Redhill Resources Corp
TSX VENTURE : RHR

Redhill Resources Corp

March 18, 2011 12:30 ET

Redhill Resources Corp.: New High Grade Gold-Copper Extensions at Deflector Deposit Highlight the Project's Significant Growth Potential

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 18, 2011) - Redhill Resources Corp., (TSX VENTURE:RHR), ("Redhill" or the "Company"), announces that Mutiny Gold Ltd. (ASX:MYG) ("Mutiny"), operator and optionee of Redhill's wholly owned Gullewa Copper-Gold Project, has informed Redhill that results received from its recent drilling program have highlighted the potential to significantly add to the resources at the Deflector Gold-Copper Deposit, the main deposit within the Gullewa Project in Western Australia. The aim of the program was to test north and south strike extensions of the deposit's main lodes.

Deflector Extension Drill Results

The recent drilling was carried out to delineate near-surface extensions to the main mineralized lodes within the Deflector Deposit. The results are presented in Tables 2 and 3 for all intersections greater than 0.5g/t Au or 0.5% Cu. Drill-hole locations are listed in Table 5 or can be viewed on maps at the website of Mutiny Gold.

Results to the south of the existing Deflector resources include:

  • 2 metres (m) @ 14.5g/t Au and 5.4% Cu in 11DRC001;
  • 3m @ 7.3g/t Au and 3.20% Cu in 11DRC020;
  • 1m @ 53.5g/t Au and 0.2% Cu in 11DRC021;
  • 6m @ 5.1g/t Au and 2.6% Cu in 11DRC024;
  • 4m @ 15.9g/t Au and 2.6% Cu in 11DRC025; and
  • 2m @ 7.4g/t Au and 2.9% Cu in 11DRC026.

To the north of the Deflector Deposit, the results include:

  • 3m @ 5.9g/t Au and 10.9% Cu in 11DRC029; and
  • 5m @ 2.1g/t Au and 0.25% Cu.

Importantly, the recent high-grade intersections are within the depth of the planned Deflector-Pit and indicate the potential for the Company to extend the Deflector-Pit to both the north and south. Benefits of an extended pit or of multiple open-pits include:

  • Longer open-pit mine life;
  • Potential increase in rate of production;
  • Earlier pay-back of project development costs; and
  • Improvement in the overall project economics.

Spanish Galleon Prospect

Following a review of exploration by previous companies in the vicinity of the Deflector Deposit, Mutiny recognized two areas of mineralization to the west of the Deflector Deposit, named the Spanish Galleon and Pieces of Eight Prospects. Mutiny recently drilled two RC holes at the Spanish Galleon Prospect that were targeted to scissor an intersection of 34m of 1.9g/t Au and 0.44% Cu made two years previously in drill hole 9DEF013. The intersection included 3m at 6.6g/t Au and 0.37% Cu. The holes were sited to ascertain the orientation of the mineralized structure and to test ground conditions within the structure in both the weathered and the fresh zones.

Both holes intersected gold-copper mineralization, with a best assay of 1m of 20.4g/t Au and 0.3% Cu. Assay results are given in Table 4. The holes achieved their objectives and verified the presence of high-grade mineralization within the easternmost structure at Spanish Galleon.

Continuing Exploration

Mutiny will now undertake another RC drill program, planned for April this year, which will follow up recent results by drilling further north and south along the main line of the Deflector Deposit mineralization. Following this drilling, Mutiny plans to carry out a re-estimation of the openpit resources of the Deflector Deposit. Historical intersections within the Spanish Galleon and Pieces of Eight Prospects will also be followed up in a systematic staged manner.

In addition, Mutiny is preparing an infill diamond drill program in order to upgrade the existing underground resources.

Background

The Gullewa Project is located 450 kilometres north of Perth, in the Yalgoo mineral fields of Western Australia. The Gullewa Project 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 which contains resources (Table 1) as disclosed in Table 3.1 to the NI 43-101 Technical Report on the Gullewa Gold-Copper Project dated June 13, 2008 as filed on SEDAR on June 18, 2008. Mining infrastructure assets at the Gullewa Project include a 800 tonne per day CIL plant, a licensed tailings disposal facility, a 50-person camp, offices, and workshops.

Table 1 - Deflector Deposit Resources

Mineral Resource Estimate for the Deflector Deposit
above a 1.0 g/t AuEq Grade Cut-Off (1.0% Cu = 2.5 g/t Au)
Category Tonnes Au (g/t) Ag (g/t) Cu (%) AuEq (g/t) AuEq (oz)
Measured 535,000 3.87 8.03 1.18 6.81 117,000
Indicated 1,169,000 4.32 6.34 0.96 6.72 252,000
Measured and Indicated 1,704,000 4.18 6.87 1.03 6.75 369,000
Inferred 1,616,000 6.50 3.41 0.48 7.71 400,000

(Metallurgical recoveries and net smelter returns are assumed to be 100%)

Table 2 Drill-hole Assay Results for Southern Extension

HOLE FROM
(m)
TO
(m)
INTERVAL
(m)
Au
(g/t)
Cu
(%)
INCLUDING
11DRC001 30 31 1 0.80 0.17  
  and 36 39 3 0.53 0.52  
  and 103 105 2 14.5 5.41 104-105m: 1m @ 25.4g/t Au, 6.6% Cu
  and 115 118 3 2.61 0.82  
11DRC002 10 11 1 0.60 0.19  
11DRC003 37 38 1 1.00 0.51  
  and 97 98 1 0.58 0.31  
  and 101 102 1 3.60 0.72  
  and 104 105 1 1.42 1.58  
11DRC004 25 26 1 0.56 0.06  
  and 56 58 2 2.01 3.15  
11DRC005 24 26 2 1.43 0.32  
  and 83 86 3 1.13 0.68  
11DRC006 35 36 1 0.67 0.28  
  and 50 52 2 0.60 0.07  
11DRC008 10 11 1 1.06 0.19  
  and 29 31 2 1.18 0.29  
  and 39 40 1 4.96 1.17  
11DRC009 30 33 3 3.86 0.59 31-32m: 1m @ 10.3g/t Au, 1.1% Cu
  and 78 79 1 0.60 0.19  
11DRC010 35 36 1 0.54 0.45  
  and 58 60 2 1.76 1.66  
11DRC011 14 15 1 2.37 0.45  
11DRC012 54 60 6 1.11 0.34  
11DRC013 34 38 4 0.38 0.83  
  and 52 53 1 1.00 1.11  
  and 67 68 1 0.85 0.15  
  and 81 82 1 3.46 2.06  
  and 106 107 1 0.52 0.30  
11DRC014 88 90 2 1.82 0.44  
11DRC015 12 13 1 8.08 0.62  
  and 17 19 2 0.73 0.18  
11DRC016 40 42 2 0.90 0.20  
11DRC017 81 83 2 2.87 1.08  
  and 96 97 1 6.59 3.06  
11DRC018 25 26 1 1.02 0.06  
11DRC020 54 57 3 7.28 3.24 54-56m: 2m @ 10.1g/t Au, 4.1% Cu
  and 68 70 2 4.28 0.08  
11DRC021 16 17 1 53.5 0.17  
  and 82 84 2 2.47 0.62  
  and 87 88 1 8.63 3.01  
11DRC023 28 30 2 0.73 0.18  
  and 43 44 1 0.70 0.13  
11DRC024 50 51 1 1.47 0.37  
  and 53 54 1 1.66 0.28  
  and 57 63 6 5.13 2.58 57-61m: 4m @ 6.5g/t Au, 3.2% Cu
11DRC025 58 59 1 3.53 0.02  
  and 82 86 4 15.9 2.62 84-85m: 1m @ 59.9g/t Au, 4.5% Cu
11DRC026 92 93 1 1.77 0.91  
  and 107 109 2 7.44 2.87 107-108m: 1m @ 14.1g/t Au, 5.2% Cu

Table 3 Drill-hole Assay Results for Northern Extension

HOLE FROM
(m)
TO
(m)
INTERVAL
(m)
Au
(g/t)
Cu
(%)
INCLUDING
11DRC028 16 18 2 1.27 0.29  
  and 21 22 1 0.90 0.63  
  and 46 47 1 0.50 0.01  
11DRC029 56 59 3 5.88 10.9 56-58m: 2m @ 7.90g/t Au, 15.1% Cu
11DRC030 27 28 1 0.72 0.31  
11DRC031 43 48 5 2.11 0.25  

Table 4 Drill-hole Assay Results for Pieces of Eight Prospect

HOLE FROM
(m)
TO
(m)
INTERVAL
(m)
Au
(g/t)
Cu
(%)
INCLUDING
11PERC001 63 66 3 7.80 0.17 63-64m: 1m @ 20.4g/t Au, 0.3% Cu
11PERC002 85 91 6 0.81 0.47  

Table 5 Drill-hole Details

HOLE EAST
(LOCAL)
NORTH
(LOCAL)
EAST
(GDA94)
NORTH
(GDA94)
RL
(m)
DEPTH
(m)
DIP
(
°)
AZIMUTH
(LOCAL)
1
11DRC001 9820 19021 439152 6828341 279 132 -56 271
11DRC002 9800 19001 439124 6828338 279 36 -60 271
11DRC003 9815 19001 439136 6828328 279 126 -59 270
11DRC004 9830 19001 439148 6828319 279 72 -60 270
11DRC005 9806 18981 439116 6828318 279 102 -59 273
11DRC006 9821 18981 439128 6828309 279 66 -60 269
11DRC007 9835 18981 439139 6828300 279 84 -59 271
11DRC008 9790 18960 439091 6828311 279 78 -59 270
11DRC009 9804 18960 439102 6828302 279 102 -59 270
11DRC010 9820 18960 439114 6828293 279 90 -59 270
11DRC011 9786 18939 439075 6828298 279 36 -60 273
11DRC012 9801 18939 439087 6828288 279 72 -61 271
11DRC013 9816 18939 439099 6828279 279 132 -61 271.5
11DRC014 9846 18939 439122 6828261 279 132 -60 270
11DRC015 9775 18920 439055 6828289 279 48 -60 270
11DRC016 9795 18920 439071 6828277 279 84 -60 270
11DRC017 9834 18920 439102 6828253 279 114 -60 273
11DRC018 9784 18900 439049 6828268 279 60 -60 268
11DRC019 9768 18900 439037 6828278 279 42 -60 267
11DRC020 9814 18900 439073 6828249 279 90 -60 270.5
11DRC021 9829 18900 439085 6828240 279 120 -60 270
11DRC022 8790 18880 439042 6828249 279 42 -60 269.5
11DRC023 9791 18859 439030 6828231 279 60 -60 268
11DRC024 9806 18859 439042 6828222 279 66 -60 269
11DRC025 9821 18859 439054 6828213 279 90 -60 269
11DRC026 9836 18859 439065 6828203 279 114 -60 269.5
11DRC027 9852 18859 439078 6828194 279 138 -60 271
11DRC028 9800 19601 439493 6828811 279 60 -60 91
11DRC029 9780 19601 439478 6828823 279 102 -60 88
11DRC030 9798 19580 439478 6828795 279 66 -60 90
11DRC031 9782 19580 439466 6828804 279 75 -60 91
11PERC001 9407 18600 438568 6828264 279 102 -60 269
11PERC002 9431 18600 438587 6828249 279 156 -60 270.5

1: Local azimuth is 38° less than UTM azimuth

The full text of Mutiny's news release can be found at its website: www.mutinygold.com.au. As an ASX issuer, Mutiny does not file on SEDAR.

The terms of the Mutiny Agreement, dated July 20, 2010, call for Mutiny to earn a 70% interest in and to the Gullewa project by making exploration expenditures and paying to Redhill's subsidiary (ATW Australia) a total of AUD$9,000,000 as follows:

1. By making the following cash payments:

(i) payment to ATW Australia of AUD$1.5 million on or before September 24, 2010; and
(ii) payment to ATW Australia of AUD$1.5million (plus applicable interest payable under clause 2 of the Underlying Agreement) to ATW Australia on or before January 24, 2011; and
(iii) payment to ATW Australia of AUD$4.0million on or before July 24, 2011; and
(iv) payment to ATW Australia of AUD$2.0 million on or before October 31, 2011; and

2. By paying all exploration and development expenditures on the Gullewa Project until October 31, 2011.

To date, Mutiny has paid AUD$3.0 million to the Company under the terms of the Mutiny Agreement.

Upon earning a 70% interest in the Gullewa Project, Mutiny may elect to enter into a 70/30 joint venture agreement with the Company or it may acquire a further 30% interest by completing a positive feasibility study on the Gullewa Project and by paying to ATW Australia an additional AUD$4,000,000. If it so elects, then it will have acquired the Gullewa Project 100% save and except that ATW Australia will retain a 10% net profit interest.

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

Graham Harris, Chairman

"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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