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Kallak North Exploitation Concession Update

1 July 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 and the Åtvidaberg polymetallic exploration licence in Sweden, and its graphite portfolio in Finland, announces that The Government of Sweden has asked the Mining Inspectorate of Sweden to review the Company’s application for an Exploitation Concession for Kallak North in the context of the recent Supreme Administrative Court judgement in the case of the Norra Kӓrr project. 

Kurt Budge, Chief Executive Officer, commented:

“I am pleased that we have movement on our application and believe it is in the best interests of our stakeholders in Sweden, and our Swedish and non-Swedish shareholders, that our application be further reviewed by the Mining Inspectorate, so that any future award of the Exploitation Concession is consistent with the Supreme Administrative Court’s judgement in the case of the Norra Kӓrr project.  

“Beowulf has been permitted to operate in Sweden for over 10 years and in that time has invested over SEK 67 million, defined a substantial orebody at Kallak, with the potential for further expansion, and produced a ‘super’ high grade 71 per cent iron content magnetite concentrate.

“Last year we gained the support of the County Administrative Board (“CAB”) for our application and the recommendation of the Mining Inspectorate that the Concession be awarded. The Norra Kӓrr judgement meant that a further review of our application was inevitable, but we maintain, for this stage of permitting, that our Environmental Impact Assessment has provided the required level of technical detail, including comprehensive studies covering all activities associated with a future mining operation and their impacts.

“Kallak has the potential to create economic benefits for Jokkmokk, the County of Norrbotten and Sweden, and this was recognised by the CAB almost a year ago. Beowulf, now 46per cent owned by Swedish shareholders, is looking forward to engaging and working in partnership with its stakeholders in Jokkmokk, to develop a modern and sustainable mining operation to deliver these benefits.”

Kallak Project Summary

  • The Company has defined a high quality resource at Kallak, including an Indicated Resource of 118.5 million tonnes (“Mt”) at 27.5 per cent iron and an Inferred Resource of 33.8Mt at 26.2 per cent iron (JORC, 2012 edition), plus an exploration target of 90-100Mt at 22-30 per cent iron.
    The exploration target represents potential ore, specifically in the gap between the northern and southern ends of Kallak South, and below the pit shells modelled for the resource statement.  The 2014 drilling programme for Kallak South focused on defining the ends of the Kallak South orebody. The geophysical magnetic signature of mineralisation, evidence of the presence of magnetite, extends through the gap giving confidence for an exploration target, but insufficient drilling precludes any additional resource classification.
    The Kallak North orebody remains open at depth and to the north.
  • On 8 June 2015, the Company announced testwork results showing that a market-leading ‘super’ high grade magnetite concentrate, with over 71 per cent iron content and low levels of deleterious elements (silica, alumina, phosphorous and sulphur) had been produced.
  • The ‘super’ high grade and purity of the magnetite concentrate produced are valuable attributes for key target markets: pellets; Direct Reduction Iron (“DRI”) facilities in Europe and the Middle East; and in chemical industry applications, with higher quality iron units benefiting manufacturing productivity with improved economy, and high purity delivering environmental benefits.
  • In February 2013, Kallak was designated as an Area of National Interest (“ANI”) for minerals by the Swedish Geological Society, affording it protection against competing land uses and measures that may hinder future potential mineral extraction.

Exploitation Concession Recap

  • On 7 July 2015, the CAB published their response to the Government of Sweden’s request for comments on the national economic assessment of Kallak North.
    The CAB stated in their response 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.
    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 ANI for minerals.
    The CAB’s announcement also looked to the future, directing the Company towards working with communities that could be affected by the development of a mining project, including Sami reindeer herding communities. This is work that the Company has already begun, with regular interactions and meetings with key stakeholders in and around Jokkmokk, including ongoing communications with the Chairmen of the Jåhkågasska and Sirges Sami reindeer herding communities.
  • On 9 October 2015, the Mining Inspectorate of Sweden wrote to the Government of Sweden and recommended that the Exploitation Concession for Kallak North be granted.
    The recommendation was delivered in response to the Department of Enterprise and Innovation’s invitation for the Mining Inspectorate to give its views on the findings made by the CAB on Kallak North, as published in the CAB’s announcement dated 7 July 2015.
  • Jokkmokk Kommun’s independent socio-economic study on Kallak shows that a mining development will create direct and indirect jobs, increase tax revenues and slow down population decline, demonstrating that mining at Kallak can provide a much needed economic stimulus for the region.
  • The Company has demonstrated its commitment to Jokkmokk’s economic future as a direct investor in the mining project, with over SEK 67 million having been invested to date, and through its partnership with the landowners’ association, Jokkmokks Allmänning, to provide financial support for the development of small and medium sized enterprises in the wider community. The Company has, to date, funded SEK 300,000 towards this partnership, with the money being directly invested into local businesses.

Kallak Environmental Impact Assessment (“EIA”)

  • The EIA, which was submitted as part of the Exploitation Concession application by Beowulf’s 100 per cent owned Swedish subsidiary, Jokkmokk Iron Mines AB (“JIMAB”) in April 2013, and later supplemented in April 2014, 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 activities, and precautionary, protective and compensatory frameworks have been established. These frameworks will be further developed into management plans, in consultation with concerned Sami reindeer herding communities, 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.
  • The supplementary EIA 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.
  • 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 reindeer herding communities. 
    • 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 activities 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 & Broker)

 

Stewart Dickson / Phil Davies / Carrie Drummond

Tel: +44 (0) 20 7894 7000

 

 

Blytheweigh 

 

Tim Blythe / Megan Ray

Tel: +44 (0) 20 7138 3204