Beacon Hill Resources Plc / Ticker: BHR / Index: AIM / Sector: Mining 27 September 2011 Beacon Hill Resources Plc (Beacon Hill or the Group) Interim Results Beacon Hill Resources Plc (AIM: BHR), the AIM listed coking coal producer, announces its interim results for the six month period ended 30 June 2011 and the achievement of key operational milestones this year. Overview Production � Open pit mining has commenced with production of thermal coal from Trial Pit 1 � Built, installed and commenced processing with Minas Moatizes first wash plant enabling first production of export grade coal � Accelerating the commencement of production of coking coal to the beginning of 2012, originally planned for Q3 2012, through the development of a further open pit � Coke tests have reconfirmed hard coking coal potential of Minas Moatize Coking Coal, which trades at a premium to other coal Logistics � Development of an end-to-end logistics solution - trucking operation has commenced to transport coal from Minas Moatize to the Port of Beira ready for the Groups first export shipment, targeted for Q4 2011 � Continued progress with negotiations with the Sena Rail Line operators ahead of establishing a longer term access arrangements Magnesite � Arthur River Magnesite project is progressing well with Phase 1 of the drilling programme completed and the Scoping Study on track to be completed in Q4 2011 moving towards full feasibility in 2012 Financials � Revenue of �292,039 (2010: �58,022) and a loss of �1.895 million (2010: �1.262 million) � Net assets as at 30 June 2011 of �40.301 million and cash in bank of �9.037 million Justin Lewis, Chairman of Beacon Hill Resources, commented, "We are making good progress at both our Minas Moatize Coal Mine in Mozambique and at our Arthur River Magnesite Project in Tasmania, as we advance our strategy of building and developing resource assets in commodities associated with the steel industry.

During the period, we significantly increased the value of our assets and we firmly believe there remains considerable potential for a further step-up in valuation as we rapidly progress our asset base through the development cycle.

Our confidence in, and commitment to, our projects lay behind the Boards decision to reject an approach for the Group pitched at 16.25p last month. "We have met key development milestones at Minas Moatize having commenced production of export grade coal and commissioned our first wash plant.

Initial production of coking coal has been accelerated with mining on course to commence in early 2012 which, following results attained from the recent coke test analysis, will now target Hard Coke which trades at a premium to thermal coal.

We remain on track for our first export shipment in Q4 2011 and are already stockpiling at our warehousing facilities in Beira. "Continued progress is also being made at our Arthur River Magnesite project where the first phase of drilling has been completed and we are in the final stages of completing the Scoping Study. The Board continues to review opportunities for the Group, particularly in Mozambique with a view to increasing the overall resource portfolio of the Group.

However we will continue to undertake thorough due diligence and focus on quality assets at the right valuation.

With our developing projects, healthy balance sheet and projected cash flow, the Board believes that we are ideally positioned to successfully grow the business and build shareholder value." For further information on the Company, visit www.bhrplc.com or contact: Justin Lewis Chairman, Beacon Hill Resources Plc +61 (0) 3 9627 9910 +61 439 162 369 Timothy Jones Finance Director, Beacon Hill Resources Plc +44 (0) 1372 464549 +44 (0) 7966 442985 John Prior Collins Stewart Europe Limited +44 (0) 20 7523 8350 Adam Miller Collins Stewart Europe Limited +44 (0) 20 7523 8350 Jeremy Wrathall Renaissance Capital Ltd +44 (0) 20 7367 8273 Hugo de Salis St Brides Media & Finance Ltd +44 (0) 20 7236 1177 Susie Geliher St Brides Media & Finance Ltd +44 (0) 20 7236 1177
Chairmans Report The past six months have been an active period for the Group, which has resulted in the achievement of several key operational milestones.

This includes the development of an initial open pit operation at the Minas Moatize Project, the commissioning of the mines first wash plant and the commencement of transportation of export quality thermal coal to the Port of Beira, ahead of Beacon Hills first export shipment which is targeted for Q4 2011.

This will see Beacon Hill become one of Mozambiques first coal exporters, whilst the Group continues to make spot coal sales to local consumers in the Tete region. Minas Moatize Overview Since taking management control of Minas Moatize in May 2010, the Group has successfully focussed on the expansion and development of the Minas Moatize Coal Mine.

An extensive drilling programme was undertaken in February 2011 which enabled the Gross Resource at Minas Moatize to be increased to 80 million tonnes (Mt) (from 50Mt) and the minable resource to be increased to 57 million tonnes (from 25Mt). Coal Qualities Results from coke tests undertaken post period end have further confirmed previous test work that Minas Moatize coal will be classified as a Hard Coking Coal.

The Coke Strength after Reaction (CSR) range of 68 to 71 per cent.

is similar to the hard coking coal produced from Queensland, Australia.

This is an encouraging result for the Group as Hard Coking Coal trades at a premium to other coking coals due to its limited resources and its importance in the production of steel. Current Production Beacon Hill has commenced production of export grade thermal coal from the initial open pit mine, Trial Pit 1.

The Group is currently mining approximately 20,000 tonnes Run of Mine (ROM) coal per month.

The coal mined is being washed at the Groups first wash plant which has been built, installed and that has a capacity of 120 tonnes per hour. We are pleased to announce that production of coking coal will be accelerated to the first half of 2012, originally planned for Q3 2012.

Pre-stripping a further open pit, Upper Chipanga Pit ("UC2"), has commenced and coking coal will be mined from the start of 2012 at a ROM rate of 50,000 tonnes per month. The decision to focus initial activities on the higher margin coking coal (through the selective mining of coking coal in the Upper Chipanga Pit) has been driven by the recent positive coke test results and the current premium market price of hard coking coal.

This will also allow production to ramp up in line with the access that the Group has to logistical infrastructure. In accordance with our development plan, operations at the underground mine have now been suspended and we will shortly commence permanent closure of the structure. Mine Development and Expansion The Group is in the final stages of completing the Definitive Feasibility Study (DFS) for the expansion of the Minas Moatize Mine, targeted to be finalised in November 2011.

This will include a detailed mine plan and the design of the larger, life of mine Coal Handling and Preparation Plant ("Washplant"). Production from the main life of mine open pit will commence in Q3 2012 following the completion of mining from the Upper Chipanga Pit with the operation targeted to ramp up to a rate of up to 4Mtpa ROM coal over the following 12 months. Transport Infrastructure The Group has commenced a trucking operation to transport coal to the Port of Beira via road.

A Mozambican logistics company has been contracted to transport the coal with a view to building a trucking operation capable of carrying up to 0.5Mtpa of coal.

There is currently a fleet of approximately 20 trucks moving coal from the mine to Beira.

Whilst the Groups preferred long term solution is via the Sena Rail Line due to cost and capacity, the trucking operation has allowed the Group to transfer coal to the port in readiness for Beacon Hills first export shipment. At the Port of Beira, the Group has secured storage infrastructure consisting of two warehouses and intends to load coal using a skip operation, as is currently undertaken in a number of African ports. We continue to have active discussions regarding the Sena Rail Line and are making progress.

Initial train loads of coal are being transported down the Sena Rail Line, which will have capacity to transport 6Mtpa of coal when fully operational.

The Group has previously entered into a Memorandum of Understanding with the current operator of the railway to provide long term capacity of up to 1.8Mtpa on the Sena Rail Line. Acquisition of further coal licences The Board continue to believe that the producing Minas Moatize Mine represents an excellent platform around which to build further coal projects in Mozambique.

The Group has continued to look at a number of opportunities in the Moatize area and are in discussions in regard to several potential projects. The Group has previously announced a memorandum of understanding in respect to one of those opportunities, the acquisition of Licence area 1165.

As previously announced, the Group has recently been undertaking an exploratory drilling program, as part of its due diligence, to assess both the quantity and quality of the coal in the Licence area.

The results of this drilling, and subsequent test work on the coal, have shown the quality of the coal has been affected by geological features, which is likely to reduce its economic value.

As a result the Board has decided not to pursue this opportunity further. However, the Group remains focused on identifying medium term development projects in steel related commodities and the Group is actively evaluating a number of additional projects to bolster existing resources and production. Tasmania Magnesite Overview Beacon Hill holds a Mining Lease and retention licence over two magnesite deposits, known as the Arthur River Project and the Lyon River Project, in north-west Tasmania, Australia.

The Group acquired a 100% interest in these projects through the acquisition of Tasmania Magnesite NL in October 2009.

The current focus is the development of the Arthur River Project. The Arthur River Project has a defined JORC compliant Measured Resource of 13Mt of magnesite and an Inferred Resource of 10Mt.

Together with the Lyon River Project, the combined resource is 39Mt, the third largest in Australia. Progress The Group is in the process of finalising the Scoping Study for the Arthur River Magnesite Project which remains on target for completion by the end of 2011. The focus of the study is to confirm the economics of the project as well as to develop an initial conceptual mine plan.

The key requirements of the Scoping Study are advancing encouragingly, with the first phase of the drilling programme completed and hydrology and metallurgical tests progressing well.

The transport logistics and infrastructure analysis has been finalised and other key requirements for the Scoping Study, including an analysis of calcining plant options, mine design inputs and energy requirements, remain on target to be finalised shortly. The Scoping Study will provide the basis for moving the project forward, looking at funding options with a view to securing a joint-venture and/or off-take partner for the project to assist in both the development of the mine and processing and marketing of any end product. Recent Approach in Respect to Possible Offer On 26 August 2011 Beacon Hill announced that it had received an unsolicited approach for the Group at a price of 16.25p per share in cash.

Whilst this offer was at a premium to the share price of the Group at this time the Board did not believe that the proposal fully reflected the value inherent in the Group.

The proposal was subsequently withdrawn.

The proposal did however highlight that whilst equity markets have been volatile, coal prices of the Groups principal asset, have remained very strong and demand for supply is at all-time highs. Financial Results For the six months under review, the Group generated revenue of �292,039 (2010: �58,022) from the sale of coal in Southern Africa.

Meanwhile the majority of production has been stockpiled and will be turned to account over the coming months.

The Group has reported a loss of �1.895 million (2010: �1.262 million).

During this period the Group made significant investment in the development of the Minas Moatize open pit mining operation. At 30 June 2011, the Group had total assets of �73.337 million (2010: �52.390), net assets of �40.301 million (2010: �14.307) and cash in bank of �9.037 million (2010: �0.496 million). Outlook Beacon Hill continues to develop rapidly as it focuses on becoming one of Mozambiques first coal exporters in the emerging, globally strategic coking coal district of Tete Province in northern Mozambique.

The Group remains on track for its maiden export shipment of coal in Q4 2011 as well as becoming cash generative at the operating level in the next financial year.
Consolidated Income Statement for the period ended 30 June 2011
Note Unaudited Unaudited Audited
period ended period ended year ended
30 June 2011 30 June 2010 31 December 2010
� � �
Revenue
292,039 58,022 511,554 Direct costs
(189,979) (117,850) (433,342) Gross profit
102,060 (59,828) 78,212 Other administrative expenses
(1,808,508) (1,072,052) (3,302,880) Share based payment charge
(204,881) (132,878) (1,170,444) Total administrative expenses
(2,013,389) (1,204,930) (4,473,324) Operating Loss
(1,911,329) (1,264,758) (4,395,112) Finance income - bank interest
15,888 3,154 5,806 Finance Costs
- - (629,247) Loss before taxation
(1,895,441) (1,261,604) (5,018,553) Tax expense
- - - Loss for the period
(1,895,441) (1,261,604) (5,018,553)
Attributable to:
Equity holders of the parent company
(1,895,441) (893,238) (4,143,860) Non-controlling interest
- (368,366) (874,693)
(1,895,441) (1,261,604) (5,018,553)
Loss per share attributable to equity holders of the parent company Basic and diluted 2
- from continuing operations
(0.28)p (0.35)p (1.524)p
Consolidated Statement of Comprehensive Income for the period ended 30 June 2011
Unaudited Unaudited Audited
period ended period ended year ended
30 June 2011 30 June 2010 31 December 2010
� � �
Currency translation differences on overseas operations (581,184)
(29,517) 509,722 Comprehensive income recognised directly in equity (581,184) (29,517) 509,722 Loss for the period (1,895,441) (1,261,604) (5,018,553) Total comprehensive loss recognised in the period (2,476,625)
(1,291,121) (4,508,831)
Attributable to:
Equity holders of the parent company (2,476,625) (922,755) (3,634,138) Non-controlling interest - (368,366) (874,693)
(2,476,625) (1,291,121) (4,508,831)
Consolidated Statement of Changes in Equity
Share capital Share premium account Merger reserve Foreign exchange reserve Warrant reserve Loan note reserve Minority Acquisition reserve Retained earnings Non- controlling interest Total
� � � � � � � � � � At 1 January 2010 1,414,000 3,534,156 12,839,346 (44,305) 37,500 - - (3,783,996) - 13,996,701 Loss for the year - - - - - - - (4,143,860) (874,693) (5,018,553) Other comprehensive income: - - - - - - - - - - Currency translation differences on overseas operations - - - 509,722 - - - - - 509,722 Total comprehensive income - - - 509,722 - - - (4,143,860) (874,693) (4,508,831) Share based payments - - - - - - - 1,386,408 - 1,386,408 Issue of shares 532,269 24,907,888 - - - - - - 51 25,440,208 Expenses of issue - (1,355,291) - - - - - - - (1,355,291) Issue of loan notes - - - - - 9,618,775 - - - 9,618,775 Conversion of loan notes 401,818 18,098,182 - - - (4,792,295) - - - 13,707,725 Acquisition of non-controlling interest - - - - - - (30,773,418) - 874,642 (29,898,776)
934,087 41,650,779 - - - 4,826,500 (30,773,418) 1,386,408 874,693 18,899,049
At 1 January 2011 2,348,087 45,184,935 12,839,346 465,417 37,500 4,826,500 (30,773,418) (6,541,448) - 28,386,919 Loss for the period - - - - - - - (1,895,441) - (1,895,441) Other comprehensive income: - - - - - - - - - - Currency translation differences on overseas operations - - - (581,184) - - - - - (581,184) Total comprehensive income - - - (581,184) - - - (1,895,441) - (2,476,625) Share based payments - - - - - - - 204,881 - 204,881 Issue of shares 325,177 14,496,044 - - - - - - - 14,821,221 Expenses of issue - (635,799) - - - - - - - (635,799)
325,177 13,860,245 - - - - - 204,881 - 14,390,303 At 30 June 2011 2,673,264 59,045,180 12,839,346 (115,767) 37,500 4,826,500 (30,773,418) (8,232,008) - 40,300,597
Consolidated Balance Sheet at 30 June 2011
Unaudited Unaudited Audited
30 June 2011 30 June 2010 31 December 2010
� � � Assets
Non-current assets
Intangible assets 14,136,290 13,126,769 13,397,353 Mineral properties 40,491,504 37,831,113 39,175,917 Mine works, plant and equipment 3,692,412 391,856 1,820,960
58,320,206 51,349,738 54,394,230 Current assets
Inventories 957,475 305,776 472,403 Trade and other receivables 5,023,083 238,584 1,444,510 Cash and cash equivalents 9,036,557 496,387 4,783,711
15,017,115 1,040,747 6,700,624
Total assets 73,337,321 52,390,485 61,094,854
Liabilities
Current liabilities
Deferred purchase consideration - 25,891,241 - Trade and other payables 3,793,660 287,869 3,853,400 Convertible loan notes 7,083,155 - 7,176,243
10,876,815 26,179,110 11,029,643
Non-current Liabilities
Convertible loan notes 10,172,944 - 9,351,630 Provision for site rehabilitation 560,219 - 575,305 Deferred tax 11,426,746 11,904,174 11,751,357
22,159,909 11,904,174 21,678,292
Total Liabilities 33,036,724 38,083,284 32,707,935
Net assets 40,300,597 14,307,201 28,386,919
Capital and reserves
Called up share capital 2,673,264 1,468,167 2,348,087 Share premium 59,045,180 4,948,682 45,184,935 Merger reserve 12,839,346 12,839,346 12,839,346 Foreign exchange reserve (115,767) (73,822) 465,417 Warrant reserve 37,500 37,500 37,500 Loan note reserve 4,826,500 - 4,826,500 Minority acquisition reserve (30,773,418) - (30,773,418) Retained earnings (8,232,008) (4,544,357) (6,541,448)
Attributable to equity holders of the parent company 40,300,597
14,675,516 28,386,919 Non-controlling interest - (368,315) - Total equity 40,300,597 14,307,201 28,386,919
Consolidated Cash Flow Statement for the period ended 30 June 2011
Unaudited Unaudited Audited
period ended period ended year ended
30 June 2011 30 June 2010 31 December 2010
� � �
Net cash flow from operating activities
Loss for the period (1,895,441) (1,261,604) (5,018,553) Depreciation and amortisation 40,404 13,261 86,357 Share-based payment expense 204,881 132,877 1,170,444 Loss on disposal of fixed assets 6,106 - - Interest received (15,888) (3,154) (5,806) Foreign exchange gain / (loss) 265,640 (29,886) 440,285 Movement in working capital:
- inventory (498,367) (43,715) (308,241) - trade and other receivables (3,584,260) 98,658 (1,137,032) - trade and other payables (158,551) 92,303 3,690,787 Cash flow used in operations (5,635,476) (1,001,260) (1,081,759)
Cash flow from investing activities
Acquisition of subsidiary undertaking (Note 4) - (663,878) (26,111,365) Additions to exploration and evaluation costs (726,215) (78,009) (290,472) Additions to mineral properties (255,691) - - Additions to mine works, plant and equipment (1,952,201) (102,212) (1,263,373) Disposal of property, plant and equipment - - 21,167 Interest received 15,888 3,154 5,806 Expenses of acquisition of non-controlling interest - -
(148,725) Net cash flow from investing activities (2,918,219) (840,945) (27,786,962)
Cash flow from financing activities
Issue of shares 13,442,340 1,580,774 25,440,157 Share issue costs (635,799) (112,030) (1,355,291) Issue of convertible loan notes - - 8,699,346 Net cash flow from financing activities 12,806,541 1,468,744 32,784,212
Net increase / (decrease) in cash and cash equivalents
4,252,846
(373,461)
3,915,491 Cash and cash equivalents at beginning of period
4,783,711
772,482
772,482 Cash acquired with subsidiary undertaking - 97,366 95,738
Cash and cash equivalents at end of period 9,036,557 496,387 4,783,711
NOTES TO THE INTERIM RESULTS 1.

Accounting policies Basis of accounting These condensed consolidated financial statements do not include all disclosures that would be required in a complete set of financial statements and should be read in conjunction with the 2010 Annual Report.

The financial information for the half years ended 30 June 2011 and 30 June 2010 does not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006 and is unaudited annual financial statements of the Company are prepared in accordance with IFRSs as adopted by the European Union.

The comparative financial information for the year ended 31 December 2010 included within this report does not constitute the full statutory accounts for that period.

The statutory Annual Report and Financial Statements for 2010 have been filed with the Registrar of Companies.

The Independent Auditors Report on that Annual Report and Financial Statements for 2010 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. The same accounting policies, presentation and methods of computation are followed in these condensed consolidated financial statements as were applied in the Groups latest annual audited financial statements.

The IASB has issued a number of IFRS and IFRIC amendments or interpretations since the last annual report was published.

It is not expected that any of these will have a material impact on the Group 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 �1,895,441 (2010: �893,238) and on 674,413,930 (2010: 257,660,754) ordinary shares, being the weighted average number of ordinary shares in issue during the period. 3.

Dividends The directors do not recommend the payment of a dividend.
INDEPENDENT REVIEW REPORT TO BEACON HILL RESOURCES PLC Introduction We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2011 which comprises the consolidated income statements, the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated balance sheet, the consolidated cash flow statement and the related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. Directors responsibilities The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors.

The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on AIM which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the companys annual accounts having regard to the accounting standards applicable to such annual accounts. Our responsibility Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose.

No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent.

Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the Auditing Practices Board for use in the United Kingdom.

A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.

Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2011 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM. BDO LLP Chartered Accountants and Registered Auditors London United Kingdom 26 September 2011 BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
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