Beowulf Mining PLC – Unaudited Interim Financial Results

Beowulf Mining PLC – Unaudited Interim Financial Results

Beowulf (AIM: BEM; Spotlight: BEO), the mineral exploration and development company, announces its unaudited financial results for the nine months ended 30 September 2019 and provides a quarterly management update.


Overview of Activities in the Quarter


·           On 8 July 2019 and further to the CEO’s attendance at the Almedalen Political Week (“Almedalen”) in Sweden, the Company outlined its immediate plans for Kallak in the event that the Swedish Government awards the Exploitation Concession (“Concession”). 

·           On 19 September 2019, the Company provided an update on the CEO’s visit to Stockholm and a letter sent to Minister Baylan, the Minister of Enterprise and Innovation of the Government of Sweden (the “Government”).

·           The Company announced, on the 24 September 2019, exploration results for Vardar Minerals Limited’s (“Vardar”) Wolf Mountain lead-zinc-silver target (“WM”), part of the Mitrovica Project situated in northern Kosovo. Results demonstrated that Wolf Mountain has potential for economic mineralisation and confirmed extensive lead-zinc mineralisation over an area of 800 metres (“m”) in length and 400m in width in its northern part, with significant potential for high-grade feeder structures.

·           On 30 September 2019, the Company announced soil sampling results for the prospective southern half of Mitrovica and the definition of three exploration targets: base, including copper, and precious metals across Mitrovica South; gold at Madjan Peak; and copper-zinc-gold on the lower slopes on Madjan Peak.

Post Period

·           On 8 October 2019, the Company announced exploration results for Vardar’s prospective Viti license in south eastern Kosovo, following the completion of an orientation drill programme over a target prospective for porphyry related mineralisation.

·           On 14 October, Beowulf exercised its option in Vardar, investing a further £115,000 and taking the Company’s ownership of Vardar from 37.6 per cent. to 40.1 per cent.

·           On 24 October, the Company was awarded an Exploration Licence for Parkijaure nr 6, covering almost 1,000 hectares immediately to the south of the Kallak deposits, and similarly prospective for magnetite iron ore.

·           The Company announced, on 24 October 2019, a subscription for 9,090,909 new ordinary shares of £0.01 each to raise £500,000.

·           On 30 October 2019, the Company announced an upgraded Mineral Resource Estimate (“MRE”) for its Aitolampi graphite project in Finland, which included an 81 per cent increase in contained graphite (compared to the 2018 MRE) for the higher-grade western zone with an Indicated and Inferred Mineral Resource of 17.2 million tonnes (“Mt”) at 5.2 per cent Total Graphitic Carbon (“TGC”) containing 887,000 tonnes (“t”) of contained graphite.

·           On 6 November 2019, the Company announced that it invested a further £100,000 in Vardar, increasing the Company’s ownership of Vardar from 40.1 per cent to 41.5 per cent.

·           The Company announced, on 8 November 2019, a subscription for 4,347,826 new ordinary shares of £0.01 each to raise £250,000.

·           On 11 November 2019, the Company announced it had submitted a concluding statement (“Statement”) for Kallak to the Government, prepared by law firms Mannheimer Swartling and Fröberg & Lundholm. The Statement summarised the circumstances relevant to a judicial review of whether the Company should be awarded the Concession for Kallak.


Kurt Budge, Chief Executive Officer of Beowulf, commented:


“Since the end of the summer, Beowulf has made good progress across its different business areas.  While shareholder focus remains on a Government decision on Kallak, we have upgraded the Mineral Resource Estimate for the Aitolampi graphite project in Finland, published several updates on Vardar’s significant exploration achievements in Kosovo and increased our ownership in Vardar to 41.5 per cent.


“With Kallak, we complemented our legal team, engaging Mannheimer Swartling to work with Fröberg & Lundholm on the Statement sent to the Government on 8 November 2019.  The Statement’s conclusion, that sufficient facts have been submitted for awarding Beowulf the Concession, speaks for itself.  As demonstrated by the Mining Inspectorate’s recent award of the Parkijaure nr 6 Exploration Licence, immediately to the south of Kallak, clearly, we are not in an exclusion zone for exploration.


“It seems evident that the coalition Government in Sweden has been struggling to reach consensus on Kallak and that politics is standing in the way of a decision being taken. We have heard before, from the Government, that Swedish law is sufficient for assessing the Kallak application, and, that any assessment of Kallak should be ‘by the book’.  We have now heard, in recent weeks, from the Green Party that the Company’s application should be tested in accordance with the law. 


“Whatever the politics, the facts speak for themselves.  The original Kallak exploration licence was granted in 2006, thirteen years ago, and there were seven years’ work before the application for an Exploitation Concession was submitted in April 2013.  The Company addressed the County Administrative Board for the County of Norrbotten’s (“CAB”) questions, undertaking further reindeer husbandry analysis, which included providing revised and  supplementary information based on comments and information received from local Sami villages, and using Luleå University of Technology for socio-economic analysis.  When, in October 2014, the CAB expressed concern regarding transport routes under consideration, the Company stated that it would not use routes passing in a north/north-easterly direction through the Jelka-Rimakåbbå Natura 2000 area, ensuring that future transport routes would not lead to a significant impact on reindeer husbandry.


“In July 2015, the CAB stated that mining is economically relevant, and that the Kallak North project generates economic benefits at local, regional and national levels, including direct and indirect jobs, tax revenues, and more broadly across mining equipment and services sectors in Sweden.  At the time, the CAB stated that there are no conflicts within the Concession area where national interests are considered, as the Concession area is designated as an Area of National Interest for minerals.  No other national interests were identified.


“When considering environmental matters, on 1 October 2014, the CAB confirmed that the Company’s Environmental Impact Assessment was sufficient with respect to Chapters 3, 4 and 6 of the Environmental Code and, on 7 July 2015, the CAB wrote to the Government indicating that the Company’s application could be permissible with respect to Chapters 3 and 4 of the Environmental Code. In October 2015, the Mining Inspectorate recommended to the Government the Concession be awarded.


“The Company has invested over SEK 80 million in the Kallak project, defined a potential 250 million tonne iron ore resource, submitted a comprehensive application for an Exploitation Concession, addressing all issues raised, voluntarily completed a Heritage Impact Assessment, even though the Swedish National Heritage Board (Riksantikvarieämbetet, “RAÄ”) and the Swedish Environmental Protection Agency (Naturvårdsverket, “NV”) had previously provided comments to the Mining Inspectorate acknowledging that Kallak does not directly affect Laponia, and most recently submitted the Statement prepared by Mannheimer Swartling and Fröberg & Lundholm which demonstrates that a judicial review would find legal tests have been met for an Exploitation Concession to be granted.


“Last week I was in Sweden, attending SveMin’s Höstmöte in Stockholm and participated in a panel discussion on permitting problems.


“Minister Baylan spoke in the morning about initiatives to review mining legislation and the role of the CAB’s.  These initiatives should be for improving the permitting system and not further delaying current application decisions.  Beowulf was one of four companies on stage talking about permitting problems.  The key message was there is no transparency of process and timeline for decisions, and no predictability of outcomes.  This a significant and real deterrent to any company considering exploring in Sweden.


“After Stockholm, I travelled to Jokkmokk to meet with an OECD delegation undertaking a study tour of Norrbotten, speaking to interested parties in the mining sector, companies, regulators, municipalities and the Sami, to understand how the benefits of mining to cities and regions can be maximised through best practice policies and procedures.  I also met with Robert Bernhardsson the Mayor of Jokkmokk, who, in common with Beowulf shareholders, is anxiously waiting for a decision on Kallak.  He is fighting for Jokkmokk’s future and looking to Kallak to provide the investment, enterprise and jobs to help him win that fight. 


“At the beginning of October, Mr Baylan wrote to me of a ‘forthcoming Government decision’ in our case.  The Company has made its case and now it is time for the Government to decide.


“I look forward to keeping shareholders updated with developments on Kallak, Fennoscandian and Vardar.”




·           As of 1 April 2019, following an increase in Investment from 14.1% to 31.3% the Company has met the definition of control as outlined in the provisions of IFRS 10. The consolidated Vardar Group has been consolidated into the Company effective of this date with the resulting fair value gain of £51,682.

·           The consolidated loss fell in the year to date from £849,525 to £765,810. The variance is attributable to the impairment loss (£150,421) relating to the relinquishing of the Viistola and a higher share-based payment charge (£153,540) relating to employees and Directors options.

·           The administration expenses increased in the year to date from £590,056 to £730,054.  Vardar’s administration expenses from 1 April to 30 September of £170,000 are included.

·           Basic/diluted loss per share for the 9 months ended 30 September 2019 was 0.11 pence (2018: loss of 0.10 pence).

·           £907,527 in cash held at the period end (2018: £2,071,748).

·           The translation reserve losses attributable to the owners of the parent increased from £520,257 at 31 December 2018 to £1,028,270 at 30 September 2019. Much of the Company’s exploration costs are in Swedish Krona which has weakened further against the pound since 31 December 2018.

·           As at 30 September 2019, there were 375,325,504 Swedish Depository Receipts representing 63.76 per cent of the issued share capital of the Company. The remaining issued share capital of the Company is held in the UK.

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