Redhill Resources Corp
TSX VENTURE : RHR

Redhill Resources Corp

January 18, 2011 09:00 ET

Redhill Resources Corp.: Deflector Deposit Resource Upgrade and Recommencement of Drilling at Deflector

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 18, 2011) - Redhill Resources Corp. (TSX VENTURE:RHR) ("Redhill" or the "Company") is pleased to announce that Mutiny Gold Ltd. (MYG: ASX) ("Mutiny"), operator and optionee of Redhill's wholly owned Gullewa gold-copper project, has significantly upgraded the gold resource of the Deflector Deposit at Gullewa.

Highlights

  • Measured resource almost doubled and gold grade up - 94% increase in the measured resource from 67,000 ounces (oz) gold (535,000 tonnes at 3.9g/t) to 130,000 ounces (930,000 tonnes at 4.3g/t).
  • Further drilling along strike of Deflector mineralisation planned to commence in second half of January 2011 to test mineralised extensions and high-grade drill intersections identified in previous drilling.

The primary objective of the recent drilling program was to upgrade the existing indicated resource above 160 metres RL (120m below surface) to measured status to underpin a feasibility study which will commence in February. This resource will be within the planned open pit.

The upgraded resource, detailed in Table 1, represents a 94% increase in the measured resource from 67,000 oz gold (535,000 tonnes at 3.9g/t) to 130,000 oz (930,000 tonnes at 4.3 g/t). In addition to the increase in measured category ounces there was also an increase in gold grade from 3.9g/t to 4.3g/t.

This upgrade of a significant portion of the indicated resource to the higher confidence category of measured confirms Deflector as a significant deposit and completes an important development step.

Table 1: Deflector Deposit – Total Resources

Classification Tonnes Au (g/t) Au (oz) Cu (%) Cu (t) Ag (g/t) Ag (oz)
Measured 930,000 4.3 130,000 1.26 12,000 6.8 200,000
Indicated 570,000 5.7 100,000 0.8 4,500 5.6 100,000
Inferred 1,900,000 6 350,000 1 9,000 3 200,000

Deflector Deposit Resource Estimation

The Deflector Deposit resources above 160m RL (120m below surface) have been re-estimated, incorporating results of Mutiny's recent RC drill program and Redhill's 2009 diamond drill program. Infill drilling enabled the measured resource to be extended to the 160m RL level. Resources were estimated by independent geological consultant, Continental Resource Management Pty Ltd., who employed geostatistical inversed squared weighting and appropriate top cuts. The revised resource above 160m RL is set out below in Table 2.

Resources below 160m RL were not re-estimated, as no new information relating to resources below this level was obtained from the recent drilling program. Resources below 160m RL are reported in Table 3, as estimated by Snowden Mining Industry Consultants on behalf of Batavia Mining Limited in 2006. The geostatistical estimation was by ordinary block kriging, with appropriate top-cuts.

Total resources for the Deflector Deposit above a block-cut off grade of 0.7g/t Au equivalent, where Au Equivalent = Au g/t + (1.3 x Cu %), are presented in Table 4.

Table 2: Deflector Deposit – Resources above 160m RL (New estimation)

Classification Tonnes Au (g/t) Au (oz) Cu (%) Cu (t) Ag (g/t) Ag (oz)
Measured 930,000 4.3 130,000 1.26 12,000 6.8 200,000
Indicated 90,000 9.7 30,000 0.9 800 8.1 25,000
Inferred 600,000 3 50,000 0.4 2,500 2.5 45,000

Table 3: Deflector Deposit – Resources below 160m RL (2006 Estimation)

Classification Tonnes Au (g/t) Au (oz) Cu (%) Cu (t) Ag (g/t) Ag (oz)
Indicated 480,000 4.9 80,000 0.8 3,800 5.2 80,000
Inferred 1,300,000 7 300,000 0.5 7,000 4 150,000

Table 4: Deflector Deposit – Total Resources

Classification Tonnes Au (g/t) Au (oz) Cu (%) Cu (t) Ag (g/t) Ag (oz)
Measured 930,000 4.3 130,000 1.26 12,000 6.8 200,000
Indicated 570,000 5.7 100,000 0.8 4,500 5.6 100,000
Inferred 1,900,000 6 350,000 1 9,000 3 200,000

Scoping Study

The positive outcome to the resource upgrade will be factored into the Deflector mine scoping study which is expected to be released by mid February.

Deflector Extension Drilling

Drilling along strike of the Deflector mineralisation will commence in the second half of January 2011 to test mineralised extensions and high-grade drill intersections identified in earlier drilling. Mutiny Gold Ltd., project operator, believes there is a high probability of discovering further gold-bearing deposits in the near-mine vicinity and delineating additional resources.

Mutiny Gold is earning a 70% interest in the Gullewa Gold Project, by making certain exploration expenditures and paying to Redhill's Australian Subsidiary, ATW Gold Corp Australia Pty Ltd., a total of AUD$9,000,000.

Gullewa is located 450 kilometres north of Perth, in the Yalgoo mineral fields of Western Australia. Gullewa is a 550 sq kilometre property that hosts several gold deposits of various size and grade, the most significant being the Deflector gold-copper deposit. Mining infrastructure assets at Gullewa include an 800 tonne per day CIL plant, a licensed tailings disposal facility, a 50-person camp, offices, and workshops.

This news release has been reviewed by Brent Butler, a Qualified Person as that term is defined in NI 43-101.

REDHILL RESOURCES CORP.

Brent Butler, President & CEO

"This news release may contain forward–looking statements. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements."

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

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