The information contained within
this announcement is deemed to constitute inside information as
stipulated under the Market Abuse Regulation (EU) No. 596/2014, as
incorporated into UK law by the European Union (Withdrawal) Act
2018. Upon the publication of this announcement, this inside
information is now considered to be in the public
domain.
29 February 2024
Beowulf
Mining plc
("Beowulf" or the "Company")
Unaudited
Preliminary Financial Results for the year ended 31 December
2023
Beowulf (AIM: BEM; Spotlight: BEO),
the mineral exploration and development company, announces its
unaudited preliminary financial results for the year ended 31
December 2023 (the "Period").
Activities in the Period
Sweden
· Following the announcement of the Scoping Study for Kallak
North, part of the Kallak Iron Ore Project ("Kallak"), in January
2023, the Company, through its 100 per cent owned subsidiary
Jokkmokk Iron Mines AB ("Jokkmokk Iron"), continued to engage with
key stakeholders and advance numerous work streams. A strategic
review for the project, focused on optimising the development and
ultimate value of the asset, was advanced during the
Period.
· Environmental baseline studies progressed in preparation for
the completion of the Environmental Impact Assessment ("EIA").
These studies included monitoring and assessment of nature values,
sound and vibration, hydrology, and cultural heritage.
· The
Pre-feasibility Study ("PFS") for Kallak was initiated with the
appointment of SLR Consultant Limited ("SLR") as lead consultant in
October 2023. In addition, samples were selected for metallurgical
test work and the preliminary roadmap for the next phase of the
project's development was defined.
· A
formal recruitment process was initiated for a
high-calibre individual to lead the further development of the
project.
· Various public meetings with local stakeholders, including
four meetings with the Sami villages and meetings with residents of
the villages closest to the project, were held.
· On the
19 and 20 September 2023, the Supreme Administrative Court held an
oral hearing at which the appeal by two Sami villages, Jåhkågasska
tjiellde and Sirges, and Naturskyddsföreningen, the associations
for the protection of the environment, at municipality, county, and
country level (together the "Applicant"), against the awarding of
the Exploitation Concession by the Government of Sweden (the
"Government"), was heard. Following the oral hearing, the
Applicant filed a further submission to the Court to which the
Court invited the Government to respond in January 2024. The
Government responded post Period (highlighted below).
Finland
· During
the year, Beowulf, through its wholly-owned Finnish subsidiary
Grafintec Oy ("Grafintec"), completed the PFS for the establishment
of the final Coating stage of a Graphite Anode Materials Plant
("GAMP") located in
the GigaVaasa area, in the municipality of Korsholm on the west
coast of Finland. This initial PFS demonstrated very positive
initial economics with a post-tax net present value (using an 8 per
cent discount rate) of US$242 million and an internal rate of
return of 39 per cent.
· The
study, prepared by the engineering consultancy RB Plant
Construction Ltd ("RB Plant"), is based on an industrial plant
importing spherical graphite, coating this to produce a total of
20,000 tonnes per annum of Coated Spherical Graphite ("CSPG") over
an initial 10-year period and with initial capital expenditure of
US$117 million.
· The
EIA for the GAMP was progressed during the year.
· Following the conclusion of the PFS, bench-scale test work was
initiated.
Kosovo
· On 12
January 2023, Beowulf invested £250,000 in Vardar Minerals. The
investment increased the Company's ownership in Vardar from 59.5
per cent to approximately 61.1 per cent. In addition, Beowulf
provided loans amounting to €75,000 between October and December
2023 to Vardar Minerals to support ongoing exploration
activity.
· Vardar
Minerals undertook further low-cost field work including mapping,
soil and grab sampling and reconnaissance work across its tenement
package during the three months ended 31 December 2023.
· The
focus of the activity during the first half of the year was on the
Shala Central area where the Company undertook mapping, surface
sampling and a drone magnetic survey.
· Reconnaissance work was undertaken in the second half of the
year on the Shala East and Shala West licences which was followed
up with a systematic mapping and sampling programme.
Corporate
· On 28 February 2023, Beowulf announced the outcome of the
Company's capital raise. In total, Beowulf received
approximately SEK 80.8 million (approximately £6.4
million) (gross). Net proceeds from the capital raise were used to
repay bridge loan financing.
· On 10 July 2023, Mikael Schauman was appointed as
Non-Executive Director.
· On 27 July 2023, the settlement in relation to Kurt Budge's
resignation was agreed and paid.
· On 7 August 2023, Ed Bowie joined the Company as Chief
Executive Officer and Director.
· On 16 August 2023, Ulla Sandborgh stepped down as Chief
Executive Officer of Jokkmokk Iron.
· On 28 December 2023, Alternative Resource Capital was
appointed as Joint UK Broker to the Company. Alternative Resource
Capital is a trading name of Shard Capital Partners LLP, which is
authorised and regulated by the Financial Conduct Authority in the
UK.
Financial
· The
consolidated loss for 2023 of £2,931,295 was higher than 2022 of
£2,041,452. This increase is due to increased administrative
expenses of £2,494,650 compared to £1,806,582 for 2022. The
increase in administrative expenses was due to the following:
share-based payment expenses of £387,668 (2022: £240,537);
professional fees of £696,247 (2022: £433,157); foreign currency
loss of £150,224 (2022: £36,321); salary costs of £483,221 (2022:
£317,717); audit and accountancy fees of £122,174 (2022:
£86,240).
· The
administration expenses of the company of £2,778,142 in 2023 exceeded 2022 of
£1,090,254. This increase is primarily due to the expected credit
loss on the intercompany loans of £1,001,537 (2022: £5,336),
share-based payment expenses of £321,534 (2022: £173,345), salary
costs of £481,903 (2022: £250,406), professional fees of £420,536
(2022: £290,760), P.R. services of £97,515 (2022: £46,493) and
legal fees of £83,226 (2022: £24,238). Professional and legal fees
increased primarily due to non-recurring advisor fees in relation
to the group directorship changes within the Period. The expected
credit loss increased due to the impairment of Ågåsjiegge and Åtvidaberg in the year
and a reassessment of expected recoverability of the loans to the
subsidiaries.
· Consolidated basic and diluted loss per share for the quarter
ended 31 December 2023 was 0.05 pence (Q4 2022: loss of 0.09
pence).
· £905,555 in cash was held at 31 December 2023 (31 December
2022: £1,776,556).
· Exploration assets increased to £14,797,833 at 31 December 2023 compared to £13,002,465
at 31 December 2022.
· The
cumulative foreign exchange translation losses held in equity
increased year ended 31 December 2023 to £1,464,486 (31 December
2022: loss of £1,289,415). Much of the Company's exploration costs
are in Swedish Krona which has weakened against the pound since 31
December 2022.
· At 31
December 2023, there were 922,337,110 Swedish Depository Receipts
in issue representing 79.71 per cent of the issued share capital of
the Company. The remaining issued share capital of the Company is
held in the UK as AIM securities.
Post Period Activities
Corporate
· On 16 February 2024, Beowulf announced its intention to
conduct a preferential rights issue of SDRs in Sweden (the "Rights
Issue") and a UK retail offer of ordinary shares and partially
secured capital raise (the "Capital Raise") up to approximately SEK
100 million (approximately £7.5 million). The Rights Issue is
underwritten to a maximum value of SEK 50 million, subject to
customary adjustments. The main purpose of the Rights Issue will be
to finance the continued development of Kallak, including
completion of the ongoing PFS and environmental studies in
preparation for the EIA and subsequent application for the
environmental permit for Kallak, and the completion of the ongoing
PFS and EIA for the GAMP.
· In conjunction with the Rights
Issue, the Company has entered into a
short-term loan agreement with the Underwriters to provide SEK 10
million (approximately £0.75
million) to ensure the Company has
sufficient financial resources to continue advancing its projects
over the coming weeks. The loan carries an interest charge of 1.5
per cent per month and has a commitment fee of 5.0 per cent. The loan and accrued interest is repayable at any time prior
to the maturity date, being 31 May 2024. If the loan and accrued
interest is not repaid by the maturity date, at the latest,
the creditors have the right to offset a
minimum of SEK 1 million at the time of the loan and accrued
interest into SDRs at a price per SDR calculated with a 15 per cent
discount on the volume weighted average price of the SDR during the
preceding 5 trading days to the conversion decision. In case of
default, the loan will accrue additional default interest of 2.5
per cent per month.
Sweden
· On 18 January 2024, the Government formally responded to the
submission. In a comprehensive response the Government endorsed the
original decision to award the Exploitation Concession. The
Government further emphasised their support for the project,
stating that the Kallak Project is of national interest (Beowulf
announcement dated 22 January 2024).
· On 5 February 2024, the Company announced that a Project
Director had been appointed to oversee the ongoing studies and
development of Kallak.
Finland
· On 17 January 2024, the Company announced an updated strategy
to fast-track the full GAMP process, capturing more of the anode
material production value-chain and providing greater supply-chain
security following the export controls imposed by China on graphite
materials in December 2023. The full GAMP process consists of
Spheronisation, Purification and Coating to produce CSPG for sale
to anode manufacturers. The PFS completed on the Coating stage of
the process in July 2023 will be enhanced to incorporate the full
process and is expected to be completed during 2024.
Kosovo
· In January and February 2024, the Company provided additional
loans to Vardar Minerals amounting to €40,000 to support ongoing
exploration activity.
· The
original Mitrovica, Viti North and Viti East licences expired on 24
January 2024. Following dialogue with Independent Commission for
Mines and Minerals ("ICMM"), applications for new licences were
submitted and formal confirmation of receipt was provided by the
ICMM in Kosovo on 22 February 2024. Exploration licence
applications are reviewed by the ICMM in Kosovo and ultimately
granted by the Board of ICMM. The Government disbanded the Board of
ICMM in October 2023, thus the licence applications remain pending
until the new Board is appointed. As these applications are for new
licences rather than extensions to the original licence, they will
be valid for an initial three-year period from the date of
granting, after which they may be extended twice for two-year
periods with a reduction in the land holding of 50% on each
occasion.
Ed Bowie, Chief Executive Officer of
Beowulf, commented:
"The Company is making excellent progress across its three
business units.
"At Kallak, we have initiated the PFS and are completing
metallurgical test-work to confirm that the project will produce a
market leading iron ore concentrate. Stakeholder consultations and
environmental studies are continuing in preparation for the EIA and
Environmental Permit application. The Company remains focused on
developing a world-class sustainable mining operation at Kallak and
the appointment of the Project Director is a key step in delivering
this.
"In Finland, we delivered the PFS for the Coating phase of the
GAMP demonstrating very robust economics. Following the Chinese
export controls introduced in December 2023, the Company has
modified its strategy and is now focused on developing the full
process route. Test-work is ongoing and the PFS will be completed
during 2024. This fast-track development will not only capture more
of the value-chain for the production of anode material but also
offers greater supply-chain security.
"In Kosovo, the detailed mapping and sampling undertaken by
Vadar Minerals has highlighted a number of high-priority targets
across the Shala licence package. Further analysis and
interpretation is ongoing as assay results are beginning to be
returned. In addition, assay results from a lithium target on the
Viti North licence are pending.
"The
Company's portfolio is well-placed in tier-one jurisdictions, with
strategic commodities that support the Green Transition and will
benefit from the increasing emphasis on resource and supply chain
security. We continue to review opportunities to optimise each
project, enhancing the value and de-risking the future development,
whilst reviewing funding opportunities and strategic partnerships
both at the project and corporate level."
Enquiries:
Beowulf Mining plc
|
|
Ed Bowie, Chief Executive
Officer
|
Tel: +44 (0) 20 7583 8304
|
SP
Angel
(Nominated Adviser &
Broker)
|
|
Ewan Leggat / Stuart Gledhill / Adam
Cowl
|
Tel: +44 (0) 20 3470 0470
|
|
|
Alternative Resource Capital
(Joint Broker)
|
|
Alex Wood
|
Tel: +44 (0) 20 7186 9004
|
BlytheRay
|
|
Tim Blythe / Megan Ray
|
Tel: +44 (0) 20 7138 3204
|
Cautionary Statement
Statements and assumptions made in
this document with respect to the Company's current plans,
estimates, strategies and beliefs, and other statements that are
not historical facts, are forward-looking statements about the
future performance of Beowulf. Forward-looking statements include,
but are not limited to, those using words such as "may", "might",
"seeks", "expects", "anticipates", "estimates", "believes",
"projects", "plans", strategy", "forecast" and similar expressions.
These statements reflect management's expectations and assumptions
in light of currently available information. They are subject to a
number of risks and uncertainties, including, but not limited to ,
(i) changes in the economic, regulatory and political environments
in the countries where Beowulf operates; (ii) changes relating to
the geological information available in respect of the various
projects undertaken; (iii) Beowulf's continued ability to secure
enough financing to carry on its operations as a going concern;
(iv) the success of its potential joint ventures and alliances, if
any; (v) metal prices, particularly as regards iron ore. In the
light of the many risks and uncertainties surrounding any mineral
project at an early stage of its development, the actual results
could differ materially from those presented and forecast in this
document. Beowulf assumes no unconditional obligation to
immediately update any such statements and/or forecasts.
About Beowulf Mining plc
Beowulf Mining plc ("Beowulf" or the
"Company") is an exploration and development company, listed on the
AIM market of the London Stock Exchange and the Spotlight Exchange
in Sweden. The Company listed in Sweden in 2008 and, as at 31
December 2023, was 79.71 per cent owned by Swedish
shareholders.
Beowulf's purpose is to be a
responsible and innovative company that creates value for its
shareholders, wider society and the environment, through
sustainably producing critical raw materials needed for the
transition to a Green Economy.
The Company has an attractive
portfolio of assets, including commodities such as iron ore,
graphite, base and precious metals, with activities in exploration,
the development of mines and downstream production in Sweden,
Finland and Kosovo.
The Company's most advanced project
is the Kallak iron ore asset in northern Sweden from which test
work has produced a 'market leading' magnetite concentrate of 71.5
per cent iron content. In the Kallak area, 389 million tonnes
of iron mineralisation has been estimated, a potential source of
high quality iron ore for fossil-free steel making in the Nordic
region for decades to come.
In Finland, Grafintec, a
wholly-owned subsidiary, is developing a resource footprint of
natural flake graphite and the capability to serve the anode
manufacturing. Grafintec is working towards creating a sustainable
value chain in Finland from high quality natural flake graphite
resources to anode material production, leveraging renewable power,
targeting Net Zero CO2
emissions across the supply chain.
In Kosovo, the Company owns
approximately 61.1 per cent of Vardar Minerals ("Vardar"), which is
focused on exploration in the Tethyan Belt, a major orogenic
metallogenic province for gold and base metals. Vardar is
delivering exciting results for its Mitrovica licence which has
several exploration targets, including lead, zinc, copper and gold.
It also has the Viti licence which is showing potential for
copper-gold porphyry mineralisation.
Kallak is the foundation asset of
the Company, and, with Grafintec and Vardar, each business area
displays strong prospects, presents opportunities to grow, with
near-term and longer-term value-inflection points.
Beowulf wants to be recognised for
living its values of Respect, Partnership and Responsibility. The
Company's ESG Policy is available on the website following the link
below:
https://beowulfmining.com/about-us/esg-policy/
BEOWULF MINING PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR
THE TWELVE MONTHS TO 31 DECEMBER 2023 AND THE THREE MONTHS TO 31
DECEMBER 2023
|
Notes
|
(Unaudited)
3 months
ended
31
December
2023
£
|
(Unaudited)
3 months
ended
31
December
2022
£
|
(Unaudited)
12 months
ended
31
December
2023
£
|
(Audited)
12 months
ended
31
December 2022
£
|
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
Administrative expenses
|
|
(222,974)
|
(605,777)
|
(2,494,650)
|
(1,806,582)
|
Impairment of exploration
assets
|
7
|
(341,926)
|
(36,988)
|
(350,158)
|
(36,988)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
(564,900)
|
(642,765)
|
(2,844,808)
|
(1,843,570)
|
|
|
|
|
|
|
Gain on disposal of
investment
|
|
-
|
21,951
|
-
|
21,951
|
Finance costs
|
3
|
(1,823)
|
(158,559)
|
(197,724)
|
(304,806)
|
Finance income
|
|
1,813
|
127
|
7,924
|
176
|
Grant income
|
|
12,795
|
14,579
|
96,750
|
84,797
|
Fair value gain on
investment
|
|
6,563
|
-
|
6,563
|
-
|
Loss before and after taxation
|
|
(545,552)
|
(764,667)
|
(2,931,295)
|
(2,041,452)
|
|
|
|
|
|
|
Loss attributable to:
|
|
|
|
|
|
Owners of the parent
|
|
(528,676)
|
(723,801)
|
(2,857,345)
|
(1,948,459)
|
Non-controlling interests
|
|
(16,876)
|
(40,866)
|
(73,950)
|
(92,993)
|
|
|
(545,552)
|
(764,667)
|
(2,931,295)
|
(2,041,452)
|
|
|
|
|
|
|
Loss per share attributable to the
owners of the parent:
|
|
|
|
|
|
Basic and diluted (pence)
|
4
|
(0.05)
|
(0.09)
|
(0.26)
|
(0.23)
|