Hillsborough Resources Limited

Hillsborough Resources Limited

March 31, 2006 18:42 ET

Hillsborough Resources: Hillsborough Announces Fourth Quarter and Full Year Results for 2005

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 31, 2006) - Hillsborough Resources Limited (TSX:HLB) is pleased to announce its financial results for the year ending December 31, 2005, as well as the final quarter of 2005. All amounts are measured and reported in Canadian dollars.

Years Ended Three Months
December 31 Ended December 31

2005 2004 2005 2004
------------- ------------- ------------ ------------
Net earnings
(loss) $ 1,141,024 $ 1,811,056 $ (226,053)$ 172,645
per share
- basic $ 0.03 $ 0.06 $ 0.00 $ 0.01
per share
- diluted $ 0.03 $ 0.05 $ 0.00 $ 0.00

Coal revenues $22.6 million $23.4 million $5.5 million $4.9 million
Clean coal
sold - tonnes 474,412 492,859 118,009 110,567

The financial results and operational highlights for the 2005 fiscal year were as follows:

- A reduction in year-over-year earnings of $670,000 resulting from the following:

- Higher general and administration costs associated with the Northeast BC properties

- Consolidated production costs in the fourth quarter due to the inclusion of Crossville Coal as it ramps up its Tennessee operations, with Crossville's operating loss during the first three months of it's production start-up period being $1.2 million including asset retirement obligation accretion expense of $170,907

- Offsetting the above, a gain of $1.3 million was recognized during the year from a future income tax recovery resulting from the renunciation of flow-through expenditures in year

- During 2005, Hillsborough acquired eleven northeast properties, totaling some 100,000 acres, and embarked on a substantial and extensive exploration program to confirm resource estimates of metallurgical coal

- Discussions and negotiations held in 2005 with Anglo Coal, a subsidiary of Anglo American plc, for an agreement on certain of the Northeast properties. As a result, a formal Coal Projects Agreement was executed between Hillsborough and Anglo Coal in early February, 2006

- Drilled off the Bingay Creek metallurgical coal property in the Elk Valley area of Southwestern BC, and established a significant measured resource

- Finalized a three year extension of a contract with a major customer at Quinsam at an increased price

- Commenced mining at Crossville, Tennessee, initially by way of a box-cut taken to expose the underground access portals, and on September 27th, 2005, by way of a conventional, room and pillar underground mine

Hillsborough's audited consolidated financial statements for the year ended December 31, 2005 have been prepared in accordance with Canadian generally accepted accounting principles. The consolidated financial statements and management's discussion and analysis of financial condition and results of operations, as well as additional information relating to Hillsborough are available on SEDAR at www.sedar.com as well as on Hillsborough's website at www.hillsboroughresources.com.

Mr. David Slater, President & CEO of Hillsborough, stated, "On their face, the financial results for 2005 were disappointing. However, when taken in the context of the substantial increase in activity that took place during the year, and the high level of administrative and professional fees needed to bring these projects to fruition, they can be regarded as acceptable. The work that has been done in 2005 will pay back to Hillsborough in subsequent years."

David J. Slater, President & Chief Executive Officer

This release may contain forward-looking statements regarding the Company's business or financial condition. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Actual results could differ materially from those described in this news release as a result of factors including but not limited to the following: adverse exploration or development results; 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. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements.

Contact Information

  • Hillsborough Resources Limited
    David J. Slater
    President & Chief Executive Officer
    (604) 684-9288
    (604) 684-3178 (FAX)