ATH Resources plc

("ATH Resources" or the "Group")

Sale of ATH Regeneration

ATH Resources plc ("ATH"), one of the UK's largest coal producers, today announces that it has completed the sale of the assets of ATH Regeneration Limited ("Regen"), the part of ATH Resources which specialises in coal recovery, land remediation and regeneration, to a newly formed company, RecyCoal Limited ("RecyCoal").  RecyCoal is funded by a substantial investment fund and its partners, and will have amongst its shareholders Tom Allchurch, the Group's current Chief Executive, and Steven Beaumont, the current Group Finance Director.  The shareholders of RecyCoal have committed £40 million to the acquisition and development of RecyCoal.

The proceeds from the disposal could total some £17 million over a seven year period, comprising £6.5 million in cash on completion plus royalties, capped at £8 million, paid dependent upon the future performance of RecyCoal.  In addition, a further £2.5 million is expected from the sale of retained land and buildings adjacent to the Langton site once the Langton regeneration project is completed in 2013.

ATH Resources has also been given an option to reduce the risk of it not receiving future royalties by electing to receive a payment of £2 million in January 2011.  If this option is taken, the total royalty cap will be reduced from £8 million to £5 million.

In the Group's most recent audited accounts for the year to 4 October 2009, the ATH Regeneration business had no turnover and made an operating loss before taxation of £2.4 million. There will be a loss on disposal of around £0.8 million after tax (including the costs of the transaction) and additionally goodwill will be written down by a further £2.3 million.

With both the Chief Executive and Group Finance Director leaving the business, the Board is keen to ensure that continuity and stability are maintained.  As a result, David Port the current Non-Executive Chairman has been appointed Executive Chairman.  Alistair Black who has been with the Group since 1998 and is also the Managing Director of the mining business becomes the new Chief Executive.  Steven Beaumont, the current Group Finance Director, will continue in that role to facilitate a smooth handover until later in the year when his replacement has been appointed.  Tom Allchurch will stay on the Board as a Non-Executive Director for a transitional period.

The Group entered into a new revolving credit facility ("RCF") of £30 million with HSBC and Yorkshire Bank in November 2009 which was contracted to reduce to £27.5 million in November 2010 and £22.5 million in November 2011.  The Board will use the proceeds from the disposal to reduce the drawings under the facility with the current maximum facility reducing to £23.5 million.  Further receipts will be used for working capital purposes and the RCF will not reduce further until November 2011 when it will become £18.5 million.

David Port, Executive Chairman of ATH Resources commented: "The disposal of the ATH Regeneration assets will reduce debt and allow the Group to focus on its surface mining business without having to raise the significant amounts of capital necessary to fully exploit the regeneration business.  The disposal will also remove the inconsistent nature of the earnings of this activity and the cost and risk associated with the development of a new business in Australia some 11,000 miles away, whilst preserving the right to an income stream should the business prove successful.  The Board therefore believes that disposal is in the best interests of ATH Resources and its shareholders."

Tom Allchurch and Steven Beaumont are related parties for the purposes of Rule 13 of the AIM Rules for Companies.  As such, the directors, with the exception of Tom Allchurch and Steven Beaumont (the "Independent Directors"), have a duty to consider whether the transaction is fair and reasonable so far as shareholders are concerned.  In the course of its deliberations, the Independent Directors sought independent valuation advice from Baker Tilly.  The Independent Directors, having consulted with the Group's nominated adviser Seymour Pierce, consider that the proposed transaction is fair and reasonable insofar as the Group's shareholders are concerned.

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