Significant Increase in Channel Iron Resources

  Red Hill Iron Ltd has announced the updated resource estimates for the Red Hill Joint Venture Project located in the West Pilbara region of Western Australia.The new resource estimates include all additional RC drilling completed in calendar 2007. Four new channel iron deposits (“CID”), Cardo Bore North, Kens Bore, Trinity Bore and Catho Well North (the northern extension of the Catho Well deposit) have been added to the original May 2007 resource statement covering Cardo Bore East, Upper Cane, Jewel and Cochrane deposits, whilst a re-estimate of the Upper Cane deposit has been completed following infill and extension drilling. The total resource inventory for the Red Hill Joint Venture stands at 350.2 million tonnes at 57.2% iron. Resource estimates have been compiled by API staff and Golder Associates and have been compiled in accordance with the guidelines of the Australasian Code for reporting of Identified Mineral Resources and Ore Reserves (JORC, 2004). Where the previous CID resource estimates were based on a constant Fe cut-off of 54% and the selective application of Al2O3 cut-offs, this resource estimate determines Fe cut-offs appropriate for each deposit. No Al2O3 cut-offs have been applied as the preference is to allow the mine planning process to determine the appropriate cut-offs for deleterious elements.Approximately 69% of the total resource is classified as either Measured or Indicated (with 56 million tonnes or 16% in the Measured category) with the balance classified as Inferred. This increase in resource of 215 million tonnes is primarily attributable to the evaluation of the Kens Bore and Trinity Bore deposits, adding 118.9 million tonnes and 34.8 million tonnes respectively. Significant potential remains at both Kens Bore and Trinity Bore deposits to expand the resources, especially to the south of the identified Trinity Bore resource. Further potential remains from additional targets identified within the Red Hill Joint Venture area. Red Hill Iron’s West Pilbara tenements are subject to an iron ore specific exploration joint venture with API Management Pty Ltd. API has earned a 60% participating interest and is earning a further 20% interest by lending Red Hill Iron all its project costs, including any capital costs for mine development. These loans are to be repaid out of 80% of Red Hill Iron’s share of any future mine revenue unless Red Hill Iron opts to convert its interest in the project to a 2% free-on-board royalty at any time up to the delivery of first ore to customers.