Beacon Hill Resources Plc ( Beacon Hill or the Company ) Completion of Minas Moatize Coking Coal Project / Definitive Feasibility Study

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1 BEACON HILL RESOURCES PLC 44 Southampton Buildings, London WC2A 1AP, United Kingdom BEACON HILL RESOURCES PTY LTD Level 18, 31 Queen Street, Melbourne, Victoria 3000, Australia Telephone: I Fax: Beacon Hill Resources Plc / Ticker: BHR / Index: AIM / Sector: Mining Beacon Hill Resources Plc ( Beacon Hill or the Company ) Completion of Minas Moatize Coking Coal Project / Definitive Feasibility Study Highlights Definitive Feasibility Study ( DFS ) completed by independent consultants, TWP Australia Pty Ltd, demonstrates compelling economics for the Minas Moatize Coking Coal Project. Financial modelling, based on a 4Mtpa Run of Mine ( ROM ) operation producing on average 2.2Mtpa of saleable coking and thermal coal during mine life using a 13% discount rate, demonstrates: NPV 13 (pre tax) US$662 million Internal Rate of Return ( IRR ) 79.5% Life of Mine 11.5 years Total JORC Mineable Reserve of 42.65Mt including a Marketable Reserve of 23.46Mt, of which at least 8.72Mt will be coking coal An average life of mine operating cost of approximately US$58.5/t FOB Beira. Total project capital estimate of US$166 million inclusive of US$42M for EPCM, contingency and other indirect costs Capital estimate reduces to US$18million utilising the Group s proposed Build, Own, Operate ( BOO ) model for key infrastructure items Independent marketing study indicates Minas Moatize Hard Coking Coal will attract a long term price around Standard Hard Coking Coal benchmarks Potential to improve economics of project and life of mine through further work Justin Lewis, Chairman of Beacon Hill commented, We are very pleased to publish the results of the DFS for the Minas Moatize Expansion Project, which provides independent confirmation that the project will support a technically and economically robust coal mine with a mine life of 11.5 years. The economics of the project are not only highly positive, but are also subject to improvement across a range of areas and with a NPV of US$662 million, a Marketable Reserve of 23.45Mt of coal, of which over one third is coking coal, near term coking coal production and a proven end to end export solution, the commercial value of the Minas Moatize Project is clearly apparent. Conference Call A conference call for analysts and investors will be held at 9.00am GMT on Wednesday 22 February To join this conference call, please dial +44 (0) or +44 (0) if you are calling from outside of the UK, using access code #. A presentation which will accompany the conference call is available at CONTACTS: INVESTORS / SHAREHOLDERS David Premraj Corporate Development info@bhrplc.com UK MEDIA ENQUIRES St Brides Media & Finance Susie Geliher / Elizabeth Cowell +44 (0) susie@sbmf.co.uk / elizabeth@sbmf.co.uk AUSTRALIAN MEDIA ENQUIRES Six Degrees Media & Communication Victoria Thomas melbourne@sixdegreesmedia.com.au

2 Project Description The Minas Moatize Coal Project is located in the heart of the Moatize Coal Basin in Mozambique where the Group currently operates. The DFS proves viability for the expansion of the Minas Moatize Coal operations from underground mining to open pit. The proposed open pit operation will extract and process approximately 4Mtpa of ROM coal at steady state production. The project is an expansion of an existing open pit operation rather than a greenfield development project. Project Valuation The DFS demonstrates the compelling economics of the Project with financial modelling using a conservative 13% discount rate demonstrating a pre tax NPV of US$662 million and a post tax NPV of US$428 million. Project Valuation NPV 13 (Pre Tax) US $662 Million Internal Rate of Return (Pre Tax) 79.50% Life of Mine 11.5 Years Coal Reserves The Group recently reported its maiden JORC compliant Coal Reserve for Minas Moatize. A total Mineable Reserve of 42.65Mt was reported with the potential upside of a further 7.9Mt. The Mineable Reserve represents the in situ portion of the Geological Resource that is economically mineable. The total Mineable Reserve includes a Marketable Reserve of 23.46Mt, representing the saleable portion after mining and processing of the resource, of which at least 8.72Mt is coking coal.

3 Resource Total Mineable Reserves 1 Marketable Reserve Marketable Coal Qualities Measured Indicated Proved Probable Total Yield 2 Total 3 Ash CV IM VM FC TS Location (Mt) (Mt) (Mt) (Mt) (Mt) % (Mt) % MJ/kg % % % % DFS Pit Total Coal Product Type Coking Coal 20.45% Thermal (Export) 25.53% Thermal (Domestic) 9.01% % All reserves stated are on an air dried basis 2. Yield calculation for marketable reserves is based on a fines content of 7% 3. Reported reserves does not include 'tonnes' currently unclassified and subject to in fill drilling programme The DFS considers that an improved understanding of the fines content in the coal has reasonable potential to increase the yield of the primary coking coal product. The DFS has recommended that additional liberation, floatation and filtration work be undertaken to provide an increased awareness of the fines content. The outcome of this additional test work has the potential to increase primary product yield and project valuation metrics.

4 Operating Expenses The DFS indicates that the mine can produce coal at approximately US$58.5/t FOB Beira, (including royalties), over the life of the mine. Beacon Hill has made provision to truck export coal to Beira at the beginning of the project pending rail upgrades to the Sena line. In addition, the DFS assumes that domestic thermal coal will be sold at the mine gate. Operating Costs USD per Saleable Tonne Mining and Processing $26.5 Storage, Handling and Transport $26.5 General/Royalties $5.5 Total Operating Cost $58.5 The DFS has identified a number of areas where additional study investigation may lead to further optimisation of capital expenditure and operation cost estimates. Optimisation of the CHPP design could improve the fines content recovery which has the potential to increase the yield of the primary coking coal product. Additional geotechnical investigation, updating of environmental studies and improved definition of the geological resource have also been recommended.

5 Capital Expenditure The DFS indicates that the project can be developed for a capital cost of US$148 million (excluding contingency). The capital cost estimated is reported as a Base Case where Beacon Hill finances 100% of the required capital cost. The DFS modelled a second scenario where Beacon Hill finances key infrastructure items (CHPP and the Power Station) through a BOO arrangement and utilises a mining contractor to mine the pit. In this scenario the total project capital cost reduces to US$18 million (US$16 million plus 12% contingency). The DFS notes that Beacon Hill has entered into a Heads of Agreement with the Basil Read Group for it to become the contractors to build, own and operate the main CHPP and for it to become the main mining contractor to the mine. Base Case 100% Owner Funded BOO Scenario Direct Cost ($ Million) ($ Million) Mine Coal Washing CHPP 83.4 BOO Contractor Power Generation 10.1 BOO Contractor Infrastructure Sub Total (Direct Costs) Indirect Costs (Project Management) Contingency Total (Including Contingency)

6 Mining The mining method proposed is a conventional truck shovel open pit and will involve some free dig of weathered overburden at surface. The initial mining equipment fleet will comprise of 80t excavators and articulated dump trucks with a ramp up to steady state in 2014 and possibly a fleet change in the second half of the mine life. At steady state production 4Mt of coal will be mined and delivered to the CHPP each year at an average strip ratio of 3.6:1. BHR has signed a Heads of Agreement with Basil Read Mining to enter into a contract for mining at Minas Moatize. Basil Read Mining has the requisite mining experience and equipment available to mobilise to site in The mining sequence derived during the DFS is a strip sequence from south to north, which has been designed to facilitate effective back filling of waste. There is a step change increase in strip ratio during the second half of the mine life (from circa 2.9:1 in the south to circa 5.2:1 in the north) that is caused by the need to access the deepest coal of the Lower Chipanga coal seam. Figure 1: Mining Sequence: Minas Moatize Expansion Project

7 Processing The DFS assumes that the main CHPP will process 100% of coal mined from the open pit. The plant has been designed to produce three products simultaneously and to receive and handle 4.3Mtpa of ROM coal at a rate of 750tph. The assumed effective utilisation of the CHPP is 5,700 operating hours per annum (65%). Figure 2: Schematic of Proposed Coal Handling and Preparation Plant

8 Marketing The CHPP has been designed to produce three products simultaneously including a specialised export coking coal (9.5% ash), an export thermal coal (25MJ/kg) and a domestic thermal sized product (18MJ/kg). The forecasted selling prices utilised in the financial model have been attained from an independent report that has been prepared by Coal Marketing International Pty Ltd. The average long term prices for the three proposed products are described below: Product Types Market Coal Type Forecasted Average Long Term Price Primary Product Export Coking Coal Max 9.5% Ash (ADB) 1 $207 per tonne Secondary Product Export Thermal Coal Min 5970 kcal/kg (NAR) 2 $94 per tonne Tertiary Product Domestic Thermal Coal Max 40 45% Ash (ADB) $55 per tonne 1 Air dried basis 2 Net as received. 5970kcal ~25MJ/kg

9 Logistics The DFS assumes that Beacon Hill will initially transport coking coal by road to the Port of Beira, before utilizing the Sena rail line as production ramps up. The study assumes a cost of $55 per tonne by road, $20 per tonne by rail and port costs of $10 per tonne. Beacon Hill s first export shipment of 10,050 tonnes of thermal coal departed from the Port of Beira on 17 December 2011 having been trucked to the Port of Beira. It marked a key milestone for the Group and demonstrates that Beacon Hill has a viable operational end to end logistics solution which allows coal to be transported from mine to port (via truck) for shipment via the seaborne market. Figure 3: MV Aztec Maiden that departed the Port of Beira on Trucking Operation Beacon Hill entered into a contractual agreement with a Mozambican logistics company to establish a trucking operation in the short term that is capable of transporting up to 0.5Mtpa of coal from Minas Moatize to the Port of Beira for future shipments. Rail Significant progress continues to be made regarding the Sena rail line which is significant to the longer term export capability of the Group. Minas Moatize is a member of Taskforce One, together with VALE, Rio Tinto and CFM, which is working with the Government of Mozambique to complete the refurbishment of the Sena rail line to an initial capacity of 6.5Mtpa in mid 2012 and then to a fully operational capacity of 12Mtpa later in the year. An allocation on the Sena Rail Line will enable the Group to ramp up export coal production to 4Mtpa.

10 Project Execution Timeline The DFS has identified distinct phases for the ramp up to full production. Phase 1: ROM Treatment Rate of 120tph: The existing operation consists of a mining operation with contractor owned equipment, as well as a small scale wash plant that is capable of processing approximately 120tph of ROM coal. Phase 2: ROM Treatment Rate of 400tph: Phase 2 will see the existing coal operation expand to be capable of treating up to 400tph of ROM coal material by retrofitting additional higher capacity equipment into the existing wash plant. Phase 3: ROM Treatment Rate of 750tph: The project will move to full scale production in phase 3. The treatment of 750tph of ROM coal feed will require the new CHPP to operate at capacity. Mineral Title and Mining Rights The mining concession for the property is valid until 15 July 2015 and Beacon Hill is currently in the process of working with the Mozambican government to extend this concession in line with the life of the mine. Conference Call A conference call for analysts and investors will be held at 9.00am GMT on Wednesday 22 February To join this conference call, please dial +44 (0) or +44 (0) if you are calling from outside of the UK, using access code #. A presentation which will accompany the conference call is available at **END** For further information, please contact: Beacon Hill Resources Plc Justin Lewis, Chairman Peter Wilson, Chief Operating Officer Collins Stewart (Nominated Advisor & Joint Broker) John Prior / Sebastian Jones Renaissance Capital (Joint Broker) Rob Edwards Halcyon Corporate (Australian Corporate Advisor) Ryan Whitelegg / Jonathon Tooth

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12 Reserve Statement The Competent Person for reporting of coal resources, Peet Meyer of PC Meyer Consulting Pty Limited, who is a member of the Geological Society of South Africa (GSSA) and the Fossil Fuel Foundation. Peet Meyer has more than 21 years experience in the southern African coal industry of which he has spent more than 5 years in the Mozambique Coalfields. He has the appropriate relevant qualifications and experience to be considered as a Competent Person as defined in the Standards on Mineral Resources and Reserves Definitions and Guidelines (2004). The Competent Person for reporting of coal reserves, Mr. Simon Griffiths, who is a Member of The Australian Institute of Mining and Metallurgy (AusIMM) and Society for Mining, Metallurgy, and Exploration, Inc. (SME) has sufficient experience which is relevant to the style and mineralisation and type of deposit under consideration and the activity to which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. The Coal Resources and Reserves are reported in compliance with the guidance as defined in Appendix 5A of the ASX Listing Rules being the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (the JORC Code), 2004 Edition. Mr Meyer and Mr Griffiths have consented to being named as the authors of the Resource and Reserve Statements respectively in this announcement. About Beacon Hill Resources Plc Beacon Hill Resources Plc (AIM: BHR) is an AIM listed resource company focussed on the acquisition and development of assets in commodities relating to the steel production industry. The Group currently has two primary assets the Minas Moatize Coal Mine in Tete, Mozambique and Tasmania Magnesite NL in Tasmania. Forward Looking Statement Certain statements made during or in connection with the communication, including, without limitation, those concerning the economic outlook for the coal mining industry, expectations regarding coal prices, production, cash costs and other operating results, growth prospects and the outlook of Beacon Hill operations, its liquidity and the capital resources and expenditure, contain or comprise certain forward looking statements regarding Company s development and exploration operations, economic performance and financial condition. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes is the regulatory environment and other government actions, fluctuations in coal prices and exchange rates and business and operational risk management. For a

13 discussion of such factors, refer to the Company s most recent annual report and half year report. The Company undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after today s date or to reflect the occurrence of unanticipated events.