Beacon Hill Resources

Beacon Hill Resources Plc is an AIM listed resource company focussed on building and developing a portfolio of resource assets with near term production potential in commodities associated with the steel industry.

Beacon Hill currently has two primary interests; a significant magnesite asset in north-west Tasmania, which has a current defined resource of 39Mt, and exposure to the only producing coal mine in the globally significant coking coal region of Tete, Mozambique.

The Company has a defined development programme in place to advance its magnesite and coal projects towards production in the near term and the Board is actively seeking to acquire or invest in additional projects to add value to its portfolio and benefit shareholders.

Picture above shows stockpiled coal

Mozambique

Overview

Mozambique, in south-eastern Africa, is bordered by the Indian Ocean to the east, Tanzania, Malawi and Zambia to the north, Zimbabwe to the west and Swaziland and South Africa to the south.  Importantly, its location gives it export channels to key growth markets, namely India and Brazil, which combined will contribute 49% of world coking coal demand growth between 2008 and 2011. For further information please click here.

Minas Moatize

Beacon Hill, through its subsidiary BHR Mining Limited, owns and operated the Minas Moatize mine in Mozambique, the only operating coal mine in the globally significant coking coal region of Tete.

Since taking management control of the mine in May 2010, the Company has focussed on refurbishing the existing underground mine, resulting in a production increase of almost four fold from approximately 2,000 tonnes per month to in excess of 8,000 tonnes per month, which was achieved in less than three months of ownership.  Stripping of a trial box cut began in June and is anticipated to increase production by an additional 120,000 tonnes by the end of 2011. 

In conjunction with the commencement of excavation work, the Company 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 to produce 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 in 2011. 

BHR Mining continues to develop the larger open pit mine that is anticipated to be in production in Q1 2012, with a target production rate of 2.36 Mtpa of saleable coal.  Since acquiring the mine, the Group has completed a drilling programme across the entire resource and is currently completing a testing programme on core samples collected.

Importantly, the acquisition of Minas Moatize provides Beacon Hill with a foothold in the region, and the Board intends to further leverage its position in the area through strategic off-take agreements for which the Company are currently in advanced discussions, and which may include the provision of financing.

Minas Moatize initial open pit

Tasmania

Overview

Tasmania is an Australian island and state located 240km south of the eastern side of the continent and separated by Bass Strait.  Its area is 68,401km2, of which the main island covers 62,409 km2.  Its location gives good export routes to Asian growth markets including China and India. For further information please click here.

Tasmania Magnesite

Beacon Hill holds two licences over magnesite deposits located in the Lyons River and Arthur River areas of North-West Tasmania.

The Arthur River Deposit has a defined JORC compliant measured resource of 13 million tonnes (‘Mt’) of magnesite and an inferred resource of 10Mt.  Exploration on the Lyons River Deposit has indentified an inferred resource of 15Mt.  Together, the Arthur River and Lyons River assets contain a 39Mt magnesite resource (13Mt to measured JORC standard) which is the third largest in Australia.

The Company was granted a Mining Lease over the Arthur River Project in August 2010 which has enabled the Group to progress to the next stages of the development this project.  As part of this development work and in preparation to commence the mine plan, the Company is planning a drilling programme in Q1 2011.  This drilling campaign will enable a greater understanding of the deposit and its geology as well as expanding the current Measured and Inferred resource.

During the mining lease approval process at the Arthur River Project, the Company 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.

It is the Company's objective to enter into a joint venture agreement for the purpose of constructing a processing operation to create magnesia, from its magnesite ore.  It is intended that this joint venture entity would enter into an exclusive off-take agreement with the Company to provide raw material for the plant.

The Market

Magnesia is used in the industrial sector for a variety of different purposes and the principal forms are:  

calcinated magnesia (‘CCM’) which is used as a chemical in a number of markets including agriculture (fertiliser and feedstock), nickel, copper and cobalt, pulp and paper, waster and water treatment; and

dead burned magnesia (‘DBM’) and electrofused magnesia (‘EFM’), which are used mainly in the refractory industry to line furnaces and are an essential raw material for the production of steel, cement and glass.

Tasmania Magnesite - Water Bore Rig

Justin Lewis - Chairman

Justin Lewis, 35, is a graduate of Geography from Newcastle University, UK. For the last 13 years he has worked for the Astaire Group in a number of roles, lately as Group Chief Executive, in both London and Melbourne. He is now a resident of Melbourne, Australia and owns a corporate advisory firm, Inteq (VIC) Pty Ltd, in Melbourne. Justin is responsible for the day to day operations of the Group.

Timothy Jones - Non-Executive Director

Timothy Jones, aged 60, qualified as a Chartered Accountant with Price Waterhouse in 1974. In 1983, he joined a client as financial director before founding his own accountancy and consultancy practice in 1990. He now has clients in a range of business sectors and sits on the boards of a number of companies, including Falkland Oil and Gas Limited, which listed on AIM in October 2004 and Xcite Energy Limited, which is listed on both AIM and TSX.

Murray d’Almeida Non-Executive Director

Murray d’Almeida, aged 61, has over 30 years of national and international business experience. He qualified as an Accountant in Perth, WA and commenced with a firm of Chartered Accountants, before moving to commercial accounting with two USA based mining companies. He founded the Retail Food Group Australia and was instrumental in the growth of that company’s brands Donut King and BB’s Coffee in Australia and internationally. He has also been involved in the restaurant, wholesaling, farming, mineral exploration and liquor industries.

Murray is currently a non executive director of Hyperion Asset Management Limited, a leading Australian equites manager, Chairman of Bartercard Australia Pty Ltd, the Federal Government’s Area Consultative Committee for the Gold Coast and Regions, The Institute of Business Leaders Ltd, Gold Coast Rugby Ltd, a member of the Gold Coast’s Regional Economic Development Advisory Board and a member of a Griffith University Business School Advisory Board. He has held previous positions as Chairman of Allied Brands Ltd and ECT Ltd (ASX listed entities), Director of Bartercard PLC (AIM Listed), Golden Pacific Resources Ltd, Capricorn Resources NL, Queensland Rugby Union, Australian Small Business Association and Franchisors Association of Australia and New Zealand.

The percentage of securities not in public hands and the identity of the holdings of significant shareholders:

Shares not in public hands: 221,966,818 - 36.48%

The rights of shareholders may be different from the rights of shareholders in a UK incorporated company.