Beowulf Regulatory News (BEM)

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, this inside information is now considered to be in the public domain.

19 August 2022

Beowulf Mining plc

("Beowulf" or the "Company")

Unaudited Financial Results for the Period Ended 30 June 2022

Beowulf (AIM: BEM; Spotlight: BEO), the mineral exploration and development company, announces its unaudited financial results for the six months ended 30 June 2022 (the "Quarter").

Overview of Activities in the Quarter

Sweden

· Further to the award of the Exploitation Concession for Kallak North in March 2022, the Company has continued conversations with engineering consultants, to support the completion of a Scoping Study and roadmap to Pre-feasibility, infrastructure operators (rail and power), technical experts, potential customers, and strategic partners.

· On 13 May 2022, Beowulf's Chief Executive Officer ("CEO"), Kurt Budge, provided a brief update on the future development of Kallak at the Swedish Mining Innovation and Research Day in Luleå. During his week-long visit to Sweden, he met with legal advisers to discuss environmental permitting and its place in the overall development timeline for Kallak and engaged in discussions with authorities and potential partners in the future development of Kallak.

· On 13 June 2022, Beowulf announced the appointment of Ulla Sandborgh as CEO of Jokkmokk Iron.

Post Period

· On 4 July 2022, the Company announced a loan financing from a Nordic Institutional Investor of SEK 22 million (approximately £1.76 million) before expenses. The funding will be used to advance the Company's projects and achieve key milestones, with the focus being on Kallak.

· On 8 July 2022, the Beowulf Board announced it had approved the implementation of a new long-term incentive plan ("LTIP") available to eligible employees of the Company. 

Corporate

· On 22 June 2022, the Company announced that all resolutions tabled at its Annual General Meeting were passed on a poll. 

Kurt Budge, Chief Executive Officer of Beowulf, commented:

"During the quarter, Kallak has been the real focus; Ulla Sandborgh joining the Company as CEO of Jokkmokk Iron was a major step forward, as we seek to strengthen and diversify the leadership team, and accelerate technical, environmental, and social workstreams. SRK have been contracted to complete the Scoping Study; having previously been engaged in 2017, the SRK team has deep knowledge of the project.

"I have no doubt that Ulla's contribution, with her years of experience in trade and industry in Sweden and a thorough knowledge of environmental permitting, will be significant, as she drives Jokkmokk Iron towards a production start in 3-4 years. Seeking greater transparency and predictability in environmental permitting, we are greatly encouraged by the permitting advances being made by downstream industrial projects, as Sweden does all it can in response to the Climate Emergency and to lead the Green Transition in steelmaking. There will be many benefits flowing from our project to the local community, including job opportunities, growing the local economy, tax revenues and more, that will help sustain and build a strong and vibrant Jokkmokk and positively affect the surrounding region. 

"An important part of Ulla's work will be engaging with the Sami communities in the Jokkmokk area; having performed similar work in her previous roles. We look forward to re-engaging with these stakeholders and together building a framework for ongoing good-faith dialogue.

"With the Concession awarded, it has been pleasing to see the interest in eventual production from Kallak and we continue to have discussions with parties keen to know when Kallak will be onstream and its high-quality products available.

"We are not the first mining company in Sweden. Many actors are operating and have been seeking opportunities for many years. With Kallak, we see that we have an opportunity now to build sustainable solutions from the beginning, starting fresh, instead of transforming already outdated structures that have been operating for decades. We wish to build this sustainable asset together with local, regional, and national actors with the goal of developing the most sustainable mining operation possible in Sweden. By building a sustainable mine, the need for importing from other, less developed and less environmentally focused countries, can be reduced and Sweden could feed into the wider Greener Transition in steelmaking with its own resources.

"Two weeks ago, I was in Finland, in Helsinki and Vaasa, and I am grateful for the continued encouragement and support that we receive from the Finnish authorities and stakeholders. Grafintec has several opportunities it is considering to realise its ambitions for a Finnish value chain for primary natural flake graphite to anode material, including the assessment of alternative feedstocks in the Circular Economy, such as recycled graphite materials, that can boost production levels and enhance our sustainability and ESG credentials as we seek to play a leading role in the European anode space.

"The need for homegrown raw materials in the EU has been debated for some time, one of the key factors is that if the EU is being too reliant on imported raw materials that poses a serious risk given the geopolitical developments seen in recent months. We see that we have the opportunity to contribute to this regional need by offering key raw materials such as graphite from Finland and high-quality iron ore from Sweden, with the added benefit of operations powered by renewables."

"Regarding Vardar, we are finalising our conclusions from the drilling programme in Kosovo, which has focused on the Mitrovica licence and the Majdan Peak exploration prospect and a further announcement will shortly be forthcoming to update the market on our progress.

"There continues to be activity taking place across Beowulf, with iron ore in Sweden, the creation of opportunities for our graphite assets and drilling base and precious metal targets in Kosovo. The Company has many opportunities to grow, each business area displaying strong prospects, with near-term and longer-term value-inflection points.

"We are looking forward to a busy and productive Autumn. With our strengthened team, great business opportunities, as well as our ambitious strategy and plan, Beowulf and its shareholders face a very interesting future."

Financials

· The consolidated loss of £365,600 for the Q2 FY22 increased from the loss of £188,293 in the comparative quarter primarily due to additional costs attributable to BATCircle 2.0 and downstream processing projects of £79,505, the foreign currency loss on the foreign currency cash balances held by the Parent increased by £83,342. The Parent also incurred additional professional fees of £37,683 and Director's salaries increased by £16,636.

· The consolidated loss to H1 FY22 of £683,607 is comparable to the H1 FY21 loss of £714,841, owing to the year-to-date increases in costs for BATCircle 2.0 and downstream projects of £110,136, professional fees of £27,065 and Directors salaries of £28,754 offsetting against a decrease in FX loss arising in the H1 FY22 period of £171,776.

· Consolidated basic and diluted loss per share for the quarter ended 30 June 2022 was 0.04 pence (Q2 2021: loss of 0.02 pence).

· £1,880,584 in cash held at the period end (Q2 2021: £4,408,639).

· The cumulative translation losses held in equity increased by £71,265 in the six months ended 30 June 2022 to £1,288,250 (31 December 2021: loss of £1,216,985). Much of the Company's exploration costs are in Swedish Krona and Euro which have weakened against the pound since 31 December 2021.

· At 30 June 2022 there were 631,691,587 Swedish Depository Receipts representing 75.95 per cent of the issued share capital of the Company. The remaining issued share capital of the Company is held in the UK.

Operational

Sweden

· Further to the award of the Exploitation Concession for Kallak North in March 2022, on 27 April 2022, the Company announced that discussions were underway with engineering consultants, who will support the completion of a Scoping Study and roadmap to Pre-feasibility, infrastructure operators (rail and power), technical experts, regarding the Kallak resource and ore processing, potential customers, and strategic partners. 

· On 13 May 2022, the Company announced that Kurt Budge, CEO, had visited Sweden and provided a brief update on the future development of Kallak at the Swedish Mining Innovation and Research Day in Luleå on 12 May 2022. During his week-long visit to Sweden, he met with legal advisers to discuss environmental permitting and its place in the overall development timeline for Kallak and engaged in discussions with authorities and potential partners in the future development of Kallak.

· On 10 June 2022, the Company shared that it had learnt that Jåhkågasska tjiellde, a Sami village, through its lawyers, had issued a press release announcing that it will take legal action against the Government of Sweden following the Government's decision, on 22 March 2022, to award an Exploitation Concession for Gállok / Kallak.

Kurt Budge CEO announced that the Company would update shareholders on further developments in this matter, but is continuing with its work on Kallak, progressing with the Scoping Study, and working with organisations in Jokkmokk and Norrbotten to build capacity and skills in the town and region, so that highly skilled jobs can be created for those persons living in Jokkmokk.

· On 13 June 2022, Beowulf announced the appointment of Ulla Sandborgh as CEO of Jokkmokk Iron, Beowulf's wholly owned Swedish subsidiary and the developer of the Kallak Project.

Ulla has held senior positions in private enterprise and public institutions, in sectors including infrastructure, electricity and water. Her most recent role was a Director General in the Ministry of Enterprise of The Government of Sweden, in which role she was responsible for issues affecting the limestone and cement industries and accountable for the development of a strategy to promote the efficient and sustainable usage of water. Ulla has extensive experience in managing permitting processes and, as part of this, engaging with stakeholders, to ensure interests are safeguarded, and benefits shared.

Finland

· On 4 July 2022, the Company provided an update on Grafintec, the Company's subsidiary operating in Finland. Grafintec had been exploring for more natural flake graphite, contracting the Geological Survey of Finland ("GTK") to do an electromagnetic survey over the Rääpysjärvi exploration permit, which is located in the municipality of Tuusniemi in Eastern Finland, 8 kilometres north-northwest of the Aitolampi graphite project.

In recent months, Grafintec has also entered into a Memorandum of Understanding ("MoU") with GTK. The MoU provides Grafintec and GTK with a framework and a platform to promote and foster cooperation in the fields of circular economy, mineral processing and exploration of graphite as pertaining to anode materials for the lithium-ion battery market and other markets from different raw material sources (Primary, Recycled and Circular) including beneficiation testing and mineralogical research.

Kosovo

· On 4 July 2022, when announcing the £1.76 million financing, the Company shared that the latest drilling programme in Kosovo had finished. The focus of drilling had been the Majdan Peak gold target, part of the Mitrovica licence. We are finalising our conclusions from the drilling programme in Kosovo and a further announcement will shortly be forthcoming to update the market on our progress.

Corporate

· On 22 June 2022, the Company announced that all resolutions tabled at its Annual General Meeting were passed on a poll. 

· On 8 July 2022, the Beowulf Board announced it had approved the implementation of a new long-term incentive plan available to eligible employees of the Company ("LTIP" or the "Plan").

In establishing the LTIP, the Company's Remuneration Committee has taken advice from a leading independent consultancy specialising in the planning, design, and implementation of business-driven pay and reward strategies, on the following matters: identifying comparable companies for pay benchmarking; collecting, analysing and presenting data on executive remuneration in comparable companies; and assisting with the development of the Plan.

· On 4 July 2022, the Company announced a loan financing from a Nordic Institutional Investor of SEK 22 million (approximately £1.76 million) before expenses. The funding will be used to advance the Company's projects and achieve key milestones, with the focus being on Kallak.

The financing of SEK 22 million before expenses has been agreed with the Nordic institutional investor Formue Nord Markedsneutral A/S (the "Creditor"). The Loan has an interest rate of 1.5 percent per each started 30-day period during the duration of the loan to maturity with accrued interest compounding and payable at maturity. The Loan has a commitment fee of 6 per cent and a Maturity Date of 28 February 2023. Beowulf can repay the Loan and accrued interest at any time prior to the Maturity Date. If the Loan and accrued interest is not repaid by 28 February 2023, at the latest, the Creditor has the right to convert the Loan and accrued interest into Swedish Depository Receipts ("SDR") at a price per SDR calculated with a 15 per cent discount on the volume weighted average price ("VWAP") of the SDR during the preceding 5 trading days to the conversion decision. The Loan has otherwise been entered into on market-based terms and is unsecured. Aside from this Loan, Beowulf has no other short or long-term interest-bearing debt.

ESG

· On 27 April 2022, in its update on the plans for Kallak's development, the Company shared that it had been reviewing workstreams and timelines that would open up the potential for the initially proposed timeframe of 4-5 years to be shortened through local partnerships, greater collaboration, and efficient development, application and permitting processes.

· On 13 May 2022, regarding Community Initiatives, the Company announced that discussions were taking place with the responsible local agency in Jokkmokk about conducting surveys to map the current workforce and future workforce, school leavers and university students in the region, to determine what initiatives need to be started to ensure sufficient locally based skilled persons are available for work at the mine or in other businesses established by the economic stimulus created by the mine.

In his comments, the CEO also acknowledged the traditional owners of the lands at Kallak, past elders, present and emerging leaders, and wrote that now the Concession decision has been made, the Company looks forward to re-engaging with them and together building a framework for ongoing good-faith dialogue.

· The Company wants to be recognised for living its values of Respect, Partnership and Responsibility. Our recent ESG work has identified, as material to the Company's activities, the following main Sustainable Development Goals and relevant actions under each goal which the Company will be focusing on:

· Goal 6: Ensure availability and sustainable management of water and sanitation for all

o  Target 6.1 - By 2030, achieve universal and equitable access to safe and affordable drinking water for all

o  Target 6.4 - By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity

· Goal 8: Decent work and economic growth

o  Target 8.2 - Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors

o  Target 8.4 - Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation, in accordance with the 10-year framework of programmes on sustainable consumption and production, with developed countries taking the lead

o  Target 8.5 - By 2030, achieve full and productive employment and decent work for all women and men, including young people and persons with disabilities, and equal pay for work of equal value

· Goal 9: Industry, innovation and infrastructure

o  Target 9.1 - Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all

o  Target 9.4 - By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities

· Goal 12: Responsible production and consumption

o  Target 12.2 - By 2030, achieve the sustainable management and efficient use of natural resources

o  Target 12.5 - By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse

o  Target 12.6 - Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle

· Goal 13: Climate Action

o  Target 13.2 - Integrate climate change measures into national policies, strategies and planning

· When it comes to the development of the Company's projects and with Kallak as the frontrunner, the above goals and our future compliance with The Equator Principles are being factored into our thinking, design, engineering, and planning of our operations and management systems.

· The Company's ESG Policy is available on the website following the link below:

https://beowulfmining.com/about-us/esg-policy/

Enquiries:

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.

About Beowulf Mining plc

Beowulf Mining plc ("Beowulf" or the "Company") is an exploration and development company, listed on the AIM market of the London Stock Exchange and the Spotlight Exchange in Sweden. The Company listed in Sweden in 2008 and, at 30 June 2022, was 75.95 per cent owned by Swedish shareholders.

Beowulf's purpose is to be a responsible and innovative company that creates value for our shareholders, wider society and the environment, through sustainably producing critical raw materials needed for the transition to a Green Economy and to address the Climate Emergency.

The Company has an attractive portfolio of assets, including commodities such as iron ore, graphite, base and precious metals, with activities in exploration, the development of mines and downstream production in Sweden, Finland and Kosovo.

The Company's most advanced project is the Kallak iron ore asset in northern Sweden from which testwork has produced a 'market leading' magnetite concentrate of 71.5 per cent iron content. In the Kallak area, 389 million tonnes of iron mineralisation has been estimated, a potential source of high-quality iron ore for fossil-free steel making in Norrbotten for decades to come.

In Finland, Grafintec (previously Fennoscandian Resources), a wholly-owned subsidiary, is developing a resource footprint of natural flake graphite and the capability to serve the anode manufacturing. Grafintec is working to towards creating a sustainable value chain in Finland from high-quality natural flake graphite resources to anode material production, leveraging renewable power, targeting Net Zero CO2 emissions across the supply chain.

In Kosovo, the Company owns approximately 59.5 per cent of Vardar Minerals ("Vardar"), which is focused on exploration in the Tethyan Belt, a major orogenic metallogenic province for gold and base metals. Vardar is delivering exciting results for its Mitrovica licence which has several exploration targets, including lead, zinc, copper and gold. It also has the Viti licence which is showing potential for copper-gold porphyry mineralisation. With Beowulf's support, Vardar is focused on making a discovery.

Kallak is the foundation asset of the Company, and, with Grafintec and Vardar, each business area displays strong prospects, presents opportunities to grow, with near-term and longer-term value-inflection points.

Beowulf wants to be recognised for living its values of Respect, Partnership and Responsibility. The Company's ESG Policy is available on the website following the link below:

https://beowulfmining.com/about-us/esg-policy/

BEOWULF MINING PLC

CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS TO 30 JUNE 2022

BEOWULF MINING PLC

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS

FOR THE SIX MONTHS TO 30 JUNE 2022

BEOWULF MINING PLC

CONDENSED COMPANY STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS TO 30 JUNE 2022

BEOWULF MINING PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2022

BEOWULF MINING PLC

CONDENSED COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2022

BEOWULF MINING PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS TO 30 JUNE 2022

BEOWULF MINING PLC

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS TO 30 JUNE 2022

BEOWULF MINING PLC

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS TO 30 JUNE 2022

BEOWULF MINING PLC

CONDENSED COMPANY STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS TO 30 JUNE 2022

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FOR THE SIX MONTHS TO 30 JUNE 2022

1. Nature of Operations

Beowulf Mining plc (the "Company") is domiciled in England and Wales. The Company's registered office is 201 Temple Chambers, 3-7 Temple Avenue, London, EC4Y 0DT. This consolidated financial information comprises that of the Company and its subsidiaries (collectively the 'Group' and individually 'Group companies'). The Group is engaged in the acquisition, exploration and evaluation of natural resources assets and has not yet generated revenues.

2. Basis of preparation

The condensed consolidated financial information has been prepared on the basis of the recognition and measurement requirements of UK-adopted International Accounting Standards (IFRS). The accounting policies, methods of computation and presentation used in the preparation of the interim financial information are the same as those used in the Group's audited financial statements for the year ended 31 December 2021.

The financial information in this statement does not constitute full statutory accounts within the meaning of Section 434 of the UK Companies Act 2006. The financial information for the period ended 30 June 2022 is unaudited and has not been reviewed by the auditors. The financial information for the twelve months ended 31 December 2021 is an extract from the audited financial statements of the Group and Company. The auditor's report on the statutory financial statements for the year ended 31 December 2021 was unqualified but did contain a material uncertainty with respect of going concern, however following additional audit procedures and noting it as key audit matter, it was concluded the going concern basis was appropriate.

The financial statements are presented in GB Pounds Sterling. They are prepared on the historical cost basis or the fair value basis where the fair valuing of relevant assets and liabilities has been applied.

Management have prepared cash flow forecasts confident that they are taking all necessary steps to ensure that the Group has the required cash to pursue it strategic objectives, an assertion supported by the significant cash available at the period end. They have therefore concluded that it is appropriate to prepare the financial statements on a going concern basis.

3. Share Capital

The number of shares in issue was as follows: