Completes Acquisition of Producing Coal Mine

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

18 May 2010

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

Completes Acquisition of Producing Coal Mine in Tete, Mozambique

Beacon Hill Resources Plc (AIM: BHR), the AIM listed resource company, is pleased to announce that all conditions relating to the acquisition of Minas Moatize LDA ('Minas Moatize'), which owns and operates a coal mine in the Tete Province of Mozambique, have been satisfied and the acquisition has now been completed by BHR Mining Limited ('BHR Mining'), Beacon Hill's 49% owned associate, in which the Group has an option giving exclusive right to increase its interest to 75%.

BHR Mining will now immediately commence development work to expand the underground mining operation, which currently produces approximately 2,500 tonnes per month. The short term objective is to achieve production in the region of 8,000 tonnes per month through the upgrading of infrastructure and the implementation of an additional mining shift. Work will also commence on a small scale open cut using the existing trial pit, with the objective of mining a total of 120,000 tonnes of coal over the next twelve months, bringing the Group's average monthly production target to approximately 18,000 tonnes per month from both the underground and small scale open cut. BHR Mining also intends to acquire a mobile wash plant to process the coal mined, thereby improving the quality of coal produced.

The coal produced over the next twelve months will be sold to domestic markets at the mine gate to local and regional businesses, such as the sugar, tobacco and smelting industries which operate in the region. The sale of this coal will provide short term cash flow for BHR Mining to be invested in the further development of this mine.

Over the next 18 months, the Group's objective is to establish a large scale open cut operation to produce approximately 4Mtpa ROM coal, capable of generating annual revenues of approximately US$200 million at current coal prices.

Beacon Hill Executive Chairman Justin Lewis said, "The completion of this acquisition provides the Group with immediate management control with revenue generation from a producing underground coal mine. We intend to immediately commence development work to expand the current production, bolstering the Group's revenue generation and supporting additional development work intended to ramp up total production to 4Mtpa ROM coal.

"Coking coal is likely to remain as one of the most sought after commodities in the world over the next decade, and this acquisition gives us exposure to the only producing coal mine in Tete, Mozambique, a globally significant coking coal region. Importantly, this acquisition also gives us a foothold in the region, and we intend to further leverage our position in the area through strategic off-take agreements for which we are currently in advanced discussions, and which may include the provision of financing."

**ENDS**

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