Final Results

Herencia Resources plc

("Herencia" or the "Company")

Final results for the 12 months ended 31 December 2010

and

Notice of AGM

The Directors present the audited results of the Group (Herencia Resources plc and its subsidiary undertakings) and the Company (Herencia) for the 12 months ended 31 December 2010.

CHAIRMAN'S STATEMENT

It is with pleasure that I update shareholders on activities undertaken by the Company during 2010.

The Company achieved a number of milestones in the year, including:

·; The successful 5,728m diamond drilling program at Patricia, completed both on time and on budget.

·; The identification of new veins with high zinc, silver and lead grades.

·; A significant upgrade to the Mineral Resource estimate for the Patricia Resource, both in terms of tonnage and grade increases, particularly in relation to silver grade.

·; Confirmation of high copper and silver grades from surface rock-chip sampling at Doris.

·; A successful £4.7 million capital raising in November 2010.

·; Golder selected to undertake a Feasibility Study in respect to the Patricia deposit.

·; Nyrstar's acquisition of a 10% stake in Herencia, thus becoming its major shareholder.

At this time the directors believe that the Company is well positioned, as:

·; The Company has cash of approximately £4.5 million.

·; There is a JORC-compliant Mineral Resource estimate at Patricia.

·; Mineralisation at Patricia is open along strike and down dip and new veins have been confirmed in 2010, providing the potential to increase tonnages.

·; The directors believe the silver, lead and potentially gold by-product credits to be significant, particularly in the context of rising silver prices as Patricia's silver grade equates to approximately 3 ounces/tonne at a 2% zinc cut-off and 5 ounces/tonne at a 4% zinc cut-off.

·; Established regional infrastructure available close to the Project.

·; A Feasibility Study is underway and an experienced Project Management team is in place.

·; A drill program is underway.

In addition to Paguanta, the Company is continuing negotiations with respect to a new copper-gold JV opportunity in Chile.

Herencia's goals for 2011 are three-fold:

·; To advance the Patricia deposit at the Paguanta Project towards mine development;

·; To test the Doris and La Rosa copper/silver targets; and

·; To advance/acquire other project opportunities.

Herencia will seek to achieve these goals by:

·; Advancing the Feasibility Study into the Patricia zinc-lead-silver-gold deposit

·; Undertaking an in-fill drill program at Patricia to upgrade the Mineral Resource category

·; Drilling the Doris prospect and La Rosa prospects

·; Advancing negotiations with respect to the new copper-gold opportunity

The Company looks forward to a busy 2011 and thanks shareholders for their support.

Hon. John Moore AO

Chairman

The Company's Annual Report will be sent to shareholders on or around 12 May 2011 and will be available from the Company's website (www.herenciaresources.com) from that date.

The Company's Annual General Meeting (AGM) will be held on 9 June 2011 at 11.00am atthe offices of Sprecher Grier Halberstam LLP, One America Square, Crosswall, London, UK, EC3N 2SG.

Please refer to the project announcements at the Company's website (www.herenciaresources.com) for further information on the Company operations.

For further information please contact:

Directors' Report

The Directors present their Directors' report together with the audited accounts of the Group ("Herencia Resources Plc and its subsidiary undertakings") and the Company ("Herencia Resources plc") for the year ended 31 December 2010.

Principal activity

The Company is registered in England and Wales, having been incorporated on 27 January 2005 under the Companies Act with registered number 5345029 as a public limited company.

The principal activity of the Group is mineral exploration and development and it owns a portfolio of zinc-silver-lead-copper-gold exploration properties in Chile, South America. The Group operates through its parent and subsidiary undertakings, details of which are set out in note 15 to these accounts.

Results and dividends

The loss of the Group for the year ended 31 December 2010 was £1,059,778 (2009: £804,330), of which the amount attributable to the equity holders of the Company, was £932,063 (2009: £675,036).

The Directors do not recommend any distribution by way of a dividend for the year ended 31 December 2010.

Review of the business and future prospects

Review of the business

Herencia Resources Plc holds a 70% interest in the advanced Paguanta Project in northern Chile. The Paguanta Project comprises the 'Patricia' zinc-silver-lead-gold Mineral Resource, the 'Doris' copper/silver prospect and the 'La Rosa' porphyry-copper prospect. In addition, the Company holds several prospective exploration properties in Chile.

The twelve month period ended 31 December 2010 was one of significant achievement for the Company. The first half of 2010 saw the successful undertaking of a 5,728m diamond drilling program, completed both on time and on budget. This drill program delivered a significant upgrade to the Mineral Resource estimate, both in terms of tonnage and grade increases, particularly in relation to silver.

Following on from the drill program completed in mid-2010, the Company turned its attention to the Doris prospect located approximately 1,500m to the north-east of the Patricia Mineral Resource and on the same tenement group. Rock-chip sampling confirmed high copper and silver grades on surface.

The success achieved on site at Paguanta during 2010, both at Patricia and Doris, led to a successful £4.7 million capital raising in November 2010. These funds were raised to allow a Feasibility Study to commence in respect to the Patricia deposit and to allow drilling of both the Doris and La Rosa copper/silver prospects in 2011.

At this time, the directors believe that the Company is well positioned, as:

·; the Company has cash of approximately £4.5 million.

·; there is a JORC-compliant Mineral Resource estimate at Patricia.

·; mineralisation at Patricia is open in all directions - along strike and down dip - providing the potential to increase tonnages. At the end of the 2010 drill program there are more drill targets available at 'Patricia' than at any previous time during the Company's tenure at Paguanta.

·; the mineralisation outcrops and is of a width that would support lower cost mechanised mining methods.

·; the directors believe the silver, lead and potentially gold by-product credits to be significant, particularly in the context of rising silver prices.

·; established regional infrastructure available close to the Project.

·; a Feasibility Study is underway.

·; a drill program is underway at Paguanta.

·; an experienced Project Management team is in place, based in Santiago, and

·; the Company is advancing negotiations with respect to a copper-gold JV opportunity in Chile.

On the corporate front, a milestone for 2010 was Nyrstar's acquisition of a 10% stake in Herencia, thus becoming our major shareholder. The significance of this is that Nyrstar is the world's leading zinc smelting company, bringing a wealth of experience to Herencia. During 2010 Nyrstar's Chief Operating Officer Greg McMillan joined Herencia's board of directors.

Future Prospects

Herencia's goals for 2011 are three-fold:

·; Advance the Patricia deposit at the Paguanta Project towards mine development;

·; Test the Doris and La Rosa copper/silver targets; and

·; Look for other opportunities to add shareholder value.

Herencia will seek to achieve these goals by:

·; Advancing a Feasibility Study into the Patricia zinc-lead-silver-gold deposit

·; Undertaking an in-fill drill program at Patricia to upgrade the Mineral Resource category

·; Drilling the Doris prospect

·; Drilling the La Rosa prospect

·; Seeking out new acquisition or JV opportunities in Chile

The timetable for 2011 is forecast as follows:

·; Golder Associates Feasibility Study - underway

·; Drilling at Doris commenced 1Q2011

·; In-fill drilling at Patricia to commence 2Q2011

·; Drilling at La Rosa to commence 2Q2011

·; Negotiate an Agreement in relation to a copper-gold opportunity announced in February 2011 as more fully described below under "Subsequent events".

Given the capital raising success in November 2010 the Company is well positioned to undertake a significant work program in 2011. With the significant grade and tonnage uplift achieved in 2010, the commencement of a Feasibility Study, the potential to further extend the Mineral Resource Estimate and the stronger commodity price environment, the Director's consider that no impairment provision is required, at this time, with respect to the goodwill, exploration and development expenditure and investment associated with the Paguanta Project.

The Group's primary business is mineral exploration and development which is subject to risks including discovery of economic mineral resources, delays in work programme plans and schedules, changes in market conditions affecting the resources industry or commodity price levels, the outcome of commercial negotiations and technical or operating factors, political, environmental and regulatory controls and approvals, and availability and retention of suitable employees and consultants. Any one or more of these risk factors could have a materially adverse impact on the value of the Company.

Due to the early stage of the development of the Group and the nature of its activities, it is not meaningful to consider a review of the key financial performance indicators in respect of the year.

Audit Committee

The Audit Committee meets twice each year to discuss the half yearly and annual results. For the annual results the independent auditors, UHY Hacker Young, are invited to discuss the results and their assessment of internal controls. The Chairman of the Audit Committee is John Russell and the other participating member of the committee is The Hon. John Moore AO.

The Company has adopted an Audit Committee Charter which addresses the mandate of the Committee, the composition, independence, expertise of the members, frequency of meetings, roles and responsibilities, external audit function, internal controls, financial reporting, annual and interim financial statements, release of financial information, non-audit services, delegation of authority, reporting responsibilities, resources and authority of the Committee, and compliance with laws and regulations.

Remuneration Committee

The Company does not, at present, have a Remuneration Committee.

Information to shareholders - Web site

The Company has its own web site (www.herenciaresources.com) for the purposes of improving information flow to shareholders as well as to potential investors.

Group structure and changes in share capital

Details of movements in share capital during the year are set out in note 19 to these accounts.

Directors

The following Directors held office during the year:

Michael Bohm (Managing Director)

The Hon. John Moore AO. (Non-Executive Chairman)

John Russell (Non-Executive)

Erling Sorensen (Non-Executive) (appointed 4 May 2010, resigned 22 September 2010)

Greg McMillan (Non-Executive) (appointed 22 September 2010)

Directors' interests

The beneficial and non-beneficial interests in the Company's shares of the Directors and their families were as follows:

1 20,251,500 shares are held by Michael Bohm's wife, Charmaine Lobo (31 December 2009: 5,851,515), 450,000 shares are held by Michael Bohm.

2 666,667 shares are held by Ralsten Pty Ltd as of 31 December 2010 (31 December 2009: 666,667). The Hon. John Moore AO. is a director and shareholder of that company.

The beneficial and non-beneficial interests in the Company's options of the Directors and their families were as follows (the details of these options are set out in note 20 to the financial statements):

Directors' service contracts

The service contracts of all the existing Directors are subject to a one month termination period.

Pensions

The Group does not operate a pension scheme for Directors or employees.

Directors' remuneration

Remuneration of Directors for the year was as follows:

The Fees/basic salary of Michael Bohm comprise a 'base' component and an 'at-risk' bonus component paid upon the achievement of performance hurdles set annually by the Board of Directors. The amount of £287,143 includes a bonus payment of £82,125 paid in January 2011. Michael Bohm's salary is paid in Australian dollars and converted to GBP£'s for these accounts. The Share based payment is not a cash payment, it is a 'calculated' fair value for share options granted during the year.

Substantial shareholders

The Company has been notified, in accordance with Section 792 of the Companies Act 2006, of the under noted interests in its ordinary shares as at 14 March 2011:

Supplier payment policy

The Company's policy is that payments to suppliers are made in accordance with those terms and conditions agreed between the Company and its suppliers, providing that all trading terms and conditions have been complied with.

Political and charitable contributions

There were no political or charitable contributions made by the Company during the year ended 31 December 2010.

Subsequent events

No other matter or circumstances have arisen since the end of the reporting date and the date of this report which significantly affect the results of the operations of the Company.

Environment Policy Statement

The Group is an Operator of exploration projects. It closely monitors activities to ensure, to the best of its knowledge, there is no potential for any breach of environment's regulations. There have been no convictions in relation to breaches of the local Chilean regulations recorded against the Group during the reporting period.

Statement of responsibilities of those charged with governance

The Directors are responsible for preparing the financial statements in accordance with applicable laws and International Financial Reporting Standards ("IFRS") as adopted by the European Union. Company law requires the Directors to prepare financial statements for each financial year. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and of the Company and of the profit or loss of the Group for that period. In preparing those financial statements, the Directors are required to:

a) select suitable accounting policies and then apply them consistently;

b) make judgements and estimates that are reasonable and prudent;

c) prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business;

d) state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The Directors confirm that the financial statements comply with the above requirements.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. The Directors are also responsible for safeguarding the assets of the Group and hence for taking steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.

Statement of disclosure to auditors

So far as all of the Directors at the time of approval of this report are aware:

1. there is no relevant audit information of which the Company's auditors are unaware; and

2. the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

Auditors

In accordance with Section 489 of the Companies Act 2006, a resolution proposing that UHY Hacker Young be re-appointed as auditors of the Company and that the Directors be authorised to fix their remuneration will be put to the next Annual General Meeting.

By order of the board

Michael Bohm

Director

CONSOLIDATEDSTATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2010

Loss per share

The results shown above relate entirely to continuing operations.

STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2010

STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2010

CONSOLIDATED STATEMENT OF CHANGES in EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2010

NOTES TO THE FINANCIAL INFORMATION

FOR THE YEAR ENDED 31 DECEMBER 2010

1. Accounting policies

The financial information set out in this announcement does not constitute the Group's statutory accounts for the year ended 31 December 2010 or the year ended 31 December 2009 under the meaning of s434 Companies Act 2006, but is derived from the 2010 annual report and audited accounts.

Statutory accounts for the year ended 31 December 2009 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 December 2010 will be delivered to the Registrar in due course.

1.1. Basis of preparation and going concern

The financial statements have been prepared using the historical cost convention and are presented in UK pounds sterling. In addition, the financial statements have been prepared in accordance with the International Financial Reporting Standards ("IFRS") including IFRS 6 'Exploration for and Evaluation of Mineral Resources', as adopted by the European Union ("EU") and in accordance with the provisions of the Companies Act 2006.

The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The Group completed a capital raising on 1 December 2010 to raise £4,736,873 from the issue of 270,678,452 ordinary shares at a price of 1.75p per share. As at 28 February 2011 the Group had £4,477,544 of cash with future expected costs to 31 March 2012 of £4,475,339. In view of the current market conditions and the need to continue Project activities, the Board will continue to review future funding options.

The operations of the Group are currently being financed from funds which the Company raised from private and public placings of its shares in the prior and current years. The Group has not yet earned revenue as it is still in the exploration phase of its business.

The Directors have reviewed the Group's overall position and outlook and are of the opinion that the Group will be able to carry out the planned activities and provide working capital to enable it to meet its liabilities as they fall due, for the foreseeable future, and for at least the next twelve months from the date of approval of these financial statements. The directors therefore believe that the use of the going concern basis is appropriate.

1.2. Basis of consolidation

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Company. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. Goodwill is capitalised as an intangible asset and in accordance with IFRS3 'Business Combinations' it is not amortised but tested for impairment on an annual basis. As such, goodwill is stated at cost less any provision for impairment in value. If a subsidiary undertaking is subsequently sold, goodwill arising on acquisition is taken into account in determining the profit and loss on sale.

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated.

All the companies over which the Company has control, apply, where appropriate, the same accounting policies as the Company.

2. Loss per share

The basic loss per ordinary share of (0.10)p (2009: (0.10)p)for the Group has been calculated by dividing the loss for the year attributable to equity holders of £932,063 (2009: £675,036) by the weighted average number of ordinary shares in issue of 949,650,555 (2009: 655,284,220).

The diluted loss per share has been calculated using a weighted average number of shares in issue and to be issued of 965,020,301 (2009: 655,284,220). The diluted loss per share has been kept the same as the conversion of share options decreases the basic loss per share, thus being anti-dilutive.

Issued capital comprises:

The following shares in the Company were issued during the year:

·; On 16 April 2010, the Company entered into a subscription agreement with Nyrstar International BV to subscribe £750,000 for 100,000,000 new 1p shares. The shares were issued on 27 April 2010.

·; On 7 October 2010, Michael Bohm, a Director of the Company, exercised options over 12,400,000 ordinary shares at a price of 0.75p each.

·; On 7 December 2010, the Company completed a private placement raising a capital sum of £4,550,418 from the issue of 270,678,452 ordinary shares at a price of 1.75p per share.

·; On 24 December 2010, the Company issued 4,545,454 ordinary shares at a price of 0.55p per share to WH Ireland Limited, following the exercise of warrants.