Ni 43-101 Report and Assays Completed on the Chandgana Khavtgai Project Confirms Large, High Quality Thermal Coal Discovery in Mongolia
Vancouver, British Columbia, March 26, 2008: Red Hill Energy
(TSX-V symbol RH) reported today that further to the December 21, 2007,
news release, a National Instrument 43-101 report and assay results
have been received by the company on its very significant Chandgana
Khavtgai coal project. All three of Red Hill Energy’s coal resources
are now National Instrument 43-101 compliant as to tonnage and quality.
The National Instrument 43-101 report on Red Hill’s 100% owned
Mongolian coal discovery, Chandgana Khavtgai, has been received by the
Company and is filed on www.SEDAR.com
where interested parties can review it in its entirety. Chandgana
Khavtai is located in the historic Nyalga Coal Basin in east central
Mongolia.
In addition to Chandgana Khavtai, Red Hill Energy also controls a
second, smaller, 100% owned coal project in the Nyalaga Basin called
Chandgana Tal 9 kilometres northeast of Chandgana Khavtgai. The Nyalga
Coal Basin is linked by a 160 km, well-maintained paved highway to a
short feeder railroad connecting to the central Mongolian railroad. The
National Instrument 43-101 report on Chandgana Khavtai was prepared by
Mr. Christopher M Kravits of Utah, United States, and is coauthored by
Mr. Eric Robeck, Red Hill Energy’s V.P. of Coal Exploration and
Development.
Coal resources were estimated by correlating the coal seams between
drill holes. The coal seam thicknesses were selected according to
Canadian Geological Survey Paper 88-21 as referenced by NI 43-101. The
resulting coal thickness data were computer modeled using a proprietary
modeling algorithm called ABOS. The modeled thicknesses were clipped to
license boundaries, geologic limits, and the minimum coal seam
thickness allowed by Paper 88-21. The modeled coal thickness was
converted to a volume, and then converted to tonnes using the average
laboratory-determined coal density. The assurance of existence areas
(measured, indicated and inferred) were determined according to NI
43-101 and used to provide a breakdown of the resource.
The total Chandgana Khavtgai resource from Mr. Kravits’ report is as
follows: 187.7 million tonnes are measured and 469.2 million tonnes are
indicated, for a total resource of 656.9 million tonnes. An additional
405.2 million tonnes are categorized as inferred.
Specifics on coal resource quantities from all three of Red Hill’s
100% owned coal projects can be viewed in the following table. All
values represent millions of tonnes.
|
PROJECT
/ BASIN |
MEASURED |
INDICATED |
MEASURED
&
INDICATED |
INFERRED |
|
Ulaan Ovoo (Northern Basin) |
174.5 |
34.3 |
208.8 |
35.9 |
|
Chandgana Tal
(Nyalga Coal Basin) |
141.3 |
(none) |
141.3 |
(none) |
|
Chandgana Khavtgai (Nyalga Coal Basin) |
187.7 |
469.2 |
656.9 |
405.2 |
|
Total |
503.5 |
504.0 |
1,007.0 |
441.1 |
Assay results from Chandgana Khavtgai confirm a high quality, very
desirable thermal coal, similar in quality to Chandgana Tal’s
previously reported assays. Specific quality details from each of Red
Hill Energy’s three resource projects can be viewed in the following
table. Also included are the very low stripping ratios and significant
average coal seam thicknesses from each project.
|
PROJECT |
ASH
(%) |
SULFUR
(%) |
HEATING
VALUE |
STRIP
RATIO
(Avg) |
SEAM
THICKNESS
(Avg) |
|
Btu/lb |
kcal/kg |
|
Ulaan Ovoo
(as-received) |
11.6 |
0.4 |
9,400 |
5,200 |
2.0:1
(1st 140
million tonnes) |
53.9 metres |
|
Chandgana Tal
(air-dried) |
12.5 |
0.7 |
7,600 |
4,200 |
0.53:1 |
40.0 metres |
|
Chandgana Khavtgai
(air-dried) |
10.3 |
0.5 |
7,800 |
4,400 |
1.9:1 |
38.0 metres |
Mongolia’s historic Nyalga Coal Basin is controlled almost entirely
by Red Hill Energy and CVRD of Brazil. Both of Red Hill’s 100% owned
Chandgana coal projects are contiguous to and share the same massive
coal seam as CVRD’s 100% owned, major Mongolian coal project. CVRD of
Brazil is the world’s largest mining company.
Combined, Red Hill’s Chandgana projects host 798.2 million tonnes of
measured and indicated high quality thermal coal with an additional
405.2 million tonnes inferred.
The coal quality found in the Nyalga Coal Basin is a likely
candidate for thermal power generation as well as conversion to gas or
liquid fuels. Coal of comparable quality is currently being profitably
mined in Mongolia, Russia and China.
Red Hill’s coal projects are all amenable to low cost surface mining
operations and are accessible to the world’s largest coal consuming
nations. In all three resource projects, the coal seam outcrops,
offering easy access to the projects’ primarily single, massive coal
seams. The Nyalga Coal Basin is linked by road to Mongolia’s capital
Ulaanbaatar (300 km to the west) and to the Mongolian Railroad (160 km
to the west), providing direct rail access to China to the south and
Russia to the north. Ulaan Ovoo, Red Hill’s northernmost project, is
within 120 km of the railroad and is also linked by a good quality road.
A Transportation and Economic assessment of the Ulaan Ovoo Project
is nearing completion and is currently being evaluated by Red Hill
Energy. The study outlines short and long term demand for Ulaan Ovoo
coal, updates anticipated mine production and operation costs, and
transportation costs for several marketing scenarios. Details will be
outlined by Red Hill Energy in a forthcoming news release.
Mr. Christopher M. Kravits is the Qualified Person for the Chandgana
Khavtgai resource area study. He received a BA from Slippery Rock
University (USA) and an MS from Southern Illinois University-Carbondale
(USA). He has 31 years of experience in the coal industry and is a
certified and licensed professional geologist. Mr. Kravits has managed
coal exploration projects, evaluated coal resources and has been
responsible for or supported coal resource acquisition, mine geology
and coal quality, environmental and marketing functions.
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. The Company is
advancing over one billion tonnes of 100% owned coal from two Mongolian
coal basins towards production. Red Hill also has multiple 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
For further information:
Paul McKenzie (Director):
Telephone 604.642.COAL (2625)
Email: info@redhillenergy.com
www.redhillenergy.com
