BHR.L Regulatory News (BHR)

9th October 2014

Beacon Hill Resources Plc / AIM: BHR / Sector: Mining

Beacon Hill Resources Plc ('Beacon Hill' or 'the Company')

Agreement to Sub-Lease Rolling Stock

Beacon Hill Resources PLC, the AIM listed Mozambique coking coal miner, is pleased to announce that it has entered into a sub-lease of its rolling stock to an undisclosed party ('the Sub-lessee').

This sub-lease agreement will support the Company's expansion strategy to advance Beacon Hill's Minas Moatize Coking Coal Project to Tier One cash cost status which will deliver an economically robust mining project even during periods of depressed coking coal prices.

Highlights

· The Sub-lessee will utilise all of Beacon Hill's five locomotives and 90 rail wagons on the Sena Line

· Minimum lease term of 12 months with extension option

· Increases Sena Line utilisation by up to 500,000 tonnes per annum

· Final regulatory and Minister of Finance approval received and this represents the completion of a key milestone towards the completion of the Senior Debt Facility

Rowan Karstel, CEO commented:

"We are delighted to have secured a high calibre counterparty to lease our rolling stock on the Sena Line further proving the viability of the logistics solution whilst Beacon Hill's Minas Moatize Coking Coal expansion project is advanced.

"This transaction is a win-win for ourselves and the Sub-lessee whilst also increasing the utilisation of the Sena Line. Our two train sets are the newest class of rolling stock and are a big boost for the entire Mozambique coal supply chain. We have taken 9 months to conclude this transaction and with considerable assistance from the Government of Mozambique represented by the Ministry of Mines and Ministry of Finance."

Background to the Transaction

During H1 2014, BHR announced the delivery of five new Grindrod locomotives and 90 Transnet Engineering rail wagons to Mozambique after 12 months of manufacture. The transaction was funded by Thelo Rolling Stock South Africa, with Beacon Hill's subsidiary BHR Investments Mauritius as lessee. The new rolling stock has a value of approximately US$21 million.

Pending the upgrade of the Minas Moatize coking coal mine to a Tier 1 cash cost producer, Beacon Hill announced its intention to sub-lease the rolling stock until it re-commenced export operations through the Port of Beira. The addition of the rolling stock translates to 500,000 tonnes per annum of new rolling stock capacity to the Sena railway rolling stock fleet with expected availability rates of 94% associated with new fleet.

**ENDS**