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Message: Announces Agreement With Vitol

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Announces Agreement With Vitol

posted on Apr 01, 09 01:30AM

March 31, 2009

Hillsborough Resources Limited Announces Agreement With Vitol

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 31, 2009) - Hillsborough Resources Limited (TSX:HLB) (the "Corporation" or "Hillsborough") is pleased to announce that it has reached agreement with the Vitol Group of Companies to remove the fixed price component of their off-take agreement in respect of the remaining 520,000 MT of Quinsam thermal coal which had been scheduled for shipment during 2009 and 2010. In consideration, Vitol will pay Hillsborough USD $17,500,000, of which approximately USD $5.74 million will be used to repay term debt plus related interest owed to Vitol by Quinsam, and approximately USD $10.18 million will be used to repay convertible debt plus related interest owed to Vitol by Hillsborough. These sums had been used to cover cash calls for Hillsborough's investment in Peace River Coal.

"The Vitol agreement will give immediate release to Hillsborough of a good portion of the profits inherent in the fixed price coal sales agreement which we signed with Vitol early in 2008 when coal prices were near all time highs," says David Slater, President & CEO. "As we expect to favourably negotiate the timing of the future shipments, it may also reduce production risk associated with meeting very tight deadlines for coal shipments under the contract, it also mitigates the very significant penalties associated with not meeting the stringent quality specifications included in the off-take contract."

The Corporation is also please to announce that it has filed its December 31, 2008 Financial Statements, Management Discussion & Analysis and Annual Information Form on SEDAR (www.sedar.com).

About the Corporation

Hillsborough Resources Limited is a coal mining company that:

- Operates the 500,000 tpy Quinsam underground thermal mine near Campbell River, British Columbia, serving the local and west-coast U.S. cement industry with increasing sales into the export market.

- Is a limited partner in the Peace River Coal Limited Partnership (with 13.4%), which has substantial metallurgical coal properties both in production (Trend Mine) and under development near Tumbler Ridge, British Columbia.

- Owns the Crossville Mine in Tennessee, which remains in reclamation at this time.

- Holds the Wapiti thermal coal property north of Tumbler Ridge, and is planning development of a mine.

- Holds the Bingay Creek metallurgical coal property located in the Elk Valley region of southeast British Columbia.

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