Hillsborough Resources Limited
TSX : HLB

Hillsborough Resources Limited

February 20, 2008 13:07 ET

Hillsborough Updates on Peace River Coal Operations and Projects

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 20, 2008) - Hillsborough Resources Limited (TSX:HLB) ("Hillsborough" or the "Corporation") Hillsborough today provided the following update on Peace River Coal's operations as provided by Peace River Coal's management. Hillsborough has a 14.1% interest in the Peace River Coal Limited Partnership.

Operations

Peace River Coal (PRC) commenced commercial production from the Trend Mine as of the beginning of January.

Total mine production to year-end 2007 was 742,000 tonnes of product, of which 515,000 tonnes were metallurgical coal and 227,000 tonnes were by-product thermal coal. Total sales to yearend were 595,000 tonnes of metallurgical coal and 102,000 tonnes of thermal coal.

PRC's production forecast for 2008 is for 2,000,000 tonnes of run-of-mine (tROM) coal, producing 1,300,000 tonnes of product metallurgical coal and 200,000 tonnes of thermal coal. By year-end the mine expects to be at a production level of 150,000 tonnes per month, thereby increasing annual saleable production capacity to 1,800,000 tonnes of metallurgical coal.

PRC has leased two aluminum rail car sets for transport of its coal to Ridley Terminals. This has increased shipping reliability and reduced railing costs.

PRC reports that customer demand for the Trend coal products is very strong and that metallurgical and thermal coal prices are well above historic highs. Anglo's coal marketing group reports favourable customer response on the Trend product quality.

Projects

PRC has carried out a number of improvement and development projects over the past year and has a number of projects in progress or planned for 2008.

In early January the Trend Mine switched to permanent power from the BC Hydro grid bringing about significant cost savings over the diesel-powered generators.

Progress was made on construction of the dedicated haul road from the mine to the Trend rail loadout. Construction is currently halted for the winter. PRC expect to complete this road in the second quarter. Once in operation this road will bring about significant savings in the coal haul costs.

Upgrades were made to the wash plant during January which has resulted in a decrease in total moisture and an improvement in coal quality control. A further modification to the wash plant is currently under review which may incorporate a full wash cycle which in turn will improve plant throughput and yield. If approved, PRC expects to complete the modifications by the fourth quarter. Upon completion of the modification, the plant will have an annual capacity of 1,800,000 tonnes.

An automated rail car loading system is currently being commissioned at the Trend loadout. Once commissioned this system will reduce train loading times and improve car loading to establish better load distribution and more consistent weights in the cars.

During 2008 a major drilling program was undertaken on the Roman Block, a block adjacent to the Trend Mine having a large resource tonnage. Eighty holes totaling 21,000 m of drilling was completed. A feasibility study is currently being initiated. Development of the Roman pit is expected to add 4,000,000 annual tonnes of ROM production to the Trend operation commencing in 2009 - 2010.

Additional exploration is being carried out on the Horizon Block during 2008, with a winter program in progress. Horizon is being planned as a combination open-pit and underground operation with a target annual production level of 2 million tonnes. Start up is targeted for 2010.

PRC has a 5-year plan to ramp total production for the Trend and Horizon Mines to 6 million tonnes per year.

PRC is a 50% partner in the BelSax Joint Venture. Over the past three years substantial exploration and feasibility work has been carried out on the Belcourt Saxon properties. Completion of a Prefeasibility Report is expected by the end of this quarter. This study focuses on the development of the Belcourt North and South Blocks with planned annual production in excess of 6 million tROM.

David Slater, President and CEO, stated, "We are pleased with Peace River Coal's progress with the ramp up in the Trend Mine production, and the potential that the high coal prices bring. Hillsborough intends to maintain its share in PRC at the current 14.1% level."

About Hillsborough Resources Limited

Hillsborough Resources Limited is a coal mining company that operates the Quinsam underground thermal coal mine near Campbell River, British Columbia, which serves the local and west-coast U.S. cement industry and is increasing export sales. The Company is a limited partner in the Peace River Coal Limited Partnership, which has substantial metallurgical coal properties both in production 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.

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