Update on Arthur River Project

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

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

Update on Arthur River Project

Beacon Hill Resources plc (AIM:BHR), the AIM listed resource company, is pleased to provide an update with regard to the development of its Arthur River magnesite project in north-west Tasmania and advancement of the Group's work programme ahead of the completion of a Feasibility Study in 2012.

Overview

·; Comprehensive review of historical exploration data compiled by former owners of the leases, including the re-logging of drill cores from previous drilling programmes

·; Completion of a ground magnetic survey has resulted in a new interpretation of the dolerite dykes which suggests that there is potential to expand the current measured resource of 13.2Mt of magnesite

·; Metallurgical test work conducted on existing core samples has been encouraging indicating high levels of magnesia in calcined samples - more tests of larger samples of existing core are planned for the near future

·; Preliminary community consultation with key stakeholders has indicated both political and business community support for the Arthur River project - formal consultation with the wider community will commence in the New Year

·; Removal from federal Environment Protection and Biodiversity Conservation Act jurisdiction following the Federal Minister for the Environment's decision to allow the National Heritage emergency listing to lapse

The Board has designed a comprehensive work programme for 2011, with the objective of accelerating development of the Arthur River project ahead of the completion of a Feasibility Study in 2012.

As part of this 2011 work programme, the Group, subject to final board approval, intends to commence a drilling campaign in Q1 2011 with the objective of developing a better understanding of the orebody, including the increase of the overall size of the current Resource. This drilling programme will also produce additional core samples for the metallurgical testing programme and enable further work to be undertaken on the hydrology of the resource, which provides additional data for review when identifying the optimum route towards production at the project.

The proposed drilling programme has been approved by Mineral Resources Tasmania and as well as by Environment Australia, part of the Federal Government, pursuant to the Environment Protection and Biodiversity Conservation Act.

Justin Lewis, Executive Chairman said, "We have made extremely encouraging progress with our Arthur River magnesite project, particularly in light of the delays that we experienced earlier in the year regarding the formal approval of a Mining Lease. The team has been pursuing a defined work programme with a view to completing a Feasibility Study in 2012. This work programme has focussed on three key areas of attaining all required environmental and regulatory approvals; undertaking a review of existing data including additional metallurgical testing work on existing core and a further exploration programme to further define the deposit, its size, make up and hydrology.

"The programme is progressing well, with a substantial number of environmental and regulatory requirements now completed, in particular the lapse in the heritage listing for the area. Initial metallurgical testing confirms previous work undertaken and demonstrates that a high quality magnesite that can be processed into a marketable magnesia product.

"We are now in the final stages of preparing an exploration programme which will commence in Q1 2011. This year has therefore seen excellent progress in developing this resource, underpinning our overriding objective to advance this project with a view to entering to production in 2012, providing the Group with a second producing asset in addition to our coal mine in Mozambique." 

**ENDS**

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