Beacon Hill slumps on offer withdrawal

Shares in AIM-listed coking and coal producer Beacon Hill Resources (BHR) were lower on Tuesday after it said a possible offer for the company had been withdrawn.

The announcement follows a statement from the company in August confirming the approach from an unnamed company and that its proposal failed to reflect the current value of Beacon Hill and its assets.

Chairman Justin Lewis commented: "Whilst the board does not think this proposal in any way reflects the current value of the group, it does serve to highlight that whilst equity markets have been volatile, coal prices have remained very strong and demand for security of supply of coking coal is at an all-time high."

He added: "As highlighted in our recent announcement, the coal produced from Minas Moatize will be a premium hard coking coal, underpinning the considerable value attributable to this asset as we move into our production phase at the main open pit mine in the next few months."

The company also took the opportunity to update investors on progress with its development of the Minas Moatize coal mine, a producing coal mine in the Tete Province of northern Mozambique.

"Mining from the first open pit area, Trial Pit 1, is progressing well and the Coal Handling and Preparation Plant (Wash Plant) recently installed is processing the coal," it said, adding that "progress continues to be made with logistics with the commencement of the main trucking operation to the port of Beira".

The group currently has a fleet of 20 trucks operating between Moatize and Beira, seven days a week, which will continue to be ramped up over the coming weeks. A further update on the mine will appear in the company’s interim results on 27 September.

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