Investments

Beowulf has a 46.1 per cent interest in Vardar Minerals Ltd (“Vardar”). Vardar is a UK registered exploration company with a focus on the mineral endowed Balkan region.

In 2019, the Company obtained control of Vardar and, as such, the Vardar Group is now consolidated into the Company and subject to the same financial controls and scrutiny.

Vardar has two exploration licences located on the Tethyan Belt, a major orogenic metallogenic province for gold and base metals which extends from the Alps (Carpathians/Balkans) to Turkey, Iran and Indochina, and contains several world class discoveries. The Tethyan Belt of south-east Europe can be regarded as Europe’s chief copper-gold (lead-zinc-silver) province.

Vardar’s Mitrovica and Viti licences are highly prospective for base and precious metals, with early indications suggesting the potential for porphyry style mineralisation. It believes the targets are all related to a potentially much larger porphyry style mineralised system, based on meticulous geological mapping of hydrothermal alteration and interpretation of trench, drill and soil geochemical exploration data. At Viti, initial stratigraphic holes, drilled in 2019, intersected the correct alteration type, returning gold and visible copper mineralisation, that indicates potential for the discovery of a mineralised copper-gold porphyry in a hitherto unexplored area.

Mitrovica

The Mitrovica project is situated in northern Kosovo and lies immediately to the west and northwest of the Stan Terg lead-zinc-silver mine which dates back to the 1930s (historical production records: 34 Mt at 3.45 per cent lead, 2.30 per cent zinc and 80 g/t silver).

The licence is prospective for a range of porphyry related mineralisation types, including the Majdan Peak high-sulphidation epithermal gold target, the Wolf Mountain low-sulphidation lead-zinc-silver target and primary porphyry copper mineralisation in the southern part of the licence area.

On a regional scale, the area is located within the late Alpine Tethyan Orogenic Belt and more specifically within the External Vardar Sub-zone of the Vardar Zone. The basement is comprised of ophiolites and a metasedimentary mélange affected by a polymetamorphic overprint (not exceeding greenschist facies conditions). A series of felsic to intermediate sub-volcanic and pyroclastic rocks of Oligocene to Early Miocene age represents the cover sequence.

In early 2018, mapping identified an extensive lead-zinc mineralised gossan, Wolf Mountain target, in the central part of Mitrovica, with associated hydrothermal breccias and silicification on the central-eastern margin of the licence area, along with copper mineralisation associated with trachyte dykes intruding into basement rocks.

In November 2018, fieldwork continued with trenching/channel sampling, geological mapping and ground magnetic geophysical surveys over Wolf Mountain. In addition, detailed geological mapping and sampling were carried out in the Mitrovica South and Majdan Peak areas in the southern part of the licence area, targeting potential porphyry copper and epithermal gold mineralisation.

In June 2020, Vardar identified an additional copper-zinc exploration target at Mitrovica. In addition, results from a soil sampling programme completed across the Majdan Peak gold target at Mitrovica identified over an area approximately 1400 metres x 700 metres, with individual soil samples returning up to 0.36 g/t gold. Furthermore, a new lead-zinc-copper-gold target was identified to the south of Majdan Peak, of significance given its situation, approximately 3 kilometres from the Stan Terg mine.

Wolf Mountain

The Wolf Mountain target is located in the central portion of the Mitrovica license forming part of an extensive potentially mineralised set of satellite deposits located in proximity to the Stan Terg mine. In addition to the Wolf Mountain target, potential also exists in the Mitrovica licence for the discovery of high-level epithermal gold deposits at Majdan Peak and further base metal deposits.

Mineralisation at Wolf Mountain appears to be intrinsically related to the contact between Jurassic ultramafics and overlying Oligo-Miocene volcanoclastic rocks where relatively flat-lying hydrothermal breccias are enriched in Pb, Zn and Ag. Below this contact several high-grade feeder structures have been anticipated and the results of the IP survey tend to confirm this hypothesis.

A total of 279 m of trenching and 1,609 m of drilling have been completed at Wolf Mountain by Vardar. The highlights of these activities include:

• 18 g/t Ag, 2.01 % Pb and 3.17 % Zn over 12.5m within a larger, 51m long cross-section in trench WM-T01 returning 11 g/t Ag, 1.43 % Pb and 1.87 % Zn
• 14 g/t Ag, 3.6 % Pb and 0.64% Zn over 8m in trench WM-T02
• 8 g/t Ag 1.27 % Pb and 0.91 % Zn over 6.6m (est. true thickness) in drill hole WM004
• 16 g/t Ag, 2.69 % Pb and 0.4 % Zn over 4.3m (est. true thickness) in drill hole WM007

The results suggest a mineralisation model analogous to the nearby Zijaca deposit, located 3km south-east of Wolf Mountain (non-JORC compliant 5.2 Mt containing 2.83 per cent Pb, 2.83 per cent Zn and 16 g/t Ag), and Crnac, (non-JORC compliant 3.5 million tonnes containing 8.1 per cent Pb, 3.2 per cent Zn, 120 g/t Ag) in northern Kosovo.

In October 2020, Vardar completed an IP survey over Wolf Mountain to detect the presence of subsurface conductors associated which could indicate the presence of both mineralised breccia and feeder structures.

The survey was completed as a full 3D programme using a combination of conventional 2D IP-DC lines using electrode spacings of 50 and 100m with additional Iris instruments FullWaver units positioned on adjacent lines. The results of the survey were highly encouraging, highlights include:

• Highly anomalous IP chargeability zones defined beneath areas of laterally extensive Pb-Zn gossans and hydrothermal alteration that are considered high priority targets for drill testing
• The IP anomalies are located below, often straddling, the contact between younger Oligo-Miocene volcanoclastic rocks and ultramafic basement in agreement with mapped and drill tested mineralisation adding further support for a mineralised source to the anomalies

Importantly, the IP anomalies follow established regional structural trends suggesting they may be representative of high-grade Pb-Zn-Ag feeder zones. Vardar plan to carry out a diamond drilling programme to investigate the IP anomalies in Spring 2021.

Majdan Peak

The Majdan Peak gold (“Au”) target is defined by a zone of intense argillic alteration capped by an extensive blanket of advanced argillic alteration and silicification which forms the hilltop. The target shares many characteristics of a high-sulphidation epithermal gold system, with distinct gold anomalies, including rock grab sample results of up to 7.2 g/t, associated with gossanous zones of vughy quartz.

In June 2020, soil sampling was conducted on a 50 m x 50 m grid, covering an area of approximately 2.0 km x 1.5 km.  A total of 726 samples were sent to ALS Bor in Serbia for processing and fire assay (ALS code ICP-22), which included sample replicates, duplicates, blanks, and control source material.  A pXRF was used for multi-element analysis.

An extensive gold anomaly was identified over an area approximately 1400 metres x 700 metres, with individual soil samples returning up to 0.36 grammes per tonne (“g/t”) Au. The elevated gold in soils correlates well with anomalous Arsenic (As), Copper (Cu), Lead (Pb), Mercury (Hg), Strontium (Sr) and Antimony (Sb). Geological mapping has shown the presence of extensive hydrothermal alteration including advanced argillic alteration and silicification. The scale and size of the anomaly, together with coincidental multi-element anomalies and extensive alteration, are comparable to significant high-sulphidation epithermal gold deposits within the region.

Mitrovica South

Mitrovica South exhibits potential for a large-scale mineralised system.  Soil sampling results have identified distinctive Zn, Cu, Pb, Ag, and Au anomalies in the southern part of the license, extending laterally from known mineralisation, suggesting that the system may be larger than indicated by initial geological mapping.

The lower slopes of Majdan Peak display elevated Cu, Zn and Ag in soils possibly correlating with structurally controlled mineralisation.

Vardar is planning to conduct DC-IP surveys, the results of which, when combined with detailed magnetic data, will be used for defining drill targets.

Viti – Metal Creek Porphyry Target

The Viti project is situated in south-eastern Kosovo and encompasses an interpreted circular intrusive, indicated by regional airborne magnetic data. There is evidence of intense alteration typically associated with porphyry systems, with several copper occurrences and stream sample anomalies in proximity to, and within the project area.

Intense hydrothermal alteration typically associated with porphyry systems has been identified and mapped together with the presence of several gossans, hydrothermal breccia zones and iron stockworks along a 3 km long zone associated with elevated Au, Cu and As from rock-chip grab samples. Two diamond drill holes for a total of 439m were sunk to test the alteration type and gossans in in 2018.

The drill holes intersected multiple highly altered trachyte dykes with associated Cu and Au mineralisation. Mineralised intersections included 1m @ 0.5 g/t Au and 10m @ 0.12 g/t Au. Whilst not economic intersections, the drill results are highly significant as they provide considerable encouragement that the target represents the upper part of a potential Cu-Au porphyry system.

Future work will focus on copper-gold target delineation using a combination of detailed magnetic and DC-IP surveys, and with new targets drilling should follow.