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.
4 March
2024
Beowulf Mining plc
("Beowulf" or the
"Company")
Vardar Minerals Limited
("Vardar"): Consolidation of Ownership and Operational
Update
Beowulf (AIM: BEM; Spotlight: BEO) is pleased
to announce the planned consolidation of 100 per cent ownership of
Vardar Minerals Limited ("Vardar") from the currently held 61.1 per
cent interest in an all-share transaction, and to provide an
operational update.
Highlights
Consolidation of
ownership:
· Beowulf has
agreed terms with the minority shareholders of Vardar Minerals to
acquire their shares and move to 100% ownership in an all-share
transaction. The Company currently owns a 61.1 per cent interest in
Vardar and will issue 52,326,761 Beowulf shares to the Vardar
minority holders.
· The transaction
remains conditional on the consolidation of 100 per cent ownership
of the underlying Vardar subsidiaries and is expected to complete
by 15 March 2024.
· The new Beowulf
shares are subject to a 12-month lock-in agreement from the date of
satisfaction of the conditions and will be issued at the same time
as shares issued in connection with the proposed capital raise
announced to the market on 16 February 2024 ("Capital Raise"), and
not later than 30 April 2024.
· The consolidation
of 100 per cent of Vardar will provide Beowulf with full control
and flexibility to drive the development of Vardar including
reviewing acquisition, divestment, joint venture and strategic
investment opportunities.
· In connection
with the transaction, Ismet Krasniqi, Vardar's local partner in
Kosovo, will join the Board of Vardar and continue to support the
company's development.
Operational
update
· Vardar has
submitted applications, and received confirmation of receipt on 22
February 2024, for new licences covering the original Mitrovica,
Viti East and Viti North licence areas all of which expired on 27
January 2024 in accordance with their terms.
· Encouraging
preliminary assay results have been received from Vardar's sampling
programmes on the Shala East licence with rock chip samples
assaying up to 3.84 grammes per tonne ("g/t") gold ("Au"),
117 g/t silver ("Ag"), 5.5% zinc ("Zn") and 5.4% lead
("Pb").
· Sampling of water
springs on the Viti North licences has returned highly anomalous
lithium ("Li") and boron ("B") results of 1,260 microgrammes per
litre ("μg/l") and 10,500 μg/l respectively from a single sample.
Further sampling and exploration is planned.
Ed
Bowie, Chief Executive Officer of Beowulf,
commented:
"Consolidating the ownership of Vardar is a significant
advancement for Beowulf, providing the Company with full
operational control. We remain committed to advancing the
exploration portfolio in Kosovo, and this transaction will enable
us to align our technical aspirations with our financial resources,
while at the same time providing greater flexibility to consider
other opportunities for the business.
"We have adopted a conservative approach to our exploration
strategy, completing further low-cost exploration and analysis to
better refine targets before we embark on drilling campaigns. Our
initial results have been encouraging and it is very pleasing that
we have had confirmation of receipt of applications for new
licences over the key Mitrovica and Viti areas. We will update the
market in due course once the award of these licenses has been
confirmed.
"It is a pleasure to have Ismet Krasniqi join the Board of
Vardar. Ismet has been instrumental in lodging our recent licence
applications and supporting our continued development in Kosovo.
With his support, we will continue to advance the Vardar portfolio,
but also review other opportunities across the
Balkans."
Consolidation
of Ownership
Since its initial investment in Vardar in
November 2018, Beowulf has invested a total of £3.34 million taking
its ownership to 61.1 per cent. The two founders of Vardar, Luke
Bryan and Adam Wooldridge, each hold a 13.6 per cent interest with
the remaining 11.7 per cent being held by private
individuals.
Vardar holds 100 per cent of two direct
subsidiaries, Vardar Exploration Kosovo LLC ("VEK") in Kosovo and
Vardar Geoscience Ltd in the British Virgin Islands, which itself
holds a 95 per cent interest in Vardar Geoscience Kosovo LLC
("VGK") in Kosovo. The remaining 5 per cent interest in VGK is held
by Ismet Krasniqi, Vardar's local partner who is also a director of
VGK.
The initial step in the proposed transaction is
the consolidation of the ownership in VGK. Ismet Krasniqi, in
consideration for his interest in VGK will receive new shares in
Vardar representing approximately 5 per cent of the enlarged share
capital of Vardar.
The second stage in the transaction is the
consolidation of 100 per cent ownership of Vardar in an all-share
transaction. The Company currently owns a 61.1 per cent interest in
Vardar and will issue of 52,326,761 Beowulf shares, representing
4.3 per cent of the enlarged Beowulf share capital (excluding any
shares issued pursuant to the Capital Raise), to the Vardar
minority holders. The transaction remains conditional on the
consolidation of 100 per cent ownership of VGK and is expected to
complete by 15 March 2024. The new Beowulf shares are subject to a
12-month lock-in agreement from the date of satisfaction of the
conditions and will be issued at the same time as shares issued in
connection with the proposed Capital Raise, and not later than 30
April 2024.
On completion of the transaction, Luke Bryan
and Adam Wooldridge will resign as directors of Vardar and its
subsidiaries and Ismet Krasniqi will be appointed as a Director of
Vardar.
The consolidation of 100 per cent ownership
provides Beowulf with full strategic and operational control of
Vardar. Vardar holds and has submitted new applications for a
portfolio of exploration licences that are prospective for a range
of precious and base metals as well as lithium. The Company is
focused on advancing this portfolio, further testing a number of
the high priority targets and reviewing strategic opportunities in
the region.
Vardar Shareholder
(post consolidation of VGK)
|
Number of new
Beowulf shares to be issued
|
Luke Bryan
|
16,206,387
|
Adam Wooldridge
|
16,206,387
|
Ismet Krasniqi
|
6,190,080
|
Other
|
13,723,907
|
Total
|
52,326,761
|
Operational
Update
The original Mitrovica, Viti North and Viti
East licences expired on 24 January 2024 in accordance with their
terms. Following dialogue with the Independent Commission for Mines
and Minerals ("ICMM") in Kosovo,
applications for new licences were submitted
and formal conformation of receipt was provided by the ICMM 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. With the licence applications formally lodged with ICMM,
no other party may apply for licences over the same area. The
Company is confident that the licences will be granted by ICMM in
due course and will update the market accordingly. As these
applications are for new licences, 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 per cent on each occasion.
Following the 2023 field season, the Company
has received initial assay results from the independent and
certified laboratory, ALS Life Sciences, from a number of sampling
programmes. In the Shala East prospect, systematic mapping and soil
geochemical and rock-chip sampling was undertaken during the second
half of 2023 focusing on three primary target areas. Target 1 in
the north of the Shala East licence returned assay results
including 3.21 g/t Au, 3.84 g/t Au and 73.8 g/t Ag over a
1km-by-1km area. Further south in Target 2, grab samples assayed up
to 5.5% Zn and 5.4% Pb with anomalous silver grades. The
southernmost Target 3 returned results including 117 g/t Ag.
Further results are expected and will be incorporated with the
Company's soil geochemical results and mapping.
In the Viti North licence, water samples were
collected from springs and assayed by ALS. One of the samples
returned highly anomalous lithium grades of 1,260 μg/l and boron
grades of 10,500 μg/l. The sample was collected from a spring
located in the centre of the Viti North licence, an area that is
believed to be a basinal margin structure with lacustrine sediments
that have the potential to host lithium-boron mineralisation, which
is the geological setting of Rio Tinto's lithium-boron Jadar
deposit in Serbia. Further spring water sampling will be undertaken
in the area and a gravity survey will be considered to better
define the basin margin.
Related Party
Transaction
Each of Luke Bryan, Adam Wooldridge and Ismet
Krasniqi, as directors of subsidiaries of the Company, are
classified as Related Parties of the Company in accordance with the
AIM Rules for Companies. The Related Party Share Issuance therefore
represents a related-party transaction for the purposes of Rule 13
of the AIM Rules for Companies. The directors of Beowulf
independent of the Related Party Share Issuance being the full
board, consider, having consulted with SP Angel Corporate Finance
LLP, the Company's nominated adviser, that the Related Party Share
Issuance is fair and reasonable in so far as Beowulf's shareholders
are concerned.
Enquiries:
Beowulf Mining plc
Ed Bowie, Chief Executive
Officer
ed.bowie@beowulfmining.com
SP
Angel
(Nominated Adviser & Joint
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 forecast.