Beacon Hill’s Minas Moatize project benefits from new management strategy

In an announcement to shareholders, Justin Farr-Jones, chairman of Beacon Hill Resources Plc, provided an update on the company’s flagship project, the Minas Moatize mine located in the Tete province of Mozambique.

Farr-Jones praised new CEO Rowan Karstel and his operational team for their “hard work and persistence” in “driving the business forward.”

Under Karstel, Beacon Hill adopted a revised expansion strategy, which sought to reduce expenditure while maintaining an initial plant capacity of 1.8 million tpa ROM, rising to 2.8 million tpa ROM by December 2013.

The new approach aimed to match the company’s metallurgical coal production targets with its rail allocation. This enabled the Beacon Hill team to tailor the volume of saleable coal with the most cost efficient method of reaching its export markets.

Farr-Jones said that the company’s focus in H1 of 2013 “has been on reviewing every facet of [the] business. We strengthened the depth of management capability and also made the necessary retrenchments.”

Beacon Hill announced they have upgraded their JPRC resource by +31%, signed a 20-year mining contract with the Mozambican Government and in April concluded a US$ 21 million equity fund raising.

Farr-Jones also stated that, under supervision of chief operating officer, John Daly, Beacon Hill’s new washplant at Minas Moatize has been performing in line with expectations. The washplant has been operational for two weeks and is demonstrating an hourly capacity of 275 tph during test intervals.

Though Farr-Jones concedes the washplant must continue to prove its value, he was pleased to announce that Daly and his team have been successful in producing Beacon Hill’s very first batches of low volatile, hard metallurgical coal from the new plant, in addition to the thermal export specification.

Beacon Hill are also in the process of implementing their marketing and logistics plant to enable the company to export its metallurgical coal product in the coming months, initially via truck and then via the upgraded Sena rail line to the port of Beira.

In February 2013, Beacon Hill secured rail allocation on the Sena line, equating to 0.5 million tpa, or 7.7% of the total line capacity.

Farr-Jones concluded by thanking shareholders for their continued support during a difficult period for Beacon Hill’s share price. The company is now looking to increase commercial metallurgical coal production at Minas Moatize as Beacon Hill seeks to break even, before becoming a cash generative operation.

Adapted from press release by Samuel Dodson

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