Interim Results

RNS Number : 2522Y

Beowulf Mining PLC

01 September 2009

 



1 September 2009

Beowulf Mining Plc

('Beowulf' or the 'Company')

Interim Results for the six months ended 30 June 2009

Beowulf (AIM: BEM, Aktietorget: BEO), an established mineral exploration company which runs several exploration projects in Northern Sweden, announces its unaudited interim results for the six months ended 30 June 2009.

Highlights:

Ruoutevare/Kallak iron ore projects:

• Independent JORC-compliant inferred mineral resource estimate for Ruoutevare of 140 million tonnes grading at 39.1% iron (Fe), 5.7% titanium and 0.2% vanadium (cut-off grade of 30% Fe).
• Further enlarged metallurgical tests commissioned from MINPRO AB on material from both Ruoutevare and Kallak to facilitate quality testing by potential clients with results anticipated in Q4 2009.
• Scoping/conceptual studies commissioned from the Raw Materials Group of Sweden to update their previous 2006 work on Ruoutevare and to also assess the Kallak iron ore deposit. 

Lulepotten copper-gold deposit/Ballek JV:

• Independent JORC-compliant inferred resource estimate for Lulepotten of 5.4 million tonnes grading 0.8% copper and 0.3 grammes per tonne of gold (cut-off value of 0.3% for copper).
• Initial metallurgical testing commenced by MINPRO AB on ore grade material from the Lulepotten copper-gold deposit to facilitate quality testing by potential clients, with results anticipated in Q4 2009. 

Corporate:

• Approximately £41,798 cash held at the period end, prior to the receipt of the net proceeds from a £500,000 placing with both new and existing investors.
• Low cash burn rate.
• Increased trading in Beowulf's shares on the Aktietorget exchange in the form of Swedish Depository Receipts.
• Beowulf continues to focus on the rapid commercialisation of its existing projects as well as exploration and development.

Clive Sinclair-Poulton, Executive Chairman of the Company commented: 

'The metallurgical testing currently underway on material from Ruoutevare, Kallak and Ballek will enable us to provide prospective future customers with a better understanding of the quality of our Swedish assets. 

We were delighted with our successful fundraising towards the end of the reporting period. The Company is now well placed to progress with the further development and commercialisation of its existing exploration assets and potentially acquire additional projects/permits in Sweden, should attractive opportunities arise.'

For further information, please contact: 

Beowulf Mining Plc
Clive Sinclair-Poulton, Chairman	Tel: [phone]
Strand Partners Limited
Simon Raggett / Matthew Chandler	Tel: [phone]
Alexander David Securities Limited
David Scott / Nick Bealer	Tel: [phone]
Lothbury Financial Limited
Gary Middleton / Ron Marshman	Tel: [phone]
or visit http://www.beowulfmining.com

Chairman's statement

The Board of Beowulf Mining plc ('Beowulf' or the 'Company') is pleased to present the unaudited interim results for the six month period to 30 June 2009. Beowulf currently has five exploration projects in Northern Sweden prospecting for iron, copper, gold and uranium. The results show that the Company incurred a loss after taxation for the six month period ended 30 June 2009 of £232,055 (2008: loss of £203,074).

Ruoutevare and Kallak projects (iron ore)

The Company's main Ruoutevare magnetite iron ore project in Norrbotten County, Northern Sweden has a maiden inferred JORC resource estimate, completed by independent geological consultants Runge Limited in August 2008, of 140 million tonnes grading 39.1% iron (Fe), 5.7% titanium (Ti) and 0.2% vanadium (V) (cut-off grade of 30% Fe). In April 2009, Beowulf announced the results of metallurgical tests conducted by MINPRO AB's ('MINPRO') research laboratory at Stråssa, Central Sweden which confirmed that by using reduction techniques in a laboratory scale simulation of a mechanical oven, it was possible to produce a final product of high grade sponge iron powder containing 97% iron (Fe), and less than 0.5% titanium (TiO2) and 0.02% vanadium (V). To complement these encouraging results, in June 2009 the Company commissioned additional enlarged metallurgical tests from MINPRO on material from both Ruoutevare and Kallak, the Company's other iron ore project. It is currently anticipated that results from this additional test work will be available in the last quarter of 2009.

In July 2009, the Company commissioned the Raw Materials Group ('RMG') of Sweden to commence an initial conceptual study on Kallak and update its 2006 scoping study on Ruoutevare, using the Company's most recent geological and technical data, with the objective of further defining the commerciality of these two projects. The 2006 study suggested that, based on a simplified cash flow analysis and various price and cost assumptions prevailing at that time, an eight year open pit operation extracting at a rate of 10 million tonnes per annum could potentially generate annual cash flows in the order of approximately US$50 million from revenues of US$218 million. Since 2006, the market price of iron ore has risen by more than a third. RMG is expected to complete its work on both studies and report back to Beowulf in the final quarter of this year.

Ballek and Grundtrask projects (copper-gold-uranium)

The second of the Company's projects to attain a JORC standard inferred resource to date is the Lulepotten copper-gold deposit on the Ballek joint venture with Agricola Resources PLC (PLUS: AGRI) with an estimated 5.4 million tonnes grading 0.8% copper and 0.3g/t of gold, representing a total of 43,000 tonnes of contained copper metal and 52,000 ounces of contained gold using a cut-off value of 0.3% for copper. Lulepotten currently forms the largest copper deposit within the Company's Ballek project area covering close to 11,000 hectares.

In line with the Company's strategy of seeking to enhance and commercialise its existing projects, MINPRO were commissioned in July 2009 to conduct metallurgy tests on this highly promising asset with results expected to be announced towards the end of this year.

Preliminary discussions with a number of potential joint venture partners for the Company's projects are ongoing. I have also recently visited Asia to meet with a number of importers and end users of natural resources of a similar type and quality to the products that could potentially be sourced from Beowulf's projects in the future once such assets have been fully developed. These initial contacts currently look promising and a further visit is planned later this year.

Corporate

In March 2008, Beowulf signed a connection agreement with AktieTorget AB (www.aktietorget.se) in Stockholm which provides a facility for the Company's ordinary shares to be traded in Sweden in the form of Swedish Depositary Receipts ('SDR's'). Under this arrangement, Beowulf's ordinary shares can be lodged with custodian bank Skandinaviska Enavilda Banken AB ('SEB'), via its London agent HSBC bank, as security against the issue of SDR's which can then be traded on the Swedish Aktietorget market. As well as affording Swedish investors easier access to ownership of a stake in Beowulf, the Board's intention was to also increase liquidity and demand for the Company's ordinary shares. Trading in the SDR's on the Aktietorget commenced on 6 August 2008. From an initial tranche of 2,000,000 ordinary shares lodged at inception of the facility, there are now currently in excess of 4,600,000 ordinary shares lodged with SEB's London agent and traded on the Aktietorget via SDR's. As a company operating in Sweden and developing Swedish natural resource assets, this increased level of trading and investor support in Sweden is highly encouraging.

In June 2009, the Company successfully completed a placing of new ordinary shares with both new and existing investors to raise £500,000 gross to provide additional working capital for the Company's continued exploration expenditure and planned growth and development. These additional financial resources will enable Beowulf to fund further work on its existing project portfolio as well as providing the flexibility to potentially acquire new projects in Sweden should suitable opportunities arise.

Outlook

The gold price currently remains at an historically high level reflecting its standing as a safe haven for investors during a period of unprecedented global economic uncertainty and turbulence, whilst the fiscal stimulus programmes of both China and the USA look set to stimulate demand for both iron ore and copper. In addition, with energy independence becoming increasingly topical for many countries' governments the demand for, and use of, uranium also appears likely to increase in the longer term.  Accordingly, future price trends for commodities such as copper, gold, iron and uranium look promising which bodes well for the commercialisation of the Company's projects and its further development.

Clive Sinclair-Poulton

Executive Chairman

1 September 2009

Income statement 

For the period ended 30 June 2009

	Unaudited Period ended 30 June 2009 £		Unaudited Period ended 30 June 2008 £		Audited Year ended 31 December 2008 £
Continuing operations
Revenue	-		-		-
Other operating income	75		-		-
Administrative expenses	(228,989)		(210,462)		(407,180)
Operating loss	(228,914)		(210,462)		(407,180)
Finance costs	(3,333)		(5,000)		(10,192)
Finance income	192		12,388		18,708
Loss before taxation	(232,055)		(203,074)		(398,664)
Taxation	-		-		-
Loss for the period	(232,055)		(203,074)		(398,664)
Loss per share expressed in pence per share:
Basic	(0.29p)		(0.26p)		(0.50p)
Diluted	(0.27p)		(0.24p)		(0.47p)

Statement of recognised income and expense

For the period ended 30 June 2009

	Unaudited Period ended 30 June 2009 £		Unaudited Period ended 30 June 2008 £		Audited Year ended 31 December 2008 £
Revaluation of investments	(24,931)		(48,195)		(221,385)
NET (EXPENSE) / INCOME RECOGNISED DIRECTLY IN EQUITY	(24,931)		(48,195)		(221,385)
LOSS FOR THE FINANCIAL PERIOD	(232,055)		(203,074)		(398,664)
TOTAL RECOGNISED INCOME / (EXPENSE) FOR THE PERIOD	(256,986)		(251,269)		(620,049)

Balance sheet

AS AT 30 June 2009

		Unaudited Period ended 30 June 2009 £		Unaudited Period ended 30 June 2008 £		Audited Year ended 31 December 2008 £
ASSETS
Non-current assets
Intangible assets		226,127		237,058		230,904
Property, plant and equipment		1,079		1,681		1,439
Investments		49,408		247,529		74,339
		276,614		486,268		306,682
Current assets
Trade and other receivables		37,433		30,760		33,954
Cash and cash equivalents		41,798		561,490		354,291
		79,231		592,250		388,245
LIABILITIES
Current liabilities
Trade and other payables		(40,195)		(37,102)		(22,291)
Net current assets		39,036		555,148		365,954
Non-current liabilities
Financial liabilities - borrowings
Interest bearing loans and borrowings		(150,000)		(250,000)		(250,000)
Net assets		165,649		791,416		422,636
SHAREHOLDER'S EQUITY
Called up share capital		808,982		808,982		808,982
Share premium account		2,597,191		2,597,191		2,597,191
Revaluation reserve		(55,592)		142,529		(30,661)
Capital contribution reserve		46,451		46,451		46,451
Share scheme reserve		5,879		5,879		5,879
Retained earnings		(3,237,262)		(2,809,616)		(3,005,206)
TOTAL EQUITY		165,650		791,416		422,636

Cash flow statement

For the period ended 30 June 2009 

	Notes	Unaudited Period ended 30 June 2009 £		Unaudited Period ended 30 June 2008 £		Audited Year ended 31 December 2008 £
Cash flows from operating activities
Cash generated from operations	1	(175,956)		(138,726)		(324,270)
Interest paid		-		-		(10,192)
Net cash outflow from operating activities		(175,956)		(138,726)		(334,462)
Cash flows from investing activities
Purchase of intangible fixed assets		(36,729)		(46,904)		(64,686)
Purchase of tangible fixed assets		-		-		-
Interest received		192		12,388		18,708
Net cash outflow from investing activities		(36,537)		(34,516)		(45,978)
Cash flows from financing activities
Loan repayments in the period		(100,000)		-		-
Share issue		-		63,500		63,500
Cost of shares issued		-		-		-
Net cash outflow from financing activities		(100,000)		63,500		63,500
(Decrease)/Increase in cash and cash equivalents		(312,493)		(109,742)		(316,940)
Cash and cash equivalents at  beginning of period	2	354,291		671,231		671,231
Cash and cash equivalents at end  of period		41,798		561,489		354,291

NOTES TO THE CASH FLOW STATEMENT

FOR THE 6 MONTH PERIOD ENDED 30 JUNE 2009

1.  Reconciliation of loss before tax to cash generated from operations

		Unaudited Period ended 30 June 2009 £		Unaudited Period ended 30 June 2008 £		Audited Year ended 31 December 2008 £
Loss before tax		(232,055)		(203,074)		(398,664)
Depreciation charges		360		239		481
Amortisation of exploration costs		41,508		50,788		74,725
Equity-settled share-based payment transactions		-		5,351		5,351
Finance costs		3,333		5,000		10,192
Finance income		(192)		(12,388)		(18,708)
		(187,046)		(154,084)		(326,623)
Decrease/(Increase) in trade and other receivables		(3,479)		3,666		472
Increase/(Decrease) in trade and other payables		14,569		11,692		1,881
Cash generated from operations		(175,956)		(138,726)		(324,270)

2. Cash and cash equivalents

The amounts disclosed in the cash flow statement in respect of cash and cash equivalents are in respect of the following balance sheet amounts

Period ended 30 June 2009
	30 June 2009 £		1 Jan 2009 £
Cash and cash equivalents	41,798		354,291

Period ended 30 June 2008
	30 June 2008 £		1 Jan 2008 £
Cash and cash equivalents	561,489		671,231

Period ended 31 December 2008
	31 December 2008 £		1 Jan 2008 £
Cash and cash equivalents	354,291		671,231

Cash and cash equivalents consist of cash in hand and balances with banks.

NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION

FOR THE 6 MONTH PERIOD ENDED 30 JUNE 2009

1.   Basis of preparation

These interim financial statements for the six month period ended 30 June 2009 have been prepared using the historical cost convention, on a going concern basis and in accordance with the International Financial Reporting Standards ('IFRS') including IAS 34 'Interim Financial Reporting' and IFRS 6 'Exploration for and Evaluation of Mineral Resources', as adopted by the European Union ('EU').  They have also been prepared on a basis consistent with the accounting policies expected to be applied for the year ending 31 December 2009, and which are also consistent with the accounting policies applied for the year ended 31 December 2008 except for the adoption of new standards and interpretations.

These interim results for the six months ended 30 June 2009 are unaudited and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial statements for the year ended 31 December 2008 have been delivered to the Registrar of Companies and filed at Companies House and the auditors' report on those financial statements was unqualified and did not contain a statement made under Section 237(2) or Section 237(3) of the Companies Act 1985.

2.    Accounting policies

Reporting entity

Beowulf Mining plc is a company domiciled in the United Kingdom. The address of the Company's registered office is Richmond House, Broad Street, Ely, Cambridgeshire, CB7 4AH. The Company primarily is involved in the exploration for world-class copper and gold deposits.

Compliance with accounting standards

These interim financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS.

The financial statements have been prepared under the historical cost convention.

Intangible fixed assets - exploration costs

Expenditure on the acquisition costs, exploration and evaluation of interests in licences including related overheads are capitalised. Such costs are carried forward in the balance sheet under intangible assets and amortised over the minimum period of licences in respect of each area of interest where:

a) such costs are expected to be recouped through successful development and exploration of the area of interest or alternatively by its sale;

b) exploration activities have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active operations in relation to the areas are continuing.

An annual impairment review is carried out by the directors to consider whether any exploration or development costs have suffered impairment in value and whether necessary provisions are made accordingly.

Accumulated costs in respect of areas of interest that have been abandoned are written off to the profit and loss account in the year in which the area is abandoned.

Exploration costs are carried at cost less provisions for impairment.

Property, plant and equipment

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life. 

Plant and machinery

- 25% on reducing balance

Investments

Fixed asset investments are stated at open market value. The revaluation adjustment is taken to the revaluation reserve and any impairments are shown in the income statement for the period.

Financial instruments

Financial assets and liabilities are recognised on the balance sheet when the Company becomes a party to the contractual provisions of the instrument.

-		Cash and cash equivalents comprise cash held at bank and short term deposits
-		Trade payables are not interest bearing and are stated at their nominal value
-		Equity instruments issued by the Company are recorded at the proceeds received except where those proceeds appear to be less than the fair value of the equity instruments issued, in which case the equity instruments are recorded at fair value. The difference between the proceeds received and the fair value is reflected in the share based payments reserve.

Taxation

Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. 

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. 

Share-based payment transactions

Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of all options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

Where terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the income statement over the remaining vesting period.

Where equity instruments are granted to persons other than employees, the income statement or share premium account if appropriate, are charged with the fair value of goods and services received.

3.   Loss per share

Basic loss per share has been calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares of 80,898,247 (30 June 2008: 77,479,016 and 31 December 2008: 79,197,974) outstanding during the period.

Diluted loss per share has been calculated using the weighted average number of ordinary shares of 84,548,247 (30 June 2008: 85,100,445 and 31 December 2008: 84,822,838) adjusted to assume the conversion of all dilutive potential ordinary shares.

4.    Called up share capital

	Unaudited 30 June 2009 £		Unaudited 30 June 2008 £		Audited 31 December 2008 £
Authorised
200,000,000 Ordinary shares of 1p each	2,000,000		2,000,000		2,000,000
Allotted, called up and fully paid
80,898,247 Ordinary shares of 1p each	808,982		808,982		808,982

5.   Reserves

		Retained earnings £		Share premium £		Revaluation reserve £
At 30 June 2008		(2,809,616)		2,597,191		142,529
Deficit for the period		(195,590)		-		-
Revaluation in period		-		-		(173,190)
Equity-settled share-based payment transaction		-		-		-
At 31 December 2008		(3,005,206)		2,597,191		(30,661)
Deficit for the period		(232,055)		-		-
Revaluation in period		-		-		(24,931)
Equity-settled share-based
payment transaction		-		-		-
At 30 June 2009		(3,237,261)		2,597,191		(55,592)

		Capital  contribution  reserve £		Share scheme reserve £		Totals £
At 30 June 2008		46,451		5,879		(17,566)
Deficit for the period		-		-		(195,590)
Revaluation in period		-		-		(173,190)
Equity-settled share-based payment transaction		-		-		-
At 31 December 2008		46,451		5,879		(386,346)
Deficit for the period		-		-		(232,055)
Revaluation in period		-		-		(24,931)
Equity-settled share-based
payment transaction		-		-		-
At 30 June 2009		46,451		5,879		(643,332)

6.  Reconciliation of movements in shareholder's funds

	Unaudited Period ended 30 June  2009 £		Unaudited Period ended 30 June 2008 £		Audited Year ended 31 December 2008 £
Loss for the period	(232,055)		(203,074)		(398,664)
Other recognised gains and losses  relating to the period (net)	(24,931)		(48,195)		(221,385)
Proceeds of share issue	-		63,500		63,500
Cost of share issue	-		-		-
Equity-settled share-based transactions	-		5,351		5,351
Net (reduction)/addition to shareholders' funds	(256,986)		(182,418)		(551,198)
Opening shareholders' funds	422,636		973,834		973,834
Closing shareholders' funds	165,650		791,416		422,636

7.    Availability of Interim Report

A copy of these results will be made available for inspection at the Company's registered office during normal business hours on any weekday. The registered office is at Richmond House, Broad Street, Ely, Cambridgeshire CB7 4AH. A copy can also be downloaded from the Company's website at www.beowulfmining.com. Beowulf Mining Plc is registered in England and Wales with registered number 02330496.

 

END

 

 

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