Red Hill Energy Ltd.
Company Contact Info: http://www.goldmau.com/rh.php

In July 2007, I commented that:
“Red Hill and Tyler are no longer speculative exploration stocks in my opinion. Both companies have quantifiable and valuable resources that’s worth tens of $billions in the ground.”
http://www.goldmau.com/stock_update_718_07.php

Sure enough, Tyler today received a hostile takeover offer from Mercator (ML.to) at $1, which represents 35% premium to the closing price of previous day.
http://quote.yahoo.com/q?s=tys.v

This takes us to Red Hill.
Red Hill by all means is now a coal company in Mongolia.

Feb 27 2006: Ulaan Ovoo 43-101 coal resouce of 136.4 million tonnes. Stock raced to $1.5 from 40cents.
July 27 2006: Ulaan Ovoo 43-101 coal resource increased to 154.3 million tonnes.
Sep 6 2006: Ulaan Ovoo 43-101 coal resource increased to 206.2 million tonnes.
Sep 10 2007: Ulaan Ovoo and Chandgana Tal 43-101 coal resource increased to 350.1 million tonnes.
Oct-Nov 2007?

Coal of similar quality to Ulaan and Chandgana’s is sold for upwards of $70/tonne, and the Japanese and Korean buyers have to pick up the tab of transportation from the Russian port. Red Hill is currently studying the various transportation scenarios to the port, and some interesting details may be obtained by contacting the company.  (Tel: 604-642- COAL “2625” e-mail: info@redhillenergy.com

Pictures above from Ulaan Ovoo.

The first picture above shows 30 meters + thick seams cropping from surface at Ulaan Ovoo are going to be easy and low cost to extract.

RH just finished an 8 hole drill program on the newly acquired Chandgana Khavtgai which is located approximately 9 km southwest of Chandgana Tal. The two projects along with Tethys Mining make up the entire Nyalga Coal Basin.  Tethys Mining is a 100% owned Mongolian subsidiary of international mining conglomerate CVRD (Companhia Vale do Rio Doce) of Brazil.

According to RH’s recent press release,
“Field exploration on Chandgana Khavtgai has identified several thick coal outcrop zones that appear to indicate the continuation of the same 30-50 metre coal seam observed at Red Hill Chandgana Tal coal property. The coal outcrop extends at least 4 km onto the license, covering an area several times the size of the Chandgana Tal license area. Several drill holes within 2 km of the new license also indicate the continuation of a thick coal seam onto the new license area. Red Hill geologists believe that this license has the potential to significantly increase Red Hill's coal resource in this area.”
http://www.redhillenergy.com/news/index.php?&content_id=102

Red Hill is very tight lipped on what they have at Khavtgai, but if their theory is proven true from the news release quoted above, their next resource estimate could be substantially larger than the current 350.1 million tonnes.  At $70 a tonne, 350 million tonnes already represents tens of $billions of resource in the ground.
Granted no two companies and deposits are the same, but QGX flagship  Baruun Naran in Mongolia has 260 million tonnes of coal and the market cap of QGX is $ 170 million ($3.7 x 46 million shares). This makes Red Hill’s current market capitalization of $42 million seem extremely tantalizing both from fundamental value and peer comparison perspective.

Technically, the stock is now at 200 DMA resistance of 90cents, once that’s over come the stock can race to $1.3 quickly.