May 05, 2008

South China Resources to buy 70.5% stake in Elof coal project

South China Resources plc announced that its 100% owned South African subsidiary will acquire 70.5% of the Elof prospecting rights from Injula Mining Operations Pty Ltd.

This transaction is a reverse takeover under the AIM Rules and is subject to shareholder approval. Consequently, SCR's shares have been suspended from trading on AIM until an admission document is posted to shareholders. Approval will also require Ministerial consent to and registration of the transfer by the Department of Minerals and Energy as well as South African Reserve Bank approval.

Elof Coal Project located in the Witbank Coal Field some 65 kilometer E of Johannesburg, the Elof Coal Project, which comprises the Middelbult, Wolvenfontein and Modderfontein areas, contains ESKOM quality domestic thermal coal suitable for power generation. The project is located proximal to several coal fired power stations and has road, rail and power infrastructure running within 1000 meters of the project.

Highlights of the project are as under

1. Shallow, largely open pittable predominantly domestic grade thermal coal resources, as well as some export grade thermal coal.

2. 112 million tonne gross in situ tonnes of which 87 million tonne are currently at JORC inferred category, 70.5% to be attributed to South China Resources PLC

3. Adjacent to several power stations for mine gate sales to ESKOM
4. Rail, road, power and water infrastructure less than 1000 meters away

5. Raw coal qualities meet ESKOM guidelines with strong domestic prices

6. Management and development team to join Board/Company with extensive local coal mining experience

7. Plan to advance toward production through completion of Bankable Feasibility Study as soon as is practicable

8. Strong BEE partner with extensive project pipeline in Southern Africa

9. Raising up to GBP 4 million to fund purchase and project development

10. Name change to Universal Coal PLC and reverse takeover triggered

The Company is in receipt of an Independent Competent Persons Report on The Elof Coal Project in South Africa, which was completed by global mining consultancy RSG Global Coffey Mining Pty Ltd.