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17 May 2004

ATH Resources announces intention to float on AIM

ATH Resources (“ATH Resources” or “the Company”), the UK’s third largest coal producer, today announces its intention to seek admission of its shares to trading on the Alternative Investment Market (“AIM”) of the London Stock Exchange plc. Dealings are expected to commence on AIM in June 2004.

ATH Resources operates opencast coal mines in the UK and has two operational sites, Skares Road and Garleffan, both near New Cumnock, East Ayrshire in Scotland.

The management team has been in place since 1998 when Aardvark TMC was incorporated as the vehicle through which the management buy-out of Skares Road was undertaken with support from The Alchemy Plan and Bank of Scotland. ATH Resources was formed in November 2003 and acquired Aardvark TMC at the time of the acquisition of Garleffan, which was backed by follow on investment from The Alchemy Plan. The Company currently employs 169 people in Ayrshire and Yorkshire.

At Skares Road and Garleffan, there are an estimated 3.28 million tonnes of coal reserves, of which 2.72 million tonnes are in the categories of proven reserves and indicated resources. These two mines are together currently producing at the rate of approximately 1.6 million tonnes per annum. ATH Resources has pre-sold most of the coal produced from these two sites to the electricity supply industry (ESI) through contracts at formulated prices. Production in excess of that sold to the ESI is sold to the industrial and domestic coal markets, generally attracting significantly higher prices.

In addition to the Skares Road and Garleffan mines, ATH Resources also has a number of other coal mining projects in Scotland and two in France, which are at different stages of development. The French subsidiary, Société des Ressources Minieres du Massif Central SA (SRMMC), is in the process of acquiring two coal concessions in France, which the Company plans to develop into opencast coal mines.

ATH Resources believes that these coal mining projects in Scotland and France could yield in aggregate over 11.5 million tonnes of coal potentially supporting production well into the future. Exploratory drilling programmes have been carried out on some projects and more are planned for 2004-2005.

The opencast coal industry in the UK began in the 1940s. With the privatisation of British Coal in the mid 1990s, the industry opened up to competition and a number of operators developed larger mines which, prior to privatisation, had been the sole preserve of British Coal. The industry produced approximately 12.1 million tonnes of coal in 2003. Approximately 6.9 million tonnes of this was from Scotland, comprising 24 per cent of total UK coal production.

Coal was used to generate 34.7 per cent of the UK’s electricity in 2003 and is utilised in industrial processes such as cement and sugar processing and in the heating of hospitals, schools and public buildings. Coal is also used in domestic heating systems and on open fires.

ATH Resources holds coal supply contracts with four of the UK’s main electricity generating companies. These contracts are at formulated prices, with some tonnages supplied fixed and some future tonnage contracted at the customer’s option. The Company has sufficient fixed-contract tonnage to meet its anticipated sales requirements for the next two years.

ATH Resources also supplies into the higher-value industrial, non-ESI and household coal markets and the Company is currently one of the largest indigenous producers of domestic coal. This product is marketed to the end user through wholesalers. The coal sold to these markets requires additional preparation to ensure higher quality.

On the decision to float on AIM, Tom Allchurch, Chief Executive Officer of ATH Resources PLC, commented: “Admission to AIM will enable us to continue to grow the business organically, drawing on the proven track record and experience of management in identifying high yielding coal producing sites. This organic growth is expected to be concentrated in Scotland and we will continue to be alert to further opportunities within the sector to expand the group.”

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