🕐29.06.11 - 09:54 Uhr

BEACON HILL RESOURCES PLC COMMENCES PRODUCTION FROM INITIAL TRIAL PIT AND TRIAL TRUCKING OF COAL



Beacon Hill Resources Plc / Ticker: BHR / Index: AIM / Sector: Mining 29 June 2011 Beacon Hill Resources plc (Beacon Hill or the Group) AGM Statement
Beacon Hill Resources PLC (AIM: BHR), the AIM listed coal producer, is pleased to provide an update on its projects, which will be read at todays Annual General Meeting.
Highlights
* First production of export grade coal to commence at Minas Moatize coal mine in Tete, Mozambique
* Mining from initial open pit and commissioning of the temporary wash plant underway
* Initial trial trucking of coal to the port of Beira by road to start in July ahead of first export shipment
Justin Lewis, Chairman of Beacon Hill Resources, commented "We are delighted to announce the commencement of operations at Minas Moatize with production of its first washed export grade coal.

This is another significant milestone for the development of the Minas Moatize coal mine, which, has been achieved in less than a year since we acquired the mine.
"A further key development is the forthcoming commencement of trial trucking of coal to Beira which we will ramp up over the coming months.

This will enable us to start stockpiling coal at the port pending a first export shipment."
AGM Statement
"I am very pleased today to announce the following trading update to shareholders, in particular in relation to the Minas Moatize coking coal project in the Tete province of north western Mozambique.
Minas Moatize
Since we acquired Minas Moatize in May 2010, the Group has pursued a twin track strategy, firstly, to continue production from the existing underground mining operation producing coal for the local markets as well as small volumes for export markets.

Secondly, the Group is rapidly developing a larger open pit mine that will have the ability to produce 2.35Mtpa of saleable coal, which will include 0.9Mtpa of coking coal.
Current Production
As announced at the time of the results, we have been progressively winding down production from the underground mining operations at Minas Moatize in preparation of the large open pit mine, which is planned to commence mining in Q1 2012.

I am pleased to be able to announce that today the Group has commenced mining from the initial open pit, together with the commissioning of the mines temporary coal handling and preparation plant (the Washplant).

This is an historic step for the Minas Moatize mine, enabling it to produce Mozambiques first export grade washed coal.
The total estimated resource of the initial open pit area is approximately 180,000 tonnes which will be progressively mined over the next 12 months.

The pit has already been pre-stripped and mining is being undertaken with excavators and trucks using a local mining contractor and will have the ability to produce approximately 15,000 tonnes of coal per month.
The Washplant has been purpose built for Minas Moatize in South Africa and has capacity of 120 tonnes per hour.

The Washplant is a modular unit that includes a double roller crusher, dense medium separation plant and a fines treatment plant.

The plant is able to treat run of mine (ROM) coal with a feed size of <400mm and supply four saleable sized coal fractions.
Minas Moatize currently has 39,000 tonnes of unwashed coking and thermal coal stockpiled at the mine and now has the ability to mine further thermal coal over the next 12 months.

Therefore, in advance of production from the main open pit mine, the Group is now able to produce a washed coking coal (from our underground operation), a washed export thermal coal, and a domestic thermal coal.

This will put the Group in an advantageous position of being able to use the current production to both test its logistics network as well as secure long term customers.
Development of Expanded Open Pit Mine
The development of the expanded open pit mine has been the Groups main focus over the last 12 months.

The Group is making good progress in regard to developing the main open pit and should be ready to commence pre-stripping from it in Q1 2012, building up to a ROM of 4Mtpa producing 2.35Mtpa of saleable coal.
As we announced in early March, TWP Australia Pty Ltd (TWP) has been appointed to finalise the Definitive Feasibility Study including the design of both the mining operation and also the permanent Coal Handling and Preparation Plant.

TWPs work continues to progress well and on schedule.

In addition, we continue to undertake further work in respect of coal qualities and will shortly commence pilot coking oven tests in Australia on large diameter cores drilled earlier in the year.
Transport Infrastructure
Logistical infrastructure and the ability to get product to market is a key challenge in Mozambique.

Beacon Hill believes that is has a significant advantage in that it is currently the sole producer, giving it a competitive advantage in relation to the logistics.
The Groups long term logistics solution will be to utilise the Sena railway line, which runs from Moatize to the port of Beira, and will be operated on a multi-user basis.

At its peak, the Minas Moatize mine is proposed to be produce approximately 1.8Mtpa of coal for export on the seaborne market.

As has been widely reported, the refurbishment of the Sena railway line has been further delayed until at least September of this year.

As a result the Group has been unable to complete a first export shipment of coal by rail to date, however, the operators of the Sena railway line remain confident of being able to transport initial volumes of Minas Moatize coal in the second half of this year.
In order to ensure that Minas Moatize is not wholly dependent on a railway line going forward we have been developing an alternative transport option using trucks.

Minas Moatize has several proposals from regional trucking companies with a view to transporting up to 0.5Mtpa by truck and road to the port of Beira.

This is a transport solution where we are not dependent on the provision of third party infrastructure.

I am therefore pleased to announce that the Group will commence trial trucking of coal from the Minas Moatize mine to the port of Beira at the beginning of July, enabling the Group to begin stockpiling coal at its facility at Beira in advance of making a first export shipment.
Licence 1165L
On 4 April 2011 the Group announced that it had entered into a Memorandum of Understanding to potentially acquire a 100% interest in coal licence area 1165L in the Moatize Coal Basin in Northern Mozambique.

The exclusivity agreement with Global Minerals & Metals Pte Limited relating to the acquisition of Licence 1165L has since been extended to 2 August 2011.
The Group continues to work with the vendors of Licence 1165L to finalise the legal documentation and due diligence to complete this acquisition, and an announcement will be made in due course to update shareholders of developments in this regard.
Tasmania Magnesite
As recently announced the Group has recently completed Phase 1 of a drilling programme at the Arthur River Project in Tasmania.

The results, which will provide the Group with a clearer understanding of the deposit in terms of size, metallurgy and hydrology will be inputted into the Scoping Study.

The Scoping Study, which focuses on confirming the economics of the project in addition to developing an initial conceptual mine plan, is currently being finalised and the Group anticipates that it will be completed before the end of 2011.

The Scoping Study will also provide the basis for moving forward to a full Feasibility Study including the submission of a development proposal and environmental management plan to secure mining approval, the completion of the approved drilling programme and the securing of a joint venture and or off-take partners for the project."
**ENDS** For further information on the Company, visit www.bhrplc.com or contact: Justin Lewis Chairman, Beacon Hill Resources Plc +61 (0) 3 9627 9905 +61 439 162369 John Prior Collins Stewart Europe Limited +44 (0) 20 7523 8350 Adam Miller Collins Stewart Europe Limited +44 (0) 20 7523 8350 Jeremy Wrathall Renaissance Capital Ltd +44 (0) 20 7367 8273 Susie Geliher St Brides Media & Finance Ltd +44 (0) 20 7236 1177
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. Susie Geliher St Brides Media & Finance Ltd Chaucer House 38 Bow Lane London EC4M 9AY T: +44 (0) 207 236 1177 | M: +44 (0) 7976 749 561 | F: +44 (0) 207 236 1188 | www.stbridesmedia.co.uk



Products & Services | Jobs