Hillsborough Resources Limited

Hillsborough Resources Limited

July 14, 2009 12:48 ET

Hillsborough Resources Finalizes Revised Agreement With Vitol

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 14, 2009) - Hillsborough Resources Limited (TSX:HLB) ("Hillsborough", "the Corporation") is pleased to announce that a revised agreement with the Vitol Group of Companies ("Vitol") has been finalized. As part of the agreement, Hillsborough has received USD$3,032,557.78 in cash from Vitol, and approximately USD$16,000,000 of Hillsborough debt to Vitol has been cancelled. Vitol will continue to provide Hillsborough with a line of credit in the amount of CDN$6,000,000.

The revised terms of the agreement with Vitol also include the delivery of 700,000 MT of Quinsam thermal coal (+/- 10% at Vitol's option) at the base price of CDN$80/MT, which is in addition to the shipment of 68,294 tonnes at USD$130 delivered in March, 2009. Two more shipments of approximately 70,000 tonnes each are planned for 2009, and the remaining tonnage will be delivered between January 1, 2010 and December 31, 2012, with the tentative schedule of three shipments per year. In addition to tonnage and base pricing, price adjustments for quality have been revised in Hillsborough's favor.

"We are very pleased to have finalized the revisions with Vitol, who remains a major shareholder and key strategic partner of Hillsborough Resources," stated Mr. David Slater, President and CEO. "The Vitol agreement remains a cornerstone of Hillsborough's business. In addition to the very positive contribution to the Corporation's 2009 financials, the agreement ensures a stable market for a large portion of the Quinsam mine's production over the next three years."

Hillsborough is also pleased to announce the election of Mr. Emmet A. McGrath to the Board of Directors. Mr. McGrath, a Chartered Accountant, is a respected business advisor with over 30 years of experience in public accounting and private industry. He was a partner with KPMG from 1981 to 2002 and has a broad cross section of experience in Canadian industry, as well as a strong understanding of regulatory and statutory reporting requirements. Mr. McGrath currently sits on the Board of Directors of a number of organizations including Westminster Savings Credit Union (currently Chair), Selkirk Metals Corp., Bard Ventures Ltd. and Pure Diamonds Exploration Inc.

"On the behalf of Hillsborough Resources, I am delighted to welcome Emmet McGrath to the Board of Directors," stated Mr. David Slater, President and CEO of the Corporation. "With Mr. McGrath's extensive financial background in the private and public sectors, we look forward to his active involvement as Hillsborough continues to develop its mines and projects."

Mr. McGrath's appointment to the Board of Directors follows the decision by Mr. Craig Bushell to not stand for re-election to the Board on June 25, 2009. Hillsborough Resources sincerely thanks Mr. Bushell for his positive contribution to the Corporation.

About the Corporation

Hillsborough Resources Limited is a coal mining company that:

- Operates the Quinsam underground thermal mine near Campbell River, British Columbia, serving the local and west-coast U.S. cement industry and the export market.

- Is a limited partner in the Peace River Coal Limited Partnership (with 13.36%), which has substantial metallurgical coal properties both in production (Trend Mine) and under development near Tumbler Ridge, British Columbia.

- Owns the Crossville Mine in Tennessee on which options for new mine development are being evaluated but the mine remains in reclamation at this time.

- Holds the Wapiti thermal coal property north of Tumbler Ridge, and is planning development of a mine.

- Holds the Bingay Creek metallurgical coal property located in the Elk Valley region of southeast British Columbia.

Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include but are not limited to statements or information as to estimates, forecasts, future financial or operating performance of the Corporation, future production, costs of production, capital requirements, operating expenditures, reserve potential, exploration drilling, exploitation activities and activities and events or developments that we expect to occur. Often, but not always, forward-looking statements and information can be identified by the use of words such as "may", "will", "should", "plans", "expects", "intends", "anticipates", "believes", "budget", "forecasted" and "scheduled" or the negative thereof or variations thereon or similar terminology.

With respect to forward-looking statements and information contained herein, we have made numerous assumptions including among other things, assumptions about prices, anticipated costs and our ability to achieve our goals. In particular, our statements regarding future production expectation is based on current existing current resource/reserve estimates, production contracts in place, historical costs and mining conditions.

Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered by management to be reasonable and to be based on reasonable assumptions, are inherently subject to significant business, economic and competitive uncertainties and contingencies and involve known and unknown risks. Readers are cautioned that any such forward-looking statements and information are not guarantees and there can be no assurance that such statements and information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Corporation's expectations include adverse exploration or development results; interruptions in the ability of the Corporation to produce coal from any of its mines; inability to meet production volumes required; adverse due diligence findings; re-assessments of corporate or development objectives and requirements; additional technical developments and considerations; unexpected increases in the costs of producing coal; changes in international coal or transportation markets; a rapid change in the value of the Canadian dollar particularly with respect to the US dollar; a fundamental slow down in the North American, Asian or worldwide economies; and other factors. See our recent annual information form and quarterly and annual management's discussion and analysis filed on SEDAR for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information.

Although we have identified factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actual results, performance, achievements or events not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on the forward-looking statements or information. We expressly disclaim any intention or obligation to update or revise any forward-looking statements and information whether as a result of new information, future events or otherwise, except as required by law. All written and oral forward-looking statements and information attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.

Contact Information

  • Hillsborough Resources Limited
    David Slater
    President & C.E.O.
    (604) 684-9288
    Hillsborough Resources Limited
    Ian Kirk, C.A.
    (604) 684-9288
    (604) 684-3178 (FAX)