Red Hill Energy Inc.

Red Hill Energy Inc.

March 19, 2010 09:00 ET

Red Hill Details the Proposed Spin-Out Company

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 19, 2010) - Red Hill Energy (TSX VENTURE:RH) (the "Company") is pleased to provide the following update on the proposed spin-out company being created in conjunction with the proposed Red Hill Energy / Prophecy Resource Corp merger. The Red Hill / Prophecy merger excludes Red Hill's non-coal assets. As the first step of the proposed plan of arrangement with Prophecy (the "Arrangement") and prior to the merger of Red Hill and Prophecy, Red Hill will transfer its non-coal assets and CDN $1 million to a wholly owned subsidiary called Elissa Resources Ltd. ("Elissa"). Shareholders of Red Hill Energy will (and in addition to their conversion to Class A common shares on a .92 for 1 basis) be issued shares of Elissa on a conversion basis of 1 for 4 whereby for every four (4) shares of Red Hill Energy held on the effective date of the Arrangement (the "Effective Date"), Red Hill shareholders will be issued one (1) share of Elissa Resources Ltd. At completion, Elissa will have approximately 15,089,969 shares outstanding. No Red Hill options or warrants will entitle their holders to receive any shares of Elissa or convertible securities of Elissa, except to the extent such holder exercises their Red Hill options or warrants, as the case may be, to acquire shares of Red Hill prior to the Effective Date. The non-coal properties consist of the 100% owned, Thor Rare Earth Property, Nevada, the 100% owned Red Lithium Property, Nevada and the 100% owned Banbury Gold Property, British Columbia.

Elissa will be initiated as a reporting but unlisted company. Elissa shares will not be listed on any stock exchange following completion of the Arrangement, however Elissa intends to apply for a listing on the TSX-V in due course. There can be no assurances that Elissa will be successful in listing on any stock exchange. For more detailed information about Elissa, including information concerning the proposed Board of Directors, capitalization structure and other information, please see the Joint Information Circular of Red Hill and Prophecy dated March 15, 2010 available on SEDAR at under Prophecy's and Red Hill's profile and/or on either or


Red Hill Energy Inc. is a junior resource company trading on the TSX-Venture Exchange under the trading symbol RH. The Company is advancing over one billion tonnes of 100% owned coal from two Mongolian coal basins towards production. Red Hill has a full-time office in Mongolia's capital, Ulaanbaatar.

Red Hill Energy Inc.

G. Arnold Armstrong – Chairman and CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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