BHR.L Regulatory News (BHR)

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

6 August 2010

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

Temporary Wash Plant Purchase for Minas Moatize Coal Project in Tete, Mozambique

Beacon Hill Resources Plc (AIM: BHR), the AIM listed resource company, is pleased to announce that it has signed a contract with PJ Technology of South Africa to supply a purpose manufactured temporary 20,000 tonnes per month capacity mobile wash plant for its Minas Moatize coal mine in the Tete Province of Mozambique. This wash plant is designed to process coal from the existing underground and the developing opencast pit producing thermal coal for local markets and to allow the Group to produce product for trial shipments of export thermal and coking coal towards the end of the year. 

Following the upgrade of the underground operation, production has increased significantly to 7,000 tonnes of coal in July, from the previous average monthly rate of 2,850 tonnes. This is expected to further increase to over 8,000 tonnes per month in August. Excavation of the 115,000 tonnes of overburden to expose the coal seam and allow the extraction of approximately 120,000 tonnes of thermal coal per annum from the initial opencast is now substantially complete.

Beacon Hill Executive Chairman Justin Lewis said, "The wash plant will enable the Group to process an additional 120,000 tonnes of thermal coal from the initial opencast operation over the next twelve months, to complement existing and improving underground production which is estimated to be 8,000 tonnes in August further to the recruitment of an additional sixty employees. Coal will be sold to local users, generating additional revenues during the development period of the mine. At the same time the plant will enable the Group to produce a coking coal product for trial export shipments."

The complete plant will consist of three sections namely a crushing section, DMS section and fines treatment section. The plant is designed to treat run of mine coal with a feed size of

**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 recent 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 is currently in the process of being granted a Mining Lease on the Arthur River project, with production targeted in Q4 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 in Q4 2010 to provide further uplift from the upgrading of the current measured and inferred resource of 39 million tonnes.