Hillsborough Resources Limited

Hillsborough Resources Limited

September 14, 2005 16:05 ET

Hillsborough Resources: Hillsborough Provides Update on Development Projects

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Sept. 14, 2005) - Hillsborough Resources Limited (TSX:HLB) is pleased to provide an update on the status of a number of the development projects it currently has in progress. This update covers the exploration and development program underway on the Five Cabin property located in Northeast British Columbia, the exploration program underway on the Bickford property located in the Northeast, the resource expansion drilling project underway at the Quinsam Mine on Vancouver Island, and the start-up development of the underground mine at Crossville, Tennessee.

Five Cabin Project

Hillsborough has made substantial progress during the summer on its Five Cabin project located southwest of Tumbler Ridge in Northeast British Columbia. Despite a shortage of drill rigs and a very wet summer, Hillsborough has completed 110 drill holes to date totaling in excess of 13,000 metres of drilling on the Five Cabin property.

At an early stage in the drilling, Hillsborough recognized the potential to have a two-stage development of the property, with the first stage being the development of what we are now calling the Horizon Mine at a targeted production level of 1.2 to 1.6 million tonnes of product per year. This mine would be developed based on two sub-areas of the property now being referred to as Barbour and Horizon. The much larger Ridge area of the Five Cabin property would form a future mine expansion with production targeted at 3 to 5 million tonnes per year.

As a result, drilling has been focused on the Barbour and Horizon areas with the intent of enabling a feasibility study to be initiated at an earlier stage. A geology report compliant with National Instrument 43-101 is currently being prepared by Norwest Corporation with completion targeted for November, to be followed in the first quarter of 2006 with a feasibility report. A second NI 43-101 geology report is planned for the Ridge area and, subject to timely completion of drilling, is targeted for early 2006.

A large diameter core bulk sample program is also currently underway at Five Cabin. The sample will be used for washability tests, for pilot oven coking tests, and for customer samples. Substantial progress has been made as well during this summer on environmental baseline monitoring and initial environmental impact assessment in support of the first steps in the regulatory approval process for the Horizon Mine development. In addition, Hillsborough is developing plans for mining trial cargos during the first and third quarters of 2006, with several Panamax cargos (approximately 65,000 tonnes each) being contemplated.

Bickford Project

Hillsborough has started a small drilling program on its Bickford property, located about 45 kilometres west of Chetwynd in Northeast British Columbia and adjacent to Highway 97. The initial program consists of 6 to 10 holes to outline the deposit and establish seam thickness and coal quality.

Historical exploration work done on this property by Gulf Canada in 1983 included several trenches across the Gething Formation coal measures exposing a number of seams, of which five have reported thicknesses greater than 1.0 metre, with cumulative thickness of 16.6 metres, and with one seam having a reported thickness of 9.26 metres (Gulf Canada Resources Inc., Goodrich Coal Property Geological Report, Assessment Report 534, 1983).

Quinsam Mine Resource Expansion

An exploration program is currently being carried out north of the current mine site on Vancouver Island with the intention of increasing the reserves and resources base to formally support mine life extension beyond the present 11 years, and to possibly support mine expansion. Hillsborough is pleased to report the results of a key drill hole located about 1.5 kilometres north of the existing 3N Mine - this hole intersected a coal seam with a thickness of 5.5 metres. Several holes drilled north of the planned 5 South Mine have also proven successful and are expected to add to the reserve and resource base. This program is being supervised by Gwyneth Cathyl-Bickford, P.Geo., an independent geologist and a Qualified Person within the context of NI 43-101.

Crossville Mine Start-Up

The start-up development of the underground Crossville Mine is in progress. The box cut excavation to develop the portal site was significantly expanded over the summer, resulting in the recovery of additional coal which is being processed through the wash plant and sold to the mine's major customer, a nearby power plant.

A full section of underground equipment is on site with commencement of underground mining now anticipated for September 26, 2005. In addition, a second continuous miner has been procured as the centre production piece for the second mining section, targeted to go into operation in the first quarter of 2006.

As part of the start-up development program, a drilling program was carried out to further delineate the coal seam and develop the resources within the underground mine area. A NI 43-101 geology report is currently being finalized to report on the geological work completed.

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, and the Crossville underground coal mine in Tennessee which is currently being brought into commercial production. We are also developing substantial metallurgical coal properties near Tumbler Ridge in the Northeast of British Columbia, as well as the Bingay Creek metallurgical coal project in the Elk Valley region of Southeast British Columbia.

David J. Slater, President & Chief Executive Officer

This release may contain forward-looking statements regarding the Company's business or financial condition. 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; 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.

Contact Information

  • Hillsborough Resources Limited
    David Slater
    President & CEO
    (604) 684-9288
    (604) 684-3178 (FAX)