Red Hill Energy to Commence Drilling Program at 819.7 Million Tonnes Chandgana Khavtgai Coal Project, Mongolia

VANCOUVER, B.C. - April 1, 2010, : Red Hill Energy Inc. ("Red Hill") (TSX-V:RH) and Prophecy Resource Corp. ("Prophecy")(TSX-V:PCY, OTC: PCYRF, Frankfurt: 3P1) announced today that it has awarded a contract to commence a ten drill hole, 2,200 metre resource expansion drilling program in early May, 2010 at its Chandgana Khavtgai Coal Project located in the Nyalga Coal Basin central eastern Mongolia.

This is the largest exploration program performed to date by Red Hill with the full support of Prophecy Resource Corp, Red Hill's proposed merger partner. (Please see joint Prophecy and Red Hill March 4, 2010 news)

Red Hill's 100% owned Nyalga Coal Basin projects (Khavtgai & Tal) host a combined total of 819.7 million tonnes (330 Measured & 489. 7 Indicated) with 409 million tonnes Inferred thermal coal. The projects have a life of mine strip ratio of 2.1 to 1, with coal seams averaging 25 to 60 meters in thickness and low ash (< 15%) and sulphur (< 1%) contents.

The Nyagla Coal basin contains over 4.5 billion tonnes of thermal coal, which makes it one of the largest thermal coal basins in Mongolia.

The primary goals of the programs are:
1. Convert over 95% of the 409 million tonne Inferred Resource to Measured and Indicated;
2. Test the eastern portion of the Chandgana Khavtgai resource, where geophysical surveys indicate the boundary may extend farther eastward than previously modeled, resulting in significant additional resources;
3. Retrieve several hundred metres of coal core samples for additional detailed coal quality analysis;

A NI 43-101 technical report with an updated resource statement will follow by early Fall 2010.

Red Hill Energy also has a 100% interest in the 208.8 million tonne Ulaan Ovoo thermal coal project which the company is preparing for production by late 2010. The project is located within 10 km of the Russian border, northern Mongolia and is 120km (75 miles) east of the Central Mongolian Railroad linking the project to the vast coal markets of Russia and Asia. The average seam thickness of the resource is 53.9 metres. Combined, Red Hill Energy's Mongolian coal resource consists of 1.0285 billion tonnes Measured & Indicated and 475.9 million tonnes Inferred.

The information concerning Red Hill Energy's coal projects as described in this news release, has been reviewed and approved by Mel Klohn, PGeo, a Director of Red Hill Energy and a Qualified Person under National Instrument 43-101.

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 has a full-time office in Mongolia's capital, Ulaanbaatar. Red Hill also owns a 100% interest in the Thor Rare Earth Property and the Red Lithium Property, both located in Nevada, USA.

Red Hill Energy Inc.
G. Arnold Armstrong - Chairman and CEO
For further information:
Paul McKenzie (President)
Telephone 604.642.COAL (2625)
Email: [email protected]

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.

 


Mineral resources that are not mineral reserves do not have demonstrated economic viability. Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.  

 Forward Looking Statements: This news release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, including, without limitation, statements potential mineralization, the estimation of mineral resources, the realization of mineral resource estimates, interpretation of prior exploration and potential exploration results, the timing and success of exploration activities generally, the timing and results of future resource estimates, permitting time lines, metal prices and currency exchange rates, availability of capital, government regulation of exploration operations, environmental risks, reclamation, title, and future plans and objectives of the company are forward-looking statements that involve various risks and uncertainties. . Although Prophecy believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Forward-looking statements are based on a number of material factors and assumptions. Factors that could cause actual results to differ materially from those in forward-looking statements include failure to obtain necessary approvals in respect of the Transaction, unsuccessful exploration results, changes in project parameters as plans continue to be refined, results of future resource estimates, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, risks associated with operating in foreign jurisdictions, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment on a timely basis, accidents or equipment breakdowns, delays in receiving government approvals, unanticipated environmental impacts on operations and costs to remedy same, and other exploration or other risks detailed herein and from time to time in the filings made by the companies with securities regulators. Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral exploration and development of mines is an inherently risky business. Accordingly the actual events may differ materially from those projected in the forward-looking statements. For more information on Prophecy and the risks and challenges of their businesses, investors should review their annual filings that are available at www.sedar.com.

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


This press release does not constitute an offer to sell or a solicitation to buy any of the securities in the United States.  The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (“the U.S. Securities Act”) or any state securities law and may not be offered or sold in the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

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*Ulaan Ovoo: 174 million tonnes  of measured and 34 million tonnes of indicated coal. Ulaan Ovoo’s resource numbers are from the Behre Dolbear & Company (USA), Inc  report referenced in the Dec 2010, 43-101 Prefeasibility Study by Wardrop Engineering. Chandgana consists of two properties-Chandgana Tal and Chandgana Khavtgai. Chandgana Tal consists of 141 mt of measured resource. Chandgana Khavtgai consists of 509 mt measured and 539 mt indicated resource. Chandgana Khavtgai’s resource estimates are based on the September 2010 NI 43-101 Chandgana Khavtgai Technical Report by Kravits Geological Services, LLC. The report is authored by Christopher M. Kravits CPG, LPG of Kravits Geological Services, LLC., who was an independent Qualified Person under NI 43-101 at the time of report preparation. And the Chandgana Tal resource estimate is also based on the September 2007 NI 43-101 Chandgana Tal Technical Report by Behre Dolbear & Company (USA), Inc..The report is authored by Mr. Gardar G. Dahl, Jr., CPG of Behre Dolbear & Company (USA), Inc., who is an independent Qualified Person under NI 43-101.