Red Hill Energy Inc. and Prophecy Resource Corp. Mail Meeting Materials

VANCOUVER, B.C. - March 16, 2010, : Red Hill Energy Inc. ("Red Hill") (TSX-V:RH) and Prophecy Resource Corp. ("Prophecy")(TSX-V:PCY, OTC: PCYRF, Frankfurt: 3P1) are pleased to announce the mailing of their joint management information circular dated March 15, 2010 (the "Information Circular"), with respect to the plan of arrangement involving Red Hill, Prophecy and their respective securityholders (the "Arrangement") as described in their news releases dated January 21, 2010 and March 3, 2010, is expected to be mailed March 22, 2010. Meetings of the shareholders of each of Prophecy and Red Hill to approve the Arrangement are scheduled for April 12, 2010 (collectively, the "Meetings"). The Information Circular contains detailed information regarding the business combination of Red Hill and Prophecy and the proposed spin-out of Red Hill's non-coal assets to its shareholders. For further details regarding the Arrangement, please refer to the Joint Information Circular, a copy of which will be available under the corporate profiles of each of Red Hill and Prophecy on the System for Electronic Document Analysis and Retrieval at

The Arrangement requires approval by the Supreme Court of British Columbia. On March 10, 2010, Red Hill and Prophecy obtained the interim order, which provides for the calling and holding of the Meetings and other procedural matters. The hearing in respect of the final order to approve the Arrangement (the "Final Order") is currently scheduled to take place on April 13, 2010 at 9:45 a.m. (Vancouver time). If the Final Order is obtained on April 13, 2010, and all other conditions to completion of the Arrangement are satisfied or waived, it is expected that the Arrangement will be completed on April 23, 2010. As previously disclosed in the joint news release dated March 3, 2010, certain directors, officers and insiders of Red Hill who hold an aggregate of 11,226,216 Red Hill shares and certain directors, officers and shareholders of Prophecy who hold an aggregate of 17,726,264 Prophecy shares, representing approximately 18.6% of the outstanding Red Hill shares and approximately 59.3% of the outstanding Prophecy shares, respectively, have signed support agreements pursuant to which they have agreed to vote all of the Red Hill and Prophecy shares beneficially owned by them in favour of the plan of arrangement.


As previously disclosed, for the purposes of the plan of arrangement, Red Hill will create a new class of common shares called "Class A Shares". As the first step in the Arrangement, Red Hill intends to transfer $1,000,000 and its non-coal assets, principally the Red Lithium Property near Clayton Valley, Nevada and the Thor Rare Earth Property in Nevada and the Banbury Property in British Columbia, to a new British Columbia company "Spinco" in exchange for Spinco common shares. Each one Red Hill share will be exchanged for 0.92 of a Class A Share and 0.25 of a Spinco common shares, and each Prophecy share will be exchanged for one Class A Share. It is anticipated that approximately 55,531,084 Class A shares will be issued to the shareholders of Red Hill and approximately 29,892,266 Class A shares will be issued to the shareholders of Prophecy. In addition, each Red Hill stock option and warrant will entitle the holder to receive 0.92 Class A Share and each Prophecy stock option or warrant will be exchanged for an option or warrant to acquire one Class A Share.

As a result of the Arrangement, the Prophecy securityholders will be Class A securityholders of Red Hill, Prophecy will be amalgamated with a wholly-owned subsidiary of Red Hill, and Prophecy will apply for voluntary delisting of its common shares from the TSX Venture Exchange. Following the Arrangement, Red Hill has agreed to change its name to "Prophecy Resource Corp." and will have a total of approximately 85,515,950 shares issued and outstanding, as well as options and warrants entitling holders to purchase approximately 25,004,901 Red Hill Class A Shares.

Prophecy Resource Corp.
John Lee - Chairman and CEO
For further information:
John Lee
Telephone 1.800.851.1528
Email: [email protected]

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


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

"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.