Finnish Graphite 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.

18 May 2020

Beowulf Mining plc

("Beowulf" or the "Company")

Finnish Graphite Update

Beowulf (AIM: BEM; Spotlight: BEO), the mineral exploration and development company, provides an update on the activities of its 100 per cent owned subsidiary Oy Fennoscandian Resources AB (“Fennoscandian”).

Fennoscandian continues to develop a 'resource footprint' of natural flake graphite to provide 'security of supply' to Finland's emerging battery sector and to benefit from Business Finland funding, as the Company seeks to move downstream and develop its knowledge in processing and manufacturing battery grade and value-added graphite products.

Since Fennoscandian was acquired in January 2016, Beowulf has invested approximately Euros 1.56 million in graphite exploration, resource development, metallurgical testwork and the assessment of market applications for graphite from its Aitolampi project, including Lithium Ion Battery (“LIB”) applications.

Update Highlights:

• Testwork on a composite sample for Karhunmäki, a new graphite prospect, produced a concentrate grade of 96.4 per cent Total Graphitic Carbon (“TGC”), with 51.3 per cent large/jumbo flakes (+180 micron).  An Exploration Permit application has been submitted.
• After upgrading the Mineral Resource Estimate (“MRE”) for Aitolampi in 2019, now with an Indicated  and Inferred Mineral Resource of 26.7 million tonnes at 4.8 per cent TGC for 1,275,000 tonnes of contained graphite, Fennoscandian will report, in the coming weeks, on the results of spheroidization testwork and battery tests on Aitolampi graphite.
• Fennoscandian is supporting a study into the supply chain for LIBs in Finland and collaborating with Åbo Akademi in Turku, Finland.
• Fennoscandian has joined, as a consortium member, the Business Finland funded BATTrace project, which aims to improve traceability along the battery raw materials value chain using mineralogical/geochemical fingerprinting, to validate responsible and sustainable sourcing of cobalt, nickel, lithium and graphite.

Kurt Budge, Chief Executive Officer of Beowulf, commented:

“While Finland remains on lockdown, the Fennoscandian team is busy assessing the results of spheroidization and battery tests on Aitolampi graphite, and contributing to studies on the supply chain for Lithium Ion Batteries in Finland and the traceability of graphite being used to manufacture batteries.

“COVID-19 has brought attention to supply chain risk across many industry sectors, no more so than feeding the growing demand for batteries for electric vehicle and energy storage.  As Finland develops its battery manufacturing capability, the Country can address its ‘security of supply’ issues for the minerals and metals needed to be self-sufficient.  

“With Karhunmäki, another seemingly attractive exploration prospect has been added to the exploration portfolio, and Fennoscandian is continuing with its strategy of developing a ‘resource footprint’ of natural flake graphite in Finland and becoming a future supplier of anode-material and value-added graphite products.  I look forward to providing further updates.”

Finnish Translation:

”Suomen pysyessä eristyksessä Fennoscandianin tiimi on kiireinen arvioidessaan Aitolammen grafiitin palloitus- ja akkutestien tuloksia sekä osallistuessaan tutkimuksiin liittyen litiumioniakkujen toimitusketjuihin Suomessa ja akkujen valmistuksessa käytettävän grafiitin jäljitettävyyteen.”

”COVID-19 on kiinnittänyt huomion toimitusketjun riskeihin monilla toimialoilla, kuten myös kasvavassa kysynnässä sähköajoneuvoissa ja energian varastoinnissa käytettävissä olevien akkujen osalta. Kun Suomi kehittää akkujen valmistus kapasiteettiaan, maa voi käsitellä ”huoltovarmuutta” koskevia kysymyksiä omavaraisuuden edellyttämien mineraalien ja metallien osalta.”

”Karhunmäen myötä malminetsintä valikoimaan on lisätty toinen ilmeisen houkutteleva malminetsintä kohde, ja Fennoscandian jatkaa strategiaansa kehittää luonnollisen suomu grafiitin ”resurssi jalanjälkeä” Suomessa ja tullakseen anodimateriaalin ja jalostettujen grafiittituotteiden toimittajaksi. Odotan innolla lisäpäivityksiä.”

Karhunmäki Exploration Permit

In 2019, the Fennoscandian team continued to explore for natural flake graphite prospects in Finland.  Comprehensive desktop studies and fieldwork were undertaken for several locations.

In December 2019, an Exploration Permit application was submitted for the Karhunmäki 1 prospect, covering an area of approximately 965 hectares, situated near the town of Lapua in Western Finland.

Highlights from Karhunmäki fieldwork include:

• 33 graphite bearing boulders and outcrops were sampled over a strongly Electromagnetic (“EM”) conductive area, measuring 7.0 kilometres by 4.0 kilometres.
• The 33 samples were analysed for TGC by Leco furnace at ALS Finland in Outokumpu. The resulting grades ranged between 1.1 per cent TGC to 10.0 per cent TGC.
• Metallurgical testwork on a composite of boulder and outcrop samples taken from a highly EM conductive area measuring 1,200 metres by 700 metres, named the Kiviniemi prospect and within Karhunmäki, produced a concentrate grade of 96.4 per cent TGC, with 51.3 per cent large/jumbo flakes (+180 micron).

Rääpysjärvi Exploration Permit

Rääpysjärvi is situated in the municipality of Tuusniemi in Eastern Finland, eight kilometres north-north west of the Aitolampi project and 30 kilometres south-west of the historic mining town of Outokumpu.

The Exploration Permit for Rääpysjärvi project, first awarded by the Finnish Safety and Chemicals Agency (“Tukes”) in April 2019, with Tukes’ decision upheld, after appeal, by the Administrative Court in Eastern Finland in March 2020, has now be appealed again to the Supreme Administrative Court in Finland.  Fennoscandian is waiting for the conclusion of this latest action before continuing to invest in further exploration at Rääpysjärvi.

From fieldwork in 2018, a composite of grab samples from historic graphite workings was sent to SGS Mineral Services in Canada, producing a combined concentrate grade of 97.4 per cent TGC, with 18.8 per cent in the large/jumbo flake fraction (+180 micron).  The head grade of the composite was 19.8 per cent TGC.  The head grade of the composite sample, encouraging metallurgical testwork results, combined with extensive electromagnetic anomalies show significant potential for flake graphite, and support further work.

Aitolampi Graphite Project – Resource, Testwork, Environmental Monitoring

During 2019, further drilling at Aitolampi supported an upgraded MRE, with an 81 per cent increase in contained graphite (compared to the 2018 MRE) for the higher-grade western zone, and an updated global Indicated and Inferred Mineral Resource of 26.7 million tonnes at 4.8 per cent TGC for 1,275,000 tonnes of contained graphite.  

In March last year, the Company announced that Fennoscandian had received additional grant funding from Business Finland, a 50 per cent contribution to a budget of Euros 224,900, for graphite purification and spheroidization test work, and the further assessment of Fennoscandian's graphite for battery applications.

Business Finland has been granted Euros 10 million funding for a project titled "BATCircle - the development of a Finland-based Circular Ecosystem of Battery Metals".  BATCircle is part of the European Union ("EU") Strategic Energy Technology Programme, where Finland, under the leadership of Aalto University and Outotec, will coordinate research into battery recycling. The national BATCircle consortium includes a total of 22 companies, four universities, two research institutes and two cities.

Both spheroidization testwork and battery tests on Aitolampi graphite have been undertaken in recent months and results will be reported in the coming weeks.

During 2019, Fennoscandian continued with baseline water quality monitoring at Aitolampi. The Finnish contractor EHP Environment Oy is providing the service, using EHP-QMS monitoring stations to enable 24/7 monitoring of pH and conductivity of surface water, ground water levels, as well as precipitation, wind direction and air temperature data. Surface water flow rate data and samples for chemical analysis are also being collected from four different locations.

Further Studies – Supply Chain, Traceability

From March 2020, Fennoscandian has been supporting a study into the graphite supply chain for LIB production in Finland.  The study is being managed by Doctor Anastasia Tsvetkova, Laboratory of Industrial Management at Åbo Akademi University, and is funded by the K.H. Renlund Foundation.

The study will provide:

• A deeper understanding of the Chinese graphite supply chain and global LIB business.
• Understanding of the current LIB business ecosystem in Europe and the prospects for its development.
• Identification of various scenarios for supply of graphite for LIB production in Europe and the potential competitive advantages compared to Chinese material supply.
• New business opportunities for a Finnish graphite mining and refinement industry.
• Security of supply of one of the critical raw materials in the EU.
• Possibility to produce LIB within EU with a lower environmental impact using traceable raw materials.

In April 2020, the BATTrace project received funding from Business Finland.  The project runs between 2020 and 2023, and aims to improve traceability along the battery raw materials value chain using mineralogical/geochemical fingerprinting, to validate responsible and sustainable sourcing of cobalt, lithium, nickel and graphite.  The consortium is led by the Finnish research organisation VTT. Other partners in the consortium include Fennoscandian, Finnish Minerals Group, Keliber, Outotec, Valmet Automation, Latitude 66 Cobalt, Mawson Resources and the Geological Survey of Finland.

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

Mr Blomqvist consents to the inclusion in the announcement of the information presented in the form and context in which it appears.

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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.