TIDMBEM
RNS Number : 7758A
Beowulf Mining PLC
31 May 2019
The following amendment has been made to the 'Audited Financial
Results for the Year Ended 31 December 2018' announcement released
on 31 May 2019 at 8:00 under RNS No 6759A.
The date of the Annual General Meeting has been corrected to 28
June 2019 at 11.00 a.m. (BST).
All other details remain unchanged.
The full amended text is shown below.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations ("MAR") (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
31 May 2019
Beowulf Mining plc
("Beowulf" or the "Company")
AUDITED FINANCIAL RESULTS FOR THE YEARED 31 DECEMBER 2018
Beowulf (AIM: BEM; Spotlight: BEO), the mineral exploration and
development company focused on the Kallak magnetite iron ore
project in northern Sweden and its graphite projects in Finland,
announces its audited financial results for the year ended 31
December 2018. The chairman's statement, review of operations and
activities, and financial information has been extracted from the
Company's Annual Report for the year ended 31 December 2018.
The financial information included in this announcement does not
constitute the Group's statutory financial statements as defined in
section 434 of the Companies Act 2006, but is derived from those
accounts. The financial information for the year ended 31 December
2018 has been extracted from the audited accounts of Beowulf Mining
plc which will be delivered to the Registrar of Companies in due
course. The auditors reported on those accounts and their report
was unqualified and did not contain a statement under section 498
(2) or (3) of the Companies Act 2006. The financial information for
the year ended 31 December 2017 has been extracted from the audited
accounts of Beowulf Mining plc which have been delivered to the
Registrar of Companies. The auditors reported on those accounts and
their report was unqualified and did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
The Annual General Meeting of the Company will be held at the
offices of BDO, 55 Baker Street, London, W1U 7EU. 28 June 2019 at
11.00 a.m. (BST).
The 2018 Annual Report will be posted to those shareholders who
have requested a copy and will be available on the Company's
website (www.beowulfmining.com). A further news release will be
made when the Notice, Form of Proxy and Annual Report are posted to
shareholders.
Enquiries:
Beowulf Mining plc
Kurt Budge, Chief Executive Officer Tel: +44 (0) 20 3771 6993
SP Angel
(Nominated Adviser and Broker)
Ewan Leggat / Soltan Tagiev Tel: +44 (0) 20 3470 0470
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.
CHAIRMAN'S STATEMENT
Dear Shareholders
Introduction
During the year, we have made good progress in developing our
various business areas.
Most importantly, delivering a Mineral Resource Estimate ("MRE")
for our Aitolampi graphite project, and strengthening our position
as a future supplier of natural flake graphite to Finland's
emerging battery sector.
We have also widened the Company's geographical and commodity
reach, investing in Vardar Minerals, a base and precious metals
exploration company with assets in Kosovo. We believe this to be an
exciting opportunity for Beowulf that allows exposure to highly
prospective exploration licences in the Tethyan Belt, and the
chance to work with a highly regarded management team.
For Kallak, it seems we are finally approaching a decision point
on our application for an Exploitation Concession. In 2018,
progress was thwarted, first by preparations for a Swedish general
election, and second by the protracted negotiations to form a new
Government. The Government is now back to business and we are
assured that our application is being prioritised.
It is the Board's opinion, that the Company's Kallak application
fully satisfies the requirements of the Swedish Mining Act and
Environmental Code and should be granted an Exploitation
Concession, therefore enabling the Company to advance the project
in partnership with all sections of the community in Jokkmokk.
Kallak
Throughout 2018 and in the months prior to the Swedish general
election, the Company continued to communicate with the Swedish
Government. Now that a new Government has been formed, the Company
believes that an Exploitation Concession should be awarded for
Kallak North without further delay. It is now over 3.5 years since,
in October 2015, the Mining Inspectorate recommended to the
Government that the Concession be awarded.
In February 2018, the CEO participated in a meeting in Stockholm
to discuss land use and engagement processes between Sami reindeer
herding communities and mining companies, as part of the
Organisation for Economic Cooperation and Development's ("OECD")
project 'Linking Indigenous Communities with Regional Development
in Sweden', supported by the Swedish Government. In March 2019, the
CEO attended the seminar launching the report of the OECD's Review.
The Company is extremely proud that it participated in the Review
and that we attended the seminar in Luleå. We are studying the
report in detail and, as we develop our Kallak project, we will
seek to find ways in which we can implement the report's findings
in our operations and build cooperative working relationships with
Sami reindeer herders.
So far, Kallak's potential impact on Sami culture and reindeer
herding rather than jobs and finances has dominated the debate. Our
view, which has been shared by past Ministers in the Government, is
reindeer herding and mining can prosper side-by-side, which has
proven to be the case across Sweden.
In October 2018, the Company re-published, in Swedish, the
Copenhagen Economics study of Kallak's potential economic benefits
that was completed in September 2017 and drawing attention to the
'big picture' economic opportunity that Kallak represents to
Jokkmokk and Norrbotten; that it is 'not just about a mine', with
Kallak's direct economic influence extending to rail, port, power
and other industries, supporting mutual investments and economic
growth.
Highlights of the study include:
-- A mining operation at Kallak has the potential to create 250
direct jobs and over 300 indirect jobs in Jokkmokk, over the period
that a mine is in operation
-- These jobs could be sustained over a period of 25 years or
more, if the Kallak South deposit is mined after the Kallak North
deposit, and further deposits can be defined
-- The Company will seek to establish a 'Task Force' with
Jokkmokks Kommun and local employment agencies so that between now
and the start of operations, plans are developed and implemented to
make sure as many jobs as possible are available to people living
in Jokkmokk
-- These tax revenues would help to develop and sustain public
services and infrastructure in Jokkmokk, which are at risk due to a
lack of new investment and job creation in the community, a
declining population and an ageing population
In its November 2017 statement, the County Administrative Board
("CAB") for the County of Norrbotten recommended that an
Exploitation Concession for Kallak North is not awarded, but failed
to use the socio-economic assessment criteria set out in the
Environmental Code for applications such as ours, which put
emphasis on safeguarding investment and job creation, and giving
consideration for the municipalities' financial health. The CAB
also contradicted its July 2015 position, when it supported the
economic case for Kallak.
Today Jokkmokk municipality struggles with a deteriorating
economy and, in March 2019, declared a need for drastic budget cuts
of SEK 28 million over the coming two years. A major mining
investment would contribute to turning around that trend.
During the early part of 2019, the mining industry in Sweden has
been in renewed focus, with other mining companies, the industry
association SveMin and the union IF Metall, raising the issues of
uncertain permitting processes for mining projects and unacceptable
delays in decision making by authorities.
In April 2019, I wrote to the new Minister for Enterprise and
Innovation, Mr. Ibrahim Baylan, to highlight these issues and the
problems that Beowulf has faced.
The mining industry is crucial for Sweden's future. Mines
contribute to growth, strengthen local communities and are an
engine for development, especially in northern Sweden. Swedish
mining companies', LKAB and Boliden long-standing businesses prove
this.
Many therefore received LKAB's warning, in October 2018, that
the ore in the Kiruna mine will be depleted earlier than expected,
with astonishment and concern. The media spotlight put on the
future of LKAB's operations, and with this the attention paid to
the importance of iron ore to Sweden, has highlighted the absurdity
of the Kallak North situation. Swedish authorities have found
themselves unable to permit Europe's largest drill defined iron ore
deposit, having issued exploration permits and watched the Company
invest SEK 77 million, drill 27,895 metres ("m"), define a
significant resource, and develop the Kallak project to where it is
today.
Taking all this into consideration, new Ministers, a debate on
the importance of mining and iron ore to Sweden, and Sweden wishing
to portray itself as an attractive destination for mining
investors, we have renewed optimism that a Concession for Kallak
North will be forthcoming, without further delay.
Graphite Portfolio
During 2018, we made significant progress at Fennoscandian.
Starting the year, in January 2018, we announced metallurgical
testwork results showing that graphite concentrates from Aitolampi
could meet the purity specification of 99.95 per cent Total
Graphitic Carbon ("TGC") required for the lithium ion battery
market, using alkaline and acid purification with some process
optimisation.
In April 2018, the Company published its involvement in a
Cooperation Network of existing and new entrant raw materials
suppliers to the emerging battery manufacturing industry in
Finland.
The Cooperation Network includes the cities of Vaasa and
Kokkola; Freeport Cobalt, the world's largest cobalt refinery and
producer of battery chemicals; Nornickel, the producer of
world-class nickel metals and nickel chemicals in Harjavalta;
Terrafame Group, the parent company of Terrafame, producing nickel,
zinc, cobalt and copper in Sotkamo; Keliber, which is preparing to
start lithium production in Kaustinen and Kokkola; as well as
Beowulf, the 100 per cent owner of the Aitolampi graphite
deposit.
In addition, Fennoscandian was granted Euros 161,000 by Business
Finland for a research project entitled "Green Minerals - Graphite,
Exploration to Products". The project runs from 1 January 2018 to
31 December 2019 and has a total budget of Euros 323,750. The
Company will contribute the balance of the funding.
In May 2018, the Company presented assays for intersected
mineralisation at Aitolampi, and followed this in August 2018,
announcing a maiden MRE for Aitolampi, highlights as follows:
-- A global Indicated and Inferred Resource (JORC Code, 2012
edition) of 19.3 million tonnes ("Mt") at 4.5 per cent TGC for
878,000 tonnes ("t") of contained graphite, comprising eastern and
western lenses above a 3.0 per cent TGC cut-off grade
-- A higher-grade Western Zone with an Indicated and Inferred
Resource of 9.8 Mt at 5.0 per cent TGC for 490,000 t of contained
graphite
-- An Eastern Zone with an Indicated and Inferred Resource of
9.5 Mt at 4.1 per cent TGC for 388,000 t of contained graphite.
Further drilling at Aitolampi has taken place in 2019, targeting
both higher-grade mineralisation and high-priority geophysical
anomalies, with full results yet to be received.
Vardar Minerals ("Vardar")
Vardar is a private UK registered exploration company with a
focus on the metal endowed Balkan region and one of the first
companies to be awarded exploration licences in Kosovo.
On 6 November 2018, Beowulf announced that it had acquired a
14.1 per cent interest in Vardar for the consideration of
GBP250,000, satisfied in cash. The Company's investment enabled
Vardar to complete its 2018 exploration programme.
Vardar is exploring the Mitrovica and Viti projects, both of
which are located within 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.
Stepping into a new geography, like Kosovo, only makes sense if
you are collaborating with a competent team, which we have in
Vardar's founders, with experienced technical and support personnel
in Kosovo.
Shareholder Base
Beowulf is approximately 99 per cent owned by retail
shareholders in Sweden and the UK. The number of Swedish
shareholders on the share register continued to grow during the
year end, at 30 April 2019, approximately 62.36 per cent of the
Company was owned by Swedish shareholders. I would like to take the
opportunity to thank our existing and new shareholders for their
continued support.
Raising Finance
Maintaining sufficient funding to continue to invest in projects
is the biggest challenge for any mining exploration and development
company, and without investment funds we cannot create shareholder
value.
During the year we undertook a single fundraising. On 17 May
2018, Beowulf completed a subscription for new ordinary shares to
raise GBP1.5 million before expenses.
Post year-end, the Company announced two fundraisings, on 1
April 2019 and 16 April 2019, raising a total amount of GBP1.25
million before expenses.
Financial Performance
Loss before and after taxation attributable to the owners of the
parent at GBP1.37 million is higher than the loss recorded in 2017
of GBP1.04 million, this increase is largely attributable to
impairment costs incurred of GBP0.57 million. The impairment costs
assessed relate to projects Haapamäki (GBP249,646), Kolari1
(GBP158,727) and Viistola (GBP163,083).
Basic loss per share of 0.25 pence increased by 25 per cent on
last year (2017: loss per share of 0.20 pence).
Approximately GBP1.53 million in cash was held at the year end
(2017: GBP1.59 million). During the year GBP0.78 million (2017:
GBP0.94 million) was spent on exploration and capitalised.
Corporate
On 22 February 2018, the Company announced that it had issued
2.1 million ordinary shares of 1.0 pence each to Rasmus Blomqvist,
the Company's Exploration Manager, as the first tranche of deferred
consideration pursuant to
the acquisition of Fennoscandian as announced via RNS on 11
January 2016 (the "Further Consideration Shares"). The second, and
final, tranche of 2.1 million deferred consideration shares will be
issued subject to completion of a bankable feasibility study on one
of the graphite projects in the Fennoscandian portfolio.
On 16 May 2018, the Company announced that it had completed a
subscription for new ordinary shares to raise GBP1.5 million before
expenses, with the funds being used for general working capital
purposes and to support activities across Beowulf's three main
business areas, which are graphite exploration, the Åtvidaberg
exploration license, and Kallak.
On 1 October 2018, the Company appointed SP Angel as Nominated
Adviser and Broker.
Staff
On behalf of the Board, I would like to express my sincere
thanks to our staff in Sweden and Finland for their hard work and
continued support during the past 12 months.
Outlook
2019 will be a busy year for the Company, as we push forward
with Kallak, our graphite business, and see what Vardar can
deliver.
Since January 2019, Sweden has a new Government, and the Company
believes that an Exploitation Concession should be awarded for
Kallak North without further delay. In that scenario, the Company
will restart and complete the Scoping Study for Kallak and work
with Jokkmokks Kommun to establish the 'Development Taskforce',
essential for maximising the benefits that will come from a mine at
Kallak and flow to the community.
With Fennoscandian, we will continue to pursue a strategy of
developing a 'resource footprint' of natural flake graphite
prospects that can provide 'security of supply' and enable Finland
to achieve its ambition of self-sufficiency in battery
manufacturing. Fennoscandian's exploration team continues to
evaluate and build our knowledge for each graphite prospect in the
portfolio, and we are putting Business Finland's funding to good
use, conducting testwork, as we seek to move downstream, and
develop know-how in processing and manufacturing value-added
graphite products.
Already in 2019, the Company has increased its commitment to
Vardar Minerals with a further GBP750,000 investment, satisfied in
cash, taking its interest in Vardar to 37.55 per cent. This will
finance intensive exploration programmes at the Mitrovica and Viti
licences over the course of the year and produce what we hope is
exciting newsflow for shareholders.
Göran Färm
Non-Executive Chairman
30 May 2019
REVIEW OF OPERATIONS AND ACTIVITIES
SWEDEN
Permits
Beowulf, via its subsidiaries, currently holds seven exploration
permits, together with one registered application for an
Exploitation Concession, as set out in the table below:
Permit Name/Minerals Permit ID Area (km(2) Valid from Valid until
)
--------------------------- ------------ -------------- -------------- ---------------
Kallak nr2 (Fe)(1,4) 2011:97 22.19 22/06/2011 22/06/2017
Parkijaure nr3 (Fe)(1,4) 2011:135 4.17 11/08/2011 11/08/2017
Åtvidaberg nr1 2016:51 125.32 30/05/2016 30/05/2019
(Pb,Zn,Cu, Ag)(2)
Sala nr10 (Pb,Ag,Zn)(2) 2016:64 10.49 29/06/2016 29/06/2019
Ågåsjiegge 2014:10 11.14 24/02/2014 24/02/2020
nr2 (Fe)(1)
Kallak nr1 (Fe)(1,3) 2006:197 5.00 28/06/2006 28/06/2021
Parkijaure nr2 (Fe)(1) 2008:20 2.85 18/01/2008 18/01/2023
Notes:
(1) held by the Company's wholly owned subsidiary, Jokkmokk Iron
Mines AB ("JIMAB").
(2) held by the Company's wholly owned subsidiary, Beowulf
Mining Sweden AB.
(3) an application for the Exploitation Concession was lodged on
25 April 2013 (Mines Inspector Official Diary nr 559/2013) and an
updated, revised and expanded application was submitted in April
2014. On 21 September 2016, the Company submitted a letter to the
Mining Inspectorate of Sweden, revising its application boundary to
encompass both the Concession Area, delineated by the Kallak North
orebody, and the activities necessary to support a modern and
sustainable mining operation.
(4) JIMAB has appealed the Mining Inspectorate's decision not to
extend these licences. The legal process is ongoing.
Introduction
The Company's most advanced project is the Kallak magnetite iron
ore deposit located approximately 40 kilometres ("km") west of
Jokkmokk in the County of Norrbotten, Northern Sweden, 80km
southwest of the major iron ore mining centre of Malmberget, and
approximately 120km to the southwest of LKAB's Kiruna iron ore
mine.
The Company is currently going through the process of obtaining
an Exploitation Concession for Kallak North (the "Exploitation
Concession"). Testwork on Kallak ore has proved that a 'super' high
grade magnetite concentrate can be produced, yielding over 71 per
cent iron content, with low levels of deleterious elements,
including phosphorous and sulphur, lending itself to pelletisation
and consumption in Direct Reduction Iron ("DRI") facilities in
Europe and the Middle East, and attracting a potential price
premium.
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 powerlines is located only a few
kilometres to the south east. The nearest railway (the Inlandsbanan
or 'Inland Railway Line') passes approximately 40km to the east.
This railway line is connected at Gällivare with the 'Ore Railway
Line', used by LKAB for delivery of its iron ore material to the
Atlantic harbour at Narvik (Norway) or to the Botnian Sea harbour
at Luleå (Sweden).
Kallak Resource
The Kallak North and Kallak South orebodies are centrally
located and cover an area approximately 3,700 metres ("m") 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 of 27,895m were drilled,
including 131 drillholes.
The latest resource statement for the Kallak project was
finalised on 28 November 2014, following the guidelines of the JORC
Code 2012 edition, summary as follows:
Project Category Tonnage Fe P S
Mt % % %
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
-------------------------- -------- ----- ------ ------
Notes:
(1) The effective date of the Mineral Resource Estimate is 28
November 2014.
(2) Resources have been classified as Indicated or Inferred,
following the guidelines of the JORC Code, 2012 edition.
(3) Cut-off grade of 15 per cent Fe has been used.
(4) Mineral Resources, which are not Mineral Reserves, have no
demonstrated economic viability.
(5) An exploration target of 90-100 Mt at 22-30 per cent Fe
represents potential ore below the pit shells modelled for this
resource statement, and in the gap between drilling defined Kallak
South mineralised zones.
(6) The resource statement has been prepared and categorised for
reporting purposes by Mr. Thomas Lindholm, of GeoVista AB, Fellow
of the MAusIMM, following the guidelines of the JORC Code, 2012
edition.
The mineralised area at Kallak North is approximately 1,100m
long, from south to north, and, at its widest part in the centre,
is approximately 350m wide.
The deepest drill hole intercept is located some 350m below the
surface in the central part of the mineralisation. In the southern
and northern parts, the intercepts are shallower at 150-200m.
However, in the northern part, there are no barren holes below
them, so the mineralisation could continue at depth.
The investigations at Kallak South have been divided into two
parts, the northern and southern ends respectively. In the northern
part the mineralisation extends approximately 750m from north to
south and has an accumulated width of 350m. The deepest drillhole
intercept is located some 350m below the surface in the
southern-most part of the mineralisation. In the southern part, the
mineralisation extends approximately 500m from north to south and
has a maximum width of just over 300m. The deepest drillhole
intercept is located some 200m to 250m below the surface in the
central part of the mineralisation.
Approximately 800m in between the southern and northern parts of
Kallak South has not been investigated by systematic drilling. An
exploration target of 90 Mt to 100 Mt at 22-30 per cent iron has
been assigned to the area between the southern and northern
parts.
2018 Update
Throughout 2018 and in the months prior to the Swedish general
election, the Company continued to communicate with the Swedish
Government.
In February 2018, the CEO participated in a meeting in Stockholm
to discuss land use and engagement processes between Sami reindeer
herding communities and mining companies, as part of the OECD's
project 'Linking Indigenous Communities with Regional Development',
supported by the Swedish Government.
On 16 May 2018, the Company learnt that the Administrative Court
in Luleå had rejected the Jokkmokk Iron Mine's AB ("JIMAB") appeal
of the Mining Inspectorate's decision not to extend Kallak nr 2 and
Parkijaure nr 3 exploration licences, in a judgement dated 7 May
2018 and sent to JIMAB by regular post. The two licences are not
part of the Kallak Exploitation Concession application.
JIMAB applied to the Administrative Court of Appeal in Sundsvall
for its case to be heard, arguing that the court judgement is
wrong, and that JIMAB's decision not to invest in further
exploration of these two licences, while the Kallak application is
being handled, is valid, given the time taken and the performance
of the authorities involved. JIMAB has an approved workplan for
Parkijaure nr 3, and intends to drill, with one objective being to
identify an exploration target for iron ore mineralisation.
Proceedings are ongoing.
In July 2018, Almedalen again provided an excellent opportunity
for the CEO to engage with Swedish Government ministers, members of
the Swedish Parliament, regional politicians from Norrbotten and
its new Governor.
In its interactions in Sweden, the Company is ensuring that the
Kallak project stays front-of-mind, that key decision makers are
cognisant of the facts, the handling of the Company's application
by the Swedish authorities, and principally that the Company has
fully satisfied the Swedish legal requirements to be granted an
Exploitation Concession.
On 22 October 2018, the Company re-published, in Swedish, the
Copenhagen Economics study of Kallak's potential economic benefits
that was completed in September 2017. It can be found on the
Company's website:
https://beowulfmining.com/wp-content/uploads/2018/10/Copenhagen-Economics_Presentation_SEP17_Swedish.pdf
Post-Year end
Now that a new Government has been formed, the Company remains
positive that an Exploitation Concession for Kallak North will be
awarded, even more so given that the Mining Inspectorate
recommended to the Government that the Concession be awarded over
three years ago in October 2015.
On 1 April 2019, Göran Färm wrote to Mr. Ibrahim Baylan, the
Minister for Enterprise and Innovation. A copy of letter and an
English translation can be found on the Company's website:
https://polaris.brighterir.com/public/beowulf_mining_plc/news/rns/story/xq4on2w
Åtvidaberg nr 1 Exploration Licence
The exploration licence for Åtvidaberg nr 1 is in southern
Sweden, to the southern end of Bergslagen, one of Europe's oldest
mining areas. Bergslagen contains one of the world's main
volcanogenic massive sulphide ("VMS") districts with deposits
characterised by high contents of zinc, lead, copper, and sometimes
silver and gold, the majority of which are small deposits.
Bergslagen yielded a substantial portion of Sweden's mineral wealth
during the 1800s to 1900s, with several large mines and hundreds of
smaller mines producing copper, zinc, lead, gold, and silver.
Current operating mines in the area include Boliden's Garpenberg
and Lundin Mining's Zinkgruvan mines.
Bergslagen has seen little modern exploration, yet it hosts
Bersbo, one of Sweden's largest early copper mines, and Zinkgruvan,
Sweden's most important zinc mine. Other than at Zinkgruvan,
exploration activity in Bergslagen has predominantly focused on
finding new outcropping ore bodies, with some historic mining areas
not being explored since the 1900s.
Åtvidaberg represents early stage exploration, but offers real
potential for Beowulf, as signified by past discoveries and
historic mines.
FINLAND
Finnish Exploration Permits
Beowulf, via its wholly-owned subsidiary, Fennoscandian,
currently holds one exploration permit and has applied for a
further two exploration permits. The Company has relinquished
permits for Viistola 1, Kolari 1 and Haapamäki 1, and made
appropriate impairments.
Permit Name Permit ID Area (km(2) Valid from Valid
) until
--------------------------- ---------- ------------ ------------ -----------
Approved Exploration
Permits
Pitkäjärvi 2016:0040 10.00 07/12/2016 07/12/2020
1
Applied for Exploration
Permits
Rääpysjärvi 2017:0104 7.16 Applied for 08/08/2017
1
Joutsjärvi 1 2017:0122 5.79 Applied for 16/10/2017
Aitolampi/Pitkäjärvi - Graphite
Introduction
The Aitolampi and Pitkäjärvi graphite prospects were discovered
in 2016 and are eastern extensions to the Haapamäki prospect.
Aitolampi and Pitkäjärvi are areas of graphitic schists on a fold
limb, coincidental with an extensive electro-magnetic ("EM")
anomaly. Many of the EM zones are obscured by glacial till, but
graphite observations in road cuttings and outcrops are also
associated with abundant EM anomalies. Haapamäki is in eastern
Finland approximately 40km southwest of the well-established mining
town of Outokumpu.
2018 Summary
The Company made significant progress with Fennoscandian in
2018, specifically with its Aitolampi project, part of the
Company's 100 per cent owned Exploration Permit, Pitkäjärvi 1.
Metallurgical testwork has demonstrated the potential to produce
battery grade graphite products and further to completing a second
drilling campaign, the Company announced a Maiden Mineral Resource
Estimate ("MRE").
Drilling confirmed wide graphite lenses extending along strike,
at least 350m along the main conductive zone (EM anomaly extends
for 700m), and at depth.
For the two parallel higher-grade zones previously identified,
mineralisation has a strike length of at least 150m (the two
parallel conductive zones extend for 300m and 250m), and these
zones seem to merge to form one body of mineralisation.
Metallurgical Testwork/Market Assessment
Concentrates from the SGS testwork conducted in 2017 were sent
to ProGraphite Gmbh ("ProGraphite") based in Germany. ProGraphite
specialises in the processing and evaluation of graphite materials.
The results were as follows:
-- Alkaline purification produced 99.86 per cent Total Carbon
("C(t)") for +100-mesh concentrate and 99.82 per cent C(t) for
-100-mesh concentrate.
-- Results from acid purification were also promising and
reached 99.6 per cent C(t) for the +100-mesh and 99.41 per cent
C(t) for the -100-mesh concentrate.
-- The alkaline and acid purification results indicate that,
with some process optimisation, Aitolampi concentrates may meet the
purity specification of 99.95 per cent C(t) required for the
lithium ion battery market.
-- Aitolampi graphite shows high crystallinity, with the degree
of graphitisation measuring approximately 98 per cent, which is
almost perfect crystallinity, an important prerequisite for high
tech applications, such as lithium ion batteries.
-- Volatiles are low, which is an attractive product attribute
in many applications, including refractories, lubricants,
crucibles, and foundries.
-- Specific Surface Area ("SSA") is comparable to that of
high-quality flake graphite from China.
-- Oxidation behaviour is comparable with Chinese graphite of
the same flake size, used for refractories, and other high
temperature applications.
Highlights of the MRE are as follows:
-- A global Indicated and Inferred Mineral Resource (reported in
accordance with the JORC Code (2012 edition)) of 19.3 Mt at 4.5 per
cent Total Graphitic Carbon ("TGC") for 878,000 t of contained
graphite, reported from all material within the eastern and western
lenses which are interpreted above a nominal 3.0 per cent TGC
cut-off grade;
-- A higher-grade Western Zone with an Indicated and Inferred
Mineral Resource of 9.8 Mt at 5.0 per cent TGC for 490,000 t of
contained graphite;
-- An Eastern Zone with an Indicated and Inferred Mineral
Resource of 9.5 Mt at 4.1 per cent TGC for 388,000 t of contained
graphite;
-- Reporting above a 4.0 per cent TGC cut-off grade based on the
grade-tonnage curve for Aitolampi, gives an Indicated and Inferred
Mineral Resource of 12.8 Mt at 5.0 per cent TGC for 639,000 t;
and
-- The Mineral Resource was estimated by CSA Global PTY Ltd ("CSA Global") of Australia.
Other Developments
In April 2018, Beowulf signed a Graphite Collaboration Agreement
between Fennoscandian, and Åbo Akademi University ("Åbo"), located
in Turku, Finland and joined a Cooperation Network of existing and
new entrant raw materials suppliers to the emerging battery
manufacturing industry in Finland.
The Cooperation Network includes the cities of Vaasa and
Kokkola; Freeport Cobalt, the world's largest cobalt refinery and
producer of battery chemicals; Nornickel, the producer of
world-class nickel metals and nickel chemicals in Harjavalta;
Terrafame Group, the parent company of Terrafame, producing nickel,
zinc, cobalt and copper in Sotkamo; Keliber, which is preparing to
start lithium production in Kaustinen and Kokkola; as well as
Fennoscandian.
Also, Fennoscandian was granted Euros 161,000 by Business
Finland for a research project entitled "Green Minerals - Graphite,
Exploration to Products". The project runs from 1 January 2018 to
31 December 2019 and has a total budget of Euros 323,750. The
Company will contribute the balance of the funding.
Post-Year End
In March 2019, the Company announced that Fennoscandian is to
receive additional funding from Business Finland, 50 per cent
contribution to a budget of Euros 224,900, for graphite
purification and spheroidization testwork, and the further
assessment of Fennoscandian's graphite for battery applications.
Business Finland has been granted Euro 10 million funding for a
project titled "BATCircle - the development of a Finland-based
Circular Ecosystem of Battery Metals".
A new drilling campaign at Aitolampi also got underway,
targeting both higher-grade mineralisation and high-priority
geophysical anomalies.
The drill plan includes seven holes for an approximate total of
1,040m. Four holes, 620m of drilling, are planned to test potential
higher-grade mineralised zones to the south-east of drill hole
AITDD18018 (completed in 2018 and which intersected 92.5m at 6.19
per cent TGC. The three remaining holes will target high-priority
geophysical anomalies untested by previous drilling.
The drilling programme will also generate sample material to
support baseline environmental studies for Aitolampi, for graphite
purification and spheroidization testwork, and the further
assessment of Aitolampi graphite for battery applications as part
of the Business Finland funded BATCircle Project.
The Company's exploration team continues to evaluate each
prospect in the Company's portfolio, with the objective of
establishing a 'resource footprint' of graphite, that could support
the developing battery manufacturing sector in Finland and satisfy
the country's ambition to be self-sufficient in the production of
battery minerals.
KOSOVO
Vardar Minerals Limited
During the year, Beowulf announced an initial investment of 14
per cent in Vardar Minerals Limited ("Vardar"), a UK registered
private exploration company with interest in the Balkans, for the
consideration of GBP250,000, satisfied in cash. The Company's
investment enabled Vardar to complete its 2018 exploration
programme, including geological mapping, specifically hydrothermal
alteration, the presence of which is an indicator of possible
porphyry-related metal deposition, and reconnaissance rock chip and
geochemical soil sampling.
Overview
Based on the geological setting and analysis of historical
archive data, Vardar has previously identified the Mitrovica and
Viti projects as attractive. Both projects are located within 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. Mitrovica
and Viti occur within calc-alkaline magmatic arc(s) which developed
during the closure of the Neotethys Ocean, primarily targeting
epithermal gold, lead-zinc-silver replacement deposits and porphyry
related copper-gold mineralisation.
The lack of modern-day exploration in the Balkans presents a
real opportunity for new discoveries, such as the Kiseljak porphyry
copper deposit in the Lece magmatic complex in neighbouring Serbia,
459 Mt at 0.22 per cent copper, 0.2 grammes per tonne ("g/t") gold,
acquired by Dundee Precious Metals in February 2016.
Mitrovica
The Mitrovica project is situated in northern Kosovo, covers 55
square kilometres ("km(2) "), and lies immediately to the west and
northwest of the Stan Terg lead-zinc-silver mine which dates back
to the 1930's (34 Mt) at 3.45 per cent lead, 2.30 per cent zinc and
80 g/t silver).
The licence area exhibits lead, zinc, silver and copper
anomalies associated with iron stockworks and gossans, anomalous
gold and silver associated with advanced argillic alteration zones,
and alteration typical of epithermal gold systems. The project is
prospective for both high sulphidation gold mineralisation and
vein/replacement related base metal targets.
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.
Highlights
-- The Wolf Mountain lead-zinc target (Vllahi Zone) forms a
prominent outcropping gossan, with strike length of more than 4km
and width ranging from approximately 20m to greater than 300m. The
target is located approximately 4km from the Stan Terg mine,
highlighting the potential for significant lead-zinc
mineralisation;
-- All assays from the exposed gossan zone have returned
anomalous metal contents averaging 0.71 per cent zinc and 0.73 per
cent lead;
-- Channel samples show continuity of mineralisation and zones
of intense silicification and hydrothermal breccias;
-- Highest combined lead-zinc assays from channel sampling
returned 2.8 per cent over 26m. Other samples returned lead-zinc
assays of 2.34 per cent over 27m, 1.4 per cent over 11m and 0.6 per
cent over 22m;
-- Elevated silver content averaging 6.0 g/t across the
mineralised zone, with individual samples returning up to 93 g/t;
and
-- Elevated nickel content averaging of 0.15 per cent across the mineralised zone.
Discovery of potential porphyry-epithermal related
mineralisation in the southern part of the Mitrovica licence
including:
-- A large hydrothermal breccia associated with trachyte sills
with significant metal anomalies, including consistent zinc values
in excess of 1.0 per cent, along with elevated gold of 1.25 g/t and
silver of 57 g/t;
-- Copper mineralisation, up to 3500 ppm, associated with altered trachyte dykes; and
-- Significant gold recoveries from advanced argillic samples
(up to 7.0 g/t) on Majdan peak in the south-eastern portion of the
licence area.
Wolf Mountain
The Wolf Mountain target forms a prominent outcropping feature,
with strike length of more than 4km and width ranging from almost
20m to greater than 300m. It represents a hydrothermal breccia zone
with stockworks, which outcrop as a gossan, with iron-manganese
oxides and hydroxides. The peripheral parts of the zone are
characterised by intense silicification corresponding to fold
structures which control the development of the hydrothermal
breccia.
The mineralisation is structurally controlled, and for most of
the target mineralisation is developed in the basement, broadly
following a tectonic contact between ultramafic rocks and phyllite,
with the bulk of mineralisation developed within the ultramafic
units. Mineralisation is likely vein/replacement-type related to
Oligocene magmatic activity responsible for the hydrothermal
systems mapped in the southern portion of the licence area.
202 samples have been analysed over the extent of the area,
including 118 composite channel samples, and rock grab samples that
were cut along traverses perpendicular to the strike of the
outcropping gossan. All samples were analysed using 48 element
ICP-MS with gold fire assay ICP-AES at ALS Global ("ALS") in Serbia
and Ireland.
Mitrovica South
Detailed alteration mapping and sampling have been carried out
across the southern half of the licence area. Of interest is a
sub-volcanic sill like body of trachytic composition associated
with a hydrothermal breccia zone and with abundant iron oxides.
Several samples collected from the breccia zone returned
significant metal anomalies including consistent zinc values in
excess of 1.0 per cent, along with gold (1.25 g/t) and silver (57
g/t) anomalies.
One kilometre south of the above target, interpretation of
magnetic airborne geophysical data has led to the identification of
a prominent circular magnetic anomaly with magnetised and
demagnetised concentric rings, displaying a typical signature of
porphyry targets. Geological mapping in this area has identified
hydrothermal breccias which have returned significant copper assays
in grab samples (0.21 per cent and 0.35 per cent). The presence of
the magnetic anomaly and associated copper mineralisation is of
interest as it may suggest the potential for porphyry style
mineralisation at a deeper structural level in basement rocks.
Higher up in the system, at Madjan Hill, also in the southern
part of the licence area, several historic gold workings/pits have
been discovered, thought to be of Saxon or Roman age. Rock chip
sampling on the slopes of the hill, in an area of advanced argillic
alteration, has returned significant gold anomalies of up to 7.0
g/t, suggesting potential for epithermal gold mineralisation.
Viti
The Viti project is situated in south-eastern Kosovo and is made
up of three adjacent licences covering 213 km(2) . The licences
cover an interpreted circular intrusive from 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. In addition, Viti is prospective for lithium-boron
mineralisation, with a geological setting like Rio Tinto's Jadar
deposit in Serbia.
In the south-east of the project area, reconnaissance mapping
identified several zones of intense argillic alteration,
hydrothermal breccias and iron oxide stockworks. The interpretation
of regional magnetic data suggests that alteration is located on
the margin of a large caldera structure, which supports the case
for porphyry mineralisation. Recent geological mapping has
identified prominent silicified gossans, breccias and iron oxide
stockworks with intense argillic alteration, often associated with
trachyte dykes.
The target area includes a gossanous zone, approximately 300m by
200m, surrounded by a zone of intense argillic alteration,
approximately 1.5km in diameter. Sampling over the gossan has
returned encouraging results, with anomalous copper (0.99 per cent)
and gold (0.16 g/t), along with elevated molybdenum and zinc,
potentially related to the deeper part of an uplifted porphyry
system with associated phyllic alteration.
Post-Year End
In April 2019, Beowulf announced a follow-on investment in
Vardar of GBP750,000, increasing Beowulf's stake in the company
from 14.1 per cent to 37.55 per cent. The investment will fund
Vardar's 2019 Kosovan exploration programme, diamond drilling,
geophysical surveys and other activities, at the Mitrovica project,
targeting lead-zinc-silver, copper and gold mineralisation, and at
the Viti project, targeting copper-gold, lithium-boron
mineralisation.
CONSOLIDATED INCOME STATEMENT
FOR THE YEARED 31 DECEMBER 2018
2018 2017
Note GBP GBP
CONTINUING OPERATIONS
Administrative expenses (794,851) (861,669)
Impairment of exploration costs (571,456) (183,131)
Share of loss in associates (19,880) -
OPERATING LOSS (1,386,187) (1,044,800)
Finance income 11,603 5,234
LOSS BEFORE INCOME TAX (1,374,584) (1,039,566)
Income tax expense - -
LOSS FOR THE YEAR (1,374,584) (1,039,566)
Loss attributable to:
Owners of the parent (1,373,936) (1,038,248)
Non-controlling interests (648) (1,318)
(1,374,584) (1,039,566)
============ ============
Loss per share attributable to the
ordinary equity holder of the parent:
Basic and diluted (pence) 2 (0.25) (0.20)
============ ============
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2018
2018 2017
Note GBP GBP
LOSS FOR THE YEAR (1,374,584) (1,039,566)
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently
to profit or loss:
Exchange losses arising on translation
of foreign operations (123,265) 67,862
(123,265) 67,862
TOTAL COMPREHENSIVE LOSS (1,497,849) (971,704)
============ ============
Total comprehensive loss attributable
to:
Owners of the parent (1,497,133) (970,426)
Non-controlling interests (716) (1,278)
(1,497,849) (971,704)
============ ============
COnsolidated STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2018
Note 2018 2017
GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible assets 3 8,285,547 8,191,232
Property, plant and equipment 16,083 28,580
Investment in associate 230,120 -
Loans and other financial assets 5,462 5,530
8,537,212 8,225,342
------------- -------------
CURRENT ASSETS
Trade and other receivables 62,956 65,032
Cash and cash equivalents 1,533,232 1,589,897
1,596,188 1,654,929
------------- -------------
TOTAL ASSETS 10,133,400 9,880,271
============= =============
EQUITY
SHAREHOLDERS' EQUITY
Share capital 5,663,072 5,342,072
Share premium 19,266,271 18,141,271
Capital contribution reserve 46,451 46,451
Share based payment reserve 612,465 575,078
Merger reserve 137,700 137,700
Translation reserve (520,257) (397,060)
Accumulated losses (15,311,933) (14,079,747)
9,893,769 9,765,765
Non-controlling interests (160,587) (159,871)
TOTAL EQUITY 9,733,182 9,605,894
------------- -------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 208,013 274,377
Deferred income 192,205 -
TOTAL LIABILITIES 400,218 274,377
------------- -------------
TOTAL EQUITY AND LIABILITIES 10,133,400 9,880,271
============= =============
The financial statements were approved and authorised for issue
by the Board of Directors on 30 May 2019 and were signed on its
behalf by:
Mr K Budge - Director
Company Number 02330496
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2018
Share Share Revaluation Merger Capital
capital premium reserve reserve contribution
reserve
GBP GBP GBP GBP GBP
At 1 January 2017 5,026,302 16,879,241 25,664 137,700 46,451
---------- ----------- ------------ --------- --------------
Loss for the year - - - - -
Reclassification - - - - -
of revaluation reserve
Foreign exchange - - - - -
translation
Total comprehensive - - - - -
income
---------- ----------- ------------ --------- --------------
Transactions with
owners
Issue of share capital 315,770 1,337,030 - - -
Cost of issue - (75,000) - - -
Equity settled share-based - - - - -
transactions
Issues of shares - - - - -
Transfer to accumulated - - (25,664) - -
losses
---------- ----------- ------------ --------- --------------
At 31 December 2017 5,342,072 18,141,271 - 137,700 46,451
========== =========== ============ ========= ==============
Loss for the year - - - - -
Foreign exchange - - - - -
translation
Total comprehensive - - - - -
income
---------- ----------- ------------ --------- --------------
Transactions with
owners
Issue of share capital 300,000 1,200,000 - - -
Cost of issue - (75,000) - - -
Equity settled share-based - - - - -
transactions
Issues of shares 21,000 - - - -
At 31 December 2018 5,663,072 19,266,271 - 137,700 46,451
========== =========== ============ ========= ==============
Share Translation Accumulated Totals Non - Totals
based reserve losses controlling
payments interest
reserve
GBP GBP GBP GBP GBP GBP
At 1 January 2017 237,803 (464,882) (13,067,163) 8,821,116 (158,593) 8,662,523
Loss for the year - - (1,038,248) (1,038,248) (1,318) (1,039,566)
Foreign exchange
translation - 67,822 - 67,822 40 67,862
Total comprehensive
income - 67,822 (1,038,248) (970,426) (1,278) (971,704)
Transactions with
owners
Issue of share
capital - - - 1,652,800 - 1,652,800
Cost of issue - - - (75,000) - (75,000)
Equity settled
share-based
transactions 203,059 - - 203,059 - 203,059
Issue of shares 134,216 - - 134,216 - 134,216
Transfer to - - 25,664 - - -
accumulated
losses
-------------
At 31 December
2017 575,078 (397,060) (14,079,747) 9,765,765 (159,871) 9,605,894
========== ============ ============= ============ ============ ============
Loss for the year - - (1,373,936) (1,373,936) (648) (1,374,584)
Foreign exchange
translation - (123,197) - (123,197) (68) (123,265)
Total comprehensive
income - (123,197) (1,373,936) (1,497,133) (716) (1,497,849)
---------- ------------ ------------- ------------ ------------ ------------
Transactions with
owners
Issue of share
capital - - - 1,500,000 - 1,500,000
Cost of issue - - - (75,000) - (75,000)
Equity settled
share-based
transactions 196,460 - - 196,460 - 196,460
Acquisition of
subsidiary (159,073) - 141,750 3,677 - 3,677
At 31 December
2018 612,465 (520,257) (15,311,933) 9,893,769 (160,587) 9,733,182
========== ============ ============= ============ ============ ============
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2018
2018 2017
Note GBP GBP
Cash flows from operating activities
Loss before income tax (1,374,584) (1,039,566)
Depreciation charges 14,696 15,890
Equity-settled share-based transactions 196,460 203,059
Impairment of exploration costs 571,456 183,131
Finance income (11,603) (5,234)
Share of loss in associate 19,880 -
(583,695) (642,720)
Decrease/(increase) in trade and
other receivables 2,603 (12,760)
(Increase)/decrease in trade and
other payables (72,740) 15,673
Net cash used in operating activities (653,832) (639,807)
------------ ------------
Cash flows from investing activities
Purchase of intangible assets 3 (778,495) (943,599)
Purchase of property, plant and equipment (2,515) (20,367)
Sale of investments 13 14
Acquisition of associate (250,000) -
Grant receipt 192,205 -
Interest received 11,603 5,234
Net cash used in investing activities (827,189) (958,718)
------------ ------------
Cash flows from financing activities
Proceeds from issue of shares 1,500,000 1,652,800
Payment of share issue costs (75,000) (75,000)
Net cash from financing activities 1,425,000 1,577,800
------------ ------------
Decrease in cash and cash equivalents (56,021) (20,725)
Cash and cash equivalents at beginning
of year 1,589,897 1,609,219
Effect of foreign exchange rate changes (644) 1,403
Cash and cash equivalents at end
of year 1,533,232 1,589,897
------------ ------------
1. ACCOUNTING POLICIES
Nature of operations
Beowulf Mining plc (the "Company") is domiciled in England. The
Company's registered office is 201 Temple Chambers, 3-7 Temple
Avenue, London, EC4Y 0DT. These consolidated financial statements
comprise the Company and its subsidiaries (collectively the 'Group'
and individually 'Group companies'). The Group is engaged in the
acquisition, exploration and evaluation of natural resources assets
and has not yet generated revenues.
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below:
Going concern
At 31 December 2018, the Group had a cash balance of GBP1.53
million and the Company had a cash balance of GBP1.47 million
Subsequent to year end, the Company has raised GBP1.25 million
(before expenses) cumulatively through two successful
subscriptions.
Management have prepared cash flow forecasts which indicate that
although there is no immediate funding requirement, the Group will
need to raise further funds in the next twelve months for corporate
overheads and to advance its projects.
The Directors are confident they are taking all necessary steps
to ensure that the required finance is available, and they have
successfully raised equity finance subsequent to year end. They
have therefore concluded that it is appropriate to prepare the
financial statements on a going concern basis. However, while they
are confident of being able to raise the new funds as they are
required, there are currently no agreements in place, and there can
be no certainty that they will be successful in raising the
required funds within the appropriate timeframe.
These conditions indicate the existence of a material
uncertainty which may cast significant doubt over the Group's and
the Company's ability to continue as a going concern and that it
may be unable to realise its assets and discharge its liabilities
in the normal course of business. The financial statements do not
include any adjustments that would result if the Group and Company
were unable to continue as a going concern.
Basis of preparation
The consolidated financial statements have been prepared in
accordance with applicable International Financial Reporting
Standards as adopted by the European Union ("IFRS") and with those
parts of the UK Companies Act 2006 applicable to companies
reporting under IFRS as adopted by the European Union. The
financial statements are presented in GB Pounds Sterling. They are
prepared on the historical cost basis or the fair value basis where
the fair valuing of relevant assets and liabilities has been
applied.
New and amended standards, and interpretations issued and
effective for the financial year beginning 1 January 2018
IFRS 15 Revenue from Contracts with Customers (effective in
accounting periods beginning 1 January 2018) is intended to clarify
the principles of revenue recognition and establish a single
framework for revenue recognition. The Company has reviewed this
standard and consider this to have no material impact on the
financial statements.
New and amended standards, and interpretations issued and
effective for the financial year beginning 1 January 2018
(continued)
IFRS 9 replaces all phases of the financial instruments project
and IAS 39 'Financial Instruments: Recognition and Measurement'.
The standard is effective from periods beginning on or after
January 2018 and introduces new requirements for the classification
and measurement of financial assets and financial liabilities; and
a new model for recognising provisions based on expected credit
losses ("ECLs"). The impact of IFRS 9 has been assessed at a Group
level, and there is no material impact on the consolidated results
of the Group, as assets other than cash are immaterial and the ECL
impairment is minimal.
The adoption of IFRS 9 has impacted the Parent company. This is
a result of the existing incurred loss approach under IAS 39 being
replaced by the forward-looking ECL model approach of IFRS 9. The
ECL model is required to be applied to the intercompany loan
receivable which is classified as held at amortised cost.
The Company has opted to transition method requires a
retrospective application for the first time adoption of IFRS 9,
however the standard allows the Company a policy choice to not
restate the comparative information with differences being recorded
in opening retained earnings, these changes have been processed at
the date of initial application (i.e. 1 January 2018), and
presented in the statement of changes in equity as at 31 December
2018.
New and amended standards, and interpretations issued but not
yet effective for the financial year beginning on or after 1
January 2018 and not early adopted
The standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the financial statements
are listed below. The Group intends to adopt these standards, if
applicable, when they become effective. Unless stated below, there
are no IFRSs or IFRIC interpretations that are not yet effective
that would be expected to have a material impact on the Group.
Standard Effective Date
IFRS 16 Leases 01-Jan-19
The impact of adopting IFRS 16 is not expected to have a
material effect on the Group at this stage of the Group's
operations.
Amendments to Existing Standards Effective Date
Annual Improvements to IFRS's 01-Jan-19
Amendments to References to the conceptual framework in IFRS standards 01-Jan-20
Definition of Material - Amendments to IAS 1 and IAS 8 01-Jan-20
Significant accounting judgements, estimates and assumptions
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that affect the
amounts reported for income and expenses during the year and the
amounts reported for assets and liabilities at the balance sheet
date. However, the nature of estimation means that the actual
outcomes could differ from those estimates.
The principal source of risk and judgement is that the
exploitation concession for Kallak North will not be awarded. The
board has considered the impairment indicators as outlined in the
Company's accounting policies and having done so is of the opinion
that the current situation does not qualify as an impairment
indicator and therefore no impairment provision is required for
this permit (see note 3).
The other key areas of judgement and sources of estimation
uncertainty that have a significant risk of causing material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are the assessment of any impairment of
intangible assets and the estimation of share-based payment
costs.
(i) The Group determines whether there are any indicators of
impairment of intangible assets on an annual basis (see note
3);
The Parent Company in applying the ECL model under IFRS 9 must
make assumptions when implementing the forward-looking ECL model.
This model is required to be used to assess the intercompany loans
receivable from subsidiaries for impairment.
Estimations were made regarding the credit risk of the
counterparty and the underlying probability of default in each of
the credit loss scenarios. The scenarios identified by management
included Production, Divestment, Fire-sale and Failure. These
scenarios considered technical data, necessary licences to be
awarded, the Company's ability to raise finance, and ability to
sell the project.
Basis of consolidation
(i) Subsidiaries and acquisitions
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 December each year. Control is
recognised where an investor is exposed, or has rights, to variable
returns from its investment with the investee, and has the ability
to affect these returns through its power over the investee.
On acquisition, the assets, liabilities and contingent
liabilities of a subsidiary are measured at their fair value at the
date of acquisition. Any excess of the cost of the acquisition over
the fair values of the identifiable net assets acquired is
recognised as goodwill. If the cost of the acquisition is less than
the fair value of net assets of the subsidiary acquired, the
difference is recognised directly in profit or loss.
The results of subsidiaries acquired or disposed of during the
year are included in the statement of comprehensive income from the
effective date of acquisition, or up to the effective date of
disposal, as appropriate.
(i) Subsidiaries and acquisitions
Non-controlling interests in subsidiaries are presented
separately from the equity attributable to equity owners of the
parent Company. When changes in ownership in a subsidiary do not
result in a loss of control, the non-controlling shareholders'
interests are initially measured at the non-controlling interests'
proportionate share of the subsidiaries net assets. Subsequent to
this, the carrying amount of non-controlling interests is the
amount of those interests at initial recognition plus the
non-controlling interests' share of subsequent changes in equity.
Total comprehensive income is attributed to non-controlling
interests even if this results in the non-controlling interests
having a deficit balance
(ii) Equity accounted investees
Associates
Associates are entities over which the Group has significant
influence but not control, generally accompanying a shareholding of
between 20% and 50% of the voting rights. Significant influence is
the power to participate in the financial and operating policy
decisions of the investee but not the ability to control or jointly
control those policies. Investments in Associates are accounted for
using the equity method of accounting.
Equity method of accounting - Associates
Under the equity method of accounting, interests in Associates
are initially recognised at cost. The Group's share of Associates
post acquisition profits or losses after tax are recognised in the
'Share of results of Equity accounted investees' in the Group
income statement. The Group's share of Associates post acquisition
movement in reserves is recognised in other comprehensive income.
The cumulative post-acquisition movements are adjusted against the
carrying amount of the investment less any impairment in value.
Where indicators of impairment arise, the carrying amount of the
Associate is tested for impairment by comparing its recoverable
amount against its carrying value. Unrealised gains arising from
transactions with Associates are eliminated to the extent of the
Group's interest in the entity. Unrealised losses are similarly
eliminated to the extent that they do not provide evidence of
impairment of a transferred asset. When the Group's share of losses
in an Associate equal or exceeds its interest in the Associate, the
Group does not recognise further losses unless the Group has
incurred obligations or made payments on behalf of the or
Associate. When the Group ceases to have or significant influence,
any retained interest in the entity is re-measured to its fair
value at the date when or significant influence is lost with the
change in carrying amount recognised in the income statement. The
Group also reclassifies any movements previously recognised in
other comprehensive income to the income statement.
(iii) Transactions eliminated on consolidation
Intra-Group balances and any unrealised gains and losses or
income and expenses arising from intra-Group transactions are
eliminated in preparing the consolidated financial statements.
Intangible assets - deferred exploration costs
All costs incurred prior to the application for the legal right
to undertake exploration and evaluation activities on a project are
expensed as incurred. Each asset is evaluated annually at 31
December, to determine whether there are any indications that
impairment exists.
Exploration and evaluation costs arising following the
application for the legal right, are capitalised on a
project-by-project basis, pending determination of the technical
feasibility and commercial viability of the project. Costs incurred
include appropriate employee costs and costs pertaining to
technical and administrative overheads.
Exploration and evaluation activity includes:
-- researching and analysing historical exploration data;
-- gathering exploration data through topographical, geochemical and geophysical studies;
-- exploratory drilling, trenching and sampling;
-- determining and examining the volume and grade of the resource;
-- surveying transportation and infrastructure requirements; and
-- conducting market and finance studies.
Administration costs that are not directly attributable to a
specific exploration area are expensed as incurred.
Deferred exploration costs are carried at historical cost less
any impairment losses recognised. When a project is deemed to no
longer have commercially viable prospects to the Group, deferred
exploration costs in respect of that project are deemed to be
impaired and written off to the statement of comprehensive income.
Deferred exploration costs will be depreciated if the asset becomes
productive.
Impairment
Whenever events or changes in circumstance indicate that the
carrying amount of an asset may not be recoverable an asset is
reviewed for impairment. An asset's carrying value is written down
to its estimated recoverable amount (being the higher of the fair
value less costs to sell and value in use) if that is less than the
asset's carrying amount.
Impairment reviews for deferred exploration and evaluation
expenditure are carried out on a project by project basis, with
each project representing a potential single cash generating unit.
An impairment review is undertaken when indicators of impairment
arise such as:
(i) unexpected geological occurrences that render the resource uneconomic;
(ii) title to the asset is compromised;
(iii) variations in mineral prices that render the project uneconomic;
(iv) substantive expenditure on further exploration and
evaluation of mineral resources is neither budgeted nor planned;
and
(v) the period for which the Group has the right to explore has
expired and is not expected to be renewed.
Property, plant and equipment
Items of property, plant and equipment are stated at historical
cost less accumulated depreciation.
Depreciation is provided at the following annual rates in order
to write off each asset over its estimated useful life.
Plant and machinery - 25 per cent on reducing balance
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each balance sheet date.
Investments in subsidiaries
Fixed asset investments in subsidiary undertakings are stated at
cost less provision for any impairment in value.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at
call with banks, and other short term highly liquid investments
with original maturities of three months or less.
Financial assets
The Group classifies all of its financial assets at amortised
cost. Management determines the classification of its financial
assets at initial recognition.
Amortised cost
The Group's financial assets held at amortised cost comprise
trade and other receivables and cash and cash equivalents in the
consolidated statement of financial position.
These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They
arise principally through the provision of goods and services to
customers (e.g. trade receivables), but also incorporate other
types of financial assets where the objective is to hold their
assets in order to collect contractual cash flows and the
contractual cash flows are solely payments of the principal and
interest. They are initially recognised at fair value plus
transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost
using the effective interest rate method, less provision for
impairment.
Impairment provisions for trade receivables are recognised based
on the simplified approach within IFRS 9 using the lifetime ECLs.
During this process the probability of the non-payment of the trade
receivables is assessed. This probability is then multiplied by the
amount of the expected loss arising from default to determine the
lifetime ECL for the trade receivables. For trade receivables,
which are reported net; such provisions are recorded in a separate
provision account with the loss being recognised within
administrative expenses in the consolidated statement of
comprehensive income. On confirmation that the trade receivable
will not be collectable, the gross carrying value of the asset is
written off against the associated provision.
Impairment provisions for other receivables are recognised based
a forward looking expected credit loss model. The methodology used
to determine the amount of the provision is based on whether there
has been a significant increase in credit risk since initial
recognition of the financial asset. For those where the credit risk
has not increased significantly since initial recognition of the
financial asset, twelve month expected credit losses along with
gross interest income are recognised. For those for which credit
risk has increased significantly, lifetime expected credit losses
along with the gross interest income are recognised. For those that
are determined to be credit impaired, lifetime expected credit
losses along with interest income on a net basis are recognised
Financial liabilities
The Group classifies its financial liabilities in the category
of financial liabilities at amortised cost. All financial
liabilities are recognised in the statement of financial position
when the Group becomes a party to the contractual provision of the
instrument.
Financial liabilities measured at amortised cost include:
- Trade payables and other short-dated monetary liabilities,
which are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest rate
method.
- Bank and other borrowings are initially recognised at fair
value net of any transaction costs directly attributable to the
issue of the instrument. Such interest-bearing liabilities are
subsequently measured at amortised cost using the effective
interest rate method, which ensures that any interest expense over
the period to repayment is at a constant rate on the balance of the
liability carried in the consolidated statement of financial
position. For the purposes of each financial liability, interest
expense includes initial transaction costs and any premium payable
on redemption, as well as any interest or coupon payable while the
liability is outstanding.
Unless otherwise indicated, the carrying values of the Group's
financial liabilities measured at amortised cost represents a
reasonable approximation of their fair values.
Equity instruments
Equity instruments issued by the Company are recorded at the
proceeds received, net of direct issue costs. Where equity
instruments are issued as part of an acquisition they are recorded
at their fair value on the date of acquisition.
Taxation
Current tax, including UK corporation tax and foreign tax, is
provided at amounts expected to be paid (or recovered) using the
tax rates and laws that have been enacted or substantively enacted
by the balance sheet date.
Deferred tax is recognised, using the liability method, in
respect of temporary differences between the carrying amount of the
Group's assets and liabilities and their tax base.
Deferred tax assets and deferred tax liabilities are offset, if
a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to
the same taxable entity and the same taxation authority. Any
remaining deferred tax asset is recognised only when, on the basis
of all available evidence, it can be regarded as probable that
there will be suitable taxable profits, within the same
jurisdiction, in the foreseeable future against which the
deductible temporary difference can be utilised.
Deferred tax is determined using tax rates that are expected to
apply in the periods in which the asset is realised or liability
settled, based on tax rates and laws that have been enacted or
substantially enacted by the balance sheet date.
Current and deferred tax is recognised in the profit or loss,
except when the tax relates to items charged or credited directly
in equity, in which case the tax is also recognised directly in
equity.
Foreign currencies
The individual financial statements of each Group entity are
presented in the currency of the primary economic environment in
which the entity operates (its functional currency). For the
purpose of the consolidated financial statements, the results and
financial position of each entity are expressed in GB Pounds
Sterling which is the presentation currency for the Group and
Company financial statements. The functional currency of the
Company is the GB Pounds Sterling.
In preparing the financial statements of the individual
entities, transactions in currencies other than the entity's
functional currency (foreign currencies) are recorded at the rates
of exchange prevailing on the dates of the transactions. At each
balance sheet date, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at the balance
sheet date.
Exchange differences arising on the settlement of monetary items
and on the retranslation of monetary items are included in the
statement of comprehensive income for the period.
For the purpose of presenting consolidated financial statements,
the assets and liabilities of the Group's foreign operations are
expressed in GB Pounds Sterling using exchange rates prevailing at
the balance sheet date. Income and expense items are translated at
the average exchange rates for the period. Exchange differences
arising, if any, are classified as other comprehensive income and
are transferred to the Group's translation reserve.
Foreign currency movements arising from the Group's net
investment, which comprises equity and long-term debt, in
subsidiary companies whose functional currency is not the GB Pounds
Sterling are recognised in the translation reserve, included within
equity until such time as the relevant subsidiary company is sold,
whereupon the net cumulative foreign exchange difference relating
to the disposal is transferred to profit and loss.
Share-based payment transactions
Where equity settled share options are awarded to employees, the
fair value of the options at the date of grant is charged to the
income statement over the vesting period. Non-market vesting
conditions are taken into account by adjusting the number of equity
instruments expected to vest at each balance sheet date so that,
ultimately, the cumulative amount recognised over the vesting
period is based on the number of options that eventually vest.
Market vesting conditions are factored into the fair value of all
options granted. As long as all other vesting conditions are
satisfied, a charge is made irrespective of whether market vesting
conditions are satisfied. The cumulative expense is not adjusted
for failure to achieve a market vesting condition.
Where terms and conditions of options are modified before they
vest, the increase in the fair value of the options, measured
immediately before and after the modification, is also charged to
the income statement over the remaining vesting period.
Where equity instruments are granted to persons other than
employees, the income statement or share premium account, if
appropriate, are charged with the fair value of goods and services
received.
Government grant
Government grants received on capital expenditure are generally
deducted in arriving at the carrying amount of the asset purchased.
Grants for revenue expenditure are netted against the cost incurred
by the Group. Where retention of a government grant is dependent on
the Group satisfying certain criteria, it is initially recognised
as deferred income. When the criteria for retention have been
satisfied, the deferred income balance is released to the
consolidated statement of comprehensive income or netted against
the asset purchased.
2. BASIC AND DILUTED LOSS PER SHARE
The calculation of basic and diluted loss per share at 31
December 2018 was based on the loss attributable to ordinary
shareholders of GBP1,373,936 (2017: GBP1,038,248) and a weighted
average number of Ordinary Shares outstanding during the period
ended 31 December 2018 of 554,716,045 (2017: 518,728,856)
calculated as follows:
2018 2017
GBP GBP
Loss attributable to ordinary shareholders (1,373,936) (1,038,248)
________ ________
Weighted average number of ordinary shares
Number Number
Number of shares in issue at the beginning
of the year 534,207,254 502,630,331
Effect of shares issued during year 20,508,791 16,098,525
Weighted average number of ordinary
shares in issue __________ __________
for the year 554,716,045 518,728,856
__________ __________
The diluted earnings per share is identical to the basic
earnings per share as the exercise of
warrants and options would be anti-dilutive.
3. INTANGIBLE ASSETS
Exploration
Costs
GBP
COST
At 1 January 2017 7,186,576
Additions for the year 1,077,815
Foreign exchange movements 109,972
Impairment (183,131)
________
At 31 December 2017 8,191,232
________
At 1 January 2018 8,191,232
Additions for the year 782,437
Foreign exchange movements (116,666)
Impairment (571,456)
________
At 31 December 2018 8,285,547
________
NET BOOK VALUE
At 31 December 2018 8,285,547
________
At 31 December 2017 8,191,232
________
The net book value of exploration costs is comprised of
expenditure on the following projects:
2018 2017
GBP GBP
Kallak 7,079,806 6,979,844
Åtvidaberg 303,565 253,778
Ågåsjiegge 17,121 7,365
Sala 8,444 2,634
Haapamäki - 231,132
Kolari1 - 151,706
Viistola - 147,784
Pitkäjärvi 817,986 414,372
Joutsijärvi 25,002 2,617
Karhunmaki 13,685 -
Rääpysjärvi 19,938 -
________ ________
8,285,547 8,191,232
________ ________
Total Group exploration costs of GBP8,285,547 are currently
carried at cost in the financial statements. The Group will need to
raise funds and/or bring in joint venture partners to further
advance exploration and development work. An amount of GBP139,594
was recorded against the projects for services provided by the
Directors during the year (2017: GBP156,862).
Accounting estimates and judgements are continually evaluated
and are based on a number of factors, including expectations of
future events that are believed to be reasonable under the
circumstances.
In accordance with its accounting policies and processes, each
asset is evaluated annually at 31 December, to determine whether
there are any indications impairment exist, the Board considers the
indications as outlined in IFRS 6.
On 30 November 2017, the County Administrative Board ("CAB") for
the County of Norbotten made the decision to not recommend that an
Exploitation Concession for Kallak North be awarded . It should be
noted that the CAB does not have the final decision, that rests
with the Government. The CAB's decision included information not
based on fact, flawed analysis, and biased conclusions that
contradicted its previous representations provided in July 2015.
The key biases include:
-- Operating outside their mandate with respect to assessing
transport matters at this stage of permitting and suggesting the
need for State investment should Kallak be built. The Company has
never stated that State support would be needed. The CAB ignored
infrastructure projects that are already under consideration e.g.
Inlandsbanan Railway, the Ore Railway and the Port of Luleå, all of
which will bring additional capacity to regional infrastructure,
which could be utilised by Kallak.
-- Disregarding Kallak's designation as an Area of National
Interest (ANI") awarded by the SGU in February 2013.
-- Disregarding the strong economic case for Kallak that the CAB
presented in July 2015, that a mine would have local, regional and
national benefits.
The Directors considered that the CAB's November 2017 statement
was not an impairment indicator, as the comments and findings of
the CAB represent a recommendation to Government that should have
limited to no persuasive impact due to the inaccuracies, flawed
analysis and biased conclusions the CAB has presented. At the date
of approval of the financial statements the Government's
consideration of the application was ongoing.
The most significant risk is that an Exploitation Concession is
declined for Kallak North. The Directors have considered the
impairment indicators as outlined in the Company's accounting
policies and having done so are of the opinion that the current
situation does not qualify as an impairment indicator and hence no
impairment provision is required for the Kallak permitting
situation. In addition, no other impairment indicators per IFRS 6
have been identified.
Kallak is included in financial statements as at 31 December
2018 as an intangible exploration licence with a carrying value of
GBP7,079,806. Management are required to consider whether there are
events or changes in circumstances that indicate that the carrying
value of this asset may not be recoverable. Management have
considered the status of the application for the Exploitation
Concession and in their judgement, they believe it is appropriate
to be optimistic about the chances of being awarded the
Exploitation Concession and thus have not impaired the project.
In the year an impairment provision of GBP571,456 (2017:
GBP183,131) was made against costs incurred on Haapamäki (2018:
GBP249,646), Kolari 1 (2018: GBP158,727) and Viistola (2018:
GBP163,083) on the basis that no further exploration would be
carried out on those projects. In respect of the other license
areas, no impairment indicators have been identified. The
impairment is charged as an expense and included within the
consolidated income statement.
4. EVENTS AFTER THE REPORTING DATE
On 14 January 2019, Beowulf granted 9,250,000 options to the
directors and employees of the Company. The exercise price of the
options are 7.35 pence per share, with a vesting period of one
year. The options are valid for five years from the date of
grant.
On the 1 April 2019, the Company announced a subscription to
issue 13,636,364 new ordinary shares to raise approximately
GBP750,000 (before expenses) at a price of 5.5 pence per new
ordinary share. The funds were used to increase the investment in
Vardar Minerals Ltd by exercising the option to acquire additional
shares in the company, increasing its share in Vardar from 14.1 per
cent to 31.3 per cent for cash consideration of GBP500,000. On the
15 April 2019, a further investment was committed to increase the
Company's holding 31.3 per cent to 37.55 per cent for cash
consideration of GBP250,000. The Company has an option to invest a
further GBP115k, bringing the Company's ownership to 40.1 per
cent.
On 16 April 2019, Beowulf announced a subscription of 8,695,652
new ordinary shares of GBP0.01 each at 5.75p per share to raise
GBP500,000 before expenses.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR BFLFXKEFXBBZ
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May 31, 2019 06:38 ET (10:38 GMT)
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