Red Hill Energy Inc.
TSX VENTURE : RH

Red Hill Energy Inc.

September 06, 2007 14:22 ET

Red Hill Energy Acquires Chandgana Khavtgai, a Promising Extension Property to Mongolia's Nyalga Coal Basin

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 6, 2007) - Red Hill Energy Inc. (TSX VENTURE:RH) Red Hill Energy (the Company) is pleased to announce that it has entered into an agreement to purchase a 100% interest in, and has already commenced significant exploratory drilling operations on, the 37,000 hectare Chandgana Khavtgai coal exploration property located in the Nyalga Coal Basin in southeast central Mongolia. Red Hill geologists believe Chandgana Khavtgai may contain a significant sized extension to the Nyalga Coal Basin.

The Chandgana Khavtgai property is located 9 km southwest of Red Hill's Chandgana Tal coal project. Both Chandgana Khavtgai and Chandgana Tal are contiguous to Tethys Mining's Nyalga Coal Basin property, a 100% owned Mongolian subsidiary of international mining conglomerate CVRD (Companhia Vale do Rio Doce) of Brazil. CVRD is actively exploring their Nyalga coal licenses.

The Nyalga Coal Basin is road linked to both Mongolia's capital Ulaanbaatar (300 km to the east) and the Mongolian Railroad (160 km to the east), giving direct rail access to China to the south and Russia to the north.

Field exploration on Chandgana Khavtgai has identified several thick coal outcrop zones that appear to indicate the continuation of the same 30-50 metre coal seam observed at Red Hill's Chandgana Tal coal property. The coal outcrop extends at least 4 km onto the license, covering an area several times the size of the Chandgana Tal license area. Several drill holes within 2 km of the new license also indicate the continuation of a thick coal seam onto the new license area. Red Hill geologists believe that this license has the potential to significantly increase Red Hill's coal resource in this area.

A month long, 8 hole, 1,200 m drilling program is now underway on Chandgana Khavtgai. These 8 holes will be widely spaced in order to test the quality and full extent of the coal deposit. In addition, surface trenches will be dug to fully define the coal outcrop zone.

Red Hill President Mr. Ranjeet Sundher stated today that:

"Potential drilling success at the Chandgana Khavtgai coal license when combined with the extensive seams of high quality coal already discovered on our Chandgana Tal property may justify a stand alone coal to liquids production operation for Red Hill's coal. The equivalent coal quality associated with Chandgana Tal is already being commercially mined regionally in Mongolia, Russia and in China for thermal power generation."

Glenn S. Griesbach, P.Geo., Red Hill's Vice President of Exploration, is the Qualified Person for the purposes of National Instrument 43-101 with respect to the technical information in this news release. Mr. Griesbach has been directly associated with Red Hill Energy and Mongolia since 2003 and has 29 years of international geological experience. Mr. Eric Robeck is Red Hill Energy's Vice President of Coal Exploration in Mongolia.

The Chandgana Khavtgai acquisition is subject to regulatory acceptance.

ABOUT RED HILL ENERGY INC.

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 and Chandgana Khavtgai Coal Projects 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.

RED HILL ENERGY INC.

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.

Contact Information

  • Red Hill Energy Inc.
    Paul McKenzie
    Director
    (604) 642-COAL (2625)
    Email: info@redhillenergy.com
    Website: www.redhillenergy.com
    or
    Fuller Fletcher & Associates Ltd. of London, UK
    Nick Fuller
    European Investor Inquiries
    +44 (0) 20 7256 5204