Annual Report
2020
“Visar respekt fôr alla intressenter”
“Vill samverka lokalt”
“Står fôr ansvarsfull utveckling”
“Kunnioittaa kaikkia sidosryhmiä”
“Toimia yhteistyössä paikallisten kanssa”
“Vastuullisuus”
“Showing respect to all our stakeholders”
“Becoming a local partner”
“Delivering responsible development”
Kallak
Merivaara
FINLAND
Aitolampi
Rääpysjärvi
Karhunmäki
SWEDEN
Åtvidaberg
Beowulf Mining Projects
Mitrovica
KOSOVO
KOSOVO
Viti
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Contents
Company Profile
Company Strategy
Chairman’s Statement
Review of Operations and Activities
Board of Directors and Senior Management
Strategic Report
Report of the Directors
Remuneration Report
Corporate Governance Report
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash flows
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Notes to the Consolidated and Company Financial Statements
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Company Information
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2020 Beowulf Mining plc Annual Report Company Profile
Beowulf Mining plc (“Beowulf” or the “Company”) is listed
on the AIM Market of the London Stock Exchange (“AIM”)
(Ticker: BEM) and Stockholm’s Spotlight Exchange
(Ticker: BEO).
During the COVID-19 pandemic year, the Company
has been relatively unaffected. Exploration activities
in Kosovo, in rural areas and with few personnel, were
able to continue employing COVID-19 health and
safety protocols. Where uncertainty prevailed such as
for drilling at Kallak, the planned work was postponed
to 2021. Staff and employees are used to working
remotely from one another, so it was very much a case
of business as usual and from a corporate perspective,
market appetite and sentiment for the mining sector
were such that the Company successfully completed a
major capital raising.
The Company’s asset portfolio is diversified by
commodity, geography and the development stage of
its various projects and features metals in demand.
At the signing date of this report the Company has a
48.4 per cent interest in Vardar Minerals Ltd (“Vardar”).
Vardar is a UK registered exploration company with a
focus on the mineral endowed Balkan region. In 2019,
the Company obtained control of Vardar and, as such,
the Vardar Group is consolidated into the Company
and subject to the same financial controls and scrutiny.
PORTFOLIO OF ASSETS IN
KOSOVO
FINLAND
SWEDEN
48.4% stake in
Vardar Minerals Ltd
100% owned
Fennoscandian Resources
RESOURCES
Aitolampi
(C)
EXPLORATION PERMITS
Rääpysjärvi
(C)
Karhunmäki
(C)
Merivaara
(Au, Ag, Cu, Ni, Co)
Kallak
(Fe)
Åtvidaberg
(Pb, Zn, Cu, Ag)
Mitrovica
(Pb, Zn, Cu, Ag, Au)
Viti
(Cu, Au, Li)
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Vardar has two exploration licences in Kosovo,
Mitrovica and Viti, located in the Tethyan Belt,
a major orogenic metallogenic province for gold
and base metals which extends from the Alps
(Carpathians/Balkans) to Turkey, Iran and Indochina,
and contains several world class discoveries.
Following the guidelines of the JORC Code, 2012
edition, an Indicated Resource of 118.5 Mt at 27.5
per cent iron content and Inferred Resource of 33.8
Mt at 26.2 per cent iron was defined. Also, there is
an additional exploration target of 90-100 Mt at 22-
30 per cent iron.
The Tethyan Belt of south-east Europe can be
regarded as Europe’s chief copper-gold (lead-zinc-
silver) province and Vardar’s licences are highly
prospective for base and precious metals, with
exploration results to date indicating porphyry style
mineralisation.
Through its 100 per cent owned subsidiary Oy
Fennoscandian Resources AB (“Fennoscandian”),
the Company has a portfolio of graphite exploration
prospects in Finland. The Mineral Resource Estimate
(“MRE”) for the Aitolampi project, has a global
Indicated and Inferred Mineral Resource of 26.7
million tonnes (“Mt”) at 4.8 per cent Total Graphitic
Carbon (“TGC”) for 1,275,000 tonnes of contained
graphite, reported in accordance with the JORC
Code, 2012 edition.
Fennoscandian is pursuing a strategy to develop a
resource and production base of graphite that can
provide security of supply and contribute to Finland’s
ambitions of achieving battery manufacturing self-
sufficiency, focusing on both natural flake graphite
production and a Circular Economy/recycling
strategy to produce high-value graphite products.
The Company is also developing its knowledge
in processing and manufacturing value-added
graphite products, including anode material for
lithium-ion batteries.
The Company’s most advanced project is the
Kallak iron ore deposit located approximately 40
kilometres (“km”) west of Jokkmokk in the County of
Norrbotten, Northern Sweden, 80 km southwest of
the major iron ore mining centre of Malmberget, and
approximately 120 km to the southwest of LKAB’s
Kiruna iron ore mine.
The first exploration licence for Kallak was awarded
by the Mining Inspectorate of Sweden in 2006. A
MRE for Kallak North and South, based on drilling
conducted between 2010-2014, a total of 131
holes and 27,895 metres (“m”) was finalised on 28
November 2014.
On 17 September 2020, the Company published
the market leading potential of Kallak’s magnetite
concentrate following an assessment by Dr.
Arvidson MSc Mining/Mineral Processing, PhD
Mineral Processing (equivalent), Royal Institute of
Technology, Stockholm, as Qualified Person, the
highlights of which can be summarised as follows:
• test work on Kallak ore has produced an
exceptionally high-grade magnetite concentrate
at 71.5 per cent iron content with minimal
detrimental components;
• this would make Kallak the market leading high-
grade product among known current and planned
future producers; and
• the next best magnetite product is LKAB’s (the
state-owned Swedish iron ore company), which
produces magnetite fines (“MAF”) with a target
specification of 70.7 per cent iron and is regarded
as unique, until now, due to its exceptionally high
iron content.
Kallak is excellently positioned as a secure and
sustainable future supplier of high-quality iron ore to
Sweden’s growing fossil-free steel making sector.
In April 2013, the Company applied for an
Exploitation Concession for Kallak North (the
“Concession”) and in October 2015, the Mining
Inspectorate recommended to the Swedish
Government that the Concession be awarded. The
Company is still waiting on the Swedish Government
to take a decision.
In southern Sweden, the Company has its
Åtvidaberg nr 1 (“Åtvidaberg”) exploration licence,
which is prospective for polymetallic discoveries,
mainly copper and zinc.
The Company’s approach is to develop mining
projects working in partnership with local
communities and stakeholders, and is encapsulated
in the following mission statements:
“Visar respekt fôr alla intressenter”
“Vill samverka lokalt”
“Står fôr ansvarsfull utveckling”
“Showing respect to all our stakeholders”
“Becoming a local partner”
“Delivering responsible development”
“Kunnioittaa kaikkia sidosryhmiä”
“Toimia yhteistyössä paikallisten kanssa”
“Vastuullisuus”
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2020 Beowulf Mining plc Annual Report
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2020 Beowulf Mining plc Annual Report Company Strategy
Delivering on the Company’s Purpose
Our purpose is to be a responsible and innovative company
that creates value for our shareholders, wider society and
the environment, through sustainably producing critical raw
materials needed for the transition to a Green Economy and
to address the Climate Emergency.
The Company’s asset portfolio is diversified by
commodity, geography and the development
stage of its various projects and features metals in
demand.
The Company is in a strong financial position. Its
2021 work programmes are fully funded and the
recent Capital Raising, completed in December
2020, demonstrates support from Nordic investors
gained through our Swedish listing.
The investment in Vardar gives the Company
exploration exposure in the Tethyan Belt, an area
which has seen both significant discoveries and
M&A activity.
Vardar’s licences are highly prospective for
base and precious metals and Kosovo has the
potential to be a new supplier of metals that are
in increasing demand for the Green Transition.
Vardar’s projects are ideally located, as Europe
needs shorter supply chains to reduce the carbon
footprint of metals it consumes, for electric vehicles
and green infrastructure.
Fennoscandian is pursuing a strategy to develop
a resource and production base of graphite that
can provide security of supply and contribute
to Finland’s ambitions of achieving battery
manufacturing self-sufficiency, focusing on both
natural flake graphite production and a Circular
Economy/recycling strategy to produce high-value
graphite products. The Company is a recipient
of Business Finland funding, which is supporting
Fennoscandian to move downstream, and develop
its knowledge in processing and manufacturing
value-added graphite products.
With Kallak, Beowulf is focused on the award of
an Exploitation Concession for Kallak North, and
thereafter completing a Scoping Study on the
project. Significant investments are being made in
fossil-free steel making in Norrbotten, and Kallak is
excellently positioned as a secure and sustainable
future supplier of high-quality iron ore.
It remains the Directors’ view that the Company’s
application for an Exploitation Concession
fully meets the requirements of the prescribed
process, and that it has done so since the Mining
Inspectorate recommended to the Government, in
October 2015, that the Concession be awarded.
In Sweden, the acknowledged direction of travel is
that more mining is needed to produce the metals
to facilitate the transition to a Green Economy and
the electrification of society to address the Climate
Emergency. It would seem illogical to consider that
given this context the Concession, which has been
in development for almost 15 years since the first
exploration permit was awarded, is not granted,
despite the inordinate time the Company has had
to wait for a decision.
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Chairman’s Statement
Dear Shareholders
Beowulf closed 2020 with a fully subscribed Capital
Raising. The Company achieved its target of SEK 83
million, with strong support from Nordic investors
who provided approximately 80 per cent of the total
funds.
Despite exploration activity being limited during the
year, Vardar made excellent progress in Kosovo,
with geophysics results delivering a plethora of
exploration targets.
Fennoscandian has widened its focus to a broader/
Circular Economy strategy, to add to its developing
resource/production base of natural flake graphite in
Finland.
Progress with Kallak was limited, as the
Government’s attention was rightly diverted to the
pandemic. The big news was the criticism of the
Government’s handling of the Kallak application
by the Constitutional Committee (“KU”), which
was slightly preceded in late October, with the
Government deciding to consult UNESCO on the
Company’s application. A response is still awaited
from UNESCO.
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2020 Beowulf Mining plc Annual Report R
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Vardar
Vardar gives Beowulf strategic investment exposure to the
highly prospective Tethyan Belt. During 2020, the Company
invested a further £380,000 funding geophysics programmes
at Mitrovica and Viti, taking the Company’s ownership to
approximately 46.1 per cent at year end.
In February 2021, the Company invested an additional
£200,000 to fund preparatory works in advance of drilling this
year. Post year end, the Company owns approximately 48.4
per cent of Vardar.
In Summer 2020, assay results were announced from soil
and grab samples across Majdan Peak at Mitrovica. An
extensive gold in soil anomaly was defined embracing an
area approximately 1400 m x 700 m, correlating with mapped
hydrothermal alteration. Furthermore, a new lead-zinc-
copper-gold target was identified to the south of Majdan
Peak; of significance given its proximity to the Stan Terg mine.
Towards the end of the year, the Company published a
sequence of announcements with results from Induced
Polarisation (“IP”) - resistivity ground surveys, coupled with
‘state-of-the-art’ high-resolution airborne magnetic drone
surveys for lead-zinc targets at Wolf Mountain and gold at
Majdan Peak in Mitrovica, and copper-gold at Viti. The results
of the IP surveys were extremely positive which defined
numerous targets for drill testing.
At Wolf Mountain, IP chargeability zones were defined
beneath areas of laterally extensive lead-zinc gossans and
hydrothermal alteration. Established regional structural
trends suggests they may be representative of high-grade
lead-zinc-silver feeder structures.
At Majdan Peak, highly anomalous IP chargeability targets
were defined beneath an area of mapped hydrothermal
alteration correlating with the significant gold in soils anomaly.
Importantly, the IP anomalies demonstrate depth extent
suggesting that the mapped surficial gold mineralisation is
related to a potentially large underlying source.
At Viti, chargeability anomalies associated with an extensive
north-northwest trending zone of alteration and anomalous
multi-element soil sample and rock grab sample results were
defined, situated near to gold and copper mineralisation,
associated with altered porphyritic trachyte dykes, intersected
by stratigraphic drilling in 2019.
With these results, the correlation of the IP anomalies with
anomalous metals in soils and mapped alteration, the
potential grows for discovering lead-zinc and gold deposits
and defining much larger mineralised systems at both
Mitrovica and Viti. There is no shortage of high priority targets
for drill testing in 2021.
Fennoscandian
Fennoscandian is developing a resource
and production base of graphite that can
provide security of supply and contribute
to Finland’s ambitions of achieving
self-sufficiency in lithium-ion battery
manufacturing, focusing on both natural
flake graphite production and a Circular
Economy/recycling strategy to produce high-
value graphite products.
Since Fennoscandian was acquired in
January 2016, Beowulf has invested over
€2.2 million in graphite exploration, resource
development, metallurgical testwork and
the assessment of market applications for
graphite from Aitolampi, including lithium-
ion battery applications.
Fennoscandian has recently signed
a Memorandum of Understanding
(“MoU”) with Epsilon Advance Materials
Limited (“EAMPL”). The MoU enables
Fennoscandian to build its downstream
capability, collaborating with a strong
and innovative technology/processing
partner, and for EAMPL to firmly establish
itself in Finland, as a market-entry point
for supplying pre-cursor anode material
into Europe. The MoU addresses the
development of a strategic processing hub
for both natural flake and recycled graphite
to be located in Finland.
In addition, a Scoping Study contract
for the Aitolampi graphite project has
been awarded to AFRY Finland Oy. The
purpose of the Scoping Study is to verify
the robustness of the work completed by
Fennoscandian, and to provide a roadmap
for the next project development stage,
most likely a Pre-feasibility Study. The
output of the Scoping Study will enable
Fennoscandian to share information on the
Aitolampi project and communicate with
the local community and other important
stakeholders.
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2020 Beowulf Mining plc Annual Report
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2020 was another frustrating year, with no
evidence of any progress being made with the
Company’s Kallak application. Beowulf continued
to engage with the Swedish Government, but
COVID-19 diverted its attention to fighting the
pandemic.
The Constitutional Committee (“KU”), which has
been reviewing the Government’s handling of the
Kallak application met 26 November 2020 and
made the following statement (translation):
“KU has examined the application for a processing
concession for Kallak. In the Government case, no
visible administrative measures were implemented
for almost three years. This means a delay that is
not acceptable, according to KU.
“It also appears that the applicant has on several
occasions asked the Ministry of Trade and Industry
for a meeting. The Ministry has then stated that
this is not possible because the issue concerns a
forthcoming Government decision and is a matter
under consideration.
“KU notes that the Ministry management’s
statement does not seem to be in line with what
the Prime Minister has stated. The Government
Offices thus seem to lack a common approach to
the possibility for parties in administrative matters
to have a meeting with the responsible ministry.”
A month prior to the KU’s statement, the
Government consulted with UNESCO on the
Company’s application. While the KU’s statement
will have no bearing on the final decision, the
Company believes that once comments are
received back from UNESCO a decision will be
‘forthcoming’, language used by the Minister in
September 2019. The Company has been in
communication with UNESCO regarding its review
of Kallak.
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Since the KU statement last November,
political parties outside of Government
are taking a greater interest in the case
and, with the support of our advisers, we
continue to inform and educate on the facts
about Kallak and dispel the perceptions that
exist.
Drilling planned for 2020 as part of the
European Union (“EU”) funded PACIFIC
Project (“PACIFIC”) was delayed until this
year. The work programme will determine
if a 3D seismic model can be constructed,
using the established seismic characteristics
of the Kallak deposit, and whether the 3D
model can be used to identify additional iron
ore mineralisation for the Exploration Target
at Kallak South and further south, following
the magnetic signature of mineralisation
which extends into the Company’s
Parkijaure nr 6 exploration licence.
There is clear potential for the mine
life at Kallak to be much greater
than the 14-years included in the
Kallak North application. As can
be seen with LKAB’s operations at
Kiruna, which have lasted over a
century, new resources are typically
identified after a mine is opened
which support further investment
and jobs over decades. Mines in
the north of Sweden operate in this
way and are very much part of the
fabric of society.
Shareholder Base
At 31 December 2020, there were
592,321,687 Swedish Depository Receipts
representing 71.52 per cent of the issued
share capital of the Company. The remaining
issued share capital of the Company is held in
the UK.
Raising Finance
Maintaining sufficient funding to sustain the
business is a significant challenge for an
exploration and development company in the
natural resources sector.
The Company announced, on 13 August 2020,
that it had secured bridge loan financing in
Sweden of SEK 12 million (approximately £1.0
million) from Nordic investors. Since 2014,
this has been the only divergence from equity
capital markets fundraising. The bridging loan
demonstrated the availability of alternative
financing to the Company and good support
from a group of Nordic investors, who went on
to underwrite the SDR offer and buy shares
via a Private Placement/Directed Issue in last
year’s Capital Raising.
The Company announced details of the
Capital Raising, on 6 November 2020 and
that it would 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”).
On 21 December 2020, the Company
closed a fully subscribed Capital Raising of
approximately £7.4 million before expenses
(approx. SEK 83 million).
The Board continues to adopt the going
concern basis to the preparation of the
financial statements. The going concern
assumption has been assessed by the
Directors in light of the impact of COVID-19,
taking into consideration the current financial
position, ability to carry out its operations for
the year and raise new funds. The Directors
are confident that there is no immediate
need for funding following the success of the
Capital Raising.
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2020 Beowulf Mining plc Annual Report
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2020 Beowulf Mining plc Annual Report 2020 Financial Performance
Corporate
On 10 November 2020, the Company announced
that Göran Färm was stepping down from the
Board and as Non-Executive Chairman, and I
joined Beowulf as a Non-Executive Chairman and
a Director of the Company.
Staff and Employees
On behalf of the Board, and especially given the
pandemic, I would like to express my sincere
thanks to our staff, employees and consultants
in Sweden and Finland, and also to the staff,
employees and consultants of Vardar, for their
significant efforts throughout the past 12 months
to drive our Company forwards.
For the year, the consolidated loss increased from
£428,707 in 2019 to £1,294,691. This increase
was attributable to three main factors:
1. As a subsidiary, no fair value gain on
investments in Vardar was accounted for, as
compared to a prior year fair value gain of
£563,431.
2. In relation to the Bridging Loan, there was a
finance charge of £203,321; and
3. A higher impairment charge on Ågåsjiegge,
Joutsijärvi, Polvela and Tammijärvi (£98,799)
compared to the impairment charge in the prior
year on Sala (£10,270).
Administration expenses increased in the year
from £904,667 to £1,005,547, due mostly to
more corporate time being devoted to the Capital
Raising and less time being spent on projects.
This resulted in a lower level of underlying
exploration cost being capitalised.
Consolidated basic and diluted loss per share for
the 12 months ended 31 December 2020 was 0.19
pence (2019: loss of 0.04 pence).
£4,329,414 in cash was held at the year-end
(2019: £1,124,062).
At 31 December 2020 trade and other receivables
of the Group included an amount of £1,392,081
relating to proceeds received in early January 2021
from issues of shares before the year end (2019:
£nil).
The translation reserve losses attributable
to the owners of the parent decreased from
£1,291,068 at 31 December 2019 to £457,813
at 31 December 2020. Much of the Company’s
exploration costs are in Swedish Krona which
has strengthened against the pound since 31
December 2019.
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ESG
Beowulf is a strong supporter of the Sustainable
Development Goals (“SDGs”) and is currently
reviewing how the Company can best proactively
support their implementation in our regions of
operation.
The Company has adopted the following
Disclosure Topics listed by the Sustainability
Accounting Standards Board for the Metals and
Mining sector (https://www.sasb.org/standards/)
as material to the Company’s stakeholders:
• Energy Management including Green House Gas
Emissions;
• Water Management;
• Biodiversity Impacts;
• Rights of Indigenous Peoples;
• Community Relations; and
• Business Ethics and Transparency.
As at this time Beowulf has no active mining
operations, these Disclosure Topics will be
integrated into the Company’s policies, corporate
strategy, project development plans and
management systems.
As the Company moves forward with its
ESG agenda, it will be transparent in its
communications, the progress it is making, and
sustainability results.
Outlook
We are at a tipping point where global issues
are converging to drive demand for primary raw
materials. Metals are critical to achieving the
transition to a Green Economy to address the
Climate Emergency; transparent, secure, and
sustainable supply chains need to be established;
and Governments are considering how to power
economic growth in a post-pandemic recovery.
Sustainability leadership is renewing the role
of business in society and its unique ability to
solve society’s problems and scale-up solutions.
When it comes to the Climate Emergency, all of
us are in this together, we each need to do things
differently, to play our part and not leave it to
others to fix the problem.
Beowulf’s purpose to be a responsible and
innovative company that creates value for our
shareholders, wider society and the environment,
through sustainably producing critical raw
materials, which includes iron ore, graphite and
base metals, needed for the transition to a Green
Economy and to address the Climate Emergency.
Vardar is developing prospects that could deliver
new metal supply to Europe.
Fennoscandian is well-positioned in the Finnish
battery ecosystem as a potential future supplier of
anode material for lithium-ion batteries.
Kallak is ideally situated as a secure and
sustainable supply of high-quality iron ore to the
growing fossil-free steel making sector powered
by renewables in Sweden. Kallak can produce a
market leading concentrate of 71.5 per cent iron
content.
We have started this year financially strong,
with a renewed sense of purpose. We have an
attractive portfolio of projects to explore and
develop and we have big ambitions. The Climate
Emergency has our attention and is focusing our
minds on what we need to do. It very much feels
like it is Beowulf’s time to step-up, respond to
challenges facing all of us and make a positive
difference. It will be an exciting year for the
Company.
Sven Otto Littorin
Non-Executive Chairman
14 May 2021
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2020 Beowulf Mining plc Annual Report Operations
and Activities
Vardar
O Review of
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O
porphyry in a hitherto unexplored area. K
At Mitrovica, located near to the world class Stan
Terg lead-zinc-silver mine, potential not only exists
for the discovery of additional lead-zinc-silver
deposits, but also for the discovery of high-level
epithermal gold deposits and for copper-zinc
deposits.
It is simplistic to think of the targets at Mitrovica,
which occur along a seven kilometres trend, in
isolation. However, Vardar believes the targets
are all related to a potentially much larger
porphyry style mineralised system, based on
meticulous geological mapping of hydrothermal
alteration and interpretation of trench, drill and soil
geochemical and geophysical exploration data.
Vardar provides Beowulf with investment
exposure to the highly prospective Tethyan Belt.
During 2020, the Company invested £380,000,
funding geophysics programmes at Mitrovica and
Viti. More recently, in February 2021, the Company
invested a further £200,000 to fund preparatory
works in advance of drilling this year. At the date
of sign-off of this report, the Company owns
approximately 48.4 per cent of Vardar.
Beowulf’s investments and increasing ownership
in Vardar are testament to the Company’s
confidence in the progress being made by the
Vardar team, exploration results and the potential
shown for a mineral deposit(s) discovery at
Mitrovica and Viti.
At Viti, stratigraphic holes in 2019, intersected the
correct alteration type, returning gold and visible
copper mineralisation, that indicates potential
for the discovery of a mineralised copper-gold
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Kosovan Exploration Permits
Vardar has a rolling programme of exploration permit applications and renewals.
As original permits were awarded around the same time, all renewals have become due around
the same time. Vardar’s renewal applications have also coincided with a changeover in personnel
on the board of The Independent Commission for Mines and Minerals (“ICMM”), the permitting
authority in Kosovo. The ratification of a new board has been delayed because of parliamentary
elections, which took place in February 2021. It is hoped that the new board will soon be
confirmed.
Name
Licence no.
Area (hectares)
Notes
Mitrovica (2231)
2231
2,713.51
Mitrovica (2541)
2541
130.20
Viti North (2230)
2230
3,546.74
Viti West (2345)
2345
5,207.78
Viti SE
(2344) 2344
8,829.91
Renewal application accepted, awaiting final approval
by ICMM board.
Renewal application accepted, awaiting final approval
by ICMM board.
Renewal application accepted, awaiting final approval
by ICMM board.
Renewal application accepted, awaiting final approval
by ICMM board.
Renewal application accepted, awaiting final approval
by ICMM board.
Exploration Overview
The Mitrovica and Viti projects are located within
the Tethyan Belt, a major orogenic metallogenic
province for gold and base metals which extends
from the Alps (Carpathians/Balkans) to Turkey,
Iran and Indochina, and contains several world
class discoveries.
The Tethyan Belt of south-east Europe can be
regarded as Europe’s chief copper-gold (lead-zinc-
silver) province. Mitrovica and Viti occur within
calc-alkaline magmatic arc(s) which developed
during the closure of the Neotethys Ocean,
primarily targeting epithermal gold, lead-zinc-
silver replacement deposits and porphyry related
copper-gold mineralisation.
The lack of modern-day exploration in the Balkans
presents a real opportunity for new mineral
deposit discoveries.
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2020 Beowulf Mining plc Annual Report Mitrovica
The Mitrovica licence is located immediately to
the west and north west of the world class Stan
Terg former lead-zinc-silver mine, which dates
back to the 1930s; with current reserves of 29
million tonnes (“Mt”) of ore at 3.45 per cent Pb,
2.30 per cent Zn, and 80 g/t Ag (ITT/UNMIK 2001
report), together with the past production of
approximately 34 Mt of ore, the deposit represents
an important source of metals in the south eastern
part of Europe (Source: Strmić Palinkaš S., Palinkaš
L.A et al, 2013. Metallogenic Model of the Trepča
Pb-Zn-Ag Skarn Deposit, Kosovo: Evidence from
Fluid Inclusions, Rare Earth Elements, and Stable
Isotope Data. Economic Geology, 108, 135-162).
Wolf Mountain
The Wolf Mountain target forms a prominent
outcropping feature, with strike length of more
than 4 km and width ranging from almost
20 m to greater than 300 m. It represents a
hydrothermal breccia zone with stockworks,
which outcrop as a gossan, with iron-manganese
oxides and hydroxides. The peripheral parts of
the zone are characterised by intense silicification
corresponding to fold structures which control the
development of the hydrothermal breccia.
The mineralisation is structurally controlled, and,
for most of the target, mineralisation is developed
in the basement, broadly following a tectonic
contact between ultramafic rocks and phyllite,
and mainly within ultramafic units. Mineralisation
is likely vein/replacement-type related to
Oligocene magmatic activity responsible for the
hydrothermal systems mapped in the southern
portion of the licence area.
In October, the Company reported highly
anomalous IP chargeability zones, considered high
priority targets for drill testing, defined beneath
areas of laterally extensive Pb-Zn gossans and
hydrothermal alteration.
The IP anomalies are located below, often
straddling, the contact between younger
Oligocene volcanoclastic rocks and ultramafic
basement, in agreement with mapped and drill
tested mineralisation, adding further support for a
source of the observed mineralisation.
14
The licence is showing its potential for a range of
porphyry related mineralisation types, including
the Majdan Peak high-sulphidation epithermal
gold target, the Wolf Mountain low-sulphidation
lead-zinc-silver target and the Mitrovica South
base and precious metal target in the southern
part of the licence area. Vardar believes all the
targets are related to a potentially much larger
porphyry style mineralised system.
Importantly, anomalies follow established
regional structural trends suggesting they may
be representative of high-grade Pb-Zn-Ag feeder
structures, often a characteristic of the deposit
type.
Resistivity results correlate very well with
geological mapping, drilling and trenching,
delineating the lateral and vertical extent of the
low resistivity volcanoclastic units over the higher
resistivity ultramafic basement.
In December, the Company announced that an
exceptional high chargeability anomaly had been
identified to the east of the main Wolf Mountain
prospect, correlating with anomalous soil samples
(up to 1.0 per cent Zn and 0.5 per cent Pb and rock
samples from gossans (including 3.5 per cent Zn,
1.8 per cent Pb, 93 g/t silver Ag.
The chargeable source follows a prominent
northwest trending structure which connects to
the Zijaca deposit (non-JORC compliant 5.2 Mt
containing 2.83 per cent Zn, 2.83 per cent Pb
and 16 g/t Ag) located just two kilometres to
the southeast and it remains open ended to the
northwest.
Results to date suggest that the Wolf Mountain
prospect covers a much larger area than
previously considered.
Referring back to 2019, a total of 278.5 m of
trenching and 1,609 m of drilling were completed
at Wolf Mountain. Drilling and trenching results
confirmed extensive lead-zinc-silver mineralisation
over an area of 800 m in length and 400 m in
width.
Trenching highlights include:
• Trench WM-T01: 18 g/t silver, 2.01 per cent lead and 3.17 per cent zinc over 12.5 m, within a
longer 51 m in length cross-section returning 11 g/t silver, 1.43 per cent lead and 1.87 per cent
zinc;
• Trench WM-T02: 14 g/t silver, 3.6 per cent lead and 0.64 per cent zinc over 8 m.
Drilling highlights include:
• Drillhole WM004: 8 g/t silver, 1.27 per cent lead and 0.91 per cent zinc over 6.6 m (estimated true
thickness); and
• Drillhole WM007: 16 g/t silver, 2.69 per cent lead and 0.4 per cent zinc over 4.3 m (estimated true
thickness).
Results to date suggest that the Wolf Mountain prospect consists of several structurally controlled
targets, often occurring along geological contacts in the basement rocks and covering a larger area
than previously considered.
Majdan Peak
Majdan Peak is situated in the central portion of
the Mitrovica licence area. Results to date have
identified the main Majdan Peak gold target and a
second target to the south, Majdan Peak South.
In June, the Company reported results from
soil sampling which highlighted epithermal
gold potential. An extensive gold anomaly was
identified over an area approximately 1400 m
x 700 m, with individual soil samples returning
up to 0.36 g/t gold. The scale and size of the
anomaly, together with coincidental multi-element
anomalies and extensive hydrothermal alteration,
are comparable to significant high-sulphidation
epithermal gold deposits within the region. The
gold anomaly correlates well with anomalous
arsenic, copper, lead, mercury, strontium and
antimony and geological mapping has shown the
presence of advanced argillic alteration.
In July, Beowulf reported results from a grab
sampling programme. 96 samples were collected
from outcrop and subcrop, 42 of which assayed in
excess of 0.1 g/t gold. The anomalous results from
this correlate well with gold in soils and alteration
intensity and again confirmed the significant scale
of the Majdan Peak gold anomaly, which remains
open to the east.
Sample results over 1 g/t gold include:
7.2 g/t; 4.6 g/t; 2.8 g/t; 2.0 g/t; 1.5 g/t; 1.3 g/t;
1.3 g/t; and 1.1 g/t.
In addition to the primary gold target at Majdan
Peak, a new multi-element anomaly delineated
to the south of the main peak correlates well with
anomalous rock grab samples, including samples
with up to 0.79 g/t gold. Galena (lead sulphide)
veins are also apparent in some of the outcropping
gossans.
In November, the Company announced results
from an IP and resistivity survey, where highly
anomalous chargeability targets were mapped
for both Majdan Peak and Majdan Peak South.
These chargeability targets correlated well
with anomalous rock and soil samples, mapped
alteration and zones of demagnetisation identified
by a high-resolution drone magnetic survey. The IP
anomalies demonstrate depth extent and suggest
that the mapped surficial gold mineralisation
is related to a potentially large underlying
source which is over 700 m in strike length with
significant width and thickness.
The zones of high resistivity correlate well with
mapped silicification and advanced argillic
alteration which appear to overlay the main IP
chargeability target, as would be expected in a
typical high-sulphidation gold deposit. Shallow IP
anomalies follow structural trends mapped in the
magnetic data suggesting a structural control to
the distribution of mineralisation which may link
up to the carbonate replacement lead-zinc ore
bodies of the neighbouring Stan Terg deposit.
14
15
2020 Beowulf Mining plc Annual Report
Mitrovica South
A new lead-zinc-copper-gold target has been identified in the southern part of the licence, particularly
significant given its proximity, approximately 4 km, to the Stan Terg mine.
The Vardar team has mapped zinc mineralisation associated with trachyte dykes and soil sampling
results, identifying distinctive zinc, copper, lead, silver, and gold anomalies extending laterally from
known mineralisation, suggest that the mineralised system may be larger than initially indicated by
geological mapping.
Viti
The Viti project is located in south-eastern Kosovo
and encompasses an interpreted circular intrusive,
indicated by regional airborne magnetic data.
There is evidence of intense alteration typically
associated with porphyry systems, with several
copper occurrences and stream sample anomalies
in proximity to, and within the project area. In the
south-east of the project area, reconnaissance
mapping has identified several zones of intense
argillic alteration, hydrothermal breccias and iron
oxide stockworks.
In In 2019, two stratigraphic holes, totalling 439 m,
were drilled to test for alteration type and potential
associated mineralisation in the gossanous
zone, and identified highly altered trachyte
porphyry dykes with associated copper and gold
mineralisation, with down the hole intersections of
1 m at 0.5 g/t and 10 m at 0.12 g/t.
Post-Year End
During the year, the Company reported results
from detailed 3D IP and resistivity surveys
undertaken over the Metal Creek prospect, which
forms part of the Viti project. High chargeability
anomalies associated with an extensive north-
northwest trending zone of alteration and
anomalous multi-element soil sample and rock
grab sample results were delineated. The newly
defined high chargeability anomalies sit near
gold and copper mineralisation, associated with
altered porphyritic trachyte dykes, intersected by
previous stratigraphic drilling. These anomalies
could represent higher grade mineralised zones
and Vardar is now planning to drill two short holes
to test chargeability ‘hot spots’.
Beowulf announced on 8 February 2021, that the Company had invested £200,000 to fund preparatory
works, building access roads and drilling platforms, across the Mitrovica licence, lead-zinc targets at
Wolf Mountain and gold targets at Majdan Peak. It is hoped that drilling can commence in the third
quarter of 2021. The investment increased the Company’s ownership in Vardar from 46.1 per cent to
48.4 per cent approximately.
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D
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I
Fennoscandian
Fennoscandian is pursuing a strategy to develop a resource and
production base of graphite that can provide security of supply and
contribute to Finland’s ambitions of achieving battery manufacturing
self-sufficiency, focusing on both natural flake graphite production and
a Circular Economy/recycling strategy to produce high-value graphite
products. The Company is also developing its knowledge in processing
and manufacturing value-added graphite products, including anode
material for lithium-ion batteries.
Since Fennoscandian was acquired by Beowulf in January 2016,
the Company has invested approximately €2.2 million in graphite
exploration, resource development, metallurgical testwork and the
assessment of market applications for graphite supplied from its
Aitolampi project, including lithium-ion battery applications.
Finnish Exploration Permits
Fennoscandian has a rolling programme of exploration permit
applications and renewals.
Tukes (the permitting authority) processes the Company’s exploration
permit applications, which if deemed satisfactory, are published as a
‘Hearing’ for one month, during which time appeals can be submitted.
With the prevalence of ‘not in my backyard’ or NIMBYism, the right of
appeal is often exercised, and an Administrative Court takes over the
case.
In the case of Rääpysjärvi 1, Tukes granted a permit on 25 April
2019. On 27 April 2020, the Administrative Court of Eastern Finland
rejected an appeal, but a further appeal has been made to the
Supreme Administrative Court of Finland. The case continues.
Permit
Name
Licence
no.
Area
(hectares)
Notes
Karhunmäki 1
ML2019:0113
964.99
Exploration permit application submitted 31 Dec
2019. Hearing published 31 March 2021.
Deadline for appeals 3 May 2021.
Merivaara 1
ML2020:0059
957.20
Exploration permit application submitted
1 Dec 2020.
Pitkäjärvi 1
ML2016:0040
407.45
Exploration permit granted and appealed.
Rääpysjärvi 1
ML2017:0104
716.25
Exploration permit granted. Ongoing appeals
process.
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2020 Beowulf Mining plc Annual Report
Aitolampi
(Pitkäjärvi 1
Exploration Permit)
– Graphite
Introduction
The Aitolampi graphite project sits within
the Pitkäjärvi 1 licence and is located in
eastern Finland, approximately 40 km
southwest of the well-established mining
town of Outokumpu.
Discovered in 2016, the licence covers an
area of graphitic schists on a fold limb,
coincidental with an extensive electro-
magnetic (“EM”) anomaly. Many of the
EM zones are obscured by glacial till, but
graphite observations in road cuttings and
outcrops are also associated with abundant
EM anomalies.
Merivaara
FINLAND
Karhunmäki
Aitolampi
Rääpysjärvi
18
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Mineral Resource Estimate:
In 2019, Fennoscandian delivered an upgraded
Mineral Resource Estimate (“MRE”) for Aitolampi,
with an 81 per cent increase in contained graphite
(compared to the 2018 MRE) for the higher-grade
western zone with an Indicated and Inferred
Mineral Resource of 17.2 Mt at 5.2 per cent Total
Graphitic Carbon (“TGC”) containing 887,000
tonnes of contained graphite.
An unchanged Indicated and Inferred Mineral
Resource of 9.5 Mt at 4.1 per cent TGC for 388,000
tonnes of contained graphite for the eastern lens.
In total, an Indicated and Inferred Mineral
Resource of 26.7 Mt at 4.8 per cent TGC for
1,275,000 t of contained graphite. All material is
contained within two graphite mineralised zones,
the eastern and western lenses, interpreted above
a nominal three per cent TGC cut-off grade.
An augmented global Indicated and Inferred
Mineral Resource of 11.1 Mt at 5.7 per cent TGC
for 630,000 t of contained graphite, reporting
above a five per cent TGC cut-off, based on the
grade-tonnage curve for the resource.
The Mineral Resource was estimated by CSA
Global of Australia following the guidelines of the
JORC Code 2012 edition. See table below:
Zone
Classification
Mt
TGC %
S % Density (t/m3)
Contained graphite (kt)
Indicated
Western lens
Inferred
9.2
8.0
Indicated + Inferred
17.2
Indicated
Eastern lens
Inferred
Indicated + Inferred
1.8
7.7
9.5
5.1
5.2
5.2
4.1
4.1
4.1
5.0
4.7
4.8
4.4
4.5
4.5
TOTAL
Indicated + Inferred
26.7
4.8
4.7
2.80
2.80
2.80
2.82
2.82
2.82
2.81
2020 Summary
During the year, test work on a composite sample
for Karhunmäki, a new graphite prospect, was
found by Fennoscandian to produce a concentrate
grade of 96.4 per cent TGC, with 51.3 per cent
large/jumbo flakes (+180 micron). The Company
has applied for an Exploration Permit for the
project.
Fennoscandian continued to assess the results of
spheroidization and battery tests on its Aitolampi
graphite.
Fennoscandian also joined, as a consortium
member, the Business Finland funded BATTrace
project, which aims to improve traceability along
the battery raw materials value chain using
mineralogical/geochemical fingerprinting, to
validate responsible and sustainable sourcing of
cobalt, nickel, lithium, and graphite.
2021 Update
In March 2021, Fennoscandian signed a
Memorandum of Understanding (“MoU”) with
Epsilon Advance Materials Limited (“EAMPL”).
The MoU enables Fennoscandian to build its
downstream capability, collaborating with a
strong and innovative technology/processing
partner, and for EAMPL to firmly establish itself in
Finland, as a market-entry point for supplying pre-
cursor anode material into Europe.
A Scoping Study contract for the Aitolampi
graphite project has also been awarded to AFRY
Finland Oy. The purpose of the Scoping Study is
to verify the robustness of the work completed by
Fennoscandian, and to provide a roadmap for the
next project development stage, most likely a Pre-
feasibility Study. The output of the Scoping Study
will enable Fennoscandian to better explain the
Aitolampi project to the local community and other
important stakeholders.
468
419
887
74
314
388
1,275
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2020 Beowulf Mining plc Annual Report
Permits
Beowulf, via its subsidiaries, currently holds four exploration permits,
together with one registered application for an Exploitation Concession, as
set out in the table below:
Name
Licence
no.
Area
(hectares)
Valid
from
Valid
to
Åtvidaberg nr 12,4
2016:51
12533
30/05/2016 30/05/2022
Notes
-
Kallak nr 11
2006:197
500
28/06/2006 28/06/2022
Kallak iron ore project
Parkijaure nr 61,4
2019:81
999
10/10/2019 10/10/2022
Exploration ground to
Parkijaure nr 21
2008:20
285
18/01/08 18/01/2024
Kallak iron ore project
the south of Kallak
Notes:
(1) Held by the Company’s wholly owned subsidiary, Jokkmokk Iron Mines AB (“JIMAB”).
(2) Held by the Company’s wholly owned subsidiary, Beowulf Mining Sweden AB.
(3) An application for the Exploitation Concession was lodged on 25 April 2013 (Mines Inspector Official Diary nr 559/2013) and an updated,
revised and expanded application was submitted in April 2014. On 21 September 2016, the Company submitted a letter to the Mining
Inspectorate of Sweden, revising its application boundary to encompass both the Concession Area, delineated by the Kallak North orebody, and
the activities necessary to support a modern and sustainable mining operation.
(4) Due to COVID-19, valid exploration permits have been awarded an additional year to their existing term. The Mining Inspectorate is yet to
complete updating its registers and will directly inform each permit holder of the change that applies to their respective permits. As such the
extension year, which should extend the term of these licences to 2023, has not been added to the licence ‘Valid To’ dates shown above.
Introduction
The Company’s most advanced project is
the Kallak magnetite iron ore deposit located
approximately 40 km west of Jokkmokk in the
County of Norrbotten, Northern Sweden, 80 km
southwest of the major iron ore mining centre of
Malmberget, and approximately 120 km to the
southwest of LKAB’s Kiruna iron ore mine.
The Company is currently going through the
process of obtaining an Exploitation Concession
for Kallak North (the “Exploitation Concession”).
On 17 September 2020, the Company published
the market leading potential of Kallak’s magnetite
concentrate following an assessment by Dr.
Arvidson MSc Mining/Mineral Processing, PhD
Mineral Processing (equivalent), Royal Institute of
Technology, Stockholm, as Qualified Person.
Kallak is excellently positioned as a secure and
sustainable future supplier of high-quality iron
ore powered by renewables to Sweden’s growing
fossil-free steel making sector.
The deposit is benefitted by excellent local
infrastructure with all-weather gravel roads
passing through the project and forestry tracks
allowing for easy access throughout the licence. A
major hydroelectric power station, with associated
electric power-lines, is located only a few
kilometres to the south east. The nearest railway,
the Inlandsbanan, passes approximately 40 km to
the east. The Inlandsbanan meets the Malmbanan
railway at Gällivare, which provides routes to the
Atlantic harbour at Narvik in Norway or to the
Bothnian Sea harbour at Luleå in Sweden.
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Kallak
SWEDEN
Åtvidaberg
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2020 Beowulf Mining plc Annual Report
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2020 Beowulf Mining plc Annual Report Kallak Resource
The Kallak North and Kallak South orebodies are centrally located and cover an area approximately
3,700 m in length and 350 m in width, as defined by drilling. The MRE for Kallak North and South is
based on drilling conducted between 2010-2014, a total of 131 holes and 27,895 m.
A resource statement for the Kallak project was finalised on 28 November 2014, following the guidelines
of the JORC Code 2012 edition, summary as follows:
Project
Category
Tonnage
Mt
105.9
17.0
12.5
16.8
118.5
33.8
Kallak North
Indicated
Inferred
Kallak South
Indicated
Inferred
Indicated
Inferred
Global
Notes:
Fe
%
27.9
28.1
24.3
24.3
27.5
26.2
P
%
0.035
0.037
0.041
0.044
0.036
0.040
S
%
0.001
0.001
0.003
0.005
0.001
0.003
(1) The effective date of the Mineral Resource Estimate is 28 November 2014.
(2) Resources have been classified as Indicated or Inferred, following the guidelines of the JORC Code, 2012 edition.
(3) Cut-off grade of 15 per cent iron has been used.
(4) Mineral Resource, which is not Mineral Reserves, has no demonstrated economic viability.
(5) An exploration target of 90-100 Mt at 22-30 per cent Fe represents potential ore below the pit shells modelled for this resource
statement, and in the gap between drilling-defined Kallak South mineralised zones.
(6) The resource statement has been prepared and categorised for reporting purposes by Mr. Thomas Lindholm, of GeoVista AB,
Fellow of the MAusIMM, following the guidelines of the JORC Code, 2012 edition.
An overview of the interpreted mineralisation is shown in the diagram.
22
An overview of the interpreted mineralisation is shown in the diagram.
The mineralised area at Kallak North is
approximately 1,100 m long, from south to
north, and, at its widest part in the centre, is
approximately 350 m wide.
The deepest drill hole intercept is located some
350 m below the surface in the central part of
the mineralisation. In the southern and northern
parts, the intercepts are shallower at 150-200 m.
However, in the northern part, there are no barren
holes below them, so the mineralisation could
continue at depth.
The investigations at Kallak South have been
divided into two parts, the northern and southern
ends, respectively. In the northern part the
mineralisation extends approximately 750 m
from north to south and has an accumulated
width of 350 m. The deepest drill hole intercept
is located some 350 m below the surface in the
southern-most part of the mineralisation. In
the southern part, the mineralisation extends
approximately 500 m from north to south and has
a maximum width of just over 300 m. The deepest
drill hole intercept is located some 200 m to 250
m below the surface in the central part of the
mineralisation.
Approximately 800 m in between the southern
and northern parts of Kallak South has not been
investigated by systematic drilling. An exploration
target of 90 -100 Mt at 22-30 per cent iron has
been assigned to the area between the southern
and northern parts.
2020 Update
Throughout 2020, Beowulf continued to push for
a decision from with the Swedish Government
on its application for an Exploitation Concession,
while demonstrating its approach to developing
an innovative, modern, and sustainable mining
operation at Kallak. The Company continued to
work with the Mayor in Jokkmokk, Norrbotten
Regional Council Members and Norrbotten
Members of Parliament to lobby the Government.
In May, the Company announced that it had
awarded a drilling contract for Kallak to Kati Oy
for up to 1,650 m diamond drilling, targeting
additional potential iron ore mineralisation
at Kallak South. The work programme, now
postponed until later in 2021, will determine if
a 3D seismic model can be constructed, using
the established seismic characteristics of the
Kallak deposit, and whether the 3D model can be
used to help define additional iron ore resource.
If successful, the set-up could then be applied
to the Exploration Target at Kallak South and
further south, following the magnetic signature of
mineralisation which extends into the Company’s
Parkijaure nr 6 exploration licence.
There is clear potential for the mine life at Kallak
to be much greater than the 14 -years included
in the Kallak North application. As can be seen
with LKAB’s operations at Kiruna, which have
lasted over a century, new resources are typically
identified after a mine is opened.
The work is being undertaken as part of the EU
funded PACIFIC Project (“PACIFIC”). The aim
of PACIFIC is to develop a new low-cost and
environmentally friendly tool for exploring for sub-
surface mineral deposits. The programme will test
a multi-array method in parallel with drilling at
Kallak South, with noise from drilling providing a
passive seismic source.
22
23
2020 Beowulf Mining plc Annual Report On 17 September 2020, the Company published
the market leading potential of Kallak’s magnetite
concentrate following an assessment by Dr.
Arvidson as Qualified Person, the highlights of
which can be summarised as follows:
“KU has examined the application for a processing
concession for Kallak. In the Government case, no
visible administrative measures were implemented
for almost three years. This means a delay that is
not acceptable, according to KU.
testwork on Kallak ore has produced
an exceptionally high-grade magnetite
concentrate at 71.5 per cent iron
content with minimal detrimental
components;
this would make Kallak the market
leading high-grade product among
known current and planned future
producers;
the next best magnetite product is
LKAB’s (the state-owned Swedish
iron ore company), which produces
magnetite fines (“MAF”) with a target
specification of 70.7 per cent iron and
is regarded as unique, until now, due to
its exceptionally high iron content; and
Kallak magnetite concentrate
would reduce the carbon footprint
of traditional steel manufacturing,
improve energy efficiency in any
downstream process and reduce
waste. Magnetite has inherent energy
content, which ultimately results
in lower energy demand for steel
manufacturing when compared to
current common practice.
Globally, the feedstock for steelmaking is 80 per
cent. hematite and 20 per cent. magnetite. The
demand for high-quality feedstock and therefore
magnetite should increase as producers look to
protect the environment by improving energy
efficiency, minimising waste and the impact of
waste disposal.
The Constitutional Committee (“KU”), which
has been reviewing the Swedish Government’s
handling of the Company’s application for an
Exploitation Concession for Kallak North met in
November and made the following statement
(translation):
It also appears that the applicant has on several
occasions asked the Ministry of Trade and Industry
for a meeting. The Ministry has then stated that
this is not possible because the issue concerns a
forthcoming Government decision and is a matter
under consideration.
KU notes that the Ministry management’s
statement does not seem to be in line with what
the Prime Minister has stated. The Government
Offices thus seem to lack a common approach to
the possibility for parties in administrative matters
to have a meeting with the responsible ministry.”
A month prior to the KU’s statement, the
Government consulted with UNESCO on the
Company’s application. While the KU’s statement
will have no bearing on the final decision, the
Company believes that once comments are
received back from UNESCO a decision will be
‘forthcoming’, language used by the Minister in
September 2019. The Company has been in
communication with UNESCO regarding its review
of Kallak.
2021 Outlook
It remains the Directors’ view that the Company’s
application for an Exploitation Concession
fully meets the requirements of the prescribed
process, and that it has done so since the Mining
Inspectorate recommended to the Government, in
October 2015, that the Concession be awarded.
In Sweden, the acknowledged direction of travel is
that more mining is needed to produce the metals
to facilitate the transition to a Green Economy and
the electrification of society to address the Climate
Emergency. It would seem illogical to consider that
given this context the Concession, which has been
in development for almost 15 years since the first
exploration permit was awarded, is not granted,
despite the inordinate time the Company has had
to wait for a decision.
24
The Directors believe that the award of the
Exploitation Concession would result in a re-
rating of the Company’s value and prospects
by investors. The ‘big picture’ for Kallak is that
a mine could be in production within four to
five years.
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 a
plan for a Pre-feasibility Study and initiate
environmental permitting.
While the Company waits for a decision on
the Exploitation Concession, exploration
work can continue under valid work plans,
with drilling at Kallak South later this year.
Work is continuing 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 sustainable mining
operation over decades, and secure supply of
high-quality iron ore to the growing fossil-free
steelmaking industry.
In addition, the Company is continuing to
work with consultants on assessing new
processing innovations, which will remove the
necessity for flotation and enable the Kallak
design to move away from a wet tailings
storage towards dry-stacking, thereby
reducing the environmental footprint of a
future operation.
Finally, the Company has embarked on
advancing social studies, specifically aimed at
advancing discussions on formal agreements
with key stakeholders including the Jokkmokk
municipality and the Sami reindeer herders.
The Company considers this work as critical
to maximising the benefits that Kallak will
generate for all stakeholders. These specific
studies and work programmes, are beneficial
to optimising the environmental and social
aspects of the Kallak project, reducing its
impacts and maximising its benefits.
24
2020 Beowulf Mining plc Annual Report
25
25
2020 Beowulf Mining plc Annual Report Board of Directors
Sven Otto Littorin - Non-Executive Chairman BSc
Mr Littorin joined Beowulf as Non-Executive Chairman in November 2020. Mr Littorin is a former
politician and Sweden’s Minister for Employment from 2006 to 2010. Since leaving government, he co-
founded his own real estate development company and has held a number of advisory positions across
Europe, North America and the Middle East.
His most recent positions include serving as a member of the Advisory Board of Gravitas in Austria,
a Partner with The Labyrinth Public Affairs in Sweden, and an Advisor to the Human Resources
Development Fund in Saudi Arabia.
Mr Littorin holds a BSc in Economics and Business from Lund University.
Kurt Budge - Chief Executive Officer
MBA MEng ARSM
Mr Budge was appointed Chief Executive Officer of Beowulf Mining in October 2014 after joining the
Company as a Non-Executive Director in September 2014.
Kurt has over 20 years’ experience in the mining sector, during which he spent five years as a Business
Development Executive in Rio Tinto’s Business Evaluation Department. Here he was engaged in mergers
and acquisitions, divestments and evaluated capital investments. He has also been an independent
advisor to junior mining companies on acquisitions and project development as well as a General
Manager of Business Development, where he developed strategic growth and merger and acquisition
options for iron ore assets.
Kurt was Vice President of Pala Investments AG, a mining focused private equity firm based in
Switzerland, and has worked as a mining analyst in investment research.
During the earlier part of his career he held several senior operations and planning roles in the UK
coal industry with RJB Mining (UK Coal plc) and worked as a Venture Capital Executive with Schroder
Ventures.
Kurt holds an M. Eng (Hons) degree in Mining Engineering from The Royal School of Mines, Imperial
College London, and an MBA from London Business School.
Christopher Davies - Non-Executive Director
BSc Hons, MSc DIC
Mr Davies joined the board of Beowulf as a Non-Executive Director in April 2016. Chris, who is a Fellow
of the Australasian Institute of Mining and Metallurgy, is an exploration/economic geologist with more
than 30 years’ experience in the mining industry. He has substantial knowledge of graphite and base
metals, a particular skill set which will be complimentary to Beowulf’s existing team. He was Manager
for the exploration and development of a graphite deposit in Tanzania and has been involved with due
diligence studies on graphite deposits in East Africa and Sri Lanka.
Chris has worked as a geologist in many different parts of the world including Africa, Australia, Yemen,
Indonesia, and Eastern Europe. His most recent role was as a Consultant to an Australian Group seeking
copper-gold assets in Africa where he carried out technical due diligence and negotiated commercial
terms for joint venture partnerships. Chris was Operations Director of African Eagle until March 2012
and Country Manager for SAMAX Resources in Tanzania, which was acquired by Ashanti Goldfields in
1998 for US$135 million.
26
Secretary
ONE Advisory Limited - Company Secretary
ONE Advisory Limited is an AIM specialist advisory and administration firm, responsible for ensuring that
Board procedures are followed and that the Company applies with all applicable rules, regulations and
obligations governing its operation, as well as helping the Chairman to maintain excellent standards of
corporate governance
Senior Management
Rasmus Blomqvist - Exploration Manager
MSc MAusIMM
Mr. Blomqvist, the founder of Fennoscandian, was appointed Exploration Manager in January 2016. Mr.
Blomqvist has been working in exploration and mining geology for over 11 years and holds an MSc in
Geology and Mineralogy from Åbo Akademi University, Turku Finland.
Since 2012, Mr. Blomqvist has been exploring for flake graphite within the Fennoscandian shield and
is one of the most experienced graphite geologists in the Nordic region. Prior to Fennoscandian, Mr.
Blomqvist was Chief Geologist for Nussir ASA, managing its exploration team and achieving significant
exploration success for the company.
Prior to Nussir, Mr. Blomqvist worked as an independent consultant for several international mining
companies including Mawson Resources, Tasman Metals and Agnico Eagle and has experience in
graphite, gold, base metals and iron ore, within the Nordic region.
Mr Blomqvist is a member of the Australasian Institute of Mining and Metallurgy (“AusIMM’’).
26
27
2020 Beowulf Mining plc Annual Report
Strategic Report
The Directors present their strategic report for the year ended 31 December 2020.
Principal Activity
The principal activities of the Group are the
exploration and development for iron ore, graphite,
base and precious metals in the Nordic Region and
Kosovo. A detailed review of the mining activities
can be found under Review of Operations and
Activities. The Group is registered in and controlled
from the United Kingdom.
Review Of The Business
The results of the Group for the year are set out in
the consolidated income statement and show a
loss after taxation attributable to the owners of the
parent for the year of £1,128,512 (2019: Loss of
£267,000). A comprehensive review of the business
is given under the Chairman’s Statement and
Review of Operations and Activities.
Principal Risks And Uncertainties
The principal risks and uncertainties facing the Group are detailed below:
Description
Not obtaining an Exploitation Concession at Kallak North
Risk
The Company does not meet the requirements of the prescribed
process for an Exploitation Concession
HIGH
In July 2015, the CAB supported the Company’s application, and in October 2015 the
Mining Inspectorate recommended that the concession be awarded. In its November
2017 statement, the CAB recommended that a Concession is not awarded, but failed
to use the socio-economic assessment criteria set out in the Environmental Code for
applications such as ours, which put emphasis on safeguarding investment and job
creation, and giving consideration for the municipalities’ financial health. The CAB also
contradicted its July 2015 position, when it supported the economic case for Kallak. It is
the Board’s opinion that the Company has fully met the requirements of the prescribed
application process, Swedish Minerals Act and Environmental Code. The Company has
the support of the Mayor of Jokkmokk, landowners’ association and local entrepreneurs
who have lobbied the Government for the award of the Concession. Kallak would have
a positive transformational economic effect on Jokkmokk, the importance of which
the Government has acknowledged. The Constitutional Committee (“KU”), which has
been reviewing the Government’s handling of the Kallak application Kallak application,
strongly criticised the government on 26 November 2020. While the KU’s statement
will have no bearing on the final decision, the Company believes that once comments
are received back from UNESCO a decision will be ‘forthcoming’, language used by the
Risk rating
pre-mitigation
Mitigating action
28
Minister in September 2019. The Company has been in communication with UNESCO
regarding its review of Kallak. Since the KU statement, political parties outside of
Government are taking a greater interest in the case and, with the support of our
advisers, we continue to inform and educate on the facts about Kallak and dispel
the perceptions that exist. In Sweden, the acknowledged direction of travel is that
more mining is needed to produce the metals to facilitate the transition to a Green
Economy and the electrification of society to address the Climate Emergency. It would
seem illogical to consider that given this context the Concession which has been in
development for almost 15 years since the first exploration permit was awarded, is
not granted, despite the inordinate time the Company has had to wait for a decision.
MEDIUM
Revocation of licences
Licences are subject to conditions which, if not satisfied,
may lead to the revocation of the licence
MEDIUM
In all cases the Company diligently manages its licences to ensure full compliance. A
monthly status report is generated for monitoring purposes and action. In Kosovo,
licence renewals have coincided with a changeover in ICMM Board members and
Parliamentary elections, but there is no justification for permits not being renewed, In
Finland, NIMBY opposition to mining development is generating appeal/court induced
delays into permitting processes. However, the Company has satisfied Tukes’ for its
permits applications/renewals and is working with the industry association FinnMin
on these matters.
LOW
Non-operator of subsidiary
Lack of control and oversight on entity spend
LOW
Budgets are provided by the entity on request and at the investment stage. Funds
invested are designated for specific project use. Accounting information prepared and
consolidated by third party provider for inclusion in external reporting. Company CEO
holds position as a director.
LOW
Risk rating
post-mitigation
Description
Risk
Risk rating
pre-mitigation
Mitigating action
Risk rating
post-mitigation
Description
Risk
Risk rating
pre-mitigation
Mitigating action
Risk rating
post-mitigation
28
29
2020 Beowulf Mining plc Annual Report
Unable to raise sufficient funds
Unable to raise sufficient funds to invest in project
portfolio and cover corporate costs
MEDIUM
Effectively communicate to the market. Raise capital in a timely manner, as record
of accomplishment shows. Ensure forecasting is accurate, and expenditure controls
are in place to optimise cash resources. The £7.4 m Capital Raising completed in
December 2020 has significantly increased the Company’s cash resources and profile
in the Nordic markets, where 80 per cent of funds were raised.
MEDIUM
Long term adverse changes in Commodity prices
Prices for iron ore, graphite, and other commodities may affect
the viability of the Company’s projects
MEDIUM
The Company identifies and invests in high quality projects that are attractive to the
market. The Company will manage capital and operating expenditures to maximise
shareholder returns. In the Nordic region, COVID-19 has not had a material effect on
the mining sector, with mines continuing to operate. In Kosovo, Vardar has continued
with exploration activities. The economic slowdown caused by the pandemic is
anticipated to reverse, once COVID-19 is brought under control. Global Platts 62%
iron ore fines benchmark was assessed at an average of $161.21/mt CFR China
during the week of 27 December 2020.
MEDIUM
Not discovering an economic mineral deposit
Very few projects go through to be developed into mines
HIGH
Early studies and testwork give confidence that the Company is allocating capital
appropriately. In Kallak and Aitolampi we have potential quality resources, benefitted
by excellent local infrastructure, and established low-risk mining countries.
MEDIUM TO LOW
Description
Risk
Risk rating
pre-mitigation
Mitigating action
Risk rating
post-mitigation
Description
Risk
Risk rating
pre-mitigation
Mitigating action
Risk rating
post-mitigation
Description
Risk
Risk rating
pre-mitigation
Mitigating action
Risk rating
post-mitigation
30
Performance Measurement
The ongoing performance of the Company is
managed and monitored using a number of key
financial and non-financial indicators (“KPIs”) on a
monthly basis:
Financial:
i. Administration Expenses
Overheads are managed versus budget and
forecast on a monthly basis. The Company has
a history of tightly managing its expenses. The
underlying group overhead expenses increased
in the year to £1,005,547 (2019: £904,666), the
increase was largely attributable to a decrease
of £56,739 capitalisation of executive time and
an increase of £39,976 foreign currency losses
recognised in the profit and loss.
ii. Cash position
Cash is vital for an exploration company and
it must be managed accordingly. Monthly, the
Company, analyses the expenditure of each
subsidiary. It also manages monthly cash flow
for the Group versus budget and forecast. The
financial strategy is to ensure that the Company
at a minimum has sufficient funds to undertake
it’s committed expenditure and meet its financial
obligations. A key objective of the Company
during the year was to complete a successful
capital raising in Sweden which was achieved
through the rights issue. The Group demonstrates
a commitment to financial stability as shown by
a year-end cash position of £4.33 million (2019:
£1.12 million), which the Board considers sufficient
for funding activities to the medium term.
iii. Exploration expenditure by project
The Company controls its exploration spend
by project versus budget and in relation to
its available cash resources. If the results of
exploration do not meet expectations, then
budgeted activities are re-evaluated or even
cancelled. Evaluation of early stage projects is
approached in a cost-effective way. The Group
determines whether there are any indicators of
impairment of its exploration assets on an annual
basis. This approach is best evidenced through the
oversight at a board level and reporting level of
operations where the Company is not the operator
decision to impair several an early stage project in
the current year, in order to preserve resources.
Non-financial:
iv. Licence renewal compliance
It is important from a risk management
perspective that the Company monitors the expiry
dates of its exploration permits. This is managed
internally for its Finnish graphite permits while, in
Sweden, the Company uses an external service
provider to report on the status of its permits and
assist with renewal applications, and in Kosovo,
works closely with Vardar management to ensure
that licences are maintained in good standing.
30
31
2020 Beowulf Mining plc Annual Report
S172 Statement
The Board of Beowulf is aware that the decisions
it makes may affect the environment and society
in which the Company operates. The Board makes
a conscious effort to understand conflicting
interests, reflect them in the choices it makes, and
create long-term success for shareholders and
stakeholders.
Due to COVID-19, overall investment and
activity levels were at a lower level during the
year, so investment decisions requiring detailed
examination of stakeholder interests were limited.
Despite the pandemic, in the case of Kallak, the
CEO maintains regular contact with the Mayor of
Jokkmokk, politicians in Norrbotten and Stockholm,
either directly or through the Company’s Public
Affairs advisers. The Chairman’s presence and
political profile in Sweden are also of benefit when
it comes to understanding the context of issues of
concern. The Company seeks to ensure it is both
sensitive and effective in its communication to and
interactions with key stakeholders and decision
makers.
During the year, our investments in Vardar were
supported by the positive way in which Vardar
has been received by the local community and
the Kosovan authorities. At this early stage,
exploration activities cause limited negative
impact on local communities and the environment,
but the Vardar team maintains a proactive
approach to engagement with stakeholders.
Engagement with our shareholders and
wider stakeholder groups plays an essential
role throughout our business. We recognise
the importance of open and transparent
communication with each of our stakeholder
groups, so that we can understand their specific
interests, and foster effective and mutually
beneficial relationships. We understand that each
stakeholder group requires a tailored engagement
approach to foster effective and mutually
beneficial relationships. We seek to maximise the
benefits to host communities in which we operate,
while minimising negative impacts to effectively
manage issues of concern. Our understanding
of stakeholders is then factored into boardroom
discussions, regarding the potential long-term
impacts of our strategic decisions on each group,
and how we might best address their needs and
concerns.
An example of the Company developing its
understanding of wider stakeholder interests
and its place in society is the ‘Big Picture’ study
for Kallak (“the Study” or “the Kallak Study”)
produced by Copenhagen Economics in 2017.
The Study built on the work carried out by
the Company and others, including the 2015
independent socio-economic study initiated by
Jokkmokks Kommun, completed by consultants
Ramböll, which in its findings concluded that
a mining development at Kallak would create
direct and indirect jobs, increase tax revenues
and slow down population decline, and the 2010
study by the Economics Unit of Luleå University
of Technology, ‘Mining Investment and Regional
Development: A Scenario-based Assessment for
Northern Sweden’.
Copenhagen Economics had previously reviewed
the attractiveness of the Swedish mining sector on
a number of parameters, including licensing and
regulation, commissioned by the Swedish Agency
for Growth Policy Analysis, part of the Government
of Sweden.
The Study demonstrated that the economic effect
of Kallak is ‘not just about a mine’. A mining
project would economically transform Jokkmokk
and support other major capital expenditure
and economic activity in the region. The Study
continues to form a basis for discussions about
Kallak’s place in the ecosystem which continues
to evolve, as renewable power in Norrbotten
is leveraged for the benefit of fossil-free steel
production.
The Company has contributed to the OECD’s work
over several years and this continues to inform
our decision making on the development path for
Kallak, engagement and benefits sharing with
stakeholders as project studies are advanced and
financial returns are better understood.
In 2019, the Company participated in the OECD’s
Rural Policy Review ‘Linking the Indigenous Sami
People with Regional Development in Sweden’
and has used this as a basis for discussions
with politicians in Norrbotten who have a vested
interest in bringing investment to the region. The
Company has also contacted groups such as
Invest in Norrbotten, Luleå Näringsliv and Luleå
Chamber of Commerce, with whom the Company
has maintained contact over recent years, and
who also seek to attract investment to the region.
32
The Board regularly reviews our principal
stakeholders and how we engage with them. The
stakeholder voice is brought into the boardroom
by the CEO’s attention to stakeholder matters or
issues and through his direct engagement with
stakeholders. The relevance of each stakeholder
group may increase or decrease depending on
the matter or issue in question, so the Board
seeks to consider the needs and priorities of each
stakeholder group during its discussions and as
part of its decision making.
While the COVID-19 pandemic interrupted in
person interactions with various stakeholders
internally and externally, the Company actively
maintained open communication channels,
and will be reintroducing in person interactions
gradually provided it is safe to do so in line with
Government guidelines and the needs of individual
attendees. The CEO was able to travel twice to
Sweden in late September, early October 2020
and visit Jokkmokk and Stockholm to meet with
local stakeholders, politicians and advisers.
Shareholders have the opportunity to discuss
issues and provide feedback at any time. Further
information is available on the Company’s website
https://beowulfmining.com/.
The CEO has previously attended the third
OECD Meeting for Mining Regions and Cities,
organised to enable knowledge sharing, with a
focus on developing policy recommendations and
standards that can help maximise the benefits
that mining can bring to a region or city.
At the meeting, learnings from past situations
and experiences, what works and what doesn’t
work, and ongoing challenges, such as gaining
acceptance by communities when it comes to
mining development and the importance of
engaging with indigenous communities, were
discussed. In addition, global trends were
presented, including the ‘Circular Economy’ and
the adoption of ‘Clean Energy’, and the impacts
that these could have on the future demand for
minerals and metals.
Throughout this Annual Report, we provide
examples of how we:
• Consider the likely consequences of long-term
decisions;
• Foster relationships with stakeholders;
• Understand our impact on our local community
and the environment; and
• Demonstrate the importance of behaving
responsibly.
This section serves as our s172 statement and
should be read in conjunction with the Strategic
Report and the Company’s Corporate Governance
Statement. Section 172 of the Companies Act
2006 requires Directors to act in a way that they
consider, in good faith, would most likely promote
the success of the Company for the benefit of its
members as a whole, considering the factors listed
in s172. The Directors continue to have regard to
the interests of the Company’s employees and
other stakeholders, including the impact of its
activities on communities, the environment and the
Company’s reputation, when making decisions.
Acting in good faith and fairly with different
interest groups, is what the Directors consider
most likely to promote the long-term success of
the Company.
32
33
2020 Beowulf Mining plc Annual Report The table below acts as our s172(1) statement by setting out the key stakeholder groups, their interests
and how Beowulf has engaged with them over the reporting period. However, given the importance of
stakeholder focus, long-term strategy and reputation, these themes are also discussed throughout this
Annual Report.
Stakeholder
Their interests
How we engage
Investors
• Sustainability
• Transparency in all communications
• ESG performance
• Ethical behaviour
• Company reputation
• Comprehensive review of
financial performance of the
business over the long-term
• Awareness of long-term
strategy and direction
• Interim and Annual Report
• Investor Relations section on the Company
website
• RNS announcements
• Option to receive RNSs directly Shareholder
circulars
• AGM
• Investor access to the CEO
Regulatory
• Compliance with regulations
• Company website
bodies
• Employee pay, conditions and
• RNS announcements
welfare
• Health and Safety
• Company reputation
• Environmental impact
• Insurance
• Interim and Annual Report
• Direct contact with regulators
• Compliance updates at Board Meetings
• Regular risk review
• Ongoing communication with the Swedish
Government
• Engagement with the Mining Inspectorate of
Sweden
• Monthly KPI’s on licence conditions compliance
34
Stakeholder
Their interests
How we engage
Environment
• Sustainability
• Transparency in ESG performance
• Biodiversity, energy, water
and waste management
• Oversight of corporate responsibility plans
• Demonstrate compliance with laws and
regulations
Community
• Sustainability
• ESG performance
• Community engagement
• Human Rights
• Participation in the OECD’s ‘Linking the
Indigenous Sami People with Regional
Development in Sweden’ project
• Engagement with the Sami reindeer herder
representatives
• Communication with Sametinget members
• Meeting with key community representatives
• Partnering with the communities in which we
operate - sharing plans/ideas for discussion
Contractors
• Terms and conditions of contract
• Anti-Bribery Policy
• Health and safety
• Whistle-blower Policy
• Human rights and modern slavery
ON BEHALF OF THE BOARD:
Mr K Budge, Director
14 May 2021
34
35
2020 Beowulf Mining plc Annual Report Report of the Directors
streams and ensuring business continuity. The
effect on the economy may impact the Group in
varying ways, which could lead to a direct bearing
on the Group’s ability to generate future cash flows
for working capital purposes. The inability to gauge
the length of such disruption further adds to this
uncertainty. For these reasons, the generation
of sufficient operating cash flows remain a risk.
Management are closely monitoring commercial
and technical aspects of the Group’s operations to
mitigate risk and is confident that the Group has
access to sufficient working capital to continue
operations for the foreseeable future.
Directors’ and Officers’
Indemnity Insurance
The Group has made qualifying third-party
indemnity provisions for the benefit of its Directors
and Officers. These were made during the period
and remain in force at the date of this report.
Further details of these agreements can be found
in the remuneration report on page 39.
Significant Shareholdings
The Directors are aware of the following interests,
directly or indirectly, in three per cent or more of the
Group’s ordinary shares as at 31 December 2020:
Shareholders
Shares
%
HSBC Global Custody
Nominee (Uk) Limited
592,321,687
71.52
Interactive Investor
Services Nominees
Limited – A/C SMKTNOMS 25,554,866
3.09
The Directors present
their report, together
with the audited financial
statements of the Group,
for the year ended 31
December 2020.
Directors
Since 1 January 2020, the following Directors have
held office:
Mr K R Budge
Mr C Davies
Mr G Färm*
Mr S O Littorin**
*Resigned from the Board on 10th November 2020
**Appointed to the Board on 10th November 2020
Dividends
No dividends will be distributed for the year ended
31 December 2020 (2019: Nil).
Going Concern
At 31 December 2020, the Group had a cash
balance of £4.33 million and the Company had a
cash balance of £4.24 million. During the year, the
Company has raised £7.4 million (before expenses)
cumulatively through a successful capital raise.
Management have prepared cash flow forecasts
to demonstrate that they are confident that they
are taking all necessary steps to ensure that
the Group has the required cash to pursue it
strategic objectives, an assertion supported by
the significant equity finance raised prior to year
end. They have therefore concluded that it is
appropriate to prepare the financial statements on
a going concern basis.
Management implemented logistical and
organisational changes to underpin the Group’s
resilience to the impact felt by the COVID-19
pandemic, with the key focus being protecting all
personnel, minimising the impact on critical work
36
Authority to Issue Shares
Each year at the AGM the Directors seek authority to
allot ordinary shares. The authority, when granted,
lasts until the next AGM (unless renewed, varied
or revoked by the Company prior to, or on, such
date). At the AGM held on 10 September 2020, the
Directors were granted authority to allot ordinary
shares generally up to an aggregate nominal value
of £4,000,000, and authority to allot ordinary
shares for cash on a non-pre-emptive basis up to
an aggregate nominal value of £4,000,000 (2019:
£1,471,598).
Significant Agreements
The Companies Act 2006 requires the Company
to disclose any significant agreements which take
effect, alter or terminate upon a change of control
of the Company. The Company is not aware of, or
party to, any such agreement.
Events After The
Reporting Period
Information relating to events since the end of the
year is given in Note 24 to the financial statements.
Financial Risk
Management
Objectives and Policies
Financial risk management policies and objectives
for capital management are provided within Note 23
to the financial statements.
Future Developments
Within the Business
Beowulf’s strategy 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 ongoing need for
minerals, metals and economic prosperity.
Beowulf is developing a high-quality asset base,
which is diversified by geography and commodity,
enabling it to simultaneously advance several
projects up the mining value curve and create
shareholder value.
Additionally, the Board of Directors continues
to look beyond the Company for value creation
opportunities.
The Company’s first priority remains the award
of the Exploitation Concession for Kallak North,
and thereafter completing the Scoping Study. The
introduction of a strategic partner/investor who
understands the value of Kallak as a high-quality
asset, which could be in production within four to
five years, is an ongoing consideration, but does not
preclude the Company from continuing to add value
to Kallak in the meantime.
Fennoscandian, the Company’s graphite business,
is pursuing a strategy to develop a ‘resource
footprint’ of natural flake graphite prospects that
can provide ‘security of supply’ and enable Finland
to achieve its ambition of self-sufficiency in battery
manufacturing. The Company is a recipient of
Business Finland funding, which is supporting
Fennoscandian to move downstream, and develop
its know-how in processing and manufacturing
value-added graphite products.
The Company’s investment in Vardar Minerals
provides diversification, in geography and
commodity exposure, to prospective exploration
opportunities in the Balkan region in Kosovo.
Mitrovica and Viti projects are both located within
the Tethyan Belt, a major orogenic metallogenic
province for gold and base metals which extends
from the Alps (Carpathians/Balkans) to Turkey, Iran
and Indochina, and contains several world class
discoveries. The Tethyan Belt of south-east Europe
can be regarded as Europe’s chief copper-gold
(lead-zinc-silver) province.
The Company’s investment priorities across its
portfolio remain subject to funding being available.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose,
with reasonable accuracy, at any time the financial
position of the Company and enable them to ensure
that the financial statements comply with the
requirements of the Companies Act 2006. They are
also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps
for the prevention and detection of fraud and other
irregularities.
36
37
2020 Beowulf Mining plc Annual Report
Website Publication
The Directors are responsible for ensuring the
annual report and financial statements are made
available on a website. Financial statements are
published on the Company’s website in accordance
with legislation in the United Kingdom governing
the preparation and dissemination of financial
statements, which may vary from legislation in
other jurisdictions. The maintenance and integrity
of the Company’s website is the responsibility of the
Directors. The Directors’ responsibility also extends
to the ongoing integrity of the financial statements
contained therein.
Directors’ Responsibilities
Statement
The Directors are responsible for preparing the
strategic report, directors’ report, annual report
and the financial statements in accordance with
applicable laws and regulations.
Company law requires the Directors to prepare
financial statements for each financial year. Under
that law the Directors have elected to prepare
the Group and Company financial statements in
accordance with International Financial Reporting
Standards (“IFRSs”) as applied in accordance with
the provisions of the Companies Act 2006. Under
company law the Directors must not approve the
financial statements unless they are satisfied that
they give a true and fair view of the state of affairs
of the Group and Company and of the profit or
loss of the Group for that year. The Directors are
also required to prepare financial statements in
accordance with the rules of the London Stock
Exchange for companies trading securities on the
AIM and the rules of the Spotlight Exchange in
Sweden.
38
In preparing these financial statements, the
Directors are required to:
• select suitable accounting policies and then apply
them consistently;
• make judgements and accounting estimates that
are reasonable and prudent;
• state whether they have been prepared in
accordance with IFRSs as applied in accordance
with the provisions of the Companies Act 2006,
subject to any material departures disclosed and
explained in the financial statements; and
• prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the Company will continue in business.
Statement as to Disclosure
of Information to Auditors
So far as the Directors are aware, there is no
relevant audit information (as defined by Section
418 of the Companies Act 2006) of which the
Group’s auditors are unaware, and each Director
has taken all the steps that they ought to have taken
as a Director in order to make themselves aware of
any relevant audit information and to establish that
the Group’s auditors are aware of that information.
Auditor
BDO LLP have expressed their willingness to
continue in office and a resolution to re-appoint
them will be proposed at the Group’s forthcoming
Annual General Meeting.
Annual General Meeting
The Notice of Meeting including details of the
proposed resolutions will be posted to shareholders
in due course and will appear on the Company’s
website.
ON BEHALF OF THE BOARD:
Mr K Budge
Director
14 May 2021
Remuneration Report
Indemnity Agreements
Pursuant to the Companies Act 2006 and the
Company’s articles of association, the Board
may exercise the powers of the Company to
indemnify its Directors against certain liabilities,
and to provide its Directors with funds to meet
expenditure incurred, or to be incurred, in defending
certain legal proceedings or in connection with
certain applications to the court. In exercise of that
power, and by resolution of the Board on 26 July
2016, the Company has agreed to enter into this
Deed of Indemnity with each Director.
The Directors have chosen to voluntarily present
an unaudited remuneration report although is
not required by the Companies Act 2006. Details
of the Remuneration Committee’s composition
and responsibilities are set out in the Corporate
Governance Report on page 43 and its terms of
reference can be found on the Group’s website:
beowulfmining.com
Executive Directors’ terms
of engagement
Mr Budge is the sole Executive Director and Chief
Executive Officer. His annual salary is £150,000. Mr
Budge has a notice period of 12 months..
Non-Executive Directors’
terms of engagement
The Non-Executive Directors have specific terms of
engagement under a letter of appointment. Their
remuneration is determined by the Board. In the
event that a Non-Executive Director undertakes
additional assignments or work for the Company,
this is covered under a separate consultancy
agreement.
Mr Davies annual fee is £31,000 per annum. Mr
Davies has a consultancy agreement with the
Company for the provision of exploration advice
over and above his Non-Executive duties. Mr
Davies has a one month notice period under his
letter of appointment.
Mr Färm was appointed as Non-Executive
Chairman on 30 October 2017. Under Mr Färm’s
letter of appointment, he was paid an equivalent
fee in Swedish Krona of £33,975 per annum. Mr
Färm had a one month notice period under his
letter of appointment. Mr Färm resigned on 10
November 2020.
Mr Littorin was appointed as Non-Executive
Director on 10 November 2020. Under Mr Littorin’s
letter of appointment, he is paid a fee in Swedish
Krona of 450,000 per annum. Mr Littorin has a
notice period of one month under his letter of
appointment.
38
39
2020 Beowulf Mining plc Annual Report Aggregate Directors’ Remuneration
The remuneration paid to the Directors in accordance with their agreements, during the years ended 31
December 2020 and 31 December 2019, was as follows:
Name
Position
Salary Benefits2
& Fees1
£
£
Pension3
£
2020
Total
£
2019
Total
£
Mr K R Budge
Chief Executive Officer
150,000
874
13,000
163,874
215,434
Mr C Davies
Non-Executive Director
31,000
Mr G Färm
Non-Executive Chairman
25,193
Mr S O Littorin
Non-Executive Director
6,654
-
-
-
-
-
-
31,000
76,954
25,193
49,956
6,654
-
Total
Notes:
212,847
874
13,000
226,721
341,975
(1) Does not include expenses reimbursed to the Directors.
(2) Personal life insurance policy
(3) Employer contributions to personal pension.
Each Director is also paid all reasonable expenses incurred wholly, necessarily, and exclusively in the proper
performance of his duties.
The beneficial and other interests of the Directors holding office on 31 December 2020 in the issued share capital of the
Company were as follows:
ORDINARY SHARES
31 December 2020
31 December 2019
Mr K R Budge
Chris Davies
3,322,585
88,800
2,416,426
-
As at 31 December 2020, all options have vested.
ORDINARY SHARES
UNDER OPTION
Mr K R Budge
Mr K R Budge
Mr C Davies
Mr C Davies
NUMBER
9,000,000
3,500,000
2,500,000
2,500,000
As at 31 December 2019, all options have vested.
ORDINARY SHARES
UNDER OPTION
Mr K R Budge
Mr K R Budge
Mr C Davies
Mr C Davies
NUMBER
9,000,000
3,500,000
2,500,000
2,500,000
ON BEHALF OF THE REMUNERATION COMMITTEE
Sven Otto Littorin, Non-Executive Chairman
14 May 2021
40
EXERCISE
PRICE
1.66 pence
7.35 pence
12 pence
7.35 pence
EXERCISE
PRICE
1.66 pence
7.35 pence
12 pence
7.35 pence
EXPIRY DATE
17 July 2021
14 January 2024
26 January 2022
14 January 2024
EXPIRY DATE
17 July 2020
14 January 2024
26 January 2022
14 January 2024
Corporate Governance Report
It is the responsibility of the Chairman of the
Board of Directors of the Company to ensure that
the Group has both sound corporate governance
and an effective Board. The Chairman’s principal
responsibilities are to ensure that the Group
and the Board are acting in the best interests of
shareholders, and by making sure that the Board
discharges its responsibilities appropriately. This
includes creating the right Board dynamic and
ensuring that all important matters and strategic
decisions receive adequate time and attention at
Board meetings.
The Company formally adopted the Quoted
Companies Alliance Corporate Governance (“QCA
Code”) in September 2018. This report follows the
QCA Code guidelines and explains how we have
applied the guidance. The Board considers that
the Group complies with the QCA Code so far as
it is practicable having regard to the size, nature
and current stage of development of the Company.
The Board recognises that the Company does not
fully comply with the 10 principles and general
provisions of the QCA Code but does use it as a
benchmark in assessing its corporate governance
standards. Areas of non-compliance are disclosed
in the text below. Details of the Company’s
compliance with the QCA code can be found below
and in the Corporate Governance section of the
Company’s website https://beowulfmining.com/
wp-content/uploads/2021/05/Beowulf-QCA-
Code-Chairs-Statement-2021.pdf
The Board believes that application of the QCA
Code supports the Company’s medium to long-
term development whilst managing risks, as
well as providing an underlying framework of
commitment and transparent communications
with stakeholders. It also seeks to develop the
knowledge shared between the Company and its
stakeholders.
Strategy, Risk
Management and
Responsibility
A description of the Company’s business model
and strategy can be found on page 4, and the
key challenges in their execution can be found on
pages 28 to 30.
The Board is responsible for the monitoring of
financial performance against budget and forecast
and the formulation of the Group’s risk appetite
including the identification, assessment and
monitoring of the Company’s principal risks. The
Audit Committee (see page 43) has delegated
responsibility for the oversight of the Company’s
risk management and internal controls and
procedures and for determining the adequacy and
efficiency of internal control and risk management
systems. The Board continuously monitors and
upgrades its internal control procedures and risk
management mechanisms and conducts an annual
review, when it assesses both for effectiveness.
This process enables the Board to determine if the
risk exposure has changed during the year and
these disclosures are included on pages 28 to 30.
In setting and implementing the Company’s
strategies, the Board, having identified the risks,
seeks to limit the extent of the Company’s exposure
to them having regard to both its risk tolerance and
risk appetite.
Directors
The Board comprises the Independent Non-
Executive Chairman, Sven Otto Littorin, who was
appointed to the Board in November 2020, the
CEO, Kurt Budge, and the other Independent
Non-Executive Director, Chris Davies. The size
and composition of the Board is matched to the
complexity of the business and its strategy.
Chris Davies holds 88,800 Ordinary Shares and
holds 5,000,000 options over Ordinary Shares.
Chris Davies entered into a consultancy agreement
with the Company in 2017. The agreement
compensates Chris Davies for the support that
he gives, beyond his role as an Independent
Non-Executive Director, where the Company is
undertaking M&A due diligence and where a
review of exploration activities is required. In Board
meetings, Chris Davies frequently challenges the
CEO on matters, issues and proposed courses of
action and maintains an independent perspective.
The level of compensation Chris Davies received
under the consultancy agreement during the period
under review is not material.
40
41
2020 Beowulf Mining plc Annual Report Neither Chris Davies nor the other Directors believe his options or consultancy agreement are significant in
assessing his independence.
All Directors are encouraged to challenge and to bring independent judgement to bear on all matters, both
strategic and operational. Biographical details of the Directors can be found on the Group’s website https://
beowulfmining.com/.
Both the Independent Non-Executive Chairman, Sven Otto Littorin, and the other Independent Non-Executive
Director, Chris Davies, dedicate approximately between two to four days per month to the Group’s business.
Key governance matters that occurred during the year include the appointment of Sven Otto Littorin as
Independent Non-Executive Chairman and the resignation of Göran Färm on 10 November 2020.
The Board is satisfied that each of the Directors are able to allocate sufficient time to the Group to discharge
their responsibilities effectively. The number of scheduled meetings of the Board together with the attendance
record of each Director for the year ended 31 December 2020 is outlined below:
Attendance by Directors
Board
(5 Meetings held)
Mr K R Budge
Mr C Davies
Mr G Farm*
Mr S O Littorin**
5
5
3
-
The Directors believe that the Board, as a whole,
has a broad range of commercial and professional
skills, enabling it to discharge its duties and
responsibilities effectively and that the Non-
Executive Directors have a sufficient range of
experience and skills to enable them to provide
the necessary guidance, oversight and advice for
the Board to operate effectively. All Directors are
encouraged to use their independent judgement
and to challenge all matters, whether strategic or
operational.
The Board annually reviews the appropriateness
and opportunity for continuing professional
development, whether formal or informal. The
Directors also endeavour to ensure that their
knowledge of best practices and regulatory
developments is continually up to date by attending
relevant seminars and conferences.
The Directors consider that the Company and
Board are not yet of a sufficient size for a full Board
evaluation to make commercial and practical sense.
Therefore, the Board accepts that the Company
does not comply with this aspect of the QCA Code,
although in the frequent Board meetings/calls, the
Directors can discuss any areas where they feel a
change would be beneficial for the Company, and
the Company Secretary remains on hand to provide
42
* Resigned from the Company on 10 November
2020
** Joined the Board on 10 November 2020
impartial advice. As the Company grows, it intends
to expand the Board and, with expansion, re-
consider the need for a formal Board evaluation.
Advisers
ONE Advisory Limited has been contracted by
the Company to act as Company Secretary and
has been given the responsibility for ensuring
that Board procedures are followed and that
the Company complies with all applicable rules,
regulations and obligations governing its operation,
including assistance with Board and shareholder
meetings and Market Abuse Regulations (“MAR”)
compliance. ONE Advisory Limited also supports
the Board in its development of the Company’s
corporate governance responsibilities, assisting with
the Company’s application of the QCA Code and
amendments in relation to AIM Rule 26.
The Company’s Nomad is consulted on all matters
and all Directors have access to independent
professional advice, if required.
Neither the Board nor its Committees have sought
external advice on a significant matter.
Culture
The Board recognises that its decisions regarding
strategy and risk will impact the corporate culture
of the Company as a whole and that this will
impact the performance of the Company. The
Directors are also aware that the tone and culture
set by the Board will greatly affect all aspects
of the Company. The corporate governance
arrangements that the Board has adopted are
designed to ensure that the Company delivers
long-term value to its shareholders, and that
shareholders have the opportunity to express
their views and expectations for the Company
in a manner that encourages open dialogue
with the Board. The Company seeks to provide
effective communication through Interim and
Annual Reports, along with Regulatory News
Service announcements and trading updates on
the Company’s website, www.beowulfmining.com.
Shareholders can also sign up to receive news
releases directly from Beowulf by email. Beowulf
also maintains a dialogue with shareholders
through formal meetings such as the AGM, which
provides an opportunity to meet, listen and present
to shareholders, other than when COVID-19
restrictions prohibit this. The Company is open to
receiving feedback from key stakeholders, and will
take action where appropriate. They key contact
for shareholder liaison is the CEO, Kurt Budge.
Information on the Investor Relations section of
the Group’s website (www.beowulfmining.com)
is kept updated and contains details of relevant
developments, presentations and other key
information.
A large part of the Company’s activities is centred
upon an open and respectful dialogue with
shareholders, contractors, regulators and other
stakeholders. Therefore, the importance of sound
ethical values and behaviours is crucial to the
ability of the Company to successfully achieve
its corporate objectives. The Board places great
importance on this aspect of corporate life and
seeks to ensure that this flows through all that the
Company does.
The Directors consider that at present the
Company has an open culture facilitating
comprehensive dialogue and feedback and
enabling positive and constructive challenge.
The Company has close ongoing relationships with
a broad range of its stakeholders such as local
tribes and adjacent landowners and provides them
with the opportunity to raise issues and provide
feedback to the Company. The Company works
closely with the communities in which it operates,
sharing its plans and ideas for the projects being
developed, and listening to any concerns and
addressing any issues raised. Beowulf remains
firmly committed to the responsible development
of a modern, sustainable and innovative mining
operation in partnership with the local community.
Audit Committee
The Audit Committee comprises Chris Davies and
Sven Otto Littorin, who chairs the Committee. The
Audit Committee is responsible for ensuring that
the financial performance, position and prospects
of the Group are properly monitored and reported
on and for meeting the auditor and reviewing
audit reports relating to the accounts. The
Audit Committee meet as and when required, at
appropriate times in the reporting and audit cycle.
The Audit Committee is required to report formally
to the Board on its proceedings after each meeting
on all matters for which it has responsibility.
The Board notes that additional information
supplied by the Audit Committee has been
disseminated across the whole of this Annual
Report, rather than included as a separate
Committee Report.
Remuneration
Committee
The Remuneration Committee comprises Chris
Davies and Sven Otto Littorin, who chairs the
Committee, and meets as required. The Committee
is responsible for the review and recommendation
of the scale and structure of remuneration
for senior management, including any bonus
arrangements or the award of share options with
due regard to the interests of shareholders and
the performance of the Company. A Remuneration
Committee Report is included on page 39.
42
43
2020 Beowulf Mining plc Annual Report Independent Auditor’s Report
Opinion on the financial
statements
In our opinion:
• the financial statements give a true and fair view
of the state of the Group’s and of the Parent
Company’s affairs as at 31 December 2020 and
of the Group’s loss for the year then ended;
• the Group financial statements have been
properly prepared in accordance with
International Accounting Standards in conformity
with the requirements of the Companies Act
2006;
• the Parent Company financial statements have
been properly prepared in accordance with
International Accounting Standards and as
applied in accordance with the provisions of the
Companies Act 2006 ; and
• the financial statements have been prepared
in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements of
Beowulf Mining Plc (the ‘Parent Company’) and
its subsidiaries (the ‘Group’) for the year ended 31
December 2020 which comprise the consolidated
income statement, the consolidated statement of
comprehensive income, the consolidated statement
of financial position, the Company statement of
financial position, the consolidated statement
of changes in equity, the Company statement of
changes in equity, the consolidated statement
of cash flows, the Company statement of cash
flows and the notes to the financial statements
including a summary of significant accounting
policies. The financial reporting framework that
has been applied in the preparation of the financial
statements is applicable law and International
Accounting Standards in conformity with the
requirements of the Companies Act 2006 and, as
regards the Parent Company financial statements,
as applied in accordance with the provisions of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under
those standards are further described in the
Auditor’s responsibilities for the audit of the
financial statements section of our report. We
believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our
opinion.
Independence
We remain independent of the Group and the
Parent Company in accordance with the ethical
requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities, and
we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Conclusions relating to
going concern
In auditing the financial statements, we have
concluded that the Directors’ use of the going
concern basis of accounting in the preparation
of the financial statements is appropriate. Our
evaluation of the Directors’ assessment of the
Group and the Parent Company’s ability to
continue to adopt the going concern basis of
accounting included:
• Obtaining, challenging and assessing the Group
and Parent Company’s base case cash flow
forecasts and underlying assumptions which
have been approved by the Board.
• Reviewing licence agreements to confirm that
committed expenditure is appropriately included
in forecasts.
• Obtaining, reviewing and challenging
Management’s reverse stress testing analysis
to determine the point at which cash becomes
negative and considered whether such scenarios,
including significant increases in supplier costs
and exploration expenditures were reasonably
possible given the level of financing obtained
during the year, the potential impacts of Covid-19
44
and the present level of uncertainty. This included
considering the Group’s experience of the
pandemic to date and the extent and likelihood of
any future events required to break liquidity.
• Reviewing and considering the adequacy of the
disclosure within the financial statements relating
to the Directors’ assessment of the going concern
basis of preparation.
Based on the work we have performed, we have
not identified any material uncertainties relating to
events or conditions that, individually or collectively,
may cast significant doubt on the Group and the
Parent Company’s ability to continue as a going
concern for a period of at least twelve months from
when the financial statements are authorised for
issue.
Our responsibilities and the responsibilities of
the Directors with respect to going concern are
described in the relevant sections of this report.
• Discussing and seeking views from the Directors
on the potential impacts of Covid-19 including
their assessment of risks and uncertainties
relating to the Group’s operations and geographic
bases.
• Comparing the Group’s actual results for the year
ended 31 December 2020 to the planned budget
for 2020 to assess the quality of Management’s
budgetary process.
• Performing retrospective analysis on the planned
capital expenditure and forecast operating and
exploration cash expenditure included, in the prior
year going concern assessment, to 2020 actuals.
• Reviewing and assessing funding assumptions
in the going concern model. We agreed a sample
of recent share issuances to underlying source
documentation such as bank receipts and share
certificates.
Overview
Coverage
64% (2019: 75%) of Group loss before tax
48% (2019: 31%) of Group total assets
Key audit matters
Carrying value of exploration asset
Accounting treatment and consolidation
of Vardar Minerals Limited
2020
N/A
2019
Materiality
Group financial statements as a whole
£180,000 (2019: £171,000) based on 1.5%
(2019: 1.5%) of total assets.
Parent company standalone financial statements
£135,000 (2019: £132,000) capped at 75%
of Group materiality (2019: capped at 75%
of Group materiality).
44
45
2020 Beowulf Mining plc Annual Report
• Being actively involved, as a Group team, in
the direction and supervision of the Swedish
component audit performed by the Swedish
component auditor and ensuring that as a Group
team we were involved in the finalisation of audit
findings and the determination of conclusions
drawn.
• Reviewing the Swedish component auditor’s
work papers remotely, and attending clearance
meetings for the Swedish component.
• Performing additional work on the area
considered to be a key audit matter at Group
level.
Key audit matters
Key audit matters are those matters that, in our
professional judgement, were of most significance
in our audit of the financial statements of the
current period and include the most significant
assessed risks of material misstatement (whether
or not due to fraud) that we identified, including
those which had the greatest effect on the overall
audit strategy, the allocation of resources in the
audit, and directing the efforts of the engagement
team. These matters were addressed in the context
of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. We
have determined the matter described below to
be the key audit matter to be communicated in our
report.
An overview of the scope
of our audit
Our Group audit was scoped by obtaining an
understanding of the Group and its environment,
including the Group’s system of internal control,
and assessing the risks of material misstatement
in the financial statements. We also addressed the
risk of management override of internal controls,
including assessing whether there was evidence of
bias by the Directors that may have represented a
risk of material misstatement.
We determined that there were three significant
components and all of these were subject to a full
scope audit (one in Sweden, one in Kosovo and the
Parent Company).
The audit of the Swedish significant component
was performed in Sweden by a local audit firm. The
audit of the Kosovan significant component, the
Parent Company and the Group consolidation were
performed in the United Kingdom by the Group
audit team. The Group audit team performed
additional procedures in respect of certain of the
significant risk areas that represented Key Audit
Matters in addition to procedures performed by the
Swedish component auditor.
The remaining components of the Group were
considered non-significant and these components
were principally subject to analytical review
procedures performed by the Group audit team.
Our involvement with component auditors
For the work performed by the Swedish component
auditor, we determined the level of involvement
needed in order to be able to conclude whether
sufficient appropriate audit evidence has been
obtained as a basis for our opinion on the Group
financial statements as a whole. Our work on and
interactions with the Swedish component auditors
included the following:
• Providing detailed Group reporting instructions to
the Swedish component auditor, which included
the significant areas to be covered by the audit
(including areas that were considered to be a key
audit matter as detailed above). The instructions
also set out the information to be reported to the
Group audit team.
46
Key Audit
Matter
Carrying value of exploration assets (Please refer to Note 7)
The Group’s total exploration assets at 31 December 2020 were £11.4m (2019:
£10m). This class of asset is the most significant to the statement of financial
position. Due to the judgements required in assessing potential triggers for
impairment this is considered to be a key audit matter.
Management have assessed exploration & evaluation assets for impairment triggers
under IFRS 6 and concluded that no triggers existed at the year-end.
How the scope of our audit addressed the key audit matter
Our work in connection with the indicators of impairment assessment included the
following:
• Performing a review of Management’s assessment of impairment triggers for
exploration assets under IFRS 6.
• Verifying a sample of capitalised costs to source documentation such as invoice
or supplier contracts and assessing the nature of the costs capitalised under the
accounting policy to evaluate whether they met the capitalisation criteria under
IFRS 6 and evidence intention to spend on the assets.
• Holding discussions with Management and reviewing relevant correspondence
with the Swedish licencing authorities around the status of the Kallak exploitation
concession award.
• For the other licences reviewing correspondence with the Finnish, Kosovan and
Swedish licencing authorities to determine whether there are any indications that
licences have not been kept in good standing during the period under review and
therefore whether there is a risk of the licences not being renewed.
• Reviewing disclosures made by management in the financial statements and
annual report in respect of the uncertainties relating to the award of the Kallak
concession.
Key observations:
Based on the work performed nothing has come to our attention which suggests that
there are unidentified triggers for impairment not considered by Management.
46
47
2020 Beowulf Mining plc Annual Report Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the
effect of misstatements. We consider materiality to be the magnitude by which misstatements, including
omissions, could influence the economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality,
we use a lower materiality level, performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we
also take account of the nature of identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole
and performance materiality as follows:
Group financial statements
Parent company financial statements
2020
2019
2020
2019
Materiality
£180,000
£171,000
£135,000
£132,000
1.5% of total assets
Restricted to 75% of Group materiality
Restricted at 75% (2019: 75%)
of Group materiality given the
assessment of the components’
aggregation risk.
Total Assets was determined
as an appropriate basis as the
principal focus of the Group,
remains fundamentally focussed
on exploration activities in Sweden,
Finland and Kosovo and as such
total assets are considered to be
the most significant determinant
of the Group’s performance
considered by users of the financial
statements.
£135,000
£128,000
£101,000
£90,000
Performance materiality was set
at 75% of the above materiality
level reflecting our understanding
gained from previous years’
audits and considering the level
of adjustments arising in the prior
year audit.
Performance materiality was set
at 75% of the above materiality
level reflecting our understanding
gained from previous years’
audits and considering the level
of adjustments arising in the prior
year audit.
Basis for
determining
materiality
Rationale for
the
benchmark
applied
Performance
materiality
Basis for
determining
performance
materiality
48
Component materiality
We set materiality for each component of the
Group from £35,000 to £110,000 dependent
on the size and our assessment of the risk
of material misstatement of that component
(based on either 75% of Group materiality
or 1.5% of total assets). In the audit of each
component, we further applied performance
materiality levels of 75% of the component
materiality to our testing to ensure that the
risk of errors exceeding component materiality
was appropriately mitigated and to sufficiently
address aggregation risk.
Reporting threshold
We agreed with the Audit Committee that
we would report to them all individual audit
differences in excess of £3,600 (2019: £3,200).
We also agreed to report differences below this
threshold that, in our view, warranted reporting
on qualitative grounds.
Other information
The directors are responsible for the other
information. The other information comprises
the information included in the annual report
other than the financial statements and our
auditor’s report thereon. Our opinion on the
financial statements does not cover the other
information and, except to the extent otherwise
explicitly stated in our report, we do not express
any form of assurance conclusion thereon. Our
responsibility is to read the other information
and, in doing so, consider whether the other
information is materially inconsistent with the
financial statements or our knowledge obtained
in the course of the audit, or otherwise appears
to be materially misstated. If we identify
such material inconsistencies or apparent
material misstatements, we are required to
determine whether this gives rise to a material
misstatement in the financial statements
themselves. If, based on the work we have
performed, we conclude that there is a material
misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
48
2020 Beowulf Mining plc Annual Report
49
49
2020 Beowulf Mining plc Annual Report Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit,
we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as
described below.
Strategic report
and Directors’ report
In our opinion, based on the work undertaken in the course of the audit
• the information given in the Strategic report and the Directors’ report
for the financial year for which the financial statements are prepared is
consistent with the financial statements, and
• the Strategic report and the Directors’ report have been prepared in
accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent
Company and its environment obtained in the course of the audit, we
have not identified material misstatements in the strategic report or the
Directors’ report.
Matters on which we
are required to report
by exception
We have nothing to report in respect of the following matters in relation
to which the Companies Act 2006 requires us to report to you if, in our
opinion:
• adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
• the Parent Company financial statements are not in agreement with the
accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not
made; or
• we have not received all the information and explanations we require
for our audit.
Responsibilities of
Directors
As explained more fully in the Report of the
Directors the Directors are responsible for the
preparation of the financial statements and for
being satisfied that they give a true and fair view,
and for such internal control as the Directors
determine is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors
are responsible for assessing the Group’s and the
Parent Company’s ability to continue as a going
concern, disclosing, as applicable, matters related
to going concern and using the going concern basis
of accounting unless the Directors either intend to
liquidate the Group or the Parent Company or to
cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities
for the audit of the
financial statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee
50
that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud
or error and are considered material if, individually
or in the aggregate, they could reasonably be
expected to influence the economic decisions
of users taken on the basis of these financial
statements.
Extent to which the audit was capable of
detecting irregularities, including fraud
Irregularities, including fraud, are instances of
non-compliance with laws and regulations. We
design procedures in line with our responsibilities,
outlined above, to detect material misstatements in
respect of irregularities, including fraud. The extent
to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
We obtained an understanding of the legal and
regulatory framework applicable to the Group. We
considered the associated mining, environmental
and taxation laws and regulations of Sweden
to be the most relevant to the audit given the
Geographical areas of focus of the Group.
We assessed compliance with these laws and
regulations through:
• Discussion with the management;
• Testing the financial statement disclosures to
supporting documentation;
• Making enquiries of Management as to whether
there was any correspondence from regulators
in so far as the correspondence related to the
Financial Statements.
• Reviewing correspondence relating to the status
of the Kallak licence application.
• Ensuring that the Swedish component auditor
involved tax specialists from their local to
evaluate the component’s compliance with
relevant local tax legislation considered of most
significance to the Group’s operations.
We assessed the susceptibility of the financial
statements to material misstatement, including
fraud and considered areas of the financial
statements subject to elevated potential fraud
risks.
Our procedures included:
• Addressing the risk of management override of
controls by performing targeted journal entry
testing based on identified characteristics the
audit team considered could be indicative of
fraud, for example unusual journal entries to
exploration assets and cash.
• Assessing areas of the financial statements
which include judgment and estimates, as set out
in note 1 to the financial statements and in the
key audit matters noted above.
• Testing consolidation entries to confirm their
validity.
• Obtaining an understanding of the laws and
regulations applicable to the Group.
Our audit procedures were designed to
respond to risks of material misstatement in the
financial statements, recognising that the risk
of not detecting a material misstatement due
to fraud is higher than the risk of not detecting
one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There
are inherent limitations in the audit procedures
performed and the further removed non-
compliance with laws and regulations is from the
events and transactions reflected in the financial
statements, the less likely we are to become aware
of it.
A further description of our responsibilities
is available on the Financial Reporting
Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms
part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s
members, as a body, in accordance with Chapter
3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might
state to the Parent Company’s members those
matters we are required to state to them in an
auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than
the Parent Company and the Parent Company’s
members as a body, for our audit work, for this
report, or for the opinions we have formed.
Anne Sayers (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
14 May 2021
BDO LLP is a limited liability partnership registered
in England and Wales (with registered number
OC305127).
50
51
2020 Beowulf Mining plc Annual Report Consolidated Income Statement
CONTINUING OPERATIONS
Administrative expenses
Impairment of exploration costs
Share based payment expense
Gain on step acquisition
OPERATING LOSS
Finance costs
Finance income
Grant income
LOSS BEFORE TAX
Tax expense
LOSS FOR THE YEAR
Loss attributable to:
Owners of the parent
Non-controlling interests
Note
2020
£
2019
£
(1,005,547)
(904,666)
(98,799)
(10,720)
-
-
(119,720)
563,431
(1,104,346)
(471,675)
(203,576)
594
(410)
6,298
12,637
37,080
(1,294,691)
(428,707)
-
-
(1,294,691)
(428,707)
9
3
3
5
(1,128,512)
(267,000)
14
(166,179)
(161,707)
(1,294,691)
(428,707)
Loss per share attributable to the ordinary equity holder of the parent:
Basic and diluted (pence)
6
(0.19)
(0.04)
The notes on pages 62 to 100 form part of these financial statements
52
Consolidated Statement of Comprehensive Income
Note
2020
£
2019
£
LOSS FOR THE YEAR
(1,294,691)
(428,707)
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss:
Exchange losses arising on translation of foreign operations
854,020
(794,299)
TOTAL COMPREHENSIVE LOSS
(440,671)
(1,223,006)
854,020
(794,299)
Total comprehensive loss attributable to:
Owners of the parent
Non-controlling interests
(294,716)
(1,037,811)
14
(145,955)
(185,195)
(440,671)
(1,223,006)
52
53
The notes on pages 62 to 100 form part of these financial statements
2020 Beowulf Mining plc Annual Report
Consolidated Statement of Financial Position
Note
2020
£
2019
£
ASSETS
NON-CURRENT ASSETS
Intangible assets
Property, plant and equipment
Loans and other financial assets
Right-of-use asset
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY
SHAREHOLDERS’ EQUITY
Share capital
Share premium
Capital contribution reserve
Share based payment reserve
Merger reserve
Translation reserve
Accumulated losses
Non-controlling interests
TOTAL EQUITY
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Grant Income
Lease liability
TOTAL LIABILITIES
7
8
10
11
12
13
15
17
17
17
17
17
17
14
18
19
20
11,371,916 10,011,494
86,998
5,212
7,324
145,094
5,468
1,937
11,524,415 10,111,028
1,566,848
4,329,414
167,261
1,124,062
5,896,262
1,291,323
17,420,677 11,402,351
8,281,751
6,022,446
24,684,737 20,824,009
46,451
732,185
137,700
(1,291,068)
(17,083,185) (15,781,161)
46,451
732,185
137,700
(457,272)
16,342,367 10,690,562
394,113
326,555
16,736,480 11,017,117
538,772
143,399
2,026
242,885
134,877
7,472
684,197
385,234
TOTAL EQUITY AND LIABILITIES
17,420,677 11,402,351
The financial statements were approved and authorised for issue by the Board of Directors on 14 May 2021 and
were signed on its behalf by: Mr K Budge - Director Company Number 02330496
The notes on pages 62 to 100 form part of these financial statements
54
Company Statement of Financial Position
ASSETS
NON-CURRENT ASSETS
Investments
Loans and other financial assets
Office Equipment
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY
SHAREHOLDERS’ EQUITY
Share capital
Share premium
Capital contribution reserve
Share based payment reserve
Merger reserve
Accumulated losses
TOTAL EQUITY
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Grant income
TOTAL LIABILITIES
Note
2020
£
2019
£
9
10
12
13
15
17
17
17
17
17
18
19
2,077,988
1,697,988
9,341,315
8,989,451
1,483
-
11,420,786
10,687,439
1,476,755
23,260
4,241,426
978,514
5,718,181
1,001,774
17,138,967
11,689,213
8,281,751
6,022,446
24,684,737
20,824,009
46,451
732,185
137,700
46,451
732,185
137,700
(17,168,118)
(16,298,859)
16,714,706
11,463,932
280,862
143,399
90,404
134,877
424,261
225,281
TOTAL EQUITY AND LIABILITIES
17,138,967
11,689,213
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent Company is not
presented as part of these financial statements. The parent Company’s loss for the financial year was £869,259
(2019: Loss £763,430).
These financial statements were approved and authorised for issue by the Board of Directors on 14 May 2021 and
were signed on its behalf by:
Mr K Budge - Director
Company Number 02330496
The notes on pages 62 to 100 form part of these financial statements
54
55
2020 Beowulf Mining plc Annual Report
Consolidated Statement of Changes in Equity
Note
Share
capital
Share
premium
Merger
reserve
£
£
£
Capital
contribution
reserve
£
Share based
Translation
Accumulated
Totals
Non-
Totals
payments
reserve
losses
controlling
interest
£
£
£
AT 1 JANUARY 2019
5,663,072
19,266,271
137,700
46,451
612,465
(520,257)
(15,311,933)
9,893,769
(160,587)
9,733,182
Loss for the year
Foreign exchange translation
Total comprehensive income
-
-
-
-
-
-
TRANSACTIONS WITH OWNERS
Issue of share capital
357,707
1,642,293
Cost of issue
Share based payment expense
Issues of shares
-
1,667
-
(93,305)
8,750
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
AT 31 DECEMBER 2019
6,022,446
20,824,009
137,700
46,451
732,185
(1,291,068)
(15,781,161)
10,690,562
326,555
11,017,117
Loss for the year
Foreign exchange translation
Total comprehensive income
-
-
-
-
-
-
TRANSACTIONS WITH OWNERS
Issue of share capital
Cost of issue
Issue of shares
15
15
9
2,259,305
5,165,060
-
-
(1,304,332)
-
-
-
-
-
-
-
-
-
-
-
-
-
AT 31 DECEMBER 2020
8,281,751
24,684,737
137,700
46,451
732,185
(457,272)
(17,083,185)
16,342,367
394,113
16,736,480
reserve
£
119,720
-
-
-
-
-
-
-
-
-
-
-
-
£
-
-
-
-
(770,811)
(770,811)
(267,000)
(267,000)
(770,811)
(161,707)
(428,707)
(23,488)
(794,299)
(267,000)
(1,037,811)
(185,195)
(1,223,006)
2,000,000
(93,305)
130,137
-
-
-
2,000,000
(93,305)
130,137
470,109
(202,228)
(202,228)
672,337
833,796
833,796
(1,128,512)
(1,128,512)
(166,179)
(1,294,691)
-
833,796
20,224
854,020
(1,128,512)
(294,716)
(145,955)
(440,671)
-
-
7,424,365
(1,304,332)
-
-
7,424,365
(1,304,332)
(173,512)
(173,512)
213,513
40,001
£
-
-
-
-
-
-
-
-
-
The notes on pages 62 to 100 form part of these financial statements
56
Loss for the year
Foreign exchange translation
Total comprehensive income
TRANSACTIONS WITH OWNERS
Issue of share capital
357,707
1,642,293
Share based payment expense
1,667
Cost of issue
Issues of shares
(93,305)
8,750
Loss for the year
Foreign exchange translation
Total comprehensive income
TRANSACTIONS WITH OWNERS
Cost of issue
Issue of shares
15
15
9
Issue of share capital
2,259,305
5,165,060
(1,304,332)
-
-
-
-
-
-
-
-
-
-
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Note
Share
capital
£
Share
premium
Merger
reserve
£
Capital
contribution
reserve
£
Share based
Translation
Accumulated
Totals
Non-
Totals
payments
reserve
losses
reserve
£
£
£
£
controlling
interest
£
£
AT 1 JANUARY 2019
5,663,072
19,266,271
137,700
46,451
612,465
(520,257)
(15,311,933)
9,893,769
(160,587)
9,733,182
-
-
-
-
-
119,720
-
-
(267,000)
-
(267,000)
(770,811)
(161,707)
(428,707)
(23,488)
(794,299)
(267,000)
(1,037,811)
(185,195)
(1,223,006)
(770,811)
(770,811)
-
-
-
-
-
-
-
2,000,000
(93,305)
130,137
-
-
-
(202,228)
(202,228)
672,337
2,000,000
(93,305)
130,137
470,109
AT 31 DECEMBER 2019
6,022,446
20,824,009
137,700
46,451
732,185
(1,291,068)
(15,781,161)
10,690,562
326,555
11,017,117
AT 31 DECEMBER 2020
8,281,751
24,684,737
137,700
46,451
732,185
(457,272)
(17,083,185)
16,342,367
394,113
16,736,480
-
-
-
-
-
-
-
(1,128,512)
(1,128,512)
(166,179)
(1,294,691)
833,796
833,796
-
833,796
20,224
854,020
(1,128,512)
(294,716)
(145,955)
(440,671)
-
-
-
-
-
7,424,365
(1,304,332)
-
-
7,424,365
(1,304,332)
(173,512)
(173,512)
213,513
40,001
56
57
Company Statement of Changes in Equity
Note
Share
capital
£
Share
premium
£
Merger
reserve
£
Capital
Share based
Accumulated
Totals
contribution
reserve
£
payment
reserve
£
losses
£
£
AT 1 JANUARY 2019
5,663,072
19,266,271
137,700
46,451
612,465
(15,535,429)
10,190,530
Loss for the year
Total comprehensive income
-
-
-
-
(763,430)
(763,430)
(763,430)
(763,430)
TRANSACTIONS WITH OWNERS
Issue of share capital
Cost of issue
Share based payment expense
15
15
16
357,707
-
1,667
1,642,293
(93,305)
8,750
AT 31 DECEMBER 2019
6,022,446
20,824,009
137,700
46,451
732,185
(16,298,859)
11,463,932
Loss for the year
Total comprehensive income
-
-
-
-
TRANSACTIONS WITH OWNERS
Issue of share capital
Cost of issue
15
15
2,259,305
-
5,165,060
(1,304,332)
AT 31 DECEMBER 2020
8,281,751
24,684,737
137,700
46,451
732,185
(17,168,118)
16,714,706
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
119,720
-
-
-
2,000,000
(93,305)
130,137
(869,259)
(869,259)
(869,259)
(869,259)
-
-
7,424,365
(1,304,332)
The notes on pages 62 to 100 form part of these financial statements
58
Note
Share
capital
Share
premium
Merger
reserve
£
Capital
Share based
Accumulated
Totals
contribution
reserve
£
payment
reserve
£
losses
£
£
AT 1 JANUARY 2019
5,663,072
19,266,271
137,700
46,451
612,465
(15,535,429)
10,190,530
-
-
-
-
-
-
-
-
-
-
-
-
-
-
119,720
(763,430)
(763,430)
(763,430)
(763,430)
-
-
-
2,000,000
(93,305)
130,137
AT 31 DECEMBER 2019
6,022,446
20,824,009
137,700
46,451
732,185
(16,298,859)
11,463,932
AT 31 DECEMBER 2020
8,281,751
24,684,737
137,700
46,451
732,185
(17,168,118)
16,714,706
-
-
-
-
-
-
-
-
-
-
-
-
(869,259)
(869,259)
(869,259)
(869,259)
-
-
7,424,365
(1,304,332)
Issue of share capital
Cost of issue
Share based payment expense
15
15
16
357,707
-
1,667
1,642,293
(93,305)
8,750
Loss for the year
Total comprehensive income
TRANSACTIONS WITH OWNERS
Loss for the year
Total comprehensive income
TRANSACTIONS WITH OWNERS
£
-
-
-
-
£
-
-
-
-
-
Issue of share capital
Cost of issue
15
15
2,259,305
5,165,060
(1,304,332)
58
5959
Consolidated Statement of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before income tax
Depreciation charges
Share based payment expense
Impairment of exploration costs
Finance income
Finance cost
Grant income
Shares in Lieu
Gain on step acquisition
Amortisation of right -of -use asset
Unrealised foreign exchange (gains) / losses
(Increase) in trade and other receivables
Increase in trade and other payables
Note
2020
£
2019
£
4
4
3
3
(1,294,691)
35,608
-
98,799
(594)
203,576
(12,637)
2,806
-
5,777
(12,590)
(973,946)
(428,707)
20,971
119,720
10,720
(6,298)
410
(37,080)
10,417
(563,431)
4,615
2,121
(866,542)
(2,203)
97,623
(106,009)
14,930
Net cash used in operating activities
(878,526)
(957,621)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets
Purchase of property, plant and equipment
Sale of investments
Acquisition of subsidiary / associate
Cash acquired with subsidiary
Grant receipt
Interest received
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Lease principal
Lease interest paid
Proceeds from borrowings
Interest paid on loan and borrowings
Investment by minority interest
Net cash from financing activities
INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
7
8
9
9
15
20
20
21
21
9
(622,501)
(89,436)
-
-
-
25,796
594
(1,304,896)
(77,615)
7
(500,000)
530,031
-
6,298
(685,547)
(1,346,175)
3,827,717
(5,840)
(255)
932,309
(93,935)
40,000
1,906,695
(4,467)
(410)
-
-
-
4,699,996
1,901,818
3,135,923
1,124,062
69,429
(401,978)
1,533,232
(7,192)
CASH AND CASH EQUIVALENTS AT END OF YEAR
4,329,414
1,124,062
The notes on pages 62 to 100 form part of these financial statements
60
Company Statement of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before income tax
Expected credit losses
Share based payment expense
Shares in Lieu
Finance income
Finance cost
Grant income
Unrealised foreign exchange (gains) / losses
(Increase) / decrease in trade and other receivables
(Decrease) / increase in trade and other payables
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Loans to subsidiaries
Acquisition of associate / subsidiary
Interest received
Grant receipt
Financing of subsidiary
Purchase of fixed assets
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from borrowings
Interest paid
Net cash from financing activities
Note
2020
£
2019
£
10
3
19
9
15
(869,259)
72,069
-
2,806
(594)
203,321
-
(16,865)
(763,430)
158,005
119,720
10,417
(6,298)
-
(1,425)
2,121
(608,522)
(480,890)
(61,415)
(524)
1,141
23,443
(670,461)
(456,306)
(448,151)
-
594
25,796
(380,000)
(1,483)
(989,434)
(500,000)
6,298
-
(465,000)
-
(803,244)
(1,948,136)
3,827,717
932,309
(93,935)
1,906,695
-
-
4,666,091
1,906,695
INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
3,192,386
978,514
70,526
(497,747)
1,470,087
6,174
CASH AND CASH EQUIVALENTS AT END OF YEAR
4,241,426
978,514
60
61
The notes on pages 62 to 100 form part of these financial statements
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
1.
ACCOUNTING POLICIES
Nature of operations
Beowulf Mining plc (the “Company”) is domiciled in England. The Company’s registered office is 201 Temple
Chambers, 3-7 Temple Avenue, London, EC4Y 0DT. These consolidated financial statements comprise the
Company and its subsidiaries (collectively the ‘Group’ and individually ‘Group companies’). The Group is
engaged in the acquisition, exploration and evaluation of natural resources assets and has not yet generated
revenues.
The principal accounting policies applied in the preparation of these consolidated financial statements are set
out below:
Going concern
At 31 December 2020, the Group had a cash balance of £4.33 million and the Company had a cash balance
of £4.24 million.
The Company announced, on 13 August 2020, that it had secured bridge loan financing in Sweden of SEK 12
million (approximately £1.0 million) from Nordic investors. Since 2014, this has been the only divergence from
equity capital markets fundraising. The bridging loan demonstrated the availability of alternative financing to
the Company and good support from a group of Nordic investors, who went on to underwrite the SDR offer
and buy shares via a Private Placement/Directed Issue in the Capital Raising.
On 21 December 2020, the Company closed a fully subscribed Capital Raising of approximately £7.4 million
before expenses (approx. SEK 83 million).
Management have prepared cash flow forecasts confident that they are taking all necessary steps to
ensure that the Group has the required cash to pursue it strategic objectives, an assertion supported by the
significant equity finance raised prior to year end. They have therefore concluded that it is appropriate to
prepare the financial statements on a going concern basis.
Management implemented logistical and organisational changes to underpin the Group’s resilience to the
impact felt by the COVID-19 pandemic, with the key focus being protecting all personnel, minimising the
impact on critical work streams and ensuring business continuity. The effect on the economy may impact the
Group in varying ways, which could lead to a direct bearing on the Group’s ability to generate future cash
flows for working capital purposes. The inability to gauge the length of such disruption further adds to this
uncertainty. For these reasons, the generation of sufficient operating cash flows remain a risk. Management
is closely monitoring commercial and technical aspects of the Group’s operations to mitigate risk and is
confident that the Group has access to sufficient working capital to continue operations for the foreseeable
future.
Basis of preparation
The consolidated financial statements have been prepared in accordance with applicable International
Accounting Standards as applied in accordance with the provisions of the Companies Act 2006 (“IAS”)
and with those parts of the UK Companies Act 2006 applicable to companies reporting under IAS. The
policies have been consistently applied to both the parent Company and Group. The financial statements are
presented in GB Pounds Sterling. They are prepared on the historical cost basis or the fair value basis where
the fair valuing of relevant assets and liabilities has been applied.
Merger relief under s612 of the Companies Act 2006 removes the requirement to credit the share premium
account and where the conditions are met, the relief must be applied. However, it allows the investment to
be accounted for at the nominal value of the shares issued or the fair value of the consideration. Where the
investment is to be recorded at fair value, then the credit will be to the merger relief reserve.
62
The conditions to qualify for merger relief are:
• the consideration for shares in another company includes issued shares;
• on completion of the transaction, the company issuing the shares will have secured at least a 90%
equity holding in the other company.
Merger relief was required to be applied in acquisition of Fennoscandian Resources, in which the Company
obtained 100% of the share capital of Fennoscandian for shares issued by the Company. Further details of
this acquisition are outlined in note 9.
Prior year restatement
The Company has amended certain prior year comparatives to correctly present amounts in the Company
financial statements for the year ended 31 December 2020. The Company determined that a correction of an
error was required related to financing of subsidiary amounts totalling £465,000 presented as cash outflows
from financing activities, specifically to present these amounts as cash flows from investing activities in the
Company statement of cash flows. The cash outflows related to additional investments made in subsidiaries
which, in accordance with IAS 7 must be classified as investing activities in the company cash flow statement
and not financing as would be the case in the group cash flow statement. As this is a material error, the
company is required to correct it retrospectively. This amendment had no other impact on the consolidated
and Company financial statements for the year ended 31 December 2020.
New standards, amendments and interpretations
There are several standards, amendments to standards, and interpretations which have been issued by the
IASB that are effective in future accounting periods that the group has decided not to adopt early. The most
significant of these are as follows, which are all effective for the period beginning 1 January 2020:
• IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors (Amendment – Definition of Material)
• IFRS 3 Business Combinations (Amendment – Definition of Business)
• Revised Conceptual Framework for Financial Reporting
• Interest Rate Benchmark Reform (IBOR) reform Phase 1 (Amendments to IFRS 9, IAS 39 and IFRS 7
The Directors have assessed there to be no material impact of these new accounting standards on the Group
financial statements.
Significant accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the amounts reported for income and expenses during the year and the amounts
reported for assets and liabilities at the balance sheet date. However, the nature of estimation means that
the actual outcomes could differ from those estimates.
A principal source of risk and judgement is that the Exploitation Concession (the “Concession”) for Kallak
North will not be awarded. Management maintains that its application for the Concession has satisfied the
requirements of the Swedish Minerals Act and Environmental Code. In October 2015, the Mining Inspectorate
recommended to the Swedish Government that the Concession be awarded.
The Company’s application for the Concession remained with the Government through 2020, and as such,
Swedish authorities other than the Government were not actively engaged in the permitting process.
The Constitutional Committee (“KU”), which has been reviewing the Swedish Government’s handling of the
Company’s application for an Exploitation Concession for Kallak North met 26 November 2020 and disclosed
in a statement that no viable administrative measures were implemented by the Government for almost three
years, resulting in an unacceptable delay.
62
63
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
A month prior to the KU’s statement, the Government consulted with United Nations Educational, Scientific
and Cultural Organization UNESCO on the Company’s application. While the KU’s statement will have no
bearing on the final decision, the Company believes that once comments are received back from UNESCO a
decision will be ‘forthcoming’, language used by the Minister in September 2019. The Company has been in
communication with UNESCO regarding its review of Kallak.
Since the KU statement last November, political parties outside of Government are taking a greater interest in
the case and, with the support of our advisers, we continue to inform and educate on the facts about Kallak
and dispel the perceptions that exist. It is management’s judgement that it is appropriate to remain optimistic
about the Government, the decision maker in the application process, awarding a Concession, and therefore
Kallak has not been impaired.
Management’s judgement is based on several factors: Kallak is ideally situated as a secure and sustainable
supply of high-quality iron ore to the growing fossil-free steel making sector powered by renewables in
Sweden; it can produce a market leading concentrate of 71.5 per cent iron content; if the Government were to
say ‘no’ they would have said ‘no’ before now; the Minister for Business, Industry and Innovation, Mr. Ibrahim
Baylan is under pressure to take decisions from politicians in his own and other political parties; Sweden’s
reputation as a mining investment destination is being significantly damaged.
The Åtvidaberg licence is located in the Bergslagen area, southern Sweden. It was renewed during 2019 and
now expires on 30 May 2022. Due to COVID-19, the exploration permit is likely to be awarded an additional
year to the existing term. The Mining Inspectorate is yet to complete updating its registers and will directly
inform each permit holder of the change that applies to their respective permits. As such the extension year,
which should extend the term of these licence to 2023, has not been added to the licence ‘Valid To’ date
shown in the Annual Report.
Bergslagen is one of Europe’s oldest mining districts and yielded a substantial portion of Sweden’s mineral
wealth in the 1800-1900s, with several large mines and hundreds of smaller mines producing copper, zinc,
lead, gold, silver, and iron ore. Current operating mines in the area include Boliden’s Garpenberg and Lundin
Mining’s Zinkgruvan. Most of southern Bergslagen has seen little modern exploration, yet it hosts Bersbo,
one of Sweden’s largest early copper mines, and Zinkgruvan, Sweden’s most important zinc mine. During
the year, no fieldwork was undertaken, due to COVID-19 restrictions and as the Company’s exploration focus
moved to Kosovo. However, the Company is now in discussions with potential partners to continue with the
next stage of work on the licence. At the date of this report the Company will have two years remaining on
the term of the licence.
Another source of risk and judgement is that the renewal applications for exploration licences at Mitrovica
and Viti have been accepted but are yet to receive final approval.
As original permits were awarded around the same time, all renewals have become due around the same
time. Vardar’s renewal applications have also coincided with a changeover in personnel on the board of The
Independent Commission for Mines and Minerals (“ICMM”), the permitting authority in Kosovo. The ratification
of a new board has been delayed because of parliamentary elections, which took place in February 2021. It is
hoped that the new board will soon be confirmed.
Management considers that in each case licence conditions have been met and applications or renewals
have been accepted by receiving authorities. Management have included this in the principal risks and
estimates due to material nature of these licences.
The Board has considered the impairment indicators as outlined in the Company’s accounting policies and
having done so is of the opinion that no impairment provisions are required for Company’s main assets,
Kallak, Aitolampi, Mitrovica, Viti and Åtvidaberg (see note 7).
The other key areas of judgement and sources of estimation uncertainty that have a significant risk of
causing material adjustment to the carrying amounts of assets and liabilities within the next financial year is
the judgment exercised in assessing the control of the Vardar Group and in respect of the Parent Company
the recoverability of the loans made to subsidiary undertakings.
64
The Company was assessed to have control on the 1 April 2019 as the Company was able to exercise
power over Vardar through the appointment of Kurt Budge as Investor Director. The investment agreement
conveyed substantive rights to the Investor Director and through the combination of the increased
shareholding and these rights the Company was able to affect the overall returns of the investee.
The Parent Company, in applying the ECL model under IFRS 9, must make assumptions when implementing
the forward-looking ECL model. This model is required to be used to assess the intercompany loans
receivable from subsidiaries for impairment.
Estimations were made regarding the credit risk of the counterparty and the underlying probability of default
in each of the credit loss scenarios. The scenarios identified by management included Production, Divestment,
Fire-sale and Failure. These scenarios considered technical data, necessary licences to be awarded, the
Company’s ability to raise finance, and ability to sell the project. A reasonable change in the probability
weightings of 3% would result in further impairment of £573,813 (2019 :£552,193).
The results of subsidiaries acquired or disposed of during the year are included in the statement of
comprehensive income from the effective date of acquisition, or up to the effective date of disposal, as
appropriate.
Non-controlling interests in subsidiaries are presented separately from the equity attributable to equity
owners of the parent Company. When changes in ownership in a subsidiary do not result in a loss of
control, the non-controlling shareholders’ interests are initially measured at the non-controlling interests’
proportionate share of the subsidiaries net assets. Subsequent to this, the carrying amount of non-controlling
interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of
subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if
this results in the non-controlling interests having a deficit balance.
Basis of consolidation
(i) Subsidiaries and acquisitions
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company (and its subsidiaries) made up to 31 December each year. Control is recognised
where an investor is exposed, or has rights, to variable returns from its investment with the investee, and has
the ability to affect these returns through its power over the investee.
(ii) Equity accounted investees
Associates
Associates are entities over which the Group has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but not the ability to
control or jointly control those policies. Investments in Associates are accounted for using the equity method
of accounting.
Equity method of accounting – Associates
Under the equity method of accounting, interests in Associates are initially recognised at cost. The Group’s
share of Associates post acquisition profit / loss after tax and other comprehensive income/ loss are
presented as the ‘Share of results of Equity accounted investees’ in the Group income statement and Group
Statement of other comprehensive income respectively. The cumulative post-acquisition movements are
64
65
2020 Beowulf Mining plc Annual Report Notes to the Consolidated Financial Statements
adjusted against the carrying amount of the investment less any impairment in value. Where indicators of
impairment arise, the carrying amount of the Associate is tested for impairment by comparing its recoverable
amount against its carrying value. Unrealised gains arising from transactions with Associates are eliminated
to the extent of the Group’s interest in the entity. Unrealised losses are similarly eliminated to the extent that
they do not provide evidence of impairment of a transferred asset. When the Group’s share of losses in an
Associate equal or exceeds its interest in the Associate, the Group does not recognise further losses unless
the Group has incurred obligations or made payments on behalf of the Associate. When the Group ceases
to have or significant influence, any retained interest in the entity is re-measured to its fair value at the date
when or significant influence is lost with the change in carrying amount recognised in the income statement.
The Group also reclassifies any movements previously recognised in other comprehensive income to the
income statement.
(iii) Transactions eliminated on consolidation
Intra-Group balances and any unrealised gains and losses or income and expenses arising from intra-Group
transactions are eliminated in preparing the consolidated financial statements.
Business combinations
On acquisition, the assets, liabilities, and contingent liabilities of a subsidiary are measured at their fair value
at the date of acquisition. Any excess of the cost of the acquisition over the fair values of the identifiable
net assets acquired is recognised as goodwill. If the aggregate of the acquisition-date fair value of the
consideration transferred and the amount recognised for the non-controlling interest (and where the business
combination is achieved in stages, the acquisition-date fair value of the acquirer’s previously held equity
interest in the acquiree) is lower than the fair value of the assets, liabilities and contingent liabilities and the
fair value of any pre-existing interest held in the business acquired, the difference is recognised in profit and
loss.
Intangible assets – deferred exploration costs
All costs incurred prior to the application for the legal right to undertake exploration and evaluation activities
on a project are expensed as incurred. Each asset is evaluated annually at 31 December, to determine
whether there are any indications that impairment exists.
Exploration and evaluation costs arising following the application for the legal right, are capitalised on
a project-by-project basis, pending determination of the technical feasibility and commercial viability of
the project. Costs incurred include appropriate employee costs and costs pertaining to technical and
administrative overheads.
Exploration and evaluation activity include:
• researching and analysing historical exploration data;
• gathering exploration data through topographical, geochemical and geophysical studies;
• exploratory drilling, trenching and sampling;
• determining and examining the volume and grade of the resource;
• surveying transportation and infrastructure requirements; and
• conducting market and finance studies.
Administration costs that are not directly attributable to a specific exploration area are expensed as incurred.
66
Deferred exploration costs are carried at historical cost less any impairment losses recognised. When a
project is deemed to no longer have commercially viable prospects to the Group, deferred exploration costs in
respect of that project are deemed to be impaired and written off to the statement of comprehensive income.
Once the decision for investment is taken, the assets will be assessed for impairment and to the extent that
these are not impaired, will be classified as development assets. At the point that production commences
these assets will be depreciated.
Impairment
Whenever events or changes in circumstance indicate that the carrying amount of an asset may not be
recoverable an asset is reviewed for impairment. An asset’s carrying value is written down to its estimated
recoverable amount (being the higher of the fair value less costs to sell and value in use) if that is less than
the asset’s carrying amount.
Impairment reviews for deferred exploration and evaluation expenditure are carried out on a project by
project basis, with each project representing a potential single cash generating unit. An impairment review is
undertaken when indicators of impairment arise such as:
(i)
unexpected geological occurrences that render the resource uneconomic;
(ii)
title to the asset is compromised;
(iii) variations in mineral prices that render the project uneconomic;
(iv)
(v)
substantive expenditure on further exploration and evaluation of mineral resources is neither
budgeted nor planned; and
the period for which the Group has the right to explore has expired and is not expected to be
renewed.
Property, plant and equipment
Items of property, plant and equipment are stated at historical cost less accumulated depreciation.
Depreciation is provided at the following annual rates in order to write off each asset over its estimated
useful life.
Office equipment
Computer equipment
Motor Vehicles
Machinery and equipment
-
-
-
-
25 per cent on reducing balance
25 per cent on reducing balance
20 per cent on reducing balance
20 to 25 per cent on reducing balance
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet
date.
Leased assets
When entering into a contract the Group assesses whether or not a lease exists. A lease exists if a contract
conveys a right to control the use of an identified asset under a period of time in exchange for consideration.
Leases of low value items and short-term leases (leases of less than 12 months at the commencement date)
are charged to the profit or loss on a straight-line basis over the lease term in administrative expenses.
66
67
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
The Group recognises right-of-use assets at cost and lease liabilities at the lease commencement date based
on the present value of future lease payments. The right-of-use assets are amortised on a straight-line basis
over the length of the lease term. The lease liabilities are recognised at amortised cost using the effective
interest rate method. Discount rates used reflect the incremental borrowing rate specific to the lease.
Investments in subsidiaries
Investments in subsidiary undertakings are stated at cost less provision for any impairment in value.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, and other short term highly
liquid investments with original maturities of three months or less.
Financial assets
The Group classifies all of its financial assets at amortised cost. Management determines the classification of
its financial assets at initial recognition.
Amortised cost
The Group’s financial assets held at amortised cost comprise trade and other receivables and cash and cash
equivalents in the consolidated statement of financial position.
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. They arise principally through the provision of goods and services to customers (e.g. trade
receivables), but also incorporate other types of financial assets where the objective is to hold their assets in
order to collect contractual cash flows and the contractual cash flows are solely payments of the principal
and interest. They are initially recognised at fair value plus transaction costs that are directly attributable
to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate
method, less provision for impairment.
Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS
9 using the lifetime ECLs. During this process the probability of the non-payment of the trade receivables
is assessed. This probability is then multiplied by the amount of the expected loss arising from default to
determine the lifetime ECL for the trade receivables. For trade receivables, which are reported net; such
provisions are recorded in a separate provision account with the loss being recognised within administrative
expenses in the consolidated statement of comprehensive income. On confirmation that the trade receivable
will not be collectable, the gross carrying value of the asset is written off against the associated provision.
Expected credit loss provisions for other receivables are recognised based a forward-looking expected credit
loss model. The methodology used to determine the amount of the provision is based on whether there
has been a significant increase in credit risk since initial recognition of the financial asset. For those where
the credit risk has not increased significantly since initial recognition of the financial asset, twelve month
expected credit losses along with gross interest income are recognised. For those for which credit risk has
increased significantly, lifetime expected credit losses along with the gross interest income are recognised.
For those that are determined to be credit impaired, lifetime expected credit losses along with interest income
on a net basis are recognised.
Financial liabilities
The Group’s financial liabilities include trade and other payables and loans and borrowings. All financial
liabilities are recognised initially at fair value, net of transaction costs incurred, and are subsequently stated
at amortised cost, using the effective interest method.
68
Loans and borrowings with settlement terms that that fail the fixed for fixed criterion will be treated as a
containing an embedded derivative liability, where this is recognised the loan value will be allocated between
the derivative value and the loan residual which will be carried amortised cost. Loans and borrowings are
derecognised when the obligation is extinguished.
Unless otherwise indicated, the carrying values of the Group’s financial liabilities measured at amortised cost
represents a reasonable approximation of their fair values.
Fair value
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements
are categorised within the fair value hierarchy. The fair value hierarchy prioritises the inputs to valuation
techniques used to measure fair value. The Group uses the following hierarchy for determining and disclosing
the fair value of financial instruments and other assets and liabilities for which the fair value was used:
-
-
-
level 1: quoted prices in active markets for identical assets or liabilities;
level 2: inputs other than quoted prices included in level 1 that are observable for the asset or
liability, either directly (as prices) or indirectly (derived from prices); and
level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Where equity instruments are issued as part of an acquisition they are recorded at their fair value on the date
of acquisition.
Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or
recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax is recognised, using the liability method, in respect of temporary differences between the
carrying amount of the Group’s assets and liabilities and their tax base.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and
the same taxation authority. Any remaining deferred tax asset is recognised only when, on the basis of all
available evidence, it can be regarded as probable that there will be suitable taxable profits, within the same
jurisdiction, in the foreseeable future against which the deductible temporary difference can be utilised.
Deferred tax is determined using tax rates that are expected to apply in the periods in which the asset is
realised or liability settled, based on tax rates and laws that have been enacted or substantively enacted by
the balance sheet date.
Current and deferred tax is recognised in the profit or loss, except when the tax relates to items charged or
credited directly in equity, in which case the tax is also recognised directly in equity.
68
69
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
Foreign currencies
The individual financial statements of each Group entity are presented in the currency of the primary
economic environment in which the entity operates (its functional currency). For the purpose of the
consolidated financial statements, the results and financial position of each entity are expressed in GB
Pounds Sterling which is the presentation currency for the Group and Company financial statements. The
functional currency of the Company is the GB Pounds Sterling.
In preparing the financial statements of the individual entities, transactions in currencies other than the
entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates
of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are
retranslated at the rates prevailing at the balance sheet date.
Exchange differences arising on the settlement of monetary items and on the retranslation of monetary items
are included in the statement of comprehensive income for the period.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s
foreign operations are expressed in GB Pounds Sterling using exchange rates prevailing at the balance sheet
date. Income and expense items are translated at the average exchange rates for the period. Exchange
differences arising, if any, are classified as other comprehensive income and are transferred to the Group’s
translation reserve.
Foreign currency movements arising from the Group’s net investment, which comprises equity and long-
term debt, in subsidiary companies whose functional currency is not the GB Pounds Sterling are recognised
in the translation reserve, included within equity until such time as the relevant subsidiary company is sold,
whereupon the net cumulative foreign exchange difference relating to the disposal is transferred to profit and
loss.
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.
Government grant
Government grants received on capital expenditure are generally deducted in arriving at the carrying amount
of the asset purchased. Grants for revenue expenditure are recorded gross in the Group income statement.
Where retention of a government grant is dependent on the Group satisfying certain criteria, it is initially
recognised as deferred income. When the criteria for retention have been satisfied, the deferred income
balance is released to the consolidated statement of comprehensive income or netted against the asset
purchased.
70
2.
EMPLOYEES AND DIRECTORS
Group
Company
2020
£
2019
£
2020
£
2019
£
Wages and salaries
443,288
464,889
212,848
225,270
Bonus
Social security costs
Other benefits
8,725
72,964
16,110
2,193
70,152
19,180
-
25,617
13,874
-
24,547
13,809
541,087
556,414
252,339
263,626
Directors’ remuneration is as follows:
2020
£
2019
£
Directors emoluments, including salary and fees
226,721
255,155
Shares settled expenses
Social security costs
Share-based payments
-
25,617
-
10,417
24,547
76,403
252,338
366,522
Further details pertaining to Directors remuneration can be found in the Directors’ remuneration report on
page 39.
The remuneration of the highest paid Director who served during the year was £150,000 (2019: £151,000)
The average monthly number of employees and Directors during the year was as follows:
2020
Group
2019
Group
2020
2019
Company
Company
Number
Number
Number
Number
Directors
Employees
3
7
3
5
3
-
3
-
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71
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
3.
FINANCE INCOME AND COSTS
Finance income:
Deposit account interest
Finance costs:
Interest on lease liabilities
Interest on lease liabilities
4.
LOSS BEFORE TAX AND AUDITOR’S REMUNERATION
a. The loss before tax is stated after charging:
Depreciation (note 8)
Amortisation of right-of-use assets (note 11)
Foreign exchange differences
Impairment of exploration costs (note 7)
b. Auditor’s remuneration
Fees payable to the Group’s auditor for the audit of the
consolidated financial statements
Fees payable to the Group auditor for other services:
- audit of subsidiaries pursuant to legislation
- review of quarterly financial statements
- tax compliance services
2020
£
594
594
255
203,321
203,576
2020
£
35,608
5,777
37,962
98,799
2019
£
6,298
6,298
410
-
410
2019
£
20,971
4,615
2,015
10,720
2020
£
2019
£
41,162
36,025
6,000
2,153
5,300
49,615
6,000
2,135
5,300
49,460
72
5.
INCOME TAX
Analysis of tax expense
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2020 or for the
year ended 31 December 2019.
Factors affecting the tax expense
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is
explained below:
2020
£
2019
£
Loss on ordinary activities before income tax
(1,294,691)
(428,707)
Tax thereon at a UK corporation tax rate of 19% (2019 – 19%)
(245,992)
(81,454)
Effects of:
Expenses not deductible for tax purposes
Non-assessable fair value loss / (gain)
Tax losses not recognised
Losses of overseas subsidiaries to be carried forward
-
-
25,400
(107,052)
170,386
108,710
75,606
54,396
-
-
The main rate of UK corporation tax during the year ended 31 December 2020 was 19.00 per cent (2019:
19 per cent). The Group has estimated UK losses of £12,480,867 (2019: £11,584,097) and foreign losses
of £4,130,263 (2019: £3,732,339) available to carry forward against future trading profits. The value of
unrecognised deferred tax assets in respect of the UK losses amounts to £3,120,217 (2019: £2,200,978) and
foreign losses of £779,586 (2019:£655,800). The Directors believe that due to the uncertainty over when the
tax losses will be utilised it is appropriate not to recognise a deferred tax asset at this time.
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73
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
6.
BASIC AND DILUTED LOSS PER SHARE
The calculation of basic and diluted loss per share at 31 December 2020 was based on the loss attributable
to ordinary shareholders of £1,128,512 (2019: £267,000) and a weighted average number of Ordinary
Shares outstanding during the year ended 31 December 2020 of 607,815,562 (2019: 585,102,740) calculated
as follows:
Loss attributable to ordinary shareholders
(1,128,512)
(267,000)
2020
£
2019
£
Weighted average number of ordinary shares
2020
2019
Number
Number
Number of shares in issue at the beginning of the year
585,102,740
554,716,045
Effect of shares issued during year
20,712,822
30,386,695
Weighted average number of ordinary shares
in issue for the year
607,815,562
585,102,740
The diluted earnings per share is identical to the basic loss per share as the exercise of warrants and options
would be anti-dilutive.
74
7.
INTANGIBLE ASSETS - Group
COST
At 1 January 2019
Additions for the year
Additions arising from the step-up in interest in Vardar
Foreign exchange movements
Impairment
At 31 December 2019
At 1 January 2020
Additions for the year
Foreign exchange movements
Impairment
At 31 December 2020
NET BOOK VALUE
At 31 December 2020
At 31 December 2019
Exploration
Costs
£
8,285,547
1,304,896
1,203,685
(771,914)
(10,720)
10,011,494
10,011,494
612,062
847,159
(98,799)
11,371,916
11,371,916
10,011,494
The net book value of exploration costs is comprised of expenditure on the following projects:
Kallak
Åtvidaberg
Ågåsjiegge
Pitkäjärvi
Joutsijärvi
Karhunmaki
Rääpysjärvi
Mervivaara
Polvela
Tammijärvi
Mitrovica
Viti
2020
£
2019
£
7,533,388 6,675,124
393,303
345,978
-
15,568
1,333,114 1,058,078
-
41,017
47,053
36,965
-
-
19,095
24,078
39,905
17,846
31,316
24,278
1,387,030 1,243,194
600,046
517,034
11,371,916 10,011,494
74
75
Total Group exploration costs of £11,371,916 are currently carried at cost in the financial statements. The
Group will need to raise funds and/or bring in joint venture partners to further advance exploration and
development work. An amount of £68,508 was recorded against the projects for services provided by the
Directors during the year (2019: £91,231).
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
The Company’s application for the Concession remained with the Government through 2020, and as such,
Swedish authorities other than the Government were not actively engaged in the permitting process.
The Constitutional Committee (“KU”), which has been reviewing the Swedish Government’s handling of the
Company’s application for an Exploitation Concession for Kallak North met 26 November 2020 and disclosed
in a statement that no viable administrative measures were implemented by the Government for almost three
years, resulting in an unacceptable delay.
A month prior to the KU’s statement, the Government consulted with United Nations Educational, Scientific
and Cultural Organization UNESCO on the Company’s application. While the KU’s statement will have no
bearing on the final decision, the Company believes that once comments are received back from UNESCO a
decision will be ‘forthcoming’, language used by the Minister in September 2019. The Company has been in
communication with UNESCO regarding its review of Kallak.
Since the KU statement last November, political parties outside of Government are taking a greater interest in
the case and, with the support of our advisers, we continue to inform and educate on the facts about Kallak
and dispel the perceptions that exist. It is management’s judgement that it is appropriate to remain optimistic
about the Government, the decision maker in the application process, awarding a Concession, and therefore
Kallak has not been impaired.
Management’s judgement is based on several factors: Kallak is ideally situated as a secure and sustainable
supply of high-quality iron ore to the growing fossil-free steel making sector powered by renewables in
Sweden; it can produce a market leading concentrate of 71.5 per cent iron content; if the Government were to
say ‘no’ they would have said ‘no’ before now; the Minister for Business, Industry and Innovation, Mr. Ibrahim
Baylan is under pressure to take decisions from politicians in his own and other political parties; Sweden’s
reputation as a mining investment destination is being significantly damaged.
The Åtvidaberg licence is located in the Bergslagen area, southern Sweden. It was renewed during 2019 and
now expires on 30 May 2022. Due to COVID-19, the exploration permit is likely to be awarded an additional
year to the existing term. The Mining Inspectorate is yet to complete updating its registers and will directly
inform each permit holder of the change that applies to their respective permits. As such the extension year,
which should extend the term of these licence to 2023, has not been added to the licence ‘Valid To’ date
shown in the Annual Report.
76
Bergslagen is one of Europe’s oldest mining districts and yielded a substantial portion of Sweden’s mineral
wealth in the 1800-1900s, with several large mines and hundreds of smaller mines producing copper, zinc,
lead, gold, silver, and iron ore. Current operating mines in the area include Boliden’s Garpenberg and Lundin
Mining’s Zinkgruvan. Most of southern Bergslagen has seen little modern exploration, yet it hosts Bersbo,
one of Sweden’s largest early copper mines, and Zinkgruvan, Sweden’s most important zinc mine. During
the year, no fieldwork was undertaken, due to COVID-19 restrictions and as the Company’s exploration focus
moved to Kosovo. However, the Company is now in discussions with potential partners to continue with the
next stage of work on the licence. At the date of this report the Company will have two years remaining on
the term of the licence.
Another source of risk and judgement is that the renewal applications for exploration licences at Mitrovica
and Viti have been accepted but are yet to receive final approval.
As original permits were awarded around the same time, all renewals have become due around the same
time. Vardar’s renewal applications have also coincided with a changeover in personnel on the board of The
Independent Commission for Mines and Minerals (“ICMM”), the permitting authority in Kosovo. The ratification
of a new board has been delayed because of parliamentary elections, which took place in February 2021. It is
hoped that the new board will soon be confirmed.
Management considers that in each case licence conditions have been met and applications or renewals
have been accepted by receiving authorities. Management have included this in the principal risks and
estimates due to material nature of these licences.
The Board has considered the impairment indicators as outlined in the Company’s accounting policies and
having done so is of the opinion that no impairment provisions are required for Company’s main assets,
Kallak, Aitolampi, Mitrovica, Viti and Åtvidaberg
In the year, an impairment provision of £98,799 was recognised for project costs capitalised for projects
at Ågåsjiegge, Joutsijärvi, Polvela and Tammijärvi (31 December 2019: Sala £10,270) on the basis that
no further exploration would be carried out on those projects. In respect of the other license areas, no
impairment indicators have been identified. The impairment is charged as an expense and included within the
consolidated income statement.
76
77
2020 Beowulf Mining plc Annual Report Total
£
82,442
77,615
(6,021)
14,989
169,025
66,359
20,971
(5,303)
82,027
Total
£
169,025
89,436
(6,383)
10,707
262,785
Notes to the Consolidated Financial Statements
8.
PROPERTY, PLANT AND EQUIPMENT
GROUP
Office
Equipment
£
6,383
941
-
-
7,324
6,383
-
-
6,383
Motor
Vehicles
£
47,424
33,873
(3,590)
13,300
91,007
35,041
8,014
(2,926)
40,129
Machinery
& equipment
£
28,635
42,801
(2,431)
1,689
70,694
24,935
12,957
(2,377)
35,515
COST
At 1 January 2019
Additions
Foreign exchange movements
Step acquisition of subsidiary
At 31 December 2019
DEPRECIATION
At 1 January 2019
Charge for year
Foreign exchange movements
At 31 December 2019
GROUP
Office
Equipment
£
Motor
Vehicles
£
Machinery
& equipment
£
Computer
Equipment
£
COST
At 1 January 2020
Additions
Disposals
Foreign exchange movements
At 31 December 2020
DEPRECIATION
At 1 January 2020
Charge for year
Disposals
Foreign exchange movements
At 31 December 2020
7,324
1,525
(6,383)
145
2,611
6,383
1,115
(6,383)
4
1,119
91,007
4,911
-
6,291
102,209
40,129
14,592
-
3,549
58,270
70,694
81,501
-
4,271
156,466
35,515
19,882
-
2,889
58,286
-
1,499
-
-
1,499
-
16
-
-
16
82,027
35,606
(6,383)
6,442
117,691
NET BOOK VALUE
At 31 December 2020
At 31 December 2019
1,492
941
43,939
50,878
98,180
35,179
1,483
-
145,094
86,998
78
PARENT
COST
At 1 January 2019
At 31 December 2019
DEPRECIATION
At 1 January 2019
At 31 December 2019
PARENT
COST
At 1 January 2020
Additions
Disposals
At 31 December 2020
DEPRECIATION
At 1 January 2020
Charge for year
Disposals
At 31 December 2020
NET BOOK VALUE
At 31 December 2020
At 31 December 2019
Office
Equipment
£
Computer
equipment
£
6,383
6,383
6,383
6,383
-
-
-
-
Office
Equipment
£
Computer
Equipment
£
6,838
-
(6,838)
-
6,838
-
(6,838)
-
-
-
-
1,499
-
1,499
-
16
-
16
1,483
-
Total
£
6,383
6,383
6,383
6,383
Total
£
6,838
1,499
(6,838)
1,499
6,838
16
(6,838)
16
1,483
-
78
79
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
9.
INVESTMENTS
COST
Group
Shares in
associates
Shares in
subsidiaries
Company
Shares in
associates
Total1
£
£
£
£
At 1 January 2019
Change in control of associate
Acquisitions
At 31 December 2019
230,120
(230,120)
-
-
482,988
250,000
965,000
1,697,988
250,000
(250,000)
-
-
963,108
(230,120)
965,000
1,697,988
At 1 January 2020
Acquisitions
At 31 December 2020
-
-
-
1,697,988
380,000
2,077,988
-
-
-
1,697,988
380,000
2,077,988
1Please note the total presented above is the Group and Company position combined.
Investments in associates are initially recorded at cost plus any equity share of post-acquisition profit or loss
after-tax. An investment in an associate is largely determined as an associate based on voting interests and
presence on the investee’s board of directors.
Further investments in the share capital of subsidiaries of Vardar constitute additions during the year of
£380,000 (2019: £965,000) to increase the Company’s shareholding in Vardar from 41.5% to 46.1%. The
share capital of Vardar was reclassified to share capital of subsidiaries following control being obtained on
1 April 2019. The basis for control was assessed on the on the Group’s ability to exercise power over Vardar
through combination of the increased investment in Vardar and the appointment of the CEO as Investor
Director, which conveyed substantive rights to direct the actions of Vardar that would ultimately affect the
returns of the investee.
The remaining investment represents 100 per cent of the share capital of Fennoscandian, that was acquired
during the year ended 31 December 2016 and holds a portfolio of four early-stage graphite exploration
projects. At the time of acquisition, Beowulf paid for 100 per cent of the share capital of Fennoscandian by
issuing 2.55 million ordinary shares in the Company, with two further tranches of 2.1 million ordinary shares
to be issued on achievement of certain performance milestones.
The first tranche of 2.1 million ordinary shares was issued on the anniversary of 24 months from the date
of the acquisition, in accordance and Mr Blomqvist having worked for the Company as a full-time employee
during that period. The second tranche of shares will be issued on completion of a bankable feasibility study
on one of the graphite projects in the portfolio.
The total number of ordinary shares that may be issued, if all performance milestones are achieved, is 6.75
million ordinary shares. Beowulf will issue up to a further 2.1 million additional consideration shares in the
form of a share-based payment transaction to the former owner, Rasmus Blomqvist. The share-based
payments fall within the scope of IFRS 2 and are fair valued at the grant date based on the estimated
80
number of shares that will vest. The fair value has been prepared using a Black-Scholes pricing model
including a share price of 6.4 pence, option life of two years, volatility of 49.79 per cent and a risk-free rate of
0.698 per cent.
There was no consideration recognised in the financial statements for the year ended 31 December 2020,
(2019: £Nil). No further share based payment charge for the consideration shares was capitalised to
intangibles in the year ended 31 December 2020. (2019: £Nil).
Step up interest in Vardar Minerals
The investment in Vardar gives the Company exposure to a portfolio of exploration licences situated in the
European Tertiary calc-alkaline Tethys Arc most notable for its lead-zinc-silver mining districts, as well as
recent porphyry related copper and gold discoveries. Further investments were made during the year ended
31 December 2020,
- On 17 February 2020, a further investment of £50,000 was made to increase the Company’s
shareholding in Vardar from 41.5% to 42.2%.
- On 25 March 2020, a further investment of £30,000 was co-invested with the existing shareholders
of Vardar not resulting any change in the ownership interest held by the Company.
- On 13 August 2020, a further investment of £300,000 was made to increase the Company’s
shareholding in Vardar from 42.2% to 46.1%.
Further investments in Vardar have been recognised as an increase to accumulated losses of £173,512
(2019: £202,228).
80
81
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
The Group consists of the following subsidiary undertakings:
Name
Incorporated
Activity
% holding % holding
2020
2019
Oy Fennoscandian Resources AB Finland
Mineral exploration
Jokkmokk Iron Mines AB
Sweden
Mineral exploration
Beowulf Mining Sweden AB
Sweden
Mineral exploration
100%
100%
100%
100%
100%
100%
Wayland Copper Limited
UK
Holding company
65.25%
65.25%
Wayland Sweden AB
Sweden
Mineral exploration
(1)(2)65.25%
(1)(2)65.25%
Vardar Minerals Ltd
UK
Mineral exploration
46.1% 41.5%
Vardar Geoscience BVI Ltd
British Virgin Islands Holding company
(1)(2)46.1%
(1)(2)41.5%
Vardar Geoscience Kosovo Ltd
Kosovo
Mineral exploration
(1)(2)41.4%
(1)(2)39.4%
Vardar Minerals Europe 1 EOOD
Bulgaria
Mineral exploration
(1)(2)46.1%
(1)(2)41.5%
Vardar Minerals Europe 2 EOOD
Bulgaria
Mineral exploration
(1)(2)46.1%
(1)(2)41.5%
Vardar Minerals Europe 3 EOOD
Bulgaria
Mineral exploration
(1)(2)46.1%
(1)(2)41.5%
(1) Indirectly held
(2) Effective interest
The registered offices of the subsidiary undertakings as are follows:
Name
Registered office
Oy Fennoscandian Resources AB Plåtslagarevägen 35 A 1, 20320 Turku, Finland
Jokkmokk Iron Mines AB
Storgatan 36, 921 31, Lycksele, Sweden
Beowulf Mining Sweden AB
Storgatan 36, 921 31, Lycksele, Sweden
Wayland Copper Limited
201 Temple Chambers, 3-7 Temple Avenue, London
Wayland Sweden AB
Storgatan 36, 921 31, Lycksele, Sweden
Vardar Minerals Limited
35-39 Maddox Street, London, England
Vardar Geoscience BVI Ltd
Trident Chambers, P.O. Box 146, Wickhams Cay 1 Road Town,
British Virgin Islands
Vardar Geoscience Kosovo L.L.C
Rifat Berisha 23/10, Pristina, Republic of Kosovo
Vardar Minerals Europe 1 EOOD
Sofia 1606, Krasno selo district, 30-32 Gen.E.I.Totleben Blvd, Fl 2
Vardar Minerals Europe 2 EOOD
Sofia 1606, Krasno selo district, 30-32 Gen.E.I.Totleben Blvd, Fl 2
Vardar Minerals Europe 3 EOOD
Sofia 1606, Krasno selo district, 30-32 Gen.E.I.Totleben Blvd, Fl 2
Details on the non-controlling interest in subsidiaries is given in note 14.
82
10.
LOANS AND OTHER FINANCIAL ASSETS
GROUP
At 1 January 2019
Foreign exchange movements
Disposals
At 31 December 2019
At 1 January 2020
Foreign exchange movements
Disposals
At 31 December 2020
COMPANY
At 1 January 2019
Advances made in the year
ECLs in year
At 31 December 2019
At 1 January 2020
Advances made in the year
ECLs in year
At 31 December 2020
Loans to group
undertakings
£
Financial
assets
£
8,219,433
925,239
(158,005)
8,986,667
8,986,667
423,933
(72,069)
9,338,531
2,784
-
-
2,784
2,784
-
-
2,784
Financial
fixed
assets
£
5,462
(243)
(7)
5,212
5,212
256
-
5,468
Total
£
8,222,217
925,239
(158,005)
8,989,451
8,989,451
423,933
(72,069)
9,341,315
Reconciliation of provisions against receivables arising from lifetime ECLs
ECLs
Total provision arising from ECLs
31 December
2019
£
1,841,504
1,841,504
Current year
movement
£
72,069
72,069
31 December
2020
£
1,913,573
1,913,573
The Directors have also assessed the cash flow scenarios of the above considerations. Estimations were made
regarding the credit risk of the counterparty and the underlying probability of default in each of the credit loss
scenarios. The scenarios identified by management included Production, Divestment, Fire-sale and Failure.
These scenarios considered technical data, necessary licences to be awarded, the Company’s ability to raise
finance, and ability to sell the project. The ECL to the 31 December 2020 represents the 12 month expected
credit loss, as underlying credit risk of the intercompany loans has not changed since initial recognition.
A reasonable change in the probability weightings of 3% would result in further impairment of £573,813
(2019 :£552,193).
Further details of the transactions in the year are shown within related parties disclosure note 23.
82
83
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
11.
RIGHT OF USE ASSETS
COST
At 1 January
Additions
Foreign exchange movements
At 31 December
AMORTISATION
At 1 January
Charge
Foreign exchange movements
At 31 December
NET BOOK VALUE
At 31 December
Group
2020
£
Buildings
Group
2019
£
Buildings
11,903
-
659
12,562
4,579
5,777
269
10,625
-
12,060
(157)
11,903
-
4,744
(165)
4,579
1,937
7,324
12.
TRADE AND OTHER RECEIVABLES
Other receivables
VAT
Prepayments and accrued income
Group
2020
£
2019
£
1,428,491
123,638
14,719
1,566,848
94,653
60,819
11,789
167,261
Company
2020
£
2019
£
1,392,081
69,955
14,719
1,476,755
-
11,471
11,789
23,260
Included in other receivables is a deposit of £17,854 held by Finnish regulatory authorities (2019: £16,927).
Included in other receivables of both the Group and the Company is a balance of £1,392,081 funds due to be
received for shares issued (2019: £nil). This amount should be considered as a reconciling item to the working
capital movements included the operating line of the statement of cashflows, as this amount has been offset
against the gross cash proceeds received from the issue of shares.
13.
CASH AND CASH EQUIVALENTS
Group
2020
£
2019
£
Company
2020
£
2019
£
Bank accounts
4,329,414
4,329,414
1,124,062
1,124,062
4,241,426
4,241,426
978,514
978,514
84
14.
NON-CONTROLLING INTERESTS
The Group has material non-controlling interests arising from its subsidiaries Wayland Copper Limited and
Vardar Minerals Limited. These non-controlling interests can be summarised as follows;
Balance at 1 January
Total comprehensive loss allocated to NCI
Effect of step acquisitions
Total
Wayland Copper Limited
Vardar Minerals Limited
Total
2020
£
326,555
(145,955)
213,513
394,113
2019
£
(160,587)
(185,195)
672,337
326,555
2020
£
(161,677)
555,790
394,113
2019
£
(161,291)
487,846
326,555
Wayland Copper Limited is a 65.25 per cent owned subsidiary of the Company that has material non-
controlling interests (“NCI”).
Summarised financial information reflecting 100 per cent of the Wayland’s relevant figures is set out below:
Administrative expenses
Loss after tax
Loss allocated to NCI
Other comprehensive income allocated to NCI
Total comprehensive loss allocated to NCI
Current assets
Current liabilities
Net liabilities
Non-Controlling Interest
2020
£
2019
£
(1,471)
(1,471)
(1,537)
(1,537)
(512)
126
(386)
(534)
(169)
(703)
4,391
(469,644)
(465,253)
5,385
(469,531)
(464,146)
(161,677)
(161,291)
84
85
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
Vardar Minerals Limited, a 46.1% per cent owned subsidiary of the Company that has material non-
controlling interests (“NCI”).
Summarised financial information reflecting 100 per cent of the Vardar Minerals relevant figures is set out
below:
Administrative expenses
Loss after tax
Loss allocated to NCI
Other comprehensive income allocated to NCI
Total comprehensive loss allocated to NCI
Current assets
Non-Current assets
Current liabilities
Net Assets
Non-Controlling Interest
15.
SHARE CAPITAL
2020
£
2019
£
284,281
284,281
(248,836)
(248,836)
(165,668)
20,099
(145,569)
(161,173)
(23,319)
(184,492)
101,029
1,047,809
(134,829)
1,014,009
118,289
746,097
(30,462)
833,924
555,790
487,846
2020
Number
2020
£
2019
Number
2019
£
Allotted, called up and fully paid
At 1 January
Issued for cash
Issued for fees
At 31 December
602,244,672
225,841,752
88,800
828,175,224
6,022,446
2,258,417
888
8,281,751
566,307,254 5,663,072
357,707
1,667
602,244,672 6,022,446
35,770,751
166,667
All issues are for cash unless otherwise stated.
At 1 January 2019
1 April - Issue of new shares1
16 April – Issue of new shares2
13 October - Issue of fee shares
24 October - Issue of new shares3
13 November - Issue of new shares4
Number
566,307,254
13,636,364
8,695,652
166,667
9,090,909
4,347,826
Share
Capital
£
5,663,072
136,363
86,957
1,667
90,909
43,478
Share
Total
Premium
£
£
19,266,271 24,929,343
712,281
474,774
10,417
474,820
244,820
575,917
387,817
8,750
383,911
201,342
At 31 December 2019
602,244,672
6,022,446
20,824,009 26,846,455
1Includes issue costs of £37,719
2Includes issue costs of £25,226
3Includes issue costs of £25,180
4Includes issue costs of £5,180
86
At 1 January 2019
21 December - Issue of new shares1
21 December - Issue of fee shares
Number
602,244,672
225,841,752
88,800
Share
Capital
£
6,022,446
2,258,417
888
Share
Premium
£
20,824,009
3,858,810
1,918
Total
£
26,846,455
6,117,227
2,806
At 31 December 2019
828,175,224
8,281,751
24,684,737
32,966,488
1Includes issue costs of £1,304,322
The par value of all Ordinary Shares in issue is £0.01.
The Company has removed the limit on the number of shares that it is authorised to issue in accordance with
the Companies Act 2006.
Shares issued in 2020
On 21 December 2020, the Company announced the completion of a rights issue in Sweden, open offer and
subscription to issue a combined 197,599,345 ordinary shares of £0.01 to raise £6,500,000 before expenses.
As part of this offering, director fees outstanding to Chris Davies of £2,806 (2019:nil) were settled in shares.
On 21 December 2020, the Company announced a fully subscribed placing to 28,331,207 ordinary shares at
£0.01 raising £900,000 before expenses.
Shares issued in 2019
On 1 April 2019, the Company announced a subscription for 13,636,364 new ordinary shares of £0.01 each
to raise £750,000 before expenses.
On 16 April 2019, the Company announced a subscription for 8,695,652 new ordinary shares of £0.01 each
to raise £500,000 before expenses.
The Company announced, on 13 October 2019, that as a part of compensation for 500,000 options at 4p
forgone Kurt Budge was to be issued was issued 166,667 new ordinary shares with a commensurate value
of approximately £10,417 being the equivalent to the economic value of the lapsed options.
The Company announced, on 24 October 2019, a subscription for 9,090,909 new ordinary shares of £0.01
each to raise £500,000.
The Company announced, on 8 November 2019, a subscription for 4,347,826 new ordinary shares of £0.01
each to raise £250,000.
86
87
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
16.
SHARE-BASED PAYMENTS
During the year ended 31 December 2020, no options were granted (2019: 9,250,000). The options
outstanding as at 31 December 2020 have an exercise price in the range of 1.66 pence to 12.00 pence (2019:
1.66 pence to 12.00 pence) and a weighted average remaining contractual life of 1 years, 242 days (2019: 2
years, 98 days).
The share-based payments expense for the options for the year ended 31 December 2020 was £nil (2019:
£119,720).
The fair value of share options granted and outstanding were measured using the Black-Scholes model, with
the following inputs:
Fair value at grant date
Share price
Exercise price
Expected volatility
Option life
Risk free interest rate
2019
1.15p
5.65p
7.35p
51.89%
5 years
0.718%
2017
8.73p
14.28p
12.00p
70.00%
5 years
0.25%
2015
0.708p
1.25p
1.66p
170.90%
5 years
1.58%
The options issued will be settled in the equity of the Company when exercised and have a vesting period of
one year from date of grant.
Reconciliation of options
in issue
Number
2020
Weighted
average
exercise price
(£’s)
2020
Number
2019
Weighted
average
exercise price
(£’s)
2019
22,750,000
Outstanding at 1 January
-
Lapsed during the year
Granted during the year
-
Outstanding at 31 December 22,750,000
22,750,000
Exercisable at 31 December
0.060
-
-
0.060
0.060
14,000,000
(500,000)
9,250,000
22,750,000
22,750,000
0.051
0.040
0.074
0.074
0.060
During the year ended 31 December 2020 there was a modification to 9,000,0000 options held by Kurt
Budge, to extend the life of these options by 1 year. The effect on fair value of the extension of the options
was de minimis.
No warrants were granted during the year (2019: Nil).
88
17.
RESERVES
The following is a description of each of the reserve accounts that comprise equity shareholders’ funds:
Share capital
Share premium
The share capital comprises the issued ordinary shares of the Company
at par.
The share premium comprises the excess value recognised from the issue
of ordinary shares above par value.
Capital contribution reserve
The capital contribution reserve represents historic non-cash
contributions to the Company from equity holders.
Share-based payment reserve
Cumulative fair value of options charged to the consolidated income
statement net of transfers to the profit or loss reserve on exercised and
cancelled/lapsed options.
Translation reserve
Cumulative gains and losses on translating the net assets of overseas
operations to the presentation currency.
Merger reserve
The balance on the merger reserve represents the fair value of the
consideration given in excess of the nominal value of the ordinary
shares issued in an acquisition made by the issue of shares where the
transaction qualifies for merger relief under the Companies Act 2006.
Accumulated losses
Accumulated losses comprise the Group’s cumulative accounting profits
and losses since inception.
18.
TRADE AND OTHER PAYABLES
Current:
Trade payables
Social security and other taxes
Other payables
Accruals
Group
Company
2020
£
406,503
13,197
15,149
103,923
538,772
2019
£
2020
£
151,332
175,855
11,623
10,619
69,311
242,885
8,994
100
95,913
280,862
2019
£
19,593
8,648
100
62,063
90,404
Included in other trade and other payables of both the Group and the Company is a balance of £190,984
due be to paid for issue costs relating to share issues (2019: £nil). This amount should be considered as a
reconciling item to the working capital movements included the operating line of the statement of cashflows,
as this amount decreases the cash issue costs displayed in the cashflow statement rather than presenting as
a movement in working capital.
88
89
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
19.
DEFERRED INCOME
2020
£
2019
£
Grants
143,399
134,877
The grant held as deferred income represents the first tranche receipt of €215,619 (£192,205) received on
the 30 July, and additional advances of €28,750 (£25,796) made during the year ended 31 December 2020
in accordance with the Company’s participation of Project Pacific, a component of the European Union’s
Horizon 2020 program. The funds held are to be utilised in further exploration work, training of staff and
travel costs. The grant period was initially contracted to end on the 31 May 2021 at which point any excess of
funding over expenses submitted will required to be refunded, due to COVID-19 pandemic this deadline has
been extended to the 30 November 2021. In the year ended 31 December 2020, The Group released £11,444
(2019: £20,379) of the liability directly against intangible asset additions and recognised £12,637 as income
(2019: £37,080).
Also, in the year ended 31 December 2020, Fennoscandian has received funds from Business Finland of
£15,350 (2019: £109,687). The funds were paid in accordance with the Groups participation in Project
Green minerals, which specified a Grant up to a total of €161,000 and had an initial grant period from 1
January 2018 to 31 December 2019, this was extended to 30 April 2020 due to the COVID-19 pandemic. The
amounts incurred are sought for reimbursement following the expenses being incurred, as a result no liability
has been recorded in the financial statements for unallocated funds. The amounts outlined above have been
netted against intangible asset additions.
In addition, Fennoscandian is also participating in project titled “BATCircle - the development of a Finland-
based Circular Ecosystem of Battery Metals”. BATCircle is part of the European Union (“EU”) Strategic Energy
Technology Programme. The project is being administered by Business Finland and a 50 per cent contribution
to a budget of Euros 224,900. The funds will be used for graphite purification and spheroidization test work,
and the further assessment of Fennoscandian’s graphite for battery applications. The funding is released by
the administrator as incurred and the action runs from the 1 January 2019 to 31 January 2020. In the year to
31 December 2020, £11,462 (2019: £13,916) has been netted against intangible asset additions.
90
20.
LEASE LIABILITY
NATURE OF LEASING ACTIVITIES
Vardar Geoscience leases buildings located in Str. Highway Prishtina Mitrovice Village Shupkove No.2,
Kosovo.
Number of active leases
Lease liability at year end
Non-current
Lease liability
Current
Lease liability
31 Dec
2020
No.
1
31 Dec
2020
£
-
-
2,026
2,026
31 Dec
2019
No.
1
31 Dec
2019
£
1,914
1,914
5,558
5,558
Total lease liability
2,026
7,472
Analysis of lease liability
At 1 January 2020
Additions
Interest expense
Lease payments
Foreign exchange movements
At 31 December 2020
At 1 January 2019
Additions
Interest expense
Lease payments
Foreign exchange movements
At 31 December 2019
Lease liability
£
7,472
-
256
(6,095)
393
2,026
Lease liability
£
-
12,144
410
(4,875)
(207)
7,472
91
90
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
ANALYSIS OF GROSS VALUE OF LEASE LIABILITIES
Maturity of the lease liabilities is analysed as follows:
Within 1 year
Later than 1 year and less than 5 years
After 5 years
At 31 December 2020
The total cash outflow for leases in 2020 was £6,095 (2019: £4,875).
31 Dec
2020
£
2,026
-
-
2,026
21.
BORROWINGS
Opening balance
Funds advanced
Finance costs
Effect of FX
Funds repaid
Group
Company
2020
£
-
932,309
203,321
20,802
(1,156,432)
-
2019
£
-
-
-
-
-
-
2020
£
-
932,309
203,321
20,802
(1,156,432)
-
2019
£
-
-
-
-
-
-
On 13 August 2020, the Company secured a Bridging loan from Nordic investors of SEK 12 million
(approximately £1.0 million) The Loan has a fixed interest rate of 1.5 percent per stated 30-day period during
the duration. Accrued interest is non-compounding. The Loan had a commitment fee of 5 per cent and a
Maturity Date of 15 January 2021.
Beowulf had the option to repay the Loan and accrued interest at any time prior to the Maturity Date. If the
Loan and accrued interest was not repaid by 15 February 2021, at the latest, the Creditors had the right
to convert the Loan and accrued interest into Swedish Depository Receipts (“SDR”) at a price per SDR
calculated with a 10 per cent discount on the volume weighted average price of the SDR during the preceding
5 trading days to the conversion decision.
The Loan was accounted for using an amortised cost using an effective rate of interest. The conversion
feature contained within the loan is considered an embedded derivative and was not assessed to be
significant given the available inputs. The Loan was fully repaid on 17 December 20, following successful
capital raisings.
See Consolidated Statement of Cash Flows on page 60.
92
22.
CHANGES IN LIABILITIES FROM FINANCING ACTIVITIES
GROUP
Opening balance 1 January 2020
Cash movements
Drawdown of borrowings
Interest paid
Repayment of loan principal
Lease payments
Total
Non-cash movements
Finance cost
Effect of FX
Closing balance 31 December 2020
GROUP
Opening balance 1 January 2019
Cash movements
Drawdown of borrowings
Interest paid
Repayment of loan principal
Lease payments
Total
Non-cash movements
Recognition of right of use lease liabilities
Effect of FX
Closing balance 31 December 2019
Leases
£
7,472
Borrowings
£
-
Total
£
7,472
932,309
(93,935)
932,309
(93,935)
(1,062,497)
(1,062,497)
-
(6,095)
(224,123)
(222,746)
203,321
203,576
20,802
-
21,196
2,026
Total
£
-
(4,465)
(4,465)
12,144
(207)
7,472
(6,095)
1,377
255
394
2,026
Leases
£
-
(4,465)
(4,465)
12,144
(207)
7,472
In the consolidated and company cashflow statements, the cash repayment of the bridging loan of
£1,062,497 has been offset against the gross proceeds from the issue of shares, this is due to the proceeds
from the issue of shares being received net of the debt repayment.
92
93
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
23.
FINANCIAL INSTRUMENTS
The Group and Company’s financial instruments comprise cash and cash equivalents, loans and investments,
trade receivables and trade payables that arise directly from its operations.
The Group and Company hold the following financial instruments:
At 31 December 2020
FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
Loans to group undertakings
Other financial assets
FINANCIAL LIABILITIES
Trade and other payables
Lease liability
At 31 December 2019
FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
Loans to group undertakings
Other financial assets
FINANCIAL LIABILITIES
Trade and other payables
Lease liability
Held at
amortised
cost
£
4,329,414
1,428,491
-
5,468
5,763,373
Group
Total
£
4,329,414
1,428,491
-
5,468
5,763,373
Held at
amortised
cost
£
4,241,426
1,391,081
9,338,531
2,784
14,974,822
Company
Total
£
4,241,426
1,391,081
9,338,531
2,784
14,974,822
525,577
2,026
527,603
525,577
2,026
527,603
415,270
-
415,270
415,270
-
415,270
Held at
amortised
cost
£
1,124,062
94,653
-
5,212
1,223,927
Group
Total
£
1,124,062
94,653
-
5,212
1,223,927
Held at
amortised
cost
£
978,514
-
8,986,667
2,784
9,967,965
Company
Total
£
978,514
-
8,986,667
2,784
9,967,965
231,262
7,472
238,734
231,262
7,472
238,734
81,756
-
81,756
81,756
-
81,756
The main purpose of these financial instruments is to finance the Group’s and Company’s operations. The
Board regularly reviews and agrees policies for managing the level of risk arising from the Group’s financial
instruments as summarised below.
a) Market risk
Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates,
interest rates and equity prices will affect the Group’s and Company’s income or the value of its holdings in
financial instruments.
94
i)
Foreign exchange risk
The Group operates internationally and is exposed to currency risk arising on cash and cash equivalents,
receivables and payables denominated in a currency other than the respective functional currencies of
the Group entities, which are primarily Swedish Krona, Euro and Sterling. The Group’s and Company’s net
exposure to foreign currency risk at the reporting date is as follows:
Group
2020
£
2019
£
Company
2020
£
2019
£
4,173,822
49,019
4,222,841
14,007
24,036
38,043
4,181,711
38,196
4,219,907
4,861
(104,723)
(98,862)
Net foreign currency financial
(liabilities)/assets:
Swedish Krona
Euro
Total net exposure
Sensitivity analysis
A 10 per cent strengthening of sterling against the Group’s primary currencies at 31 December 2020 would
have increased/(decreased) equity and profit or loss by the amounts shown below:
GROUP
Swedish Krona
Euro
Total
COMPANY
Swedish Krona
Euro
Total
Profit or Loss
Equity
2020
£
(417,382)
(4,902)
(422,284)
2019
£
(1,401)
(2,404)
(3,805)
2020
£
(417,382)
(4,902)
(422,284)
Profit or Loss
Equity
2020
£
(418,171)
(3,820)
(421,991)
2019
£
(486)
10,472
9,986
2020
£
(418,171)
(3,820)
(421,991)
2019
£
(1,401)
(2,404)
(3,805)
2019
£
(486)
10,472
9,986
A 10 per cent weakening of sterling against the Group’s primary currencies at 31 December 2020 would have
an equal but opposite effect on the amounts shown above
Interest rate risk
ii)
The Group’s and Company’s policy is to retain its surplus funds on the most advantageous term of deposit
available up to a 12-month maximum duration. Given that the Directors do not consider that interest income
is significant in respect of the Group’s and Company’s operations no sensitivity analysis has been provided in
respect of any potential fluctuations in interest rates.
94
95
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the
instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from interest bearing
financial assets and liabilities that the Group uses. The Group’s interest-bearing financial liabilities were the
bridging loan finance entered into and repaid during the year; these were at a fixed rate of interest.
b)
Credit risk
The Group’s principal financial assets are the cash and cash equivalents and loans and receivables, as
recognised in the statement of financial position, and which represent the Group’s maximum exposure to
credit risk in relation to financial assets. The Group and Company policy for managing its exposure to credit
risk with cash and cash equivalents is to only deposit surplus cash with financial institutions that hold a
Standard & Poor’s, BBB- rating as a minimum.
The Company has made unsecured interest-free loans to its subsidiaries. Although they are repayable on
demand, they are unlikely to be repaid until the projects becomes successful and the subsidiaries start to
generate revenues. An assessment of the expected credit loss arising on intercompany loans is detailed in
note 10.
The amounts used by the subsidiaries are as follows:
Jokkmokk Iron Mines AB
Beowulf Sweden AB
Oy Fennoscandian Resources AB
Gross
2020
£
2019
£
7,407,215
7,241,375
358,947
1,572,369
9,338,531
361,773
1,383,519
8,986,667
Reconciliation of provisions against receivables arising from lifetime ECLs
ECLs
Total provision arising from ECLs
31
December
2019
£
1,841,504
1,841,504
Current
year
movement
£
72,069
72,069
31
December
2020
£
1,913,573
1,913,573
The Directors have also assessed the cash flow scenarios of the above considerations. Estimations were
made regarding the credit risk of the counterparty and the underlying probability of default in each of the
credit loss scenarios. The scenarios identified by management included Production, Divestment, Fire-sale
and Failure. These scenarios considered technical data, necessary licences to be awarded, the Company’s
ability to raise finance, and ability to sell the project. The ECL to the 31 December 2020 represents the 12
month expected credit loss, as underlying credit risk of the intercompany loans has not changed since initial
recognition. A reasonable change in the probability weightings of 3% would result in further impairment of
£573,813 (2019 :£552,193).
96
i)
Commodity price risk
The principal activity of the Group is the exploration for iron ore in Sweden, graphite in Finland and other
prospective minerals in Kosovo, and the principal market risk facing the Group is an adverse movement in
the price of such commodities/industrial minerals. Any long-term adverse movement in market prices would
affect the commercial viability of the Group’s various projects..
Liquidity risk
c)
To date the Group and Company have relied on shareholder funding to finance operations. As the Group and
Company have finite cash resources and no material income, the liquidity risk is significant and is managed
by controls over expenditure and cash resources. In addition, the Group and Company do not have any
material borrowings and primarily have trade and other payables with a maturity of less than one year, the
only exception being the lease liability per note 20. The rationale for the preparation of the accounts on a
going concern basis is detailed in the Report of the Directors.
Capital management
d)
The Groups capital structure consists of issued capital and reserves, accumulated losses and non-controlling
interest. The Board’s policy is to preserve a strong capital base in order to maintain investor, creditor
and market confidence and to safeguard the future development of the business, whilst balancing these
objectives with the efficient use of capital.
GROUP
NET WORKING CAPITAL
Cash and cash equivalents
Trade payables
Grant income
Net cash
Total equity
Net cash to equity ratio
2020
£
4,329,414
(538,771)
(143,399)
3,647,244
2019
£
1,124,062
(242,885)
(134,877)
746,300
16,736,480
11,219,345
21.79%
6.65%
96
97
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
24. SEGMENT REPORTING
The Group’s only reportable segment is the exploration for, and the development of iron ore, graphite and
other mineral deposits. The Group also reports by geographical reportable segment in the countries in which
it operates. The Group’s exploration and development activities are focused on three countries, Sweden,
Finland and Kosovo, with support provided from the UK headquarters. In presenting information on the basis
of geographical reportable segments, the loss for the year, key statement of financial position data, property,
plant and equipment additions and deferred exploration additions is based on the geographical location of
the assets. The Group has adopted IFRS 8 ‘Operating Segments’. IFRS 8 requires operating segments to be
identified on the basis of internal reports that are regularly reviewed by the chief operating decision maker to
allocate resources and assets.
2020
Sweden
£
Finland
£
Kosovo
£
UK
£
Total
£
Licence and Exploration
Other non-current assets
Current assets
Liabilities
Finance Income
Finance Costs
Impairment
Expenses
Loss for the year
Total comprehensive loss
7,927,185
2,995
34,383
(42,172)
-
-
18,879
(69,891)
(66,320)
679,410
1,457,655
5,659
41,917
(68,595)
-
-
79,920
(146,460)
(137,394)
(63,324)
1,906,001
70,317
71,687
(53,274)
-
(255)
-
(180,660)
(180,660)
(193,935)
81,075
73,528
5,748,275
(520,155)
594
(203,321)
-
(910,911)
(910,317)
(862,822)
11,371,916
152,499
5,896,262
(684,196)
594
(203,576)
98,799
(1,307,922)
(1,294,691)
(440,671)
2019
Licence and Exploration
Other non-current assets
Current assets
Liabilities
Finance Income
Finance Costs
Impairment
Expenses
Loss for the year
Total comprehensive loss
7,036,672
2,711
46,339
(28,453)
-
-
-
(110,224)
(109,538)
(795,503)
1,214,595
9,700
124,145
(86,702)
-
-
10,720
(55,221)
(20,252)
(89,186)
1,578,300
75,689
48,346
(29,979)
-
-
-
(167,513)
395,918
405,782
181,897
11,434
1,072,493
(240,100)
6,298
(410)
-
(702,148)
(694,835)
(744,099)
10,011,494
99,534
1,291,323
(385,234)
6,298
(410)
10,720
(1,035,106)
(428,707)
(1,223,006)
98
25. RELATED PARTY DISCLOSURES
Transactions with subsidiaries
During the year, cash advances of £170,257 (2019: £286,045) were made to Jokkmokk Iron Mines AB and
incurred costs of £68,130 that were paid on behalf by the Company (2019: £131,948). The advances are held
on an interest free inter-group loan which has no terms for repayment. At the year end the inter-Group loan
amounted to £7,407,215 (2019: £7,241,374).
Beowulf Sweden AB received cash advances of £nil (2019: £72,290) and settled had net settled costs with
the Company of (£2,512) (2019: £5,057). The advances are held on an interest free inter-Group loan which
has no terms for repayment. At the year end the inter-Group loan amounted to £358,947 (2019: £361,772).
OY Fennoscandian AB received cash advances of £206,513 (2019: £479,458) and incurred costs of £19,936
(2019: £31,296) that were paid on behalf by the Company. The advances are held on an interest free inter-
Group loan which has no terms for repayment. At the year end the inter-Group loan amounted to £1,572,369
(2019: £1,383,518).
In accordance with its service agreement, Fennoscandian charges Beowulf Mining plc for time incurred by
its staff on exploration projects held by other entities in the Group. In turn Beowulf Mining plc recharges the
other entities involved.
In addition, Beowulf Mining plc charges entities in the Group for time and expenses spent by Directors
on providing services. An arm’s length margin has been included at entity level, but this is subsequently
eliminated on consolidation.
The Company has made unsecured interest-free loans to its subsidiaries. Although they are repayable on
demand, they are unlikely to be repaid until the projects becomes successful and the subsidiaries start to
generate revenues. An assessment of the expected credit loss arising on intercompany loans is detailed in
note 21.
Transactions with other related parties
Key management personnel include all Directors and those who have authority and responsibility for
planning, directing and controlling the activities of the entity, the aggregate compensation paid to key
management personnel of the Company is set out below.
Short-term employee benefits (including employers’
national insurance contributions)
Bonus
Post-retirement benefits
Share based payments
Share settled expense
Insurance
2020
£
2019
£
435,353
4,608
26,710
-
-
874
467,545
489,727
-
30,364
105,359
10,417
809
636,676
Mr Blomqvist incurred a charge of £nil with respect of remaining unvested options (2019: £22,976).
Mr Blomqvist is considered key management personnel in his role as the Group’s Exploration Manager.
98
99
2020 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
Key management personnel commitments and shareholdings
On 6 November 2020, included in the Company’s announcement regarding a partially secured capital raising,
certain of the Directors and Rasmus Blomqvist agreed to subscribe for Open Offer Shares and Additional
Subscription Shares. The Company received pre-subscription commitments totalling approximately £87,000
regarding the Open Offer and Additional Subscription from certain members of the Directors and Rasmus
Blomqvist, as below:
Name
Number and type
of New Ordinary Shares
Number of Ordinary Shares
at the end of the period
Kurt Budge
Christopher Davies
Rasmus Blomquist
Open Offer Shares 906,159
Additional Subscription Shares 88,800
Open Offer Shares 1,743,750
3,322,585
88,800
6,393,750
26. EVENTS AFTER THE REPORTING DATE
On 8 February 2021, Beowulf invested £200,000 in Vardar Minerals limited, increasing the Company’s
investment in Vardar from 46.1% to 48.4%.
On 12 March 2021, Fennoscandian has recently signed a Memorandum of Understanding (“MoU”) with
Epsilon Advance Materials Limited (“EAMPL”). The MoU enables Fennoscandian to build its downstream
capability, collaborating with a strong and innovative technology/processing partner, and for EAMPL to firmly
establish itself in Finland, as a market-entry point for supplying pre-cursor anode material into Europe. The
MoU addresses the development of a strategic processing hub for both natural flake and recycled graphite to
be located in Finland.
100
100
101
2020 Beowulf Mining plc Annual Report Notes
102
102
103
2020 Beowulf Mining plc Annual Report Company Information
Directors
Mr K R Budge
Mr C Davies
Mr S O Littorin
Secretary
ONE Advisory Limited
Registered
Number & Office
Incorporated in England
and Wales
02330496 (England & Wales)
Beowulf Mining plc
201 Temple Chambers
3-7 Temple Avenue
London EC4Y 0DT
Registrars
Neville Registrars Ltd
Neville House,18 Laurel Lane
Halesowen
West Midlands
B63 3DA
Swedish Registered
Address
All subsidiary companies
Storgatan 36,
921 31 LYCKSELE
Sweden
Nominated Adviser
& Broker
SP Angel Corporate Finance LLP
Swedish Custodian
Bank
Skandinaviska Enskilda
Prince Frederick House
35-39 Maddox Street
London
W1S 2PP
Banken AB
ST M7
106 40 Stockholm
Sweden
Finnish Office
Oy Fennoscandian
Resources AB
Akademigatan 1,
20500 Åbo
Finland
Auditors
BDO LLP
55 Baker Street
London
W1U 7EU
UK Bank
The Royal Bank of Scotland
Public Relations UK
Blytheweigh Communications
Website
https://beowulfmining.com/
Piccadilly Circus Branch
4-5 Castle Court
London
EC3V 9DL
48 Haymarket
London
SW1Y 4SE
Solicitors
BHW Solicitors
1 Smith Way
Grove Park
Enderby
Leicestershire
LE19 1SX
104
104
105
2020 Beowulf Mining plc Annual Report https://beowulfmining.com/