BEM Beowulf Mining Plc

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.

30 August 2024

Beowulf Mining plc

("Beowulf" or the "Company")

Unaudited Financial Results for the Period Ended 30 June 2024

Beowulf Mining (AIM: BEM; Spotlight: BEO), the mineral exploration and development company, announces its unaudited financial results for the six months ended 30 June 2024 (the "Period").

The Company has made significant progress across its portfolio during the Period, building out a skilled and dedicated team, ramping up activities at the Gállok or Kallak Iron Ore Project ("Gállok") and the Graphite Anode Materials Plant ("GAMP") in preparation for their respective Pre-Feasibility Studies and permitting processes, and derisking the Company's projects to ensure that their value can be fully demonstrated and optimised.

Activities in the Period

Corporate

·      During the Period, the Company completed a capital raise, raising a total of SEK 56.3 million (approximately £4.4 million) by way of a rights issue of Swedish Depository Receipts in Sweden and a PrimaryBid retail offer and a placing to certain UK investors including members of the Board and executive management. Proceeds of the capital raise are being used to fund the continued development of the Company's projects, in particular, the Gállok in Sweden and the GAMP in Finland.

·      In order to complete the capital raise, a General Meeting was held to provide the Board of Directors with the requisite authorisation and flexibility to increase the Company's share capital. In addition, given the Company's share price was near the nominal value of the Ordinary Shares, the existing Ordinary Shares of 1p each were subdivided into a new Ordinary Share of 0.1p and a deferred A share of 0.9p.

·      Following the capital raise, the Company, at its Annual General Meeting ("AGM") on 14 June 2024, passed a resolution to complete a consolidation of shares in the Company on the basis of 1 New Share of £0.05 (5 pence) for every 50 Existing Shares of £0.001 (0.1 of a penny) each. The consolidation of the Existing Shares provides greater flexibility for the Company when issuing new equity and should help to minimise dilution to Shareholders.

·      The completion of this financing has enabled the progression of crucial workstreams, including advancing permit applications, environmental impact assessments, and technical test-work at both sites, significantly derisking the Company's projects.

Sweden

·      During the Period, Dmytro Siergieiev joined Jokkmokk Iron Mines AB ("Jokkmokk Iron") as Project Director with responsibility for leading the further development of Gállok.

·      Under Dmytro's leadership, Jokkmokk Iron initiated meetings with local stakeholders including landowners and Sami villages focused on developing a collaborative approach to future activity, with the view that active transparent communication will aid Gállok through its developmental phase.

·      Work continued in preparation for both the Pre-Feasibility Study ("PFS") and Environmental Impact Assessment ("EIA") for Gállok. Critical workstreams included metallurgical test-work, hydrogeological testing and the initiation of trade-off studies on transport and logistics and the location of the tailings management facility.

·      During the Period, representatives of the Company met with a delegation from UNESCO to discuss the development of Gállok in the context of the Laponia World Heritage Site.

·      On 25 June 2024, the Swedish Supreme Administrative Court released its judgment upholding the Government's decision to award the Exploitation Concession for Gállok in March 2022. The Exploitation Concession and all attaching conditions therefore remain in full force.

Finland

·      On 17 January 2024, Beowulf, through its wholly owned Finnish subsidiary Grafintec Oy ("Grafintec"), announced an updated strategy to fast-track the full GAMP process, consisting of Spheronisation, Purification and Coating to produce Coated Spherical Graphite ("CSPG") for sale to anode manufacturers. The updated strategy captures more of the anode material production value-chain and provides greater supply-chain security following the export controls imposed by China on graphite materials in December 2023, further derisking the project.

·      Test-work in preparation for an enhanced PFS on the full GAMP was initiated during the Period with positive results demonstrating that the proposed process flow-sheet produced battery grade graphite material. Optimisation work is continuing with the conclusion of the PFS expected by the end of 2024.

·      The enhanced PFS will be followed by a Definitive Feasibility Study ("DFS") during 2025 with first production still planned from 2027.

Kosovo

·      The Company announced the consolidation of 100 per cent ownership of Vardar Minerals Limited ("Vardar") during the Period, through the issue of 1,046,535 Beowulf shares (which remain subject to a 12-month lock-in agreement), providing Beowulf with full ownership and optionality and, through bringing management and administrative functions in-house, reduces the overall running cost to Beowulf. The transaction completed on 8 April 2024.

·      In connection with the consolidation, Ismet Krasniqi was appointed to the Board of Vardar on the 8 April 2024.

·      Vardar submitted applications, and received confirmation of receipt on 22 February 2024, for new licences covering the original Mitrovica, Viti East and Viti North licence areas, all of which expired on 27 January 2024 in accordance with their terms. Exploration licence applications are reviewed by the Independent Commission for Mines and Minerals ("ICMM") in Kosovo and ultimately granted by the Board of ICMM. The Government disbanded the Board of ICMM in October 2023 and, although it is being reinstated, the licence applications currently remain pending while the new ICMM Board works through the backlog. With the licence applications formally lodged with ICMM, no other party may apply for licences over the same area. The Company is confident that the licences will be granted in the coming months and will update the market accordingly. As these applications are for new licences, they will be valid for an initial three-year period from the date of granting after which they may be extended twice, for two-year periods with a reduction in the land holding of 50 per cent on each occasion.

·      Vardar received encouraging preliminary assay results from sampling programmes on the Shala East licence with rock chip samples assaying up to 3.84 grammes per tonne ("g/t") gold ("Au"), 117 g/t silver ("Ag"), 5.5% zinc ("Zn") and 5.4% lead ("Pb"). Infill soil and rock chip sampling is ongoing.

·      Furthermore, sampling of water springs on the Viti North licences has returned highly anomalous lithium and boron results of 1,260 and 10,500 microgrammes per litre respectively from a single sample. Further sampling and exploration are planned.

Post Period

·    The Company confirmed that the formal consultation process for the Gállok EIA will be initiated following the summer. Feedback from this consultation process will be taken into consideration and inform the completion of the Gállok EIA and subsequent Environmental Permit application. The submission for the Environment Permit application is targeted for Spring 2025.

·    As part of the process, Reindeer Herding analysis, World Heritage Assessments, and local stakeholder engagement continues.

·    Indications from metallurgical test-work confirm that Gállok can produce very high grade, low impurity iron concentrate.

·    The infill drilling programme focussed on upgrading Inferred resource to Measured and Indicated category is now expected to commence in Autumn 2024. Following this drilling, the Mineral Resource Estimate ("MRE") will be updated and form the basis of mine planning and reserve estimation.

·    Other workstreams at Gállok, including metallurgy, mineral processing, waste management, site infrastructure and transportation and logistics, are being advanced or nearing completion.

·    This ramp up in activity has advanced Gállok towards the completion of the PFS, anticipated in Q2 2025, which will support the EIA and Environmental Permit submission process.

·    Optimisation work as part of the GAMP PFS continued with the development of the water treatment flow-sheet to recycle sodium hydroxide ("NaOH"). Bench-scale test-work demonstrated the ability to recover more than 90 per cent of the NaOH, the primary reagent in the purification process, and that this recycled material is high quality and can be reused in the process to produce battery-grade graphite (>99.95 per cent graphite purity). In addition, high-quality calcium carbonate ("Lime") produced as by-product from the process can be used for neutralisation of the acidic wastewater and potentially sold to other industries. The ability to recycle and reuse reagents, decreases their overall consumption thereby reducing both the operating cost and environmental impact.

Financial

·      The underlying administration expenses of £520,157 in Q2 2024 were lower than Q2 2023 at £1,097,738. This has decreased primarily due to share-based payment expenses of £116,280 (Q2 2023: £158,120), professional fees of £123,744 (Q2 2023: £236,877), directors and staff costs of £130,234 (Q2 2023: £301,576), downstream processing costs of £6,143 (Q2 2023: £113,034), legal fees of £7,220 (Q2 2023: £29,809), audit fees of £24,566 (Q2 2023: £36,900) and a foreign currency loss of £17,636 (Q2 2023: loss of £140,575).

·      The consolidated loss before tax for H1 2024 decreased to £976,478 (H1 2023: £1,799,616). This decrease is primarily due to share-based payment expenses of £126,432 (H1 2023: £238,843), professional fees of £293,779 (H1 2023: £405,196), directors and staff costs of £233,149 (H1 2023: £424,875), and a foreign currency loss of £33,253 (H1 2023: £199,393), combined with finance costs in relation to the bridging loan of £59,147 (H1 2023: £195,304), which was fully repaid in the period.

·      Consolidated basic and diluted loss per share for the quarter ended 30 June 2024 was 1.81 pence (Q2 2023: loss of 4.40 pence restated for the 50 to 1 share consolidation in Q2 FY24).

·      The Company raised SEK 56.3 million (approximately £4.4 million) before expenses as part of the Capital Raise, of which, the net proceeds have been used to repay the bridging loan principal and interest of SEK 10.3 million (approximately £0.76 million).

·      £2,686,189 in cash was held at 30 June 2024 (30 June 2023: £2,855,840).

·      Exploration assets increased to £15,211,731 at 30 June 2024 compared to £13,588,729 at 30 June 2023.

·      The cumulative translation losses held in equity increased by £446,232 in the period ended 30 June 2024 to £1,904,104 (31 December 2023: loss of £1,457,872). Much of the Company's exploration costs are in Swedish Krona which has weakened against the GB Pound Sterling since 31 December 2023.

·      At 30 June 2024, there were 32,018,357 Swedish Depository Receipts representing 82.43% per cent of the issued share capital of the Company. The remaining issued share capital of the Company is held in the UK.

Ed Bowie, Chief Executive Officer of Beowulf, commented:

"Significant progress has been made across the Company's portfolio during the Period.

"With the appointment of Dmytro, the leadership of Jokkmokk Iron is now on a sure footing and we continue to work with a team of market leading consultants. Activity at Gállok is ramping, with the EIA consultation process planned to commence in September and multiple ongoing workstreams in preparation for the PFS. Our focus over the coming months remains on advancing these workstreams, whilst delivering a robust Environmental Permit application.

"In Finland, test-work in preparation for the conclusion of the GAMP PFS targeted for the end of the year. This is the first comprehensive test-work, taking graphite concentrate through the full process to produce battery grade graphite anode material, and thus, is a significant advancement for the GAMP.

"Finally, in Kosovo, we consolidated 100% ownership in Vadar Minerals, significantly reducing the holding costs and giving us full flexibility to grow the subsidiary. Following the excellent results from the Shala East licence released on 4 March 2024, the Vardar team are completing the infill soil and rock chip sampling programme to better define the key target areas. With the re-instatement of the ICMM Board, we anticipate receipt of our exploration licence renewals in the coming months.

"Having now spent a year in post, I am pleased by the excellent progress we have made both corporately and at asset level. We are building a skilled and dedicated team, working more closely with local stakeholders and the advancement of the projects represents a very significant derisking both from technical and permitting perspectives. Despite this progress, equity markets remain challenging and the Company's share price has performed poorly. We remain focused on further derisking the Company's assets, demonstrating their true value and closing the market disconnect. I would like to thank shareholders for their continued support, and I look forward to providing further updates as we look to realise the portfolio's extensive potential."

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

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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, as at 30 June 2024, was 82.43 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, which includes iron ore, graphite and base metals, needed for the transition to a Green Economy.

The Company has an attractive portfolio of assets, including commodities such as iron ore, graphite, gold and base 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 Gállok 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 Gállok area, the Mineral Resources of the deposits have been classified according to the PERC Standards 2017, as was reported by the Company via RNS on 25 May 2021, based on a revised resource estimation by Baker Geological Services. The total Measured and Indicated resource reports at 132 million tonnes ("Mt") grading 28.3 per cent iron ("Fe"), with an Inferred Mineral Resource of 39 Mt grading 27.1 per cent Fe.

In Finland, Grafintec, a wholly-owned subsidiary, is developing a resource footprint of natural flake graphite and the capability to serve the anode manufacturing industry. Grafintec is working 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 100% 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 and Shala licence areas which are showing potential for copper-gold porphyry mineralisation. With Beowulf's support, Vardar is focused on making a discovery.

Gállok is the foundation asset of the Company, and, with Grafintec and Vardar, each business area displays strong prospects, and 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 2024