Kallak North Exploitation Concession 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. 

30 January 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, has learnt that the Mining Inspectorate of Sweden has written to The Government of Sweden, as the Government seeks comments from interested parties on the County Administrative Board (“CAB”) for the County of Norrbotten’s statement dated 30 November 2017.

Summary 

• The Mining Inspectorate maintains that it is the Government that should decide on the Company’s application for an Exploitation Concession for Kallak North.
• In its comments, the Mining Inspectorate has highlighted that the CAB’s assessment of which national interest should take precedence under Chapter 3 of the Environmental Code, is based on the CAB’s assumption that the estimated production life of the Kallak mine is approximately 14 years.
• The Mining Inspectorate remarks that the mineral resource underlying any Exploitation Concession application is the known part of the mineralisation which makes a mine likely to be economically profitable, such that a Concession can thereby be granted.
• The Mining Inspectorate states that after the start of a mine, further exploration is typically carried out, with the aim of gradually increasing the resource base, thereby extending the production life of a mine.  Additional resources that are found are benefited by the infrastructure and operational facilities that already exist, improving the economic conditions for continued production.
• The Mining Inspectorate has given examples of existing mines in Sweden, which have done just this, applying for separate Exploitation Concessions over time, thereby extending their production lives.  These include Boliden’s Aitik mine, in operation since 1968, the Garpenberg mine, in operation since the thirteenth century, and the Kristineberg mine, in operation since 1940.
• The Mining Inspectorate concludes that it is not possible to estimate the exact production life of Kallak nr. 1, but that the Mining Inspectorate’s comments on the potential for the discovery of additional resources, that support an extended production life, as evidenced by other mines in Sweden, should be taken into consideration, when assessing which national interest should take precedence.

Kurt Budge, CEO, commented:

“It is good to read the Mining Inspectorate’s comments, and for the Inspectorate to highlight to the Government examples of Swedish mines that have been in production for decades, and centuries, in the case of Garpenberg.

“In July 2015, the CAB referred to a longer life mining operation when it made a positive economic case for Kallak, and it is therefore our view that the CAB is fully aware of the possibility of an extended production life. However, in November 2017, the CAB chose to ignore the potential of additional resources at Kallak South, which the Company has already started to define, and the prospective exploration potential of our Parkijaure licence.

“The Mining Inspectorate’s comments are a positive development in the Kallak North Exploitation Concession process and the Company looks forward to the Government taking them into consideration.”

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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.