Update-Wood Pellet Operations

RNS Number:3764B
Libra Natural Resources PLC
02 August 2007


Press Release                                                      2 August 2007



                          Libra Natural Resources plc

                            ("LNR" or "the Company")



         Canadian Wood Pellet Operations: Update and Further Expansion



Libra Natural Resources plc ('LNR' or the 'Company'), the international cleaner
fuel company, today announces further details on its expansion strategy for its
North American wood pellet businesses.

WEST KOOTENAY: NEW FACILITY



In line with the strategic direction outlined in LNR's Preliminary Results for
the year ended 31 December 2006, which described a significant increase in size,
scale, and range of investments in our wood pellet business, we are pleased to
inform shareholders that we have completed the acquisition of all development
rights associated with a proposed 60,000 metric ton pellet plant in the West
Kootenay region of British Colombia from Sure Fire Capital Corp.

The project, known as West Kootenay Pellets Ltd, will be located on a seven acre
site adjacent to a wood processing plant which is owned and operated by
Kalesnikoff Lumber Company. Fibre will be supplied from a number of local
sources under contracts which have already been signed. In each case the initial
fibre supply contract is for a period of seven years, which can be renewed for a
further seven year period (14 years in total).

The project capital cost is estimated at C$6 million, and will be funded from a
mixture of existing cash resources and debt.  Upon receipt of requisite permits,
the plant will take approximately six months to construct.   It is expected that
the West Kootenay facility will enter commercial service during Q1 of 2008.



EXISTING BRITISH COLUMBIA FACILITIES: EXPANSION OF OPERATIONS


As announced at the time of LNR's Preliminary Results, we have commenced a
programme to significantly upgrade our existing wood pellet production
facilities in British Columbia, the Westbank plant and the Princeton-Co
Generation ('Princeton') plant.


          Westbank
          At Westbank, a project is now well advanced to install a semi-automated bagging line.  This
          equipment, similar to that which has been in use at our Princeton plant for more than a year, will
          enable reductions in operating costs and access to the higher margin retail markets. Substantial
          elements of the equipment have been installed and the remainder has been shipped by the
          manufacturer.

          We anticipate that the line will be operational in September and will immediately enhance earnings
          for LNR.


          Princeton
          At Princeton, a project has been initiated to expand pellet production capacity, which involves the
          installation of a larger capacity pellet mill, installation of an additional dryer for raw material
          and the erection of expanded finished product storage capacity. The larger mill was successfully
          installed in early June and has immediately begun to increase Princeton's pellet production.

          Major elements of the dryer expansion have been ordered and several elements have been received on
          site and are in the process of being installed.  The expanded drying capacity will enable more
          production from lower cost raw material sources.  The foundations for the expanded storage capacity
          have been dug and the silos have been ordered.

          This Princeton upgrade project is on schedule for completion in early Q4 and will immediately
          enhance earnings for LNR.





In combination, these plant upgrade projects will enhance LNR's wood pellet
business by reducing operating costs and expanding production and storage
capacity resulting in a greater ability to respond to growing market
opportunities.

We estimate that these upgrade projects alone, will increase LNR's 2008 revenue
by at least 15%, with a similar beneficial impact on the combined earnings from
the two plants.



UK AND USA



Shareholders can expect a further announcement within the next month or so,
giving similar details of LNR's planned expansion of its wood pellet operations
in the UK and in the South-East of the United States.

LNR continues to evaluate acquisition opportunities in both these markets,
including the previously announced negotiations to acquire the UK's largest wood
pellet facility.  However, given the relative immaturity of the existing market
in these regions, and the growing focus of LNR on acquiring and developing
larger, > 50,000 tpa facilities, as it seeks to meet the exponential growth in
demand for wood pellets, your Company increasingly believes that such expansion
in these specific territories will be development, not acquisition, led.


                                    - Ends -



For further information:
Libra Natural Resources plc
Peter Greensmith, Chief Executive                      Tel: [phone]
[e-mail]


Teather & Greenwood Limited
Nominated Advisor & Joint Broker                       Tel: [phone]
Gareth Price/Simon Brown, Corporate Finance



Media enquiries:
Abchurch
Heather Salmond / Franziska Bohnke                     Tel: [phone]
[e-mail]                        www.abchurch-group.com




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