Name and Location
Minas Moatize coal expansion project, Tete, Mozambique.

Client
Beacon Hill Resources, through its subsidiary, Minas Moatize.

Project Description
Minas Moatize has a Joint Ore Reserves Committee-compliant resource of 86.8-million tons.

The project proposes to develop a large-scale openpit mine, which will extract and process about four-million tons a year of run-of-mine (RoM) coal at steady-state production and produce 2.8-million tons of saleable coal a year over 15 years, 30% of which will be coking coal.

Value
Total project capital was estimated at $166-million; however, Beacon Hill has identified a strategy to deliver an estimated $80-million reduction in the proposed capital expenditure (capex) associated with the expansion of Minas Moatize.

Duration
A revised expansion strategy will result in the company achieving plant capacity of 2.8-million tons a year by the end of 2013.

Latest Developments
Beacon Hill is aiming to raise up to $25-million through a share placement.

“The placing, which has received strong institutional demand to date, will strengthen the company’s balance sheet and will enable us to complete important rail infrastructure upgrades, start phase 2B and 2C wash plant upgrades; ait also leaves sufficient working capital for our rail operations,” says chairperson Justin Farr-Jones.

In addition, and most significantly, the funding will be sufficient to see the Minas Moatize operation enter full-scale production of coking coal.

The share placement will take place in two tranches, subject to shareholder approval, and will be conducted through a book-build process, with a minimum of $15-million raised, and shares offered at 25p a share.

The first tranche of the placement will be issued under the company’s 15% placement capacity, while the second tranche will be determined by the company and joint bookrunners.

It is expected that the first tranche of shares will be made available on March 18 on the Aim and on March 19 on the ASX.

In addition to the proposed equity raising, Beacon Hill continues discussions with several financial institutions regarding a secured debt facility for capital expenditure, ongoing working capital funding and the refinancing of the senior secured $10-million debt facility with Vitol Coal SA.

Key Contracts and Suppliers
Global Coke (offtake agreement); Tayanna Mozambique (excavation and coal extraction works) and Vitol Coal SA (marketing agreement).

On Budget and on Time?
Yes.

Contact Details for Project Information
Beacon Hill Resources executive chairperson Justin Lewis, tel +61 3 96279910 or email info@bhrplc.com.