The
information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation ("MAR") (EU) No. 596/2014, as incorporated into UK law
by the European Union (Withdrawal) Act 2018. Upon the publication
of this announcement, through the agency of the contact person of
the Company set out below, this inside information is now
considered to be in the public domain.
16 February
2024
Beowulf Mining plc
("Beowulf" or the
"Company")
Proposed fundraise to advance
Beowulf projects and Notice of General Meeting
Beowulf (AIM: BEM; Spotlight: BEO), the mineral
exploration and development company, announces its intention to
undertake a capital raise to advance the Kallak Iron Ore Project in
northern Sweden ("Kallak"), the Graphite Anode Materials Plant
("GAMP") in Finland, and for general corporate purposes.
In connection with this capital raise, the
Company announces that a General Meeting ("GM") of the Company will
be held at Arena Sergel, Malmskillnadsgatan 36, 111 57
Stockholm, Sweden at 2:00 p.m. CET (1:00 p.m. GMT) on 5 March 2024.
Further details are set out in the Notice of General Meeting
("Notice of GM"), which will be posted to shareholders later today.
The following documents will shortly be available on the
"Investors" section of the Company's website under
"GM 2024": https://beowulfmining.com/investors/
:
· Notice
of GM;
· Form
of Proxy (Shareholders);
· Form
of Proxy (Holders of SDRs); and
· Short
Notice of GM (Holders of SDRs) (Swedish).
Shareholders who have elected to
receive e-communications from the Company will receive a Form of
Proxy containing a notification as to the availability of the
Notice of GM on the Company's website. All other
shareholders will receive a physical copy of the Notice
of GM and a Form of Proxy.
Summary
· Beowulf announces
its intention to undertake a preferential rights issue of Swedish
Depository Receipts ("SDRs") (the "Rights Issue") and a PrimaryBid
retail offer of ordinary shares in the Company ("Ordinary Shares")
in the UK (the "UK Issue") in the aggregate total of up to the
equivalent of approximately SEK 100 million (approximately £7.5
million) (the "Capital Raise").
· The Rights Issue
will be for up to the equivalent of approximately SEK 80 million
(approximately £6.0 million) before deduction for transaction
related costs.
· The main purpose
of the Rights Issue will be to finance the continued development of
Kallak, including completion of the ongoing Pre-Feasibility Study
("PFS") and environmental studies in preparation for the
Environmental Impact Assessment ("EIA") and subsequent application
for the environmental permit for Kallak, and the completion of the
ongoing PFS and EIA for the GAMP.
· The Company
values its UK investor base and therefore the purpose of the UK
Issue will be to allow existing holders of Ordinary Shares
("Shareholders"), along with private and other investors, the
opportunity to participate in the Capital Raise, as well as to
provide additional working capital in support of the Company's
ongoing projects.
· The proposed
split of the Capital Raise between the Rights Issue and the UK
Issue will be proportionate to the relative shareholdings of SDRs
and Ordinary Shares, currently approximately 80 per cent SDRs and
20 per cent Ordinary Shares.
· The UK Issue will
be for up to the equivalent of approximately SEK 20 million
(approximately £1.5 million) before deduction for transaction
related costs.
· Beowulf has
secured underwriting commitments which, subject to customary
conditions, in aggregate, amount to maximum SEK 50 million
(approximately £3.75 million), corresponding to approximately 62.5
per cent of the maximum amount of the Rights Issue.
· Members of the
Board of Directors, Executive and Senior Management (including the
Company's Chairman and CEO), have declared their intentions to
subscribe in the Capital Raise in aggregate of equivalent
approximately SEK 1-2 million (approximately
£75,000-150,000).
· The Company has
entered into a short-term loan agreement ("Bridge Loan") with the
Underwriters (as defined below) to provide SEK 10 million to ensure
the Company has sufficient financial resources to continue
advancing its projects over the coming weeks.
· In order to
complete the Capital Raise without unnecessary delay, a GM is
planned to be held on 5 March 2024, the purpose of which is to seek
an increase in the authorities granted at the 2023 Annual General
Meeting to issue securities in the Company to ensure that the Board
of Directors has the requisite authorisation and flexibility to
increase the Company's share capital, as needed. In addition, given
the Company's share price is near the nominal value of the Ordinary
Shares, and recognising that the Capital Raise will be conducted at
a discount to the current share price, resolutions will be proposed
to subdivide the existing Ordinary Shares of 1p each into a new
Ordinary Share of 0.1p ("New Ordinary Share") and a deferred A
share of 0.9p ("Deferred Share") (the "Capital
Reorganisation").
· The formal
decision to proceed with the Capital Raise as well as an
announcement of its full terms and conditions, inter alia, the
proposed subscription price, number of SDRs and Ordinary Shares to
be offered, and the proposed timeline, is planned for 7 March
2024.
· A prospectus for
the Rights Issue is expected to be published on 12 March 2024 and
ahead of the subscription period which is intended to take place
between 13 March and 27 March 2024 for both the Rights Issue and
the UK Issue.
Background to
and reasons for the Capital Raise
Beowulf's strategy is to develop mineral
projects critical to Europe's green transition. Beowulf operates
through its subsidiaries Jokkmokk Iron Mines AB ("Jokkmokk Iron"),
active in Sweden, Grafintec Oy ("Grafintec"), active in Finland,
and through 61.1 per cent owned Vardar Minerals Limited ("Vardar"),
active in Kosovo.
In March 2022, Jokkmokk Iron was granted a
mining concession for the Kallak North iron ore deposit in
Norrbotten County in northern Sweden. Kallak North is Beowulf's
most advanced project, and the Company's top priority. The main
objective for Jokkmokk Iron is to become a supplier of market
leading, high-grade, low-impurity iron ore concentrates to support
the decarbonisation of the steel industry and, in particular, for
the developing green steel producers in the Nordic
region.
In January 2023, the Company completed a
Scoping Study for Kallak North and shortly after initiated a number
of environmental studies in preparation for the EIA and
environmental permit application. Following a full review of the
Scoping Study, a PFS was initiated in October 2023 with lead mining
consultancy group, SLR Consulting Ltd. Metallurgical test-work has
been initiated to confirm that the project can produce the
high-quality concentrate as this is a key value driver for the
project. The intention is to complete the PFS and EIA during the
third quarter of 2024, submit the environmental permit application
in the fourth quarter and complete a Definitive Feasibility Study
("DFS") for the project in 2025.
In addition to the Kallak North deposit - the
focus of the economic studies - resources have been defined at the
two Kallak South deposits and a significant exploration target has
been identified within the Company's surrounding permits. Further
exploration will be considered to assess the economic viability of
developing these targets to provide a potential extension to the
mine life.
Given the quality of the concentrate that the
Kallak project is expected to produce, the Company has already
received interest from a number of third-parties. As the project is
advanced further, it is anticipated that this interest will
increase and the Company will consider opportunities to form
strategic partnerships that could de-risk the project from
financing, technical, and market access perspectives and enable an
accelerated development.
Grafintec continues to advance the development
of the GAMP. In July 2023, the Company completed a PFS on the final
stage of the graphite anode material processing. The study
envisaged importing spherical coated graphite which would then be
coated to produce Coated Spherical Graphite or CSPG which would be
sold to anode manufacturers for the lithium-ion battery industry.
China, which currently controls 99 per cent of global spherical
graphite refining of natural graphite, introduced export controls
on graphite products in December 2023. In order to mitigate the
supply chain risks that these export controls highlighted, the
Company updated its strategy to focus on a fast-track development
of the full graphite anode materials plant. A PFS has been
initiated which incorporates spheronisation, purification and
coating to produce 20,000 tonnes per year of CSPG and will be
completed during 2024 along with the EIA. During 2025, a DFS and
the environmental permitting process will be concluded with
construction possible in 2026 and first production in
2027.
The strategy is to initially import graphite
concentrate to feed the GAMP but longer-term, Grafintec intends to
develop its own graphite deposits in Finland. The Aitolampi project
is one of Europe's largest flake graphite projects and current
test-work suggests it is highly amenable to processing into anode
material. The Company has a number of earlier stage graphite
projects that have the potential to provide additional resources
and future feed for the GAMP. Subject to the availability of funds,
further exploration work will be undertaken to advance these
projects. Following the introduction of the Chinese export
controls, the Company has received interest from a number of
international groups involved in the production and trade of
battery minerals. Grafintec will continue to review opportunities
to form strategic partnerships that can both fast-track development
and mitigate technical and financing risks.
In Kosovo, Vardar is focused on making
discoveries of base and precious metals. The Company has a large
and highly prospective land package in a region that has seen very
limited exploration since the 1980s. The Mitrovica licence package
surrounds the Stan Terg mine that was one of Europe's largest
lead/zinc mines. Highly anomalous base and precious metal values
have been returned from soil and rock-chip sampling and drilling.
To the north of the Mitrovica licence, the Company is exploring the
Shala licence package in order to identify and refine exploration
targets. In eastern Kosovo, the Company holds the Viti licences
that host anomalous copper and gold values and have the potential
to host lithium mineralisation. The focus of the current
exploration programme is on refining existing exploration targets
and identifying new areas of interest.
The main purpose of the Capital Raise will be
to finance the continued development of Kallak and the GAMP,
including completion of the ongoing PFSs and EIAs during 2024. The
Rights Issue will also repay amounts advanced under the Bridge
Loan. With sufficient funding available, further programmes will be
considered at each of the Company's exploration
projects.
Ed Bowie,
Chief Executive Officer of Beowulf, commented:
"Since
joining Beowulf in mid-August, it is pleasing to have made
significant progress across each of our business areas. The team
remains focused on optimising the value of our portfolio by
advancing each project through its technical and permitting
steps.
"The
Company's projects are located in tier-one jurisdictions and in
commodities that stand to benefit from the drive to decarbonise the
global economy and secure supply chains.
"The next 12
months will be an exciting time for the Company as we deliver the
PFSs and EIAs at both Kallak and GAMP. We will continue to review
opportunities to derisk the projects and fast track their
development, including through strategic partnerships. Our
objective is to demonstrate the underlying value of our assets and
deliver shareholder value."
Use of
proceeds
The Rights Issue, if fully subscribed, will
provide the Company with the equivalent of approximately SEK 80
million (approximately £6.0 million) before deduction of
transaction related costs and compensation to the Underwriters (see
"Commitments in relation to the Capital Raise" below). The UK
Issue, if fully subscribed, will amount to the equivalent of SEK 20
million (approximately £1.5 million) before deductions for
transaction related costs.
With the net proceeds from the Rights Issue,
the Company intends to finance the following activities in
summary:
· Kallak Iron Ore
Project workstreams including PFS, EIA and environmental permitting
and stakeholder engagement: SEK 28.5 million (approximately £2.1
million).
· Grafintec
workstreams including GAMP PFS and EIA, and ongoing test-work: SEK
19.5 million (approximately £1.5 million).
· Ongoing low-cost
exploration at Vardar: SEK 3 million (approximately £0.2
million).
· Corporate costs
including repayment of amounts advanced under the Bridge Loan: SEK
16 million (approximately £1.2 million).
Additional proceeds from the UK Issue will be
distributed across Beowulf's projects and workstreams to further
advance the Company's position and add value to the asset
portfolio.
In the event that the Capital Raise is fully
subscribed, the Board of Directors anticipates that the working
capital will cover the Company's operations for at least 15 months.
In a scenario where the Rights Issue is subscribed to the
underwritten level of 62.5 per cent and no further funds are
provided in the UK Issue, the Board of Directors assesses that the
available working capital will cover the Company's operations for
the upcoming 12-month period after completion of the intended
Capital Raise.
Commitments in
relation to the Capital Raise
Beowulf has received underwriting commitments
from the Formue Nord Marknadsneutral A/S, Buntel AB, Oscar Molse,
Wilhelm Risberg and Fredrik Lundgren (the "Underwriters"). The
Underwriters have committed to the Company to the extent that SDRs
in the Rights Issue are not subscribed up to SEK 50 million to
subscribe for the amount of SDRs required for the Rights Issue to
be subscribed up to SEK 50 million, provided that the total
underwritten amount does not exceed 65 per cent of the number of
SDRs offered in the Rights Issue. Subscription of SDRs according to
the underwriting commitments shall be carried out to the
subscription price in the Rights Issue.
In addition, members of the Board of Directors
and Executive Management (including the Company's Chairman and CEO)
have declared their intention to subscribe in the Capital Raise in
aggregate equivalent to approximately SEK 1-2 million.
A cash compensation of 12 per cent of the
underwritten amount is payable by the Company to the underwriters
after completion of the Rights Issue. The underwriters have the
option to request that the compensation is received in new SDRs in
the amount of 14 per cent of the underwritten amount or as a
combination of cash and SDRs. If compensation is to be received in
SDRs, the Company will conduct a placing of new additional SDRs to
the underwriters, after completion of the Rights Issue, at the same
subscription price as in the Rights Issue. No compensation will be
paid for the declared intentions of subscription by the Board of
Directors and Executive Management. The underwriting commitments
and the declared intentions are not secured via bank guarantee,
pledging or similar arrangements. If the Board of Directors has not
resolved to proceed with the Capital Raise by 30 April 2024, then
the Company is liable for 50 per cent of the cash compensation due
to the underwriters.
The Underwriters have also agreed to provide
the Bridge Loan of SEK 10 million to the Company to ensure the
Company has sufficient financial resources to continue the work
programmes on its projects. The Bridge Loan carries a monthly
interest charge of 1.5 per cent and a commitment fee of 5 per
cent.
General
Meeting
At the Company's annual general meeting in June
2023, shareholders passed resolutions which would allow the Company
to allot, prior to the Capital Reorganisation, approximately
115,000,000 Ordinary Shares for cash on a non-pre-emptive basis.
Following the Capital Reorganisation this authority now provides
for approximately 1,150,000,000 Ordinary Shares for cash on a
non-pre-emptive basis. In any event, this authority will be
insufficient to allow the Capital Raise to complete and accordingly
the Company is convening the General Meeting in order to seek
approval from Shareholders to additional share
authorities.
In addition, the Company is not permitted by
law to issue Ordinary Shares at an issue price which is below their
nominal value, currently 1 penny per Ordinary Share. Given the
Company's current share price and that the subscription price under
the Capital Raise will be determined by reference to a discount to
the prevailing market price, the Company feels that it is prudent
to sub-divide the existing Ordinary Shares in order to reduce their
nominal value. Subject to passing of the necessary resolutions at
the General Meeting, each of the existing Ordinary Shares will be
sub-divided into one New Ordinary Share of 0.1 pence and a Deferred
A Share of 0.9 pence.
The Capital Reorganisation will not of itself
affect the value of the shares held by Shareholders. After the
Capital Reorganisation there will be the same number of New
Ordinary Shares in issue as there are existing Ordinary Shares and
therefore Shareholders will not be diluted (other than as a result
of the Capital Raise).
The New Ordinary Shares will have the same
rights as those currently accruing to the existing Ordinary Shares
in issue, including those relating to voting and entitlement to
dividends. New share certificates for New Ordinary Shares will not
be issued and the existing certificates will remain
valid.
The Deferred A Shares will have no significant
rights attached to them and will carry no right to vote or
participate in distribution of surplus assets and will not be
admitted to trading on the AIM market of the London Stock Exchange.
The Deferred A Shares will effectively carry no value.
Timetable for
the Capital Raise and additional information
The formal decision to proceed with the Capital
Raise as well as an announcement of its full terms and conditions,
inter alia, the proposed subscription price, number of SDRs and
Ordinary Shares to be offered and the proposed timeline, is planned
for 7 March 2024. The subscription price in the Capital Raise will
be determined by the Board of Directors in consultation with its
advisors and in accordance with relevant market conditions, and is
planned to be based upon a discount customary in the Swedish market
to the average daily weighted average price for the SDRs and the
Ordinary Shares during a trading period of a of 10 days prior to
the resolution by the Board of Directors. The subscription period
for both the Rights Issue and the UK Issue is intended to take
place between 13 March and 27 March 2024.
A prospectus related to the Rights Issue
containing the full terms and conditions and instructions on
subscription and payment will be made available together with other
investor material on 12 March 2024 and before the subscription
period commences on Beowulf's website (https://beowulfmining.com/),
Evli Plc's website (www.evli.com), Aqurat's
website (www.aqurat.se), as well as
Finansinspektionen's website (www.fi.se).
The Company values its UK investor base and
therefore the purpose of the UK Issue will be to allow
Shareholders, along with private and other investors, the
opportunity to participate in the Capital Raise.
Once announced, Shareholders and other
investors will be able to access the UK Issue by visiting
www.PrimaryBid.com or downloading the PrimaryBid mobile app
available on the Apple App Store and Google Play. Shareholders and
other investors may also be able to take part through PrimaryBid's
extensive network of retail brokers, wealth managers and investment
platforms. Subscriptions through these partners can be made from
tax efficient savings vehicles such as ISAs or SIPPs, as well as
General Investment Accounts (GIAs).
For further details of how to register with
PrimaryBid, please refer to the PrimaryBid website at
www.PrimaryBid.com. The terms and conditions on which the UK Issue
will be made, including the procedure for application and payment
for new Ordinary Shares, will be available to all persons who
register with PrimaryBid.
Timetable for
the Capital Reorganisation
Publication and dispatch of the Circular and
Form of Proxy
|
16 February
2024
|
Latest time and date for receipt of the Form of
Proxy
|
1:00p.m. GMT on 3
March 2024
|
Time and date of the General Meeting
|
1:00 p.m. GMT on 5
March 2024
|
Results of the General Meeting announced
through RNS
|
5 March
2024
|
Record date for the share
sub-division
|
6.00pm GMT on 5 March
2024
|
Admission and dealings in sub-divided
shares
|
8.00am GMT on 6 March
2024
|
Advisers
In relation to the Rights Issue, the Company
has engaged Evli Plc as Swedish financial adviser, Bird & Bird
Advokat KB as Swedish legal advisor and Aqurat Fondkommission AB as
Swedish issuing agent.
Enquiries:
Beowulf Mining
plc
Ed Bowie, Chief Executive
Officer
ed.bowie@beowulfmining.com
Evli Plc
(Swedish financial adviser)
Mikkel Johannesen / Lars Olof Nilsson
Tel: +46 (0) 73 147 0013
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.