, Salman Partners will act as agent on a best efforts basis while Hillsborough's largest shareholder, MinQuest Fund 1, LP will commit a lead order of $2 million. As a result, MinQuest Fund 1, LP's stake in Hillsborough will rise to approximately 15% on a fully diluted basis.

The debentures have a 5 year term and are convertible into common shares of Hillsborough at any time up until maturity at a conversion price of $0.60 per share. After two years, the Corporation has the right, under certain circumstances, to redeem the debentures. The transaction is subject to due diligence and to regulatory approval.

The expected closing date of the transaction is February 13, 2008. Proceeds will be committed to capital equipment at the Quinsam mine and wash plant, as well as to definition drilling and feasibility work at 7 South and Quinsam North projects. Cash commitments at Hillsborough's Peace River Coal Partnership will also be addressed.

The above financing will enable Hillsborough to optimize its operations and to take full advantage of current coal prices which are unprecedented in the Company's history.

About Hillsborough Resources Limited

Hillsborough Resources Limited is a coal mining company that operates the Quinsam underground thermal coal mine in Campbell River, British Columbia, serving the local and west-coast U.S. cement industry. The Company is a limited partner in the Peace River Coal Limited Partnership, which has substantial metallurgical coal properties both in production start-up and under development near Tumbler Ridge, British Columbia. In addition, the Company is developing the proposed Wapiti thermal coal mine in the same region. Hillsborough also holds the Bingay Creek metallurgical coal property located in the Elk Valley region of southeast British Columbia.

Contact Information

  • Hillsborough Resources Limited
    David Slater
    President & C.E.O.
    (604) 684-9288
    (604) 684-3178 (FAX)
    Website: www.hillsboroughresources.com
    CHF Investor Relations
    Chris Haldane
    Associate Account Manager
    (416) 868-1079 ext 237
    (416) 868-6198 (FAX)
    Email: chris@chfir.com