Operational Update

RNS Number : 1814E

Beowulf Mining PLC

08 May 2013

 

8 May 2013

Beowulf Mining Plc

("Beowulf" or the "Company")

Operational Update and Exploration Permit Relinquishments

Beowulf (AIM: BEM; Aktietorget: BEO), the mineral exploration company focused on developing its Kallak North and Kallak South iron ore deposits in northern Sweden, today announces an operational update, together with details of the relinquishment of certain exploration permits.

Highlights:

·     Application for exploitation concession for Kallk North deposit submitted.

·     Good progress made with the drilling campaign at Kallak South; two rigs in operation and approximately 2,900 metres drilled to date covering 13 holes.

·     Kallak North work plans now valid as no objections received. Test mining operations to commence as scheduled and will include limited forest clearing, till removal, the cleaning of exposed bedrock (for geological mapping), drilling and blasting of 16 test pits and road transport by truck of approximately 400 tonnes of mineralised material to a pilot plant in Finland.

·     Relinquishment of certain exploration permits, including Ruoutevare nr1, in order to concentrate resources on those projects which offer the best potential for generating long term shareholder value.

Clive Sinclair-Poulton, Executive Chairman of Beowulf, commented:

"I am delighted to be able to confirm that our in-depth application for an Exploitation Concession for the Kallak North deposit has been submitted for assessment by the requisite Swedish authorities; this represents a significant step forward in the development of our flagship Kallak Iron Ore Project and demonstrates our belief in its potential.

"The absence of any objections to our work plans notified in respect of our planned additional drilling programme and test mining operations at Kallak North is another pleasing development. Both fieldwork activities will serve to enhance our understanding of the Kallak North deposit, the full potential of which has yet to be fully ascertained.

"We have consistently looked to commit our resources to the development of projects that we believe offer the best prospect of generating a return for shareholders. Based on legal advice and our assessment of the limited potential for achieving an exploitation concession and the requisite environmental clearances for Ruoutevare, relinquishment of this project's permit, together with certain other non-core permits, leaves the Company better placed to target its resources on the advancement of its most promising assets.

"I look forward to receiving and reporting on the results from our further fieldwork activities scheduled for this summer/autumn at Kallak North as well as the initial assay results from our currently ongoing Kallak South drill programme."

Operational Update

Application for Exploitation Concession

Further to the Company's announcement of 3 April 2013, its wholly owned subsidiary, Jokkmokk Iron Mines AB ("JIMAB"), duly submitted its comprehensive application for an exploitation concession for the Kallak North deposit, located within the Kallak nr1 permit area, to the Swedish Mining Inspectorate on 25 April 2013.  

In accordance with Swedish mineral legislation and regulations, a concession shall normally be granted if: (i) a mineral deposit has been found which can probably be exploited economically; and (ii) if the location and nature of the deposit does not make it inappropriate that the applicant is granted the concession requested. In addition to the results of all drilling and metallurgical test works, the application included reports on the exploration work performed, brief plans in respect of a potential future mining operation and a detailed Environmental Impact Assessment (EIA). The assessment process by the appropriate Swedish authorities is currently expected to take four to nine months. The successful receipt of an Exploitation Concession in due course would grant JIMAB the right to carry out mineral exploitation for a 25 year period.

Kallak South drill programme

JIMAB has continued to make good progress with its ongoing drilling campaign of up to approximately 19,000m at Kallak South. Two drill rigs are operating on site and to date approximately 2,900m has been drilled covering thirteen holes.

The drill programme is principally targeting a maiden JORC Code compliant resource estimate for the Kallak South deposit as well as seeking to determine whether the Kallak South and Kallak North deposits are geologically connected. Initial assay results are anticipated in Q3 2013. 

Kallak North work plans

On 3 April 2013, the Company announced that JIMAB had filed and notified a new work plan in respect of its Kallak nr1 permit area to enable a planned additional exploratory drilling programme of up to approximately 11,000m at Kallak North to commence in summer/autumn 2013. The purpose of the programme is to ascertain the extent of the ore zones at greater depths at the northern and southern parts of the deposit.  A detailed work plan was also notified and disseminated to the Mining Inspector and relevant land owners and users setting out JIMAB's planned test mining operations this summer on a defined area of the Kallak North deposit.

As no objections to the aforementioned notified work plans were received within the statutory time period, they are now legally effective/valid such that JIMAB can commence its planned fieldwork as anticipated once preparations have been completed.

The test mining operations will include, inter alia, limited forest clearing, till removal, the cleaning of exposed bedrock (for geological mapping), drilling and blasting of 16 test pits and road transport by truck of approximately 400 tonnes of mineralised material to a pilot plant in Finland. The sampling of mineralised material for metallurgical test work will guide and facilitate the design of future mineral processing procedures and facilities, as well as generating final product samples for testing by potential future customers.

Exploration Permit Relinquishments

In conjunction with the group's annual audit process, the Board has conducted a comprehensive review of the Company's project portfolio and the status and scheduled expiry dates of its exploration permits.  In line with the Company's principal strategic focus on the advancement of its promising Kallak North and Kallak South iron ore deposits, the Board has decided to relinquish the group's permit in respect of the Ruoutevare project, together with certain other non-core exploration permits, in order to concentrate resources on the projects which offer the best potential for generating long term shareholder value. Accordingly, the Company's subsidiaries have recently notified the Mining Inspectorate of the permit relinquishments set out below.

Ruoutevare nr1

The Ruoutevare iron-titanium project consists of one exploration permit located in the municipality of Jokkmokk in the Norrbotten County. The group has held this permit since March 2006 and in August 2008 the Company announced a maiden independent JORC Code compliant Inferred Resource estimate for the project of 140Mt grading at 39.1% iron (Fe), 5.7% titanium (Ti) and 0.2% vanadium (V) at a cut-off grade of 30% Fe. The estimate was principally based on 32 diamond drill holes, drilled by the Geological Survey of Sweden (SGU) in the early 1970s, and Beowulf's exploration activities have primarily been limited to geological mapping and the commissioning of metallurgical test programmes on drillcores and bedrock samples from surface outcrop, as well as conceptual scoping studies.  

Further to an assessment of the project's status with its retained consultants, and specific legal advice obtained, the Board has determined that there is a low probability of being able to secure an exploitation concession and the requisite environmental permits for any potential future mining activity at Ruoutevare. This is principally a reflection of the fact that the area holds designations as an Area of National Interest with respect to nature conservation, tourism and outdoor recreation. Furthermore, the project is located within the Laponia World Heritage area and proximate to the Sarek National Park. These designations, the competing interests of other land users and special protections afforded to the area under the Swedish Environmental Code, impose significant restrictions on any potential development and permitting activities. The lack of access to rail and heavy duty road infrastructure further reduces the potential for economic development. Accordingly, the Board has decided not to pursue its existing extension application and has now relinquished the project's exploration permit.

Manakjaure nr1, Riikalahti nr1 and Geddaur nr1, nr2 and nr3

The early stage Manakjaure (uranium), Riikalahti (nickel and copper) and Geddaur (uranium and copper-gold) projects have been assessed as being non-core and incurring the escalating annual permit renewal fees is not justified based on their potential.   

Ballek nr4 and nr5

The Ballek copper-gold project has previously comprised four exploration permits, Ballek nr2, Ballek nr3, Ballek nr4 and Ballek nr5 in the Arjeplog municipality in the Västerbotten County in Northern Sweden. The exploration permits are held by Wayland Copper Limited ("Wayland Copper"), a private company which is owned jointly and equally by Beowulf and its joint venture partner, Energy Ventures Limited ("EVE").

The project area contains the Lulepotten deposit on which a maiden independent JORC Code compliant Inferred Resource estimate was compiled and reported in September 2008 of 5.4Mt, grading at 0.8% Cu and 0.3g/t Au, representing a total of 43,000 tonnes of contained copper metal and 52,000 ounces of contained gold at a cut-off value of 0.3% for copper.

Beowulf assumed the role of operator in February 2011, and further to an assessment with EVE of the development options for the project, it has been decided to relinquish the Ballek nr4 and nr5 permits and reduce the areas retained under the Ballek nr2 and nr3 permits from 38km² and 37.94km² to 13.59km² and 4.69km² respectively, thereby reducing the annual renewal fees and focusing resources on the most promising exploration targets.      

The Lulepotten deposit lies within the retained Ballek nr2 permit area and Wayland Copper has recently notified and disseminated a work plan to the Mining Inspector and the relevant land owners and users in respect of a 3,000m drill programme which is currently intended to be conducted on defined targets at both the retained Ballek nr2 and nr3 permit areas in late 2013. The programme will primarily seek to test the previously indicated copper targets at increased depths, as defined by historical deep sensing geophysical ground surveys completed by GeoVista AB.

As a consequence of the permit relinquishments detailed above, the Company will recognise an additional impairment expense of approximately £277,855 in its forthcoming audited annual report and consolidated financial statements for its financial year ended 31 December 2012.

Enquiries:

Beowulf Mining Plc
Clive Sinclair-Poulton, Chairman	Tel: [phone]
Strand Hanson Limited
Matthew Chandler / Rory Murphy	Tel: [phone]
Cantor Fitzgerald Europe
Stewart Dickson / Julian Erleigh / Jeremy Stephenson	Tel: [phone]
Blythe Weigh Communications
Tim Blythe / Robert Kellner	Tel: [phone]
or visit http://www.beowulfmining.com

Notes to Editors:

Remaining permit portfolio

Following the above mentioned permit relinquishments, Beowulf's subsidiaries now hold 14 exploration permits, together with one registered application for an exploitation concession, in Northern Sweden, as set out in the table below: 

Permit Name/(Mineral(s))	Permit ID	Area (km2)	Date Granted/ Valid from	Valid until
Arjeplog Region:
Ballek nr2 (Cu, Au)*	2005:069	13.59	21/04/2005	21/04/2014
Ballek nr3 (Cu, Au)*	2005:098	4.69	24/05/2005	24/05/2014
Munka nr10 (Mo)^	2009:178	8.00	03/11/2009	03/11/2013
Jokkmokk Region:
Majves nr3 (Cu)^	2009:019	7.15	21/01/2009	21/01/2014
Parkijaure nr3 (Fe)**	2011:135	4.17	11/08/2011	11/08/2014
Parkijaure nr2 (Fe)**	2008:020	2.85	18/01/2008	18/01/2016
Kallak nr1 (Fe)**µ	2006:197	5.00	28/06/2006	28/06/2016
Kallak nr2 (Fe)**	2011:097	22.19	22/06/2011	22/06/2014
Kallak nr3 (Fe)**	2012:100	5.56	09/08/2012	09/08/2015
Parkijaure nr4 (Cu)**	2012:059	15.71	04/05/2012	04/05/2015
Parkijaure nr5 (Fe)**	2013:036	12.97	04/03/2013	04/03/2016
Nautijaur nr1 (Cu)**	2012:057	106.19	04/05/2012	04/05/2015
Skellefte Mining District:
Grundträsk nr6 (Au)^	2010:161	15.53	04/11/2010	04/11/2013
Grundträsk nr4 (Au)^	2008:107	20.63	28/05/2008	28/05/2013†
TOTAL:		244.23

Notes:

* - the Ballek permits are held by the joint venture company, Wayland Copper, in which Beowulf has a 50 per cent. ownership interest and is the operator.

** - held by Beowulf's wholly owned subsidiary, JIMAB.

^ - held by Beowulf's wholly owned subsidiary, Norrbotten Mining AB.

µ - an application for an exploitation concession was lodged on 25 April 2013 (Mines Inspector Official Diary nr 559/2013).

† - extension application to be submitted shortly.

 

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