Red Hill and Prophecy Announce Completion of Merger, New Company to Trade on Monday Under ‘Pcyv’
JOINT NEWS RELEASE
RED HILL AND PROPHECY ANNOUNCE COMPLETION OF MERGER, NEW COMPANY TO TRADE ON MONDAY UNDER ‘PCYV’
Vancouver, British Columbia, April 14, 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 that the merger of Red Hill and Prophecy (see joint Red Hill / Prophecy news, January 21, 2010) will be completed on April 16, 2010 (the “Closing Date”).
As the first step in the plan of arrangement (the “Arrangement”) set forth in the Arrangement Agreement dated March 3, 2010, Red Hill intends to transfer $1,000,000 and its non-coal assets, principally the Red Lithium Property near Clayton Valley, Nevada, the Thor Rare Earth Property in Nevada and the Banbury Property in British Columbia, to Elissa Resources Ltd., (“Elissa”) in exchange for Elissa common shares.
Red Hill will then create a new class of common shares called "Class A Shares". Prophecy will be amalgamated with a wholly-owned subsidiary of Red Hill, and the common shares of Prophecy will be voluntarily delisted from the TSX Venture Exchange (the “TSX-V”). Each one Red Hill share will be exchanged for 0.92 of a Class A Share and 0.25 of a Elissa common shares, and each Prophecy share will be exchanged for one Class A Share. In addition, each Red Hill stock option and warrant, including the Red Hill Placement Warrants, will entitle the holder to receive 0.92 Class A Share and each Prophecy stock option or warrant, including the Placement Warrants, will be exchanged for an option or warrant to acquire one Class A Share.
Following the Arrangement, Red Hill has agreed to change its name to "Prophecy Resource Corp." (“New Prophecy”) and will have a total of approximately 96,672,974 Class A Shares issued and outstanding, as well as options and warrants entitling holders to purchase approximately 30,088,865 Class A Shares, comprising 6,996,600 options at exercise prices ranging from $0.25 to $1.03 and having expiry dates ranging from February 14, 2012 to March 24, 2015 and 23,092,265 warrants at exercise prices ranging from $0.10 to $1.36 and having expiry dates ranging from May 31, 2010 to March 31, 2012.
As a result of the Arrangement, the Red Hill and Prophecy securityholders will be Class A securityholders of New Prophecy. As part of the Arrangement, the Class A Shares of New Prophecy will be renamed as new common shares.
Elissa will have 16,455,758 common shares issued and outstanding, all of which will be held by former Red Hill shareholders and no options or warrants outstanding.
The last day of trading of the common shares of Red Hill and the common shares of Prophecy on the TSX-V will be Thursday, April 15, 2010. At the open on Friday, April 16, 2010, each of Red Hill and Prophecy will be halted for trading with the common shares of Prophecy delisting from the TSX-V at the close of business. On Monday April, 19, 2010, the shares of New Prophecy will be listed and posted for trading under the symbol PCY.V.
Red Hill Energy Inc.
Prophecy Resource Corp. G. Arnold Armstrong – Chairman and CEO John Lee - Chairman and CEO For further information:
For further information: Paul McKenzie (President):
John Lee Telephone 604.642.COAL (2625)
Telephone 1.800.851.1528 Email: [email protected] Email: [email protected] www.redhillenergy.com www.prophecyresource.com
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 regarding 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 companies are forward‐looking statements that involve various risks and uncertainties. . Although Red Hill and Prophecy believe 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 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 Red Hill and Prophecy and the risks and challenges of their businesses, investors should review their filings that are available at www.sedar.com
“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.”