BHR.L Regulatory News (BHR)

Beacon Hill Resources plc / Ticker: BHR / Index: AIM / Sector: Mining

12 August 2010

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

Approval of Mining Lease at Arthur River Magnesite Project

Beacon Hill Resources plc (AIM:BHR), the AIM listed resource company, is pleased to announce a further significant step in the development of its Arthur River magnesite project in north-west Tasmania, with the formal grant of a Mining Lease by the Government of Tasmania. This allows the Group to progress to the next stages of the development and construction of the mine.

Following the approval of the Mining Lease by Mineral Resources Tasmania, the Group will continue to advance the statutory Development Proposal and Environmental Management Plan ('DPEMP'), which is already well progressed and anticipated to be finalised by the end of the year. Several key components of the DPEMP have been completed, including the flora, fauna and Aboriginal heritage surveys, which are necessary for the Group to complete in order to design initial mine plans and associated drilling programmes.

In addition to this development work, the Group has also developed a drilling programme to further expand the resource, targeted at increasing the current Measured and Inferred resource of 39 million tonnes, in order to bring additional tangible value to this significant magnesite resource. The drilling programme is anticipated to begin in the last quarter of 2010.

Beacon Hill Executive Chairman Justin Lewis said, "The formal granting of a Mining Lease will allow us to continue to the next stage of development at our Arthur River project, including the commencement of a drilling programme before the end of the year. 

"Whilst the application process was in progress, we ensured that essential surveys for the Development Proposal and Environmental Management Plan were continued, and I believe that we are now in a strong position to rapidly advance this process towards completion by the end of the year.

"The granting of the Lease also allows us to progress our discussions with potential off-take and joint venture partners in regard to the construction of a calcination plant. Such a plant would enable the processing of our magnesite product into magnesia (CCM, DBM and/or EFM)."

**ENDS**

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Notes

Beacon Hill Resources Plc (AIM:BHR) is an AIM listed resource company focussed on the acquisition and development of assets in commodities relating to the steel production industry.

The Group currently has two primary assets:

·; Minas Moatize Coal Mine in Tete, Mozambique

BHR Mining Limited owns the Minas Moatize coal mine, the only operating mine in the globally significant coking coal region of Tete, Mozambique. Since acquiring the mine in April 2010, the Group has made strong progress towards ramping up production with a focus on establishing a large open cast operation, capable of producing approximately 2Mtpa saleable coal.

BHR Mining is a joint venture between Consolidated Minerals, Global Coke Limited and Beacon Hill. The recently announced strategic investment by Global Coke valued BHR Mining at US$210 million; following this investment Beacon Hill will own approximately 50% of BHR Mining. BHR Mining has an agreement to enter into an off-take agreement with Global Coke to purchase all the coking coal produced by the mine over its life at a price referenced to market rates from the mine gate.

·; Tasmania Magnesite NL, Tasmania

In October 2009 the Group acquired Tasmania Magnesite NL, which owns the Arthur River and Keith River magnesite projects in north-west Tasmania. The Group's initial focus is on the Arthur River project, which is the third largest recorded magnesite deposit in Australia, with a JORC compliant measured and inferred resource of 39 million tonnes of magnesite.

The Group has been granted a Mining Lease on the Arthur River project and production is targeted by the end of 2011. In tandem with the application of a Mining Lease, Beacon Hill has made solid progress with the Development Proposal and Environmental Management Plan at the Arthur River project. In addition to this development work, the Group will commence a further exploration and drilling programme towards the end of this year to provide further uplift from the upgrading of the current measured and inferred resource of 39 million tonnes.