TIDMBEM
RNS Number : 2180Y
Beowulf Mining PLC
04 December 2017
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations ("MAR") (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of Kurt Budge, Chief Executive Officer.
04 December 2017
Beowulf Mining plc
("Beowulf" or the "Company")
Kallak North Exploitation Concession Update
Beowulf (AIM: BEM; Aktietorget: BEO), the mineral exploration
and development company, focused on the Kallak iron ore project and
the Åtvidaberg polymetallic exploration licence in Sweden, and its
graphite portfolio in Finland, provides an update on the Kallak
North Exploitation Concession application process.
The Government of Sweden has asked the Company to provide
comments on the statement, dated 30 November 2017, made by the
County Administrative Board ("CAB") for the County of Norrbotten.
In its statement, the CAB recommended that a Concession for Kallak
North is not awarded. The deadline for the Company's comments to
the Government is the 2 January 2018.
The Company maintains its position that its application has
satisfied the requirements of the prescribed process, in accordance
with Swedish law.
The CAB has previously stated, on 1 October 2014, that the
Company's Environmental Impact Assessment ("EIA") is sufficient
with respect to Chapters 3, 4 and 6 of the Environmental Code, and,
on 7 July 2015, the CAB wrote to the Government indicating that the
Company's application could be permissible with respect to Chapters
3 and 4 of the Environmental Code.
In 2015, the CAB confirmed its support for the Company's
application to the Mining Inspectorate, and in October 2015, the
Mining Inspectorate recommended to the Government that the
Exploitation Concession be awarded.
In addition, on 29 June 2017, the Mining Inspectorate confirmed
to the Government that the Company's EIA is consistent, in the
detail provided, in meeting the requirements of the Supreme
Administrative Court judgement in the case of Norra K rr.
The Company has continued to invest in the Kallak project based
on confirmatory statements made by the Swedish authorities. We are
making good progress with the Kallak Scoping Study, and we have
plans for drilling the Kallak South Exploration Target and
Parkijaure exploration licences in 2018.
Economic Case
Kallak is Sweden's largest known deposit of quartz-banded iron
ore for which mining has not started. Testwork carried out in 2015,
produced a 'super' high grade magnetite concentrate with over 71
per cent iron content and very low levels of deleterious elements,
and a high grade hematite concentrate with over 68 per cent iron
content.
The 'super' high grade and purity of the Kallak magnetite
concentrate are valuable attributes for key target markets:
pellets; Direct Reduction Iron ("DRI") facilities in Europe and the
Middle East; and in chemical industry applications. End-users
demand higher quality iron units, which benefit manufacturing
productivity with improved economy, and deliver environmental
benefits.
In July 2015, the CAB supported the economic case for Kallak,
and in its analysis referenced the extended production life that
the resource at Kallak South could add to a mining operation. In
the CAB's latest assessment, it has made no mention of Kallak
South, even though the Company has discussed with the CAB the
potential for a 250 million tonne resource, which could support a
25-year mine life. The Company has a valid workplan for drilling
the Kallak South Exploration Target in 2018.
The CAB has made no reference to the study by Copenhagen
Economics, titled 'Kallak - A real asset, and a real opportunity to
transform Jokkmokk', which the Company commissioned to illustrate
the 'big picture' impact that Kallak could have on Jokkmokk and the
County of Norrbotten. The study shows that Kallak could create 250
direct jobs and over 300 indirect jobs in Jokkmokk, over the period
that a mine is in operation, which could be 25 years or more, and
generate SEK 1 billion in tax revenues over that period.
In addition, the CAB seems not to recognise the
interconnectedness of Kallak, the ambitions of Inlandsbanan, and
the Port of Luleå, both of whom are looking to expand their
capacity, grow their businesses, further boosting Norrbotten's
economy.
Area of National Interest ("ANI")
Sticking to a 14-year mine life for Kallak North, the CAB has
now decided to weigh-up one national interest against another, and
determined in the favour of reindeer herding.
Since February 2013, Kallak has been designated an ANI for its
minerals and metals, affording it protection against competing land
use, and measures that may hinder future potential mineral
extraction. Kallak's area of 13.6 square kilometres ("km(2") )
compares to Jåhkågaska reindeer herding community's 2,640km(2) of
grazing land or 0.5 per cent, as a percentage.
Before February 2017, when Sametinget designated national
interest for reindeer herding directly on top of Kallak, there were
no conflicting national interests for the Concession Area, or for
those areas taken by operational facilities necessary to support
mining. A fact recognised by the CAB in July 2015 when it supported
the Company's application.
Reindeer Herding - national interest at Kallak, and Laponia
Despite Sametinget's relatively recent designation of national
interest for reindeer herding at Kallak, reindeer herding is far
from a static activity, and the importance of any specific area
varies from year to year. Therefore, the Company has been careful
in its analyses to consider the proposed mine's potential impacts
on Jåhkågaska tjiellde's reindeer herding activities in their
totality, whatever the designation of any specific land area may
be. The recent designation does therefore not change anything in
our assessment of the potential impacts on Jåhkågaska.
As the Company moves forward with the project, we will work more
closely with Jåhkågaska, to learn from their annual reindeer
herding management plan ("renbruksplan"), such that we can plan
together our mutual activities. Even now, we have ongoing
communications with Jåhkågaska, Sirges, Tuorpon, and Slakka,
regarding the permitting process, and our Kallak drilling plans for
2018.
Recent comments by Naturvårdsverket ("NV") and
Riksantivarieämbetet ("RAÄ") to the CAB suggested that Kallak poses
a risk to nomadic reindeer herding in Laponia, and as a result
threatens Laponia's World Heritage Status. This is an extreme and
highly unlikely scenario, and this can be understood with a
reasonable assessment of some pertinent facts:
-- Kallak is situated, at the closest point, approximately 34 kilometres away from Laponia.
-- NV and RAÄ have already concluded that operations at Kallak
would have no direct impact on Laponia, and have said that use of
existing roads and railways is a positive feature;
-- Laponia's boundary has been established to protect what lies
within the boundary, and not to restrict development, such as
Kallak, which is located far beyond any conceivable 'buffer
zone';
-- Kallak represents only about 0.5 per cent of Jåhkågaska's
available pasture lands, and Jåhkågaska's 4,500 reindeer make up
less than ten per cent of the total number of reindeer that are
present in Laponia over some part of the year; and
-- It is an established fact that there are solutions for how to
manage the competing land requirements of mining operations (and
other industrial activities) and reindeer herding. With regards to
migration, for example, reindeer can be moved around an obstacle,
such as a mine, using specific fenced corridors, Eco ducts or even
trucks. A highly relevant practical case can be found in
LKAB-Kiruna-Abisko National Park area. Abisko is like Laponia, a
protected area which is used by reindeer herders. The reindeer
herders at Abisko are maintaining their traditional activities,
whilst sharing their winter pasture with the industrial activities
present around Kiruna and Svappavaara.
When the Company has received specific comments from the CAB, it
has addressed them immediately. In November 2014, the Company
eliminated the Jelka-Rimakåbbå transport route from its plans,
after the CAB expressed concern about the potential risk the use of
this route posed to reindeer herding. The CAB has presented no
specific issues or questions to the Company since then.
Kurt Budge, CEO, commented:
"In my career, I have never been involved in a permitting
process where the authorities show such a lack of willingness to
engage with a company on a major application. The permitting
process we have experienced has been inefficient, and our
application has been passed back and forth, from one authority to
another, with no questions put to the Company, nor feedback given
on additional documentation we have provided, nothing. Instead
decision makers choose to sit in isolation, and determine the fate
of our application, misrepresenting the facts, and seemingly biased
in their analysis.
"Throughout my time with Beowulf, we have been respectful
towards the Swedish authorities and decision makers, but in return,
and especially with the CAB, have seen scant recognition of the
SEK72 million we have invested in Kallak, our status as a public
company, and the interests of our shareholders, over 58 per cent of
whom are Swedish.
"The CAB's actions are destroying confidence in Beowulf, the
Kallak project, and, as commented by industry participants in
Sweden and mining analysts in London, damaging Sweden's reputation
as place to invest and do business.
"The fact that the application for Kallak is based on a deposit
as defined in 2013 and a 14-year mine life, is considered by the
CAB to be the same thing as the future mine's life expectancy. The
CAB thereby ignore the scale of Kallak and the potential for a 250
million tonne resource across North and South deposits, supporting
a 25-year mine.
"Exploration rarely covers the whole prospect from the start,
but defines a resource to support an economic enterprise. With our
work to date, we have defined Kallak North for the application, and
started to define Kallak South, and we are continuing to explore
the potential our other exploration licences, including Parkijaure.
It is common practice for mines in Sweden, and around the world, to
add resource over time, extending a mine's production life. This
supports the case for a mining operation at Kallak to last well
beyond fourteen years.
"Focusing on a 14-year mine life, the CAB has weighed one
national interest against another and finds in favour of reindeer
herding, discounting the evidence that reindeer herding is on the
increase in Sweden, and in practice, there are many examples of the
mining industry and reindeer herders cooperating. The Company
maintains its belief, that mining and reindeer herding can prosper
together. There is no evidence to suggest otherwise.
"The CAB has given no recognition to local support for Kallak.
The fact that Robert Bernhardsson, the Mayor of Jokkmokk, is a
strong supporter, the good relations we have developed with
Jokkmokks Allmänning, honouring our SEK 500,000 commitment to its
SME enterprise investment fund, and with local entrepreneurs who
see the benefits that a mine could bring.
"Last week at SveMin's Höstmöte in Stockholm, the Board listened
to Mr. Damberg, Minister for Enterprise and Innovation, speak about
the importance of the mining industry in Sweden, and the problems
being experience with permitting new mines. In September 2017, Mr.
Damberg was quoted in the Swedish media as saying that Swedish law
is enough for testing our application, and that the permitting
process should be "by the book".
"With our Swedish Advisory Board and expert Swedish technical
team, we will present comments to the Government which explain the
reality of the Kallak project, rather than the one-sided view that
the CAB has displayed. The Company remains hopeful of an award of
the Exploitation Concession.
"I look forward to updating shareholders on progress in due
course."
Competent Person Review
The information in this announcement has been reviewed by Mr.
Rasmus Blomqvist, a Competent Person who is a Member of the
Australasian Institute of Mining and Metallurgy. Mr. Rasmus
Blomqvist has sufficient experience, that is relevant to the style
of mineralisation and type of deposit taken into consideration, and
to the activity being undertaken, to qualify as a Competent Person
as defined in the 2012 Edition of the "Australasian Code of
Reporting of Exploration Results, Mineral Resources and Ore
Reserves".
Mr. Rasmus Blomqvist is a full-time employee of Oy Fennoscandian
Resources AB, a 100 per cent owned subsidiary of Beowulf.
Enquiries:
Beowulf Mining plc
Kurt Budge, Chief Executive Tel: +44 (0) 20 3771 6993
Officer
Cantor Fitzgerald Europe
(Nominated Advisor & Broker)
David Porter Tel: +44 (0) 20 7894 7000
Blytheweigh
Tim Blythe / Megan Ray Tel: +44 (0) 20 7138 3204
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
forecasts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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