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Beacon Hill Resources, Kirkland Lake Gold, Richland Resources, Sula Iron & Gold news briefs

Contributed by Fox-Davies Capital

Beacon Hill Resources has announced its wholly owned subsidiary Minas Moatize Limitada ('MML') has received its 0.5Mt Sena Rail Line allocation.

In this news:
- MML is granted line access by CFM for a capacity of 0.5Mtpa and MML pays CFM a monthly line access fee
- The Interim Rail Access Agreement automatically renews itself each year until MML and CFM entered into a long term take or pay agreement
- MML shall initially operate two train sets each consisting of two locomotives with 42 wagons (each wagon of up to sixty three tonnes load capacity)
- The long term contract is in recognition of the significant investment in new rolling stock to be made by MML during 2013.

FD Comment:
This is great news for the Company and comes after it signed an operating lease agreement for the required rolling stock on the 1st February and will allow the Company to start exporting coking coal. As we said after the Dec'Q results we believe that Beacon Hill is the best placed outside the majors in Mozambique, getting the rail allocation remains critical for the Company. With this now in place, which will coincide with the commissioning of the Phase 2A wash plant, the Company will be able to both increase export volumes and materially decrease operating costs due to lower transport costs and focussing on the coking coal product which will increase yields. Based on a slight discount to current quarter Hard Coking Coal ('HCC') pricing we'd expect BHR to have an operating margin of ~US$93/t or ~US$46M pa.

Kirkland Lake Gold announced production results for the third quarter of its fiscal year 2013. During the quarter, 73,678 tons of ore were produced at a head grade of 0.32 ounces per ton (opt) and a gold recovery rate of 95.66% to produce 22,261 ounces of gold. Ounces sold during the quarter were 17,389. The difference between ounces produced and ounces sold was due to road closures as a result of an ice storm that delayed the last pour of the quarter (4,271 ounces) from being delivered to the gold refinery where it was to be sold until February 1. These additional ounces will remain in inventory in Q3 and will be sold in Q4. For the year to date, 214,678 tons of ore have been produced at a head grade of 0.29 opt and a gold recovery rate of 95.58% to produce 60,015 ounces of gold. Sold ounces year to date are 59,648. The overall production results are slightly ahead of the plan to meet the Company's guidance of 90,000oz- 110,000 sold ounces for fiscal year 2013. The Company plans to increase production in Q4 as a result of the contribution to production of the newly operational service cage, and the beginning of the ramp up of production to the 1,400-1,600 ton per day milestone, targeted for Q2 of fiscal year 2014 (August to October, 2013).

Richland Resources Limited announced an operational, sales and marketing update. Total tanzanite production of 795,162 cts for Q4 2012 (554,060 cts for Q4 2011), with an average grade of 102 cts per tonne achieved (58 cts for Q4 2011). The US$3.9M in sales achieved in Q4 2012 (US$5.9M in Q4 2011), was adversely impacted by the theft of gemstones during the quarter. The Company commenced the evaluation of proposed graphite production restart on existing Tanzanite licence area. There are significant non-JORC compliant resources and reserve sand discussions with potential commercial partners commenced. There are also ongoing negotiations with the Government of the United Republic of Tanzania regarding a potential shareholding by the Government.

FD Comment:
In December 2012 a sorting house break-in resulted in the estimated theft of stones valued at US$1.46M and it is the subject of an insurance claim.

Sula Iron & Gold is an iron ore and gold exploration company focussed on Sierra Leone. The Company has announced that it will be focussing on five targets for hard rock gold mineralisation for follow-up exploration at its wholly owned 153km2 Blue Horizon exploration licence.

In this news:
- Five target areas for hard rock gold mineralisation have been identified that appear to host source areas of placer gold
- The Dalakuru and Lagunda prospects are high priority targets where further exploration including detailed ground magnetic surveys is planned
- Defined exploration area of approximately 8km2 identified for placer gold source at Lagunda prospect where extensive artisanal mining occurs
- Historic drilling intercepted hard rock mineralisation that is open in all directions at the Dalakuru prospect
- Historic diamond drilling intercepted:2.00m @ 8.76g/t Au, 8.72m @ 10.46g/t Au, 1.55m @ 11.68g/t Au, 9.03m @ 6.63g/t Au.

FD Comment:
Sula has compiled existing GIS data with recently acquired satellite imagery and historic drilling to identify five areas for follow-up work. This will initially involve a ground magnetic survey followed by a soil and channel sampling programme at Dalakuru and Lagunda. This is still very early stage work, but the geology is prospective, hosting Amara's 2.24Moz at 1.82g/t Indicated and 0.54Moz at 2.52g/t inferred resource at Baomahun for which it is hoping to complete a BFS during 1H'13.