Beowulf Regulatory News (BEM)

29 February 2016

Beowulf Mining plc

("Beowulf" or the "Company")

Unaudited Financial Results for year ended 31 December 2015

Beowulf (AIM: BEM; Aktietorget: BEO), the mineral exploration and development Company focused on the Kallak magnetite iron ore project in northern Sweden and its graphite portfolio in Finland, announces its unaudited financial results for the year ended 31 December 2015 (see Appendix 1).

Highlights for the Year:

Financial

· Loss before and after taxation attributable to the owners of the parent at £1.48m is significantly down on the loss recorded in 2014 of £3.06m while basic loss per share of 0.38p also improved over last year (2014: loss per share of 1.00p).

· Approximately £0.35m in cash was held at the year end.

· Approximately £0.18m cash was held at the end of February 2016, before proceeds of the subscription of shares announced 25 February 2016 are received.

Operational

· On 13 February 2015, the Company announced it had received notification that the Mining Inspectorate of Sweden had referred the decision regarding the Exploitation Concession for Kallak North to the Swedish Government.

· On 8 June 2015, the Company announced outstanding testwork results on ore samples from Kallak North which showed a 'super' high grade magnetite concentrate, with over 71 per cent iron content and low levels of deleterious materials.

· On 7 July 2015, the County Administrative Board ("CAB") announced that Kallak North could deliver significant economic benefits for Jokkmokk, the County of Norrbotten, and for Sweden.

· On 12 October 2015, the Mining Inspectorate of Sweden wrote to the Government of Sweden and recommended that the Exploitation Concession for Kallak North be granted.

Corporate

· Received £150,000 in January 2015 by accelerating all settlements under the Equity Swap Agreements with Lanstead Capital L.P.

· Raised £350,000 on 10 March 2015 and £650,000 on 9 July 2015.

· The Board's Salary Sacrifice programme undertaken when cash was low amounted to £45,798 which was taken is shares.

· Increase in the number of Swedish shareholders from 12% a year ago to approximately 40% of the issued share capital of the Company at the year end.

· The Company's share price, for the year, has risen approximately 276% between 1 January 2015 and 31 December 2015.

Post Period Highlights:

· Acquisition of Fennoscandian Resources, a privately owned Finnish company with a portfolio of four early-stage graphite exploration projects located in Finland.

· Published an Open Letter to Sami Chairmen showing our willingness to work together.

· Subscription to raise £1.25 million with an option for an additional raise up to £250,000.

Kurt Budge, Chief Executive Officer of Beowulf, commented:

"2015 has been a significant year for Beowulf with excellent progress achieved on the Kallak North Exploitation Concession - with both the CAB and the Mining Inspectorate giving their support to the project.

"Beowulf is leaving no stone unturned and continues to work hard towards a positive decision by the Swedish Government on the Exploitation Concession. In addition to this we were delighted to announce the excellent testwork results earlier in the year on ore samples from Kallak North showing a 'super' high grade magnetite concentrate can be produced.

"2016 has so far been very busy with the acquisition of the Finnish graphite company and the completion of the subscription for £1.25 million which will provide funding for approximately the next 12 months.

"The Company has an exciting work programme planned for 2016, including fieldwork around Kallak and drilling the Exploration Target at Kallak South, once the Exploitation Concession has been awarded, conducting exploration on our graphite portfolio in Finland, and developing further exploration ideas in Sweden.

"With our work programmes fully funded we can now focus on creating value with the assets we have. We will also continue to evaluate more M&A opportunities in the Nordic region, targeting deals where we can unlock value for shareholders.

"We would like to take the opportunity to thank our shareholders in both Sweden and UK for their support during the year."

Summary of 2015

Financials

· Loss before and after taxation attributable to the owners of the parent at £1.48m is significantly down on the loss recorded in 2014 of £3.06m while basic loss per share of 0.38p also improved over last year (2014: loss per share of 1.00p).

· The lower loss in the year was due to reduced administrative overheads (£0.38m below 2014) especially directors' remuneration and professional fees. There was also an allocation in the year of executive director salaries and fees to Kallak exploration costs of approximately £68k (2014: Nil). There were nil losses on derivative financial assets (2014: £2.03m) following the accelerated settlement of Equity Swap Agreements in January 2015. However, these reductions were partly offset by higher impairment charges of £1.12m (£3k in 2014).

· The main projects impaired were Ballek (£0.84m) and Grundträsk (£0.27m). The decision to fully impair these projects followed a detailed review of all available data by independent consultants. The review confirmed that further exploration work could be undertaken, but given neither project has demonstrated sufficient scale to support a standalone mine, no funds have been allocated to these projects in 2016. The Company still maintains the licences and will look at ways of monetising the work done to-date.

· Approximately £0.35m in cash was held at the year end.

· Total assets at £6.1m are £0.9m below 2014. This is principally due to the reduction in intangible assets to £5.59m following the impairment of projects mentioned above.

Operational

· On 8 June 2015, Beowulf announced outstanding testwork results on ore samples from Kallak North which showed a 'super' high grade magnetite concentrate, with over 71 per cent iron content and low levels of deleterious elements. The 'super' high grade and purity of the magnetite concentrate produced are valuable attributes for key target markets and support the case for a significant price premium for 'Kallak super concentrate.'

· On 8 July 2015, the Company announced that the CAB commented on the national economic assessment of Kallak North. They found that mining is economically relevant and that the Kallak North project generates economic benefits at local, regional and national levels. In addition, they stated that the Concession area applied for by the Company creates no conflicts where national interests are considered.

· In a letter dated 9 October 2015, the Mining Inspectorate of Sweden wrote to the Government of Sweden and recommended that the Exploitation Concession for Kallak North be granted. The recommendation was delivered in response to the Department of Enterprise and Innovation's invitation for the Mining Inspectorate to give its views on the findings made by the CAB when commenting on the national economic assessment for Kallak North.

Corporate

· On 7 January 2015, Beowulf and Lanstead mutually agreed to accelerate all settlements under the Equity Swap Agreements. Under the terms of the Accelerated Settlement, the Company received a final settlement payment of £150,000 from Lanstead. The Company confirms that Lanstead are no longer a shareholder.

· On 10 March 2015, the Company placed 29,166,666 ordinary shares to raise approximately £350,000 (before expenses) at a price of 1.2 pence per share.

· On 9 June 2015, the Company announced that the total amount of the Salary Sacrifice between 1 October 2014 and 31 May 2015 was £45,798. The share price used to calculate the number of shares is the mid-market closing price on 8 June 2015 of 2.25 pence. The Company made an application for 2,035,457 shares to be admitted to trading on AIM.

· On 9 July 2015, the Company placed 49,600,000 ordinary shares and directors subscribed for 2,400,000 ordinary shares to raise approximately £650,000 (before expenses) at a price of 1.25 pence per ordinary share. The Placing was oversubscribed.

· The Company announced that options were granted on 17 July 2015 over a total of 17,000,000 ordinary shares of 1 pence. The exercise price of 1.66 pence per share, was a 32.8% premium over the closing mid-market share price on 17 July 2015. The options vest over a two-year period with one third vesting immediately on grant, one third on the first anniversary of grant and one third on the second anniversary of grant. The options are valid for five years from the date of grant.

· 1,234,568 Performance Warrants were exercised by the Company's joint broker in the year pursuant to their engagement letter. The first 617,284 Performance Warrants were exercised on or around 14 October 2015 after Beowulf's mid-market share price exceeded 3.04p over a 14-day Volume Weighted Average Price ("VWAP") within 6 months of their appointment at an exercise price of 2.025p. Our joint broker exercised a second 617,284 Performance Warrants on or around the 10 December 2015 when Beowulf's mid-market share price exceeded 4.05p over a 14-day VWAP within 12 months of their appointment at an exercise price of 2.025p. The Company received a total of £25,000 on the exercise of both sets of Performance Warrants. There are no further Performance Warrants outstanding.

· At 31 December 2015 Swedish investors held approximately 173,672,737 SDRs (2014: 47,985,114), representing approximately 40 per cent of the Company's issued share capital.

Post period summary 

Acquisition of Fennoscandian Resources

· On 11 January 2016, the Company announced the acquisition of Oy Fennoscandian Resources AB ("Fennoscandian"), a privately owned Finnish company with a portfolio of four early-stage graphite exploration projects located in Finland; all projects being held by Fennoscandian are under 100 per cent owned Claim Reservations.

· Beowulf acquired 100 per cent of the share capital of Fennoscandian in consideration for a total of 2.55 million ordinary shares in the capital of the Company. The transaction consideration consisted of an initial payment of 2.1 million shares with a deferred payment of 450,000 shares. In addition, two equal tranches of shares will be issued on achievement of certain performance milestones. The total number of ordinary shares that may be issued, if all performance milestones are achieved, is 6.75 million ordinary shares.

· Workplans for 2016 include desktop studies and fieldwork across all four projects. Geophysical surveys have already begun on Pippumäki and Haapamäki, with the purpose of defining targets for drilling to be undertaken in the second quarter.

· Drilling on priority targets will enable resource definition, generate representative samples for analysis of grade and flake size distribution, and testwork will provide an assessment of the commercial applications for graphite types that are present in the portfolio.

Open Letter to the Sami Chairmen

· On 5 February 2016, the Company published an Open Letter to the Chairmen of Jåhkågasska and Sirges Sami Villages ("Sami Villages"), which are situated in the vicinity of the Kallak project.

· The Chairmen of the Sami Villages asked Beowulf several questions relating to the Company progressing its application for an Exploitation Concession at Kallak; their questions were included in an announcement made on 2 February 2016 by the Svenska Samernas Riksförbund, the Swedish Sami National Association.

· The Company answered the Sami Chairmen's questions in full and followed-up with direct communications.

· In all interactions with its stakeholders in and around Jokkmokk, the Company shows respect, its desire to become a strong local partner in the future economic growth of the region, and demonstrates a responsible approach to the future development of Kallak. We will continue to engage with all our stakeholders, sharing our ideas and plans, and listening to any concerns.

Corporate

· On 11 February 2016, the Company issued 729,329 new ordinary shares of 1p each. This included the issue of 450,000 new ordinary shares being the deferred payment in connection with its acquisition of Fennoscandian (announced on 11 January 2016) and 279,329 new ordinary shares in satisfaction of the professional fees due to our joint broker.

· On 25 February 2016, the Company announced that it had raised £1.25m before expenses and issued 38,461,538 new ordinary shares ("Subscription Shares") at a price of 3.25 pence per new ordinary share. Following Admission of the Subscription Shares the Company will have 471,604,691 ordinary shares of £0.01 each in issue, each share carrying the right to one vote. The Company does not hold any ordinary shares in treasury. In addition, an over-allotment option has been granted by the Company in respect of 7,692,307 new ordinary shares in the Company (the "Over-allotment Shares"), representing 20 per cent of the Subscription Shares.

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 forecasts.

APPENDIX 1 - FINANCIAL RESULTS

CONSOLIDATED INCOME STATEMENT 

For the year ended 31 December 2015

CONSOLIDATED Statement of COMPREHENSIVE income

For the year ended 31 December 2015

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2015 

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2015

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2015

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2015

NOTES TO THE FINANCIAL INFORMATION

For the year ended 31 December 2015

1. Basis of preparation and accounting policies

The financial information contained in this preliminary results announcement does not constitute the Company's statutory financial statements for the years ended 31 December 2015 or 31 December 2014. The financial information for the year ended 31 December 2014 is derived from the statutory financial statements for that year which have been approved by the board of directors and delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified.

2. Loss per share

The basic and diluted loss per share have been calculated using the loss attributable to owners of the parent for the 12 months ended 31 December 2015 of £1,477,109 (2014: Loss £3,060,482). The basic loss per share was calculated using 

a weighted average number of shares in issue of 392,759,984 (2014: 304,755,824).

3. Share capital

The number of shares in issue is reconciled as follows:

NOTES TO THE FINANCIAL INFORMATION

For the year ended 31 December 2015

4. Intangible Assets: Group

The net book value of exploration costs is comprised of expenditure on the following projects:

5. Post balance sheet events

On 11 January 2016, the Company announced the acquisition of Oy Fennoscandian Resources AB ("Fennoscandian"), a privately owned graphite exploration company with projects in Finland. Through this acquisition Beowulf has acquired a portfolio of four early-stage graphite exploration projects, with all projects being held by Fennoscandian under 100 per cent owned Claim Reservations.

On 11 February 2016, the Company announced it was issuing 729,329 new ordinary shares of 1p each, which included the issue of 450,000 new ordinary shares being the deferred payment in connection with its acquisition of Fennoscandian (announced on 11 January 2016) and 279,329 new ordinary shares in satisfaction of the professional fees due to the Company's join broker under the terms of a letter of engagement dated 17 June 2015.

On 25 February 2016, the Company announced a subscription for new ordinary shares to raise £1,250,000 before expenses. In addition, an over-allotment option was granted by the Company in respect of 7,692,307 new ordinary shares in the Company, representing 20 per cent of the Subscription Shares.

6. Availability of Annual Report and Financial Statements

Copies of the Company's Annual Report and Financial Statements are expected to be posted to shareholders in due course and, once 

posted, will also be made available to download from the Company's website at www.beowulfmining.com. 

The Annual Report and Financial Statements will also be made available for inspection at the Company's registered office during 

normal business hours on any weekday. Beowulf Mining plc is registered in England and Wales with registered number 02330496. 

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