Beowulf Regulatory News (BEM)

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations ("MAR") (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

30 October 2020

Beowulf Mining plc

("Beowulf" or the "Company")

Kallak Update

Beowulf (AIM: BEM; Spotlight: BEO), the mineral exploration and development company, has learnt that the Ministry of Enterprise and Innovation (the "Ministry"), in a submission to the Constitutional Committee, which is reviewing the Swedish Government's handling of the Company's application for an Exploitation Concession (the "Concession") for Kallak North, has suggested that the 'the United Nations Educational, Scientific and Cultural Organization ("UNESCO") should be given the opportunity to assess whether the activities in question [the Kallak Iron Ore Project] have an impact on the world heritage of Laponia'.

The Company has written to the Ministry and made the following points:

· Over four years ago, in July 2016, when the Company was providing further information on the perceived impact of Kallak on Laponia, there were 1,052 UNESCO sites, including 814 cultural, 203 natural, and 35 mixed properties, in 165 states.

At that time, to the Company's knowledge, there had only been two sites which had lost their UNESCO World Heritage status:

o An Oryx Sanctuary in Oman, where the government reduced its size by 90 per cent for oil development. The result of which decimated the Oryx population through habitat loss and poaching; and

o The Dresden Elbe Valley. A picturesque City in Germany had a large modern transport bridge built through its middle and crossing the valley.

It is the Company's understanding that World Heritage sites may lose their designation when the UNESCO World Heritage Committee determines that the designated site is not properly managed or protected.

First, however, the Committee would place a site it is concerned about on its list of 'World Heritage in Danger' and attempt to negotiate with the local authorities to remedy the situation. If remediation fails, the Committee then revokes its designation.

Today, there are 53 entries on the List of World Heritage in Danger https://whc.unesco.org/en/danger/. Laponia has never been on the list.

· The total area of Laponia is about 9,400 square kilometres and in 2016 it was the world's largest unmodified nature area to be still cultured by natives - the natives in this case being the Sami reindeer herders.

Kallak is approximately 34 kilometres outside of Laponia, at its closest point, and 13.6 square kilometres or 0.15 per cent the size of Laponia.

· For reference, Boliden's Aitik mine, Sweden's largest open pit, was established in 1966, some 30 years before Laponia was granted World Heritage status. Both it and state-owned LKAB's Malmberget operations are closer to Laponia than Kallak.

· The Company has provided the Ministry with the Heritage Impact Assessment ("HIA") (https://beowulfmining.com/wp-content/uploads/2020/10/BEM-Yttrande-Bergstaten-2017-04-28_bilaga1.pdf) and covering letter (https://beowulfmining.com/wp-content/uploads/2020/10/BEM-Yttrande-Bergsstaten-2017-04-28.pdf) sent to Bergsstaten (the Mining Inspectorate) in April 2017 .

A File Note (https://beowulfmining.com/wp-content/uploads/2020/10/BEM-Note-on-matters-regarding-Kallak.pdf) has also been provided, on matters regarding Kallak, the purpose of which is to provide the reader with details on the Company's application, including Environmental Impact Assessment, matters regarding the perceived interaction between Kallak and Laponia and the co-existence of mining and reindeer herding.

In the HIA, the Company presented an analysis of the indirect effects of a mining operation at Kallak on Laponia with respect to reindeer herding, and the effects of transport on Laponia. The analysis followed UNESCO guidelines for conducting an HIA. Typically, an HIA is not required with an application for an Exploitation Concession, but the Company voluntarily produced one, with the support of its Swedish technical team.

· In March 2017, it had already been concluded by Naturvårdsverket and Riksantikvarieämbetet that a mining operation at Kallak would have no direct impact on Laponia. The Company believes that mining and reindeer herding can cooperate and prosper side-by-side, and there is no evidence to suggest that they cannot. The Company also believes that transport solutions will be optimised during, and controlled by, environmental permitting, such that there is no effect on Laponia. It is the Company's ambition to seek environmentally sensitive solutions with respect to all aspects of the Kallak project, and to develop the project in partnership with the community.

· Since the original application for the Concession was submitted in April 2013, the Company has addressed concerns raised by Länsstyrelsen Norrbotten (the CAB) and been proactive, providing further information when we believed it would help the authorities. In July 2015, Länsstyrelsen were supportive of our application and the economic benefits that Kallak could deliver, and in October 2015, the Mining Inspectorate recommended to the Swedish Government that the Concession be awarded.

· The study by Copenhagen Economics titled 'Kallak - A real asset, and a real opportunity to transform Jokkmokk' https://beowulfmining.com/wp-content/uploads/2018/10/Copenhagen-Economics_Presentation_SEP17_Swedish.pdf demonstrated the 'big picture' impact of a mining operation at Kallak, the direct and indirect economic influences on Jokkmokk, but also the connections with other businesses in Norrbotten e.g. rail, port, power supplier and end-users e.g. HYBRIT.

Kurt Budge, Chief Executive Officer of Beowulf, commented:

"We are pleased that the application appears to be being progressed by the Government and it is the Company's view that by consulting UNESCO the Ministry is satisfying all partners in Government that the Company's application is good. While the news came as a surprise to the Company and clearly investors have reacted negatively, the Company does not believe this matter is a material cause for concern.

"There have only been two examples where World Heritage status has been lost and the development of the Kallak project does not even begin to compare to the circumstances in these cases.

"Kallak's proximity to Laponia, its comparative scale, 0.15 per cent the size of Laponia, the fact that both Boliden and state-owned LKAB have mining operations closer than Kallak to Laponia, and in the case of Aitik, the mine was established thirty years before Laponia gained its World Heritage status, would lead any reasonable assessor to conclude that a mine at Kallak poses no threat to Laponia; which, throughout 7.5 year application process, is something the Company has been arguing and supporting its arguments.

"Recently I presented in Stockholm and spoke about the driving forces in Sweden, in the mining sector and wider society, that support the award of the Concession for Kallak; the need for security of high quality raw materials for fossil-free steel making, produced from sustainable mining operations, leveraging renewable power and demonstrating the collective strength of northern Sweden's basic, but highly innovative, industrial base; all fitting parts of the Government's 'Green Transition'.

"I look forward to keeping the markets updated on the Company's progress."

About Beowulf Mining plc

Beowulf's strategy 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 ongoing need for metals.

Beowulf is developing a high-quality asset base, which is diversified by geography and commodity, enabling it to simultaneously advance several projects up the mining value curve.

The Company's first priority remains the award of the Exploitation Concession for Kallak North, and thereafter completing the Scoping Study. The introduction of a strategic partner/investor who understands the value of Kallak as a high-quality asset, which could be in production within four to five years, is an ongoing consideration, but does not preclude the Company from continuing to add value to Kallak in the meantime.

Fennoscandian Resources ("Fennoscandian"), the Company's graphite business, is pursuing a strategy to develop a resource/production base of natural flake graphite that can provide 'security of supply' and enable Finland to achieve its ambition of self-sufficiency in battery manufacturing. The Company is a recipient of Business Finland funding, which is supporting Fennoscandian to move downstream, and develop its knowledge in processing and manufacturing value-added graphite products.

The Company owns 46.1 per cent of Vardar, a UK registered exploration company with a focus on the metal endowed Balkan region. Vardar holds 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 which extends from the Alps (Carpathians/Balkans) to Turkey, Iran and Indochina, and contains several world class discoveries. The Tethyan Belt of south-east Europe can be regarded as Europe's chief copper-gold (lead-zinc-silver) province.

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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.