VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 08/15/12 -- Redhill Resources Corp. (TSX VENTURE: RHR) ("Redhill" or the "Company") is pleased to announce the signing of an Option Agreement (the Option Agreement") with Decade Resources Ltd (TSX VENTURE: DEC) and Mountain Boy Minerals, (TSX VENTURE: MTB) (the "Optionors") whereby Redhill can earn up to a 80% interest in the Blackwater Properties ("the Properties") located approximately 115 kilometers south-southwest of Vanderhoof, British Columbia in the Nechako Plateau region. The Properties consist of 80 claims comprised of two claim blocks, North Blackwater and East Blackwater, encompassing a total of 37,296.28 hectares. The Properties are readily accessible along a well developed network of established forestry roads in the area.
The North Blackwater property is strategically located adjacent to properties hosting the Chu molybdenum deposit (TTM Resources Inc.) and 15 kms northeast of the Blackwater gold-silver deposit (New Gold Inc.). The North Blackwater property is also located 26 kms northeast of the Capoose silver-gold deposit (New Gold Inc.). Please refer to a map of the Properties which can be found on the Company's website www.redhill-resources.com.
At New Gold Inc's Blackwater gold-silver deposit, disseminated gold-silver mineralization is associated in shear-hosted veins, hosted in Jurassic-aged Hazelton Group volcanic rhyolites. The Capoose deposit mineralization is associated with younger Cretaceous-aged rhyolitic sills that have intruded the Hazelton rocks. At the Chu deposit, molybdenite and copper mineralization is associated with an apparent modified quartz veinlet stockwork hosted by hornfelsed fine-grained sandstone and granodioritic intrusive rocks.
The exploration activities in the area by Richfield Ventures Corp., Silver Quest Resources Ltd., and Geo Minerals Inc. in the area of the Blackwater and Capoose deposits have resulted in acquisition of all three companies by New Gold Inc. in 2011 to consolidate their property position and mineral deposits.
Combined with exploration activities by Independence Gold Corp., on their 3T's gold-silver project, and several other exploration companies, this area represents one of the busiest for exploration in Canada.
On March 7, 2012, New Gold Inc. announced an updated Indicated and Inferred Mineral Resource estimate for the Blackwater deposit representing drill results through December 2011. It estimated an Indicated Resource of 5.5 million ounces of gold and an Inferred Resource of 2.3 million ounces of gold at a 0.4 gram per tonne cut-off grade. During 2012, New Gold Inc. intends to drill approximately 500 holes totalling over 200,000 metres at their Blackwater Project.
The North Blackwater property is extensively covered by glacial till but it is interpreted to be underlain by Jurassic-aged Hazelton Group volcano-sedimentary sequences and is viewed as prospective for both precious metals and volcanogenic massive sulphide (VMS) discoveries.
The East Blackwater property is underlain by Jurassic-aged Hazelton Group volcano-sedimentary sequences on the southern portion of the block, and Jurassic aged sediments on the northern portion.
Redhill is currently establishing exploration budgets and expects exploration on the Blackwater property will begin this fall. The work will include geochemical surveys and geological investigation.
The Option Agreement
In consideration of the option ("the First Option") Redhill can earn up to 60% interest in the Property by: making cash payments to the Optionors totaling $300,000 as follows:
a. $50,000 on the date of signing this Agreement; b. $75,000 (cumulative $125,000) on or before the first anniversary of the Effective Date; c. $75,000 (cumulative $200,000) on or before the second anniversary of the Effective Date; d. $100,000 (cumulative $300,000) on or before the third anniversary of the Effective Date; and
Incurring a minimum of $2,500,000 in Expenditures as follows:
a. $250,000 on or before the first anniversary of the Effective Date b. $750,000 (cumulative $1,000,000) on or before the second anniversary of the Effective Date; and c. $1,500,000 (cumulative $2,500,000) on or before the third anniversary of the Effective Date).
Redhill shall pay each of the Optionors one-half of the cash payments.
Upon completion of the requirements Redhill shall be deemed to have exercised the First Option and shall have earned a 60% undivided beneficial interest in the Property such that the respective interests of the parties in the Property will be as follows: 60% Redhill, 20% Mountain Boy and 20% Decade.
Subject to the exercise of the First Option, the Optionors hereby grant to Redhill the exclusive right to increase its undivided beneficial interest in the Property by an additional 20% (the "Second Option"), which Redhill may exercise by:
ii. providing written notice to the Optionors not later than 30 days following the exercise of the First Option that Redhill elects to proceed with the Second Option (the "Second Option Notice"); and iii.incurring additional Expenditures in the Property in the amount of $1,500,000 (cumulative $4,000,000) within two years of the date of the Second Option Notice.
Upon completion of the requirements Redhill shall have earned an additional 20% undivided beneficial interest in the Property such that the respective interests of the parties in the Property will be as follows: 80% Redhill, 10% Mountain Boy and 10% Decade.
This news release has been reviewed by Brent Butler, a Qualified Person as that term is defined in NI 43-101.
To find out more about Redhill Resources Corp, please visit our website at www.redhill-resources.com.
REDHILL RESOURCES CORP.
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."
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.