Interim Results

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

27 September 2010

Beacon Hill Resources Plc

('Beacon Hill' or 'the Company' and its subsidiaries together 'the Group')

Interim Results

Beacon Hill Resources Plc (AIM: BHR), the AIM listed resource group, announces its interim results for the six month period ended 30 June 2010.

Highlights:

·; Acquisition of Minas Moatize, a producing thermal and coking coal mine in the Tete region of Mozambique

·; Revenue for the six months ended 30 June 2010 of £58,022 (2009: Nil) and a loss for the six months ended 30 June 2010 of £1.261 million (2009: £176,863)

·; Net assets as at 30 June 2010 of £14.307 million and cash at bank of £0.496 million

·; Rapid development of Minas Moatize with production levels exceeding budget targets and now at four times the level prior to acquisition - targeting to raise production to a rate of 2 Mtpa of saleable coal in 2012

·; Modular coal processing plant coming on line in 10 weeks time and trial shipments of coal to the export market planned to commence early in the new year

·; Proposed investment by Global Coke Limited in BHR Mining Limited, the holding company of Minas Moatize, valuing the project at over US$210m

·; Off take agreement for coking coal fraction at market prices at mine gate with Global Coke

·; Significant progress with Tasmania Magnesite following grant of Mining Lease

Beacon Hill Chairman, Justin Lewis, said, "We are delighted with the progress the Group has made over the course of the year, which has seen us move from a development company to the owner and operator of a producing asset. Mozambique is rapidly developing, with a short term production target of some 20,000 tonnes per month, and significant progress is being made at our Tasmanian magnesite project. With these projects, cashflow and the proposed strategic investment from Global Coke, I believe we are ideally positioned to successfully grow the business and build shareholder value."

For further information on the Group, visit: www.bhrplc.com or contact:

Chairman's Report

On behalf of the Board we provide this interim report for the Company and its subsidiaries (together 'the Group'), for the six months ended 30 June 2010.

This has been an active period for Beacon Hill, resulting in the achievement of several key corporate and operational developments, which combined have significantly advanced the Group's strategy to become a producer of commodities relating to the steel industry. We remain focussed on developing our key assets and increasing production in the near-term, providing us with a solid operational and financial foothold to grow the Group and create value for our shareholders.

Minas Moatize

In May 2010 the Group completed the acquisition of the Minas Moatize Mine through our joint venture company, BHR Mining Limited ('BHR Mining'). Minas Moatize is currently the only operating coal mine in the globally significant coking coal region of Tete, Mozambique, and so the Group is in a unique position to capitalise on the local and export demand for coal from the area. The Group has today partially exercised an option it holds over existing shares in BHR Mining to increase its interest in BHR Mining to 51%.

Production and Mine Development

Since taking management control of the Mine, we have focussed on refurbishing the existing underground mine, that has resulted in a production increase of almost four fold from approximately 2,000 tonnes per month to in excess of 8,000 tonnes per month. This was achieved in less than three months of ownership. Furthermore, stripping of a trial box cut began in June and will complete shortly, increasing production by an additional 120,000 tonnes over the next twelve months.

In conjunction with the commencement of excavation work, we also commissioned a purpose manufactured 80 tonnes per hour capacity mobile wash plant. This is designed to process coal from the existing underground mine and the developing opencast pit. The mobile wash plant will be operational before the end of the year with a view to producing thermal coal for local African markets. The wash plant will also allow the Group to produce product for trial shipments of export grade thermal and coking coal and we hope to complete an initial shipment in early 2011.

Minas Moatize continues to develop the larger open pit mine that is anticipated to be in production in January 2012, with a target production rate of 2 Mtpa of saleable coal. Since May, the Group has completed a drilling programme across the entire resource and is currently completing a testing programme on core samples collected. This will allow for an updated resource statement to be finalised before the end of the year.

Offtake

Demand remains very strong for all the Group's products and global coal markets continue to go from strength to strength. Minas Moatize's position, as the only producing coal mine in the heart of the largest undeveloped coal basin in the world, has led to substantial interest from potential customers.

We announced our partnership with Global Coke Limited ('Global Coke') in July. When finalised, this arrangement provides BHR Mining with a guaranteed off-take agreement to purchase all the coking coal produced at the mine from the mine gate over its life at a price referenced to market rates. This ensures our coking coal product has a buyer without the potential issues associated with transporting the coal to port.

As part of this partnership, Global Coke intends to take up to a 26% interest in BHR Mining, which as announced today, we are in the final stages of concluding. Once this happens this will represent a further significant step in developing the mine. Furthermore, through this partnership, we will also benefit from access to a world class expertise on the manufacture of metallurgical coke and access to long standing relationships with major steel producers.

Tasmania Magnesite

The much anticipated granting of a Mining Lease at Arthur River was a key development in regard to our magnesite project in north-west Tasmania, the third largest recorded magnesite deposit in Australia, with a JORC compliant measured and inferred resource of 39 million tonnes of magnesite. The Mining Lease, which was approved in August 2010, has enabled the Group to progress to the next stages of the development this project.

During the mining lease approval process, the Group made initial progress towards preparing the statutory Development Proposal and Environmental Management Plan ('DPEMP'). Several key components of the plan are already completed including the flora, fauna and Aboriginal heritage surveys, which are a necessary part of the development programme.

As part of this development work and in preparation to commence the Mine Plan, Tasmania Magnesite is planning a drilling programme early in the new year. This will enable a greater understanding of the deposit and its geology as well as expanding the current Measured and Inferred resource. This drilling programme is anticipated to begin in early 2011, and we will keep shareholders updated with developments from this campaign.

Finally the market for both calcined magnesia and deadburned magnesia remains strong with supply constraints from the world's largest producer, China. We are currently seeing a significant demand for non-Chinese product and the expansion of western production. The Group continues to progress its investigations into the development of a downstream processing, in particular a calcination plant, as well as discussions with potential partners for this.

Financial results

For the six months under review, the Group reported its maiden sales revenue from the sale of coal in Mozambique, a significant step forward. In the same period the Group reported a loss of £1.262 million (2009: £176,863).

At 30 June 2010, the Group had total assets of £52.39 million, net assets of £14.31 million and cash of £0.496 million (2009: £160,054). During the period under review the Group raised £1.57 million through the issue of equity and since the period end raised a further £8.7 million following the issue of convertible loan notes in July 2010.

Outlook

We have achieved some transformational developments over the period and since, which have created an ideal platform for us to capitalise on the lucrative steel production industry. We currently have exposure to two significant assets, and have a robust and successful strategy in place which the Board believes has the ability to generate healthy returns for investors.

In tandem with this, I am encouraged by the corporate activity that we have had to date, and look forward to working with our partners going forward. As a Group, we continue to look at acquisition opportunities and are currently reviewing several projects. As such, the Board is focussed on developing current relationships, to ensure Beacon Hill continues to grow and achieve its potential of becoming a producer of commodities for the steel production industry.

Justin Lewis

Chairman

27 September 2010

Consolidated Income Statement for the period ended 30 June 2010

Consolidated Statement of Comprehensive Income for the period ended 30 June 2010

Consolidated Statement of Changes in Equity

Consolidated Balance Sheet at 30 June 2010

Consolidated Cash Flow Statement for the period ended 30 June 2010

1. Accounting policies

Basis of accounting

The interim financial information for the six months ended 30 June 2010 and that for the equivalent period in 2009 have been neither audited nor reviewed by the Group's auditors. The comparatives for the full year ended 31 December 2009 are not the Group's full statutory accounts for that year. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

The interim financial information has been prepared in accordance with the accounting policies and presentation required by International Financial Reporting Standards, incorporating International Accounting Standards and Interpretations (collectively "IFRS") as endorsed by the European Union.

The interim report is presented and prepared in a form consistent with that which has been adopted in the Group's annual accounts having regard to the accounting standards applicable to such accounts.

2. Loss per share

The calculation of loss per ordinary share is based on a loss attributable to equity holders of the parent company of £893,238 (2009: £176,863) and on 257,660,754 (2009: 6,680,000) ordinary shares, being the weighted average number of ordinary shares in issue during the period. On 7 April 2010, by resolution of the members, every 25 existing ordinary shares in the company were consolidated into one new ordinary share. The weighted average numbers of shares and the resulting losses per share for the six month period ended 30 June 2009 and for the year ended 31 December 2009 have been adjusted to reflect this change.

3. Dividends

The directors do not recommend the payment of a dividend.

4. Acquisition of Minas Moatize LDA

On 28 April 2010, the Company's partially owned subsidiary, BHR Mining Limited, entered into an agreement to acquire the entire share capital of Minas Moatize LDA, a Mozambique company operating a coal mine.

The acquisition had the following effect on the Group's assets and liabilities.

Of the deferred consideration, £4,248,366 was paid on 19 July 2010 and the balance is payable by 30 September 2010.

The fair value adjustment of £37,831,113 arose as a result of the premium attributable to the mineral properties purchased (grossed up for deferred taxation).

The statement of net asses acquired is provisional pending the completion by the directors of their assessment of the fair values of the assets and liabilities acquired.

The Group has partially exercised its option over existing shares in BHR Mining Limited ('BHR Mining'), a joint venture between the Group and Consolidated Minerals Pte Limited, to increase its shareholding to 51% of BHR Mining for a nominal consideration of £2. The Group retains the exclusive option to increase its interest in BHR Mining to 75%.