Beowulf Regulatory News (BEM)

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6 November 2020

Beowulf Mining plc

("Beowulf" or the "Company")

Beowulf launches a partially secured capital raising of up to approximately £7.3 million (approximately SEK 83 million) to advance the Company's asset portfolio

Beowulf (AIM: BEM; Spotlight: BEO) announces that it will conduct an open offer of up to 225,841,752 new Ordinary Shares to Qualifying Shareholders at 3.16 pence per Share (the "Offer Price") on a pre-emptive basis to raise up to approximately £7.3 million (gross) (the "Open Offer"). The Company will also receive a further conditional subscription of 88,800 new Ordinary Shares to raise £2,806 (the "Additional Subscription").

In order to ensure that existing holders of Swedish Depository Receipts ("SDRs") are able to participate in the Open Offer in respect of the underlying Ordinary Shares represented by the SDRs, the Board will instruct Sedermera Fondkommission as issuing agent in the Swedish market to offer the underlying Ordinary Shares' entitlements to accept the Open Offer to Qualifying SDR Holders in Sweden for subscription by way of a rights issue of new SDRs with preferential rights of up to approximately SEK 56.7 million (gross) (the "SDR Rights Issue") at a price of SEK 0.370 per New SDR (the "SDR Offer Price").

New SDRs in the SDR Rights Issue will also be offered for subscription without preferential rights to institutional investors, other professional investors and the general public in Sweden. The New SDRs to be offered with preferential rights to Qualifying SDR Holders and without preferential rights to investors and the general public in Sweden will represent up to the entirety of the Custodian's Open Offer Entitlements.

Beowulf has received underwriting commitments from certain Nordic investors for up to 80 per cent. (approximately SEK 45.3 million) of the SDR Rights Issue. Beowulf has also received pre-subscription commitments totalling approximately £87,000 regarding the Open Offer and Additional Subscription from certain members of the Board and senior management.

The gross proceeds from the Open Offer, the SDR Rights Issue and the Additional Subscription (together the "Capital Raising") will be up to approximately £7.3 million (corresponding to approximately SEK 83 million) in aggregate. The net proceeds from the Capital Raising, estimated to be approximately £6 million (corresponding to approximately SEK 69 million) (assuming full take-up under the Open Offer and SDR Rights Issue), will be used to advance the Company's portfolio of assets in Sweden, Finland and Kosovo.

The Offer Price under the Open Offer and Additional Subscription of 3.16 pence represents approximately a 35 per cent. discount to the theoretical ex-rights price ("TERP") of the Ordinary Shares based on the Closing Price per Ordinary Share and the SDR Offer Price of SEK 0.370 represents approximately a 35 per cent. discount to the TERP of the SDRs based on the closing price per SDR on Spotlight, in each case on 5 November 2020.

The New Ordinary Shares will be issued using the Directors' existing authority to allot shares for cash on a non-pre-emptive basis. This authority was granted by Shareholders at the Company's annual general meeting held on 10 September 2020.

A prospectus relating to the Open Offer and SDR Rights Issue is expected to be posted to Qualifying Shareholders on or around 17 November 2020 subject to final regulatory approval.

Background and use of proceeds

Beowulf has an asset portfolio diversified by commodity and development stage in several countries. The Company's vision is to build a sustainable and innovative mining company, which creates shareholder value by developing mining assets, delivering production and generating cash flow, and, in so doing, meets society's needs for metals.

With plans for each business area to drive the Company forward, the Capital Raising is intended, first and foremost, to further develop the Company's projects, while supporting its tightly managed corporate overheads.

Beowulf's first priority remains the award of the Exploitation Concession for Kallak North. If the Swedish Government approves the Exploitation Concession, and with funding from the Capital Raising, the Company's immediate plan is to complete a scoping study within 12 months, and in parallel plan for a pre-feasibility study and initiate environmental permitting. Work will continue on firmly establishing the resource upside, and the potential for a much longer life mining operation, beyond the 14 years included in the Kallak North application, which can support a long-life sustainable mining operation, high quality production and the economic future of Jokkmokk municipality.

Beowulf holds, through its 46.1 per cent. interest in Vardar, exploration licences for the Mitrovica and Viti projects in Kosovo. Both projects are located within the Tethyan Belt, a major orogenic metallogenic province for gold and base metals. Beowulf recently invested in Vardar to fund a geophysics programme that was designed to map out alteration zones and identify potential structural controls to mineralisation. 3D IP/DC surveys are also being used to directly map sulphides and resistivity contrasts associated with mineralisation. With continued exploration success in Kosovo, the Company will fund further work at Mitrovica and Viti, the goal being to discover a deposit(s) and thereafter define a mineral resource(s).

In Finland, Beowulf is pursuing, through its wholly owned subsidiary, Fennoscandian, a strategy to develop a 'resource footprint' of natural flake graphite. With sufficient funding from the Capital Raising, by the end of 2021, Fennoscandian will have completed a scoping study for its Aitolampi project, and in conjunction with the scoping study, developed plans for test mining at Aitolampi to produce a bulk sample and the establishment of a pilot plant for producing spherical graphite for batteries and other high-value graphite products.

Value drivers

The Company's estimated expenditure for the next 12 months, using the expected Minimum Net Proceeds from the Capital Raising and its cash balance, approximately £756k as of 31 October 2020, is as follows:

Additional proceeds from the Capital Raising, up to the maximum net proceeds of approximately £6 million, will be used to expand and accelerate the Company's work programmes across each of the three business areas, which could include resource drilling in Kosovo and initiating a Pre-feasibility Study for Kallak.

Kurt Budge, Chief Executive Officer of Beowulf, commented:

"The Board has considered giving shareholders the opportunity to invest in the Company on many occasions over the last six years of my involvement with Beowulf and, until now, it has never been the right time. With the financing in August, we made our first step to establishing relationships with Nordic investors, and their underwriting commitment is the cornerstone of this Capital Raising.

"Beowulf's asset portfolio is diversified by commodity, geography and development stage of its various projects, and features metals in demand to facilitate an economic green transition and for addressing the climate emergency.

"Kallak is the foundation asset of Beowulf, that we have been developing since 2006. The work towards obtaining regulatory approval has recently been intensified and we hope for a positive conclusion. We see great potential in developing a sustainable mining operation, that provides secure supply of high-quality feedstock for fossil-free steelmaking and stimulates the local and regional economy.

"In parallel with the development of Kallak, Fennoscandian is strengthening its position in the Finnish battery sector, as Finland's only developer of natural flake graphite. We see great opportunities to being seen as a secure supply to the growing demand for feed material for manufacturing anodes for lithium-ion battery manufacturing in Finland and Europe.

"In addition, through Vardar Minerals, we have a strategic investment exposure to the highly prospective Tethyan Belt, a major orogenic metallogenic province for gold and base metals, with geophysics results expected to provide targets for drilling at Mitrovica and Viti in 2021.

"We are now carrying out the Capital Raising to further advance and strengthen the Company and its assets.

"We see great potential in our Company, which is further emphasised by members of the Board and senior management subscribing in the Open Offer and Additional Subscription.

"Kallak is the foundation asset of the Company, but with Vardar and Fennoscandian, the Company has many investment opportunities to grow, with each business area displaying strong prospects for an exciting future for the Company."

The Capital Raising

The Open Offer provides an opportunity for all Qualifying Shareholders to acquire Open Offer Shares pro rata to their holdings of Ordinary Shares as at the Open Offer Record Time. The Offer Price of 3.16 pence per Open Offer Share for the Open Offer is the same as the Offer Price in the Additional Subscription, while the Offer Price of SEK 0.370 per Open Offer Share to be subscribed for by the Custodian is the same as the SDR Offer Price in the SDR Rights Issue. Qualifying Shareholders will also be able to apply through the Excess Application Facility for New Ordinary Shares under the Open Offer in excess of their Open Offer Entitlement, provided that they have agreed to take up their Open Offer Entitlement in full. The Custodian will not be permitted to apply for Excess Open Offer Shares through the Excess Application Facility.

Approximately 68 per cent. of the Existing Ordinary Shares are represented in the form of SDRs. Hence, a rights issue of New SDRs, representing interests in the Custodian's Open Offer Entitlements in the Open Offer, will be conducted with preferential rights pro rata to Qualifying SDR Holders' holdings of SDRs at the SDR Rights Issue Record Date. Qualifying SDR Holders may also apply for new SDRs in the SDR Rights Issue in excess of their preferential rights in the SDR Rights Issue. New SDRs in the SDR Rights Issue will also be offered for subscription by institutional investors, other professional investors and the general public in Sweden.

In November 2020, the Company entered into underwriting commitments concerning the SDR Rights Issue with the Guarantors. The commitments amount to up to 80 per cent. of the issue volume in the SDR Rights Issue corresponding to approximately SEK 45.3 million. The Guarantors have committed to the Company, to the extent that New SDRs in the SDR Rights Issue are not subscribed up to 80 per cent., to subscribe for the amount of New SDRs required for the SDR Rights Issue to be subscribed up to 80 per cent., provided that the total underwritten amount shall not exceed approximately SEK 45.3 million. Subscription of New SDRs according to the underwriting commitments shall be carried out to the SDR Offer Price. A total cash compensation of 12 per cent. of the underwritten amount is payable to the Guarantors. The underwriting commitments has not been secured via a pre-transaction, bank guarantee or the like.

Since the transfer of Ordinary Shares between CREST and the VPC system may cause reconciliation issues, it will not be possible to process conversions of: (i) Ordinary Shares to SDRs and the crediting of such SDRs to the VPC system from 8.00 a.m. (Stockholm time) on 6 November 2020 until 8.00 a.m. (Stockholm time) on 19 November 2020; and (ii) the removal from the VPC system of SDRs and their conversion to Ordinary Shares from 8.00 a.m. (Stockholm time) on 6 November 2020 until 8.00 a.m. (Stockholm time) on 19 November 2020. Accordingly, Shareholders will not be able to convert their Ordinary Shares to SDRs (or vice versa) during these times.

In addition, it will not be possible to transfer or exchange Open Offer Entitlements to or for Swedish Subscription Rights in the VPC system, or to transfer or exchange Swedish Subscription Rights or Paid Subscribed SDRs in the VPC system to or for Open Offer Entitlements or Ordinary Shares.

The Additional Subscription allows for Christopher Davies, Independent Non-Executive Director of the Company, who is not currently a shareholder, to invest in the Company. The Offer Price of 3.16 pence per Additional Subscription Share is the same as the Offer Price in the Open Offer.

The total estimated issuing costs of the Capital Raising payable by the Company are approximately £1.2 million (corresponding to approximately SEK 14 million) (assuming full take-up under the Open Offer and SDR Rights Issue). Of the total estimated issuing costs, corresponding to approximately £0.48 million (approximately SEK 5.4 million) are attributable to cash compensation to the underwriters of the SDR Rights Issue.

The New Ordinary Shares to be issued pursuant to the Open Offer and Additional Subscription are to be admitted to trading on AIM, which is expected to take place at 8.00 a.m. on 22 December 2020. The Swedish Subscription Rights, the Paid Subscribed SDRs and the New SDRs are to be admitted to trading on Spotlight which, in the case of the Swedish Subscription Rights and the Paid Subscribed SDRs, is expected to take place on 20 November 2020 and, in the case of the New SDRs, is expected to take place on or around 29 December 2020.

Directors' and the senior manager's commitments and shareholdings

Certain of the Directors and Rasmus Blomqvist, the only senior manager of the Company, have agreed to subscribe for Open Offer Shares and Additional Subscription Shares. The Company has received pre-subscription commitments totalling approximately £87,000 regarding the Open Offer and Additional Subscription from certain members of the Board and senior management:

Summary of the Open Offer

· Subscription period: 18 November 2020 - 18 December 2020 (11.00 a.m. London time).

· Subscription price: 3.16 pence per new Ordinary Share (in the case of Open Offer Shares applied for by the Custodian in connection with the SDR Rights Issue, the SDR Offer Price). The Offer Price under the Open Offer represents approximately a 35 per cent. discount to the TERP based on the Closing Price per Ordinary Share on 5 November 2020. The Offer Price per Open Offer Share under the Open Offer is the same as the Offer Price in the Additional Subscription.

· Issue amount: The Open Offer will comprise a maximum of approximately 225,841,752 new Ordinary Shares (of which up to approximately 153,172,548 Ordinary Shares will be offered under the SDR Rights Issue in the form of New SDRs). The proceeds of the Open Offer (excluding the proceeds from the SDR Rights Issue) will be up to approximately £2.3 million (gross). The number of Ordinary Shares in issue as at the date of this announcement amounts to 602,244,672.

· Preferential rights: Qualifying Shareholders will have preferential rights to subscribe for three (3) Open Offer Shares for every eight (8) Existing Ordinary Shares held by them and registered in their names at 6.00 p.m. on 16 November 2020. The ex-entitlement date for the Open Offer will be 8.00 a.m. on 17 November 2020. Open Offer Entitlements cannot be traded.

· No underwriting: the Open Offer is not being underwritten.

Summary of the SDR Rights Issue

· Subscription period: 20 November 2020 - 4 December 2020 (5.00 p.m. Stockholm time).

· Subscription price: SEK 0.370 per new SDR. The SDR Offer Price represents approximately a 35 per cent. discount to the TERP of the SDRs based on the closing price per SDR on Spotlight on 5 November 2020. No brokerage fee will be charged.

· Issue amount: The SDR Rights Issue will comprise a maximum of approximately 153,172,548 new SDRs. The proceeds of the SDR Rights Issue will be up to approximately SEK 56.7 million (gross). The number of SDRs in issue as at the date of this announcement amounts to 408,460,129.

· Preferential rights: Qualifying SDR Holders will have preferential rights to subscribe for new SDRs in relation to their existing holdings of SDRs. Qualifying SDR Holders will receive Swedish Subscription Rights on the basis of one Swedish Subscription Right for each SDR held on the SDR Rights Issue Record Date 18 November 2020. Holders of Swedish Subscription Rights will be entitled to subscribe for three (3) New SDRs for every eight (8) Swedish Subscription Rights held. The last day of trading in SDRs with preferential rights will be 16 November 2020. The first day of trading in SDRs without preferential rights will be 17 November 2020. Trading in Swedish Subscription Rights will take place on Spotlight from 20 November 2020 until 2 December 2020.

· Underwriting commitments: Beowulf has received underwriting commitments from Nordic investors (of up to 80 per cent. (approximately SEK 45.3 million) of the SDR Rights Issue. A total cash compensation of 12 per cent. of the underwritten amount is payable by the Company to the Guarantors.

· Paid subscribed SDRs: Trading in Paid Subscribed SDRs will take place on Spotlight from 20 November 2020 until the New SDRs can be registered in the VPC system.

Summary of the Additional Subscription

· The Additional Subscription comprises 88,800 Additional Subscription Shares raising approximately £2,800 (gross).

· The Offer Price of 3.16 pence per Additional Subscription Share is the same as the Offer Price of the Open Offer.

Change in Ordinary Shares, share capital and dilution 

A maximum of 225,930,552 New Ordinary Shares (including in relation to the SDR Rights Issue) may be issued pursuant to the Capital Raising, increasing the number of Ordinary Shares in issue from 602,244,672 to 828,175,224, corresponding to a £2,259,306 increase in the issued share capital of the Company from £6,022,446 to £8,281,752. If Qualifying Shareholders or Qualifying SDR Holders do not participate in the Open Offer or SDR Rights Issue and do not take up any of their Open Offer Entitlements or Excess Open Offer Entitlements, such Qualifying Shareholders' holdings, as a percentage of the Enlarged Share Capital, will be diluted by approximately 27 per cent. of votes and share capital (assuming full take-up under the Open Offer and SDR Rights Issue) as a result of the Capital Raising.

Related Party Transaction

The Additional Subscription from Christopher Davies is considered a related-party transaction for the purposes of Rule 13 of the AIM Rules for Companies. The directors independent of the Additional Subscription, (being Kurt Budge and Göran Färm) consider, having consulted with SP Angel, the Company's nominated adviser, that the Additional Subscription participation is fair and reasonable in so far as Beowulf's shareholders are concerned.

Expected Timetable of Principal Events

Each of the times and dates in the tables below is indicative only and may be subject to change. References to times in this timetable and in the rest of this announcement are to London time unless otherwise stated.

Summarised indicative timetable for the Open Offer

Summarised indicative timetable for the SDR Rights Issue

These times and dates and those mentioned throughout this announcement are indicative only and may be adjusted by the Company in consultation with the Brokers, in which event details of the new times and dates will be notified to the FCA, the London Stock Exchange and Spotlight.

Prospectus

The Prospectus will be posted to Qualifying Shareholders and will be available on Beowulf's, Sedermera Fondkommission´s and Spotlight Stock Markets webpages www.beowulf.com, www.sedermera.se, www.spotlightstockmarket.com on or around 17 November 2020 before the start of the SDR Rights Issue subscription period.

Exchange rate

This announcement contains certain translations of pounds sterling into amounts in SEK for convenience of the reader based on the exchange rate of £1.00 = SEK 11,398, being the relevant exchange rate at 5.30 p.m. on 5 November 2020. These exchange rates were obtained from the homepage of the Central Bank of Sweden.

Enquiries:

Forward Looking Statements

Certain statements contained in this announcement relate to the future, including 'forward looking statements' relating to the Group's financial position and strategy. These statements relate to future events or the future performance of the Group. In some cases, these forward looking statements can be identified by the use of forward looking terminology, including the terms 'believes', 'estimates', 'plans', 'prepares', 'anticipates', 'expects', 'intends', 'may', 'will' or 'should' or, in each case, their negative or other variations or comparable terminology. These statements discuss future expectations concerning the Group's results of operations or financial condition, or provide other forward looking statements.

These forward looking statements are not guarantees or predictions of future performance, and are subject to known and unknown risks, uncertainties and other factors, including, but not limited to: (a) the Company may not be granted an Exploitation Concession for its principal and most advanced project at Kallak North; (b) the Company's operations are dependent upon the grant, renewal or continuance in force of appropriate licences which may be revoked if their conditions are not complied with; (c) the Company will have additional financing needs in the future and adequate financing might not be available on acceptable terms, or at all; (d) the Company's value and financial performance is dependent on commodity prices; (e) the Company is exposed to foreign currency risk; (f) the Company may not discover an economic mineral deposit; (g) COVID-19 has negatively impacted economic conditions globally and may adversely affect the Group's operations; and (h) the Company has no current revenue source and a history of operating losses, is likely to generate operating losses for the foreseeable future and is likely to achieve revenues or profitability for some time, if at all. Many of these risk factors are beyond the Group's control, and may cause the Group's actual results of operations, financial condition and the development of the business sectors in which the Group operates to differ materially from those suggested by the forward looking statements contained in this announcement. In addition, even if the Group's actual results of operations, financial condition and the development of the business sectors in which it operates are consistent with the forward looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Recipients of this announcement are cautioned not to put undue reliance on forward looking statements.

Other than as required by English law, none of the Company, its Directors, officers, advisers or any other person gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in this announcement will actually occur, in part or in whole.

Additionally, statements of the intentions of the Board and/or Directors reflect the present intentions of the Board and/or Directors, respectively, as at the date of this announcement and may be subject to change as the composition of the Company's board of directors alters, or as circumstances require.

The forward looking statements speak only as at the date of this announcement. Except as required by the FCA, the London Stock Exchange or applicable law (including as may be required by FSMA, the Prospectus Regulation Rules, the Prospectus Regulation, the Disclosure Guidance and Transparency Rules, the AIM Rules, the Market Abuse Regulation and other applicable regulations), the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained in this announcement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Disclaimer

SP Angel, which is authorised and regulated by the FCA in the United Kingdom, is acting as nominated adviser and financial adviser exclusively for the Company and no-one else in connection with the Capital Raising, this announcement and AIM Admission and will not regard any other person (whether or not a recipient of this announcement) as a client of SP Angel in relation to the Capital Raising, this announcement or AIM Admission or any arrangement referred to in, or information contained in, this announcement and will not be responsible for providing the protections afforded to SP Angel's clients nor for giving advice in relation to the Capital Raising, this announcement or AIM Admission, or any arrangement referred to or information contained in this announcement.

Sedermera Fondkommission is acting as the financial adviser and broker to, and is providing issuing services for, the Company in relation to the SDR Rights Issue. Sedermera Fondkommission is a secondary business name of ATS Finans AB. Sedermera Fondkommission has assisted the Company in the preparation of this announcement. The Directors are responsible for the contents of this announcement and Sedermera Fondkommission and ATS Finans AB disclaim all responsibility in relation to Shareholders and SDR Holders and for other direct or indirect consequences as a result of investment decisions or other decisions based on the information in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on SP Angel by FSMA or the regulatory regime established thereunder or on Sedermera under the Swedish Securities Markets Act (Swedish: lagen (2007:528) om värdepappersmarknaden) or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, neither SP Angel, Sedemera (together the "Brokers"), nor any of their respective affiliates, accepts any responsibility whatsoever for the contents of this announcement including its accuracy, completeness and verification or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Swedish Subscription Rights, the Paid Subscribed SDRs, the New Ordinary Shares, the New SDRs, the Capital Raising or Admission and nothing in this announcement is or shall be relied upon as a promise or representation in this respect, whether as to the past or future. The Brokers and their respective affiliates accordingly disclaim, to the fullest extent permitted by applicable law, all and any liability whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise be found to have in respect of this announcement or any such statement. No representation or warranty express or implied, is made by the Brokers or any of their respective affiliates as to the accuracy, completeness, verification or sufficiency of the information set out in this announcement , and nothing in this announcement will be relied upon as a promise or representation in this respect, whether or not to the past or future.

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