BHR.L Regulatory News (BHR)

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

4 April 2011

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

MoU to Acquire Significant New Coal Asset in the Moatize Coal Basin, Mozambique

Beacon Hill Resources, the AIM listed resource company, announces that it has entered into a Memorandum of Understanding ('MoU') relating to the potential acquisition by Beacon Hill of a 100 per cent interest in coal licence area 1165L in the Moatize Coal Basin in Northern Mozambique ('Licence 1165L'). Completion of this acquisition would provide a significant expansion to the Group's existing coal resources and represents a first step in building upon its existing operating coking coal mine at Minas Moatize.

Highlights

·; Significant block located close to the Group's existing Minas Moatize coking coal mine ('Minas Moatize')and just to the east of Vale's Moatize project and ETA Star's licence 1068

·; Estimated by the current owners to have a gross coal resource of in excess of 450 million tonnes (Gross Tonnes in Situ) with evidence of a low ash export product with the potential for coking coal

·; Estimated by the current owners to have a low strip ratio, with overall overburden ratio estimated to be less than 3.5:1

·; Acquisition price of US$42 million, payable in cash upon completion

Justin Lewis, Executive Chairman said "This represents a very significant opportunity for the Group, and demonstrates the first step in the Group's wider expansion strategy, linking our current and near term production with a longer term development project to provide considerable value uplift for investors.

"With the acquisition and development of Minas Moatize, currently the only producing coal mine in Mozambique, we have a proven team with a track record for identifying and developing value enhancing projects. Licence 1165L represents a rare opportunity in a prime locality in the globally significant coking coal district of the Moatize basin. The acquisition of Licence 1165L has the capability to increase Beacon Hill's coal resources in the region by more than five fold as well as the potential to add further near term production of coking coal."

Memorandum of Understanding

BHR Mining Limited ('BHRM'), a subsidiary of Beacon Hill, has entered into the MoU with Global Minerals & Metals Pte Limited ('GMM'), a subsidiary of Global Coke Limited to acquire a 100 per cent interest in Licence 1165L for a consideration of US$42 million, payable in cash upon completion. GMM has entered into a similar memorandum of understanding with the current owner of Licence 1165L, having paid a deposit of US$2 million to such owner and with the balance of US$40 million due upon completion of the acquisition. The acquisition of Licence 1165L by BHRM is conditional upon completion of GMM's acquisition of Licence 1165L. Completion of both transactions is conditional inter alia upon agreement of formal terms, BHRM and GMM being satisfied with due diligence on Licence 1165L and the obtaining of any necessary government consents.

The MoU provides that BHRM will grant GMM the right to acquire a 26% interest in Licence 1165L for a consideration of US$10.5 million for a period of 120 days following completion of BHRM's acquisition of such licence. Conditional upon GMM exercising its option to acquire 26% of Licence 1165L, BHRM and GMM will use their reasonable endeavours to agree an off-take agreement in relation to the coking coal produced from the area under Licence 1165L and BHRM will grant GMM the first right of refusal to enter into an off-take agreement for the thermal coal produced from such licence, in each case upon terms to be agreed.

BHRM and GMM currently have an exclusivity for a further 60 days and BHRM is currently undertaking detailed due diligence.

About Licence 1165L

The licence area of Licence 1165L is situated in the Calambo/Nhamporopiri region, Moatize District, Tete Province, north-western Mozambique, about 55km from Tete town, the capital of the province and about 40 km from Minas Moatize. For a map showing the location of Licence 1165L visit Beacon Hill's website at www.bhrplc.com.

The block covers an area of 11.467 sq km and is located just to the east of Vale's Moatize project and ETA Star's licence area 1068. Bordering on the North, South and East of Licence 1165 is Riversdale's licence area.

The current owners of the resource carried out a drilling program during 2009 which included the drilling of 55 boreholes, on a 400m by 400m grid, ranging in depth from 104.2m to 185.1m. In addition coal analysis was carried out on all the cores. The program identified three seams of coal ranging in thickness from 2m to 26.7m.

Synergy Geotech Pvt Ltd of Nagpur, India estimated a total coal resource of 450 million tonnes (Gross Tonnes in Situ) discounted to 360 million tonnes (Total Tonnes in Situ) after applying a 20% discount for geological loss.

Development Plan

Following due diligence and acquisition of Licence 1165L, Beacon Hill will create a development plan for the project which will initially include further exploration to confirm a JORC compliant mineable resource as well as further testing on coal quality.

**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.