Beowulf Regulatory News (BEM)

21 February 2023

Beowulf Mining plc

("Beowulf" or the "Company")

New Site Reserved in the GigaVaasa Area for establishing Anode Materials Production

Beowulf (AIM: BEM; Spotlight: BEO), is pleased to announce that the Company's wholly owned Finnish subsidiary Grafintec Oy ("Grafintec") has signed a site reservation agreement with the municipality of Korsholm, securing Plot 1, Block 3017 in the GigaVaasa area, for the establishment of a Graphite Anode Materials Plant ("GAMP"). The agreement was signed on 13 February 2023 and the reservation is valid for an initial six-month period from signing, with the option to extend.

Over the coming months, Grafintec will work closely with the municipality of Korsholm and other important stakeholders, continue with its Pre-Feasibility Study ("PFS") announced on 9 January 2023, and in addition parallel workstreams as part of an Environmental Assessment Impact ("EIA") programme. Grafintec intends to apply for a long-term site reservation for Plot 1 before the end of July 2023.

Plot 1 covers an area of approximately 47 hectares and is located immediately to the south-southeast of the area where FREYR, the battery cell manufacturing company, has secured land to develop industrial scale battery technology and production (see FREYR Battery begins preparatory work in Vaasa, Finland | Gigavaasa).

While a number of European graphite anode materials projects are in planning, there remains a real risk that regional supply will fail to satisfy demand for several years. Seeing the opportunity, Grafintec is collaborating with its technology partner Qingdao Hensen Graphite Ltd ("Hensen") and the Engineering Consultancy RB Plant Construction Ltd. ("RB Plant") to fast-track the development of GAMP. Funding by Business Finland as part of the BATCircle2.0 (Finland-based Circular Ecosystem of Battery Metals) consortium will be used to develop state-of-the art technological solutions to provide sustainable and high-quality precursor anode materials to the European battery cell manufacturing industry.

Kurt Budge, Chief Executive Officer of Beowulf, commented:

"I am thrilled that Grafintec has secured a new site in the GigaVaasa area, as the Company seeks to fulfil its downstream ambitions and build a graphite-based anode materials value chain in Finland.

"The exploration work Grafintec is doing with its upstream assets at Aitolampi and Rääpysjärvi and study work on the downstream configuration, should see the Company make significant progress by the mid-year and I am looking forward to building a fruitful partnership with the municipality in Korsholm and other players in the GigaVaasa Area.

"The GigaVaasa area is dedicated to the battery value chain and provides access to renewable energy, well developed infrastructure, a plot area with room for expansion, as well as possible synergies with other industries as part of a sustainable green ecosystem. As Grafintec focuses on Net Zero operations and its ESG performance, the new site fits perfectly with the Company's development plans."

Rasmus Blomqvist, Managing Director of Grafintec, commented:

"The Award of the site reservation with the municipality of Korsholm is a big step forward for Grafintec and maintains the Company's momentum towards building a Finnish anode materials value chain.

"Since I started visiting the GigaVaasa area a few years ago, I have always received a very warm and collaborative welcome, and my impression has only strengthened during discussions with the municipality of Korsholm over recent months, which have resulted in this agreement.

The GigaVaasa area is dedicated to the battery value chain and it's important that Grafintec is strategically part of this, especially when we have a site so close to key developments, such as FREYR's battery cell factory. 

"I look forward to some busy months ahead".

European Lithium-Ion Battery and Graphite Anode Market

The Lithium-Ion Battery ("LIB") market is predicted to grow significantly, reaching an annual global demand of 8,000 gigawatt-hours ("GWh") by 2031 from a current level of 1,000 GWh (Benchmark Mineral Intelligence, December 2022). According to McKinsey the market is mainly driven by mobility applications which are expected to account for approximately 90 per cent of the demand, most importantly the Electrical Vehicle ("EV") industry, but the demand for energy storage systems for renewable energy such as wind and solar power will also play an important role when moving away from non-renewable energy sources. McKinsey forecast the global battery-value chain is expected to grow by as much as ten times between 2020 and 2030 reaching an annual revenue of US$410 billion.

Graphite is the single largest component by volume in a LIB which contains significantly more graphite than lithium, nickel, and cobalt. Currently graphite, either natural or synthetic accounts for approximately 95 per cent of the anode market and due to its cost-performance ratio it will remain the material of choice for anodes for the next decade. The World Bank has said graphite demand will increase by 500 per cent between 2018 and 2050, while the global graphite market is expected to reach US$21.6 billion. In Europe the graphite anode market is expected to grow even faster with an expected annual growth rate by more than sixteen times from a current level of 84,000 tonnes to 1.4 million tonnes of graphite anodes by 2031 (Benchmark Mineral Intelligence, December 2022). Geopolitical tensions, the European Green Transition, and a focus on sustainable and secure supply-chains, as well as self-sufficiency, has led countries to re-assess their overreliance on Chinese supply of strategic materials including graphite.

The lack of commercial production of graphite anodes in Europe, and with the continent aiming to strengthen its domestic raw material supply chain, together with the predicted market growth is a unique window of opportunity for Grafintec to establish itself in the graphite anode space.

Grafintec's Aitolampi natural flake graphite project with an Indicated and Inferred Mineral Resource of 26.7 Mt at 4.8 per cent Total Graphitic Carbon ("TGC") for 1,275,000 tonnes of contained graphite (see announcement 30 October 2019) together with its plans to develop the GAMP in the GigaVaasa area presents a unique opportunity for the Company to achieve its goal to become the leading European supplier of sustainably produced graphite-based anode materials.

Finnish Graphite Anode Value Chain

The development of downstream capabilities is a key part of Grafintec's strategy and following the announcement on 26 September 2022 on signing a Memorandum of Understanding ("MoU") with Hensen, the collaboration between the companies has proceeded with regards to establishing an anode materials hub in Finland. 

To support a sustainable graphite anode value chain in Finland, Grafintec continues to focus on expanding its resource footprint; with recently announced encouraging results from its 100 per cent owned Rääpysjärvi natural flake graphite exploration project located just eight kilometres north-northwest of the Company's most advanced natural flake graphite project Aitolampi.

The Company is evaluating possible operational synergies for future development of the two sites, given their proximity, such as shared processing infrastructure. The aim is to provide a secure local and sustainably produced feed for downstream processing facilities, leveraging renewable power across and targeting Net Zero CO2 emissions ("Net Zero") across the supply chain.

While the development of primary raw materials supply takes more time to permit in Finland, the Company has other initiatives to secure supply, both natural flake graphite and recycled graphite, to feed downstream processing in the short term. 

In May last year, Grafintec signed an MoU with Dominik Georg Luh Technografit GmbH ("Technografit"), establishing the basis for a commercial partnership for securing sustainable supply of natural flake graphite for Grafintec's planned graphite anode materials plant; samples are now being tested by Hensen and processed to anode material. Also, the Company has test work programmes on recycled graphite containing waste to assess whether it can be processed to suitable feedstock for anode materials production.

Pre-Feasibility Study

On 9 January 2023, Grafintec announced the award of a PFS contract to RB Plant to assess the technical, economic, statutory, regulatory, and commercial options for a natural flake graphite micronisation, spheronisation, purification, and coating plant in Finland.

The study will investigate the Best Available Technology ("BAT") with consideration for environmental, operational, and financial factors and performance, for transforming a high-grade natural flake graphite concentrate to graphite anode material suitable for the European LIB market opportunities and is targeted for completion during H1 2023.

The PFS is a key part of Grafintec`s strategy to develop a Finnish value chain for anode materials production, aligned with the objectives of the funding received from Business Finland as part of the BATCircle2.0 (Finland-based Circular Ecosystem of Battery Metals) consortium. BATCircle2.0 is a key project in Business Finland's Smart Mobility and Batteries from Finland programmes. 

About Grafintec

Beowulf Mining's 100 per cent owned subsidiary Grafintec is recognised in Finland as one of the main companies in the anode space and continues to be supported by Business Finland, the Finnish governmental organization for innovation funding and investments.

The Company's most advance natural flake graphite project, Aitolampi, has an Indicated and Inferred Mineral Resource of 26.7 Mt at 4.8 per cent TGC for 1,275,000 tonnes of contained graphite (see announcement 30 October 2019), possessing almost perfect crystallinity, an important prerequisite for high tech applications such as lithium-ion batteries. The Mineral Resource was estimated by CSA Global of Australia in accordance with the JORC Code, 2012 Edition. In addition to Aitolampi, the Company has other graphite exploration prospects, including Rääpysjärvi.

On 26 September 2022, Beowulf announced the signing of a MoU with Qingdao Hensen Graphite Ltd. that includes an agreed framework and key terms on which both companies are collaborating with regards to establishing an anode materials hub in Finland.

In 2021, Grafintec was granted EUR 791,000 funding by Business Finland as part of the BATCircle2.0 (Finland-based Circular Ecosystem of Battery Metals) consortium. The funding will be used to develop a sustainable technological solution, utilizing renewable energy, to spheronise and purify graphite within a Finnish industrial ecosystem, for use in the manufacture of lithium-ion battery anodes.

The project has three objectives, which are to:

· Validate a process to support progress to a Bankable Feasibility Study for construction of a commercial scale unit within three to five years.

· Secure and protect any arising intellectual property.

· Deliver a detailed strategic marketing and commercialisation plan.

About Korsholm Municipality

The municipality of Korsholm is located in the Ostrobothnian region in Western Finland. It surrounds the city of Vaasa.

Korsholm has a history that can be dated back to 1348, and the municipality is in fact celebrating its 675th anniversary in 2023. Korsholm aims to be the most business-friendly municipality in Finland. In the region of Ostrobothnia, it is the most business-friendly, according to a recent survey on businesses and municipalities. Korsholm's focus on circular economy has a prominent place in the municipal strategy.

About Vaasa Region

The Nordic Energy Capital Vaasa is a unique combination of modern internationalism, young enthusiasm, innovative know-how as well as peace and tranquility of the sea and the unique nature. In Vaasa Region, energy is a positive force that is not only visible in business, but also in people's everyday lives and the development of the city. Technologies are being developed in the Vaasa region for a cleaner, more sustainable and more energy efficient world. The region's industry produces more than 30% of Finland's energy technology exports, a significant part of which is renewable energy technologies. The largest energy cluster in the Nordics is located in the Vaasa region. Our work is about new energy technologies, and our passion is to save the world. www.energyvaasa.fi

About GigaVaasa

GigaVaasa's main goal is to provide a carbon-neutral environment ecosystem for a competitive battery cluster. We are offering a wide range of different size of T/KEM sites for battery value chain manufacturers. Through our work, we are committed on supporting sustainable manufacturing in GigaVaasa area. www.gigavaasa.fi

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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.