TIDMBEM
RNS Number : 8305N
Beowulf Mining PLC
26 May 2020
26 May 2020
Beowulf Mining plc
("Beowulf" or the "Company")
Kallak Update - Parliamentary Question
Beowulf (AIM: BEM; Spotlight : BEO), the mineral exploration and
development company, provides an update on the Kallak Iron Ore
Project ("Kallak").
Highlights:
-- Last week a written question was put to Mr Ibrahim Baylan,
Minister for Business, Industry and Innovation, which the Minister
is scheduled to answer on 27 May 2020. The question was posed by
Lars Hjälmered, a Moderate Party Member in the Swedish
Parliament.
-- Summary translation of Mr Hjälmered's question:
"The Kallak iron ore project has had to wait for a decision on
permits for over six years. The matter has been ready to make a
decision on the Minister's table for three years without him and
the Government making any decision. Another project received [by
the Government and] waiting unreasonably long for a decision is
Laver [Boliden AB].
In the [mining] industry, the question is now asked why the
Government is not coming to terms with it. Despite repeated
questions about when a decision may be made, and great irritation
from the industry, [the Government] has not yet returned to the
issue.
This management [of the issue by the Government] is under all
criticism, and the Government must recognize the importance of it
to Swedish mining industry. The industry is responsible for large
export revenues and employment [of] many people in Sweden. When the
Government cannot give any message, investments are not completed,
jobs are [not created] and [wider] benefits are not realized. In
addition, long processing times and uncertain processes mean Sweden
becomes less relevant to foreign investment.
In view of the above, I would like to ask Minister of Business
Ibrahim Baylan: When does the Minister and the Government intend to
make a decision on any mining activity in Kallak and Laver?"
Kallak - 'Big Picture'
-- In 2017, Copenhagen Economics produced a 'Big Picture' study
for Kallak ("the Study" or "the Kallak Study"):
https://beowulfmining.com/wp-content/uploads/2018/10/Copenhagen-Economics_Presentation_SEP17_Swedish.pdf
The Study built on the work carried out, by the Company and
others, including the 2015 independent socio-economic study
initiated by Jokkmokks Kommun, completed by consultants Ramböll,
which in its findings concluded that a mining development at Kallak
would create direct and indirect jobs, increase tax revenues and
slow down population decline, and the 2010 study by the Economics
Unit of Luleå University of Technology, 'Mining Investment and
Regional Development: A Scenario-based Assessment for Northern
Sweden'.
-- Copenhagen Economics has previously reviewed the
attractiveness of the Swedish mining sector on a number of
parameters, including licensing and regulation, commissioned by the
Swedish Agency for Growth Policy Analysis, part of the Government
of Sweden.
-- The Kallak Study demonstrated that the economic effect of
Kallak is 'not just about a mine'. A mining project would
economically transform Jokkmokk and support other major capital
expenditure and economic activity e.g. Inlandsbanan, Luleå Hamn,
Vattenfall etc, spreading the benefits, through Norrbotten and
beyond.
-- When it comes to Kallak's economic effect on Jokkmokk, the Study highlights were as follows:
-- 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 at Parkijaure 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 as possible jobs are available to people living
in Jokkmokk.
-- Kallak has the potential to generate SEK 1 billion in tax
revenues, considering the case where 70 per cent of the mine's
workforce are based locally, with annual tax revenues of SEK 40
million over a 25 years mine life.
-- 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.
Kurt Budge, Chief Executive Officer of Beowulf, commented:
"It is not the first time Minister Baylan has been asked a
question in the Swedish Parliament about Kallak, and no doubt his
response, this Wednesday, is again eagerly awaited by Beowulf's
Swedish and non-Swedish shareholders, the Company and the Swedish
mining sector.
"Often overlooked when permitting is debated, is an
acknowledgement of the risk capital needed, the timeline for
investment, and the 'big picture' economic impact that a
large-scale mining project, such as Kallak, can create.
"The first exploration licence for Kallak was granted in 2006
and to date over SEK 80 million has been invested. If a Concession
were to be granted today, then it would take 18 years from the
first exploration licence to get to a producing mine. The
investment in delivering a mining project will be hundreds of
billions of SEK and the value chain impact will extend to the
railway, port, downstream processing, and end-uses.
"As governments seek to reboot their economies post COVID-19, it
would be logical to assume that a project such as Kallak, which has
the potential to bring billions of SEK in investment and hundreds
of jobs to northern Sweden, should finally gain approval.
"At the Nordic Mining Day in Toronto in early March, Minister
Baylan saved his biggest welcome for investors. The Swedish
Government lacks credibility in welcoming investors to Sweden,
while it demonstrates zero transparency in how the Government
handles permit applications or predictability in timelines for
decision making. Mining investors cannot commit to exploration in
Sweden under these conditions.
"At the same event, the 'rule of law' was stated as one of
Sweden's attributes. Both Social Democrat and Green parties in
Sweden have said that a decision on Kallak should be taken in
accordance with the law. Beowulf has demonstrated with the
Concluding Statement submitted to the Government last November,
that, under judicial review, Beowulf's application has satisfied
all requirements. We even have the recommendation from Bergsstaten
(the "Mining Inspectorate") to the Government, in October 2015,
over 4.5 years ago, that the Concession be awarded.
"Later this week, we will update the market on Minister Baylan's
response to this latest Parliamentary Question."
About Kallak
T he Kallak iron ore deposit is located approximately 40
kilometres ("km") west of Jokkmokk in the County of Norrbotten,
Northern Sweden, 80 km southwest of the major iron ore mining
centre of Malmberget, and approximately 120 km to the southwest of
LKAB's Kiruna iron ore mine.
The first exploration licence for Kallak was awarded by the
Mining Inspectorate of Sweden in 2006. A Mineral Resource Estimate
for Kallak North and South, based on 27,895 m of drilling conducted
between 2010-2014, 131 drillholes, was finalised on 28 November
2014. Following the guidelines of the JORC Code, 2012 edition, an
Indicated Resource of 118.5 Mt at 27.5 per cent iron content ("Fe")
and Inferred Resource of 33.8 Mt at 26.2 per cent Fe was defined.
In addition, there is an exploration target of 90-100 Mt at 22-30
per cent Fe.
Testwork on Kallak ore has shown 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.
In April 2013, the Company applied for an Exploitation
Concession for Kallak North (the "Concession") and in October 2015,
the Mining Inspectorate recommended to the Swedish Government that
the Concession be awarded. The Company is still waiting on the
Swedish Government to take a decision.
Competent Person Review
The information in this announcement has been reviewed by Mr.
Rasmus Blomqvist, a Competent Person who is a Member of the
Australasian Institute of Mining and Metallurgy. Mr. Rasmus
Blomqvist has sufficient experience, that is relevant to the style
of mineralisation and type of deposit taken into consideration, and
to the activity being undertaken, to qualify as a Competent Person
as defined in the 2012 Edition of the "Australasian Code of
Reporting of Exploration Results, Mineral Resources and Ore
Reserves".
Mr. Rasmus Blomqvist is a full-time employee of Oy Fennoscandian
Resources AB, a 100 per cent owned subsidiary of Beowulf.
Mr Blomqvist consents to the inclusion in the announcement of
the information presented in the form and context in which it
appears.
Enquiries:
Beowulf Mining plc
Kurt Budge, Chief Executive Tel: +44 (0) 20 3771
Officer 6993
SP Angel
(Nominated Adviser & 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.
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END
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