Beacon Hill Resources Plc (‘Beacon Hill’ or ‘the Company’) is an AIM and ASX listed resources company, headquartered in Johannesburg, that is focussed on building and developing a portfolio of near term production projects in commodities relating to the steel production industry.
Mozambique-focused Beacon Hill Resources (LON:BHR) started mining coking coal at the Upper Chipanga Pit at Minas Moatize this week, with first shipments due by the middle of the year.
Beacon Hill had already started production of thermal coal from Minas Moatize, but coking coal is higher quality and commands better prices.
Minas Moatize, located in the Tete region of Mozambique and surrounded by a number of significant mine development projects, has a JORC mineable reserve of 42.7 million tonnes, including a marketable reserve of 23.5 million tonnes. At least 8.7 million will be top quality coking coal.
Justin Lewis, Beacon Hill’s chairman said the "tremendous progress” the miner had made at Minas Moatize throughout 2011 had continued in to 2012.
“Mining of coal has this week commenced at the Upper Chipanga Pit which will allow production of coking coal for an initial shipment by the middle of the year.
"These key achievements have further de-risked the project and leave the group well-placed to ramp up production throughout 2012.”
Beacon Hill posted a loss of £7.4 million in 2011, up from £5.0 million, as it increased spending on the ramp-up of production at Minas Moatize. Revenues rose to over £1 million as the first coal was shipped from the project.
Last month, the miner published a definitive feasibility study for Minas Moatize indicating a net present value of US$662 million and a mine life of 11.5 years.
Drilling will also start this month on the recently acquired Changara project, which is expected to give a major boost to the company’s resource base.
"Our position in the world-class coking coal Tete Province of Mozambique has been strengthened through our acquisition of majority ownership of the Changara Coal Project, which covers a tenement 70 times the size of our current operation in the region,” Lewis added.
Currently, Beacon Hill is shipping the coal it produces by road to the port of Beira but it wants to ship its output by rail.
Today it reiterated progress is being made on the proposed upgrade of the Sena rail line to the port and it is confident it will be allocated a slot on the line.