BHR.L Regulatory News (BHR)

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

7 March 2011

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

Minas Moatize Coal Resource Upgraded to 80 million tonnes

Beacon Hill Resources Plc (AIM: BHR), the AIM listed resource company, is pleased to announce a significant JORC compliant Coal Resource upgrade at the Minas Moatize coal mine in the Tete Province of Mozambique, in which is has a 100% interest, following completion of a recent drilling programme. 

Overview

·; 59% increase in overall JORC compliant Coal Resource to 79.77 million Gross Tonnes in Situ (from 50.31 million tonnes)

·; 123% increase in Measured and Indicated Coal Resource to 56.73 million Total Tonnes in Situ, allowing for geological loss (from 25.39 million tonnes)

·; Significant increase in coking coal yield (a high quality 10.5% ash product) to 23.08%

·; Increased coking coal yield providing an estimated additional annual production of 200,000 tonnes of coking coal - total coking coal production now estimated to be in excess of 900,000tpa of coking coal (based on ROM of 4 Mtpa)

·; With current coking coal prices of in excess of $250 per tonne, this translates into significant additional potential revenue for the Group

·; Upgrade resource calculation based upon 41 drill holes, including 22 cored holes recently drilled by the Group with core samples tested by ALS Laboratories in Witbank, South Africa

Beacon Hill Executive Chairman Justin Lewis said, "We are delighted to announce this significant increase in the JORC compliant Coal Resource at Minas Moatize, which confirms the management team's ongoing confidence in the significant upside of the mine. The size of the mineable coal resource has doubled in the last 12 months. This translates to both a significant extension to the overall mine life as well as a further upgrade in the coking coal yield expected from the mine over its lifetime. In tandem, these two factors should translate into a significant increase in the revenues and profits achievable from the mine over its lifetime."

Resource Upgrade

Beacon Hill is pleased to announce an updated JORC compliant Coal Resource following the completion of a recent drilling and testing programme at the Minas Moatize coal mine in the Tete Province of Mozambique. Between May 2010 and November 2010 the Group drilled an additional 22 cored holes across it licence area. This is in addition to 19 holes previously drilled by the former owners of the mine between 2007 and 2008. The holes were drilled to an approximate grid of 350m by 350m and coal plies depths ranged from 13.2m to 158.8m. Testing of the cores was undertaken by ALS Laboratories at Witbank, South Africa.

The assessment of the Coal Resource is in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) 2004 and has been independently compiled by Peet Meyer of PC Meyer Consulting Pty Ltd, a qualified Competent Person for the purposes of the JORC Code and the AIM Rules.

All coal tonnes and qualities are quoted on an air dry basis. A geological discount of 10% for "Measured" and 20% for "Indicated" were applied to "Gross Tonnes in Situ" (GTIS) to derive the "Total Tonnes in Situ" (TTIS).

Notes:

1. The Coal Resource in March 2010 was compiled by SRK Consulting (South Africa) (Pty) Limited.

2. In March 2010 a total discount of 30% was applied to the GTIS to calculate TTIS.

Product yields

There were two wash products extracted:

Yield

- Primary 10.5% ash content product 23.08%

- Secondary 25 Mj/kg product 21.33%

The coal plies which yield these products were modelled and the Gross Tonnes in Situ for those plies calculated with its concomitant qualities.

The primary 10.5% ash product has a sulphur content under 1% and a swelling index of 9, which is indicative of good coking properties. The Group has drilled two large diameter cored holes to do full coking coal analysis which will be reported on once the analytical results are available. These specialised tests are being done by ALS in Witbank in South Africa and Maitland in Australia.

**ENDS**

For further information on the Group, visit www.bhrplc.com or contact:

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 - the Minas Moatize Coal Mine in Tete, Mozambique and Tasmania Magnesite NL in Tasmania.

The Coal Resources quoted in this announcement are based on the Resource Statement: Minas Moatize Limitada as at 1 March 2011, complied by Peet Meyer of PC Meyer Consulting Pty Limited, who is a member of the Geological Society of South Africa (GSSA) and the Fossil Fuel Foundation. Peet Meyer has more than 21 years experience in the southern African coal industry of which he has spent more than 5 years in the Mozambique Coalfields. He has the appropriate relevant qualifications and experience to be considered as a Competent Person as defined in the Standards on Mineral Resources and Reserves - Definitions and Guidelines (2004). The Coal Resources Estimate presented in this report has been carried out in accordance with the JORC Code and Mr Meyer consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.