23 September 2016
Beowulf Mining plc
("Beowulf" or the "Company")
Kallak North Exploitation Concession Application Update
Beowulf (AIM: BEM; Aktietorget: BEO), the mineral exploration and development company, focused on the Kallak magnetite iron ore project and the Åtvidaberg polymetallic exploration licence in Sweden, and its graphite portfolio in Finland, is pleased to provide an update on the application process for Kallak North.
On the 21 September 2016, the Company submitted a letter to the Mining Inspectorate of Sweden, revising its application boundary to encompass both the Concession Area, delineated by the Kallak North orebody, and the activities necessary to support a modern and sustainable mining operation.
The revised boundary takes into account the judgement made by the Supreme Administrative Court of Sweden in the Norra Kärr case, which stated that activities associated with a mining operation, but outside of the previously considered Concession Area, need to be studied as part of an application for an Exploitation Concession.
All the activities associated with a mine at Kallak, and their environmental effects, have been comprehensively studied as part of the Environmental Impact Assessment ("EIA") for the project. The EIA has also been reviewed in full by the County Administrative Board ("CAB"), during the period from April 2013 to October 2014.
In the letter, we have reaffirmed the commitment we made back in November 2014, in response to the concerns raised by the CAB in October 2014 about a specific transport corridor under consideration, to eliminate the transport corridor that passes in a north/north-easterly direction through the Jelka-Rimakåbbå Natura 2000 area.
Kurt Budge, CEO, commented:
"We have been proactive in addressing what we believe are the matters raised by the Norra Kӓrr case, to facilitate the Mining Inspectorate's further review of the Company's application.
"We have always maintained that we have carried out all the necessary work to get an Exploitation Concession awarded. In 2015, and before the Norra Kӓrr judgement, this was validated by gaining the support of the CAB and the recommendation of the Mining Inspectorate.
"Before the Norra Kӓrr judgement, it was working practice in Sweden to limit decision criteria for an Exploitation Concession to the Concession Area, even though the EIA studied all the activities necessary to support a mining operation. Yet, you can't reap the economic benefits that a Concession Area can deliver, without having the required activities to support a mining operation.
"We have invested in Jokkmokk, we have established a business, created value and, most importantly, we have taken no shortcuts in the preparation of our application for an Exploitation Concession.
"I was in Luleå in early September and read in the newspaper of the loss of 40 jobs in Jokkmokk, being equivalent, in effect, to the loss of 7,000 jobs in Stockholm. Kallak has the potential to create 250 long term jobs, and we have a vision of Kallak as the catalyst for establishing a diverse, thriving and sustainable economy in Jokkmokk, long after mining has finished.
"Our approach throughout my time with the Company, has been to show our desire to become a local partner and, as we advance the project, deliver the responsible development of Kallak, sharing our plans and ideas with the community. Permitting delays have hindered our efforts, but we have demonstrated our firm commitment and begun to establish important relationships for the future.
"Now that we have made this submission, we will be asking for transparency on timeline and process to a decision being made, and will update shareholders in due course. I am optimistic that we remain on course for a positive decision."
Kallak Project Summary
· The Company has defined a high quality resource at Kallak, including an Indicated Resource of 118.5 million tonnes ("Mt") at 27.5 per cent iron and an Inferred Resource of 33.8Mt at 26.2 per cent iron (JORC, 2012 edition), plus an exploration target of 90-100Mt at 22-30 per cent iron.
The exploration target represents potential ore, specifically in the gap between the northern and southern ends of Kallak South, and below the pit shells modelled for the resource statement. The 2014 drilling programme for Kallak South focused on defining the ends of the Kallak South orebody. The geophysical magnetic signature of mineralisation, evidence of the presence of magnetite, extends through the gap giving confidence for an exploration target, but insufficient drilling precludes any additional resource classification.
The Kallak North orebody remains open at depth and to the north.
· On 8 June 2015, the Company announced testwork results showing that a market-leading 'super' high grade magnetite concentrate, with over 71 per cent iron content and low levels of deleterious elements (silica, alumina, phosphorous and sulphur) had been produced.
The 'super' high grade and purity of the magnetite concentrate produced are valuable attributes for key target markets: pellets; Direct Reduction Iron ("DRI") facilities in Europe and the Middle East; and in chemical industry applications, with higher quality iron units benefiting manufacturing productivity with improved economy, and high purity delivering environmental benefits.
· In February 2013, Kallak was designated as an Area of National Interest ("ANI") for minerals by the Swedish Geological Society, affording it protection against competing land uses and measures that may hinder future potential mineral extraction.
Exploitation Concession Recap
· On 1 July 2016, the Government of Sweden asked the Mining Inspectorate of Sweden to review the Company's application for an Exploitation Concession in the context of the recent Supreme Administrative Court judgement in the case of the Norra Kӓrr project.
· On 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 on Kallak North, as published in the CAB's announcement dated 7 July 2015.
· On 7 July 2015, the CAB published their response to the Government of Sweden's request for comments on the national economic assessment of Kallak North.
The CAB stated in their response that mining is economically relevant, and that the Kallak North project generates economic benefits at local, regional and national levels, including direct and indirect jobs, tax revenues, and more broadly across mining equipment and services sectors in Sweden.
The CAB stated that there are no conflicts within the Concession area where national interests are considered, as the Concession area is designated as an ANI for minerals.
The CAB's announcement also looked to the future, directing the Company towards working with communities that could be affected by the development of a mining project, including Sami reindeer herding communities. This is work that the Company has already begun, with regular interactions and meetings with key stakeholders in and around Jokkmokk, including ongoing communications with the Chairmen of the Jåhkågasska and Sirges Sami reindeer herding communities.
· Jokkmokk Kommun's independent socio-economic study on Kallak shows that a mining development will create direct and indirect jobs, increase tax revenues and slow down population decline, demonstrating that mining at Kallak can provide a much needed economic stimulus for the region.
· The Company has demonstrated its commitment to Jokkmokk's economic future as a direct investor in the mining project, with over SEK 71 million having been invested to date, and through its partnership with the landowners' association, Jokkmokks Allmänning, to provide financial support for the development of small and medium sized enterprises in the wider community.
Kallak Environmental Impact Assessment ("EIA")
· The EIA, which was submitted as part of the Exploitation Concession application by Beowulf's 100 per cent owned Swedish subsidiary, Jokkmokk Iron Mines AB ("JIMAB") in April 2013, and later supplemented in April 2014, has comprehensively studied all aspects of a future mining operation and their associated environmental impacts, with a detailed technical description and site plan.
· The EIA includes detailed studies into local reindeer herding activities, and precautionary, protective and compensatory frameworks have been established. These frameworks will be further developed into management plans, in consultation with concerned Sami reindeer herding communities, as the project is advanced.
· The supplementary EIA application was a revised and expanded version of the original submission made in April 2013, following the CAB's request in late November 2013 for further information and clarification on certain aspects of the EIA.
· JIMAB added certain supplements to the EIA, along with further technical description and commentary. The enhanced report comprised 164 pages, including various figures and tables, with an additional 16 appendices of more than 200 pages in length covering various technical and specialist aspects based on work performed by the Company's expert team of Swedish consultants.
· The EIA was supplemented in the following principal areas:
o The reindeer husbandry section was complemented by further analysis commissioned from consultants Swedish Geological AB. It was also supplemented and revised based on certain comments and information received from the local Sami reindeer herding communities.
o Additional investigations regarding safety aspects for hydroelectric power dams were conducted by Ramboll Sweden AB.
o Questions raised regarding security issues surrounding any tailings dams for the project were further investigated and addressed by Tailings Consultants Scandinavia AB.
o Various comments received on the socio-economic aspects were responded to by Luleå University of Technology.
o Additional investigations concerning local hunting and fishing activities and specialist environmental aspects, including water ecology and water chemistry, were conducted by Pelagia Miljökonsult AB based in Umeå.
o Additional information was gathered regarding Areas of National Interest and other interests of importance in respect of general water management and military defence aspects.
o Additional studies and inventories on the existing natural water sources in the project area were compiled by Hifab International AB, together with reports on dust and air quality issues.
o Further information was obtained on the Laponia World Heritage site located more than 40 kilometres away from the Kallak North deposit, as well as on the general tourism industry in the Jokkmokk region sourced from the Destination Jokkmokk organisation.
· The methodologies utilised in the enhanced EIA report were generally developed and conducted in accordance with the comments received from the CAB, and reflected the feedback from a constructive meeting held with representatives of the Norrbotten County authorities in March 2014.
The mineral resources for the Kallak North and Kallak South iron ore deposit have been prepared and categorised for reporting purposes by Mr. Thomas Lindholm, of GeoVista AB, Fellow of the MAusIMM, following the guidelines of the JORC Code, 2012 edition. Mr. Lindholm is qualified to be a Competent Person as defined by the JORC Code on the basis of training and experience in the exploration, mining and estimation of mineral resources of ferrous deposits and by his membership in a recognized professional association. Mr. Lindholm consents to the inclusion in this announcement of resource statement information in the form and context in which it appears.
Beowulf Mining plc
Kurt Budge, Chief Executive Officer
Tel: +44 (0) 20 3771 6993
Cantor Fitzgerald Europe
(Nominated Advisor & Broker)
Phil Davies / David Porter
Tel: +44 (0) 20 7894 7000
Tim Blythe / Megan Ray
Tel: +44 (0) 20 7138 3204
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