Red Hill Energy Inc. and its proposed merger partner, Prophecy Resource Corp., have provided an update on activities under way to expedite production from the 20-million-ton Ulaan Ovoo thermal coal project in northern Mongolia, 100% owned by Red Hill. A Preliminary Economic Assessment (PEA) has begun to incorporate project economics based on current substantial increases in international coal prices since the project”s Pre-feasibility Study was completed over 10 months ago. The PEA will also assess the viability of utilizing truck transport on existing roads to the central railroad thereby deferring the construction of a 120-km spur line.

Red Hill is in discussion with international mining contractors, including those with extensive experience operating inside Mongolia, to finalize mine plans and a turn-key contract to begin production this year.

Arnold Armstrong, Chairman and CEO of Red Hill, has stated, “We intend to transform Red Hill from a junior company to a producer in 2010, and together with Prophecy we will have a strong pipeline of resource projects from which to build a company with a diversified revenue generating base.”