Red Hill Energy Inc.
TSX VENTURE : RH

Red Hill Energy Inc.

December 21, 2007 09:00 ET

Mine Engineering Studies Underway on Red Hill Energy's Ulaan Ovoo Coal Property, Mongolia

NI 43-101 Report Confirms Red Hill Energy's New Coal Discovery at Chandgana Khavtgai, Mongolia

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 21, 2007) - Red Hill Energy (TSX VENTURE:RH) reported today that engineering studies are now in progress on the Company's 100% owned Ulaan Ovoo coal project located in north central Mongolia. The company also reports that a National Instrument 43-101 report and analytical results have been completed which confirm the previously reported tonnage and quality of its significant Chandgana Khavtgai coal discovery in east central Mongolia. All three of Red Hill Energy's coal resource areas in Mongolia - representing more than one billion cumulative tonnes of thermal coal - are now National Instrument 43-101 compliant.

Ulaan Ovoo, Red Hill's northernmost coal project, contains a combined 208.8 million tonnes of high quality thermal coal (174.5 measured and 34.3 indicated tonnes) plus an additional 35.9 million tonnes of inferred coal. A scoping study by Behre Dolbear (USA) (Red Hill news release dated November 9th, last year) indicates the project is capable of supporting a surface mine with 6 million tonnes of coal production per year for 20 years. Engineering studies are now underway, expanding on the previous scoping study, in preparation for comprehensive pre-feasibility and feasibility studies.

To carry out these engineering studies for the Ulaan Ovoo project, Red Hill has hired Mr. Robert L. Purswell of Wyoming, USA, who has now relocated to Mongolia. Financial analyses, mine development, infrastructure and economic planning studies are already underway.

Mr. Purswell is a seasoned veteran in coal mine engineering and has worked extensively on many Asian and American coal mines in the capacity of General Manager, Financial Planner, Business Development and Manager of Technical Services. Mr. Purswell received an MBA from the University of Kentucky and a BS in Mining Engineering from the Colorado School of Mines.

Red Hill also expects with the first quarter of 2008 to have an independent study completed regarding the detailed specifics of transportation costs and coal sale values for accessible Asian coal markets. The study will consider not only Ulann Ovoo but also Red Hill's other two Mongolian coal projects in east central Mongolia. This marketing-related study is expected to outline short and long term demand for such coals regionally. Details regarding this study and its authorship will be provided in a future news release.

In other news, the National Instrument 43-101 report on Red Hill's 100% owned Mongolian coal discovery, Chandgana Khavtgai, has been received by the Company. Resources defined in that report are in-line with those reported in Red Hill's previous news release (dated October 25th, 2007) on this discovery. The report is being filed on www.SEDAR.com and will be summarized in a subsequent detailed news release.

Chandgana Khavtai is located in the historic Nyalga Coal Basin in east central Mongolia. Red Hill controls a second, smaller, 100% owned coal project, Chandgana Tal, located in the same basin. Resources for Chandgana Tal were summarized in a previous NI 43-101 report by Behre Dohlbear (dated September 10th, 2007). Together, these two coal deposits contain 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.

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.

Contact Information

  • Red Hill Energy Inc.
    Paul McKenzie
    Director
    (604) 642-COAL (2625)
    Email: info@redhillenergy.com
    Website: www.redhillenergy.com
    or
    Fuller Fletcher & Associates Ltd. of London, UK
    Nick Fuller
    European Investor Inquiries
    +44 (0) 20 7256 5204