Final Results

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

6 April 2010

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

Final Results

Beacon Hill Resources plc, the AIM listed resource company, announces its results for the year ended 31 December 2009.

Overview

·; Significant progress made towards new strategy of acquiring and developing assets in commodities relating to the production of steel

·; Acquired Tasmania Magnesite NL in October 2009 - owns the third largest recorded magnesite deposit in Australia across the Arthur River project and Keith River project, with a JORC compliant resource of 39Mt of magnesite

·; Application made for mining lease on Arthur River magnesite project - expected to be granted shortly ahead of production targeted by end of 2011

·; Development Proposal and Environmental Management Plan progressing well on Arthur River magnesite project

·; Strong progress made towards completing the acquisition of Minas Moatize LDA, which owns an underground coal mine in Mozambique - plans to develop a large open cast operation producing thermal and coking coal for export markets

·; Advanced negotiations with potential off-take and joint venture partners in regard to both Tasmanian magnesite assets and Mozambican coal assets

·; Strong investor appetite - raised £1.95 million before expenses over period

·; Secured the provision of up to £5 million from Fortrend Securities Pty Ltd post year end to accelerate development of projects and fund evaluation of additional opportunities

Beacon Hill Chairman Justin Lewis said, "Beacon Hill is making excellent progress towards meeting its strategic objectives in regards to acquiring and developing assets in commodities relating to the steel production industry. During 2009 we worked hard to put the foundations of this strategy in place, namely with the acquisition of our magnesite assets in Tasmania, where we plan to commence production during 2011 in tandem with upgrading the project's JORC resource. In anticipation of commencing production, we are in advanced discussions with various parties in regards to off-take agreements.

"Our highly active work schedule has continued into the current year, with the planned acquisition of Minas Moatize which will provide Beacon Hill with exposure to one of the world's largest undeveloped coking coal regions, the Tete Province of Mozambique. Not only will this strengthen and diversify our portfolio, but will also provide near term cash flow from its small operating underground coal mine. On completion of the acquisition, we hope to implement a defined development plan with the aim of constructing a large open cast coal mining operation." 

Chairman's Statement

This has been a transformational year for the Group, and I am pleased to report that we have made substantial progress in re-aligning the business and implementing the Board's new strategy of acquiring and developing assets in commodities relating to the production of steel. This strategy is designed to capitalise on the continued growth in the steel industry through partnerships with major producers and users, and in turn, create value for our shareholders.

Tasmania Magnesite

The first milestone towards achieving our new strategic objective was the acquisition of Tasmanian Magnesite NL ('Tasmanian Magnesite') in October 2009. Via the Group's Arthur River and Keith River Projects in north-west Tasmania, it provides the Group with direct access to the third largest recorded magnesite deposit in Australia, with a JORC compliant measured and inferred resource of 39 million tonnes of magnesite.

Magnesite, when processed into calcinated magnesia ('CCM'), deadburned magnesia ('DBM') or electrofused magnesia ('EFM'), is a valuable industrial commodity and is used in the refractory and steel making industry to line furnaces and as a chemical in a variety of markets including the agricultural, pulp and paper, waste and water treatment, food, and pharmaceuticals sectors. The market dynamics for magnesia have evolved over recent years as the availability of this commodity has become more constrained, providing the Group with an opportunity to capitalise on the increased demand and reduced global supply.

A significant attraction of Tasmania Magnesite was the significant investment and development work that had been completed on its Arthur River and Keith River projects over the last twenty years. This historical development work has ensured that the Group already has a good understanding of the mineralisation of both projects, and facilitated the significant progress that we have made along our development path and towards finalising a feasibility study. 

Our first step towards enabling Beacon Hill to commence mining at our Arthur River project was the application for a mining lease, which we submitted in December 2009. Despite a delay in the granting of this mining lease due to an objection being submitted to Mining Tribunal, the objection was withdrawn in March 2010 and we now don't expect any additional hurdles before we are formally granted our lease. We continue to make good progress with the Development Proposal and Environmental Management Plan having instructed consultants and commenced the required studies. Finally, we shortly intend to commence a further exploration and drilling programme that will lead to a better understanding of the resource as well as upgrading the current measured and inferred resource of 39 million tonnes.

Minas Moatize

The Board has also made significant progress post the year end towards diversifying its asset portfolio through the proposed acquisition of Minas Moatize LDA and its immediate holding companies ('Minas'), which owns an operating coal mine in the Tete Province of Mozambique. This acquisition when completed, will provide Beacon Hill with exposure to one of the world's largest undeveloped coal regions, and has the potential to be a transformational asset for the Group. 

Minas owns an estimated 33 million tonne resource, together with a small underground mine. Following the completion of the acquisition it is our intention to develop the existing mine into a larger open pit operation, producing in the region of two million tonnes of coal per annum of both coking and thermal coal for export markets.

The Group continues to make good progress towards satisfying the due diligence and legal documentation requirements relating to the purchase of Minas, and I am confident that we will be in a position to announce the formal acquisition of this significant coal resource in the very near future. 

Financial results

For the year under review, the Group reported a loss of £485,000. At 31 December 2009, the Group had cash of £772,000 and net assets of £14 million. Since the year end, a further £1.6 million (before expenses) has been raised by share placings.

Outlook

Beacon Hill now a radically changed group with a defined strategy to acquire and develop assets in commodity groups relating to steel production, a strategy and area which the Board believes it has the ability to generate healthy returns for its investors. The progress made over the past twelve months, in particular in the last six months, towards achieving our objectives has provided us with a solid foundation for future growth, strengthening our burgeoning portfolio of assets with near-term production potential.

We remain focussed on the continued development of our magnesite assets in Tasmania through to the commencement of mining which we anticipate to be in the next two years. In tandem with this, the Board remains committed to negotiating with and ultimately securing off-take partners, and joint venture partners ahead of the construction of a calcination plant. This plant would enable the processing of our magnesite product into CCM, DBM and/or EFM, which would not only guarantee a much higher price for the commodity, but would also significantly reduce shipping and transportation costs.

The Board is also encouraged by the progress made towards the completion of the acquisition of Minas, which we believe to be a milestone in Beacon Hill's development and growth, and I hope to be able to report positively on the outcome of the acquisition process very shortly. 

I would like to take this opportunity to thank our valued shareholders and my fellow board members for their support over the past year, and reiterate my confidence in our ability to propel Beacon Hill towards achieving our operational and corporate objectives over the next twelve months.

Justin Lewis

Chairman

6 April 2010

**ENDS**

Consolidated income statement

For the year ended 31 December 2009

Consolidated statement of recognised income and expense

For the year ended 31 December 2009

Consolidated Statement of Changes in Equity

For the year ended 31 December 2009

Consolidated Balance Sheet

At 31 December 2009

Consolidated Cash Flow Statement

For the year ended 31 December 2009

Notes to the preliminary results

For the year ended 31 December 2009

The financial information set out in this announcement does not constitute the company's statutory accounts for the years ended 31 December 2009 or 2008, but is derived from those accounts. Statutory accounts for the period ended 31 December 2008, prepared under IFRS, have been delivered to the Registrar of Companies and those for the year ended 31 December 2009 will be delivered following the company's annual general meeting. The auditors reported on these accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or (3) of the Companies Act 2006.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs.

The Group's full report and accounts will be dispatched to shareholders as soon as practicable and before 30 April 2010. Copies will also be available on the Group's website, www.bhrplc.com. Notice of the AGM will be dispatched to shareholders with the Group's report and accounts.