Quinsam Coal

Geneva-based Vitol Group has agreed to provide US$6 million cash to Hillsborough Resources Ltd. (TSX:HLB), which will use the money primarily at the Quinsam coal mine near Campbell River, B.C.

Clean coal production for nine month periods ended September 30, 2008 was 335,098 tonnes, compared to 350,613 tonnes for the same periods in 2007, from raw coal production of 555,658 tonnes respectively in 2008 compared to 527,175 tonnes in 2007. Adversely affecting the production cost of coal during the third quarter of 2008 was the effect of continued training of new personnel, faulting experienced in new sections of the mine and equipment breakdowns. The Quinsam mine began development of an underground access route which will allow depillar mining of up to 700,000 tonnes of raw coal. While coal extraction continues concurrently in other sections of the mine, the development of this access route is expected to be completed no later than Q1 of 2009. A drilling program was completed on the Quinsam North block, located immediately north of and adjacent to the existing Quinsam mine. The purpose of the program was to further define the resources described in the National Instrument 43- 101 compliant technical report completed in July 2006, and to provide additional technical data for preparation of a mine development plan. In addition to the Quinsam North drilling and coring work, a number of infill drill/core holes were completed at the Quinsam 7 South area. These holes provided a closer drill spacing to increase confidence in the coal quality of the No. 4 Seam at 7 South, and to provide drilling control to facilitate the design of an underground mine plan.

Released a revised a technical report recommending further development drilling in order to assess possible means of extending the mine’s No.1 Seam workings north-eastwards. The principal focus of this work should be to assess the optimal limits for the extension of the projected 2-North workings into the northern extension areas of 2-North and 5-South, on the west and east sides of Quinsam River respectively.