Red Hill Energy Inc.

Red Hill Energy Inc.

January 29, 2007 08:30 ET

Red Hill & Mega Uranium to Commence 2007 Mongolian Uranium Exploration Programs

Richmond Club Signed to Provide Investor Relation Services

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 29, 2007) - Red Hill Energy Inc. (TSX VENTURE:RH) (the "Company") advises that preparations for the 2007 Mongolian uranium exploration season are underway and field work will commence as soon as weather permits.

In June of 2005, Red Hill Energy and Mega Uranium Ltd (TSX:MGA) formed a strategic alliance (the "Alliance") to jointly develop Red Hill Energy's vast uranium land position in Mongolia. Red Hill Energy was appointed and remains operator of the Alliance. The current land position covers 219,862 hectares within 11 properties comprising 13 licenses.

The results of field work conducted in 2006 have provided Red Hill with a number of targets for advanced exploration in 2007. This will include gamma-spectrometry, AlphaCard and AlphaTrack radon emanation studies, Vertical Electric Sounding, downhole electric gradient surveys, reverse circulation drilling and diamond drilling.

Prospecting and mapping of the Jargalan license areas in 2006 provided new insights into the potential of the property. Two paleovalleys viewed as highly prospective for uranium deposits will be drilled later this year. An initial 1,150 meters of drilling has been planned. If results are good, the drill program will be expanded.

All of Red Hill's uranium properties received at least several days of field reconnaissance in 2006. In addition to Jargalan, the following 6 properties have been selected for further work in 2007: Ganga (Dornogovi Province), Khashaat (Dundgovi Province), Naidal (Tuv Province), Emeelt (Dornogovi Province), Elgen (Tuv Province) and Ulziit (Dornod Province). The Ulziit property is a new acquisition, having been granted to RH-Mega on 20 Dec 2006. This 5,849 hectare license in far eastern Mongolia was selected based upon information found in archives together with a verification reconnaissance trip. Several licenses deemed unfavorable for economic concentrations of uranium mineralization will be allowed to lapse in 2007. In addition to Ulziit, applications for other licenses have been submitted and negotiations are underway to purchase additional properties.

Historical information and supporting field observations made in 2006 indicate that there are drill-ready targets on the Ganga, Khashaat and Naidal properties. An initial 2,500 combined meters of drilling is budgeted for these properties.

Red Hill has selected 3 areas for exploration on its large Ganga (72000 Ha.) property and plans to drill at least 1000 meters in 2007. In 1976 previous workers discovered a roll front type uranium occurrence at 200-300 meters depth about 2 to 5 km south of the property. Red Hill geologists will search for evidence of a shallower roll front deposit within the property.

On and adjacent to Red Hill's Khashaat Property are a number of uraniferous phosphorite occurrences that have historically been known as Ore Bodies #1, #2, #3 and #4. The principal Bodies, held by International Uranium Corp, are located to the NE of the Khashaat license area. Fault-controlled Ore Body #4 is on Red Hill's property. Red Hill geologists briefly prospected Khashaat in May 2006 and found anomalous radiometric readings within the northwest part of the license area. Red Hill plans to drill an 800 metres long target on Orebody #4 this year. Red Hill has also identified uranium targets in the vicinity of Orebody #4 and in the south central part of the property.

Red Hill has not fully assessed the Naidal property through field work. However, in 2007 it intends to investigate a number of untested uranium anomalies to the north and west of the area that was the focus of previous exploration.

A brief examination of the Emeelt Property was made in June 2006. Red Hill found signs that significant uranium mineralization may be present. These include anomalous uranium in volcanic rocks showing epithermal alteration. The northwest corner of the Emeelt property will be explored in 2007. It is underlain by Jurassic-Cretaceous rhyolite, tuffs and basalts which have been intensely metasomatized. These rocks lie within the northeast trending Ulaan Nur volcano-tectonic structure that is a known uranium host. The Ulaan Nur Uranium deposit is located within this structure about 20 km to the northeast of the property.

The Elgen (Tuv Province) Property will receive first-pass attention in 2007.

In 2006, Red Hill's Canadian, Russian and Mongolian geologists also made a number of weeks-long prospecting forays to 8 areas in 6 provinces in central, southern and eastern Mongolia in order to evaluate prospective open ground for acquisition. These trips were based on information obtained from historic database files stored outside Mongolia and through discussions with highly informed semi-retired Russian geologists who participated in 1970's exploration in Mongolia. Results of these reconnaissance forays are extremely promising and as a result, certain areas were applied for in late 2006, and other applications will be made in 2007. Our Russian uranium experts have pointed out that a number of highly prospective areas, blanket-staked by numerous under- and non-financed individuals and companies in the rush of 2004 and 2005, will be coming open in 2007.

Mr. Ranjeet Sundher, President of Red Hill Energy, commented that:

"We are encouraged by last year's findings of additional highly prospective drill targets which offer our shareholders continued potential for economic Mongolian uranium discoveries."

He added that:

"2007 will be busy for Red Hill on several fronts, including uranium and coal drilling, and marketing strategies that will allow for the best shareholder return for bringing our coal assets into production in a timely and responsible fashion."

Red Hill remains committed to becoming a major source of energy for Asia through acquisition, exploration and development of its uranium and coal Properties.

In other news, Red Hill is pleased to announce it has retained the services of The Richmond Club Corp. ("Richmond Club") of Toronto, Ontario, to provide investor relations services for the Company, subject to TSX Venture Exchange approval.

The Richmond Club is a media company that showcases 3-4 companies that it feels have an excellent chance of out-performing the market over a 1-2 year period, at its monthly luncheon meetings. These companies are showcased to The Richmond club's 1900 members, through its website and at investor luncheon meetings. Richmond Club members are a mixture of brokers, fund managers analysts and high net-worth investors. Monthly Meetings are held in Toronto at the National Club, at Bay & King Street and are free of charge to brokers, fund managers, analysts and high net-worth investors.

Richmond Club will receive a monthly fee of $1,450 and will be granted 45,000 stock options vesting 25% every three months during the first 12 months at an exercise price of $0.78 per share for a period of three years from the date of this release. The term of the investor relations contract with the Richmond Club is one year.


Red Hill Energy Inc. is a junior resource company trading on the TSX-Venture Exchange under the trading symbol "RH". In addition to developing the 208.8 million tonne Ulaan Ovoo Coal Project in northern Mongolia Red Hill is also developing the Chandgana Tal Coal Project in Eastern Mongolia and has 14 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.


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
    (604) 642-COAL (2625)
    Fuller Fletcher & Associates Ltd. of London, UK
    Nick Fuller
    European Investor Inquiries
    +44 (0) 20 7256 5204
    Fuller Fletcher & Associates Ltd. of London, UK
    Samantha Fletcher
    European Investor Inquiries
    +44 (0) 20 7256 5204