Hillsborough Resources Limited

Hillsborough Resources Limited

July 19, 2007 09:52 ET

Hillsborough Elects to Not Participate in Peace River Coal Program and Budget

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 19, 2007) - Hillsborough Resources Limited (TSX:HLB) ("Hillsborough" or the "Corporation") today announced that it has elected to not participate in the 2007 operating program and budget for the Peace River Coal Limited Partnership. Hillsborough has also been advised that the full amount of the program and budget will be funded by one or both of the other limited partners, such that the program and budget may proceed as planned.

As previously announced, the proposed 2007 program and budget totals $53 million, and participation by Hillsborough in its pro rata share of that program would have entailed a net funding requirement to the Corporation of approximately $11.2 million. Participation in any proposed program and budget by the partners is not obligatory under the terms of the limited partnership agreement, with each partner able to elect to participate partially or not at all but subject to dilution provisions. Hillsborough conducted an evaluation of the investment merits of participation in the 2007 program and budget, and from that analysis determined that the cost at which the necessary finance could be arranged was too high relative to the investment merits. Hillsborough has accordingly elected to not participate in the 2007 operating program and budget, and will instead take the resulting dilution in its participating interest.

"What is important to recognize", stated David Slater, President & CEO of Hillsborough, "is that Hillsborough's election to not participate in funding the 2007 program is specific only to this particular program, and only to this particular incremental investment decision. Our support for Peace River Coal is strong, and we remain fully confident in Peace River Coal's long term strategic plan and our overall PRC investment."

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
    Cathy Hume
    (416) 868-1079 ext. 231
    (416) 868-6198 (FAX)
    Email: cathy@chfir.com