"I am very pleased to inform shareholders that Bisichi made a record profit before tax in 2008 in excess of £6.0 million (Realised) (2007: £2.3 million). As £5.1 million of this profit was made in the second half of 2008, at a time when international commodity prices were tumbling, the year’s success can be attributed to the advent of open cast mining at Black Wattle combined with strong performance from the existing underground sections. In contrast to many mining companies around the world, the financial position of Bisichi has never been stronger.

The commencement of open cast mining at Black Wattle Colliery in April 2008 fundamentally changed the profitability profile of the mine. In addition to improving yields and product quality, open cast mining also allows us to mine much more flexibly, adding or reducing production promptly when necessary. As a result of the open cast mining, we have been able to increase monthly production to a regular 130,000 metric tonnes per month. We are presently finalising applications to the Department of Mineral and Energy (DME) for the opening up additional areasto mine open cast.

In 2008, we commenced a capital investment programme at Black Wattle which, when completed in the second quarter of 2009, will expand the plant’s capacity from 130,000 to 170,000 metric tonnes per month. The investment programme is already producing results having already improved yields and increased productivity at the plant.

In April 2008 - with the full and final settlement of our dispute with our previous Black Economic Empowerment (BEE) partner - we embarked on a search to identify a new BEE partner for a 37.5% equity stake in Black Wattle. I am pleased to report that, in November 2008, we signed an agreement for the sale of this stake to a well recognised, publicly listed BEE company with a strong track record in financial services, property and mining. Further details of this transaction will be released in due course once the transaction has received the approval of the Department of Minerals and Energy.

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 are intensively managing the properties to ensure that rental income remains strong. To date, we have not seen any effect on rental income or on the lettings within the portfolio: in 2008, rental income totalled £1.032 million (2007: £1.019 million).

To underline our confidence in the future of Bisichi, your directors are recommending a dividend of 3.5p, compared to a 3.0p per share in the previous year, an increase of 16.7%. This will be paid on Monday 10 August to shareholders on the register at the close of business on 4 July 2009

2008 has been a record year for Bisichi. Although we anticipate 2009 will be a difficult year in the international coal market, with the open cast operations running smoothly at Black Wattle and your management taking a proactive approach to managing in the downturn, we are well positioned for the coming year.

Michael Heller, Chairman