Red Hill Energy Inc.

Red Hill Energy Inc.

November 24, 2008 09:00 ET

Red Hill Energy Inc.: Ulaan Ovoo Pre-Feasibility Study in Final Stages

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 24, 2008) - Red Hill Energy (TSX VENTURE:RH) announced today that the Ulaan Ovoo Pre-Feasbility Study (PFS) recently entered the third and final stage of completion. The study, being prepared by Minarco-MineConsult Ltd. of Australia, began in June of this year (see June 18, 2008 press release). The geological model is complete, railroad and infrastructure plans are at advanced stages of development, and preliminary economic models have been reviewed by Red Hill Energy. The mine plan in development targets a production of 6 million tonnes of coal per annum over a total mine life of about 20 years. The project consists of a single surface mining operation with low average strip ratios. The Company anticipates filing the PFS on and issuing a detailed press release in the first quarter of 2009. The project has a long term mining licence, sufficient to meet its production timeline and is fully compliant with all necessary Mongolian environmental legislation to commence production (see September 2, 2008 press release).

Red Hill's President, Ranjeet Sundher, stated that:

"The study will be extensive including detailed mine plans for each year of operation and will go a long way in allowing us to expedite Ulaan Ovoo to production."

Ulaan Ovoo contains 208.8 million tonnes of high quality thermal coal (174.5 Measured, 34.3 Indicated) with an additional 35.9 million tonnes inferred. The project has been granted a 30-year mining license by the Mongolian government with a 40-year extension option. It is situated approximately 17 kilometres (km) south of the Russian/Mongolian border and is located within 120 km of either Russia's (north) or Mongolia's (east) main railroads. The railroads offer transportation options to the world's 3 largest coal importing markets of Japan, Taiwan and South Korea. Ulaan Ovoo's coal quality is particularly desirable in these markets due to its low ash, low sulphur, low nitrogen, high volatile matter and its high calorific value averaging 5,092 kcal/kg or 9,165 BTU/lb (on an as-received moisture basis).

These markets can be accessed via either of Russia's eastern coal exporting seaports, Vostochny (Vladivostok) or Vanino. In addition, China's vast coal markets and Mongolia's domestic coal market are accessible by rail to the south. The Zelter River is in immediate proximity to Ulaan Ovoo and assures the project of abundant water for mining operations. Ulaan Ovoo coal is carried primarily in a single, near surface coal seam averaging approximately 60 meters in thickness. Stripping ratios are very low, averaging less than 2:1 (bcm/tonne) over most of the project. At an annual production capacity of 6 million tonnes, the project is capable of supporting a 20-year mine life.

Red Hill's combined 100% owned, high quality thermal coal resource in Mongolia, located in 2 coal basins, presently stands at over 1 billion tonnes (503.5 Measured, 503.6 Indicated) with an additional 444.9 million tonnes inferred. Red Hill's Chandgana coal projects are located in east/central Mongolia 160 km east of Mongolia's central railroad.

Red Hill Grants Option on Banbury Gold Project

In other news, Red Hill Energy also announced today that it has granted a three year option to a private B.C. numbered company to acquire an undivided 60% interest in its 100% owned Banbury Gold Property. The Banbury Property consists of five crown grants located in the Similkameen Division of Yale Land District near Hedley, BC. Historically there have been four periods of work on the property including an underground mining operation from 1900 to 1936 and most recently an exploration drill program in 1997.


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's Ulaan Ovoo Coal Project has a mining license and is fully compliant with all necessary environmental legislation to commence production; a Pre-Feasibility Study is the final stages of completion. Red Hill has a full-time office in Mongolia's capital, Ulaanbaatar.

Red Hill Energy Inc.

G. Arnold Armstrong - Chairman and CEO

Ranjeet Sundher - President

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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