BHR.L Regulatory News (BHR)

3 April 2013

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

Beacon Hill Resources Plc

("Beacon Hill" or "the Company")

Operations Update

Beacon Hill Resources Plc, the coal producer listed on the AIM Market of the London Stock Exchange ('AIM') and on the Australian Securities Exchange ('ASX'), is pleased to provide an update on operations at its Minas Moatize Coking Coal Project in Mozambique.

Highlights

·; Commissioning for Phase 2A of the Minas Moatize Coking Coal Plant in progress with first coal due May 2013

·; Mining Contract agreed between the Company and the Government of Mozambique to underpin development

·; Rolling stock conditions precedent expected to complete in April 2013 to export coal on the rail line to the coast

·; New executive personnel employed to ensure strategic delivery

Beacon Hill CEO, Rowan Karstel said, "We continue to make excellent progress on all fronts. The commissioning of the Minas Moatize wash plant is a major milestone in the Company's history and I am delighted that we will now deliver coking coal product as promised. The signing of the Mining Contract also represents a major strategic shift for Minas Moatize Ltda bringing it closer to Government objectives and ensuring the longevity of the operation, fiscal exemptions and its sustainability going forward. The rolling stock conditions precedent will be completed this month and, with the addition of new highly experienced personnel, I am highly confident that we will deliver on our strategy and build shareholder value."

Minas Moatize Limitada ('MML') Plant Update:

The Minas Moatize plant Phase 2A is ready to start, with commissioning scheduled during April 2013. The plant, which was fabricated and designed in South Africa and transported to Tete in Mozambique, was re-designed in November 2012 to be more capital efficient which resulted in savings of 80%. This meant construction was phased in order to coincide with the arrival of the rolling stock and assist with the spreading of the risk and the impact on the Company's cash flow and the balance sheet. In particular, the plant design took into account the consultants collective experience from Vale and Rio Tinto's wash plants with regard to maximising the coke fraction in the fine coal. Procurement of the Reflux Classifier and later of the Flotation cells (Phase 2B and 2C) will ensure that the coking coal yield is fully optimised.

The electrical commissioning of the plant will commence in early April 2013 followed by the water and medium circuit commissioning. The hot commissioning will start mid-April and the expected plant feed will be c. 30-40,000 tons during April 2013. The design and procurement of the process plant Phase 2B and 2C is still on track and commissioning of 2B will start during Q4 of 2013.

Mining Contract:

MML, represented by CEO Mr. Rowan Karstel and the Mozambican Government, represented by her Excellency the Minister for Mineral Resources, Dra Esperanca Bias, signed a mining contract in Maputo on the morning of 3 April 2013. The initial phase of this allows the Government a 5% equity stake in MML which aligns the Government's interests with that of the Company. In addition, Mozambiquian national interests can acquire a further 10% stake in MML at fair market price, of which: i.) 5% can be acquired at fair market price by the Mozambique Sovereign Fund, EMEM; ii.) the Mozambique Government can exercise its option to acquire a 5% stake in MML at fair market price for the purposes of listing on the Mozambique Stock Exchange.

The signing represents a milestone in the process of stabilising the fiscal and legal framework of MML by providing the following advantages:

·; Security of tenure through this 25 year contract and a predictable long term legal framework of investment

·; The ability to transfer the attained contractual position to third parties

·; The granting of fiscal incentives and exemption from custom duties

·; The ability to employ sufficient skilled foreign professionals required to implement planned development and if required hire international contractors for the term of the contract.

Rolling Stock Update:

Following the rolling stock transaction announced on 1 February 2013 between the Company's wholly owned subsidiary MML and Thelo Rolling Stock Leasing Proprietary Limited ('Thelo'), the Board is pleased to announce that the completion of the conditions precedent are progressing well, with rail access and general insurance conditions being fulfilled by MML. The final leasing financing condition outstanding is political and commercial risk insurance from ECIC, the export agency of South Africa. This cover is expected to be completed prior to the end of April 2013 and to this end MML and Thelo have extended the deadline for its completion to 30 April 2013. The extended ECIC approval process is not expected to impact the delivery of rolling stock to MML by Thelo in Q3 2013.

Expansion of the Team:

In order to facilitate its growth strategy and ramp up production, the Company recently appointed Stefanie Cronje as Chief Financial Officer for MML and Lynette Kruger as the new Marketing and Logistics Manager.

Stefanie has a wealth of knowledge with regards to growth companies and has successful track record of implementing turnaround strategies. She has a B.Com degree from the University of Pretoria and a MBA from the University of Stellenbosch. From 1991 to 1998 Stefanie was Group Financial Director at Incledon and from 1999 to 2009 was the CFO at Geratech Zirconium Beneficiations. For the last three years she has held the position of Financial Director at Brokrew Industrial (Pty) Ltd. Stefanie has already had a positive impact on the recent audit and is in the process of implementing new international standard financial systems and processes.

Lynette Kruger is the new Marketing and Logistics Manager for the Company. She has invaluable experience in all aspects of coal marketing and the logistics value chain. She completed her B. Com. Marketing degree from the University of Pretoria.

Lynette has been in the mining industry since 1999 where she started with Metorex Coal Division, responsible for all domestic marketing and logistics for four collieries and a siding. After the Shanduka Coal buy out of the Metorex in 2006, she worked closely with Glencore International.

**ENDS**