Update on Arthur River Project

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

16 February 2010

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 NW Tasmania, which has a current JORC-compliant measured and inferred resource of 39 million tonnes of magnesite.

Overview

·; Good progress has been made on a Development Proposal and Environmental Management Plan ('DPEMP'), to be submitted as part of the mining approval process -Pitt & Sherry have been appointed to lead the process.

·; Work is commencing on Flora and Fauna Studies and Aboriginal Heritage Studies, as part of the DPEMP.

·; Hydrological studies have been commenced by Coffey Mining.

·; Initial Mining Lease directions hearing before the Mining Tribunal has taken place today and was adjourned until 17 March 2010.

·; The Company is currently appraising options to initiate drilling programme which will facilitate development of a mine plan and add value by upgrading the current 39 million tonne resource.

Justin Lewis, Executive Chairman said, "The Board is very pleased with the progress being made at the Arthur River Project, the third largest recorded magnesite deposit in Australia with a JORC compliant measured and inferred resource of 39 million tonnes of magnesite. We remain focussed on bringing this significant asset into production by the end of 2011. In addition, through the implementation of our defined development plan, we believe that we can add considerable value to the project by upgrading the inferred resource through further exploration and drilling.

"Whilst there remains a potential delay in the granting of a Mining Lease, we do not believe this will negatively impact our overall timetable for production. We remain confident that the permitting process will result in a positive decision by the Tribunal." 

Further Information

Development Proposal and Environmental Management Plan ('DPEMP')

The Group continues to make good progress with the development of its DPEMP for the Arthurs River Project. Pitt & Sherry has been retained as consultants to lead the process. In addition, consultants have been retained to commence work of Flora and Fauna studies and Aboriginal Heritage Studies and Coffey Mining is progressing with hydrological studies and expect to report back soon.

Mining Lease Application

An initial directions hearing of the Mining Tribunal in connection with the Group's Mining Lease Application, took place today in Hobart. The Tribunal adjourned the hearing until 17 March 2010 to provide the claimant an opportunity to satisfy the Tribunal that they had an "interest or estate" in the application and were therefore entitled to make a submission.

The submission relates to the impact the Arthur River Project may have on certain fauna and flora species. The Group is already addressing this as part of its DPEMP and does not believe that it will provide an impediment to the development of the project.

In the meantime, the Group continues to work to a timetable that will see production at the Arthur River Project commencing by the end of 2011. Whilst the hearing before the Tribunal may result in a delay in the grant of a Mining Lease until the second quarter of 2010, the Group is progressing with development the DPEMP, to ensure it is completed by the end of 2010.

Drilling Programme

The Group is currently investigating a further drilling programme to gain a better understanding of the deposit and assist in the development of mine plan. It is anticipated that this programme will also increase the size of the resource at the Arthurs River Project. A further announcement will be once this programme has been finalised.

**ENDS**

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