TIDMBEM
Beowulf Mining PLC
17 September 2020
17 September 2020
Beowulf Mining plc
("Beowulf" or the "Company")
Kallak Products - Market Leading Potential
Beowulf (AIM: BEM; Spotlight : BEO), the mineral exploration and
development company, announces the findings of an expert market
assessment by Dr. Bo Arvidson, which investigated the market
potential of future products from the Kallak North ("Kallak")
deposit, based on the results of laboratory and pilot plant
testwork conducted to date.
Highlights:
-- Testwork on Kallak ore has produced an exceptionally
high-grade magnetite concentrate at 71.5 per cent iron ("Fe")
content with minimal detrimental components.
-- This would make Kallak the market leading high-grade product
among known current and planned future producers.
-- The next best magnetite product is LKAB's (the state-owned
Swedish iron ore company), which produces magnetite fines ("MAF")
with a target specification of 70.7 per cent Fe and is regarded as
unique, until now, due to its exceptionally high iron content.
-- Kallak magnetite concentrate would reduce the carbon
footprint of traditional steel manufacturing, improve energy
efficiency in any downstream process and reduce waste. Magnetite
has inherent energy content, which ultimately results in lower
energy demand for steel manufacturing when compared to current
common practice.
-- Globally, the feedstock for steelmaking is 80 per cent
hematite and 20 per cent magnetite. The demand for high-quality
feedstock and therefore magnetite should increase as producers look
to protect the environment by improving energy efficiency,
minimizing waste and the impact of waste disposal.
Kurt Budge, Chief Executive Officer of Beowulf, commented:
"The Kallak deposit is unique considering the quality of the
magnetite concentrate it can produce. Beowulf has been stating this
since 2015 and, with Dr. Arvidson's latest assessment, significant
knowledge of the iron ore market and the testwork completed on
Kallak ore, he has validated Kallak concentrate's market leading
attributes.
"Sweden wants to be a leader in sustainable mining and a Green
Transition. When considering Kallak's magnetite concentrate, you
have a product that 'ticks all the boxes', that can increase energy
efficiency, reduce the carbon footprint of traditional steel
manufacturing, minimise waste and the impact of waste disposal.
"Recently, the Swedish Prime Minister Stefan Löfven, together
with Isabella Lövin, Minister for Environment and Climate and
Deputy Prime Minister, started up the HYBRIT plant. HYBRIT is a
joint initiative between the steel manufacturer SSAB, the mining
company LKAB and the energy company Vattenfall. The purpose of the
collaboration is to develop the world's first fossil-free ore-based
steelmaking process.
"The Prime Minister spoke of the historic opportunity to do
things that provide jobs here and now - but also hasten the climate
transition that everyone realises is necessary.
"Sweden's ambition is for fossil-free steel production and to do
that you need high-quality feedstock. It is potentially an
important tool in the Swedish Government's ambition to make Green
Transition part of its efforts to restart the Swedish economy after
the COVID-19 crisis. That's where Beowulf believes Kallak fits into
the 'big picture', bringing much need investment and hundreds of
jobs to Jokkmokk and Norrbotten.
"Benchmark iron ore prices climbed to around $130 a dry metric
tonne in late August, the highest level since 2014, and with prices
set to remain strong for the remainder of the year, now is the time
for the Swedish Government to give Kallak the 'green light'. "
2015 - Metallurgical testwork
The impetus for the 2015 programme was the belief that even
higher grade magnetite concentrate could be produced through the
application of reverse flotation, and that the results would prove
the suitability of the Kallak North magnetite concentrate for use
in Direct Reduction Iron ("DRI") facilities and as chemical grade
raw material.
Kallak North has three main ore types, classified as
follows:
1. 'Blue' ore - magnetite rich;
2. 'Green' ore - magnetite rich with hematite; and
3. 'Red' ore - hematite rich.
The work at GTK applied reverse flotation on two of the three
ore types, Blue and Green. Flotation of the magnetite portion of
the Red ore type will be done at a later stage.
Head assays for the samples used were performed using X-Ray
Fluorescence ("XRF") analysis for Green, Blue and Red samples. The
main elements of interest are shown below:
Element Green Blue Red
Fe % 31.9 36.5 37.9
------- ------- -------
SiO (2)
% 47.7 40.6 40.8
------- ------- -------
Al (2)
O (3)
% 2.92 2.41 1.84
------- ------- -------
CaO % 1.2 2.51 1.05
------- ------- -------
MgO % 2.37 2.58 2.59
------- ------- -------
P (2)
O (5)
% 0.068 0.096 0.081
------- ------- -------
MnO % 0.229 0.51 0.296
------- ------- -------
This assay work was carried out by Labtium, who have a
geo-analytical laboratory in Outokumpu City and are accredited
according to ISO/IEC 17025 by FINAS (Finnish accreditation
service).
Concentrate product results:
The table below shows detailed product specifications for
concentrates produced in 2015, and in italics the results from the
previous, initial, programme in 2014:
Fe SiO S CaO MgO Al TiO Na K P MnO
(2) (2) (2) (2) (2) (2)
O O O O
(3) (5)
% % % % % % % % % % %
Magnetite
(SGS
certified, 71.5 0.62 <0.01 0.03 0.03 0.10 <0.01 <0.01 0.01 <0.01 0.48
2015)
----- ----- ------ ------ ----- ----- ------ ------ ------ ------ ------
Magnetite
(GTK, 69+ 3.9 0.003 0.109 0.11 0.24 0.010 0.03 0.19 0.009 0.444
2014)
----- ----- ------ ------ ----- ----- ------ ------ ------ ------ ------
Hematite
(GTK, 68.3 2.03 0.005 0.15 0.25 0.20 0.26 0.02 0.019 0.04 0.023
2015)
----- ----- ------ ------ ----- ----- ------ ------ ------ ------ ------
Hematite
(GTK, 65.8 4.1 0.018 0.54 0.50 0.43 0.449 0.05 0.03 0.093 0.183
2014)
----- ----- ------ ------ ----- ----- ------ ------ ------ ------ ------
Key: Fe - Iron, SiO (2) - Silica, S - Sulphur, CaO - Calcium
Oxide, Al (2) O (3) - Alumina, TiO (2) -
Titanium Dioxide, K (2) O - Potassium Oxide, P (2) O (5) - Phosphate, MnO - Manganese Oxide.
About Kallak
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 an 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 n exceptionally 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 (the "Concession") 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.
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 had 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 other major capital
expenditure 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:
o 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.
o 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.
o 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.
o 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.
o 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.
Qualified Person Review:
Dr. Arvidson, MSc Mining/Mineral Processing, PhD Mineral
Processing (equivalent), both read at the Royal Institute of
Technology, Stockholm, has reviewed and approved the technical
information contained within this announcement in his capacity as a
qualified person, as required under the AIM rules. Dr. Arvidson has
over 50 years relevant experience in the minerals industry, and has
developed over 80 new applications within the industrial minerals
and iron ore areas. Dr. Arvidson has visited the Kallak site and
supervised laboratory and pilot plant testing of samples extracted
from trenches on the site.
References:
Arvidson, B. (2020). BO ARVIDSON'S IRON ORE AND DRY MINERAL
PROCESSING. Lakewood, CO 80228, USA: Bo Arvidson Consulting
LLC.
Waldon, D. (2015). CERTIFICATE OF ANALYSIS. Lakefield, Ontario,
Canada: SGS Canada Inc.
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.
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