Beowulf launches a partially secured capital raise

RNS Number : 4519E
Beowulf Mining PLC
06 November 2020
 

 

 

 

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THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

6 November 2020

 

Beowulf Mining plc

 

("Beowulf" or the "Company")

 

Beowulf launches a partially secured capital raising of up to approximately £7.3 million (approximately SEK 83 million) to advance the Company's asset portfolio

 

Beowulf (AIM: BEM; Spotlight: BEO) announces that it will conduct an open offer of up to 225,841,752 new Ordinary Shares to Qualifying Shareholders at 3.16 pence per Share (the "Offer Price") on a pre-emptive basis to raise up to approximately £7.3 million (gross) (the "Open Offer"). The Company will also receive a further conditional subscription of 88,800 new Ordinary Shares to raise £2,806 (the "Additional Subscription").

 

In order to ensure that existing holders of Swedish Depository Receipts ("SDRs") are able to participate in the Open Offer in respect of the underlying Ordinary Shares represented by the SDRs, the Board will instruct Sedermera Fondkommission as issuing agent in the Swedish market to offer  the underlying Ordinary Shares' entitlements to accept the Open Offer to Qualifying SDR Holders in Sweden for subscription by way of a rights issue of new SDRs with preferential rights of up to approximately SEK 56.7 million (gross) (the "SDR Rights Issue") at a price of SEK 0.370 per New SDR (the "SDR Offer Price").

 

New SDRs in the SDR Rights Issue will also be offered for subscription without preferential rights to institutional investors, other professional investors and the general public in Sweden. The New SDRs to be offered with preferential rights to Qualifying SDR Holders and without preferential rights to investors and the general public in Sweden will represent up to the entirety of the Custodian's Open Offer Entitlements.

 

Beowulf has received underwriting commitments from certain Nordic investors for up to 80 per cent. (approximately SEK 45.3 million) of the SDR Rights Issue. Beowulf has also received pre-subscription commitments totalling approximately £87,000 regarding the Open Offer and Additional Subscription from certain members of the Board and senior management.

 

The gross proceeds from the Open Offer, the SDR Rights Issue and the Additional Subscription (together the " Capital Raising") will be up to approximately £7.3 million (corresponding to approximately SEK 83 million) in aggregate . The net proceeds from the Capital Raising, estimated to be approximately £6 million (corresponding to approximately SEK 69 million) (assuming full take-up under the Open Offer and SDR Rights Issue), will be used to advance the Company's portfolio of assets in Sweden, Finland and Kosovo.

 

The Offer Price under the Open Offer and Additional Subscription of 3.16 pence represents approximately a 35 per cent. discount to the theoretical ex-rights price ("TERP") of the Ordinary Shares based on the Closing Price per Ordinary Share and the SDR Offer Price of SEK 0.370 represents approximately a 35 per cent. discount to the TERP of the SDRs based on the closing price per SDR on Spotlight, in each case on 5 November 2020.

 

The New Ordinary Shares will be issued using the Directors' existing authority to allot shares for cash on a non-pre-emptive basis. This authority was granted by Shareholders at the Company's annual general meeting held on 10 September 2020.

 

A prospectus relating to the Open Offer and SDR Rights Issue is expected to be posted to Qualifying Shareholders on or around 17 November 2020 subject to final regulatory approval.

 

Background and use of proceeds

Beowulf has an asset portfolio diversified by commodity and development stage in several countries.  The Company's vision is to build a sustainable and innovative mining company, which creates shareholder value by developing mining assets, delivering production and generating cash flow, and, in so doing, meets society's needs for metals.

 

With plans for each business area to drive the Company forward, the Capital Raising is intended, first and foremost, to further develop the Company's projects, while supporting its tightly managed corporate overheads.

 

Beowulf's first priority remains the award of the Exploitation Concession for Kallak North. If the Swedish Government approves the Exploitation Concession, and with funding from the Capital Raising, the Company's immediate plan is to complete a scoping study within 12 months, and in parallel plan for a pre-feasibility study and initiate environmental permitting. Work will continue on firmly establishing the resource upside, and the potential for a much longer life mining operation, beyond the 14 years included in the Kallak North application, which can support a long-life sustainable mining operation, high quality production and the economic future of Jokkmokk municipality.

 

Beowulf holds, through its 46.1 per cent. interest in Vardar, exploration licences for the Mitrovica and Viti projects in Kosovo. Both projects are located within the Tethyan Belt, a major orogenic metallogenic province for gold and base metals. Beowulf recently invested in Vardar to fund a geophysics programme that was designed to map out alteration zones and identify potential structural controls to mineralisation. 3D IP/DC surveys are also being used to directly map sulphides and resistivity contrasts associated with mineralisation. With continued exploration success in Kosovo, the Company will fund further work at Mitrovica and Viti, the goal being to discover a deposit(s) and thereafter define a mineral resource(s).

 

In Finland, Beowulf is pursuing, through its wholly owned subsidiary, Fennoscandian, a strategy to develop a 'resource footprint' of natural flake graphite. With sufficient funding from the Capital Raising, by the end of 2021, Fennoscandian will have completed a scoping study for its Aitolampi project, and in conjunction with the scoping study, developed plans for test mining at Aitolampi to produce a bulk sample and the establishment of a pilot plant for producing spherical graphite for batteries and other high-value graphite products.

 

Value drivers

Business area

Near-term

Medium-term

Kallak

Exploitation Concession - 'forthcoming decision' - potential re-rating event. Continue to evaluate Parkijaure nr 6 and increase the total resource.

Advance project development studies/strategic partner search/develop formal agreements with Jokkmokk municipality and Sami reindeer herders

Fennoscandian

Focus is on building a resource and production base, positioning the Company as a supplier of feed material for manufacturing the anodes in lithium-ion batteries.

Continue to develop graphite portfolio, including scoping study, test mining and pilot plant for Aitolampi, and to investigate other sources of graphite supply

Vardar

Geophysics programme results expected for Mitrovica and Viti, which should provide targets for drilling in 2021.

Drilling for epithermal and porphyry targets in 2021. Focus on discovery. Continue to evaluate additional licence opportunities in Kosovo.

 

The Company's estimated expenditure for the next 12 months, using the expected Minimum Net Proceeds from the Capital Raising and its cash balance, approximately £756k as of 31 October 2020, is as follows:

 

 

£

Percentage of Capital Raising

Repayment of the Bridge Loan

1,100,000

34%

Vardar - drilling of exploration targets defined by 2020 geophysics

719,000

22%

Fennoscandian - Aitolampi scoping study, pilot plant/test mining studies

430,000

13%

Kallak - drilling, scoping/technical studies

204,000

6%

Working capital

811,000

25%

Total

3,264,000

100%

 

Additional proceeds from the Capital Raising, up to the maximum net proceeds of approximately £6 million, will be used to expand and accelerate the Company's work programmes across each of the three business areas, which could include resource drilling in Kosovo and initiating a Pre-feasibility Study for Kallak.

 

Kurt Budge, Chief Executive Officer of Beowulf, commented:

 

"The Board has considered giving shareholders the opportunity to invest in the Company on many occasions over the last six years of my involvement with Beowulf and, until now, it has never been the right time.  With the financing in August, we made our first step to establishing relationships with Nordic investors, and their underwriting commitment is the cornerstone of this Capital Raising. 

 

"Beowulf's asset portfolio is diversified by commodity, geography and development stage of its various projects, and features metals in demand to facilitate an economic green transition and for addressing the climate emergency.

 

"Kallak is the foundation asset of Beowulf, that we have been developing since 2006. The work towards obtaining regulatory approval has recently been intensified and we hope for a positive conclusion.  We see great potential in developing a sustainable mining operation, that provides secure supply of high-quality feedstock for fossil-free steelmaking and stimulates the local and regional economy.

 

"In parallel with the development of Kallak, Fennoscandian is strengthening its position in the Finnish battery sector, as Finland's only developer of natural flake graphite.  We see great opportunities to being seen as a secure supply to the growing demand for feed material for manufacturing anodes for lithium-ion battery manufacturing in Finland and Europe.

 

"In addition, through Vardar Minerals, we have a strategic investment exposure to the highly prospective Tethyan Belt, a major orogenic metallogenic province for gold and base metals, with geophysics results expected to provide targets for drilling at Mitrovica and Viti in 2021.

 

"We are now carrying out the Capital Raising to further advance and strengthen the Company and its assets.

 

"We see great potential in our Company, which is further emphasised by members of the Board and senior management subscribing in the Open Offer and Additional Subscription. 

 

"Kallak is the foundation asset of the Company, but with Vardar and Fennoscandian, the Company has many investment opportunities to grow, with each business area displaying strong prospects for an exciting future for the Company."

 

 

The Capital Raising

The Open Offer provides an opportunity for all Qualifying Shareholders to acquire Open Offer Shares pro rata to their holdings of Ordinary Shares as at the Open Offer Record Time. The Offer Price of 3.16 pence per Open Offer Share for the Open Offer is the same as the Offer Price in the Additional Subscription, while the Offer Price of SEK 0.370 per Open Offer Share to be subscribed for by the Custodian is the same as the SDR Offer Price in the SDR Rights Issue. Qualifying Shareholders will also be able to apply through the Excess Application Facility for New Ordinary Shares under the Open Offer in excess of their Open Offer Entitlement, provided that they have agreed to take up their Open Offer Entitlement in full. The Custodian will not be permitted to apply for Excess Open Offer Shares through the Excess Application Facility.

 

Approximately 68 per cent. of the Existing Ordinary Shares are represented in the form of SDRs. Hence, a rights issue of New SDRs, representing interests in the Custodian's Open Offer Entitlements in the Open Offer, will be conducted with preferential rights pro rata to Qualifying SDR Holders' holdings of SDRs at the SDR Rights Issue Record Date. Qualifying SDR Holders may also apply for new SDRs in the SDR Rights Issue in excess of their preferential rights in the SDR Rights Issue.  New SDRs in the SDR Rights Issue will also be offered for subscription by institutional investors, other professional investors and the general public in Sweden.

 

In November 2020, the Company entered into underwriting commitments concerning the SDR Rights Issue with the Guarantors. The commitments amount to up to 80 per cent. of the issue volume in the SDR Rights Issue corresponding to approximately SEK 45.3 million. The Guarantors have committed to the Company, to the extent that New SDRs in the SDR Rights Issue are not subscribed up to 80 per cent., to subscribe for the amount of New SDRs required for the SDR Rights Issue to be subscribed up to 80 per cent., provided that the total underwritten amount shall not exceed approximately SEK 45.3 million. Subscription of New SDRs according to the underwriting commitments shall be carried out to the SDR Offer Price. A total cash compensation of 12 per cent. of the underwritten amount is payable to the Guarantors. The underwriting commitments has not been secured via a pre-transaction, bank guarantee or the like.

 

Since the transfer of Ordinary Shares between CREST and the VPC system may cause reconciliation issues, it will not be possible to process conversions of: (i) Ordinary Shares to SDRs and the crediting of such SDRs to the VPC system from 8.00 a.m. (Stockholm time) on 6 November 2020 until 8.00 a.m. (Stockholm time) on 19 November 2020; and (ii) the removal from the VPC system of SDRs and their conversion to Ordinary Shares from 8.00 a.m. (Stockholm time) on 6 November 2020 until 8.00 a.m. (Stockholm time) on 19 November 2020. Accordingly, Shareholders will not be able to convert their Ordinary Shares to SDRs (or vice versa) during these times.

 

In addition, it will not be possible to transfer or exchange Open Offer Entitlements to or for Swedish Subscription Rights in the VPC system, or to transfer or exchange Swedish Subscription Rights or Paid Subscribed SDRs in the VPC system to or for Open Offer Entitlements or Ordinary Shares.

 

The Additional Subscription allows for Christopher Davies, Independent Non-Executive Director of the Company, who is not currently a shareholder, to invest in the Company. The Offer Price of 3.16 pence per Additional Subscription Share is the same as the Offer Price in the Open Offer.

 

The total estimated issuing costs of the Capital Raising payable by the Company are approximately £1.2 million (corresponding to approximately SEK 14 million) (assuming full take-up under the Open Offer and SDR Rights Issue). Of the total estimated issuing costs, corresponding to approximately £0.48 million (approximately SEK 5.4 million) are attributable to cash compensation to the underwriters of the SDR Rights Issue.

 

The New Ordinary Shares to be issued pursuant to the Open Offer and Additional Subscription are to be admitted to trading on AIM, which is expected to take place at 8.00 a.m. on 22 December 2020. The Swedish Subscription Rights, the Paid Subscribed SDRs and the New SDRs are to be admitted to trading on Spotlight which, in the case of the Swedish Subscription Rights and the Paid Subscribed SDRs, is expected to take place on 20 November 2020 and, in the case of the New SDRs, is expected to take place on or around 29 December 2020.

 

Directors' and the senior manager's commitments and shareholdings

Certain of the Directors and Rasmus Blomqvist, the only senior manager of the Company, have agreed to subscribe for Open Offer Shares and Additional Subscription Shares. The Company has received pre-subscription commitments totalling approximately £87,000 regarding the Open Offer and Additional Subscription from certain members of the Board and senior management:

 

Name

Number and type of New Ordinary Shares

Number of Ordinary Shares on AIM Admission

Kurt Budge

906,159 Open Offer Shares

3,322,585

Christopher Davies

88,800 Additional Subscription Shares

88,800

Rasmus Blomquist

1,743,750 Open Offer Shares

6,393,750

 

Summary of the Open Offer

· Subscription period: 18 November 2020 - 18 December 2020 (11.00 a.m. London time).

· Subscription price: 3.16 pence per new Ordinary Share (in the case of Open Offer Shares applied for by the Custodian in connection with the SDR Rights Issue, the SDR Offer Price). The Offer Price under the Open Offer represents approximately a 35 per cent. discount to the TERP based on the Closing Price per Ordinary Share on 5 November 2020. The Offer Price per Open Offer Share under the Open Offer is the same as the Offer Price in the Additional Subscription.

· Issue amount: The Open Offer will comprise a maximum of approximately 225,841,752 new Ordinary Shares (of which up to approximately 153,172,548 Ordinary Shares will be offered under the SDR Rights Issue in the form of New SDRs). The proceeds of the Open Offer (excluding the proceeds from the SDR Rights Issue) will be up to approximately £2.3 million (gross). The number of Ordinary Shares in issue as at the date of this announcement amounts to 602,244,672.

· Preferential rights: Qualifying Shareholders will have preferential rights to subscribe for three (3) Open Offer Shares for every eight (8) Existing Ordinary Shares held by them and registered in their names at 6.00 p.m. on 16 November 2020. The ex-entitlement date for the Open Offer will be 8.00 a.m. on 17 November 2020. Open Offer Entitlements cannot be traded.

· No underwriting: the Open Offer is not being underwritten.

 

Summary of the SDR Rights Issue

· Subscription period: 20 November 2020 - 4 December 2020 (5.00 p.m. Stockholm time).

· Subscription price: SEK 0.370 per new SDR. The SDR Offer Price represents approximately a 35 per cent. discount to the TERP of the SDRs based on the closing price per SDR on Spotlight on 5 November 2020. No brokerage fee will be charged.

· Issue amount: The SDR Rights Issue will comprise a maximum of approximately 153,172,548 new SDRs. The proceeds of the SDR Rights Issue will be up to approximately SEK 56.7 million (gross). The number of SDRs in issue as at the date of this announcement amounts to 408,460,129.

· Preferential rights: Qualifying SDR Holders will have preferential rights to subscribe for new SDRs in relation to their existing holdings of SDRs. Qualifying SDR Holders will receive Swedish Subscription Rights on the basis of one Swedish Subscription Right for each SDR held on the SDR Rights Issue Record Date 18 November 2020. Holders of Swedish Subscription Rights will be entitled to subscribe for three (3) New SDRs for every eight (8) Swedish Subscription Rights held. The last day of trading in SDRs with preferential rights will be 16 November 2020. The first day of trading in SDRs without preferential rights will be 17 November 2020. Trading in Swedish Subscription Rights will take place on Spotlight from 20 November 2020 until 2 December 2020.

· Underwriting commitments: Beowulf has received underwriting commitments from Nordic investors (of up to 80 per cent. (approximately SEK 45.3 million) of the SDR Rights Issue. A total cash compensation of 12 per cent. of the underwritten amount is payable by the Company to the Guarantors.

· Paid subscribed SDRs: Trading in Paid Subscribed SDRs will take place on Spotlight from 20 November 2020 until the New SDRs can be registered in the VPC system.

 

Summary of the Additional Subscription

· The Additional Subscription comprises 88,800 Additional Subscription Shares raising approximately £2,800 (gross).

· The Offer Price of 3.16 pence per Additional Subscription Share is the same as the Offer Price of the Open Offer.

 

Change in Ordinary Shares, share capital and dilution 

A maximum of 225,930,552 New Ordinary Shares (including in relation to the SDR Rights Issue) may be issued pursuant to the Capital Raising, increasing the number of Ordinary Shares in issue from  602,244,672 to 828,175,224, corresponding to a £2,259,306 increase in the issued share capital of the Company from £6,022,446 to £8,281,752. If Qualifying Shareholders or Qualifying SDR Holders do not participate in the Open Offer or SDR Rights Issue and do not take up any of their Open Offer Entitlements or Excess Open Offer Entitlements, such Qualifying Shareholders' holdings, as a percentage of the Enlarged Share Capital, will be diluted by approximately 27 per cent. of votes and share capital (assuming full take-up under the Open Offer and SDR Rights Issue) as a result of the Capital Raising.

 

Related Party Transaction

The Additional Subscription from Christopher Davies is considered a related-party transaction for the purposes of Rule 13 of the AIM Rules for Companies. The directors independent of the Additional Subscription, (being Kurt Budge and Göran Färm) consider, having consulted with SP Angel, the Company's nominated adviser, that the Additional Subscription participation is fair and reasonable in so far as Beowulf's shareholders are concerned.

 

Expected Timetable of Principal Events

Each of the times and dates in the tables below is indicative only and may be subject to change. References to times in this timetable and in the rest of this announcement are to London time unless otherwise stated.

 

Summarised indicative timetable for the Open Offer

 

Latest time and date for conversion of Ordinary Shares into SDRs (and vice versa) 

 

7.00 a.m. on 6 November

 

Open Offer Record Time for Open Offer Entitlements

 

6.00 p.m. on 16 November

Publication of the Prospectus

 

17 November

Ex-entitlement date for the Open Offer

 

8.00 a.m. on 17 November

Posting of the Prospectus and Application Forms (to Qualifying Non-CREST Shareholders only)

 

17 November

Open Offer Entitlements and excess Open Offer Entitlements credited to stock accounts in CREST (Qualifying CREST Shareholders only)

 

as soon as practicable after

8.00 a.m. on 18 November

Time and date from which conversion of Ordinary Shares into SDRs (and vice versa) is permitted again

 

7.00 a.m. on 19 November

 

Recommended latest time for requesting withdrawal of Open Offer Entitlements from CREST

 

4.30 p.m. on 14 December

Latest time for depositing Open Offer Entitlements into CREST

 

3.00 p.m. on 15 December

Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)

 

3.00 p.m. on 16 December

Latest time and date for receipt of completed Application Forms and payments in full and final settlement of CREST instructions (as appropriate)

 

11.00 a.m. on 18 December

Announcement of the results of the Capital Raising

 

21 December

AIM Admission and commencement of dealings in the New Ordinary Shares

 

 8.00 a.m. on 22 December

New Ordinary Shares credited to CREST stock accounts (uncertificated Shareholders only)

as soon as practicable after 8.00 a.m. on 22 December

 

 

Summarised indicative timetable for the SDR Rights Issue

 

Latest time and date for conversion of SDRs into Ordinary Shares (and vice versa)

 

8.00 a.m. (Stockholm time)

on 6 November

 

The last day of trading in SDRs with preferential rights

 

16 November

Publication of the Prospectus

 

17 November

The first day of trading in SDRs without preferential rights

 

  17 November

 

SDR Rights Issue Record Date for the SDR Rights Issue

 

18 November

Time and date from which conversion of SDRs into Ordinary Shares (and vice versa) is permitted again

 

8.00 a.m. (Stockholm time)

on 19 November

 

Start of the subscription period for the SDR Rights Issue  and dealings in the Swedish Subscription Rights and Paid
Subscribed SDRs

 

20 November

Last day of trading in the Swedish Subscription Rights

 

  2 December

 

Subscription period for the SDR Rights Issue ends

 

5.00 p.m. (Stockholm time) on 4 December

 

Announcement of the results of the SDR Rights Issue

 

on or around 9 December

Announcement of the results of the Capital Raising

 

21 December

Last day of trading in the Paid Subscribed SDRs

  on or around 21 December

 

Record date for conversion of the Paid Subscribed SDRs into new SDRs

 

on or around 23 December

Swedish Admission and commencement of dealings in the New SDRs

on or around 29 December

 

These times and dates and those mentioned throughout this announcement are indicative only and may be adjusted by the Company in consultation with the Brokers, in which event details of the new times and dates will be notified to the FCA, the London Stock Exchange and Spotlight.

 

Prospectus

The Prospectus will be posted to Qualifying Shareholders and will be available on Beowulf's, Sedermera Fondkommission´s and Spotlight Stock Markets webpages www.beowulf.com, www.sedermera.se, www.spotlightstockmarket.com on or around 17 November 2020 before the start of the SDR Rights Issue subscription period.

 

Exchange rate

This announcement contains certain translations of pounds sterling into amounts in SEK for convenience of the reader based on the exchange rate of £1.00 = SEK 11,398, being the relevant exchange rate at 5.30 p.m. on 5 November 2020. These exchange rates were obtained from the homepage of the Central Bank of Sweden.

 

Enquiries:

 

Beowulf Mining plc

 

Kurt Budge, Chief Executive Officer

Tel: +44 (0) 20 3771 6993

SP Angel

(UK Financial Adviser, Nominated Adviser & Broker)

 

Ewan Leggat / Stuart Gledhill

Tel: +44 (0) 20 3470 0470

 

 

Sedermera Fondkommission

Tel:  +46 (0) 40-615 14 10

Swedish Financial Adviser and Broker

 

 

 

Bird & Bird

 

Legal adviser to the Company as to Swedish law

Tel:  +46 (0)8 506 320 00

 

 

 

 

Blytheweigh

 

Tim Blythe / Megan Ray

Tel: +44 (0) 20 7138 3204

 

 

Forward Looking Statements

 

Certain statements contained in this announcement relate to the future, including 'forward looking statements' relating to the Group's financial position and strategy. These statements relate to future events or the future performance of the Group. In some cases, these forward looking statements can be identified by the use of forward looking terminology, including the terms 'believes', 'estimates', 'plans', 'prepares', 'anticipates', 'expects', 'intends', 'may', 'will' or 'should' or, in each case, their negative or other variations or comparable terminology. These statements discuss future expectations concerning the Group's results of operations or financial condition, or provide other forward looking statements.

 

These forward looking statements are not guarantees or predictions of future performance, and are subject to known and unknown risks, uncertainties and other factors, including, but not limited to: (a) the Company may not be granted an Exploitation Concession for its principal and most advanced project at Kallak North; (b) the Company's operations are dependent upon the grant, renewal or continuance in force of appropriate licences which may be revoked if their conditions are not complied with; (c) the Company will have additional financing needs in the future and adequate financing might not be available on acceptable terms, or at all; (d) the Company's value and financial performance is dependent on commodity prices; (e) the Company is exposed to foreign currency risk; (f) the Company may not discover an economic mineral deposit; (g) COVID-19 has negatively impacted economic conditions globally and may adversely affect the Group's operations; and (h) the Company has no current revenue source and a history of operating losses, is likely to generate operating losses for the foreseeable future and is likely to achieve revenues or profitability for some time, if at all. Many of these risk factors are beyond the Group's control, and may cause the Group's actual results of operations, financial condition and the development of the business sectors in which the Group operates to differ materially from those suggested by the forward looking statements contained in this announcement. In addition, even if the Group's actual results of operations, financial condition and the development of the business sectors in which it operates are consistent with the forward looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Recipients of this announcement are cautioned not to put undue reliance on forward looking statements.

 

Other than as required by English law, none of the Company, its Directors, officers, advisers or any other person gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in this announcement will actually occur, in part or in whole.

 

Additionally, statements of the intentions of the Board and/or Directors reflect the present intentions of the Board and/or Directors, respectively, as at the date of this announcement and may be subject to change as the composition of the Company's board of directors alters, or as circumstances require.

 

The forward looking statements speak only as at the date of this announcement. Except as required by the FCA, the London Stock Exchange or applicable law (including as may be required by FSMA, the Prospectus Regulation Rules, the Prospectus Regulation, the Disclosure Guidance and Transparency Rules, the AIM Rules, the Market Abuse Regulation and other applicable regulations), the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained in this announcement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

 

Disclaimer

SP Angel, which is authorised and regulated by the FCA in the United Kingdom, is acting as nominated adviser and financial adviser exclusively for the Company and no-one else in connection with the Capital Raising, this announcement and AIM Admission and will not regard any other person (whether or not a recipient of this announcement) as a client of SP Angel in relation to the Capital Raising, this announcement or AIM Admission or any arrangement referred to in, or information contained in, this announcement and will not be responsible for providing the protections afforded to SP Angel's clients nor for giving advice in relation to the Capital Raising, this announcement or AIM Admission, or any arrangement referred to or information contained in this announcement.

 

Sedermera Fondkommission is acting as the financial adviser and broker to, and is providing issuing services for, the Company in relation to the SDR Rights Issue. Sedermera Fondkommission is a secondary business name of ATS Finans AB. Sedermera Fondkommission has assisted the Company in the preparation of this announcement. The Directors are responsible for the contents of this announcement and Sedermera Fondkommission and ATS Finans AB disclaim all responsibility in relation to Shareholders and SDR Holders and for other direct or indirect consequences as a result of investment decisions or other decisions based on the information in this announcement.

 

Apart from the responsibilities and liabilities, if any, which may be imposed on SP Angel by FSMA or the regulatory regime established thereunder or on Sedermera under the Swedish Securities Markets Act (Swedish: lagen (2007:528) om värdepappersmarknaden) or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, neither SP Angel, Sedemera (together the "Brokers"), nor any of their respective affiliates, accepts any responsibility whatsoever for the contents of this announcement including its accuracy, completeness and verification or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Swedish Subscription Rights, the Paid Subscribed SDRs, the New Ordinary Shares, the New SDRs, the Capital Raising or Admission and nothing in this announcement is or shall be relied upon as a promise or representation in this respect, whether as to the past or future. The Brokers and their respective affiliates accordingly disclaim, to the fullest extent permitted by applicable law, all and any liability whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise be found to have in respect of this announcement or any such statement. No representation or warranty express or implied, is made by the Brokers or any of their respective affiliates as to the accuracy, completeness, verification or sufficiency of the information set out in this announcement , and nothing in this announcement will be relied upon as a promise or representation in this respect, whether or not to the past or future.

 

Definitions

 

Additional Subscription

the conditional subscription by Christopher Davies, Independent Non-Executive Director, for New Ordinary Shares

 

Additional Subscription Shares

the New Ordinary Shares subscribed for by Christopher Davies pursuant to the Additional Subscription

 

Admission

the AIM Admission, Swedish Rights Admission and Swedish Admission

 

Aggregate Limit

a restriction on any Shareholder acquiring any New Ordinary Shares pursuant to the Open Offer which would, when aggregated with any existing interests in shares held by such Shareholder, result in such Shareholder holding an interest in shares which (taken together with shares in which persons acting in concert with him are interested) carry 30 per cent. or more of the voting rights of the Company

 

AIM

the market of that name operated by the London Stock Exchange

 

AIM Admission

the admission of the New Ordinary Shares to trading on AIM

 

AIM Rules

the AIM Rules for Companies published from time to time by the London Stock Exchange

 

Aitolampi

the Company's Aitolampi graphite project in Finland

 

Application Form

the personalised application form on which Qualifying Non-CREST Shareholders may apply for Open Offer Shares under the Open Offer

 

Board

the board of directors of the Company (as at the date of this announcement, unless otherwise stated)

 

Bridge Loan

the bridge loan dated 13 August 2020 to the Company by Formue Nord Markedsneutral A/S and Modelio Equity AB of SEK 12 million before expenses

 

Brokers

SP Angel and Sedermera Fondkommission

 

Capital Raising

the Open Offer, the SDR Rights Issue and the Additional Subscription, taken together

 

certificated or in certificated form

refers to a share or other security which is not in uncertificated form (that is, not in CREST)

 

Closing Price

the closing middle market quotation of an Ordinary Share

 

Company or Beowulf

Beowulf Mining plc, a company incorporated in England and Wales with registered number 02330496 and with its registered office at 201 Temple Chambers, 3-7 Temple Avenue, London EC4Y 0DT

 

COVID-19

the Corona Virus Disease 2019 as designated by the World Health Organization

 

CREST

the relevant system (as defined in the CREST Regulations) in respect of which Euroclear UK is the operator (as defined in the CREST Regulations)

 

CREST Regulations

the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended

 

Custodian

Skandinaviska Enskilda Banken AB (publ)

 

Directors

the directors of the Company as at the date of this announcement (unless otherwise stated)

 

Disclosure Guidance and Transparency
Rules

the disclosure guidance and transparency rules made under Part VI of FSMA (as set out in the FCA Handbook), as amended

 

Enlarged Share Capital

the expected issued ordinary share capital of the Company immediately following the issue of the New Ordinary Shares, assuming that no further Ordinary Shares are issued whether as a result of the exercise of any options or otherwise

 

EU

the European Union first established by the treaty made at Maastricht on 7 February 1992

 

Euroclear Sweden

Euroclear Sweden AB, the operator of the VPC system

 

Euroclear UK

Euroclear UK & Ireland Limited, the operator of CREST

 

Excess Application Facility

the arrangement pursuant to which Qualifying Shareholders may apply, subject to the Aggregate Limit, for any number of Open Offer Shares in excess of their Open Offer Entitlement, provided that they have agreed to take up their Open Offer Entitlement in full

 

Excess Open Offer Shares

New Ordinary Shares in addition to their Open Offer Entitlement for which Qualifying Shareholders may apply under the Excess Application Facility

 

Existing Ordinary Shares

the existing Ordinary Shares in issue

 

Exploitation Concession

an exploitation concession (Swedish: bearbetningskoncession) which gives the holder the right to exploit a proven, extractable mineral deposit for a period of 25 years, which may be extended

 

FCA

the Financial Conduct Authority in the UK

 

FCA Handbook

the FCA's Handbook of Rules and Guidance, as amended

 

Fennoscandian

Oy Fennoscandian Resources AB, a wholly owned subsidiary of the Company

 

FSMA

the Financial Services and Markets Act 2000, as amended

 

Group

the Company and each of its direct and indirect subsidiaries from time to time

 

Guarantors

Formue Nord Markedsneutral A/S, Modelio Equity AB (publ) and Oscar Molse

 

Guarantee Commitment Agreements

the guarantee commitment agreements dated 5 November 2020 between the Company and each of the Guarantors

 

Kallak

the Company's Kallak iron ore project in Sweden made up of the Kallak North and Kallak South deposits

 

London Stock Exchange

London Stock Exchange Group plc

 

Market Abuse Regulation

Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse, as amended

 

Minimum Net Proceeds

approximately £2.9 million

 

New Ordinary Shares

up to approximately 225,930,552 new Ordinary Shares to be allotted and issued by the Company pursuant to the Open Offer and Additional Subscription

 

New SDRs

up to approximately 153,172,548 new SDRs to be issued by the Custodian pursuant to the SDR Rights Issue

 

Offer Price

3.16 pence per New Ordinary Share or the SDR Offer Price per New Ordinary Share in the case of Open Offer Shares applied for by the Custodian

 

Open Offer

the conditional invitation to Qualifying Shareholders to apply to subscribe for the Open Offer Shares and Excess Open Offer Shares at the Offer Price to be made on the terms and subject to the conditions set out in the Prospectus and, in the case of Qualifying Non-CREST Shareholders only, the Application Form

 

Open Offer Entitlements

entitlements to subscribe for Open Offer Shares allocated to a Qualifying Shareholder pursuant to the Open Offer

 

Open Offer Record Time

6.00 p.m. on 16 November 2020, being the date specified in the Expected Timetable of Principal Events on which a Shareholder must hold Ordinary Shares to be a Qualifying Shareholder

 

Open Offer Shares

up to 225,841,752 New Ordinary Shares which are to be issued by the Company pursuant to the Open Offer

 

Ordinary Shares

ordinary shares of 1 pence in the capital of the Company

 

PACIFIC

the EU funded PACIFIC research project aimed at developing new exploration techniques that respect the environment and incur relatively low costs

 

Paid Subscribed SDRs

the right to be credited with New SDRs following the record date for conversion of the Paid Subscribed SDRs into New SDRs pursuant to the terms and conditions of the SDR Rights Issue

 

Prospectus

the document, comprising a simplified prospectus relating to the Company for the purposes of the Capital Raising to be posted to Qualifying Shareholders on or around 17 November 2020

 

Prospectus Regulation

Regulation (EU) No 2017/1129 of the European Parliament and of the Council of 14 June 2018 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, as amended

 

Prospectus Regulation Rules

the prospectus regulation rules made by the FCA pursuant to Part VI of FSMA (as set out in the FCA Handbook), as amended

 

Qualifying CREST Shareholders

Qualifying Shareholders holding Ordinary Shares in uncertificated form

 

Qualifying Non-CREST Shareholders

Qualifying Shareholders holding Ordinary Shares in certificated form

 

Qualifying SDR Holders

holders of existing SDRs admitted to trading on Spotlight at the SDR Rights Issue Record Date with the exclusion of Restricted SDR Holders

 

Qualifying Shareholders

holders of Ordinary Shares on the register of members of the Company at the Open Offer Record Time with the exclusion of Restricted Shareholders

 

Restricted Jurisdiction

any jurisdiction, including but not limited to Australia, Canada, Hong Kong, Japan, New Zealand, the Republic of South Africa, Singapore, Switzerland and the United States of America, where the extension or availability of the Capital Raising (and any other transaction contemplated thereby) would (i) result in a requirement to comply with any governmental or other consent or any registration filing or other formality which the Company regards as unduly onerous, or (ii) otherwise breach any applicable law or regulation

 

Restricted SDR Holders

subject to certain exceptions, SDR Holders who have registered addresses in, who are incorporated in, registered in or otherwise resident or located in, any Restricted Jurisdiction or any other countries in which participation in the SDR Rights Issue requires the preparation of a prospectus, further registration or measurements other than those which are required by Swedish or UK legislation

 

Restricted Shareholders

subject to certain exceptions, Shareholders who have registered addresses in, who are incorporated in, registered in or otherwise resident or located in, any Restricted Jurisdiction

 

SDRs

Swedish depositary receipts representing interests in Ordinary Shares

 

SDR Holders

holders of SDRs from time to time

 

SDR Offer Price

SEK 0.370 per New SDR

 

SDR Rights Issue

the offer to the SDR Holders to apply for the New SDRs at the Offer Price to be made on the terms and subject to the conditions set out in the Prospectus

 

SDR Rights Issue Record Date

18 November 2020, being the date specified in the Expected Timetable of Principal Events on which an SDR Holder must be registered in the VPC system to be a Qualifying SDR Holder

 

Shareholders

the holders of Ordinary Shares from time to time

 

SP Angel

SP Angel Corporate Finance LLP, nominated adviser and broker to the Company

 

Spotlight

the Spotlight Stock Market in Sweden which is a

secondary business name of ATS Finans AB, a

securities company under the supervision of the

Swedish Financial Authority

 

subsidiary

has the meaning given in section 1159 of the Companies Act 2006, as amended, unless otherwise provided in this announcement

 

Swedish Admission

admission of the New SDRs to trading on Spotlight

 

Swedish Rights Admission

admission of the Swedish Subscription Rights and

Paid Subscribed SDRs to trading on Spotlight

 

Swedish Subscription Rights

the right to subscribe for New SDRs in the SDR Rights Issue pursuant to the terms and conditions of the SDR Rights Issue

 

uncertificated or in uncertificated form

refers to a share or other security recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST

 

TERP

the theoretical ex-rights price of securities, being the market price that the securities will theoretically have following completion of a new preemptive offer of those securities

 

United Kingdom or UK

the United Kingdom of Great Britain and Northern Ireland

 

United States

the United States of America, its territories and possessions, any state of the United States and the District of Columbia

 

Vardar

Vadar Minerals Limited, incorporated and registered in England and Wales with registered number 10474687, a subsidiary of the Company

 

VPC Account

an account in the VPC system

 

VPC system

the accounts based system for clearing and settlement of securities maintained by Euroclear Sweden.

 

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