TIDMBEM
Beowulf Mining PLC
03 June 2020
03 June 2020
Beowulf Mining plc
("Beowulf" or the "Company")
Letter to the Minister for Business, Industry and Innovation,
The Government of Sweden
Beowulf (AIM: BEM; Spotlight : BEO), the mineral exploration and
development company, announces that Kurt Budge CEO has written to
Mr Ibrahim Baylan, Minister for Business, Industry and Innovation,
The Government of Sweden.
The letter, sent yesterday, is below:
London 2020.06.02
Statsrådet Ibrahim Baylan
Näringsdepartementet
Minister,
There is considerable stock market anticipation as to your
response this Wednesday to the Parliamentary Question put to you by
Mr Lars Hj ä lmered.
I politely remind you that Beowulf Mining is a public company
and any statements made public when stock markets are open can
generate unwarranted volatility in trading and pricing of the
Company's shares.
In late January 2017, after a public statement by L ä
nsstyrelsen Norrbotten, with no forewarning to Beowulf, the
Company's shares were suspended from trading for 24-hours, until
such time that a full explanation of the statement could be
disclosed to markets. However, the damage had already been done,
with the Company's share price falling 40 per cent in
Stockholm.
Since you, and I, attended the Mining Nordic Day in Toronto in
early March, the Government has understandably prioritised its
response to the COVID-19 pandemic, the short-medium term need for
Government support to protect businesses, safeguard jobs,
livelihoods and the wellbeing of Swedish society, as economic
activity is constrained.
In Toronto, you saved your biggest welcome for investors. I
reminded you that Beowulf has been invested in Sweden and working
on Kallak for 14 years. You also said that I was welcome to do
business in Sweden. The fact of the matter is, Beowulf is unable to
do business in Sweden, because we cannot get a decision on Kallak
from the Government.
In May 2019, the State Secretary said to G ö ran F ä rm,
Beowulf's Chairman, and me, in a face to face meeting in Stockholm,
that the Government understood the importance of Kallak to
Jokkmokk. Jokkmokk's need for investment and jobs is acute, and,
with the added pressure of COVID-19, it would seem logical that a
project such as Kallak, which has the potential to bring billions
of SEK in investment and hundreds of jobs to northern Sweden,
should be approved.
What is often overlooked in the debate around mining projects is
the risk capital needed to develop a mine, the timeline for
investment and the 'big picture' economic impact that a mining
project, such as Kallak, can create.
The first exploration licence for Kallak was granted in 2006 and
to date over SEK 80 million has been invested. If a Concession were
to be granted today, then it would take 18 years from the beginning
to get to a producing mine. The investment in building a mine can
support further investments and commercial opportunities in rail,
port, downstream processing and end-uses.
Bergsstaten, as part of the SGU, a Government Office, has seen
the Company drill almost 28,000 metres, 131 drill holes, to define
a potential 250 million tonnes of iron ore, which is an asset to
Sweden's iron ore resource inventory. The SGU first discovered
Kallak in the 1940s, designated it an Area of National Interest
("ANI") in 2013 and produced its latest study, headlined 'New light
on iron ore at Kallak', last month. Kallak has been on the SGU's
radar for 80 years!
Bergsstaten recommended to the Government in October 2015, that
the Concession for Kallak should be awarded, and last October
awarded an Exploration Permit for Parkijaure nr 6, which covers
approximately 1,000 hectares and lies immediately to the south of
the Kallak deposits.
On the evidence, the authorities are happy for Beowulf to
continue to invest in iron ore exploration, which in the context of
LKAB's announcement, in October 2018, on diminishing reserves at
Kiruna and the need to replenish, recent seismic activity
disrupting production at Kiruna, while thankfully sparing lives,
and Government statements on a sustainable mining industry, makes
sense. Yet, over 4.5 years after Bergsstaten recommended to the
Government that the Concession for Kallak be awarded and with
Beowulf planning to drill the 90-100 million tonnes Exploration
Target at Kallak South this Autumn, we have no decision.
In Toronto, the 'rule of law' was mentioned as one of Sweden's
attributes. Both Social Democrat and Green parties in Sweden have
said that a decision on Kallak should be taken in accordance with
the law. Beowulf has demonstrated with the Concluding Statement
submitted to the Government last November, prepared by lawyers
Mannheimer Swartling and Fr ö berg and Lundholm, that, under
judicial review, Beowulf's application has satisfied all
requirements.
The Green Party may, in part, be using Länsstyrelsen
Norrbotten's statement from November 2017 as justification for
obstructing the Kallak Concession being awarded. Länsstyrelsen
Norrbotten concluded that reindeer herding is a better use of the
13.6 square kilometres of land at Kallak, ignoring the SGU's ANI
designation, effectively deeming Kallak a 'stranded asset'.
Länsstyrelsen Norrbotten's statement was erroneous and contradicted
its response to the Government on the economic case for Kallak,
made in July 2015, when it described positive local, regional and
national economic effects.
Beowulf has several thousand Swedish shareholders, who own over
67 per cent of the Company. They have witnessed the Government's
unacceptable mishandling of the Kallak application and false
promises; the opportunity cost of which is incalculable. They are
demanding the Government be fully transparent now and remove all
uncertainty as to when a decision on Kallak will be taken.
Beowulf is ready to play its part in Sweden's economic recovery,
to advance Kallak in partnership with the community in Jokkmokk,
which includes Sami reindeer herders. Benchmark iron ore prices
have risen above US$ 100 per tonne this week and investors with
cash are looking for investment opportunities, such as Kallak, and
towards mining jurisdictions that function effectively.
Yours sincerely,
Kurt Budge
Chief Executive Officer
Kallak - 'Big Picture'
-- In 2017, Copenhagen Economics produced a 'Big Picture' study
for Kallak ("the Study" or "the Kallak Study"):
https://beowulfmining.com/wp-content/uploads/2018/10/Copenhagen-Economics_Presentation_SEP17_Swedish.pdf
The Study built on the work carried out, by the Company and
others, including the 2015 independent socio-economic study
initiated by Jokkmokks Kommun, completed by consultants Ramböll,
which in its findings concluded that a mining development at Kallak
would create direct and indirect jobs, increase tax revenues and
slow down population decline, and the 2010 study by the Economics
Unit of Luleå University of Technology, 'Mining Investment and
Regional Development: A Scenario-based Assessment for Northern
Sweden'.
-- Copenhagen Economics has previously reviewed the
attractiveness of the Swedish mining sector on a number of
parameters, including licensing and regulation, commissioned by the
Swedish Agency for Growth Policy Analysis, part of the Government
of Sweden.
-- The Kallak Study demonstrated that the economic effect of
Kallak is 'not just about a mine'. A mining project would
economically transform Jokkmokk and support downstream investments
and economic activity e.g. Inlandsbanan, Luleå Hamn, Vattenfall
etc, spreading the benefits, through Norrbotten and beyond.
-- When it comes to Kallak's economic effect on Jokkmokk, the Study highlights were as follows:
-- A mining operation at Kallak has the potential to create 250
direct jobs and over 300 indirect jobs in Jokkmokk, over the period
that a mine is in operation.
-- These jobs could be sustained over a period of 25 years or
more, if the Kallak South deposit is mined after the Kallak North
deposit, and further deposits at Parkijaure can be defined.
-- The Company will seek to establish a 'Task Force' with
Jokkmokks Kommun and local employment agencies, so that between now
and the start of operations, plans are developed and implemented to
make sure as many as possible jobs are available to people living
in Jokkmokk.
-- Kallak has the potential to generate SEK 1 billion in tax
revenues, considering the case where 70 per cent of the mine's
workforce are based locally, with annual tax revenues of SEK 40
million over a 25 years mine life.
-- These tax revenues would help to develop and sustain public
services and infrastructure in Jokkmokk, which are at risk due to a
lack of new investment and job creation in the community, a
declining population, and an ageing population.
Kallak - Background
T he Kallak iron ore deposit is located approximately 40
kilometres ("km") west of Jokkmokk in the County of Norrbotten,
Northern Sweden, 80 km southwest of the major iron ore mining
centre of Malmberget, and approximately 120 km to the southwest of
LKAB's Kiruna iron ore mine.
The first exploration licence for Kallak was awarded by the
Mining Inspectorate of Sweden in 2006. A Mineral Resource Estimate
for Kallak North and South, based on 27,895 m of drilling conducted
between 2010-2014, 131 drillholes, was finalised on 28 November
2014. Following the guidelines of the JORC Code, 2012 edition, an
Indicated Resource of 118.5 Mt at 27.5 per cent iron content ("Fe")
and Inferred Resource of 33.8 Mt at 26.2 per cent Fe was defined.
In addition, there is an exploration target of 90-100 Mt at 22-30
per cent Fe.
Testwork on Kallak ore has shown that a 'super' high grade
magnetite concentrate can be produced, yielding over 71 per cent
iron content, with low levels of deleterious elements, including
phosphorous and sulphur, lending itself to pelletisation and
consumption in Direct Reduction Iron ("DRI") facilities in Europe
and the Middle East, and attracting a potential price premium.
In April 2013, the Company applied for an Exploitation
Concession for Kallak North and in October 2015, the Mining
Inspectorate recommended to the Swedish Government that the
Concession be awarded. The Company is still waiting on the Swedish
Government to take a decision.
Competent Person Review
The information in this announcement has been reviewed by Mr.
Rasmus Blomqvist, a Competent Person who is a Member of the
Australasian Institute of Mining and Metallurgy. Mr. Rasmus
Blomqvist has sufficient experience, that is relevant to the style
of mineralisation and type of deposit taken into consideration, and
to the activity being undertaken, to qualify as a Competent Person
as defined in the 2012 Edition of the "Australasian Code of
Reporting of Exploration Results, Mineral Resources and Ore
Reserves".
Mr. Rasmus Blomqvist is a full-time employee of Oy Fennoscandian
Resources AB, a 100 per cent owned subsidiary of Beowulf.
Mr Blomqvist consents to the inclusion in the announcement of
the information presented in the form and context in which it
appears.
Enquiries:
Beowulf Mining plc
Kurt Budge, Chief Executive Tel: +44 (0) 20 3771
Officer 6993
SP Angel
(Nominated Adviser & Broker)
Ewan Leggat / Soltan Tagiev Tel: +44 (0) 20 3470
0470
Blytheweigh
Tim Blythe / Megan Ray Tel: +44 (0) 20 7138
3204
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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