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Kallak North Exploitation Concession Update

18 April 2016

Beowulf Mining plc

(“Beowulf” or the “Company”)

Kallak North Exploitation Concession Update

Beowulf (AIM: BEM; Aktietorget: BEO), the mineral exploration and development company focused on the Kallak magnetite iron ore project in northern Sweden and its graphite projects in Finland, provides an update on its application to secure an Exploitation Concession for Kallak North.

Summary:

  • The Company’s 100% owned subsidiary Jokkmokk Iron Mines AB (“JIMAB”) has responded to a letter from the Government of Sweden, requesting our opinion on the judgement of the Supreme Administrative Court of Sweden (“SAC”) dated 22 February 2016 regarding Tasman Metal’s Norra Kärr project (Case 2047-14), and how it relates to the Company’s Kallak North application for an Exploitation Concession.
  • On 23 February 2016, Tasman Metals (“Tasman”) announced that it had been notified of a decision by the SAC to cancel its Norra Kärr Mining Lease (“ML”). The ML was granted to Tasman in May 2013 by the Mining Inspectorate of Sweden and has remained in force since that time.
    On the basis of a review of the process of granting of the ML, the SAC determined that the decision by the Mining Inspectorate was incorrect, as the decision to grant the ML was not adequately supported by environmental studies into a future mining operation. As a result, the Norra Kärr ML was cancelled and the project reverts to an Exploration Licence. The SAC decision to cancel the ML cannot be appealed, but Tasman is free to re-apply for a ML.
  • In response, JIMAB has stated that the Environmental Impact Assessment (“EIA”) for the Kallak North application has been completed in accordance with the recent SAC judgement.
  • The EIA has comprehensively studied all aspects of a future mining operation and their associated environmental impacts, with a detailed technical description and site plan.
  • The EIA includes detailed studies into local reindeer herding businesses, and precautionary, protective and compensatory frameworks have been established. These frameworks will be further developed into management plans, in consultation with concerned Sami villages, as part of the Company’s application for an Environmental Permit.
  • The EIA provides sufficient detail for an assessment under Chapters 3 and 4 of the Environmental Code.
  • Despite the fact that the EIA has comprehensively studied all aspects of a future mining operation, both the CAB’s support of the Company’s application in July 2015 and the Mining Inspectorate’s recommendation that the Concession be awarded in October 2015 were specific to the Concession Area, an area delineated by the Kallak North orebody, and not the full extent of future mining operations.
  • Working practice in Sweden up until the SAC judgement has been to focus on the Concession Area and activities within it, with aspects of a future mining operation outside of the Concession Area being dealt with under Environmental Permitting.
  • The Company has suggested to the Government that the Kallak North application should be returned to the Mining Inspectorate, such that a review of the EIA in the context of the SAC judgement can be made.
  • The Company has stated that if this course of action or any other is taken, it assumes the Kallak North application will from now be dealt with efficiently and promptly, and the Company will be kept properly informed.

Kurt Budge, CEO, commented:

“The goalposts have been moved with the SAC judgement, however, I remain confident that Beowulf will be awarded the Exploitation Concession for Kallak North.

“We have satisfied the requirements of the Swedish regulations. We used an experienced team of Swedish consultants to prepare our EIA. A team possessing the knowledge and the understanding of the requirements to develop a sustainable and modern mining operation in a location such as Kallak. That remains our ambition.

“We have always said that if there were outstanding concerns with our application then we would address them. We responded in full to questions raised by the CAB in November 2013, with an enhanced EIA, and we dealt with a specific concern of the CAB on transport, when it was raised in October 2014.

“Up until the SAC judgement, it has been working practice in Sweden to limit decision criteria for an Exploitation Concession to the Concession Area.

“Whatever further review of the EIA takes place, it brings forward work that would, until the SAC judgement, have been done in the Environmental Permitting stage; with regards to the overall timeline for Kallak’s development, the extra time to be taken now to award the Concession, is not significant. We welcome the opportunity to further demonstrate our responsible approach to the development of Kallak.

“The Company has invested in Kallak for over 10 years. Kallak is an Area of National Interest, affording it protection against competing land use and measures that may hinder future potential mineral extraction. We have defined a high quality magnetite iron ore resource and produced ‘super’ high grade magnetite concentrate from it.

To achieve all this, Beowulf has raised funds from shareholders, of which more than 3,000 are Swedes, owning almost 46% of the Company. With our shareholders support we have built a valuable business, with the potential to create jobs and deliver economic growth in the North of Sweden.

“Beowulf will continue to reach out and work with all its stakeholders and interested parties, in getting Kallak permitted and a mine built.”

Please use the following link to hear an interview with Kurt Budge, CEO:

Directors Talk Kurt Budge Explains Tasman Metals Norra Karr Project Judgement

Exploitation Concession Application – Supplementary EIA Information

  • JIMAB submitted an updated Exploitation Concession application for Kallak North to the Mining Inspectorate of Sweden in April 2014.
  • The updated application was a revised and expanded version of the original submission made in April 2013, following the CAB’s request in late November 2013 for further information and clarification on certain aspects of the EIA, a component of JIMAB’s original application.
  • JIMAB added certain supplements to the EIA, along with further technical description and commentary. The enhanced report comprised 164 pages, including various figures and tables, with an additional 16 appendices of more than 200 pages in length covering various technical and specialist aspects based on work performed by the Company’s expert team of Swedish consultants.
  • The EIA was supplemented in the following principal areas:
    • The reindeer husbandry section was complemented by further analysis commissioned from consultants Swedish Geological AB. It was also supplemented and revised based on certain comments and information received from the local Sami villages.
    • Additional investigations regarding safety aspects for hydroelectric power dams were conducted by Ramboll Sweden AB.
    • Questions raised regarding security issues surrounding any tailings dams for the project were further investigated and addressed by Tailings Consultants Scandinavia AB.
    • Various comments received on the socio-economic aspects were responded to by Luleå University of Technology.
    • Additional investigations concerning local hunting and fishing activity and specialist environmental aspects, including water ecology and water chemistry, were conducted by Pelagia Miljökonsult AB based in Umeå.
    • Additional information was gathered regarding Areas of National Interest and other interests of importance in respect of general water management and military defence aspects.
    • Additional studies and inventories on the existing natural water sources in the project area were compiled by Hifab International AB, together with reports on dust and air quality issues.
    • Further information was obtained on the Laponia World Heritage site located more than 40 kilometres away from the Kallak North deposit, as well as on the general tourism industry in the Jokkmokk region sourced from the Destination Jokkmokk organisation.
  • The methodologies utilised in the enhanced EIA report were generally developed and conducted in accordance with the comments received from the CAB, and reflected the feedback from a constructive meeting held with representatives of the Norrbotten County authorities in March 2014.

Enquiries:

Beowulf Mining plc

 

Kurt Budge, Chief Executive Officer

Tel: +44 (0) 20 3771 6993

Cantor Fitzgerald Europe

(Nominated Advisor & Joint Broker)

 

Stewart Dickson / Phil Davies / Carrie Drummond

Tel: +44 (0) 20 7894 7000

Beaufort Securities Limited

(Joint Broker)

 

Jon Belliss

Tel: +44 (0) 20 7382 8300

Blytheweigh

 

Tim Blythe / Megan Ray

Tel: +44 (0) 20 7138 3204

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.