Annual Report
2021
“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
SWEDEN
FINLAND
Aitolampi
Rääpysjärvi
GVA10/50
Karhunmäki
Luopionen
Åtvidaberg
Beowulf Mining Projects
Mitrovica
KOSOVO
KOSOVO
Viti
2
Contents
Company Profile
Company’s Purpose
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
2
4
5
14
30
32
40
43
45
48
56
57
58
59
60
62
64
65
Notes to the Consolidated and Company Financial Statements
66
Company Information
106
2
1
2021 Beowulf Mining plc Annual Report Company Profile
Beowulf Mining plc (“Beowulf” or the “Company”) is listed
on London’s Alternative Investment Market (“AIM”)
(Ticker: BEM) and Stockholm’s Spotlight Exchange
(Ticker: BEO).
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’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. Kallak is excellently positioned as a potential
secure and sustainable supplier of high-quality iron ore
to Sweden’s growing fossil-free steel making sector for
decades to come. In the Kallak area, 389 million tonnes
(“Mt”) of iron mineralisation have been estimated.
On 22 March 2022, the Minister of Enterprise and
Innovation, The Government of Sweden announced
the award of the Concession for Kallak; attached to
the decision were 12 conditions for the Company
to comply with. The Company’s legal advisers
have reviewed the Government’s decision and the
conditions attached to it and are satisfied that, with
respect to the conditions, they include matters the
Company would naturally expect to address in project
development and the Environmental Court process.
The first exploration licence for Kallak was awarded
by the Mining Inspectorate of Sweden in 2006. Drilling
was conducted between 2010-2014, a total of 131
holes and 27,895 metres (“m”).
On 25 May 2021, the Company published a ‘Mineral
Resource Estimate and Exploration Target Upgrade’,
prepared by Baker Geological Services (“BGS”). For
Kallak North, a Measured and Indicated Resource of
111 Mt grading 28 per cent iron content was defined.
With an additional Inferred Resource of 25 Mt grading
28.3 per cent iron.
For Kallak North and South combined, BGS derived
a Measured and Indicated Mineral Resource of 132
Mt grading 27.8 per cent iron and an Inferred Mineral
Resource of 39 Mt grading 27.1 per cent iron. In
addition to the figures above, exploration targets
were reported for Kallak South and the Company’s
Parkijaure licences.
In September 2020, the Company published the
findings of an investigation by Dr. Arvidson MSc
Mining/Mineral Processing, PhD Mineral Processing
(equivalent), Royal Institute of Technology, Stockholm,
as Qualified Person, into the market potential of
future products from Kallak, based on the results of
laboratory and pilot plant testwork conducted to date,
the highlights of which can be summarised as follows:
• 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; 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.
In southern Sweden, the Company has its Åtvidaberg
nr 1 (“Åtvidaberg”) exploration licence, which is
prospective for polymetallic discoveries, mainly copper
and zinc.
2
In Finland, Grafintec, previously Fennoscandian
Resources, is developing a resource footprint
of natural flake graphite and anode materials
production capability, offering sustainable and
secure supply to Europe’s rapidly expanding
lithium-ion battery market. Grafintec seeks to
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, including anode materials for
lithium-ion batteries.
Aitolampi remains Grafintec’s most advanced
graphite project and the Company has invested
approximately £1.5 million in exploration, mineral
resource development, metallurgical testwork and
the assessment of market applications for graphite,
including lithium-ion battery applications.
In 2021, the Company made significant progress
through its collaboration with Epsilon Advanced
Materials Limited (“EAMPL”) and is enhancing its
position within the Finnish battery ecosystem. On
6 December 2021, Grafintec signed Heads of Terms
(“HoT”) for a Joint Venture (“JV”) with EAMPL, for
the establishment of an anode materials production
facility. Grafintec will own 49 per cent of the JV,
with Epsilon owning 51 per cent. The project will
work towards creating a sustainable value chain
in Finland from high-quality natural flake graphite
resources to anode material production, leveraging
renewable power, targeting net zero CO2 emissions
across the supply chain.
In Kosovo, Beowulf is invested in exploration for
base and precious metals. At the signing date of
this report the Company has a 59.5 per cent interest
in Vardar Minerals Ltd (“Vardar”) and Vardar is
drilling on the Mitrovica licence. Vardar is focused
on exploration in the Tethyan Belt, a major orogenic
metallogenic province for gold and base metals. At
Mitrovica, Vardar is delivering exciting results and
has defined several exploration targets, including
lead, zinc, silver, copper, and gold. It also has the Viti
licence which is showing potential for copper-gold
porphyry mineralisation. With Beowulf’s support,
Vardar is focused on making a discovery. 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.
PORTFOLIO OF ASSETS IN
KOSOVO
FINLAND
SWEDEN
59.5% stake in
Vardar Minerals Ltd
Mitrovica
(Pb, Zn, Cu, Ag, Au)
Viti
(Cu, Au, Li)
100% owned
Grafintec
RESOURCES
Aitolampi
(C)
EXPLORATION PERMITS
Rääpysjärvi
(C)
Karhunmäki
(C)
Luopionen
(C)
Kallak
(Fe)
Åtvidaberg
(Pb, Zn, Cu, Ag)
2
3
2021 Beowulf Mining plc Annual Report Company’s Purpose
The Company’s 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, which includes iron ore, graphite, and
base metals, 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.
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”
4
4
Chairman’s Statement
Dear Shareholders
Introduction
Following on from the Capital Raising in late 2020,
the Beowulf team was keen to maintain momentum
through 2021, despite the ongoing impact of
COVID-19 restrictions.
The Company finished the year with strong
prospects for 2022 across our three business areas;
the future development of an anode materials plant
in Vaasa, Finland; the restart of drilling in Kosovo;
and a new Minister talking about making a decision
on our Kallak application, which finally happened on
22 March 2022.
Sustainability, short and secure supply chains of
primary raw materials, and, in this context, the need
for mines to supply regional manufacturers and
thereby meet society’s needs are critical to achieving
the transition to a Green Economy.
With Kallak, the Company believes it can
demonstrate how mining can take place, in balance
with the environment and stakeholder interests, for
the benefit of wider society, and thereby validate
Sweden’s leadership in sustainable mining and
responsible business practice.
The Company is focused on the role it plays in
society and its contribution and is committed to
working constructively - and in good faith - with all
stakeholders and engaging in meaningful dialogue.
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4
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2021 Beowulf Mining plc Annual Report
E
R
O
N
O
R
I
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Beowulf has been listed in Sweden since 2008.
At the year end, the Company was almost 75 per
cent owned by Swedish shareholders trading on
the Spotlight Exchange.
Much has changed since the first Exploration
Licence was granted in 2006 and during the
nearly nine years since the Company submitted its
application for an Exploitation Concession in April
2013. In our daily lives, the Climate Emergency
is an ever-present threat. In Norrbotten fossil-
free steel making is in the ascendency and there
is increasing demand for high quality iron ore,
such as Kallak’s market-leading 71.5 per cent
iron magnetite concentrate, in both innovative
and traditional steel making processes in Sweden
and Europe, to eliminate CO2 emissions from steel
production, increase energy efficiency, minimize
waste and the impact of waste disposal.
During 2021, the Company responded to
Government enquiries, continuing to demonstrate
that its application for an Exploitation Concession
for Kallak North was comprehensive. In December
2021, changes in the Swedish Government put
renewed focus on the importance of primary raw
material supply from mines as part of the Green
Transition.
The Company’s longstanding commitment to
Kallak was finally recognised when, on 22 March
2022, the Minister of Enterprise and Innovation
announced the award of the Exploitation
Concession for Kallak North. The Company’s
legal advisers have reviewed the Government’s
decision and the conditions attached to it and are
satisfied that, with respect to the conditions, they
include matters the Company would naturally
expect to address in project development and the
Environmental Court process.
Kallak is excellently positioned as a potential
secure and sustainable supplier of high-quality
iron ore to Sweden’s fossil-free steel making sector
for decades to come. In the Kallak area, 389 million
tonnes of iron mineralisation have been estimated.
When it comes to sustainable mining in the north
of Sweden, mines can be powered by renewable
electricity, with the goal being ‘Net Zero’ mining
operations. There is a tremendous opportunity
to create a fossil-free business ecosystem of
companies and stakeholders, collaborating and
delivering the greater good.
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7
2021 Beowulf Mining plc Annual Report I
E
T
H
P
A
R
G
8
Grafintec
(formerly Fennoscandian Resources)
Grafintec had an extremely busy 2021,
advancing its collaboration with Epsilon
Advanced Materials from a Memorandum
of Understanding (“MoU”) in March 2021, to
the signing of a Joint Venture Head of Terms
in December 2021, with plans to build an
anode materials production facility, project
name GVA10/50, situated in the GigaVaasa
Battery Ecosystem in the City of Vaasa,
Finland. During the year, Kurt Budge CEO
visited Epsilon Carbon in India in September
2021 to further strengthen the partnership.
In January 2022, further progress was made
with the signing of an MoU with the City of
Vaasa for the establishment of an anode
materials production facility to be located
in the GigaVaasa area, Plot 18, situated
in proximity to Freyr Battery’s proposed
battery cell development.
In the middle of 2021, Grafintec was
granted €791,000 by Business Finland,
equivalent to 50 per cent of the three-year
€1.6 million budget for its ‘Spheronisation
and Purification of Natural Graphite for
the European Lithium-Ion Battery Market’
project.
Grafintec truly values the support of
Business Finland, which has now been
evident over several years, as the Company
seeks to play a full role in the Finnish
Battery Ecosytem, creating a sustainable
value chain from high-quality natural
flake graphite resources to anode material
production, leveraging renewable power,
targeting net zero CO2 emissions across the
supply chain.
In the context of GVA10/50, work continues
on aspects of the Aitolampi Scoping Study,
as it represents a potential mining asset
offering supply chain security to Finnish
anode materials production.
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2021 Beowulf Mining plc Annual Report S
L
A
T
E
M
E
S
A
B
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Vardar Minerals
(“Vardar”)
During 2021, the Company invested a further
£300,000 with the expectation that licences were
going to be renewed. As I write, Vardar has now
secured both licence renewals and been awarded
the promising Shala licence, and the Company has
made further investments of £1.2 million to fund
drilling and taking the Company’s ownership of
Vardar to approximately 59.5 per cent.
Drilling is underway and will cover both the
Majdan Peak gold (“Au”) prospect and the Wolf
Mountain zinc-lead-silver (“Zn-Pb-Ag”) targets. A
total programme of approximately 3,400 metres is
planned.
The Majdan Peak prospect, located adjacent to
the Stan Terg deposit, is defined by a blanket
of advanced argillic alteration typical of high
sulphidation epithermal systems. Rock and soil
sampling programmes have identified widespread
and significant Au anomalies (up to 11 grammes
per tonne (“g/t”) in rock samples and up to 0.36
g/t in soils). Results from 3D IP surveys have
delineated prominent IP anomalies which are
clearly associated with soil and rock anomalies
at shallow depth. Associated resistivity results
correlate well with mapped alteration, and likely
model a resistive silica-rich cap. Importantly the
IP suggests the best target is located at greater
depth to the north of the soil anomalies below the
modelled silica cap as would be expected in typical
high-sulphidation Au deposits. The 2022 drill
programme will focus on drilling a selection of the
most compelling IP targets on this prospect.
At Wolf Mountain, in 2020, the area was covered
by an extensive 3D IP campaign which identified
a series of exceptionally high IP anomalies located
on distinct northwest trends. The anomaly trends
are clearly visible in ultra-high resolution drone
magnetics collected during the same campaign
and link with neighbouring Stan Terg and Zijika
deposits as well as being supported by significant
soil and rock sample anomalies.
The 2022 drill programme will in part focus on
testing these anomalies to determine if they
represent important feeder structures to the
widespread mineralisation identified across Wolf
Mountain.
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2021 Beowulf Mining plc Annual Report Shareholder Base
At 31 December 2021, there were 621,366,320
Swedish Depository Receipts representing
74.71 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 raised no
additional funds during the year, having completed
a fully subscribed Capital Raising of approximately
£7.4 million before expenses (approx. SEK 83
million) at the end of 2020.
The Board continues to adopt the going
concern basis to the preparation of the financial
statements. The Group is dependent on further
equity fundraising to operate as a going concern
for at least 12 months from the date of approval of
the financial statements. Although the Group has
had past success in fundraising and continues to
attract interest from investors, making the Board
confident that such fundraising will be available
to provide the required capital, there can be no
guarantee that such fundraising will be available
and as such this constitutes a material uncertainty
over going concern.
2021 Financial Performance
For the year, the consolidated loss increased
from £1,294,691 in 2020 to £1,485,611. This
increase was largely attributable to an increase in
administration expenses.
Administration expenses increased in the year
from £1,005,547 to £1,503,049, due mostly to an
expense in relation to the net settlement of share
options of £103,281, increased foreign currency
translation losses of £298,442 (2020: £36,348),
and increased consultancy fees of £107,032
(2020: £46,087) for strategic and corporate
advisory.
Consolidated basic and diluted loss per share for
the 12 months ended 31 December 2021 was 0.16
pence (2020: loss of 0.19 pence).
£3,336,134 in cash was held at the year-end
(2020: £4,329,414).
The translation reserve losses attributable to the
owners of the parent increased from £457,272 at
31 December 2020 to £1,216,985 at 31 December
2021. Much of the Company’s exploration costs
are in Swedish Krona which has worsened against
the pound since 31 December 2020.
Corporate
The Company announced, on 8 July 2021, the
issue and allotment of 3,535,412 new ordinary
shares of 1 pence each in the Company to satisfy
an exercise of share options held by Kurt Budge,
CEO.
12
2020 Beowulf Mining plc Annual Report
12
We acknowledge the traditional owners of the lands
at Kallak, past elders, present and emerging leaders,
and now that the Concession decision has been
made, we look forward to re-engaging with them and
together building a framework for ongoing good-faith
dialogue.
Grafintec is creating a sustainable value chain in
Finland from high-quality natural flake graphite
resources to anode material production, leveraging
renewable power, targeting net zero CO2 emissions
across the supply chain, with the GVA10/50 project
taking the Company to another level.
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, and we are excited to find out what this
year’s drilling can bring.
The Company has an attractive portfolio of business
areas and we have big ambitions. We will respond
to challenges of what it takes to be a responsible
company. The Company will remain focused on its
role in society, its contribution and its commitment to
working constructively - and in good faith - with all
stakeholders and engaging in meaningful dialogue.
The Company wants to be recognised for living its
values of Respect, Partnership and Responsibility.
Our recent ESG work has identified Sustainable
Development Goals which the Company will be
focusing on, and our plans take into consideration our
future compliance with The Equator Principles. The
Company has recently published its ESG Policy which
can be viewed on the Company’s website following
the link: https://beowulfmining.com/about-us/esg-
policy/.
Sven Otto Littorin
Non-Executive Chairman
25 May 2022
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.
Outlook
Whether it be the ever-present Climate Emergency
in our daily lives, the need for a Green Transition, or
geopolitical tensions, we are in a crisis, where the
convergence of global issues demands real action to
secure primary raw materials to enable us to continue
to live our lives in a safe, secure and better world.
The Board believes that Russia’s aggression against
Ukraine will not have an impact on the Company,
directly or indirectly.
Metals are critical to achieving the Green Transition.
As are transparent, secure, and sustainable supply
chains.
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.
Kallak is excellently positioned as a potential secure
and sustainable supplier of high-quality iron ore to
Sweden’s growing fossil-free steel making sector for
decades to come and we are excited to finally take the
project on to its next stage of development.
The Company’s overall objective is to have Kallak in
production in 3-4 years, developing the mine alone or
with a strategic partner. It seems that authorities and
courts dealing with permits are responding to material
issues, such as the Climate Emergency and the Green
Transition, when considering downstream industrial
projects. If Kallak were to be treated equally, and
even as a priority case, given the drive for security of
supply and self-sufficiency of primary raw materials in
Sweden and Europe, then the Company will be doing
all it can to make 3-4 years achievable.
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13
13
2021 Beowulf Mining plc Annual Report Review of Operations
and Activities
Permits
Beowulf, via its subsidiaries, currently holds six exploration permits in
Sweden, and one Exploitation Concession, as set out in the table below:
Name
Licence
no.
Area
(hectares)
Valid
from
Valid
to
Åtvidaberg nr 12
2016:51
12,533
30/05/16 30/05/2023
Kallak nr 11 3
2006:197
Parkijaure nr 61
2019:81
Parkijaure nr 21
2008:20
500
999
285
28/06/06 28/06/2022
10/10/19 10/10/2022
18/01/08 18/01/2023
Parkijaure nr 71
2021:47
2,212
18/01/08 18/01/2023
Ågåsjiegge nr 31
2021:73
2,771
27/10/21 27/10/2024
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. On
22 March 2022, the Minister of Enterprise and
Innovation, announced the award of the Concession
for Kallak nr 1; attached to the decision were 12
conditions for the Company to comply with. The
Company’s legal advisers have reviewed the
Government’s decision and the conditions attached
to it and are satisfied that, with respect to the
conditions, they include matters the Company
would naturally expect to address in project
development and the Environmental Court process.
Kallak
SWEDEN
Åtvidaberg
N
E
D
E
W
S
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Kallak Introduction
Kallak Resource
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.
Kallak was discovered by The Swedish Geological
Survey (“SGU”) in the 1940s. The first exploration
licence for Kallak was awarded by the Mining
Inspectorate of Sweden in 2006. Drilling was
conducted at Kallak North and South between
2010-2014, a total of 131 holes and 27,895
metres (“m”).
Kallak 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 southeast. 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.
Kallak is excellently positioned as a potential
secure and sustainable supplier of high-quality
iron ore to Sweden’s growing fossil-free steel
making sector for decades to come. In the
Kallak area, 389 million tonnes (“Mt”) of iron
mineralisation have been estimated and when
it comes to sustainable mining in the north of
Sweden, mines can be powered by renewable
electricity, with the goal being ‘Net Zero’ mining
operations.
On 25 May 2021, the Company published a
‘Mineral Resource Estimate and Exploration
Target Upgrade’, prepared by Baker Geological
Services (“BGS”). For Kallak North, a Measured
and Indicated Resource of 111 Mt grading 28 per
cent iron content was defined. With an additional
Inferred Resource of 25 Mt grading 28.3 per cent
iron.
For Kallak North and South combined, BGS
derived a Measured and Indicated Mineral
Resource of 132 Mt grading 27.8 per cent iron and
an Inferred Mineral Resource of 39 Mt grading
27.1 per cent iron. In addition to the figures above,
exploration targets were reported for Kallak South
and the Company’s Parkijaure licences.
BGS prepared a Technical Report which serves
as an independent report prepared by the
Competent Person (“CP”) as defined by the Pan-
European Reserves and Resources Reporting
Committee (“PERC”) Standard for Reporting
of Exploration Results, Mineral Resources and
Mineral Reserves. PERC sets out minimum
standards, recommendations and guidelines for
Public Reporting of Exploration Results, Mineral
Resources and Mineral Reserves in Europe.
PERC is a member of CRIRSCO, the Committee
for Mineral Reserves International Reporting
Standards, and the PERC Reporting Standard
is fully aligned with the CRIRSCO Reporting
Template.
14
15
2021 Beowulf Mining plc Annual Report Below is a table showing the Mineral Resource Statement for the Kallak Project at a 0% Fe cut-off grade:
Deposit
Classification
Million
Tonnes
Density
(g/cm3)
Fe
(%)
FeO
(%)
SiO2
(%)
Al2O3
(%)
P
(%)
S
(%)
Kallak North
Measured
Kallak South
North
Kallak South
South
Total
Indicated
Sub-Total
Inferred
Measured
Indicated
Sub-Total
Inferred
Measured
Indicated
Sub-Total
Inferred
Measured
Indicated
Sub-Total
Inferred
16
95
111
25
21
21
6
8
16
116
132
39
3.5
3.3
3.3
3.4
3.3
3.3
3.2
3.3
3.5
3.3
3.3
3.3
33.6
10.5
43.4
2.9 0.04 0.002
27.0
7.1
49.8
4.5 0.03 0.002
28.0
7.6
48.9
4.3 0.03 0.002
28.3
7.8
48.1
4.2 0.04 0.002
26.9
7.2
49.3
4.9 0.04 0.003
26.9
7.2
49.3
4.9 0.04 0.003
23.4
6.5
50.1
6.6 0.05 0.004
26.1
12.0
50.1
5.2 0.05 0.009
33.6
10.5
43.4
2.9 0.04 0.002
27.0
7.1
49.7
4.6 0.03 0.002
27.8
7.5
48.9
4.4 0.03 0.002
27.1
8.5
48.8
4.8 0.04 0.004
Notes:
(1) Mineral Resources, which are not Mineral Reserves, have no demonstrated economic viability.
(2) The effective date of the Mineral Resource is 9 May 2021.
(3) The Open Pit Mineral Resource Estimate was constrained within lithological and grade-based solids and within an optimised pit
shell defined by the following assumptions; base case metal price of USD130 / tonne for a 65% Fe concentrate; Fe recovery of 71%
at Kallak North, 86% at Kallak South North and 94% at Kallak South South; Fe concentrate grades of 68% at Kallak North, 70% at
Kallak South North and 69% at Kallak South South; Processing costs of USD6.8 / t wet; Selling cost of USD21.0 / t wet concentrate;
Mining cost of Ore of USD3.3 / t, mining cost of waste of USD3.0 / t and an incremental mining cost per 10 m bench of USD0.05 / t;
Wall angles of 30° within the overburden and 47.5° in the fresh rock.
(4) Mineral Resources have been classified according to the PERC Standards 2017, by Howard Baker (FAusIMM(CP)), an independent
Competent Person as defined in the PERC Standard 2017.
16
An overview of the interpreted mineralisation is shown in the diagram below, a) left - plan view,
b) top right - looking east, c) bottom right – oblique view, looking northeast. Coloured by domain (Source: BGS)
In September 2020, the Company published
the findings of an investigation by Dr. Arvidson
MSc Mining/Mineral Processing, PhD Mineral
Processing (equivalent), Royal Institute of
Technology, Stockholm, as Qualified Person,
into the market potential of future products from
Kallak, based on the results of laboratory and pilot
plant testwork conducted to date, the highlights of
which can be summarised as follows:
• 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; 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.
2021 Update
This year saw the Company continue to press
the Swedish Government to decide on Beowulf’s
application for an Exploitation Concession for
Kallak.
In April, Beowulf announced that a letter had been
sent from the Chairman to Sweden’s then Minister
of Enterprise and Innovation, Mr. Ibrahim Baylan,
concerning the status of its Kallak application. The
Company received a brief administrative response.
On 8 June 2021, via the Swedish Government, the
Company received a copy of a letter written by
UNESCO, dated 2 June 2021, with its comments
on Beowulf’s application.
Comments from UNESCO suggested that:
• The Swedish Government seek a revised and
extended In-Depth Assessment in assessing
the impact of the proposed development [of the
Kallak Iron Ore Project] on a World Heritage
Property [Laponia] prior to any decision being
taken to approve the mining exploitation;
16
17
2021 Beowulf Mining plc Annual Report • That the role of the Sami Parliament is relevant
to the assessment of the impact of the proposed
development on the World Heritage property;
and
• The Company’s application is comprehensive for
this stage of permitting, and the assessment of
it, by relevant authorities, is complete;
• There are no direct effects of Kallak on the
• That the Swedish Government should also
Laponian Area (“Laponia”);
consider how the practice of reindeer husbandry
outside the property and directly related to
reindeer husbandry within the property will be
protected.
On 14 June 2021, the CEO wrote to Minister
Baylan regarding the UNESCO letter. Selected
extracts from the letter are provided below:
‘On 8 June 2021, Beowulf Mining was notified
by the Finansinspektionen, Sweden’s financial
supervisory authority, whose role is to promote
stability and efficiency in Sweden’s financial
system as well as to ensure sustainability and an
effective consumer protection, of UNESCO’s letter
regarding our Kallak Iron Ore Project (“Kallak”)
dated 2 June 2021.
Finansinspektionen wrote that UNESCO’s letter
had been in the hands of members of the Swedish
public (including elected Sami officials) for several
days, with associated posts on social media.
At the time, Beowulf had not received a copy
of UNESCO’s letter, but as the information was
already in the public domain, with no explanation
of its significance the market reacted strongly, left
to draw its own conclusions.’
Beowulf also announced that further to the
UNESCO letter dated 2 June 2021 and the CEO’s
letter to Minister Baylan dated 14 June 2021,
on 18 June 2021 the Ministry of Enterprise and
Innovation (the “Ministry”) invited the Company
to submit any comments regarding the UNESCO
letter to the Ministry by 6 September 2021.
Beowulf submitted comments to the Ministry
regarding the UNESCO letter which, in summary,
included:
• The potential indirect effects are limited and will
be dealt with later in the permitting process,
of which ICOMOS (International Council on
Monuments and Sites) is seemingly unaware;
• The fact that operating mines are situated closer
to Laponia than Kallak proves that mining does
exist without harming Laponia’s Outstanding
Universal Values;
• The fact that UNESCO has not, at any time,
indicated the requirement for a ‘buffer zone’
around the boundary of Laponia proves that a
‘buffer zone’ has not been deemed necessary;
• The fact that the Company has already
committed to take precautionary measures that
will minimise the impact on reindeer husbandry
and commits to fully compensate Sami villages;
and
• The possibility for the Government to ascertain
that this commitment becomes a precondition for
the granting of the Exploitation Concession.
In July, Beowulf announced that it had awarded
Carci Mining Consultant’s (“Carci”) a contract to
develop an open pit design and mining schedule
based on the upgraded MRE for Kallak North.
Carci completed its study on Kallak North in
October and presented a production case of
approximately 2.7 Mt per annum of concentrate,
based on the Kallak North resource only and
modelled over an initial 15-year period.
Carci’s production rate is one scenario; given the
forecast demand for high quality iron ore being
created by projects such as HYBRIT and H2 Green
Steel in Norbotten, options for higher production
rates will be considered.
18
On 2 December 2021, the CEO wrote a letter
to Sweden’s new Minister of Enterprise and
Innovation, Mr. Karl-Petter Thorwaldsson,
concerning the status of Beowulf’s Kallak
application following the Minister’s immediate
attention and positive public statements.
Beowulf pressed for the Minister to give timely
consideration and arrive at a decision on Kallak so
that the Company can commence with playing its
part in Sweden’s sustainable mining future.
On 21 December 2021, Beowulf provided
comments to the Ministry regarding a letter,
dated 10 December 2021, written on behalf
of Jåhkågasska and Sirges samebyar (“Sami
villages”) and addressed to Bergsstaten.
Highlights as follows:
“The conditions for granting processing
concessions have not changed from April 2013
when the application was submitted. The ore
proofing requirement under Chapter 4 Section 2
of the Minerals Act has been fulfilled.
In a letter, the Sami National Association points
to an analysis commissioned by JIMAB. This
analysis shows one scenario for how mining
operations can be conducted. Other initial studies
conducted by the Company also indicate that
there are approximately 389 million tonnes of
iron mineralisation in the area, which shows that
there are also good future conditions for mining in
addition to the current application.
The iron ore in the current deposit is a purity that,
compared to other iron ore, provides the best
conditions for low environmental impact and low
climate footprint throughout the production chain
until finished steel. SGU has stated in the decision
on the designation of national interest that the
deposit is important from a material supply point
of view and important for the mining industry
from a national perspective.”
2022 Update
On 11 February 2022, the Company announced
that it had provided a final statement to the
Government in respect of its application. The
Company directed the Government to previous
correspondence and submitted investigation
documentation, which demonstrate that the
conditions for granting an Exploitation Concession
according to Chapter 4 Section 2 of the Minerals
Act are fulfilled.
On 22 March 2022, Minister Thorwaldsson
announced the award of the Concession for Kallak;
attached to the decision were 12 conditions for
the Company to comply with. The Company’s
legal advisers have reviewed the Government’s
decision and the conditions attached to it and are
satisfied that, with respect to the conditions, they
include matters the Company would naturally
expect to address in project development and the
Environmental Court process.
The award of the Concession is a long-awaited
milestone on the development timeline. Beowulf’s
ambition is to build the most sustainable mine
possible. The Company believes that there is no
better country than Sweden in which to make
this vision a reality, where mining can take place
in balance with the environment and stakeholder
interests for the benefit of wider society.
Following our guiding principles, Beowulf
seeks to build mutually respectful relations and
productive partnerships with Jokkmokks Kommun,
local entrepreneurs, landowners and reindeer
herders. The Beowulf team is looking forward
to establishing our proposed ‘Task Force’ with
the municipality, local agencies and enterprises,
to help build local capacities and to maximise
local economic opportunities during Kallak’s
development, construction and when the mine is in
operation.
18
19
2021 Beowulf Mining plc Annual Report D Grafintec
N
A
L
N
F
I
Grafintec, previously Fennoscandian Resources, is developing a
resource footprint of natural flake graphite and anode materials
production capability, offering sustainable and secure supply to
Europe’s rapidly expanding lithium-ion battery market. Grafintec seeks
to 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, focusing on anode materials for lithium-ion batteries.
Aitolampi remains Grafintec’s most advanced graphite project, and
the Company has invested approximately £1.5 million in exploration,
mineral resource development, metallurgical testwork and the
assessment of market applications for graphite, including lithium-ion
battery applications.
In 2021, the Company made significant progress through its
collaboration with Epsilon Advanced Materials (“EAMPL”), signing a
Heads of Terms (“HoT”) for a Joint Venture (“JV”) with EAMPL, for the
establishment of an anode materials production facility in Finland and
then, in January 2022, an Memorandum of Understanding (“MoU”)
with the City of Vaasa for the establishment of an anode materials
production facility to be located in the GigaVaasa area, Plot 18, situated
in proximity to Freyr Battery’s proposed battery cell development.
Finnish Exploration Permits
Grafintec 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 an Exploration Permit on
25 April 2019. On 27 April 2020, the Administrative Court of Eastern
Finland rejected an appeal, a further appeal was then made to the
Supreme Administrative Court of Finland. The permit eventually gained
legal force on 21 June 2021.
20
20
Permit
Name
Licence
no.
Area
(hectares)
Notes
Pitkäjärvi 1
ML2016:0040
407
Exploration permit granted by TUKES 27.4.2021.
Decision appealed. On 3.3.22, the Administrative
Court dismissed all the appellants’ claims, both the
ones concerning the substance matter and also as
to the litigation costs. The extension permit decision
issued by TUKES thus remains unchanged and is
now enforceable unless the Supreme Administrative
Court would handle the case based on a leave
to appeal by the appellants, and the Supreme
Administrative Court would explicitly decide to cancel
the enforceability, which is not likely.
Rääpysjärvi 1
ML2017:0104
716
Exploration permit granted. The permit gained legal
force 21.6.2021 and is valid to 20.6.2025.
Karhunmäki 1
ML2019:0113
889
Exploration permit granted by TUKES 29.9.2021.
The decision has been appealed to the Vaasa
Administrative Court by Lapua Municipality and
MiningWatch Finland ry.
Merivaara 1
ML2020:0059
957
Exploration permit application submitted 1 Dec 2020.
Luopioinen 1
ML2022:0004
218
Application submitted 28.1.2022. Previous applicant:
GTK.
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,
and an eastern extension of known old graphite
workings from when graphite prospecting was
undertaken many years ago. Infrastructure in
the area is excellent, with road access and good
availability of high voltage power.
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.
The resource contains graphite of almost perfect
crystallinity, and high proportion of fine and
medium flake, which is an important prerequisite
for high tech applications, such as lithium-
ion batteries. Purification results indicate that
concentrates meet the purity specification of 99.95
per cent C(t) for lithium-ion batteries.
20
20
21
2021 Beowulf Mining plc Annual Report Mineral Resource
Estimate (“MRE”)
In 2019, Grafintec, then Fennoscandian, delivered
an upgraded 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 tonnes 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 tonnes 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 in accordance with the JORC
Code, 2012 Edition. See table below:
Zone
Classification
Mt TGC %
S %
Density
(t/m3)
Contained graphite
(kt)
Western lens
Eastern lens
Indicated
Inferred
9.2
8.0
Indicated + Inferred
17.2
Indicated
Inferred
Indicated + Inferred
1.8
7.7
9.5
TOTAL
Indicated + Inferred
26.7
5.1
5.2
5.2
4.1
4.1
4.1
4.8
5.0
4.7
4.8
4.4
4.5
4.5
4.7
2.80
2.80
2.80
2.82
2.82
2.82
2.81
468
419
887
74
314
388
1,275
2021 Summary
In March, Grafintec signed a MoU with Epsilon
Advanced Materials. The MoU was intended
to enable Grafintec to build its downstream
capability, collaborating with a strong and
innovative technology/processing partner, and for
Epsilon Advanced Materials to firmly establish
itself in Finland, as a market-entry point for
supplying anode materials into Europe.
A Scoping Study contract for the Aitolampi
graphite project was awarded to AFRY Finland
Oy later in March. The purpose of the Scoping
Study was to verify the robustness of the work
completed by Grafintec, and to provide a roadmap
for the next project development stage, most likely
a Pre-feasibility Study. The output of the Scoping
Study will be used by Grafintec to better explain
the Aitolampi project to the local community and
other important stakeholders.
In June, Grafintec was granted €791,000 by
Business Finland. The grant funding is equivalent
to 50 per cent of the three-year €1.6 million budget
for Grafintec’s ‘Spheronisation and Purification
of Natural Graphite for the European Lithium-Ion
Battery Market’ project. The remainder of the
project’s budget will be funded by Beowulf.
This work is part of the BATCircle2.0 (Finland-
based Circular Ecosystem of Battery Metals)
consortium which has been granted €10.8 million
by Business Finland as part of a total funding
budget of €19.3 million. BATCircle2.0 is a key
project in Business Finland`s Smart Mobility and
Batteries from Finland programmes.
22
on aspects of the Aitolampi Scoping Study, as
it represents a potential mining asset offering
supply chain security to Finnish anode materials
production.
2022 Update
We were pleased to start 2022 with the
announcement that Grafintec and Epsilon
Advanced Materials had signed a MoU with the
City of Vaasa for the establishment of an anode
materials production facility to be located in the
GigaVaasa area, Plot 18, situated in proximity to
Freyr Battery’s proposed battery cell development.
The MoU gives the JV partners six months
exclusivity to Plot 18, with an option to extend by
a further six months, to develop GVA10, which will
have a production capacity of 10,000 tonnes per
annum of high-quality anode materials, as well
as conduct technical and environmental studies,
and initiate permitting discussions with Finnish
authorities.
Under the JV, Grafintec and Epsilon Advanced
Materials will work together on building GVA10
with the ambition of creating a sustainable value
chain in anode materials production, leveraging
renewable power, targeting net zero CO2
emissions across the supply chain, benefiting from
the significant support of Business Finland and
collaboration within the Finnish Battery Cluster.
Finland has high-quality natural flake graphite
resources and the opportunity exists to create
a sustainable value chain for anode material
markets in Finland and Europe. Currently, China
is the dominant producer of spheronised graphite,
utilising chemical purification and using hazardous
hydrofluoric acid.
The objectives of Grafintec’s project are to develop
a chemical free technological solution, utilising
renewable energy, to spheronise and purify
graphite within a Finnish industrial ecosystem,
for use in the manufacture of lithium-ion battery
anodes.
The project has three main objectives, which are
to:
• Validate a process to support progress to a
Bankable Feasibility Study for construction of a
commercial scale unit within three to five years.
• Secure and protect any arising intellectual
property.
• Deliver a detailed strategic marketing and
commercialisation plan.
On 6 December 2021, Grafintec signed HoT for
a JV with EAMPL, for the establishment of an
anode materials production facility to be located
in Finland. Grafintec will own 49 per cent of the JV,
with Epsilon Advanced Materials owning 51 per
cent.
The proposed plant will supply battery/cell
manufacturing companies in Europe. The plant will
be built in two phases: Phase 1 “GVA10” with a
production capacity of 10,000 tonnes per annum
and Phase 2 “GVA50” adding a further 40,000
tonnes per annum. The funding from Business
Finland will be used by Grafintec to develop a
Bankable Feasibility Study for the plant, including
strategic marketing and a commercialisation plan
based on a comparable plant being developed in
India.
The project will work towards creating a
sustainable value chain in Finland from high-
quality natural flake graphite resources to anode
material production, leveraging renewable power,
targeting net zero CO2 emissions across the supply
chain.
In the context of GVA10/50, work continues
22
23
2021 Beowulf Mining plc Annual Report O
V
O
S
O
deposits. K
24
24
Vardar
Minerals
Limited
Vardar provides Beowulf with investment
exposure to the highly prospective Tethyan Belt.
In February and August 2021, the Company
invested £200,000 and £100,000 respectively,
to fund preparatory works in advance of its
planned drilling campaign. The Company invested
a further £1.2 million in March 2022 and at the
date of sign-off of this report, the Company owns
approximately 59.5 per cent of Vardar.
Vardar was unable to drill in 2021, as it awaited
approval of its licence renewal applications. It
has, since March 2022, secured both licence
renewals and been awarded a permit for the
promising Shala licence, which covers 87 square
kilometres, extends to the north and northeast
of the Mitrovica Project, and includes several
areas with significant alteration associated with
Oligo-Miocene magmatics along with associated
gossans and evidence of historical artisanal
workings.
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 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
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.
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
porphyry in a hitherto unexplored area.
Exploration Permits
Vardar has a rolling programme of exploration permit applications and renewals.
As original permits were awarded around the same time, all renewals were due around the same time.
Vardar’s renewal applications coincided a changeover in personnel on the board of The Independent
Commission for Mines and Minerals (“ICMM”), the permitting authority in Kosovo. The selection of a
new board was delayed, firstly, by COVID related disruptions, and secondly, by Kosovo’s parliamentary
elections which took place in February 2021 and concluded in December 2021.
In March 2022, Vardar finally secured both licence renewals and was awarded a permit for the Shala
licence.
License No.
Term
Project
Date issued
Expiry Date
2879
2878
2912
2935
2nd
2nd
2nd
1st
Mitrovica
2022-03-11
2024-01-27
Viti N
2022-03-22
2024-01-27
Viti SE
2022-03-11
2024-01-27
Shala
2022-03-11
2025-02-25
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.
Area
(km2)
27.1
35.5
44.1
87.5
25
24
24
2021 Beowulf Mining plc Annual Report
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 lead-zinc-silver
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 2020,
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 zinc and 0.5 per cent lead) and rock
samples from gossans (including 3.5 per cent zinc,
1.8 per cent lead, 93 g/t silver).
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 zinc, 2.83 per cent lead
and 16 g/t silver) 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.
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 Mt of ore at
3.45 per cent lead, 2.30 per cent zinc, and 80 g/t
silver (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 four kilometres 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.
Vardar has reported highly anomalous IP
chargeability zones in the area, considered high
priority targets for drill testing, defined beneath
areas of laterally extensive lead-zinc 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.
26
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 2020, 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.
Vardar then conducted a grab sampling
programme, collecting 96 samples 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 correlating 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 late 2020, 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.
Mitrovica South
A lead-zinc-copper-gold target has been identified in the southern part of the licence, particularly
significant given its proximity, approximately four kilometres, 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.
26
27
2021 Beowulf Mining plc Annual Report
Shala
In March 2022, the approval of a new exploration
licence, Shala, was announced. The application
covers an area of 87 square kilometres, extends to
the north and northeast of the Mitrovica Project,
and includes several areas with significant
alteration associated with Oligo-Miocene
magmatics along with associated gossans and
evidence of historical artisanal workings. The
licence encompasses the extension of a distinct
northwest trending zone of lead-zinc-silver
mineralisation from the Stan Terg deposit through
the Wolf Mountain target.
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 2019, two stratigraphic holes, totalling 439
metres, 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.
In 2020, 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.
28
28
2022 Outlook
In March 2022, Beowulf invested a further £1.2
million in Vardar to fund drilling. The investment
increases the Company’s ownership in Vardar to
59.5 per cent approximately.
Drilling has started and will cover both Wolf
Mountain zinc-lead-silver (“Zn-Pb-Ag”) targets,
and Majdan Peak gold (“Au”) prospect. A total
programme of approximately 3,400 m is planned.
The Majdan Peak prospect, located adjacent to
the Stan Terg deposit, is defined by a blanket
of advanced argillic alteration typical of high
sulphidation epithermal systems. Rock and soil
sampling programmes have identified widespread
and significant Au anomalies (up to 11 g/t in
rock samples and up to 0.36 g/t in soils). Results
from 3D IP surveys have delineated prominent IP
anomalies which are clearly associated with soil
and rock anomalies at shallow depth. Associated
resistivity results correlate well with mapped
alteration, and likely model a resistive silica-rich
cap. Importantly the IP suggests the best target
is located at greater depth to the north of the
soil anomalies below the modelled silica cap as
would be expected in typical high-sulphidation
Au deposits. The 2022 drill programme will focus
on drilling a selection of the most compelling IP
targets on this prospect.
Previous drilling and trenching at Wolf Mountain,
completed in 2019, focused on testing the depth
extension and lateral continuity of mineralisation
associated with widespread gossanous
hydrothermal breccias. While results were able to
prove the lateral continuity of mineralisation with
several sub-economic intersections, further work
was required to target potential higher-grade
feeder structures which could produce economic
results.
In 2020, the area was covered with extensive
3D IP campaign which identified a series of
exceptionally high IP anomalies located on distinct
northwest trends. The anomaly trends are clearly
visible in ultra-high resolution drone magnetics
collected during the same campaign and link with
neighbouring Stan Terg and Zijika deposits as well
as being supported by significant soil and rock
sample anomalies.
The 2022 drill programme will in part focus on
testing these anomalies to determine if they
represent important feeder structures to the
widespread mineralisation identified across Wolf
Mountain.
ESG
Beowulf is a strong supporter of the Sustainable
Development Goals (“SDGs”). The Company
has identified which SDGs to focus on and is
incorporating them into project planning, to best
ensure their implementation in the Company’s
areas of influence, while being proactive with
respect to the Company’s future compliance with
The Equator Principles.
In addition, 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:
o Energy Management including Green House Gas
Emissions;
o Water Management;
o Biodiversity Impacts;
o Rights of Indigenous Peoples;
o Community Relations; and
o Business Ethics and Transparency.
As currently 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.
The Company has recently published its ESG
Policy which can be viewed on the Company’s
website following the link: https://beowulfmining.
com/about-us/esg-policy/.
28
28
29
2021 Beowulf Mining plc Annual Report Board of Directors
Sven Otto Littorin - Non-Executive Chairman
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 almost 30 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.
30
Senior Management
Rasmus Blomqvist - Exploration Manager
Mr. Blomqvist, the founder of Grafintec (formerly 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 Grafintec, 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”).
Company Secretary
One Advisory
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.
30
31
2021 Beowulf Mining plc Annual Report Strategic Report
The Directors present their strategic report for the year ended 31 December 2021.
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 £1,351,188 (2020: Loss
of £1,128,512). 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
Risk
Risk rating
pre-mitigation
Mitigating action
Political Risk
The Company could be exposed to
macro-political risk or sovereign risk.
MEDIUM
The Company actively monitors developments on the geopolitical stage, and where
appropriate engages advisers and the British Embassy to support its in-country
operation. It is not foreseeable that recent events in Ukraine will negatively impact the
Company’s business. In addition, when it comes to the Nordics, they are seen to be low-
risk countries by investors. With Kosovo, it is seeking EU accession and its institutions
are well supported by the EU and the UK.
Risk rating post-
mitigation
LOW
32
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
Climate Emergency
The Company’s activities could be negatively impacted
by adverse climate events.
MEDIUM
The Company operates in relatively hospitable environments and so adverse climate
events are difficult to foresee. Conversely, the Company’s eventual products will be
used in the Green Transition in part addressing the Climate Emergency.
LOW
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 Finland, NIMBY opposition to mining development is generating appeal/court
induced delays into permitting processes. In all cases the Company continues to
satisfy Tukes’ application requirements and permits/renewals are being received.
LOW
Non-operator of subsidiary
Lack of control and oversight on entity spend.
LOW
The Company has a controlling interest in all subsidiaries, Director representation
on boards and approves budgets. All subsidiaries are consolidated in the Group’s
financial statements and the necessary controls and oversight are in place.
LOW
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33
2021 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
Raise capital in a timely manner, as evidenced by current management’s track record.
Ensure forecasting is accurate, and expenditure controls are in place to optimise
cash resources. The £7.4 million 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. When it comes to iron ore and graphite, these commodities will
be needed for the Green Transition.
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. With Kallak and Grafintec the Company has quality assets, benefitted
by excellent infrastructure, including access to renewable power, and positioned in
proximity to European markets in need of primary raw material supply to achieve a
Green Transition.
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
34
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. At
the date of signing of this report, the overall status
for all licences is good.
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 £1,503,049 (2020: £1,005,547), the
increase was largely attributable to an expense in
relation to the net settlement of share options of
£103,281, increased foreign currency translation
losses of £298,442 (2020: £36,348), and increased
consultancy fees of £107,032 (2020: £46,087) for
strategic and corporate advisory.
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 prior 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 £3.34 million (2020:
£4.33 million), which the Board considers sufficient
for funding activities. The current management
team has a consistent track record of raising
capital in a timely manner.
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35
2021 Beowulf Mining plc Annual Report
Section 172
Companies Act Statement
In compliance with section 172 of the UK
Companies Act, the Board of Directors of the
Company (the Board) makes the following
statement in relation to the year ended 31
December 2021 (s172 Statement):
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. The Board makes
a conscious effort to understand the principal
issues that matter to each stakeholder group
and any conflicting interests. 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. 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.
Throughout this Annual Report, we provide
examples of how we:
- Consider the likely consequences of long-term
strategic decisions;
- Foster relationships with stakeholders;
- Understand our impact on local communities and
the environment; and
- Demonstrate the importance of behaving
responsibly towards our stakeholders as a
Company.
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.
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.
During the year, the CEO and Chairman
maintained regular contact with Swedish
stakeholders, either directly or through the
Company’s Public Affairs advisers. The Company
remains committed to working constructively - and
in good faith - with all stakeholders and engaging
in meaningful dialogue.
Vardar continues to proactively engage with
local communities, stakeholders and the Kosovan
authorities, even though exploration activities
cause limited negative impact on society and the
environment.
In December 2021, the Company’s wholly owned
Finnish subsidiary, Grafintec Oy, signed Heads
of Terms for a Joint Venture (JV) with Epsilon
Advanced Materials Private Limited (EAMPL),
a subsidiary of Epsilon Carbon Private Limited,
for the establishment of an anode materials
production facility to be located in Finland. A key
objective of the JV is to bring the supply chain
closer to the Company’s European customers,
leading to enhanced service levels and enabling
the Company to play a key role in assisting with
the development of a sustainable battery cluster in
country.
36
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.
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.
Shareholders have the opportunity to discuss
issues with the Board and provide feedback at
any time. Further information is available on the
Company’s website https://beowulfmining.com/.
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.
36
37
2021 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
• Company website (Investor Relations)
• RNS announcements
• Option to receive RNSs directly
• Shareholder circulars
• AGM
• Investor meetings & access to the CEO
Government
• Compliance with regulations
• Company website
and regulatory
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 KPIs on licence conditions compliance
38
Stakeholder
Their interests
How we engage
Environment
• Sustainability
• Transparency in ESG performance
• Biodiversity, energy, water and
• Oversight of corporate responsibility plans
waste management
• Demonstrate compliance with laws and
• Climate change
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
• Whistleblowing Policy
• Human rights and modern slavery
This section serves as our s172 Statement and should be read in conjunction with the Strategic Report
and the Company’s Corporate Governance Statement contained within this Annual Report.
ON BEHALF OF THE BOARD:
Mr K Budge, Director
25 May 2022
38
39
2021 Beowulf Mining plc Annual Report Report of the Directors
The Directors present
their report, together
with the audited financial
statements of the Group,
for the year ended 31
December 2021.
Directors
Since 1 January 2021, the following Directors have
held office:
Mr K R Budge
Mr C Davies
Mr S O Littorin
Dividends
No dividends will be distributed for the year ended
31 December 2021 (2020: Nil).
Going Concern
At 31 December 2021, the Group had a cash
balance of £3.34 million and the Company had a
cash balance of £3.08 million.
Management have prepared cash flow forecasts
which indicate that although there is no immediate
funding requirement, the Group will need to raise
further funds in the next 12 months for corporate
overheads and to advance its key projects and
investments.
The Directors are confident they are taking all
necessary steps to ensure that the required finance
will be available, and they have successfully raised
equity finance in the past. They have therefore
concluded that it is appropriate to prepare the
financial statements on a going concern basis.
However, while they are confident of being able
to raise the new funds as they are required, there
are currently no agreements in place, and there
can be no certainty that they will be successful in
raising the required funds within the appropriate
timeframe.
40
These conditions indicate the existence of a
material uncertainty which may cast significant
doubt over the Group’s and the Company’s ability
to continue as a going concern and that it may
be unable to realise its assets and discharge
its liabilities in the normal course of business.
The financial statements do not include any
adjustments that would result if the Company was
unable to continue as a going concern.
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 43.
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 2021:
Shareholders
Shares
%
HSBC Global Custody
Nominee (Uk) Limited
Interactive Investor Services
Nominees Limited
– A/C SMKTNOMS
621,366,320 74.71
26,630,895 3.20
Authority to Issue Shares
Each year at the Company’s Annual General
Meeting (AGM) the Directors seek authority to
allot ordinary shares. The authority, when granted,
lasts until the conclusion of the next AGM (unless
renewed, varied or revoked by the Company prior
to, or on, such date). At the AGM held on 18 June
2021, the Directors were granted authority to
allot ordinary shares generally up to an aggregate
nominal value of £5,521,168, and authority to
allot ordinary shares for cash on a non-pre-
emptive basis up to an aggregate nominal value of
£5,521,168 (2020: £4,000,000).
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 26 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
With Kallak, since the award of the Exploitation
Concession, the Company is now preparing
a detailed plan for project development and
environmental permitting. The work to complete a
Scoping Study and quickly move to Pre-feasibility is
underway. The Company will look to secure options
that can de-risk project execution, while meeting
environmental and social goals, balancing cost and
benefit.
The Company’s overall objective is to have Kallak
in production in 3-4 years, developing the mine
alone or in partnership. It seems that authorities
and courts dealing with permits are responding to
material issues, such as the Climate Emergency and
the Green Transition, when considering downstream
industrial projects. If Kallak were to be treated
equally, and even as a priority case, given the drive
for security of supply and self-sufficiency of primary
raw materials in Sweden and Europe, then the
Company will be doing all it can to make 3-4 years
achievable.
Grafintec is continuing to develop a resource
footprint of natural flake graphite and anode
materials production capability, offering sustainable
and secure supply to Europe’s rapidly expanding
lithium-ion battery market. Grafintec seeks to
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, including anode materials for
lithium-ion batteries.
Grafintec’s collaboration with Epsilon Advanced
Materials Limited is enhancing its position within
the Finnish battery ecosystem and the Heads
of Terms for a Joint Venture with EAMPL, for the
establishment of an anode materials production
facility, creates a sustainable value chain in Finland
from high-quality natural flake graphite resources
to anode material production, leveraging renewable
power, targeting net zero CO2 emission across the
supply chain.
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 latest
investments and drilling in Kosovo are focused
on making a discovery. Vardar aims to complete
drilling by the middle of 2022, with assay results
following thereafter, which will inform next steps.
A strategic review of Beowulf’s investment will then
be conducted to assess the optimum development
path for Vardar’s projects.
The Company’s investment priorities across its
portfolio remain subject to funding being available.
40
41
2021 Beowulf Mining plc Annual Report 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.
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 UK adopted international
accounting standards and 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.
42
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
25 May 2022
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 and its terms of reference can
be found on the Group’s website:
https://beowulfmining.com
Executive Directors’ terms
of engagement
Mr Budge is the sole Executive Director and Chief
Executive Officer. His annual salary is £180,000.
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 £33,000 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 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.
42
43
2021 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 2021 and 31 December 2020, was as follows:
Name
Position
Salary Benefits2
& Fees1
£
£
Pension3
£
2021
Total
£
2020
Total
£
Mr K R Budge
Chief Executive Officer
172,500
877
13,000
186,377
163,874
Mr C Davies
Non-Executive Director
33,000
Mr G Färm
Non-Executive Chairman
-
Mr SO Littorin
Non-Executive Director
38,041
-
-
-
-
-
-
33,000
31,000
-
25,193
38,041
6,654
Total
Notes:
243,541
877
13,000
257,418
226,721
(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 2021 in the issued share capital of the
Company were as follows:
ORDINARY SHARES
31 December 2021
31 December 2020
Mr K R Budge
Mr C Davies
5,957,997
88,800
3,322,585
88,800
EXERCISE
PRICE
7.35 pence
12 pence
7.35 pence
EXERCISE
PRICE
1.66 pence
7.35 pence
12 pence
7.35 pence
EXPIRY DATE
14 January 2024
26 January 2022
14 January 2024
EXPIRY DATE
17 July 2021
14 January 2024
26 January 2022
14 January 2024
As at 31 December 2021, all options have vested.
ORDINARY SHARES
UNDER OPTION
Mr K R Budge
Mr C Davies
Mr C Davies
NUMBER
3,500,000
2,500,000
2,500,000
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
ON BEHALF OF THE REMUNERATION COMMITTEE
Sven Otto Littorin
Non-Executive Chairman
25 May 2022
44
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. Further details of the Company’s
compliance with the QCA code can be found in the
Corporate Governance section of the Company’s
website: https://beowulfmining.com/wp-content/
uploads/2022/05/Beowulf-QCA-Code-Chairs-
Statement-2022.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 5, and the
key challenges in their execution can be found on
pages 32 to 34.
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 38) 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 32 to 34.
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, 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.
For the year under review Chris Davies held 88,800
Ordinary Shares and held 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 issues arising and proposed
courses of action and maintains an independent
perspective. The level of compensation Chris
Davies received under the consultancy agreement
for the period under review is not material. Neither
Chris Davies nor the other Directors believe his
options or consultancy agreement are significant in
assessing his independence.
44
45
2021 Beowulf Mining plc Annual Report 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 Company’s
website.
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.
The Board is satisfied that each of the Directors
are able to allocate sufficient time to the Group to
discharge their responsibilities effectively. The Board
met formally on eight scheduled occasions during
the year and all Board meetings were attended by
all Directors. The Board and its sub-committees
receive appropriate and timely information prior to
each meeting. Any specific actions arising from such
meetings are agreed by the Board or relevant sub-
committee and then followed up accordingly. There
is a formal schedule of matters reserved for the
decision of the Board that covers the key areas of the
Company’s affairs.
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 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 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
compliance in relation to disclosures required on the
Company’s website under 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 during the
year under review.
Culture
The Directors consider that at present the Company
has an open culture facilitating comprehensive
dialogue and feedback and enabling positive and
constructive challenge.
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 in
turn affect 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. Shareholders can also sign up to
receive news releases directly from Beowulf by email.
In normal circumstances 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. The 2021
AGM was held as a closed meeting due to COVID-19
restrictions in place at the time, and a Q&A facility
46
was put in place to enable shareholders to ask
questions and engage with the Board remotely.
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 Company’s
website is kept updated and contains details of
relevant developments, presentations and other
key information.
The Company has implemented, inter alia, the
following policies to help ensure appropriate values
and behaviours:
- an Anti-Bribery and Corruption Policy;
- a Whistleblowing Policy;
- a Social Media Policy;
- a Securities Dealing Policy; and
- an Inside Information and Delayed Disclosure
Policy.
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
Committee’s Terms of Reference are available to
view on the Company’s website.
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. The Committee met twice during the
year under review. 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 43. The Committee’s
Terms of Reference are available to view on the
Company’s website.
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.
46
47
2021 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 2021 and
of the Group’s loss for the year then ended;
• the Group financial statements have been
properly prepared in accordance with UK adopted
international accounting standards;
• the Parent Company financial statements have
been properly prepared in accordance with UK
adopted 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 2021 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 their preparation is applicable law and
UK adopted international accounting standards
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.
Material uncertainty
related to going concern
We draw your attention to note 1 of the financial
statements, which explains that the Parent
Company’s and Group’s ability to continue as a
going concern is dependent on raising further
funds in order to support the working capital needs
of the Group. There are currently no agreements in
place and there is no certainty that the funds will
be raised within the appropriate timeframe. These
conditions indicate the existence of a material
uncertainty which may cast significant doubt
over the Parent Company’s and Group’s ability to
continue as a going concern. Our opinion is not
modified in respect of this matter.
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:
48
• 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 by reviewing
historic forecasts against actuals in order to
assess the ability of Management to forecast
accurately.
• Reviewing licence agreements to confirm that
committed expenditure is appropriately included
in forecasts.
• Obtaining, reviewing and challenging the
Directors’ reverse stress testing analysis to
determine the point at which liquidity breaks
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 and the present level of uncertainty.
This included considering the Group’s and Parent
Company’s experience of the pandemic to date
and the extent and likelihood of any future events
required to break liquidity.
• Comparing the Group’s actual results for the year
ended 31 December 2021 to the planned budget
for 2021 to assess the quality of the Directors
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 2021 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.
• Reviewing and considering the adequacy of the
disclosure within the financial statements relating
to the Directors’ assessment of the going concern
basis of preparation in order to conclude on
whether the disclosure reflects our understanding
of the business, gained during the course of the
audit.
Our responsibilities and the responsibilities of
the Directors with respect to going concern are
described in the relevant sections of this report.
Overview
Coverage1
83% (2020: 64%) of Group loss before tax
41% (2020: 48%) of Group total assets
Key audit matters
Carrying value of exploration asset
2021
2020
Materiality
Group financial statements as a whole
£220,000 (2020: £180,000) based on 1.5% (2020: 1.5%) of total assets.
Parent company standalone financial statements
£165,000 (2020: £135,000) capped at 75% of Group materiality
(2020: capped at 75% of Group materiality).
(1) These are areas which have been subject to a full scope audit by the group engagement team
48
49
2021 Beowulf Mining plc Annual Report
Audit Matter, as detailed above). The instructions
also set out the information to be reported by the
Swedish component auditor to the Group audit
team.
• Being active, as the Group audit team, in
the direction of the audits performed by the
component auditor for Group reporting purposes,
along with the consideration of findings and
determination of conclusions drawn.
• Reviewing the Swedish component auditor’s
work papers remotely.
• 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 or substantive testing performed on
areas such as the exploration and evaluation
assets 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
50
Key Audit Matter
Carrying value of exploration assets (Please refer to Note 7)
The Group’s total exploration assets at 31 December 2021 were £11.2 million (2020:
£11.4 million). This class of asset is the most significant to the statement of financial
position.
Management have assessed exploration & evaluation assets for impairment triggers
under IFRS 6 ‘Exploration for and Evaluation of Mineral Resources’ and concluded
that no triggers existed at the year-end.
As the exploration assets are a material non-current asset balance and there is
significant judgement required in assessing for potential triggers for impairment this
is considered to be an audit risk.
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, as
required by IFRS 6, and annual report in respect of the uncertainties relating to the
award of the Kallak concession.
Key observations:
Based on the work performed we did not identify any impairment triggers which
would lead to the Directors performing a full carrying value assessment under the
requirements of the accounting standards.
50
51
2021 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
2021
2020
2021
2020
Materiality
£220,000
£180,000
£165,000
£135,000
1.5% of total assets
Restricted to 75% of Group materiality
Restricted at 75% (2020: 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.
£165,000
£135,000
£124,000
£101,000
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
52
Component materiality
We set materiality for each component of the
Group in the range from £110,000 to £116,000
(2020: £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
component assets) (2020: based on either 75%
of Group materiality or 1.5% of total component
assets). In the audit of each component,
we further applied performance materiality
levels of 75% (2020: 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 £4,400 (2020: £3,600).
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.
52
53
2021 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 Directors’
Responsibilities Statement within 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.
54
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
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
being UK law and regulations. 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 in order
to obtain an understanding of compliance
throughout the reporting period;
• Testing the financial statement disclosures to
supporting documentation;
• Making enquiries of Management and those
charged with governance as to whether there
was any correspondence from regulators in so far
as the correspondence related to the audit risks
identified;
• Reviewing correspondence relating to the status
of the Kallak licence application; and
• Requesting 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, such as a risk of management override of
control or bias in judgements taken in the course of
the preparation of the financial statements.
Our procedures included:
• In addressing the risk of management override of
controls, 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.
• Critically 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 assess their
validity.
• Communicating relevant laws and regulations
and fraud risks identified by the group audit
team to the entire team, including the component
auditors (through the group instructions).
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.
25 May 2022
BDO LLP is a limited liability partnership registered
in England and Wales (with registered number
OC305127).
54
55
2021 Beowulf Mining plc Annual Report Consolidated Income Statement
CONTINUING OPERATIONS
Administrative expenses
Impairment of exploration costs
Impairment of property, plant and equipment
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
2021
£
2020
£
(1,503,049)
(1,005,547)
-
(98,799)
(48,966)
-
(1,552,015)
(1,104,346)
(256)
(203,576)
71
594
66,589
12,637
(1,485,611)
(1,294,691)
-
-
(1,485,611)
(1,294,691)
3
3
5
(1,351,179)
(1,128,512)
14
(134,432)
(166,179)
(1,485,611)
(1,294,691)
Loss per share attributable to the ordinary equity holder of the parent:
Basic and diluted (pence)
6
(0.16)
(0.19)
The notes on pages 66 to 104 form part of these financial statements
56
Consolidated Statement of Comprehensive Income
Note
2021
£
2020
£
LOSS FOR THE YEAR
(1,485,611)
(1,294,691)
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss:
Exchange losses arising on translation of foreign operations
(794,368)
854,020
TOTAL COMPREHENSIVE LOSS
(2,279,979)
(440,671)
(794,368)
854,020
Total comprehensive loss attributable to:
Owners of the parent
Non-controlling interests
(2,110,892)
(294,716)
14
(169,087)
(145,955)
(2,279,979)
(440,671)
56
57
The notes on pages 66 to 104 form part of these financial statements
2021 Beowulf Mining plc Annual Report
Consolidated Statement of Financial Position
Note
2021
£
2020
£
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
7
8
10
11
12
13
15
17
17
17
17
17
17
11,235,656 11,371,916
145,094
5,468
1,937
133,428
5,247
7,401
11,381,732 11,524,415
183,139
3,336,134
1,566,848
4,329,414
3,519,273
5,896,262
14,901,005 17,420,677
8,317,105
8,281,751
24,689,311 24,684,737
46,451
732,185
137,700
(457,272)
(18,470,674) (17,083,185)
46,451
668,482
137,700
(1,216,985)
Non-controlling interests
14
325,039
394,113
14,171,390 16,342,367
TOTAL EQUITY
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Grant Income
Lease liability
TOTAL LIABILITIES
14,496,429 16,736,480
18
19
20
357,236
39,849
7,491
538,772
143,399
2,026
404,576
684,197
TOTAL EQUITY AND LIABILITIES
14,901,005 17,420,677
The financial statements were approved and authorised for issue by the Board of Directors on 25 May 2022
and were signed on its behalf by:
Mr K Budge - Director
Company Number 02330496
The notes on pages 66 to 104 form part of these financial statements
58
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
2021
£
2020
£
9
10
2,377,988
2,077,988
10,179,650
9,341,315
1,112
1,483
12,558,750
11,420,786
12
13
41,185
1,476,755
3,075,741
4,241,426
3,116,926
5,718,181
15,675,676
17,138,967
15
17
17
17
17
17
18
19
8,317,105
8,281,751
24,689,311
24,684,737
46,451
668,482
137,700
46,451
732,185
137,700
(18,337,713) (17,168,118)
15,521,336
16,714,706
114,491
39,849
280,862
143,399
154,340
424,261
TOTAL EQUITY AND LIABILITIES
15,675,676
17,138,967
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 £1,233,298
(2020: loss £869,259).
These financial statements were approved and authorised for issue by the Board of Directors on 25 May 2022
and were signed on its behalf by:
Mr K Budge - Director
Company Number 02330496
The notes on pages 66 to 104 form part of these financial statements
58
59
2021 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
reserve
£
£
£
£
£
controlling
interest
£
AT 1 JANUARY 2020
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
Issues of shares
-
-
-
-
-
-
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
Loss for the year
Foreign exchange translation
Total comprehensive income
Transactions with owners
Issue of share capital
Cost of issue
Step up interest in subsidiary
Transfer of reserve on option
exercised
15
15
9
-
-
-
35,354
-
-
-
-
-
-
23,334
(18,760)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
At 31 December 2021
8,317,105
24,689,311
137,700
46,451
(1,216,985)
(18,470,674)
14,171,390
325,039
14,496,429
-
-
-
-
-
-
-
-
-
-
-
-
(63,703)
668,482
-
(1,128,512)
(1,128,512)
(166,179)
(1,294,691)
833,796
833,796
(1,128,512)
(294,716)
(145,955)
(440,671)
833,796
20,224
854,020
7,424,365
(1,304,332)
-
-
7,424,365
(1,304,332)
(173,512)
(173,512)
213,513
40,001
(759,713)
(759,713)
(1,351,179)
(1,351,179)
(134,432)
(1,485,611)
(759,713)
(34,655)
(794,368)
(1,351,179)
(2,110,892)
(169,087)
(2,279,979)
58,688
(18,760)
(100,013)
(100,013)
100,013
63,703
-
-
-
-
58,688
(18,760)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The notes on pages 66 to 104 form part of these financial statements
60
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 2020
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
-
-
-
-
-
-
(63,703)
668,482
-
(1,351,179)
(1,351,179)
(134,432)
(1,485,611)
(759,713)
(759,713)
-
(759,713)
(34,655)
(794,368)
(1,351,179)
(2,110,892)
(169,087)
(2,279,979)
-
-
-
-
-
-
58,688
(18,760)
-
-
58,688
(18,760)
(100,013)
(100,013)
100,013
63,703
-
-
-
-
(1,216,985)
(18,470,674)
14,171,390
325,039
14,496,429
Loss for the year
Foreign exchange translation
Total comprehensive income
Transactions with owners
Issue of share capital
Cost of issue
Issues of shares
Loss for the year
Foreign exchange translation
Total comprehensive income
Transactions with owners
Issue of share capital
Cost of issue
Step up interest in subsidiary
Transfer of reserve on option
exercised
15
15
9
-
-
-
-
-
-
-
-
-
-
-
2,259,305
5,165,060
(1,304,332)
35,354
23,334
(18,760)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
At 31 December 2021
8,317,105
24,689,311
137,700
46,451
60
61
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 2020
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
At 31 December 2020
Loss for the year
Total comprehensive income
Transactions with owners
Issue of share capital
Cost of issue
15
15
15
15
Transfer of reserve on option exercised
-
-
2,259,305
-
8,281,751
-
-
35,354
-
-
-
-
5,165,060
(1,304,332)
24,684,737
-
-
23,334
(18,760)
-
At 31 December 2021
8,317,105
24,689,311
137,700
46,451
£
-
-
-
-
-
-
-
-
-
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)
(1,233,298)
(1,233,298)
(1,233,298)
(1,233,298)
-
-
58,688
(18,760)
(63,703)
668.482
63,703
-
(18,337,713)
15,521,336
The notes on pages 66 to 104 form part of these financial statements
62
Note
Share
premium
Share
capital
£
Merger
reserve
£
Capital
Share based
Accumulated
Totals
contribution
reserve
£
payment
reserve
£
losses
£
£
AT 1 JANUARY 2020
6,022,446
20,824,009
137,700
46,451
732,185
(16,298,859)
11,463,932
-
-
-
-
-
-
-
-
-
-
-
-
(869,259)
(869,259)
(869,259)
(869,259)
-
-
7,424,365
(1,304,332)
137,700
46,451
732,185
(17,168,118)
16,714,706
At 31 December 2021
8,317,105
24,689,311
137,700
46,451
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,233,298)
(1,233,298)
(1,233,298)
(1,233,298)
-
-
58,688
(18,760)
(63,703)
668.482
63,703
-
(18,337,713)
15,521,336
Loss for the year
Total comprehensive income
Transactions with owners
Issue of share capital
Cost of issue
At 31 December 2020
Loss for the year
Total comprehensive income
Transactions with owners
Issue of share capital
Cost of issue
15
15
15
15
Transfer of reserve on option exercised
£
-
-
-
-
-
-
-
-
-
-
-
-
2,259,305
8,281,751
5,165,060
(1,304,332)
24,684,737
35,354
23,334
(18,760)
62
6363
Consolidated Statement of Cash Flows
Note
2021
£
2020
£
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before income tax
Depreciation of property, plant and equipment
Equity-settled share-based transactions
Impairment of exploration costs
Impairment of property, plant and equipment
Finance income
Finance cost
Grant income
Shares in lieu
Gain on sale of property, plant and equipment
Amortisation of right-of-use asset
Unrealised foreign exchange losses/(gains)
Increase in trade and other receivables
(Decrease)/increase in trade and other payables
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Grant receipt
Interest received
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares in prior year
Proceeds from issue of shares
Payment of share issue costs
Lease principal
Lease interest paid
Proceeds from borrowings
Interest paid on loan and borrowings
Investment by minority interest
Net cash from financing activities
(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
4
4
8
3
3
7
8
15
15
20
20
21
21
9
(1,485,611)
36,790
23,334
-
48,966
(71)
256
(66,589)
-
(17,414)
5,630
292,452
(1,162,257)
(1,294,691)
35,608
-
98,799
-
(594)
203,576
(12,637)
2,806
-
5,777
(12,590)
(973,946)
(12,796)
(174,732)
(2,203)
97,623
(1,349,785)
(878,526)
(735,847)
(86,219)
24,806
24,031
71
(622,501)
(89,436)
-
25,796
594
(773,158)
(685,547)
1,392,081
35,354
(18,760)
(5,594)
(256)
-
-
-
-
4,941,065
(1,113,348)
(5,840)
(255)
932,309
(93,935)
40,000
1,402,825
4,699,996
(720,119)
4,329,414
(273,161)
3,135,923
1,124,062
69,429
CASH AND CASH EQUIVALENTS AT END OF YEAR
3,336,134
4,329,414
The notes on pages 66 to 104 form part of these financial statements
64
Company Statement of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before income tax
Expected credit losses
Equity-settled share-based transactions
Depreciation of property, plant and equipment
Shares in lieu
Finance income
Finance cost
Unrealised foreign exchange losses/(gains)
Decrease/(increase) in trade and other receivables
Decrease in trade and other payables
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Loans to subsidiaries
Interest received
Grant receipt
Financing of subsidiary
Purchase of property, plant and equipment
Note
2021
£
2020
£
10
3
(1,233,298)
187,340
23,334
371
-
(71)
-
293,304
(869,259)
72,069
-
-
2,806
(594)
203,321
(16,865)
(729,020)
(608,522)
43,490
(166,371)
(61,415)
(524)
(851,901)
(670,461)
(1,122,845)
71
-
(300,000)
-
(448,151)
594
25,796
(380,000)
(1,483)
Net cash used in investing activities
(1,422,774)
(803,244)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares in prior year
Proceeds from issue of shares
Payment of share issue costs
Proceeds from borrowings
Interest paid
Net cash from financing activities
15
1,392,081
35,354
(18,760)
-
-
-
4,941,065
(1,113,348)
932,309
(93,935)
1,408,675
4,666,091
(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
(866,000)
4,421,426
(299,685)
3,192,386
978,514
70,526
CASH AND CASH EQUIVALENTS AT END OF YEAR
3,075,741
4,241,426
64
65
The notes on pages 66 to 104 form part of these financial statements
2021 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 2021, the Group had a cash balance of £3.34 million and the Company had a cash balance
of £3.08 million.
Management have prepared cash flow forecasts which indicate that although there is no immediate funding
requirement, the Group will need to raise further funds in the next 12 months for corporate overheads and to
advance its key projects and investments.
The Directors are confident they are taking all necessary steps to ensure that the required finance will be
available, and they have successfully raised equity finance in the past. They have therefore concluded
that it is appropriate to prepare the financial statements on a going concern basis. However, while they
are confident of being able to raise the new funds as they are required, there are currently no agreements
in place, and there can be no certainty that they will be successful in raising the required funds within the
appropriate timeframe.
These conditions indicate the existence of a material uncertainty which may cast significant doubt over the
Group’s and the Company’s ability to continue as a going concern and that it may be unable to realise its
assets and discharge its liabilities in the normal course of business. The financial statements do not include
any adjustments that would result if the Company was unable to continue as a going concern.
Basis of preparation
The consolidated financial statements have been prepared in accordance with UK adopted international
accounting standards and as applied in accordance with the provisions of the Companies Act 2006. The
policies have been consistently applied to both the parent Company and Group. The financial statements
are presented in GB Pounds Sterling rounded to the. 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.
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 (now Grafintec), 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.
66
New standards, amendments and interpretations
Standards and interpretations adopted during the year
Information on new standards, amendments and interpretations that are relevant to the Group’s annual
report and accounts is provided below:
• Interest Rate Benchmark Reform (IBOR) reform Phase 2 (Amendments to IFRS 9, IAS 39 and IFRS 7); and
• COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendments to IFRS 16).
These standards have no material impact on the Group.
Standards, amendments and interpretations that are not yet effective
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 2022:
• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37);
• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
• Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41);
and
• References to Conceptual Framework (Amendments to IFRS 3).
The following amendments are effective for the period beginning 1 January 2023:
• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
• Definition of Accounting Estimates (Amendments to IAS 8); and
• Deferred Tax Related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12).
The Directors have assessed there to be no material impact of these new accounting standards on the Group
financial statements.
66
67
2021 Beowulf Mining plc Annual Report
Notes to the Consolidated 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.
Exploitation Concession for Kallak North
A principal source of risk and judgement is that the Exploitation Concession (the “Concession”) for Kallak
North will not be awarded. At the year end, management maintained 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.
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. Managements judgement that
the asset is not impaired at the year end as a result of a concession being denied is further reinforced by the
exploitation concession being awarded subsequent to year end.
Åtvidaberg licence
The Åtvidaberg licence is located in the Bergslagen area, southern Sweden. It was renewed during 2019 and
now expires on 30 May 2023. 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,
68
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.
Mitrovica and Viti licences
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.
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. This
judgement has continued to be applied consistently throughout the year ended 31 December 2021.
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 £624,464 (2020: £573,813).
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.
68
69
2021 Beowulf Mining plc Annual Report Notes to the Consolidated Financial Statements
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.
(ii) 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.
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.
70
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.
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.
70
71
2021 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
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, cash and cash
equivalents and loans and other financial assets 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.
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.
72
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.
72
73
2021 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.
74
2.
EMPLOYEES AND DIRECTORS
Group
Company
2021
£
2020
£
2021
£
2020
£
Wages and salaries
437,990
443,288
243,541
212,848
Bonus
Social security costs
Other benefits
-
98,783
16,211
8,725
72,964
16,110
-
60,764
13,877
-
25,617
13,874
552,984
541,087
318,182
252,339
Directors’ remuneration is as follows:
Directors emoluments, including salary and fees
Shares settled expenses
Social security costs
2021
£
2020
£
257,418
226,721
103,281
-
60,764
25,617
421,463
252,338
Further details pertaining to Directors remuneration can be found in the Directors’ remuneration report on
page 43.
The remuneration of the highest paid Director who served during the year was £275,781 which consisted of
base salary of £172,500 (2020: £150,000) and a gain from the net settlement of options of £103,281 (2020:
£Nil).
The average monthly number of employees and Directors during the year was as follows:
2021
Group
2020
Group
2021
2020
Company
Company
Number
Number
Number
Number
3
7
3
7
3
2
3
-
Directors
Employees
74
75
2021 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 loans and borrowings
4.
LOSS BEFORE TAX AND AUDITOR’S REMUNERATION
a. The loss before tax is stated after charging:
Depreciation of property, plant and equipment (note 8)
Amortisation of right-of-use asset (note 11)
Foreign exchange differences
Impairment of property, plant and equipment (note 8)
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
2021
£
71
71
256
-
256
2021
£
36,790
5,630
298,442
48,966
-
2020
£
594
594
255
203,321
203,576
2020
£
35,608
5,777
37,962
-
98,799
2021
£
2020
£
41,457
36,162
6,000
2,153
6,232
55,842
6,000
2,153
5,300
49,615
76
5.
INCOME TAX
Analysis of tax expense
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2021 or for the
year ended 31 December 2020.
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:
2021
£
2020
£
Loss on ordinary activities before income tax
(1,485,611)
(1,294,691)
Tax thereon at a UK corporation tax rate
of 19% (2020: 19%)
Effects of:
Tax losses not recognised
Losses of overseas subsidiaries to be carried forward
(282,266)
(245,992)
236,039
170,386
46,227
75,606
-
-
The main rate of UK corporation tax during the year ended 31 December 2021 was 19 per cent (2020:
19 per cent). The Group has estimated UK losses of £13,723,180 (2020: £12,480,867) and foreign losses
of £4,452,690 (2020: £4,130,263) available to carry forward against future trading profits. The value of
unrecognised deferred tax assets in respect of the UK losses amounts to £3,430,795 (2020: £3,120,217) and
foreign losses of £785,196 (2020: £779,586). 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.
76
77
2021 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 2021 was based on the loss attributable
to ordinary shareholders of £1,351,179 (2020: £1,128,512) and a weighted average number of Ordinary
Shares outstanding during the year ended 31 December 2021 of 829,879,971 (2020: 607,815,562) calculated
as follows:
Loss attributable to ordinary shareholders
(1,351,179)
(1,128,512)
2021
£
2020
£
Weighted average number of ordinary shares
2021
2020
Number
Number
Number of shares in issue at the beginning of the year
607,815,562
585,102,740
Effect of shares issued during year
222,064,409
20,712,822
Weighted average number of ordinary shares
in issue for the year
829,879,971
607,815,562
The diluted earnings per share is identical to the basic loss per share as the exercise of warrants and options
would be anti-dilutive.
78
7.
INTANGIBLE ASSETS - Group
COST
At 1 January 2020
Additions for the year
Foreign exchange movements
Impairment
At 31 December 2020
At 1 January 2021
Additions for the year
Foreign exchange movements
At 31 December 2021
NET BOOK VALUE
At 31 December 2021
At 31 December 2020
Exploration
Costs
£
10,011,256
612,062
847,397
(98,799)
11,371,916
11,371,916
682,367
(818,627)
11,235,656
11,235,656
11,371,916
The net book value of exploration costs is comprised of expenditure on the following projects:
Kallak
Åtvidaberg
Ågåsjiegge
Pitkäjärvi
Karhunmaki
Rääpysjärvi
Merivaara
Mitrovica
Viti
2021
£
2020
£
7,210,380 7,533,388
363,131
393,303
6,482
-
1,457,826 1,333,114
51,622
73,859
36,096
41,017
47,053
36,965
1,376,598 1,387,030
659,662
600,046
11,235,656 11,371,916
Total Group exploration costs of £11,235,656 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 £121,226 was recorded against the projects for services provided by the
Directors during the year (2020: £68,508).
78
79
2021 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
In Sweden, much has changed since the first Exploration Licence was granted at Kallak in 2006 and during
the nearly nine years since the Company submitted its application for an Exploitation Concession in April
2013. In our daily lives, the Climate Emergency is an ever-present threat. In Norrbotten fossil-free steel
making is in the ascendency and there is increasing demand for high quality iron ore, such as Kallak’s market-
leading 71.5 per cent iron magnetite concentrate, in both innovative and traditional steel making processes
in Sweden and Europe, eliminate CO2 emissions from steel production, increase energy efficiency, minimize
waste and the impact of waste disposal.
During 2021, the Company responded to Government enquiries, continuing to demonstrate that its
application for an Exploitation Concession for Kallak North was comprehensive. In December 2021, changes
in the Swedish Government put renewed focus on the importance of primary raw material supply from mines
as part of the Green Transition.
The Company’s longstanding commitment to Kallak was finally recognised when on 22 March 2022, the
Minister of Enterprise and Innovation, announced the award of the Exploitation Concession; attached to the
decision were 12 conditions for the Company to comply with. The Company’s legal advisers have reviewed
the Government’s decision and the conditions attached to it and are satisfied that, with respect to the
conditions, they include matters the Company would naturally expect to address in project development and
the Environmental Court process.
Kallak is excellently positioned as a potential secure and sustainable supplier of high-quality iron ore to
Sweden’s fossil-free steel making sector for decades to come. In the Kallak area, 389 million tonnes of iron
mineralisation have been estimated. When it comes to sustainable mining in the north of Sweden, mines
can effectively be plugged into the grid, be powered by renewable electricity, with the potential to also use
hydrogen produced from renewables to power mobile equipment. It is a tremendous opportunity to create a
fossil-free business ecosystem of companies and other stakeholders collaborating and delivering the greater
good.
The Company is now looking at the future development of Kallak and therefore Kallak has not been impaired.
80
The Åtvidaberg licence is located in the Bergslagen area, southern Sweden. Due to COVID-19 disruptions,
the exploration permit has been awarded an additional year to its previous existing term. As such with the
extension year now granted, the permit term has been extended to 30 May 2023.
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 approximately one year
remaining on the term of the licence.
In Finland, a Scoping Study was initiated for the Aitolampi graphite project during the year, which, in the
context of the anode materials production project GVA10/50, has been extended, as it represents a potential
mining asset offering supply chain security to Finnish anode materials production. This was further advanced
through the Company signing a Heads of Terms (“HoT”) for a Joint Venture (“JV”) with Epsilon Advanced
Materials, for the establishment of an anode materials production facility in Finland.
In Kosovo, Vardar has now secured both licence renewals and been awarded the promising Shala licence,
and the Company has made further investments to fund drilling and taking the Company’s ownership of
Vardar to approximately 59.5 per cent.
Drilling is underway and will cover both Wolf Mountain zinc-lead-silver targets, and Majdan Peak gold
prospect. A total programme of approximately 3,400 metres is planned.
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.
80
81
2021 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
8.
PROPERTY, PLANT AND EQUIPMENT
GROUP
Office
Equipment
£
Motor
Vehicles
£
Machinery
& Equipment
£
Computer
Equipment
£
COST
At 1 January 2020
Additions
Disposals
Foreign exchange movements
7,324
1,525
(6,383)
145
91,007
4,911
-
6,291
70,694
81,501
-
4,271
-
1,499
-
-
Total
£
169,025
89,436
(6,383)
10,707
At 31 December 2020
2,611
102,209
156,466
1,499
262,785
DEPRECIATION
At 1 January 2020
Charge for year
Disposals
Foreign exchange movements
6,383
1,115
(6,383)
4
40,129
14,592
-
3,549
35,515
19,882
-
2,889
-
16
-
-
82,027
35,606
(6,383)
6,442
At 31 December 2020
1,119
58,270
58,286
16
117,691
GROUP
Office
Equipment
£
Motor
Vehicles
£
Machinery
& Equipment
£
Computer
Equipment
£
COST
At 1 January 2021
Additions
Disposals
Impairment
Foreign exchange movements
2,611
363
-
-
-
102,209
63,262
(11,720)
-
(7,206)
156,466
22,594
(1,422)
(74,681)
(4,127)
1,499
-
-
-
-
Total
£
262,785
86,220
(13,142)
(74,681)
(11,333)
At 31 December 2021
2,975
146,545
98,830
1,499
249,849
DEPRECIATION
At 1 January 2021
Charge for year
Disposals
Impairment
Foreign exchange movements
1,119
668
-
-
-
58,270
16,932
(5,266)
-
(4,125)
58,286
18,820
(484)
(25,715)
(2,471)
16
371
-
-
-
117,691
36,791
(5,750)
(25,715)
(6,596)
At 31 December 2021
1,787
65,811
48,436
-
116,421
NET BOOK VALUE
At 31 December 2021
At 31 December 2020
82
1,118
1,492
80,734
43,939
50,394
98,180
1,112
1,483
133,428
145,094
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
PARENT
COST
At 1 January 2021
Additions
Disposals
At 31 December 2021
DEPRECIATION
At 1 January 2021
Charge for year
Disposals
At 31 December 2021
NET BOOK VALUE
At 31 December 2021
At 31 December 2020
Office
Equipment
£
Computer
Equipment
£
6,838
-
(6,838)
-
6,838
-
(6,838)
-
-
1,499
-
1,499
-
16
-
16
Office
Equipment
£
Computer
Equipment
£
-
-
-
-
-
-
-
-
-
-
1,499
-
-
1,499
16
371
-
387
1,112
1,483
Total
£
6,838
1,499
(6,838)
1,499
6,838
16
(6,838)
16
Total
£
1,499
-
-
1,499
16
371
-
387
1,112
1,483
83
82
2021 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
9.
INVESTMENTS
COST
At 1 January 2020
Acquisitions
At 31 December 2020
At 1 January 2021
Acquisitions
At 31 December 2021
Company
Shares in
subsidiaries
£
1,697,988
380,000
2,077,988
2,077,988
300,000
2,377,988
Further investments in the share capital of subsidiaries of Vardar constitute additions during the year of
£300,000 (2020: £380,000) to increase the Company’s shareholding in Vardar from 46.1% to 49.4%. 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 (now Grafintec),
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
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 2021,
(2020: £Nil). No further share based payment charge for the consideration shares was capitalised to
intangibles in the year ended 31 December 2021 (2020: £Nil).
84
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 2021,
- On 8 February 2021, a further investment of £200,000 was made to increase the Company’s
shareholding in Vardar from 46.1 per cent to 48.4 per cent.
- On 2 August 2021, a further investment of £100,000 as made to increase the Company’s
shareholding in Vardar from 48.4 per cent to 49.4 per cent.
Further investments in Vardar have been recognised as an increase to accumulated losses of £100,013
(2020: £173,512).
84
85
2021 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
The Group consists of the following subsidiary undertakings:
Name
Incorporated
Activity
% holding % holding
2021
2020
Grafintec Oy
Jokkmokk Iron Mines AB
Beowulf Mining Sweden AB
Wayland Copper Limited
Wayland Sweden AB
Vardar Minerals Ltd
Finland
Sweden
Sweden
UK
Sweden
UK
Mineral exploration
Mineral exploration
Mineral exploration
100%
100%
100%
100%
100%
100%
Holding company
65.25%
65.25%
Mineral exploration
(1)(2)65.25%
(1)(2)65.25%
Mineral Exploration
49.4% 46.1%
Vardar Geoscience BVI Ltd
British Virgin Islands Holding company
(1)(2)49.4%
(1)(2)46.1%
Vardar Geoscience Kosovo L.L.C
Kosovo
Mineral exploration
(1)(2)49.4%
(1)(2)41.4%
Vardar Exploration Kosovo L.L.C
Kosovo
Mineral exploration
(1)(2)49.4%
-
Vardar Minerals Europe 1 EOOD^ Bulgaria
Vardar Minerals Europe 2 EOOD^ Bulgaria
Vardar Minerals Europe 3 EOOD^ Bulgaria
Mineral exploration
Mineral exploration
Mineral exploration
-
-
-
(1)(2)46.1%
(1)(2)46.1%
(1)(2)46.1%
(1) Indirectly held
(2) Effective interest
^ These entities were struck off in the year.
The registered offices of the subsidiary undertakings as are follows:
Name
Registered office
Grafintec Oy
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 Exploration Kosovo L.L.C
Rifat Berisha 23/10, Pristina, Republic of Kosovo
Details on the non-controlling interest in subsidiaries is given in note 14.
86
10.
LOANS AND OTHER FINANCIAL ASSETS
GROUP
At 1 January 2020
Foreign exchange movements
Disposals
At 31 December 2020
At 1 January 2021
Foreign exchange movements
Disposals
At 31 December 2021
COMPANY
At 1 January 2020
Advances made in the year
ECLs in year
At 31 December 2020
At 1 January 2021
Advances made in the year
ECLs in year
At 31 December 2021
Loans to group
undertakings
£
Financial
assets
£
8,986,667
423,933
(72,069)
9,338,531
9,338,531
1,025,675
(187,340)
10,176,866
2,784
-
-
2,784
2,784
-
-
2,784
Financial
fixed
assets
£
5,212
256
-
5,468
5,468
(221)
-
5,247
Total
£
8,989,451
423,933
(72,069)
9,341,315
9,341,315
1,025,675
(187,340)
10,179,650
Reconciliation of provisions against receivables arising from lifetime ECLs
ECLs
Total provision arising from ECLs
31 December
2020
£
1,913,573
1,913,573
Current year
movement
£
187,340
187,640
31 December
2021
£
2,100,913
2,100,913
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 2021 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 £624,464 (2020:
£573,813).
Further details of the transactions in the year are shown within related parties disclosure note 25.
86
87
2021 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
11.
RIGHT OF USE ASSETS
COST
At 1 January
Additions
Disposals
Foreign exchange movements
At 31 December
AMORTISATION
At 1 January
Charge
Disposals
Foreign exchange movements
At 31 December
Net book value
At 31 December
Group
2021
£
Buildings
12,562
10,852
(11,822)
(490)
11,102
10,625
5,631
(11,822)
(733)
3,701
Group
2020
£
Buildings
11,903
-
-
659
12,562
4,579
5,777
-
269
10,625
7,401
1,937
12.
TRADE AND OTHER RECEIVABLES
Other receivables
VAT
Prepayments and accrued income
Group
2021
£
122,701
37,195
23,243
183,139
2020
£
1,428,491
123,638
14,719
1,566,848
2021
£
-
17,942
23,243
41,185
Company
2020
£
1,392,081
69,955
14,719
1,476,755
Included in other receivables is a deposit of £16,810 held by Finnish regulatory authorities (2020: £17,854).
Included in other receivables of both the Group and the Company in the prior year is a balance of £1,392,081
for funds due to be received for shares issued, these funds were received in the year and are shown
separately in statement of cash flows for the current year.
13.
CASH AND CASH EQUIVALENTS
Group
2021
£
2020
£
2021
£
Company
2020
£
3,336,134
3,336,134
4,329,414
4,329,414
3,075,741
3,075,741
4,241,426
4,241,426
Bank accounts
88
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
2021
£
2020
£
394,113
(169,087)
100,013
325,039
326,555
(145,955)
213,513
394,113
2021
£
(162,484)
487,523
325,039
2020
£
(161,677)
555,790
394,113
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
2021
£
2020
£
(1,212)
(1,212)
(1,471)
(1,471)
(422)
(396)
(818)
(512)
126
(386)
17,498
(485,102)
(467,604)
4,391
(469,644)
(465,253)
(162,484)
(161,677)
88
89
2021 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
Vardar Minerals Limited, a 49.4 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
2021
£
2020
£
248,093
248,093
284,281
284,281
(134,011)
(34,259)
(168,270)
(165,668)
20,099
(145,569)
55,793
101,029
1,098,746 1,047,809
(134,829)
(160,940)
993,599 1,014,009
487,523
555,790
2021
Number
2021
£
2020
Number
2020
£
Allotted, called up and fully paid
At 1 January
Issued for cash
Issued for fees
At 31 December
828,175,224
3,535,412
-
831,710,636
8,281,751
35,354
-
8,317,105
602,244,672 6,022,446
225,841,752 2,258,417
888
828,175,224 8,281,751
88,800
All issues are for cash unless otherwise stated.
Number
828,175,224
3,535,412
-
831,710,636
Share
Capital
£
8,281,751
35,354
-
8,317,105
Share
Total
Premium
£
£
24,684,737 32,966,488
4,5741
39,928
-
-
24,689,311 33,006,416
At 1 January 2021
8 July - Issue of new shares
At 31 December 2021
1Includes issue costs of £18,760.
90
Share
Capital
£
Share
Premium
£
Total
£
Number
At 1 January 2020
21 December - Issue of new shares
21 December – Issue of fee shares
602,244,672
225,841,752
88,800
6,022,446
2,258,417
888
20,824,009
3,858,8101
1,918
26,846,455
6,117,227
2,806
At 31 December 2020
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 2021
On 8 July 2021, the company announced the issue of 3,535,412 new ordinary shares at £0.01 each, in
settlement of 9,000,000 options held by Kurt Budge with an exercise price of £0.0166.
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 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.
90
91
2021 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
16.
SHARE-BASED PAYMENTS
During the year ended 31 December 2021, no options were granted (2020: Nil). The options outstanding as
at 31 December 2021 have an exercise price in the range of 7.35 pence to 12.00 pence (2020: 1.66 pence to
12.00 pence) and a weighted average remaining contractual life of 1 year, 144 days (2020: 1 year, 242 days).
The share-based payments expense for the options for the year ended 31 December 2021 was £Nil (2020:
£Nil).
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%
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
Weighted
average
exercise price
(£’s)
2021
Number
2021
22,750,000
Outstanding at 1 January
Exercised during the year
(9,000,000)
Outstanding at 31 December 13,750,000
13,750,000
Exercisable at 31 December
0.060
0.017
0.089
0.089
Weighted
average
exercise price
(£’s)
2020
0.060
-
0.060
0.060
Number
2020
22,750,000
-
22,750,000
22,750,000
No warrants were granted during the year (2020: Nil).
92
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
2021
£
263,062
11,976
17,114
65,084
357,236
2020
£
406,503
13,197
15,149
103,923
538,772
2021
£
62,215
8,693
3,600
39,983
114,491
2020
£
175,855
8,994
100
95,913
280,862
Included in other trade and other payables of both the Group and the Company is a balance of £Nil due be
to paid for issue costs relating to share issues (2020: £190,984). This amount should be considered as a
reconciling item to the working capital movements included the operating line of the statement of cash flows
for the prior year, as this amount decreases the cash issue costs displayed in the cashflow statement rather
than presenting as a movement in working capital.
92
93
2021 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
19.
DEFERRED INCOME
Grants
2021
£
2020
£
39,849
143,399
The grant held as deferred income represents the first tranche receipt of €215,619 (£192,205) received on
the 30 July 2018, 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
was extended to the 30 November 2021. In the year ended 31 December 2021, The Group released £61,729
(2020: £11,444) of the liability directly against intangible asset additions and recognised £42,558 as income
(2020: £12,637).
Also, in the year ended 31 December 2020, Grafintec received funds from Business Finland of £15,350. 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 amount outlined above was netted against intangible asset
additions.
In addition, Grafintec 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 €791,000 for Phase 2 (Phase 1 €224,900). The funds will be used for graphite purification and
spheroidization test work, and the further assessment of Grafintec’s graphite for battery applications. The
funding is released by the administrator as incurred with Phase 1 running from 1 January 2019 to 31 January
2020 and Phase 2 running from 1 January 2021 to 31 December 2023. In the year to 31 December 2021,
£24,031 has been recognised as grant income (2020: netted against intangible asset additions).
94
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
CURRENT
Lease liability
TOTAL LEASE LIABILITY
ANALYSIS OF LEASE LIABILITY
At 1 January 2021
Additions
Interest expense
Lease payments
Foreign exchange movements
At 31 December 2021
At 1 January 2020
Additions
Interest expense
Lease payments
Foreign exchange movements
At 31 December 2020
31 Dec
31 Dec
2021
No.
1
2020
No.
1
31 Dec
2021
£
31 Dec
2020
£
7,491
2,026
7,491
2,026
Lease liability
£
2,026
10,852
302
(5,896)
207
7,491
Lease liability
£
7,472
-
256
(6,095)
393
2,026
94
95
2021 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 2021
The total cash outflow for leases in 2021 was £5,850 (2020: £6,095).
31 Dec
2021
£
7,491
-
-
7,491
21.
BORROWINGS
Opening balance
Funds advanced
Finance costs
Effect of FX
Funds repaid
Group
Company
2021
£
-
-
-
-
-
-
2020
£
-
932,309
203,321
20,802
(1,156,432)
-
2021
£
-
-
-
-
-
-
2020
£
-
932,309
203,321
20,802
(1,156,432)
-
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 2020, following successful
capital raisings (see note 22).
96
22.
CHANGES IN LIABILITIES FROM FINANCING ACTIVITIES
GROUP
Opening balance 1 January 2021
CASH MOVEMENTS
Lease additions
Lease payments
Total
NON-CASH MOVEMENTS
Finance cost
Effect of FX
Closing balance 31 December 2021
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
Leases
£
2,026
10,852
(5,896)
6,982
302
207
7,491
Leases
£
7,472
-
-
-
(6,095)
1,377
255
394
2,026
Borrowings
£
-
-
-
-
-
-
-
Total
£
2,026
10,852
(5,896)
6,982
302
207
7,491
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
In the prior year 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.
96
97
2021 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 other
financial assets, trade and other receivables, trade and other payables and lease liabilities that arise directly
from its operations.
The Group and Company hold the following financial instruments:
At 31 December 2021
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 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
Group
Company
Held at
amortised
cost
£
3,336,134
122,701
-
5,247
3,464,082
Total
£
3,336,134
122,701
-
5,247
3,464,082
Held at
amortised
cost
£
3,075,741
-
10,176,866
2,784
13,255,391
Total
£
3,075,741
-
10,176,866
2,784
13,255,391
345,263
7,491
352,754
345,263
7,491
352,754
145,647
-
145,647
145,647
-
145,647
Group
Company
Held at
amortised
cost
£
4,329,414
1,428,491
-
5,468
5,763,373
525,577
2,026
527,603
Total
£
4,329,414
1,428,491
-
5,468
5,763,373
525,577
2,026
527,603
Held at
amortised
cost
£
4,241,426
1,392,081
9,338,531
2,784
14,974,822
415,270
-
415,270
Total
£
4,241,426
1,392,081
9,338,531
2,784
14,974,822
415,270
-
415,270
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.
98
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
2021
£
2020
£
Company
2021
£
2020
£
2,693,547
251,115
2,944,662
4,173,822
49,019
4,222,841
2,695,521
4,528
2,700,049
4,181,711
38,196
4,219,907
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 2021 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
2021
£
(269,355)
(25,112)
(294,467)
2020
£
417,382)
(4,902)
(422,284)
2021
£
(269,355)
(25,112)
(294,467)
2020
£
(417,382)
(4,902)
(422,284)
Profit or Loss
Equity
2021
£
(269,552)
(453)
(270,005)
2020
£
(418,171)
(3,820)
(421,991)
2021
£
(269,552)
(453)
(270,005)
2020
£
(418,171)
(3,820)
(421,991)
A 10 per cent weakening of sterling against the Group’s primary currencies at 31 December 2021 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.
98
99
2021 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 in the prior
year were the bridging loan finance entered into and repaid during the prior year; these were at a fixed rate
of interest. There were no interest-bearing financial liabilities in the current year.
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
Grafintec Oy
Gross
2021
£
2020
£
7,692,987
7,407,215
360,887
2,122,991
10,176,865
358,947
1,572,369
9,338,531
Reconciliation of provisions against receivables arising from lifetime ECLs
ECLs
Total provision arising from ECLs
31
December
2020
£
1,913,573
1,913,573
Current
year
movement
£
187,340
187,340
31
December
2021
£
2,100,913
2,100,913
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 2021 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
£624,464 (2020: £573,813).
100
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
2021
£
3,336,134
(263,062)
(39,849)
3,033,223
2020
£
4,329,414
(538,771)
(143,399)
3,647,244
14,496,429
16,736,480
20.92%
21.79%
100
101
2021 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.
2021
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
7,579,995
2,748
32,381
(34,254)
-
-
-
38,561
13,756
679,827
1,619,400
(1,898)
314,701
(41,967)
-
-
-
202,369
160,585
222,750
2,036,261
139,624
21,535
(63,014)
-
256
-
51,761
51,761
117,894
-
5,602
3,149,931
(264,591)
(71)
-
48,966
1,259,555
1,259,484
1,259,483
11,235,656
146,076
3,518,548
(403,826)
(71)
256
48,966
1,552,246
1,485,586
2,279,954
2020
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)
102
25. RELATED PARTY DISCLOSURES
Transactions with subsidiaries
During the year, cash advances of £356,613 (2020: £170,257) were made to Jokkmokk Iron Mines AB and
net settled costs of £12,310 with the Company (2020: incurred costs of £68,130). 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 £7,692,987 (2020: £7,407,215).
Beowulf Sweden AB received cash advances of £Nil (2020: £Nil) and incurred costs paid on behalf of the
Company of 2,338 (2020: net settled costs of £2,512). 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 £360,887 (2020:
£358,947).
Grafintec Oy received cash advances of £678,845 (2020: £206,513) and net settled costs of £17,883 (2020:
incurred costs of £19,936) with 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 £2,122,991 (2020:
£1,572,369).
In accordance with its service agreement, Grafintec 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 settled expense
Insurance
2021
£
2020
£
482,895
-
27,749
103,281
877
614,802
435,353
4,608
26,710
-
874
467,545
Share settled expenses relate to a net settlement of share options by Kurt Budge resulting in a gain of
£103,281.
102
103
2021 Beowulf Mining plc Annual Report
Notes to the Consolidated Financial Statements
26. EVENTS AFTER THE REPORTING DATE
On 11 January 2022, the Company announced that its wholly owned Finnish subsidiary Grafintec Oy and
Epsilon Advanced Materials Private Limited, have signed a Memorandum of Understanding with the City of
Vaasa for the establishment of an anode materials production facility to be located in the GigaVaasa area,
Plot 18, situated in proximity to Freyr Battery’s proposed battery cell development.
On 1 March 2022, the Company announced that it has invested a further £200,000 in Vardar Minerals Ltd.
The investment increases the Company’s ownership in Vardar from 49.4 per cent to approximately 51.4 per
cent, a majority shareholding.
On 22 March 2022, the mineral exploration and development company, is pleased to announce that its 100
per cent owned Jokkmokk Iron Mines AB has been awarded an Exploitation Concession for the Kallak North
Iron Ore Project.
On 30 March 2022, the Company has invested £1,000,000 in Vardar Minerals Ltd to fund drilling. The
investment increases the Company’s ownership in Vardar from 51.4 per cent to 59.5 per cent approximately.
The rig has arrived on the Mitrovica licence and drilling is expected to start on Wolf Mountain zinc-lead-silver
targets, before attention is turned to the Majdan Peak gold prospect. A total programme of approximately
3,400 metres is planned.
104
104
105
2021 Beowulf Mining plc Annual Report Company Information
Directors
Mr K R Budge
Mr C Davies
Mr S O Littorin
Finnish Office
Grafintec Oy
Akademigatan 1,
20500 Åbo
Finland
Auditors
BDO LLP
55 Baker Street
London
W1U 7EU
Secretary
ONE Advisory Limited
Swedish Registered
Address
All subsidiary companies
Storgatan 36,
921 31 LYCKSELE
Sweden
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
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
UK Bank
The Royal Bank of Scotland
Public Relations UK
BlytheRay Limited
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
106
106
107
2021 Beowulf Mining plc Annual Report https://beowulfmining.com/