Beowulf Regulatory News (BEM)

24 Oct 2006 09:00

Beowulf Mining PLC24 October 2006 BEOWULF MINING PLC Independent Conceptual Study on Ruoutevare Iron Titanium Deposit in Northern Sweden London, 24 October 2006. Beowulf Mining PLC (AIM : BEM) the AIM quoted resourcecompany with iron, titanium, gold and copper projects in Sweden, is pleased toannounce that Raw Materials Group (RMG) of Sweden has completed a conceptualstudy of the Ruoutevare iron/titanium deposit. RMG suggest an extraction rate of10 million tonnes per annum as an economic production rate, requiring furthercost analysis work to be undertaken on ore transportation. RMG produced a simplified cash flow analysis for an eight year open pitextracting 10 million tons per year. This produced a positive study with a cashflow of just over US$50M per year from US$218 million per year of generatedrevenues, using various assumptions. (Full report is on www.beowulfmining.com ). Ruoutevare is 5 km outside the Sareks Nation Park, and careful attention to thelandscaping of the mine and associated facilities will be required. RMG suggestthis may cause a delay in permitting of the deposit. The study used current forecasts of revenues, capital costs and operationalcosts applied to a life of mine financial model. The Ruoutevare deposit is located in northern Sweden in the county ofNorrbotten, and is approximately 8 km NW of the small village of Kvikkjokk. Theproject is at an altitude of 610 meters above sea level and will require fortransport purposes a new 15 km road to be built from the site to Kvikkjokk. Hereit would link up with the existing 180 km road to Murjek and onward roadtransport or product reloading for rail shipment to the Gulf of Bothnia sea portof Lulea. The Swedish iron ore mining company LKAB is shipping out from Luleaannually some 4 Mt of magnetite concentrates and pellets to steel plants inFinland and Sweden. The deposit was originally discovered in the 18th Century. It was assessed bySveriges Geologiska Undersonkning (SGU) in the early 1970s during which timeground geophysics, metallurgical test work and detailed diamond drilling werecompleted. SGU determined a resource for the deposit of 116 Mt grading 38% ironand 5.6% titanium. This data was reviewed by Snowden Mining Industry ConsultantsLimited (Snowden) in 2006 for Beowulf and they reported a slightly highertonnage and a slightly lower grade. The mineralization occurs within outcropping shallowly dipping anorthosite asseveral separate tabular bodies in an area approx 1500m long and 200-300m wide.Snowden concluded that there are probably two lenses lying one above the other.Detailed geological mapping by Beowulf also found two over lying mineralisedlenses. Snowden and Beowulf both conclude that there is reason to believe thatthe resource estimates can be increased by additional drilling. The metallurgical test work was completed by LKAB and Rautaruukki during 1973and gives potential recoveries, using magnetic separation and flotation toproduce an iron ore concentrate and an ilmenite concentrate. The metallurgicalrecoveries are outlined below: Grade Recovery Ore feed to process plant 38% iron 5.6% titaniumMagnetite concentrate 65%iron 65%Ilmenite 44% titanium dioxide 45% A price FOB for magnetite concentrate is estimated to be US$52 per tonne and theprice FOB for ilmenite is estimated to be US$36 per tonne. The capital expenditure plus mine operation costs are not a major impact on whatwould be an open pit mine and are estimated to be 15% over the total eight yearmine life. Estimated costs are however relatively high mainly due to the cost oftransport and port handling charges. Commenting on the conceptual study, Dr. Jan Ola Larsson, Beowulf's SwedishManager, stated: "Initial indications on the economics of Ruoutevare are positive, but we need toaddress the transportation costs by negotiations with the State bodies inSweden. It is believed from geological studies that the tonnage of theRuoutevare reserves can be increased by additional drilling, thus extending themine life and reducing overall unit costs. Selective mining of the deposit canalso be achieved to increase cash flow in the early years of operation, as theSGU suggests that there is a 20 million tonne section grading 47% iron and 11%titanium oxide. Metallurgical testing work to improve the concentrate grade isongoing". For further information :- Dr. Robert Young, ChairmanBeowulf Mining plc Tel: +44-(0)1353 649 701 Gavin BurnellRuegg & Co. Limited Tel: +44-(0)207 584 3663 Nick BealerKing & Shaxson Tel: +44-(0)207 426 5986 Charles DampneyCity Capital Securities Limited Tel: +44-(0)207 822 7107 Gary MiddletonSt Swithin's Public Relations Tel: +44 (0) 207 429 4391 This information is provided by RNS The company news service from the London Stock Exchange