Upon our initial meeting with Mr. Ranjeet Sundher, at the Hard Assets Conference in San Francisco, we learnt of his achievements to date and knew he warranted the respect of making Challenger Deep Resources, CDE, our first Featured Company of 2011.


In the early 2000's Mr. Sundher travelled to Mongolia soon after learning of the success, famed Canadian Miner, Robert Friedland was experiencing. In short order, Sundher's company became the 2nd largest holder of mineral rights in Mongolia; second only to Ivanhoe. Mr. Sundher's company sold a number of its initially staked claims to various Canadian companies, but kept the best for inclusion into the formation of Red Hill Energy (his newly formed company at the time).


After Mr. Ranjeet Sundher's company missed on a number of drill programs looking for copper/gold porphyry systems in Mongolia, it switched gears to coal and never looked back. This was the 'game changer' in Mr Sundher's career because he soon made strategic alliances in Mongolia that began opening the right doors. Those who know Mr. Sundher well attribute his honesty, integrity and ability to strike an amicable deal quickly to be what separated Red Hill from the pack. He made Red Hill a preferable company to do business with, as far as its Mongolian partners were concerned.


The first coal property that Mr. Sundher acquired was the Ulaan Ovoo Property, which when combined tonne for tonne with his second and third acquisitions, made Red Hill Energy one of the fastest companies to go from zero tonnes to over 1 billion tonnes in the history of the coal business.


Upon acquisition, Ulaan Ovoo had an historic resource of 78 million tonnes. Not knowing how accurate the historic data was (as it couldn't be compliantly relied upon), and after structuring the deal in a manner that limited Red Hill's upfront risks, it began advancing the project to its current size. Keep in mind the project was acquired in November of 2005 and by September of 2006, it was at full size. This is how fast certain coal deposits can be identified and proven up - unlike most mining situations which can take decades of risk capital.


The potential fast track capabilities for coal projects is another big reason why we took on Challenger Deep Resources as a client, invested in the company and selected them as our first Featured Company of 2011.


The Ulaan Ovoo Project in Mongolia went through a scoping study, a pre-feasibility study and a feasibility study in addition to various transportation studies, analysis of coal quality, bulk sampling programs, etc. Mr. Sundher also successfully obtained environmental approval for the project from the Mongolian Government. This proved to our team that Mr. Sundher is a more than capable CEO. It gives us confidence in Mr. Sundher's ability to not only deal with foreign governments, but to develop a project from exploration through to advanced status. Red Hill's ultimate legacy is that the initiatives and people put in place by Mr. Sundher have allowed the Ulaan Ovoo Project to achieve a final permit to mine from the Mongolian government.


Important Fact: Total coal discovered by Red Hill in Mongolia was 1.4 billion tonnes: (839 Mt Measured, 579 Mt Indicated).


After acquiring Ulaan Ovoo, Sundher navigated Red Hill through a series of other deals, including the purchase of the majority of prospective ground surrounding the Ulaan Ovoo property. Red Hill also acquired through purchase, two additional Mongolian coal properties, Chandgan Tal and Chandgana Khavtgai, the latter being a pure exploration concept property. It was the exploration property (Chandgana Khavtgai) that made up the bulk of Red Hill's subsequent coal resource.

Within roughly 24 months after first pursuing Mongolia coal opportunities, Red Hill had assets of over 1 billion tonnes and had tied up 2 of Mongolia's most important coal basins.


Possibly the most impressive feat of all was that Red Hill, under Sundher's guidance, only expended $15 million dollars on all of its coal projects collectively, not just on its Ulaan Ovoo Project. This fact played a big role in our selection of Challenger Deep Resources as Sundher's allocation of capital was extremely efficient.


Red Hill merged its Mongolian Ulaan Ovoo Coal Project and all its coal assets with Prophecy Resources (PCY:TSX) which is producing coal from the project and currently has a market cap of $185 million. The cash portion of the deal was worth $30 million at the time. The shareholder appreciation (from the merger with Prophecy) was tremendous as timely investors experienced significant multiples on their initial investment.