Preliminary Results



Strategic Natural Resources PLC

("SNR" or "the Company")

Preliminary Results

for the year ended 29 February 2008

SNR (AIM:SNRP) announces it's maiden Preliminary Results for the year ended 29 February 2008.

Highlights:

• Operations have focussed on Elitheni's drilling programme and mining rights application submission;

• Elitheni has been granted permission to extract the first 50,000 tonnes of coal under the open-cast mining permit, as previously announced in May 2008;

• To date,  Elitheni has established over 25 million tonnes of proven coal having drilled less than 15% of Elitheni's prospecting acreage;

• Quantity of run-of-mine coal proved to date is sufficient to provide 20 years supply to 250 MW of  IPSA Group PLC's proposed 500 MW mine mouth power plant;

• The Board plans to apply for SNR to be listed on the Altx  market of the Johannesburg Stock Exchange to facilitate investment in the Group by South African investors;

• Chief Operating Officer, David Nel, appointed to the Board, based in Port Elizabeth, South Africa with a view to succeeding Jeremy Metcalfe as Chief Executive upon his retirement in July 2009;

• Black Economic Empowerment investors in place, as announced on 1 July 2008;

Commenting on the results, Richard Latham, Chairman of SNR, said: "As anticipated in SNR's admission document, we have been granted permission to extract the first 50,000 tonnes of coal under the terms of an open-cast mining permit, as previously announced on 19 May 2008. We expect to initiate mining under this permit in July and will supply a number of customers in the local brick manufacturing and domestic supply markets over the next five months. This will be a significant milestone for the Company as it will enable us to initiate revenue generation pending the grant of permission to commence our underground mining, which is expected in November. This firmly positions SNR as a production company, not one focused purely on exploration.

Although Group losses arose as expected during this investment phase, it is extremely pleasing to be able to report a series of strong moves forward during the period."

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STRATEGIC NATURAL RESOURCES PLC

Chairman's Statement

FOR THE YEAR ENDED 29 FEBRUARY 2008

Chairman's Statement

I have great pleasure in presenting the Annual Results for the year ending 29th February 2008, the first full year of operations for your Company. Although losses arose as expected during this investment phase, it is extremely pleasing to be able to report a series of strong moves forward during the period.

As anticipated the Group made an after tax loss of £667,000 in its first full year since acquiring its interests in Elitheni Coal (Pty) Limited ("Elitheni Coal"), compared with a loss of £42,000 for the period ended 28th February 2007.

Operations over the last 12 months have been focussed on our drilling programme and our mining rights application submission, in order to prove up our resource base on which basis to advance future contract negotiations and our mining rights application. To date we have been able to prove over 25 million tonnes of measured resource as verified by our independent competent person's reports under SAMREC rules, having drilled less than 15 per cent. of our prospecting acreage.

During 2007, we concentrated on drilling in the area covered by our original prospecting right. Following the grant of a prospecting right over 27,913 hectares of land in December 2007 (the "Phase 3 Area") we have now moved on to a drilling programme in this area using five rigs to accelerate the proving process. To date the success in the Phase 3 Area has been pronounced, with thicker intersections and less overburden, which should improve the margins on coal extracted from seams in this area. 

In July 2007 Elitheni Coal entered into framework coal supply agreement, which granted IPSA Group PLC first right of refusal of all coal for use in power generation. The quantity of run-of-mine coal proved to date is sufficient to supply IPSA Group PLC's proposed independent power project at the mine mouth of 250 MW over twenty years, the initial period of the prospective fuel supply agreement for the plant. A fast track development timetable for the power plant is being considered, which would mean that the mine could be selling coal in sufficient quantities to supply large scale power generation within two years, subject to conclusion of the full coal supply agreement and construction of the power plant. We are accelerating our plans for production to meet this opportunity.

Since the year end, we are pleased to welcome Liketh Union (Pty) Limited and Mr Mazizandile Msutu as our broad based black economic empowerment ("BEE") partners who have now acquired holdings of 21% and 5% in Elitheni Coal (Pty) Limited respectively. 

Your Board plans to apply for a listing on AltX, the alternative exchange of the Johannesburg Stock Exchange Limited later this year, following grant of the mining right. The AltX listing will facilitate investment in the Group by South African investors.

You will recall that the admission document to AIM dated 1st August 2007 indicated SNR will seek to acquire other projects in the future and later in the year we expect to be announcing details of additional projects in South Africa for which funding will be sought in the AltX listing.

STRATEGIC NATURAL RESOURCES PLC

Chairman's Statement

FOR THE YEAR ENDED 29 FEBRUARY 2008

As anticipated in the admission document, we have been granted permission to extract the first 50,000 tonnes of coal under the terms of an open-cast mining permit previously announced on 19th May 2008. We expect to initiate mining under this permit in July and will supply a number of customers in the local brick manufacturing and domestic supply markets over the next five months. This will be a significant milestone for the company as it will enable us to initiate revenue generation pending grant of our underground mining right, which is expected in November. This firmly positions SNR as a production company, not one focused purely on exploration.

David Nel, who is Barry Nel's son, was appointed a director of the Company in January 2008. David holds the position of Chief Operating Officer based in Port Elizabeth, South Africa, and is responsible for mine development and operations. He has a wealth of experience of the coal industry in South Africa and mining generally. It is planned that he will take over as Chief Executive of SNR on Jeremy Metcalfe's retirement in July 2009.

The initial period, before commercial operations begin in earnest, can be a difficult time for a new company. We have been fortunate in that power shortages in South Africa and the increase in the coal price both underpin our business plan to supply the markets of the Eastern Cape with a long term source of locally produced coal.

We look forward to taking our place in the provision of energy to the South African economy over the near future and I know you will want me to congratulate all our staff and Directors who have worked tirelessly to produce solid results over the year.

I look forward to a very interesting year to come.

R. H. R. Latham

Chairman

STRATEGIC NATURAL RESOURCES PLC

CONSOLIDATED INCOME STATEMENT AND STATEMENTS OF RECOGNISED INCOME AND EXPENSE

FOR THE PERIOD ENDED 29 FEBRUARY 2008

Statements of recognised income and expense

a) Group

b) Company

The accompanying accounting policies and notes form an integral part of these financial statements.

STRATEGIC NATURAL RESOURCES PLC

CONSOLIDATED BALANCE SHEET

AS AT 29 FEBRUARY 2008

The financial statements were approved by the Board on 7 July 2008.

The accompanying accounting policies and notes form an integral part of these financial statements.

STRATEGIC NATURAL RESOURCES PLC

COMPANY BALANCE SHEET

AS AT 29 FEBRUARY 2008

The financial statements were approved by the Board on 7 July 2008.

The accompanying accounting policies and notes form an integral part of these financial statements.

STRATEGIC NATURAL RESOURCES PLC

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 29 FEBRUARY 2008

The accompanying accounting policies and notes form an integral part of these financial statements.

STRATEGIC NATURAL RESOURCES PLC

COMPANY CASH FLOW STATEMENT

FOR THE YEAR ENDED 29 FEBRUARY 2008

The accompanying accounting policies and notes form an integral part of these financial statements.

STRATEGIC NATURAL RESOURCES PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 29 FEBRUARY 2008

1    Nature of operations

The principal activity of Strategic Natural Resources PLC and its subsidiary entities ('The Group') is the acquisition and development of natural resource assets. During the period under review, all of the Group's activities were located in South Africa.

2    General information

Strategic Natural Resources PLC is the Group's ultimate parent company. It is incorporated and domiciled in England and Wales. 

The consolidated financial statements for the year ended 29 February 2008 (including the comparatives for the year ended 28 February 2007) were approved by the Board of directors on 7 July 2008.

3    Summary of accounting policies

3.1    Basis of preparation

The Company and the consolidated financial statements have been prepared under the historical cost convention and in accordance with applicable IFRSs as adopted by the European Union. The measurement bases and principal accounting policies of the Group are set out below.

This is the Group's second set of financial statements prepared under IFRS.

The financial statements have been prepared on the going concern basis. The directors have prepared forecasts covering the next 12 months to demonstrate that they consider that adequate funding will be available to meet the liabilities as they fall due from the ongoing trading activities of the Group.

3.2 Accounting Standards

a) Standards, amendments and interpretations becoming effective in the year to 29 February 2008:

IFRS 7, 'Financial instruments: Disclosures' and the complimentary amendment to IAS1, 'Presentation of financial statements - Capital     disclosures', introduces new disclosures relating to financial instruments. It does not have any impact on the classification and/or valuation of the Group or Company's financial instruments. The additional disclosures in accordance with the standard are set out in note 23 to the accounts.

IFRIC 10, 'Interim financial reporting and impairment', prohibits impairment losses recognised in an interim period on goodwill or investments to be reversed at a subsequent balance sheet date. This standard does not have any impact on the Group or Company's financial statements.

  STRATEGIC NATURAL RESOURCES PLC

NOTES TO THE FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 29 FEBRUARY 2008

b) Standards, amendments and interpretations becoming effective in the year to 29 February 2008 but which are not relevant to the Group or Company:

IFRS 4, 'Insurance contracts'.

IFRIC 7, 'Applying the restatement approach under IAS 29, Financial reporting in hyper-inflationary economies'.

IFRIC 9, 'Re-assessment of embedded derivatives'.

c)        Standards, amendments and interpretations to existing standards that become effective in the future accounting periods and have not been adopted early by the Group or Company:

• IAS 1 Presentation of Financial Statements (revised 2007) (effective 1 January

    2009).

• IAS 23 Borrowing Costs (revised 2007) (effective 1 January 2009).

• Amendment to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements - Puttable Financial Instruments and Obligations Arising on Liquidation (effective 1 January 2009).

• IAS 27 Consolidated and Separate Financial Statements (Revised 2008) (effective 1 July 2009).

• Amendment to IFRS 2 Share-based Payment - Vesting Conditions and Cancellations (effective 1 January 2009).

• IFRS 3 Business Combinations (Revised 2008) (effective 1 July 2009).

• IFRS 8 Operating Segments (effective 1 January 2009