Red Hill Energy Inc.

Red Hill Energy Inc.

August 15, 2007 09:00 ET

Red Hill Confirms That Coal at Chandgana Tal is Highly Desirable for Both Power Generation and Coal to Liquids Production

National Instrument 43-101 Measured Resource Calculation Due Shortly

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 15, 2007) - Red Hill Energy Inc. (TSX VENTURE:RH) (the Company) is pleased to announce that assays received from recent core samples from drilling at the Company's second Mongolian coal project, Chandgana Tal confirm a high quality subbituminous coal that is conducive to both thermal power generation and coal-to-liquids (conversion to synthetic fuel). Coal of similar rank and quality is currently used for power generation as close as 180 km away from the Chandgana Tal Coal Project and as well is mined commercially at Baganuur, Mongolia; Krasanoyarsk, Russia; Chita, Russia, and other locations throughout China, Russia and Mongolia.

In June of this year Red Hill Energy was extremely pleased by the results of an extensive drilling program at Chandgana Tal. Drilling extended and in some cases deepened historical coal showings associated with a large non NI 43-101 compliant historical coal resource. The coal seam averages over 40 m thick and has relatively low ash content. Overburden on the Red Hill licenses is shallow, with a maximum strip ratio of less than 1.25:1 and an average strip ratio of less than 0.75:1. A National Instrument 43-101 compliant technical report and resource calculation has been commissioned to Behre Dolbear (USA) of Denver Colorado results of which are due in the very near term. Spacing of the drill program was such that the forthcoming resource calculation will fall under the National Instrument 43-101 measured category.

Over 284 m of coal core were recovered during the drilling program in May 2007. Samples were sealed immediately upon retrieval and packed in wooden boxes to prevent damage during transport. Reserves from each sample are being kept at the laboratory. Assays from Chandgana Tal were analyzed at SGS's internationally certified laboratory in Tianjin, China. The analytical results, which have just been received, indicate that this is low-sulfur (0.68%) subbituminous coal with an average calorific value of 4,242 kcal/kg (7,635 BTU/lb).

Chandgana Tal is road linked approximately 300 km east of Mongolia's capital Ulaanbaatar and 160 km east (also road linked) of the Mongolian Railroad which accesses directly to China to the south and Russia to the north.

Red Hill Energy's President Mr. Ranjeet Sundher commented today that:

"These strong assay results highlight the potential for very strong economic viability at Chandgana Tal. I look forward to press releasing the project's resource calculation as soon as we receive it from our consultants, Behre Dolbear (USA). Red Hill plans to advance Chandgana Tal to economic production in a timely manner like we are currently doing with our 208.8 million tonne Ulaan Ovoo coal project."

The 100% owned Chandgana Tal Coal Project is contiguous to and almost entirely surrounded by Tethys Mining, a 100% owned Mongolian subsidiary of international mining conglomerate CVRD (Companhia Vale do Rio Doce) of Brazil. CVRD is actively exploring their Tethys licenses which cover a large portion of the same coal deposit as Red Hill's Chandgana Tal licenses. All told, the shared coal extent has a maximum width of 7.5 km E-W and a NE-SW length of 20.0 km.

The independent Qualified Person responsible for summarizing the technical material presented in this news release is Gardar G. Dahl, Jr., CPG, a Senior Associate of Behre Dolbear. Mr. Dahl is an established coal consultant with more than 35 years experience in coal exploration, mining and sales, both in surface and underground operations. Behre Dolbear is one of the oldest, continually operating minerals industry consulting firms in the world, offering fully integrated management consulting and technical advisory services specializing exclusively in the minerals industries from offices around the world. Behre Dolbear has performed numerous coal assignments globally for major and junior mining companies alike.


Red Hill Energy Inc. is a junior resource company trading on the TSX-Venture Exchange under the trading symbol "RH". In addition to developing the 208.8 million tonne Ulaan Ovoo Coal Project in northern Mongolia Red Hill is also developing the Chandgana Tal Coal Project in Eastern Mongolia and has 11 uranium properties and several gold and copper exploration projects located throughout Mongolia. Red Hill has a strategic alliance with Mega Uranium Ltd. to jointly develop its uranium assets and has a full time office in Mongolia's capital, Ulaanbaatar.


G. Arnold Armstrong - Chairman and CEO

Ranjeet Sundher - President

Forward-Looking Statements: Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Corporation's periodic filings with Canadian Securities Regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The companies do not assume the obligation to update any forward-looking statement.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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