Aitolampi Drilling Results Update

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations ("MAR") (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain. 

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of Kurt Budge, Chief Executive Officer. 

23 March 2018

Beowulf (AIM: BEM; Aktietorget: BEO), the mineral exploration and development company, focused on the Kallak magnetite iron ore project and the Åtvidaberg polymetallic exploration licence in Sweden, and its graphite portfolio in Finland, is pleased to announce preliminary drilling results for its latest drilling campaign at its Aitolampi graphite project in Finland. Aitolampi is part of the Company’s 100 per cent owned Exploration Permit Pitkäjärvi 1.

Highlights: 

•  10 holes have been completed and 1577.6 metres (“m”) have been diamond drilled.
•  Longest hole drilled, AITDD18014, was 235.3m, and intercepted a total length of graphite mineralisation of 127.4m, including a single intercept of 44.9m. Mineralisation started 24.4m from the collar. This hole tested all three conductive zones including the north-western strike extension of the higher-grade parallel graphite zones intersected in hole AITDD17006 in last year’s drilling programme.
•  Longest single intercept of graphite mineralisation, in hole AITDD18015, was 99.4m. Total hole length was 150.0m and mineralisation started at 20.7m from the collar.
•  Infill drilling has confirmed the continuity of graphite mineralisation between holes drilled in the 2017 drilling programme.
•  Several holes proved mineralisation down-dip from graphite intersected in 2017 and intersected wide mineralised zones along strike and down-dip for some of the previously identified higher grade mineralised zones. 
•  Drilling shows that mineralisation has a strike length of at least 350m along the main conductive zone (the main electro-magnetic (“EM”) anomaly extends for 700m).
•  For the two parallel higher-grade zones previously identified, mineralisation has a strike length of at least 150m (the two parallel conductive zones extend for 300m and 250m).
•  Mineralisation for all zones remains open along strike and at depth.
•  Within the Company’s Pitkäjärvi licence area, several extensive EM conductors, associated with graphite observed in surface outcrops, have yet to be drilled, are prospective for graphite mineralisation, and offer potential upside.
•  The Company's geologists have completed core logging for all holes, and samples have been sent to ALS Minerals in Finland for assay. All samples will be assayed for Graphitic Carbon (C-IR18), Total Carbon (C-IR07) and Total Sulphur (S-IR08).
•  A map showing the positions of drill holes, assays and EM conductors can be viewed at the following link:

http://beowulfmining.com/wp-content/uploads/2018/03/BEM_aitolampi_drill_plan_map.jpg 

Kurt Budge, CEO, commented:

“Thanks to the rapid progress of our local Finnish contractor, Northdrill Oy, we’ve been able to complete the latest drilling campaign at Aitolampi in one month.

“Now, we wait for assays, but once we have those, and with the information obtained from our 2017 drilling, we hope to produce a maiden resource estimate for Aitolampi (JORC Code 2012 edition) in Q2 2018.

“Thereafter, we will look to start a Scoping Study and baseline environmental studies, and more closely assess how we can expedite an application for a mining permit and leverage the growing enthusiasm for battery minerals in the Nordic region.

“We look forward to updating shareholders on our progress in due course.”

2018 Drilling

The 2018 drilling programme supports our objectives of defining a maiden resource, following the guidelines of the JORC Code 2012 edition, and conducting a Scoping Study.

Drill Results:

*Lengths in metres, and mineralised intercepts are the down-hole widths and are not the true widths.

Aitolampi - Background 

Aitolampi is in eastern Finland, approximately 40 kilometres southwest of the well-established mining town Outokumpu. Infrastructure in the area is excellent, with road access and good availability of high voltage power.

2017 Drilling

In March 2017, the Company completed an eight hole, 1,197m diamond drilling programme.  The aims of the drilling were to test the potential for economic mineralisation along a major EM conductive zone and two parallel conductive zones to the south-west (Parallel Conductive Zones 1 and 2), and to provide representative sample material for assaying and metallurgical testwork.

During 2017, the Company also completed two rounds of testwork, first with SGS Mineral Services in Canada to prove attainable concentrate grades, and second with ProGraphite Gmbh in Germany to determine possible market applications and end-uses for Aitolampi concentrate products. 

Drill Results:

Drilling confirmed that the EM conductive zones identified at Aitolampi are associated with wide zones of graphite mineralisation, with a mineralised strike length of at least 350m along the main, drill tested, conductive zone, which extends for 700m, continuous along strike and down dip. The zones, which dip between 40 to 50 degrees to the southwest, can be very broad, attaining down-hole thicknesses of continuous graphite intercepts up to 140m.

Mineralised drill intercepts included 202.9m at 3.09 per cent Total Graphite Carbon (“TGC”, also described by some laboratories as Graphitic Carbon “Cg”) (including barren zones with no assays and assumed to be zero per cent TGC), including higher-grade zones of 18.95m at 6.33 per cent TGC, and 14m at 6.26 per cent TGC, 141.86m at 3.72 per cent TGC, including a higher-grade zone of 39.48m at 5.02 per cent TGC, and 41.1m at 4.39 per cent TGC, including 28.4m at 5.1 per cent TGC. Mineralisation intercepts are down-hole widths and are not true widths; however, it is noted that the holes were drilled approximately orthogonal to the mineralisation.

See announcement on the Company’s website, dated 24 May 2017:

http://beowulfmining.com/news/graphite-exploration-update/ 

Metallurgical Testwork

Three samples, MET-17001, MET-17002 and MET-17003, comprising composited quarter drill core of approximately 10 kilograms each, were dispatched to SGS Minerals Services in Canada for metallurgical testwork. The objective of the testwork was to develop a preliminary understanding of the metallurgical response of the different samples and to characterise the graphite concentrate produced, in terms of flake size distribution and total carbon grades of different size fractions.

•  Sample MET-17001 comprised representative graphite mineralised drill core from drill holes along the main conductive zone (average 5.02 per cent Cg).
•  Sample MET-17002, comprised drill core from higher grade horizons (average 6.47 per cent Cg) in two parallel conductors’ south-west of the main zone.
•  Sample MET-17003 was collected from drill core from the main conductive zone (average 4.60 per cent Cg).

All three samples produced high grade concentrate grades when subjected to a preliminary flowsheet, and secondary cleaning circuits proved highly effective in liberating and rejecting gangue minerals.

The Total Carbon grades ranged between 92.7 per cent C(t) for the +48-mesh of the MET-17001 sample and 98.5 per cent C(t) for the -150/+200 mesh of the MET-17003 sample.

Discounting the lowest grade of 92.7 per cent C(t), all other size fractions graded 94.4 per cent C(t) or higher.

Even the -400-mesh produced high grades ranging from 95.0 per cent C(t) for sample MET-17001 to 97.8 per cent C(t) for sample MET-17003.

See announcement on the Company’s website, dated 2 October 2017:

http://beowulfmining.com/news/aitolampi-delivers-high-grade-concentrate-results/

Latest Metallurgical Testwork – Marketing Assessment

The latest round of metallurgical testwork has been conducted by ProGraphite Gmbh (“ProGraphite”) based in Germany. ProGraphite specialises in the processing and evaluation of graphite materials.

Concentrates produced by SGS Minerals Services were combined and sent to ProGraphite in the fourth quarter last year. The objective of the advanced testwork was to determine the suitability of Aitolampi concentrates for different market applications.

The following tests were undertaken:

•  Concentrate Product Characterisation (LOI/Fixed carbon on concentrate and mesh fractions, bulk densities, Specific Surfaces Analysis (SSA), Thermogravimetric Analysis (TGA), Inductively Coupled Plasma (“ICP”) analysis, and X-ray Diffraction (“XRD”) analysis;
•  Purification Processing (Acid purification, Alkaline purification, and ICP analysis on purified graphite); and
•  Production of Expandable Graphite.

The following results were achieved:          

•  Results show that both acid and alkaline purification methods can produce a very clean concentrate of greater than 99.41 per cent C(t).
•  The alkaline method, using standard formulation, produced the highest grades, 99.82 per cent C(t) for the -100-mesh concentrate, and 99.86 per cent C(t) for the +100-mesh concentrate.
•  Results obtained from acid purification reached 99.6 per cent C(t) for the +100-mesh fraction.
•  The alkaline and acid purification results indicate that, with some process optimisation, Aitolampi concentrates may meet the purity specification of 99.95 per cent C(t) required for the lithium ion battery market.
•  There is also a good market for the -100 mesh and greater than 95 per cent C(t) concentrate.
•  Carbon content in all fractions, including the fines, is very high and ranges from 96.25 to 97.61 per cent C(t). The demand is significant for fine graphite with high carbon, across various applications.
•  Aitolampi graphite shows high crystallinity, with the degree of graphitisation measuring approximately 98 per cent, which is almost perfect crystallinity, and an important consideration for battery manufacturers seeking high energy density in cells.
•  Volatiles are low which is an attractive product attribute, and often a pre-condition, in many applications, including refractories, lubricants, crucibles, and foundries.
•  SSA is comparable to that of high quality flake graphite from China.
•  Oxidation behaviour, tested with TGA analysis, is comparable with Chinese graphite of the same flake size, used for refractories, and other high temperature applications.
•  ICP analysis, for elemental impurities in the alkaline purified concentrate, showed that impurities could be reduced to significantly lower levels by intensifying purification, optimising the amount of chemicals used, and process parameters, such as reaction time and temperature.

Competent Person Review

The information in this announcement has been reviewed by Mr. Rasmus Blomqvist, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. It should be noted that the technical disclosure herein, for which the CP takes responsibility, is based on desk-top review of the drillcore logs provided by the Company`s geologists, and no drill core inspection verification works have been carried out by the CP at this time. Mr. Blomqvist has sufficient experience, that is relevant to the style of mineralisation and type of deposit taken into consideration, and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves".

Mr. Blomqvist is a full-time employee of Oy Fennoscandian Resources AB, a 100 per cent owned subsidiary of Beowulf.

Enquiries:

Cautionary Statement

Statements and assumptions made in this document with respect to the Company’s current plans, estimates, strategies and beliefs, and other statements that are not historical facts, are forward-looking statements about the future performance of Beowulf. Forward-looking statements include, but are not limited to, those using words such as "may", "might", "seeks", "expects", "anticipates", "estimates", "believes", "projects", "plans", strategy", "forecast" and similar expressions. These statements reflect management's expectations and assumptions in light of currently available information. They are subject to a number of risks and uncertainties, including, but not limited to, (i) changes in the economic, regulatory and political environments in the countries where Beowulf operates; (ii) changes relating to the geological information available in respect of the various projects undertaken; (iii) Beowulf’s continued ability to secure enough financing to carry on its operations as a going concern; (iv) the success of its potential joint ventures and alliances, if any; (v) metal prices, particularly as regards iron ore. In the light of the many risks and uncertainties surrounding any mineral project at an early stage of its development, the actual results could differ materially from those presented and forecast in this document. Beowulf assumes no unconditional obligation to immediately update any such statements and/or forecasts.