Half Yearly Report

Herencia Resources plc

("Herencia" or the "Company")

HALF-YEARLY FINANCIAL REPORT

For the six months ended 30 June 2012

Herencia Resources plc is pleased to announce the unaudited half-yearly accounts of the Company and its subsidiaries (the "Group") for the six months ended 30 June 2012.

CHAIRMAN'S STATEMENT

The six months ended 30 June 2012 was an active period for Herencia during which we significantly increased the Mineral Resource Estimate at Patricia and advanced the Patricia Feasibility Study. Patricia is the Company's flagship Project given its advanced stage, the outlook for zinc prices, and the recent high silver grades confirmed near surface.

Following the return of all assay results from the 2011 drilling programme in the period, the Company completed a JORC-compliant Mineral Resource Estimate at Patricia which resulted in a 244% increase in the Measured and Indicated resource categories and a 29% increase in total tonnage when compared to the 2010 estimate (using a 2% zinc cut-off).

This estimate, announced on 22 June 2012, included approximately 15,600m of both diamond and RC drilling undertaken in 2011 and included some of the highest grades ever achieved at Paguanta. These included 6m at 15.5% lead and 729g/t from 38m in PTRC113 and 6m at 10.4% zinc, 2.9% lead and 150g/t silver from 110m in PTDD089. An additional mineralised vein 50m south of Carlos vein was identified during the period with the return of 4.2m at 3.2% zinc, 1.5% lead and 65g/t silver from 259.5m in PTDD101 announced 9 February 2012. This new vein is supported by a previously reported intersection of 20m @ 3% zinc, 1.4% lead and 80g/t silver with high grade core of 6m @ 5.9% zinc, 2.6% lead and 144g/t silver from 241m in PTDD073, announced 14 June 2011. These intersections continue to demonstrates the potential of the Patricia mineralised system, at depth, along strike and to the south.

Subsequent to 30 June 2012, the Company commenced a resampling programme and a comprehensive surface sampling programme at Paguanta following the return of near-surface high-grade silver results. This work was aimed at defining further mineralisation up-dip and near-surface from existing resources, targeting the potential for development of an open pit operation. Initial results have returned a number of very high silver grades at surface including a high of 1,051g/t silver (+32 ounces/tonne).

The Company also recently completed a geophysical survey which extended the Patricia geophysical anomaly to approximately 3km in length and up to 1km in width and which correlates well with the existing Patricia Mineral Resource and supports the potential to extend the resource to the south and east of the project. This large anomaly appears to increase with depth and is largely untested.

Following the end of the period under review, the Company successfully completed a placing through WH Ireland Limited, to raise £1.2 million from the issue of 150,000,000 new ordinary shares. Nyrstar participated to maintain its position as Herencia's largest shareholder. The funds raised from this modest placing, which was oversubscribed and was scaled back, are being used to investigate the open pit potential at Patricia following high-grade, near surface silver results announced on 26 April 2012. They were also used to successfully complete the IP geophysical survey mentioned above.

The Company continues to advance the Paguanta Project on many fronts, as can be noted from the steady flow of positive announcements. These announcements have continued to highlight Mineral Resource upgrades, high drilling grades, and the open pit potential at Patricia. We look forward to moving the Project toward production to potentially coincide with supply constraints in the zinc market forecast for 2014 onwards.

Hon. John Moore AO

Chairman

27 September 2012

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:

Graeme Sloan, Herencia Resources plc

Tel: +61 8 9481 4204

Katy Mitchell, WH Ireland Limited

Tel: +44 161 832 2174

Simon Courtenay, Broker Profile

Tel: +44 207 448 3244

The information in this report that relates to the 2012 Mineral Resource estimate is based on information compiled by Dr Marcelo Godoy. Dr Godoy is a full time employee of Golder Associates, a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for the Reporting of Mineral Resources and Ore Reserves. The Mineral Resource estimate complies with recommendations in the Australasian Code for Reporting of Mineral Resources and Ore Reserves (2004) by the Joint Ore Reserves Committee (JORC). Dr Godoy consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

References in this announcement to exploration results and potential have been approved for release by Mr. Graeme Sloan (BAppSc Mining Engineering WASM) and Mr. Antonio Valverde (Bsc Geology Universidad Complutense de Madrid), both with more than 15 years relevant experience in the field of activity concerned. Mr. Sloan is a Member of the Australasian Institute of Mining and Metallurgy. Both Mr. Sloan and Mr. Valverde have consented to the inclusion of the material in the form and context in which it appears.

CONSOLIDATED STATEMENTS OF COMPRHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2012

The results shown above relate entirely to continuing operations.

STATEMENTS OF FINANCIAL POSITION

AT 30 JUNE 2012

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2012

CONSOLIDATED STATEMENTS OF CHANGES in EQUITY

NOTES TO THE UNAUDITED HALF-YEARLY ACCOUNTSFOR THE SIX MONTH PERIOD ENDED 30 JUNE 2012

1. Accounting policies

The condensed half-year accounts have been prepared using policies based on International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. The condensed half-year accounts have been prepared using the accounting policies which are expected to be applied in the Group's statutory financial statements for the year ending 31 December 2012.

1.1. Basis of preparation and going concern

Herencia Resources plc ('the Company') is incorporated in England and Wales. The half-yearly accounts for the six months ended 30 June 2012 is unaudited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

The half-yearly accounts include unaudited comparative figures for the half year ended 30 June 2011. The comparatives for the year ended 31 December 2011 are not the Company's full statutory accounts for that period but have been extracted from the statutory accounts for that period which have been delivered to the Registrar of Companies. 

The financial reports have been prepared using the historical cost convention and are presented in UK pounds sterling. The half-yearly accounts for the six months ended 30 June 2012 has been prepared in accordance with IAS 34 'Interim financial reporting'.

The half-yearly accounts for the six months ended 30 June 2012 has been prepared pursuant to AIM Rule 18, which states "An AIM company must prepare a half-yearly report in respect of the six month period from the end of the financial period for which financial information has been disclosed in its admission document and at least every subsequent six months thereafter (apart from the final period of six months preceding its accounting reference date for its annual audited accounts)."

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 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 Group is reliant on the continuing support from its existing and future shareholders.

On 10 July 2012, the Company successfully completed a private placing to raise £1.2 million from the issue of 150,000,000 ordinary shares at a price of 0.8p per share.

The Directors have reviewed the Group's overall position and outlook and are of the opinion that the Group will be able to raise the required funding 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.

2. Loss per share

The basic loss per ordinary share of (0.07)p (30 June 2011; (0.10)p, 31 December 2011; (0.16)p)for the Group has been calculated by dividing the loss for the period attributable to equity holders of £1,127,976 (30 June 2011; £1,129,651, 31 December 2011; £2,190,038) by the weighted average number of ordinary shares in issue of 1,521,971,393 (30 June 2011; 1,259,882,343, 31 December 2011; 1,338,351,024).

The diluted loss per share has been calculated using a weighted average number of shares in issue and to be issued of 1,577,614,250 (30 June 2011; 1,259,882,343, 31 December 2011; 1,391,872,942). 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.

3. Segmental information 

The activities of the Group are broken down into the operating segments of Mineral Exploration and Central Costs. Segment information by operating segment and by region is as follows:

Segment information by region

At the end of the financial period, the Group had not commenced commercial production from its exploration sites and therefore had no turnover in the period.

11. Contingent liabilities and capital commitments

There have been no changes to the capital commitments as disclosed in the most recent annual financial report.

The Group had no contingent liabilities at 30 June 2012.

12. Decommissioning expenditure

The Directors have considered the environmental issues and the need for any necessary provision for the cost of rectifying any environmental damage, as might be required under local legislation. A provision of £62,276 has been made for any future costs of decommissioning or environmental damage.