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Kallak North Exploitation Concession Update

08 July 2015

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 iron ore project in northern Sweden and its Swedish exploration portfolio, provides an update on the Company’s application for an Exploitation Concession for Kallak North, further to an announcement published 7 July 2015 by the County Administrative Board (“CAB”) for Norrbotten County, Sweden.

Highlights:

The CAB was asked by the Swedish Government to provide comments on the national economic assessment of Kallak North. The CAB’s findings are 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 Concession area applied for by the Company creates no conflicts where national interests are considered.
  • The Concession is designated as an Area of National Interest (“ANI”) for minerals.
  • The Company should work with communities that could be affected by the development of a mining project, in order to eliminate or mitigate any impacts, including reindeer herders and Sami villages.
  • The Company should consider in its ongoing studies the potential impact of its mining activities on tourism and transport infrastructure.

Kurt Budge, Chief Executive Officer of Beowulf, commented:

“We welcome the announcement by the CAB, and its important findings that a mining project can deliver significant economic benefits for Jokkmokk, Norrbotten County, and for Sweden.

“These findings add to the list of arguments for why an Exploitation Concession for Kallak North should be granted: its ANI designation; the scale of the defined resource; and the “super” high grade magnetite concentrate that can be generated from the orebody.

“With management change in Beowulf and a distinct change in approach in Sweden, we hope that we are clearly demonstrating our respect for all our stakeholders, our desire to partner, and our responsible attitude to development.

We have heard the CAB’s suggestions for areas we need to focus on in environmental permitting and we can assure the CAB and our other stakeholders that these areas will receive our full attention.

“With the ambitions expressed in the CAB’s recent publication of the ‘Regional strategy for innovation and sustainable development of the mineral sector’ for Norrbotten and Västerbotten, we are very motivated to play a leading role in partnering with stakeholders and delivering sustainable economic growth in Jokkmokk and Norrbotten.

“The Company is confident its application for an Exploitation Concession has met the requirements of the Swedish regulations and we will be in contact with the Swedish Government, after the summer holidays, to understand the Exploitation Concession decision making process following CAB’s positive feedback, and will provide a further update to the market in due course.”

Kallak North Exploitation Concession – Recap

  • Since the Company received notification on 13 February 2015 that the Mining Inspectorate of Sweden had referred the decision regarding the Exploitation Concession for Kallak North to the Swedish Government, the Chief Executive Officer (“CEO”) has visited Sweden regularly and on each occasion met with officials at the CAB, the municipality (Jokkmokks Kommun) and other key stakeholders, including the landowners’ association in Jokkmokk and the Mining Inspectorate.
  • During these meetings the CEO has explained the changes that have taken place within Beowulf and its subsidiary Jokkmokk Iron Mines AB since October 2014, in terms of leadership and approach to stakeholders. He also provided an update on the Company’s understanding of the process being followed by the Swedish Government, and provided supporting arguments for the award of the Exploitation Concession, including:
  • Kallak’s designation, in February 2013, by the Swedish Geological Society as an Area of National Interest (“ANI”) for minerals, affording it protection against competing land use and measures that may hinder future potential mineral extraction.
  • The Chief Mining Inspectorate finding, in February 2015, that the prerequisites for an Exploitation Concession have been fulfilled.
  • The definition of 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.
  • 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 £5.4 million having been spent to date and through its partnership with the landowners’ association, Jokkmokks Allmänning, to support the development of small and medium enterprises in the wider community.
  • The Company is confident its application for an Exploitation Concession has met the requirements of the Swedish regulations, and despite the CAB raising concerns in October 2014 regarding transport routes, which are typically assessed during environmental permitting, the Company went further and made significant concessions to address the CAB’s concerns, with a written submission to the Mining Inspectorate in November 2014 (RNS 28 November 2014 Third Quarter Update).

Enquiries:

Beowulf Mining plc

 

Kurt Budge, Chief Executive Officer

Tel: +44 (0) 20 3771 6993

Cantor Fitzgerald Europe

(Nominated Advisor & Joint Broker)

 

Stewart Dickson / Jeremy Stephenson / Carrie Lun

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.

About Us

The Kallak North iron ore deposit is located about 40km west of the Jokkmokk municipality centre in the Norrbotten County in Northern Sweden.

Local infrastructure is excellent with all-weather gravel roads passing through the project area and all parts are easily reached by well used forestry tracks. A major hydroelectric power station with associated electric power-lines is located only a few kilometres to the south east. The nearest railway (the ‘Inland Railway Line’) passes approximately 40km to the east. This railway line is connected at Gällivare with the ‘Ore Railway Line’, which is used by LKAB for delivery of their iron ore material to the Atlantic harbour at Narvik (Norway) or to the Botnian Sea harbour at Luleå (Sweden).

The total Kallak project area is approximately 80km2, and includes the Parkijaure licence granted in 2010 and the Ågåsjiegge nr2 licence granted in 2014.

The Kallak North and Kallak South orebodies are centrally located and cover an area approximately 3,700m in length and 350m in width, as defined by drilling. The mineral resource estimate for Kallak North and South is based on drilling conducted between 2010-2014, a total 27,895m drilled, including 131 drillholes.

The latest resource statement for the Kallak project was finalised on the 28 November 2014, following the guidelines of the JORC Code 2012 edition, summary as follows:

 

Category

Tonnage

Mt

Fe

%

P

%

S

%

Kallak North

Indicated

105.9

27.9

0.035

0.001

 

Inferred

17.0

28.1

0.037

0.001

           

Kallak South

Indicated

12.5

24.3

0.041

0.003

 

Inferred

16.8

24.3

0.044

0.005

           

Global

Indicated

118.5

27.5

0.036

0.001

 

Inferred

33.8

26.2

0.040

0.003

The Ballek Joint Venture project comprises two exploration permits over a total area of approximately 8.7km2, located in the Norrbotten County in Northern Sweden. In September 2008 Beowulf reported a maiden JORC Code compliant Inferred Resource estimate for the Lulepotten copper-gold deposit of 5.4Mt, grading 0.8% Cu and 0.3g/t Au.

Other attractive portfolio assets include the Nautijaure licence with potential for IOCG, Grundträsk gold project and the Munka licence which hosts Sweden’s largest, drill confirmed deposit of molybdenum.