SNRP.L Regulatory News (SNRP)

31 May 2013

STRATEGIC NATURAL RESOURCES PLC

("SNR" or the "Company")

Unaudited interim results for the twelve months ended

28 February 2013

Strategic Natural Resources PLC (AIM: SNRP), the 74 per cent. owner of coal exploration and mining assets located near Indwe in the Eastern Cape Province of South Africa, today announces its unaudited interim results for the twelve month period ended 28 February 2013. On 16 January 2013 the Company announced that it had changed its accounting reference date from 28 February to 30 June. The Company is announcing its unaudited second interim figures for the twelve month period ended 28 February 2013 and will announce audited accounts for the 16 month period ending 30 June 2013 by 31 August 2013 and publish its 2013 Annual Report and Accounts by the same date.

Highlights:

·; Mining operations commenced in 2012

·; Logistics and infrastructure to transport coal mined at Elitheni to the port now fully in place

·; Operational review commenced - start up and commissioning difficulties being addressed

·; Discussions commenced with potential strategic investors

Gabriel Ruhan, Chief Executive Officer of SNR, today said:

"We continue to be excited by the strategic mining potential at Elitheni and are optimistic that the project start up and commissioning difficulties are largely behind us.

The operational review we commissioned earlier in the year, involving both internal and external experts, is on going. The initial recommendations have and are being implemented and mine site productivity benefits are already being seen. Based on current mine production and wash plant rates, we are targeting having sufficient coal from the Elitheni Mine delivered to the port by the end of June / early July 2013 to enable the shipment of a cargo of Elitheni coal.

Discussions with several potential strategic investors are progressing well and we remain confident that a investment deal will be concluded with the right partner before the end of July 2013."

For further information about Strategic Natural Resources plc please visit www.snrplc.co.uk

Chairman's Statement

Following my appointment as the Chairman of SNR in February of this year, I am reporting on recent developments at the Company and on our unaudited second interim results for the 12 month period ended 28 February 2013.

Operational update

As shareholders will be aware we appointed our new CEO, Gabriel Ruhan, in February 2013. Mr Ruhan is an accomplished CEO with extensive management experience across a wide spectrum of businesses. Under his leadership a full operational and management review was instigated and this is still on going. We are very pleased with the progress that has been seen since we started implementing the initial recommendation of this review.

From an operational viewpoint it is significant that we are now actively in our commencement phase of mining coal. This is a major change in our business, the Company having made the transition from being a resource company to also being a coal producing miner. It should be noted however that we continue to be an exciting resource company with significant prospects for adding further additional major coal resources.

Given that we have still only drilled 6% of our licence area to date, extensive amounts of resource remain to be proved up in areas that have been mined since the mid 19th Century. We shall be continuing with our drilling programme over the next twelve months and look forward to giving regular updates as additional coal resources and value are added to our reserves. We are hopeful that we shall be in a position to announce good news in the coming year.

Coal production

On the production front, our desire to increase future production is balanced by the current low price of coal that we expect to recover over the next 18 to 24 months. Our business structure and future mine planning is designed to facilitate acceleration of production as coal prices improve. Whilst at current price levels our profit is marginal, it is worth producing coal to prove up our logistics and establish our position as an emerging coal miner with exciting potential given our significant geographical and logistics advantage in South Africa.

We have achieved a great deal in this period with the Elitheni Mine commencing coal production at the end of 2012. Regrettably, difficulties encountered in the start up and commissioning phase of the project has delayed the timing of the first sales cargo of Elitheni coal As a consequence, the Board commissioned the operational review covering all aspects of the Company's mining operations.

We have made further modification to the wash plant during the first 5 months of this year further improving its performance. In line with the initial recommendations of this review, our mining operations were reduced during the latter half of April 2013 while corrective interventions were made and mining production levels have now been increased, with encouraging results. The Company is currently mining with a single Continuous Miner ("CM") section and is planning to commence two additional Drill and Blast sections, prior to the end of the calendar year.

SNR engaged a South African based mining consultancy to advise the Company on its operations and have contributed to the operational review. A number of recommendations were made, most of which we have already been implemented.

Logistics advantage

We are the only coal producer in the Eastern Cape of South Africa (with a population of circa 6.6m) and we control most of its known coalfield. Our logistic advantage is significant, given our access to the underutilised export ports of East London and rail facilities available to us near to the Elitheni Mine.

Electricity opportunity

The absence of a coal fired power station in the Eastern Cape is due, in the main to the historical lack of a coal producing mine in the region. The Elitheni Mine now provides a strong business case to construct a coal fired power station to address the power shortages in the region.

The Eastern Cape Province is an area of high unemployment and the South African government is attempting to attract businesses to the region. Industry requires continuity of electricity supply and building a mine mouth power station in the Eastern Cape would be a significant way of establishing confidence within the business community and attracting investment to the region.

The South African government has demonstrated its commitment to the long term development programme in the Eastern Cape as evidenced by the recent construction of the nearby $2.0bn port at Coega, Port Elizabeth. We believe that a coal fired power station is a logical and essential continuing part of this development program in order to bring the infrastructural capacity of the Eastern Cape up to the standard of other parts of the country. As the sole coal producing mine in the Eastern Cape, we will look to advance a coal power strategy partnership during 2014.

Strategy

Our immediate key objectives are as follows:

- to maintain and enhance the current levels of production at the Elitheni Mine, thus generating revenue for the Company;

- to finalise an agreement with an equity partner / investor to repay our short term debt and secure adequate funding to further develop the Elitheni Mine. This process is progressing well and we are hopeful to be in a position to announce the results of the process by the end of July 2013;

- to advance a coal power strategy partnership during 2014;

- to advance the sale of domestic coal to the local industrial market in the Eastern Cape; and

- to advance further drilling of the licence area; and

- to enhance shareholder value.

Update on a strategic investor

We are in the process of raising further finance to help the Company implement its strategy and, on 2 May 2013, we announced that we have been approached by, and had held discussions with, a number of parties (including international coal companies) who had expressed an interest in working with the Company to develop its coal resources in the Eastern Cape. I am pleased to report that these discussions are continuing and we expect to be in a position to update investors on this in the near future.

The commencement of our mining operations has been a capital intensive activity and in light of this we are targeting to receive further investment by the end of July 2013. This will enable us to repay our existing finance facility with LCL and meet our on going working capital needs.

Financial results

During the 12 month period ended 28 February 2013, the Company made a loss of £2,528,000 (loss of £1,906,000 for the year ended 29 February 2012) inclusive of a charge for share options of £242,000 (2012 - £92,000). The increase in this loss is due to the additional corporate overhead supporting the significantly increased business and operational activities in the twelve months to February 2013.

These second interim financial results reflect the large increase in capital investment in the Elitheni Mine and its associated equipment as we approach steady state production in the latter part of 2013. All associated development costs have been capitalised and these will be amortised over the anticipated life expectancy of the Elitheni Mine and the underlying mining resources. Long-term assets have increased by some £13,151,000 to £20,452,000, mainly attributable to the capitalisation of these development costs, related capital equipment and the capitalisation of the containers.

Costs have been well controlled during the period despite the significant increase in activity and I believe we are well positioned as we approach our maiden revenues in the build-up to full production towards the end of 2013. The short-term capital needs of the Company have been funded through the short-term LCL facility, which is due for repayment in July 2013. This, together with the leasing of some capital equipment, has contributed to the increase in current liabilities that now stand at £6,338,000 (2012 - £1,104,000).

As I have mentioned earlier, discussions with potential strategic investors and partners continue and I look forward to updating shareholders on this in the near term.

Andy Brennan

Chairman

31 May 2013

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)

For the twelve months ended 28 February 2013

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (unaudited)

As at 28 February 2013

Company registration number 5249946

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)

For the year ended 28 February 2013

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)

For the twelve months ended 28 February 2013

NOTES TO THE INTERIM STATEMENT

For the 1212 months ended 2828 February 20132013

1. Basis of preparation

These un-audited condensed consolidated second interim financial statements do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The comparative figures for the year ended 29 February 2012 were derived from the Statutory Accounts for that year and were approved on the 5 July 2012. The auditors' report on those accounts was unqualified and did not contain a statement under section 498 (2) - (3) of the Companies Act 2006. These accounts have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006. The financial information contained in this interim statement has been prepared in accordance with all relevant International Financial Reporting Standards ('IFRS') in force and is expected to apply to the Group's results for the period ending 30 June 2013 and on interpretations of those Standards released to date.

The Financial Statements have been prepared on a going concern basis. The impact of market conditions both from a currency and commodity price could however negatively impact in this ability. The Group is considering a number of funding options including the issue of new equity to a strategic partner and investors. Whilst these negotiations are on-going, the Group does not have any binding agreements in place at present but is confident with current production build-up, that it will be able to attract the investors who will provide the necessary funding for current and future needs of the Group.

2. Accounting policies

These condensed consolidated interim financial statements have been prepared in accordance with the accounting policies set out in the Group's financial statements for the year ended 28 February 2013.

3. Loss per share

The basic and diluted loss per share has been calculated by dividing the result for the respective period attributable to shareholders by the weighted average number of shares in issue during the relevant period.

4. Property Plant and Equipment / Intangibles

a. Property Plant and Equipment

b. Intangibles

5. Reconciliation of profit before tax to cash generated from operations

6. Year end

As announced in February 2013, the Company has changed its accounting reference date from 28 February to 30 June. The Company will announce its audited Report and Accounts for the 16 months ending 30 June 2013 by 31 August 2013.

7. Approval

The Board of directors approved this interim statement on 30 May 2013. This interim statement has not been audited.

Shareholders will be able to download a copy of second interim report from the Group's website www.snrplc.co.uk. Copies may also be obtained from the Company's registered office, 3 St Helen's Place, London EC3A 6A