I am pleased to be able to inform shareholders that Bisichi Mining has never been in a stronger financial position.

Bisichi made a trading profit in 2007 in excess of £2.3 million, group gearing fell from 22.4% to 15.2%, we have over £3 million on deposit, we expect shortly to commence open cast mining at Black Wattle Colliery, opportunities to acquire new coal reserves in South Africa have never been better, and income from our property portfolio remained steady. The headline loss for the full year, which arises from the way in which we now have to treat unrealised gains and losses in our property portfolio, therefore disguises an exceptionally strong performance by your company.

The success of the past year rests firmly on the strong performance of Black Wattle. With production averaging 110,000 metric tonnes per month, we have been able to take advantage of the substantial strengthening of prices for steam coal and metallurgical coal, both within South Africa and in the international export market. Although Black Wattle suffered only minimal disruptions from power cuts by the national electricity supplier Eskom, these have had no effect on Black Wattle's monthly production, sales or exports. We have received approval from the Department of Minerals and Energy (DME) for open cast mining at Black Wattle, and expect to commence these operations shortly. When combined with the benefits we are now deriving from our direct management of the washing plant, open cast mining will further improve yields and product quality.

The signing of a Memorandum of Understanding (MOU) with Barclays Capital Commodities Principal Investment Area (Barclays Capital CPIA) for the expansion of Bisichi's operations in South Africa represents an important step in our growth strategy in South Africa. We hope to announce the first transaction for this investment framework in the near future.

As I stated last year, the prospect of obtaining additional mineral reserves has never been better. The full implementation of the Mineral and Petroleum Resource Development Act (MPRDA) of 2004 has resulted in the transfer of a substantial number of coal reserves to empowered companies. We have a pipeline of prospective acquisitions that is continually growing. We are in the process of acquiring an additional drill rig and have put in place a technical team in Middelburg solely dedicated to the review and assessment of these reserves. Moreover, with the support and cooperation of our partner, Barclays Capital CPIA, we have a successful transaction model in place that will allow us to move quickly when opportunities present themselves.

To support our growth strategy in South Africa, we have invited Robert Grobler, our General Mine Manager at Black Wattle, to join the Bisichi Board of Directors and to take on the role of Director of Mining with the responsibility to oversee all of our operations in South Africa.

With regard to the legal issues surrounding the removal of our former partner at Black Wattle, there is nothing further to report other than to reiterate that court proceedings have been initiated in South Africa to obtain a declaration that the Mhlaba Dube Memorial Trust is no longer a shareholder. This legal action does not affect the operation of Black Wattle nor its mineral rights granted under the MPRDA. As stated previously, once this matter has been resolved, we will invite a new partner to join us as a shareholder in Black Wattle. We are proud of our commitment to, and track record in, the area of Black Economic Empowerment (BEE) and look forward to concluding more transactions with BEE groups as we grow in South Africa.

Bisichi's UK retail property portfolio, managed by London & Associated Properties PLC, continues to contribute substantial cash to the company and is virtually fully let. Although there has been a significant downturn in the UK property market and, more specifically, in the valuation of Bisichi's property portfolio, we have not seen any effect on rental income or on the lettings within the portfolio.

To underline our confidence in the future of Bisichi, your directors are recommending a dividend of 3.0p, compared to 2.50p per share in the previous year, an increase of 20 %. This will be paid on 11 August 2008 to shareholders on the register as of 4 July 2008.

2007 has been an excellent year for Bisichi, and, with a strong platform for growth now in place within South Africa, we look forward to the coming year with confidence.

Michael Heller, Chairman