Hillsborough Resources Limited

Hillsborough Resources Limited

November 16, 2007 15:09 ET

Hillsborough Resources Limited: Quinsam Mine Production Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 16, 2007) - Hillsborough Resources Limited (TSX:HLB) ("Hillsborough" or the "Corporation") is pleased to provide an update on thermal coal production at its wholly-owned Quinsam Mine.

The full year of production to end December 31, 2007, is now forecast to be 715,000 tonnes run-of-mine yielding 472,000 tonnes of clean product, all of which is committed to customers. For 2008 Hillsborough is budgeting production of 630,000 clean product tonnes from the current underground Mine in 2008. Of this tonnage, an estimated 230,000 product tonnes are expected to be sold into the robust export thermal market.

The recent MinQuest financing has allowed the Company to initiate further plant improvements and upgrades that, when completed, will improve coal recoveries. These improvements will serve to increase production and reduce mining costs in this quarter and into 2008. The outlook for Hillsborough is excellent.

Additional production from other sources is under evaluation, including: bulk sample tonnage from 7 South, 2 South open pit coal recovery, and re-equipping the 4 South Mine which has been on care and maintenance for three years. All additional tonnage would go to the export market.

While Hillsborough experienced some challenges in 2007 relating principally to lengthy power outages, Company management look forward to recouping this year's production shortfall in 2008 with significantly higher coal prices.

The Rising Canadian dollar Advantage

The recent strengthening of the Canadian dollar has had a net positive impact on Hillsborough. Only one of its six domestic contracts is denominated in U.S. dollars. Further, and more importantly, the Company has reclamation and other liabilities (equipment leases) which are denominated in U.S. dollars. The strength of the Canadian dollar has allowed Hillsborough to write down the balance sheet value of these liabilities vis-a-vis the Canadian dollar resulting in unrealized gains for the Company.

Although international shipments flowing from the planned increase in production will be denominated in U.S. dollars, the prices currently available in this market have far exceeded any negative impact from the interrelationship between the Canadian/U.S. dollar.

About the Corporation

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
    Email: cathy@chfir.com
    CHF Investor Relations
    Chris Haldane
    Assoc. Account Manager
    (416) 868-1079 ext.237
    (416) 868-6198 (FAX)
    Email: chris@chfir.com