TIDMBEM
RNS Number : 1377F
Beowulf Mining PLC
14 July 2021
14 July 20 21
Beowulf Mining plc
("Beowulf" or the "Company")
Kallak Iron Ore Project Update
Beowulf (AIM: BEM; Spotlight: BEO), the mineral exploration and
development company, provides an update on the Kallak Iron Ore
Project ("Kallak").
Mining Study
A contract has been awarded to Carci Mining Consultants Limited
("Carci") to conduct a Mining Study ("Study") on Kallak. The
purpose of the Study is to develop an open pit design and mining
schedule based on the upgraded Mineral Resource Estimate ("MRE",
RNS announcement dated 25 May 2021) for a 25-year life-of-mine
operation at Kallak. Previously, Carci supported the MRE by
completing an open pit optimisation study.
The output from the Mining Study will provide better definition
for mining equipment selection, and product types, production
volumes and specifications, which will support project development,
discussions with The Swedish Transport Agency (Trafikverket), the
Inlandsbanan (the Inland Railway) and emerging fossil-free steel
producers in Norrbotten. The Study is due to be completed by the
end of August 2021.
Exploitation Concession
Further to the UNESCO letter dated 2 June 2021 and the CEO's
letter to Minister Baylan dated 14 June 2021, on 18 June 2021 the
Ministry of Enterprise and Innovation (the "Ministry") invited the
Company to submit any comments regarding the UNESCO letter to the
Ministry by 6 September 2021. A few days later the Swedish Prime
Minister lost a 'vote of no confidence' in the Swedish
Parliament.
On 9 July 2021, it was confirmed that Prime Minister Stefan
Löfven had succeeded in reforming a government and would continue
in office, with no ministerial changes. Minister Baylan has
remained in office and taken on additional responsibility for rural
affairs.
During the last few months, Minister Baylan has said that a
decision on Kallak will be made once UNESCO comments are received.
This was also stated in a debate in Parliament with Lars Hjälmered
(Interpellation 2020/21:216 Tillståndsprövningen gällande Kallak
och Laver),
where he said that "vi skickar det här ärendet vidare till
UNESCO så att vi får deras synpunkter och därefter kan gå till
beslut. Då är det färdigberett, och då är också min bedömning att
det beslut som regeringen fattar håller rättsligt" (Translation:
"we are forwarding this matter to UNESCO so that we can receive
their views and then take a decision. Then it is ready, and then my
assessment is that the decision made by the government is
legal").
Kurt Budge, Chief Executive Officer of Beowulf, commented:
"We are moving forwards with the Mining Study, the outputs of
which will enable us to advance discussions on both logistics for
Kallak production, and product volumes, specifications and
attributes with potential customers.
"Kallak is ideally positioned with respect to the HYBRIT and
H2GreenSteel projects and can similarly leverage renewable power to
ensure the integrity of a fossil-free supply chain in
Norrbotten.
"We are engaging with our legal and technical advisers and will
be submitting comprehensive comments on the UNESCO letter to the
Ministry in due course. We hope to give Minister Baylan, once and
for all, the confidence he needs to support the award on an
Exploitation Concession for Kallak. The Company has already
questioned UNESCO's jurisdiction over Kallak.
"Importantly, UNESCO does not conclude that Kallak cannot be
mined. It is an easy recommendation to suggest the Company could
provide more information, but the checks and balances already exist
in Sweden's laws and permitting processes, granted they need to
function effectively, for everything that needs to be done, to get
done.
"In November 2019, the Company's lawyers submitted a Concluding
Statement ("Statement") to the Swedish Government. The purpose of
the Statement was not to submit any new facts in the Kallak case,
as all necessary and relevant facts have already been established
as part of the application process. Rather, the Statement
summarised the circumstances relevant to a judicial review of
whether an Exploitation Concession should be awarded.
"The Statement stressed that, as has previously been
demonstrated by the Company, and acknowledged by the County
Administrative Board ("CAB") for the County of Norrbotten, the
establishment of a mine at Kallak would have significant positive
effects on the local economy: creating jobs, generating tax
revenues for Jokkmokk municipality, and stimulating and
diversifying the business sector in Jokkmokk. In so doing, Kallak
would help solve the problems Jokkmokk is facing, a lack of
investment in new enterprise and job creation, and a declining and
ageing population, which is putting a burden on Jokkmokks Kommun
that it cannot afford.
" Speaking recently to the Mayor of Jokkmokk, the Municipality's
financial situation is not improving and Jokkmokk's need for
investments and jobs remains as acute as ever.
"The Statement noted that neither the Reindeer Herding Impact
Assessment, nor the Environmental Impact Assessment concluded that
mining operations at Kallak would threaten the existence and
livelihoods of local reindeer herding communities. Furthermore, the
Statement highlights the similarities between Kallak and available
case law, which support the approval of the Concession.
"Based on these arguments, the Statement concluded that an
Exploitation Concession for Kallak should be awarded. The Statement
was submitted 20 months ago and met with silence from the
Government.
"With added responsibility for rural affairs Minister Baylan
will no doubt be doing all he can to encourage economic development
in struggling municipalities such as Jokkmokk. While at the same
time, giving investors in downstream fossil-free steel production
the certainty that upstream supply of locally produced high quality
iron ore, such as Kallak's 71.5 per cent iron concentrate, will be
available to feed their projects.
"I look forward to providing shareholders and investors with
further updates."
About Kallak
The 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.
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.
Kallak Iron Ore Project - MRE and Exploration Target Upgrade
RNS dated 25 May 2021
https://polaris.brighterir.com/public/beowulf_mining_plc/news/rns/story/x8q5k9x
-- An additional 19 million tonnes ("Mt") of iron mineralisation
equating to a 12.5 per cent increase in the resource.
-- Measured and Indicated Mineral Resource of 132 Mt grading 27.8 per cent iron ("Fe").
-- Inferred Mineral Resource of 39 Mt grading 27.1 per cent Fe.
The definitions of Measured, Indicated and Inferred Resources,
as well as Reserves, as used in the MRE, conform to the definitions
and guidelines of the PERC Reporting Standard, 2017.
Market Leading Potential
RNS dated 17 September 2020
https://polaris.brighterir.com/public/beowulf_mining_plc/news/rns/story/x8l7kjr
-- Testwork on Kallak ore has produced an exceptionally
high-grade magnetite concentrate at 71.5 per cent Fe with minimal
detrimental components.
-- This would make Kallak the market leading high-grade product
among known current and planned future producers.
-- The next best magnetite product is LKAB's (the state-owned
Swedish iron ore company), which produces magnetite fines ("MAF")
with a target specification of 70.7 per cent Fe and is regarded as
unique, until now, due to its exceptionally high iron content.
-- Kallak magnetite concentrate would reduce the carbon
footprint of traditional steel manufacturing, improve energy
efficiency in any downstream process and reduce waste. Magnetite
has inherent energy content, which ultimately results in lower
energy demand for steel manufacturing when compared to current
common practice.
-- Globally, the feedstock for steelmaking is 80 per cent
hematite and 20 per cent magnetite. The demand for high-quality
feedstock and therefore magnetite should increase as producers look
to protect the environment by improving energy efficiency,
minimizing waste and the impact of waste disposal.
Economic Potential
In response to the Government's request, in the middle of 2015,
for the County Administrative Board for the County of Norrbotten
(the "CAB") to provide comments on the national economic assessment
for Kallak, the CAB's findings were as follows:
-- Mining is economically relevant and the Kallak North project
generates economic benefits at local, regional and national levels,
including direct and indirect jobs, tax revenues, and more broadly
across mining equipment and services sectors in Sweden.
-- The Concession Area applied for by the Company creates no
conflicts where national interests are considered.
-- The Concession is designated as an Area of National Interest ("ANI") for minerals.
-- The Company should work with communities that could be
affected by the development of a mining project, in order to
eliminate or mitigate any impacts, including reindeer herders and
Sami villages.
-- The Company should consider in its ongoing studies the
potential impact of its mining activities on tourism and transport
infrastructure.
In 2017, Copenhagen Economics produced a 'Big Picture' study for
Kallak ("the Kallak Study"):
https://beowulfmining.com/wp-content/uploads/2018/10/Copenhagen-Economics_Presentation_SEP17_Swedish.pdf
The Kallak 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 had 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
Kallak 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-year 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.
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 is approximately 73.4 per cent
owned by Nordic shareholders.
The Company's purpose is to be a responsible and innovative
company that creates value for our shareholders, wider society and
the environment, through sustainably producing critical raw
materials needed for the transition to a Green Economy and to
address the Climate Emergency.
The Company's asset portfolio is diversified by commodity,
geography and the development stage of its various projects and
features metals in demand.
Competent Person ("CP")
Mr Howard Baker of BGS is a resource geologist with 25 years'
experience covering multiple commodities from early-stage
exploration through to definitive feasibility studies. Mr Baker is
the Managing Director of BGS and previously worked for the
International Mining Consultancy, SRK Consulting (UK) Ltd ("SRK")
where he was employed for eight years as a Principal Consultant and
Practise Leader. In his time at SRK, he focussed on the management
of Mineral Resource Estimates with a strong focus on technical
quality management and compliancy to international reporting codes.
In addition, he played a key role in advising on suitable
exploration protocols and drill programmes and effectively assisted
clients in the development of numerous large-scale projects. Prior
to his time at SRK, Mr Baker lived and worked in Australia, working
for Rio Tinto, BHP Billiton, Iluka Resources and Anaconda
Nickel.
Mr Baker was educated in the United Kingdom, being a dual
British and Australian citizen. He is a Chartered professional
fellow (#224239) of the Australasian Institute of Mining and
Metallurgy.
Mr Baker has extensive global experience in the geology and
Mineral Resource Estimation of iron ore projects and also worked as
a mine geologist and specialist resource geologist in the iron ore
Pilbara district of Western Australia.
Mr Baker has reviewed the technical information included in this
announcement and approves the disclosure of technical information
in the form and context in which it appears, in his capacity as a
CP as required under the AIM rules.
Enquiries
Beowulf Mining plc
Kurt Budge, Chief Executive Officer Tel: +44 (0) 20 7583
8304
SP Angel
(Nominated Adviser & Broker)
Ewan Leggat / Stuart Gledhill Tel: +44 (0) 20 3470
/ Adam Cowl 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
forecast.
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END
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