BEOWULF MINING PLC
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
Company Number 02330496
BEOWULF MINING PLC
CONTENTS
Page
CONTENTS
Company Profile
Company 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
Notes to the Consolidated and Company Financial Statements
Company Information
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Registered Number: 02330496
1
BEOWULF MINING PLC
COMPANY PROFILE
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
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).
Beowulf’s ambition is to become a trusted European supplier of metals needed for the Green Transition. The
Company has an attractive strategic position, and is developing production assets, in magnetite iron ore and natural
flake graphite, in stable jurisdictions and proximity to growing downstream markets, the decarbonising steel
industry and the lithium-ion battery manufacturing sector.
The Company’s most advanced project is the Kallak Iron Ore Project (“KIOP”) 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 market-leading high-grade iron
concentrate to Europe’s decarbonising steel industry and fossil-free steel making projects in the Nordic region for
decades to come.
On 22 March 2022, the Company was awarded an Exploitation Concession for Kallak North. This permit provides
exclusive mining rights in the defined areas for a period of 25 years. The Kallak North deposit has an estimated
Mineral Resource of 111 million tonnes, Measured and Indicated, with an average grade of 28 per cent iron
content. In the Kallak area, the Company has additional defined mineral resources and exploration targets which
could support a longer life mining operation beyond Kallak North.
For Kallak North and South combined, Baker Geological Services Limited (“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.
In southern Sweden, the Company has its Åtvidaberg nr 1 (“Åtvidaberg”) exploration licence, which is prospective
for polymetallic discoveries, mainly copper and zinc.
Beowulf’s 100 per cent owned subsidiary Grafintec is recognised in Finland as one of the main companies in the
anode space and continues to be supported by Business Finland, the Finnish governmental organisation for
innovation funding and investments.
Grafintec's exploration programme is targeted at securing long-term sustainably produced primary raw material
supply to support a Finnish graphite anode value chain. The Company has reported a Mineral Resource Estimate
at Aitolampi of 26.7 Mt at 4.8 per cent total graphic carbon (“TGC”) for 1,275,000 tonnes of contained graphite
and is exploring at the nearby Rääpysjärvi exploration permit.
Grafintec has signed a Memorandum of Understanding (“MoU”) with Qingdao Hensen Graphite Ltd. (“Hensen”),
including an agreed framework and key terms, by which both companies can collaborate on downstream anode
materials development.
Registered Number: 02330496
2
BEOWULF MINING PLC
COMPANY PROFILE
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
In Kosovo, Beowulf is invested in exploration for base metals and precious metals. At the signing date of this
report the Company has a 61.1 per cent interest in Vardar Minerals Ltd (“Vardar”). Vardar is focused on
exploration in the Tethyan Belt, a major orogenic metallogenic province for gold and base metals.
During 2022, Vardar’s exploration drilling programme led to the definition of a Polymetallic Epithermal System
at Majdan Peak in the Mitrovica licence, with potential to host gold and silver-lead-zinc-copper mineralisation. .
In addition, geological mapping at the nearby Red Lead prospect, identified marble units along with gossans,
trachyte bodies and carbonate alteration, highlighting potential for carbonate-replacement style lead-zinc-silver
mineralisation.
On 16 December 2022, the Company announced the addition of two new licences to Vardar’s exploration profile,
extending coverage of Mitrovica and Shala projects. The Viti licence is also 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.
Registered Number: 02330496
3
BEOWULF MINING PLC
COMPANY PURPOSE
FOR THE YEAR ENDED 31 DECEMBER 2022
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.
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”
“Kunnioittaa kaikkia sidosryhmiä”
“Toimia yhteistyössä paikallisten kanssa”
“Vastuullisuus”
“Showing respect to all our stakeholders”
“Becoming a local partner”
“Delivering responsible development”
Registered Number: 02330496
4
BEOWULF MINING PLC
CHAIRMAN’S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
Dear Shareholders
Introduction
Beowulf has transformed itself in the last year, with the award of Exploitation Concession for the Kallak North
Iron Ore Project and, post-period, positive economics results from the Kallak North 'Only' Base Case.
The preliminary economic assessment for Kallak North is only part of the bigger Kallak story, and we have many
levers to increase value, which will be investigated as we proceed with Pre-feasibility. These include resource
expansion, a longer life mining operation, increased production capacity, and higher proportion of high-grade
concentrate sales to decarbonising steelmakers in the Nordics and Europe, of which there are many.
We built new partnerships in Finland, firstly collaborating with Hensen, an established graphite and anode
materials company, and then, post period, signing a new site agreement with the municipality of Korsholm for
establishing an anode materials production facility in the GigaVaasa area.
Grafintec continued its efforts to expand its natural flake graphite resource inventory, with promising exploration
findings for the Rääpysjärvi prospect, which in the future, could potentially add to the Company's resources
already defined at Aitolampi, offering sustainable and secure primary raw materials supply to a Finnish anode
materials value chain.
In Kosovo, Vardar’s exploration drilling defined a large polymetallic epithermal system at Madjan Peak in the
Mitrovica licence, with potential to host economic concentrations of base and precious metals. Furthermore,
fieldwork at the Red Lead Prospect, also in Mitrovica, highlighted the potential for discovery of lead-zinc
carbonate hosted mineralisation. As the prospect is located just 2km east of the world-class Stan Terg lead-zinc
deposit with similar geology, it is considered a priority target for follow up drilling.
During the year, we made significant process in our ESG work, policy development and in practice with our
project development work. Beowulf and its subsidiaries are focused on the role they play in society and
contribution and are committed to working constructively - and in good faith - with all stakeholders and engaging
in meaningful dialogue.
Kallak
The Company’s longstanding commitment to Kallak was finally recognised when, on 22 March 2022, the
Company was awarded an Exploitation Concession for Kallak North. This permit provides exclusive mining rights
in the defined areas for a period of 25 years.
The Kallak North deposit has an estimated Mineral Resource of 111 Mt, Measured and Indicated, with an average
grade of 28 per cent iron content. In the Kallak area, the Company has additional defined mineral resources and
exploration targets which could support a longer life mining operation beyond Kallak North.
Kallak is excellently positioned as a potential secure and sustainable supplier of market-leading high-grade iron
concentrate to Europe’s decarbonising steel sector and fossil-free steel making projects in the Nordic region for
decades to come.
During the year, the Company strengthened its leadership team in Sweden, with the appointment of Ulla
Sandborgh as CEO of Jokkmokk Iron bringing extensive experience from trade and industry in Sweden and deep
knowledge of environmental permitting, and initiated the Scoping Study for Kallak North.
On 24 January 2023, Beowulf announced positive economic results for Kallak North, forming part of the larger
Kallak Iron Ore Project, from a Scoping Study prepared by independent consulting firm SRK Consulting (UK)
Ltd. The study indicates a positive economic assessment for a mining operation producing up to 2.7 million tonnes
per annum ("Mtpa") of high-grade iron concentrate over a production life of 14 years.
Registered Number: 02330496
5
BEOWULF MINING PLC
CHAIRMAN’S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
Grafintec Oy ("Grafintec")
Grafintec continued to focus on the creation of a Finnish anode materials value chain, with exploration for more
natural flake graphite, contracting the Geological Survey of Finland ("GTK") to carry out an electromagnetic
("EM") survey over the Rääpysjärvi exploration permit. This yielded extensive EM anomalies, suggesting
significant potential for a larger tonnage of high-grade graphite mineralisation than that defined at Aitolampi and
for localised very high-grade mineralisation.
During the year, Grafintec entered into a MoU with GTK, providing Grafintec and GTK with a framework and
platform to promote and foster cooperation in the fields of a circular economy, mineral processing and exploration
of graphite as pertaining to anode materials for the lithium-ion battery market and other markets from different
raw material sources.
During the year, Grafintec also entered into a new partnership with Hensen, a company that has been operating in
the graphite industry for 37 years and has been producing graphite-based anode materials since 2003, as the
Company continued to pursue its downstream ambitions.
Vardar Minerals ("Vardar")
During 2022, the Company invested a further £1.2 million (2021: £300,000) to fund drilling taking the Company’s
ownership of Vardar to approximately 59.5 per cent (2021: 49.4%). In 2023, Beowulf increased its ownership to
61.1 per cent.
From late summer onwards, the Company published a number of positive announcements, starting in August with
the discovery of a large Polymetallic Epithermal System (copper, gold and lead-zinc) at Majdan Peak ("MP"), part
of Mitrovica licence in Kosovo, with drilling results both supporting the potential for epithermal mineralisation of
economic grades to be present and for comparisons to be drawn with the Chelopech copper-gold deposit in
Bulgaria. This was soon followed up with new exploration targets at MP and then the identification, in December,
of the Red Lead target, bearing striking similarities observed at the neighbouring world-class Stan Terg deposit,
such as the same host rocks, trachyte heat source, hydrothermal breccias and hydrothermal alteration patterns.
Shareholder Base
At 31 December 2022, there were 632,863,876 (2021: 621,366,320) Swedish Depository Receipts representing
76.09 per cent (2021: 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.
With the Kallak North Exploitation Concession awarded, and to fund work programmes, with the focus being on
Kallak, on 4 July 2022, the Company announced bridging loan financing from a Nordic Institutional Investor of
SEK 22 million (approximately £1.76 million) before expenses.
The Company announced on 20 December 2022 it had secured a preferential rights issue of Swedish Depository
Receipts (“SDRs”) in Sweden (“Rights Issue”) and a PrimaryBid retail offer of ordinary shares in the UK
(“PrimaryBid Offer”) which included a placing to certain UK investors (“Placing”). As part of this the Company
received underwriting commitments to the value of a maximum of SEK 60 million, or approximately 70 per cent
of the intended Rights Issue.
On 28 February 2023, Beowulf announced the outcome of the Rights Issue and the PrimaryBid offer. The Rights
Issue raised approximately SEK 62.8 million (approximately £5 million) and the PrimaryBid Offer raised
approximately £0.8 million. In addition to the PrimaryBid Offer, the Placing raised approximately £0.4 million.
Members of the Board and executive management also subscribed to an agreed amount of £181,000.
Following the year end, it became apparent that due to the timing of the receipt of the funds from the Rights Issue
the Company was not be in a position to pay back the bridging loan facility at its maturity. The outcome of this is
that the holder of the loan enforced the penalty interest for entering another 30-day period, which was circa 1
million SEK (approximately £80,000). The loan principal and interest totalling £2.13m was repaid via a deduction
to the gross proceeds from the Rights Issue.
The net funds raised after the loan repayment and share issue transaction costs were £3.72 million.
6
Registered Number: 02330496
BEOWULF MINING PLC
CHAIRMAN’S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
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 twelve months from the date
of approval of the financial statements, this conclusion has been reached following managements review of both
cost and foreign exchange sensitivities and potential key hires required to advance projects. 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.
2022 Financial Performance
For the year, the consolidated loss increased in the year before tax from £1,485,611 in 2021 to £2,041,452 in 2022.
This increase is primarily due to finance costs in relation to the bridging loan of £304,529 (2021: £Nil) and share
based payment expenses of £240,537 (2021: £Nil).
The underlying administration expenses of £1,806,582 were higher than the previous year of £1,503,049, due to
share-based payment expenses of £240,537 (2021: £Nil).
Consolidated basic and diluted loss per share for the 12 months ended 31 December 2022 was 0.23 pence (2021:
loss of 0.16 pence).
The Company received loan financing from a Nordic Institutional Investor of SEK 22 million, which generated
£1,554,381 of net proceeds to fund working capital.
£1,776,556 in cash was held at the year-end (2021: £3,336,134).
Exploration assets increased to £13,002,465 at 31 December 2022 compared to £11,235,656 at 31 December 2021
primarily due to exploration activities in Mitrovica and Kallak.
The translation reserve losses attributable to the owners of the parent increased from £1,216,985 at 31 December
2021 to £1,289,415 at 31 December 2022. Much of the Company's exploration costs are in Swedish Krona which
has weakened against the pound since 31 December 2021.
Corporate
Post period end on 3 May 2023, Kurt Budge, the Company’s CEO, announced that he would step down from the
Company to pursue other business interests. Kurt had been with the Beowulf for nine years and his presence was
pivotal to the Company, especially in achieving the successful delivery of the Exploitation Concession for Kallak
North. I should like to thank him for his many years of service and wish him all the best in his future endeavours.
The Company announced, on 8 July 2022, the implementation of a new Long-Term Incentive Plan ("LTIP")
available to eligible employees, an important element of the Company's remuneration policies designed to retain
and incentivise key employees. Moving forwards, the Company's remuneration policies will be developed on a
systematic basis and matched to performance metrics, such as achieving important business milestones and ESG
objectives.
Staff and Employees
On behalf of the Board, 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.
Registered Number: 02330496
7
BEOWULF MINING PLC
CHAIRMAN’S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
ESG
The Company believes in living its values of Respect, Partnership and Responsibility. Over the last year, our ESG
work has identified, as material to the Company's activities, specific Sustainable Development Goals which the
Company will be focusing on as it develops its projects. These goals and our future compliance with The Equator
Principles are being factored into our thinking, design, engineering, and planning of our operations and
management systems. In 2022, Beowulf published its ESG Policy which can be viewed on the Company’s website
following the link: https://beowulfmining.com/about-us/esg-policy/.
Outlook
Beowulf’s ambition is to become a trusted European supplier of metals needed for the Green Transition. The
Company has an attractive strategic position, developing production assets, in magnetite iron ore and natural flake
graphite, in stable jurisdictions and proximity to growing downstream markets, the decarbonising steel industry
and the lithium-ion battery manufacturing sector.
With Jokkmokk Iron and Grafintec, we have distinct businesses positioned to benefit from the Green Transition
and the demand for sustainable and secure supply of primary raw materials. The status of our iron ore and natural
flake graphite resources can only be enhanced, as geopolitical uncertainties remain, and Europe seeks to be
sustainable and self-sufficient.
With the aim of bringing Kallak into production, and opportunities with Grafintec to get into anode materials
production, we are currently reassessing our timelines for advancing our projects and look forward to a busy
schedule ahead progressing them.
J Röstin
Executive Chairman/Interim Chief Executive Officer
2 June 2023
Registered Number: 02330496
8
BEOWULF MINING PLC
REVIEW OF OPERATIONS AND ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
SWEDEN
Permits
Beowulf, via its subsidiaries, currently holds six exploration permits in Sweden, and one Exploitation Concession,
as set out in the table below:
Exploration
Permit Name
Licence
no.
Area
(hectares)
Valid from
Valid to
Parkijaure nr 21
Parkijaure nr 61
Parkijaure nr 71
Ågåsjiegge nr 31
Åtvidaberg nr 12
2008:20
2019:81
2021:47
2021:73
2016:51
285
999
2,212
2,771
12,533
18/01/2008
10/10/2019
16/06/2021
27/10/2021
30/05/2016
18/01/2025
10/10/2024
16/06/2024
27/10/2024
30/05/2024
Exploitation
Concession Name
Kallak K nr 11 3
Licence no.
BK-2022:1
Area
(hectares)
103
Valid from
Valid to
22/03/2013
22/03/2047
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.
Kallak Introduction
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 has the benefit of 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 market-leading high-grade iron
concentrate to Europe’s decarbonising steel sector and fossil-free steel making projects in the Nordic region for
decades to come.
Kallak Resource
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 m.
Registered Number: 02330496
9
BEOWULF MINING PLC
REVIEW OF OPERATIONS AND ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
On 25 May 2021, the Company published a 'Mineral Resource Estimate and Exploration Target Upgrade',
prepared by 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.
Below is a table showing the Mineral Resource Statement for the Kallak Project at a 0% Fe cut-off grade:
Million
Tonnes
16
Density
(g/cm3)
3.5
FeO
Fe
(%)
(%)
33.6 10.5
SiO2
(%)
43.4
49.8
48.9
48.1
49.3
49.3
50.1
Al2O3
(%)
2.9
4.5
4.3
4.2
4.9
4.9
6.6
S
(%)
P
(%)
0.04 0.002
0.03 0.002
0.03 0.002
0.04 0.002
0.04 0.003
0.04 0.003
0.05 0.004
27.0 7.1
28.0 7.6
28.3 7.8
26.9 7.2
26.9 7.2
23.4 6.5
Deposit
Classification
Kallak North
Kallak South North
Kallak South South
Total
Measured
Indicated
Sub-Total
Inferred
Measured
Indicated
Sub-Total
Inferred
Measured
Indicated
Sub-Total
Inferred
Measured
Indicated
Sub-Total
Inferred
95
111
25
21
21
6
8
16
116
132
39
3.3
3.3
3.4
3.3
3.3
3.2
3.3
3.5
3.3
3.3
3.3
26.1 12.0
50.1
33.6 10.5
43.4
27.0 7.1
27.8 7.5
27.1 8.5
49.7
48.9
48.8
5.2
2.9
4.6
4.4
4.8
0.05 0.009
0.04 0.002
0.03 0.002
0.03 0.002
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
Baker (FAusIMM(CP)), an independent Competent Person as defined in the PERC Standard 2017.
the PERC Standards 2017, by Howard
to
Registered Number: 02330496
10
BEOWULF MINING PLC
REVIEW OF OPERATIONS AND ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
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).
BGS reported an Exploration Target in an untested gap between and Kallak South North and Kallak South South,
of between 25 Mt and 75 Mt grading between 20% Fe to 30% Fe. In addition, an Exploration Target of between
45 Mt and 135 Mt grading between 20% Fe to 30% Fe at has been reported at Parkijaure. The potential quantity
and grade are conceptual in nature as there has been insufficient exploration to estimate a Mineral Resource. It is
uncertain if further exploration will result in the estimation of a Mineral Resource.
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.
2022 Update
On 22 March 2022, the Swedish Government awarded an Exploitation Concession for Kallak North; attached to
the decision were 12 conditions for the Company to comply with. The Company's legal advisers reviewed the
Government's decision and the conditions attached to it and, with respect to the conditions, were satisfied that
these were matters the Company would naturally expect to address during project development and the
Environmental Court process. The award of the Concession was a long-awaited milestone on the development
timeline, and now the Company can focus its attention on project development and applying for the Environmental
Permit.
Registered Number: 02330496
11
BEOWULF MINING PLC
REVIEW OF OPERATIONS AND ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
The Government's decision to grant the Exploitation Concession is subject to a review by the Supreme
Administrative Court following an application by the Swedish Society for Nature Conservation, the Sirges Sami
and the Jåhkågasska Sami. They argue that the government was not entitled to make the decision in question, on
the grounds that it would be contrary to legal rules in support of mainly nature conservation and the national
interest of reindeer husbandry. They argue that the Government's decision lacks support in the legal order and that
the Supreme Administrative Court should therefore declare the decision invalid. There is a risk that the Supreme
Administrative Court will find that the Government has made the decision in violation of the law and therefore
annul it. In such a case, the Government may reconsider the issue, but such a procedure risks delaying the start of
mining production at Kallak North. There is also a risk that the Government will not take a new decision on the
processing concession, which could prevent or at least delay the start of mining production. There is also a risk
that the Government will attach additional conditions to a new decision, which may affect or delay the start of
mining production at Kallak North. The Company assesses the probability of the described risks occurring to be
low.
The Company strengthened its leadership team in Sweden with the appointment of Ulla Sandborgh as CEO of
Jokkmokk Iron, Beowulf’s wholly owned Swedish subsidiary and the developer of the Kallak North. Before
joining Jokkmokk Iron, Ulla held senior positions in private enterprise and public institutions, in sectors including
infrastructure, electricity and water. Her most recent role was a Director General in the Ministry of Enterprise of
The Government of Sweden, where she was responsible for issues affecting the limestone and cement industries
and led the development of a strategy to promote the efficient and sustainable use of water. Ulla has extensive
experience in managing permitting processes and, as part of this, engaging with stakeholders, to ensure interests
are safeguarded, and benefits shared.
During the year, the Company contracted independent consulting firm SRK Consulting (UK) Ltd ("SRK")
Company to prepare a Scoping Study for Kallak North and engaged Vulcan Technologies Pty Ltd (“VulcanTech”),
an Australian company specialising in the modelling of iron and steel making processes, to complete a Marketing
Study to consider traditional and non-traditional market opportunities that might be served by Kallak concentrates.
Workstreams associated with the Environmental Permit continued, including updating investigations regarding
nature values, water management and options for transporting production from the mine.
2023 Update
On 24 January 2023, Beowulf announced the positive economic results of the Kallak North Scoping Study,
forming part of the larger Kallak Iron Ore Project, prepared by independent consulting firm SRK Consulting (UK)
Ltd. The Scoping Study presents a ‘Base Case’ solely focused on the Kallak North deposit, incorporating a Mineral
Resource Estimate (“MRE”) with effective date of 9 May 2021 and an economic assessment for a mining operation
producing up to 2.7 Mt per annum of high-grade iron concentrate over a production life of 14 years. The scoping
study economic highlights include a Net Present Value (NPV8) of US$177 million, Internal Rate of Return of 14.5
per cent and a Payback Period of ~ 4.5 years from commencement of construction activity. The 'Base Case'
assumes 67 per cent of Kallak production is sold to the Blast furnace market and 33 per cent is sold to the Direct
Reduction market, consistent over the 14 years production life.
A Pre-feasibility Study (PFS) is due to commence in Q2 2023, and the offers for the work was sent to the Company
by the 11 May 2023. The offers are evaluated and compared before the assignment is given to one or several
bidding companies. The PFS is an important part of the Environmental Permit. The Permitting workstreams are
continuing with all the necessary investigations that must be included in the application for an Environmental
Permit that will be handed in to the court. Like background measuring of noise, dust, waterflows and inventory of
nature values.
Registered Number: 02330496
12
BEOWULF MINING PLC
REVIEW OF OPERATIONS AND ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
FINLAND
Grafintec
Grafintec is recognised in Finland as one of the main companies in the anode space and continues to be supported
by Business Finland, the Finnish governmental organisation for innovation funding and investments.
Finnish Exploration Permits
Grafintec's exploration programme is targeted at securing long-term sustainably produced primary raw material
supply to support a Finnish graphite anode value chain. The Company has a rolling programme of exploration
permit and claim reservation applications and exploration permit renewals.
Tukes (the permitting authority) processes the Company’s applications, which if deemed satisfactory, are
published as a ‘Hearing’ for one month, during which time appeals can be submitted.
Exploration
Permit Name
Pitkäjärvi 1
Licence no.
ML2016:0040-
02
Area
(hectares)
Notes
407 27.4.2021: Extension permit granted by TUKES.
3.3.2022: The Administrative Court dismissed all the
appellants’ claims and the litigation costs. 11.4.2022:
Appeal application to the Supreme Administrative
Court by Puhtaan Saimaan puolesta ry, Kansalaisten
kaivosvaltuuskunta ry and Vesiluonnon puolesta ry.
3.11.2022: The Supreme Administrative Court
dismissed the NGO’s application for leave to appeal
the exploration permit. The permit is now legally
valid until 26.4.2024.
Rääpysjärvi 1
ML2017:0104
716 Exploration permit granted. The permit gained legal
Karhunmäki 1
ML2019:0113
force 21.6.2021 and is valid to 20.6.2025.
889 Granted by TUKES 29.9.2021. The decision has been
appealed to the Vaasa Administrative Court by Lapua
municipality and MiningWatch Finland ry.
Luopioinen 1
ML2022:0004
218 Exploration permit application submitted 28.1.2022.
The permit has not gained legal force yet.
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 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
electromagnetic (“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.
Mineral Resource Estimate
In 2019, Grafintec 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.
Registered Number: 02330496
13
BEOWULF MINING PLC
REVIEW OF OPERATIONS AND ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
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 %
Indicated
Inferred
Indicated + Inferred
Indicated
Inferred
Indicated + Inferred
Indicated + Inferred
9.2
8.0
17.2
1.8
7.7
9.5
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
Western lens
Eastern lens
TOTAL
2022 Update
Density
(t/m3)
2.80
2.80
2.80
2.82
2.82
2.82
2.81
Contained graphite (kt)
468
419
887
74
314
388
1,275
Grafintec continued to focus on the creation of a Finnish anode materials value chain, with exploration for more
natural flake graphite, contracting Geological Survey of Finland (“GTK”) to carry out an EM survey over the
Rääpysjärvi exploration permit.
Grafintec entered into a Memorandum of Understanding (“MoU”) with GTK, providing Grafintec and GTK with
a framework and platform to promote and foster cooperation in the fields of circular economy, mineral processing
and exploration of graphite as pertaining to anode materials for the lithium-ion battery market and other markets
from different raw material sources.
Grafintec also entered into a new partnership with Hensen, a company that has been operating in the graphite
industry for 37 years and has been producing graphite-based anode materials since 2003. The MoU includes an
agreed framework and key terms on which both companies are collaborating to establish an anode materials hub
in Finland.
Along with the MoU signed with Hensen, Grafintec also signed a MoU with Dominik Georg Luh Technografit
GmbH ("Technografit"), establishing the basis for a commercial partnership for procuring sustainably produced
natural flake graphite for Grafintec's planned graphite anode materials plant. The MoU was signed with
Technografit in May 2022 and sets the heads of terms for incorporating a formal sales agreement between
Grafintec and Technografit, This follows the Company’s strategy to expand its resource footprint while its projects
are still in development, in order to develop downstream anode capabilities. Samples received from Technografit
will be tested by Hensen and other possible technology partners and processed to anode material. Also, the
Company has testwork programmes on recycled graphite containing waste to assess whether it can be processed
to suitable feedstock for anode materials production.
In the final quarter of the year, the Company announced the results from the EM survey and assays for the
Rääpysjärvi flake graphite prospect.
The EM survey indicated extensive EM anomalies, significant potential for a larger tonnage of high-grade graphite
mineralisation than that defined at Aitolampi and for localised very high-grade mineralisation.
Registered Number: 02330496
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BEOWULF MINING PLC
REVIEW OF OPERATIONS AND ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
Highlights included:
•
13 highly conductive EM zones were identified, with isolated zones extending for up to 850m strike length
and 250m width.
• Analysis of eight grab samples from outcrops in the area range from 0.52 to >50 per cent TGC. The sample
assaying more than 50 per cent TGC (limit of the analysing methodology) was taken from a historic graphite
quarry situated close to the north-western limit of one of the largest EM conductive zones.
• Six holes drilled in the 1980s have also been re-sampled and re-assayed for TGC. Two of the drill holes
intersected significant graphite mineralisation:
o TN/SM-2: 19.29m at 5.62 per cent TGC (from 177.11m); and
o TN/SM-3: 9.84m at 6.70 per cent TGC (from 226.16m) and 35.55m at 4.98 per cent TGC (from
266.45m).
• Previous metallurgical testwork on a 10kg composite grab sample has produced a concentrate grade of 97.4
per cent TGC.
• The encouraging exploration data set indicates significant potential for natural flake graphite mineralisation
suitable for graphite anodes across Rääpysjärvi.
Samples were taken from four trenches in different locations within the identified EM conductive Zone 1, with
assays confirming the existence of significant flake graphite mineralisation grade and intersected width.
Flake graphite mineralisation was discovered in all four trenches sampled, including:
• RAA-TR1-22: 10.6 m at 4.33 per cent TGC and 3.8m at 5.77 per cent TGC;
• RAA-TR2-22: 9.96 per cent TGC from grab sample;
• RAA-TR3-22: 5.8m at 7.25 per cent TGC and 7.1 m at 7.43 per cent TGC; and
• RAA-TR4-22: 1.0m at 26.00 per cent TGC.
2023 Update
Grafintec announced, on 9 January 2023, that it had awarded a Pre-feasibility Study (“PFS”) contract to RB
Plant to assess the technical, economic, statutory, regulatory and commercial options for a natural flake graphite
micronisation, spheronisation, purification, and coating plant in Finland.
The study will investigate the Best Available Technology ("BAT") with consideration for environmental,
operational and financial factors and performance, for transforming a high-grade natural flake graphite concentrate
to graphite anode material suitable for the European lithium-ion battery market opportunities.
The PFS is a key component of Grafintec`s strategy to develop a Finnish value chain for anode materials
production, aligned with the objectives of the funding received from Business Finland as part of the BATCircle2.0
(Finland-based Circular Ecosystem of Battery Metals) consortium. BATCircle2.0 is a key project in Business
Finland's Smart Mobility and Batteries from Finland programmes.
At the start of February, the Company signed an agreement with the municipality of Korsholm to secure a new
site at the GigaVaasa area (Plot 1, Block 3017) to establish a Graphite Anode Materials Plant (“GAMP”).
Grafintec will work closely with the municipality of Korsholm and other important stakeholders and intends to
apply for a long-term site reservation for Plot 1 within the second half of 2023.
Registered Number: 02330496
15
BEOWULF MINING PLC
REVIEW OF OPERATIONS AND ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
KOSOVO
Vardar Minerals Limited (“Vardar”)
Beowulf’s investment in Vardar gives the Company exposure to base metals and precious metals exploration in
the highly prospective Tethyan Belt.
Exploration Permits
Vardar has a rolling programme of exploration permit applications and renewals, see table below:
Licence
Number
2879
2878
2912
2935
3122
3123
3054
Term1
Licence
Valid From
Valid To
2nd
2nd
2nd
1st
1st
1st
1st
Mitrovica
Viti N
Viti SE
Shala
Shala East
Shala West
Zvecan
2022-03-11
2022-03-22
2022-03-11
2022-03-11
2022-09-06
2022-10-22
2022-06-27
2024-01-27
2024-01-27
2024-01-27
2025-02-25
2025-08-17
2025-10-11
2024-05-14
Area
(km2)
27.1
35.5
44.1
87.5
78.8
36.2
6.4
1 Refers to whether the licence has been renewed e.g. 2nd means licence has been renewed after its 1st term.
Exploration Overview
Vardar’s exploration permits 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.
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). The licence is showing its potential for a range of porphyry related mineralisation types.
Registered Number: 02330496
16
BEOWULF MINING PLC
REVIEW OF OPERATIONS AND ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
Shala
During the year, three Shala exploration licences were approved, extending to the north and northeast of the
Mitrovica licence, its polymetallic epithermal system and associated lead-zinc-silver and gold-silver-copper
mineralisation. The new areas are situated in the prospective Vardar lead-zinc-silver belt along trend from
historical mining districts.
The new licences include prospective carbonate host rocks along with Oligocene magmatic rocks which provide
the heat and metal source in the surrounding lead-zinc ore districts; alteration and gossan outcrops have been noted
in early reconnaissance visits further demonstrating the potential for lead-zinc-silver mineralisation in both of the
licences.
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.
Zvecan
The Zvecan licence is a small extension licence east of the main Mitrovica project and was created by changes in
municipality boundaries.
Registered Number: 02330496
17
BEOWULF MINING PLC
REVIEW OF OPERATIONS AND ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
2022 Update
During 2022, the Company invested a further £1.2 million to fund drilling taking the Company’s ownership of
Vardar to approximately 59.5 per cent. At the signing date of this report, the Company has invested a further
£250,000 and now owns a 61.1 per cent interest in Vardar.
Significant and positive exploration results were delivered by Vardar in 2022, which resulted in the identification
of a high sulphidation Polymetallic Epithermal System at Majdan Peak (“MP”), part of the Mitrovica licence.
Epithermal systems, which are formed at shallow levels in the earth’s crust, are highly prospective for their gold
and silver contents and can also contain lead, zinc and copper.
During the year, drilling focused on the MP target and the results both supported the potential for epithermal
mineralisation of economic grades to be present and for comparisons to be drawn with the Chelopech copper-gold
deposit in Bulgari. Numerous additional base and precious metal targets were also defined for future drilling.
The exploration programme consisted of 16 holes, totalling 3709.7 metres(m) of diamond drilling, including 3
holes (643.5 m) at MP South and 13 holes (3066.2 m) at MP North. All drillholes intersected abundant sulphides,
intense alteration, and multiple generations of veining which are all factors indicative of a large polymetallic
epithermal system. Significant gold-copper-silver, lead-zinc-silver and gold intersections include:
• Drillhole MP006: 10.8m at 0.48 grammes per tonne ("g/t") gold ("Au"), 0.1 per cent copper ("Cu") and 18 g/t
silver ("Ag"), including 3.2m at 1.1 g/t Au, 0.2 per cent Cu and 50 g/t Ag;
• Drillhole MP006: 6.8m at 4.1 per cent lead ("Pb"), 0.6 per cent zinc ("Zn") and 15 g/t Ag; and
• Drillhole MP013: 16.1m at 0.21 g/t Au.
Following this, on 8 September 2022, the Company announced additional analysis of drilling and exploration
activities in and around the Majdan Peak South (“MPS”) area. This analysis generated additional exploration
targets effectively increasing the significant district potential. The additional targets include Gold Ridge and Red
Lead.
The main objective of exploration is to discover an economic deposit of base and precious metals, and recent
drilling has shown this potential. Drilling at MPS intercepted several noteworthy precious metals intersections,
including:
• Drillhole MP002: 8.8 m at 0.34 g/t Au, including 0.9m at 1.52 g/t Au and 20 g/t Ag; and
• Drillhole MP003: 36.4m at 19 g/t Ag, 0.5 per cent Pb and 0.2 per cent Zn, including:
o 1.5m at 128 g/t Ag, 0.35 per cent Cu, 1.5 per cent Pb and 0.3 per cent Zn;
o 1.1m at 71 g/t Ag, 0.1 per cent Cu, 0.7 per cent Pb and 0.3 per cent Zn;
o 1.0m at 50 g/t Ag, 0.2 per cent Cu, 0.5 per cent Pb and 0.3 per cent Zn;
o 4.8m at 44 g/t Ag and 0.7 per cent Pb; and
o 1.1m at 46 g/t Ag, 2.7 per cent Pb and 0.6 per cent Zn.
On 14 December 2022, Beowulf released results from detailed geological mapping over the Red Lead target,
located within the Mitrovica Licence, situated approximately 2km east of the world class Stan Terg lead-zinc
deposit, which is still in production. The target is defined by a two kilometre East-Northeast trending lead-zinc-
copper-gold in soil sample anomaly along with:
Mineralised trachyte bodies (with up to three per cent zinc from rock sampling);
• Prominent induced polarisation (“IP”) anomalies indicative of potential sulphide metal sources; and
• Hydrothermal breccias and gossanous outcrops.
Registered Number: 02330496
18
BEOWULF MINING PLC
REVIEW OF OPERATIONS AND ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
Detailed geological mapping undertaken in December identified marble units together with gossans, trachyte
bodies and carbonate alteration, highlighting the potential for carbonate-replacement style lead-zinc-silver
mineralisation. As this important target shares the same host rocks, and alteration as seen the neighbouring Stan
Terg deposit, it is considered a highly prospective target for follow up drilling.
ESG
The Company’s overall purpose is to be a responsible and innovative company that creates value for our
shareholders, the wider society and the environment, through sustainably producing critical raw materials needed
for the global transition to a Green Economy.
On 13 May 2022, regarding Community Initiatives, the Company announced that discussions were taking place
with the responsible local agency in Jokkmokk about conducting surveys to map the current workforce and future
workforce, school leavers and university students in the region, to determine what initiatives need to be started to
ensure sufficient locally based skilled persons are available for work at the mine or in other businesses established
by the economic stimulus created by the mine.
Registered Number: 02330496
19
BEOWULF MINING PLC
REVIEW OF OPERATIONS AND ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
The Company wants to be recognised for living its values of Respect, Partnership and Responsibility. In its recent
ESG work it has identified, as material to the Company's activities, the following main Sustainable Development
Goals and relevant actions under each goal which the Company will be focusing on:
• Goal 6: Ensure availability and sustainable management of water and sanitation for all
o Target 6.1 - By 2030, achieve universal and equitable access to safe and affordable drinking water for all
o Target 6.4 - By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable
withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of
people suffering from water scarcity
• Goal 8: Decent work and economic growth
o Target 8.2 - Achieve higher levels of economic productivity through diversification, technological
upgrading and innovation, including through a focus on high-value added and labour-intensive sectors
o Target 8.4 - Improve progressively, through 2030, global resource efficiency in consumption and
production and endeavour to decouple economic growth from environmental degradation, in accordance
with the 10-year framework of programmes on sustainable consumption and production, with developed
countries taking the lead
o Target 8.5 - By 2030, achieve full and productive employment and decent work for all women and men,
including young people and persons with disabilities, and equal pay for work of equal value
• Goal 9: Industry, innovation and infrastructure
o Target 9.1 - Develop quality, reliable, sustainable and resilient infrastructure, including regional and
transborder infrastructure, to support economic development and human well-being, with a focus on
affordable and equitable access for all
o Target 9.4 - By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with
increased resource-use efficiency and greater adoption of clean and environmentally sound technologies
and industrial processes, with all countries taking action in accordance with their respective capabilities
• Goal 12: Responsible production and consumption
o Target 12.2 - By 2030, achieve the sustainable management and efficient use of natural resources
o Target 12.5 - By 2030, substantially reduce waste generation through prevention, reduction, recycling and
reuse
o Target 12.6 - Encourage companies, especially large and transnational companies, to adopt sustainable
practices and to integrate sustainability information into their reporting cycle
• Goal 13: Climate Action
o Target 13.2 - Integrate climate change measures into national policies, strategies and planning
When it comes to the development of the Company's projects and with Kallak as the frontrunner, the above goals
and our future compliance with The Equator Principles are being factored into our thinking, design, engineering,
and planning of our operations and management systems.
The Company's ESG Policy is available on the website following the link below:
https://beowulfmining.com/about-us/esg-policy/
Registered Number: 02330496
20
BEOWULF MINING PLC
BOARD OF DIRECTORS AND SENIOR MANAGEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
BOARD OF DIRECTORS
Johan Röstin –Executive Chairman / Chief Executive Officer (“CEO”)
Mr Röstin was appointed to the Beowulf Mining Board on 7 November 2022, following the announcement that
outgoing Chairman Sven Otto Littorin would be stepping down. On 3 May 2022 Johan assumed the role of Interim
CEO and hence Executive Chairman following the resignation of Kurt Budge, former CEO.
Johan spent three years as CEO of ferry operator ForSea between 2017-2020, and before that was CEO of
Copenhagen Malmo Port AB, 2009-2017. He has significant experience in infrastructure, logistics, capital
investments and permitting processes, and has held Board, executive and senior management positions during his
career.
In his role at ForSea, Mr Röstin led the company to create a new brand, a stronger organisation and set the company
on its sustainability journey.
Christopher Davies - Non-Executive Director
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.
Chris holds a BSc Hons Geology from Aberystwyth University in Wales, and an MSc DIC Mineral Exploration
from Imperial College, London. He is a Fellow of the Australasian Institute of Mining and Metallurgy (FAusImm)
Registered Number: 02330496
21
BEOWULF MINING PLC
BOARD OF DIRECTORS AND SENIOR MANAGEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
SENIOR MANAGEMENT
Rasmus Blomqvist – Managing Director Grafintec
Mr. Blomqvist, the founder of Grafintec (formerly Fennoscandian Resources), joined the Company 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”).
Ulla Sandborgh – Chief Executive Officer Jokkmokk Iron
Ms Sandborgh has held senior positions in private enterprise and public institutions, in sectors including
infrastructure, electricity and water. Her most recent role was a Director General, Ministry of Enterprise, The
Government of Sweden, where she was responsible for issues affecting the limestone and cement industries and
accountable for the development of a strategy to promote the efficient and sustainable usage of water.
Ulla has extensive experience in managing permitting processes and, as part of this, engaging with stakeholders,
ensuring interests are safeguarded and benefits shared.
Ulla has a degree in Civil Engineering from KTH Royal Institute of Technology and is an elected Member of the
Royal Swedish Academy of Engineering Sciences.
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.
Registered Number: 02330496
22
BEOWULF MINING PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
The Directors present their strategic report for the year ended 31 December 2022.
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 £1,948,459 (2021: loss of £1,351,179). 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
Risk rating
post-mitigation
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 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.
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.
The Company
could be
exposed to
macro-
political risk
or sovereign
risk.
The
Company’s
activities
could be
negatively
impacted by
adverse
climate
events.
MEDIUM
MEDIUM
LOW
LOW
Political Risk
Climate Emergency
Registered Number: 02330496
23
BEOWULF MINING PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
The principal risks and uncertainties facing the Group are detailed below:
EU countries
must cut
greenhouse
gas emissions
by at least 55
% by 2030,
compared to
1990 levels,
and to become
climate-
neutral by
2050. There is
a risk that
electrical
vehicles and
machines are
not available.
Lack of
control and
oversight on
entity spend
Unable to
raise sufficient
funds to invest
in project
portfolio and
cover
corporate
costs
Prices for iron
ore, graphite,
and other
commodities
may affect the
viability of the
Company’s
projects
European Climate
Law
Non-operator of
subsidiary
Unable to raise
sufficient funds
Long term adverse
changes in
commodity prices
Not discovering an
economic mineral
deposit
Very few
projects go
through to be
developed into
mines
HIGH
Registered Number: 02330496
LOW
Mining operations will have Net
zero Emissions by using
electrical vehicles and fossil free
electricity.
LOW
LOW
MEDIUM
MEDIUM
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.
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 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.
Early studies and testwork give
confidence that the Company is
allocating capital appropriately.
With Kallak and Grafintec we
have 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.
LOW
MEDIUM
MEDIUM
MEDIUM TO
LOW
24
BEOWULF MINING PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
The principal risks and uncertainties facing the Group are detailed below:
Revocation of
licences
Licence awards
can be
appealed and
subject to
conditions
which, if not
satisfied, may
lead to the
revocation of
the licence
MEDIUM
With respect to the Kallak North
Exploitation concession, the
Government's decision to grant the
Exploitation Concession is subject to
a review by the Supreme
Administrative Court following an
application by the Swedish Society
for Nature Conservation, the Sirges
Sami and the Jåhkågasska Sami. They
argue that the government was not
entitled to make the decision in
question, on the grounds that it would
be contrary to legal rules in support of
mainly nature conservation and the
national interest of reindeer
husbandry. They argue that the
Government's decision lacks support
in the legal order and that the
Supreme Administrative Court should
therefore declare the decision invalid.
There is a risk that the Supreme
Administrative Court will find that
the Government has made the
decision in violation of the law and
therefore annul it. In such a case, the
Government may reconsider the issue,
but such a procedure risks delaying
the start of mining production at
Kallak North. There is also a risk that
the Government will not take a new
decision on the processing
concession, which could prevent or at
least delay the start of mining
production. There is also a risk that
the Government will attach additional
conditions to a new decision, which
may affect or delay the start of mining
production at Kallak North.
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
Registered Number: 02330496
25
BEOWULF MINING PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
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 were higher than the previous year at £1,806,582
(2021: £1,503,049) due to share-based payment expenses of £240,537 (2021: £Nil).
ii.
Cash position
Cash is vital for any 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.
Post the award of the Kallak North Concession, a key objective of the Company was to ensure capital was available
to inject pace into project development. The Group demonstrates a commitment to financial stability as shown by
a year-end cash position of £1.78 million (2021: £3.34 million), with the announced SDR Rights Issue and UK
Retail Offer in progress, necessary to provide sufficient funding for project development activities and general
working capital. The current management team has a consistent track record of raising capital in a timely manner.
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 and the local team 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.
Registered Number: 02330496
26
BEOWULF MINING PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
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 2022 (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, while:
- Considering the likely consequences of long-term strategic decisions;
- Understanding the impacts of our activities on local communities and the environment;
- Being respectful and behaving responsibly towards our stakeholders; and
-
Seeking to engage on acceptable terms and to build good relationships with stakeholders.
The Board regularly reviews our principal stakeholders and how we engage with them. The stakeholder voice is
brought into the boardroom by the Director’s direct engagement with senior operations management on matters in
need of attention. 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. The Company remains committed to working constructively - and
in good faith - with all stakeholders and engaging in meaningful dialogue.
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 a decarbonising steel industry in Europe.
In addition, 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.
Registered Number: 02330496
27
BEOWULF MINING PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
Section 172 Companies Act Statement (continued)
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 Company 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/.
Registered Number: 02330496
28
BEOWULF MINING PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
Section 172 Companies Act Statement (continued)
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
Government and
regulatory bodies
•
Sustainability
•
ESG performance
•
Ethical behaviour
• Company reputation
• Comprehensive review of financial
performance of the business over the
long-term
Interim and Annual Report
• Transparency in all communications
•
• Company website (Investor Relations)
• RNS announcements
Option to receive RNS announcements
directly
Shareholder circulars
• Awareness of long-term strategy and
• AGM
direction
Investor meetings & access to the
Executive
• Compliance with regulations
•
• Health and Safety
• Company reputation
•
•
Employee pay, conditions and welfare
•
• Direct contact with regulators
•
•
• Ongoing communication with the Swedish
Company website
RNS announcements
Interim and Annual Report
Compliance updates at Board Meetings
Regular risk review
Environmental impact
Insurance
•
•
Environment
Sustainability
•
• Biodiversity, energy, water and waste
management
• Climate change
•
Government
Engagement with the Mining Inspectorate
of Sweden
• Monthly KPIs on licence conditions
compliance
• Transparency in ESG performance
• Oversight of corporate responsibility plans
• Demonstrate compliance with laws and
regulations
Registered Number: 02330496
29
BEOWULF MINING PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
Section 172 Companies Act Statement (continued)
Stakeholder
Their interests
How we engage
Community
Sustainability
•
• Community engagement
• Human Rights
•
• ESG performance
• 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
Employees and
contractors
Terms and conditions of contract
•
• Health and safety
• Human rights and modern slavery
• Anti-Bribery Policy
• Whistleblowing Policy
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.
The Board of Directors confirms that during the year under review, it has acted to promote the long-term success
of the Group for the benefit of shareholders, whilst having due regard to the matters set out in Section 172(1)(a)
to (f) of the Companies Act 2006, being:
(a) the likely consequences of any decision in the long term;
(b) the interests of employees;
(c) the need to foster the business relationships with suppliers, customers and others;
(d) the impact of the Group’s operations on the community and the environment;
(e) the desirability of maintaining a reputation for high standards of business conduct; and
(f) the need to act fairly between all shareholders.
This statement describes how the Directors have regard for s172 Matters.
The Company Secretary sets out the s172 Matters in all Board meeting packs to ensure these are front of mind,
and the Directors are reminded of their duty under s172(1) at the start of each Board meeting. Consideration of the
broader s172 matters forms an integral part of Board discussion; the Directors as a matter of course have regard to
the need to maintain a reputation for high standards of business conduct, the need to act fairly between
shareholders, and the long-term consequences of their decisions. Stakeholder considerations on the whole will be
brought to the Board’s attention through reports and presentations given during the Board meetings. These
considerations are referenced in meeting papers as relevant, and discussions recorded in the meeting minutes.
The Board regularly reviews our principal stakeholders and how we engage with them. The stakeholder’s voice is
brought into the boardroom throughout the annual cycle through information provided by management and also
by direct engagement with stakeholders themselves. We are aware that each stakeholder group requires a tailored
engagement approach in order to foster effective and mutually beneficial relationships. The Board determined its
key stakeholders on the basis of each group’s potential to a) be impacted by the Company’s activities, and/or b)
have an impact on the Company’s activities.
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.
Registered Number: 02330496
30
BEOWULF MINING PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
Set out below are those stakeholders that the Board has identified as being key, alongside details of how the Board
engages with each key stakeholder group. As a result of these processes, the Directors have the necessary oversight
of the Group’s engagement with stakeholders to enable them to discharge their duty under s172(1) in the course
of their decision making. Moreover, the Board has concluded that the Company’s methods of engagement for each
key stakeholder group are proportionate and effective. The Company’s key stakeholders and methods of
engagement will be kept under review and reported on each year in the Company’s Annual Report.
Stakeholder
Shareholders
is
Why
this stakeholder group
important for the Company’s long
term success?
to
Our shareholders expect us
operate
cost
efficiently
effectively to maximise long-term
value creation. Ultimately,
the
Company operates for the long-term
benefit of its shareholders.
and
Our communities and the
environment
We have an important role to play as
a custodian of exploration and
mining land and in supporting the
communities in which we operate,
and ensuring that our long-term
growth is sustainable and minimises
our environmental footprint.
How the Board engages with this
stakeholder group
• Regular updates from Executive and
non-executive directors, as well as
from advisers and investment banks
who have the relationships with certain
of the underlying shareholders and
meetings with investors.
• The AGM, investor roadshows and
other conferences represent further
opportunities for direct shareholder
engagement with the Board.
• Keeping shareholders up to date with
the Company’s activities through our
Annual Report, Company’s website,
stock exchange announcements, press
releases and
reports and
regular
analyses for investors and shareholders.
• The Board
its ESG
responsibilities seriously and receives
periodic reports on our broader ESG
activities. We appreciate that societal
expectations on corporates to tackle
climate change continue to change, and
we will continue to look at new and
innovative ways of reducing our carbon
footprint.
takes
life
implement an ESG
• We will
management framework to govern the
whole
the mine
cycle of
development – from initial conceptual
and
through
operation, to progressive closure and
restoration.
feasibility
studies,
Require our supply chain to meet our
standards as part of our
ESG
sustainable
responsible
procurement and codes of conduct.
and
Registered Number: 02330496
31
BEOWULF MINING PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
Employees
Our employees play a central role in
delivering the Group’s long-term
strategy and
the
standards of service our customers
expect.
in delivering
Government and regulators
Compliance with all applicable legal
and regulatory obligations is key to
our long-term success.
ON BEHALF OF THE BOARD:
Mr J Röstin
Director
2 June 2023
constantly
attendance
• The Board
seek
opportunities to engage with the wider
workforce directly, either through site
the various projects or
visits
to
employee
at Board
meetings.
• The Company provides ongoing
training and development opportunities
to certain employees and have taken
appropriate steps for having policies
relating
to Modern Slavery and
whistleblowing to discourage unethical
business conduct, thus ensuring its
employees are protected.
We will ensure our demonstrable
compliance with established national
and international environmental social
governance and ethical standards.
good
Establish
relations with
responsible authorities and always seek
dialogue with
to fulfil our
them
obligations.
Registered Number: 02330496
32
BEOWULF MINING PLC
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
The Directors present their report, together with the audited financial statements of the Group and Company, for
the year ended 31 December 2022.
DIRECTORS
Since 1 January 2022, the following Directors have held office:
Mr K R Budge (Resigned 3 May 2023)
Mr C Davies
Mr J Röstin (Appointed 7 November 2022)
Mr S O Littorin (Resigned 7 November 2022)
DIVIDENDS
No dividends will be distributed for the year ended 31 December 2022 (2021: Nil).
GOING CONCERN
At 31 December 2022, the Group had a cash balance of £1.78 million and the Company had a cash balance of
£1.67 million.
Management prepared cash flow forecasts which indicate that although there is no immediate funding requirement,
the Group would need to raise further funds in the next 12 months for corporate overheads and to advance its key
projects and investments. This conclusion has been reached following managements review of both cost and
foreign exchange sensitivities and potential key hires required to advance projects.
On 20 December 2022, the Company secured a Rights Issue in Sweden and a PrimaryBid Offer and Placing in the
UK As part of this the Company received underwriting commitments to the value of a maximum of SEK 60
million, or approximately 70 per cent of the intended Rights Issue. Therefore, at the year end, the Directors were
confident that the Group would be able to raise sufficient capital to fund the Group’s key projects and investments.
Since the year end, the Group have completed the Rights Issue raising SEK 62.8 million (approximately £5
million) before expenses and the PrimaryBid Offer and Placing raising an aggregate of £1.3 million before
expenses. As a result, the underwriting commitments were not activated.
Following the year end, it became apparent that due to the timing of the receipt of the funds from the Rights Issue
the Company will not be in a position to pay back the bridging loan facility at its maturity. The outcome of this is
that the holder of the loan enforced the penalty interest for entering another 30-day period, which was circa 1
million SEK. The loan principal and interest totalling £2.13m was repaid via a deduction to the gross proceeds
from the Rights Issue.
The net funds raised after the loan repayment and share issue transaction costs are £3.72 million.
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.
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 37.
Registered Number: 02330496
33
BEOWULF MINING PLC
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
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 2022:
Shareholders
HSBC Global Custody Nominee (UK) Limited
Shares
633,477,309
%
76.17
The Directors were 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
HSBC Global Custody Nominee (Uk) Limited
Interactive Investor Services Nominees Limited – A/C SMKTNOMS
Shares
621,366,320
26,630,895
%
74.71
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 June 2022, 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 £5,544,738 (2021: £5,521,168).
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 28 to the financial statements.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Financial risk management policies and objectives for capital management are provided within Note 24 to the
financial statements.
FUTURE DEVELOPMENTS WITHIN THE BUSINESS
With Kallak North, since the award of the Exploitation Concession, the Company is focused on project
development, environmental permitting, de-risking the project and increasing value, while delivering on
environmental and social goals, balancing cost and benefit.
The Company's overall objective is to have Kallak in production, developing the mine alone or in partnership. The
present Government of Sweden has promised to shorten and simplify the processes for environmental permits to
secure the pace of the Climate Emergency and the Green transition. The Company will be doing all it can to make
the ambitious timeline achievable.
Grafintec's strategy remains to build an anode value chain in Finland. The Company’s exploration programme is
targeted at securing long-term sustainably produced primary raw material supply to feed downstream processing.
The Company has reported a MRE at Aitolampi of 26.7 Mt at 4.8 per cent TGC for 1,275,000 tonnes of contained
graphite and is exploring at the nearby Rääpysjärvi exploration permit. Grafintec has signed a MoU with Hensen,
including an agreed framework and key terms, by which both companies can collaborate on downstream anode
materials development.
The Company’s investment in Vardar provides diversification, in geography and commodity exposure, to highly
prospective exploration opportunities in the Tethyan Belt. Vardar achieved tremendous exploration success in
2022, which has created the opportunity to consider spinning-off Vardar. The Company’s investment priorities
across its portfolio remain subject to funding being available.
Registered Number: 02330496
34
BEOWULF MINING PLC
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
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 (“IFRS”). 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 Stock Market in Sweden.
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 UK-adopted International Accounting
Standards, 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.
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.
Registered Number: 02330496
35
BEOWULF MINING PLC
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
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 J Röstin
Director
2 June 2023
Registered Number: 02330496
36
BEOWULF MINING PLC
REMUNERATION REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
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 was the sole Executive Director and Chief Executive Officer during the reporting period. His annual
salary was £210,000 (2021: £180,000). Post period, Mr Budge stepped down as CEO on 3 May 2023.
Post period, Mr Röstin assumed the role of Executive Chairman and interim CEO effective 3 May 2023 at the time
of Mr Budge’s resignation.
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 £36,000 per annum (2021: £33,000). 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 resigned as Non-Executive Director and Mr Röstin was appointed as Non-Executive Director on 31
October 2022. Under Mr Röstin’s letter of appointment, he is paid a fee in Swedish Krona of 500,000 per annum.
Mr Rostin has a notice period of one month under his letter of appointment.
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.
Aggregate Directors’ Remuneration
The remuneration paid to the Directors in accordance with their agreements, during the years ended 31 December
2022 and 31 December 2021, was as follows:
Name
Position
Salary &
Fees1
Benefits2
Pension3
Mr K R Budge4
Mr C Davies
Mr J Rostin5
Mr SO Littorin
Total
Chief Executive
Officer
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
£
210,000
£
887
£
5,667
39,000
25,328
34,215
-
-
-
-
-
-
Share-
based
payments
2022
Total
£
158,817
375,371
2021
Total
£
186,377
14,528
53,528
33,000
-
-
25,328
-
34,215
38,041
308,543
887
5,667
173,345
488,442
257,418
Registered Number: 02330496
37
BEOWULF MINING PLC
REMUNERATION REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
Notes:
(1) Does not include expenses reimbursed to the Directors.
(2) Personal life insurance policy
(3) Employer contributions to personal pension.
(4) Post period, Kurt Budge resigned as CEO effective 3 May 2023
(5) Post period, Johan Röstin assumed the role of Executive Chairman / Interim CEO.
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 2022 in the issued share capital
of the Company were as follows:
ORDINARY SHARES
Mr K R Budge
Mr C Davies
31 December
2022
5,957,997
88,800
31 December
2021
5,957,997
88,800
As at 31 December 2022, 8,500,000 options have vested.
ORDINARY SHARES UNDER
OPTION
Mr K R Budge
Mr K R Budge
Mr K R Budge
Mr C Davies
Mr C Davies
NUMBER
3,500,000
9,500,000
2,500,000
2,500,000
2,000,000
EXERCISE
PRICE
7.35 pence
5.25 pence
1 pence
7.35 pence
5.25 pence
EXPIRY DATE
14 January 2024
27 September 2032
27 September 2032
14 January 2024
27 September 2032
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
EXERCISE
PRICE
7.35 pence
12 pence
7.35 pence
EXPIRY DATE
14 January 2024
26 January 2022
14 January 2024
ON BEHALF OF THE REMUNERATION COMMITTEE
Chris Davies
Non-Executive Director
2 June 2023
Registered Number: 02330496
38
BEOWULF MINING PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
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 4, and the key challenges in
their execution can be found on pages 23 to 25.
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 41) 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 monitors 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
23 to 25.
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 Executive Chairman and acting Chief Executive Officer, Johan Röstin, and Independent
Non-Executive Director, Chris Davies. The Board recognises that the current size and composition of the Board
is not aligned to the QCA principles. At the time of writing, a recruitment process is underway for a replacement
CEO following the resignation of Kurt Budge on 3 May 2023 and for the appointment of an additional Non-
Executive Director. The Board will ensure that its future size and composition is appropriate the complexity of the
business and its strategy.
For the year under review Chris Davies held 88,800 Ordinary Shares (2021:88,800) and held 4,500,000 options
(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.
All Directors are encouraged to challenge and to bring independent judgement to bear on all matters, both strategic
and operational. Biographical details of
the Group’s website
www.beowulfmining.com.
the Directors can be
found on
Registered Number: 02330496
39
BEOWULF MINING PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
During the reporting period as Independent Non-Executive Chairman, Johan Röstin, and the other Independent
Non-Executive Director, Chris Davies, dedicated 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 relevant 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, www.beowulfmining.com. 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.
Registered Number: 02330496
40
BEOWULF MINING PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)
The Company is open to receiving feedback from key stakeholders, and will take action where appropriate. The
key contact for shareholder liaison at the time of writing is Johan Röstin. Information on the Investor Relations
section of the Group’s website (www.beowulfmining.com) is kept updated and contains details of relevant
developments, presentations and other key information.
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.
A large part of the Company’s activities is centred upon an open and respectful dialogue with shareholders,
contractors, regulators and other stakeholders. Therefore, the importance of sound ethical values and behaviours
is crucial to the ability of the Company to successfully achieve its corporate objectives. The Board places great
importance on this aspect of corporate life and seeks to ensure that this flows through all that the Company does.
The Directors consider that at present the Company has an open culture facilitating comprehensive dialogue and
feedback and enabling positive and constructive challenge.
The Company has close ongoing relationships with a broad range of its stakeholders such as local tribes and
adjacent landowners and provides them with the opportunity to raise issues and provide feedback to the Company.
The Company works closely with the communities in which it operates, sharing its plans and ideas for the projects
being developed, and listening to any concerns and addressing any issues raised. Beowulf remains firmly
committed to the responsible development of a modern, sustainable and innovative mining operation in partnership
with the local community.
Audit Committee
The Audit Committee comprises Chris Davies and Johan Rostin, 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
at www.beowulfmining.com.
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.
Following the post period director changes the responsibilities of the Audit Committee will be discharged by the
Board of Directors until such time as a further Director appointment is made.
Remuneration Committee
During the reporting period, the Remuneration Committee comprised Chris Davies and Johan Röstin, who chaired
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. In September 2022, Mr Davies attended a Remuneration Committee training course
with Mercer.
A Remuneration Committee Report is included on pages 37 to 38. The Committee’s Terms of Reference are
available to view on the Company’s website at www.beowulfmining.com.
Following the post period director changes the responsibilities of the Remuneration Committee will be discharged
by the Board of Directors until such time as a further Director appointment is made.
41
Registered Number: 02330496
BEOWULF MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BEOWULF MINING PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
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 2022 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 2022 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 attention to note 1 in the financial statements which explains that the Group and the Parent Company’s
ability to continue as a going concern is dependent on raising further funds for corporate overheads and to advance
its key projects and investments. 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 Group and the Parent Company’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Given the conditions and uncertainties disclosed in note 1, we considered going concern to be a Key Audit Matter.
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 and in response to the Key Audit Matter included evaluating the following:
• 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 and reviewing Group’s actual results
for the year ended 31 December 2022 to the planned budget for 2023 to assess whether an appropriate
level of costs has been incorporated into the cash flow forecast.
• Reviewing licence agreements to confirm that committed expenditure is appropriately included in
forecasts.
Registered Number: 02330496
42
BEOWULF MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BEOWULF MINING PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
• 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.
• Reviewing and assessing use of post year end received funding 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.
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 responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report.
Overview
Coverage
100% (2021: 100%) of Group loss before tax
100% (2021: 100%) of Group total assets
Key audit matters
Carrying value of exploration assets
Going concern
Materiality
Group financial statements as a whole
2022
2021
£230,000 (2021:£220,000) based on 1.5% (2021: 1.5%) of total assets
Parent company standalone financial statements
£172,500 (2021: £165,000) capped at 75% of Group materiality
(2021: capped at 75% of Group materiality).
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. Specific audit procedures were performed on the Finnish non-significant
Registered Number: 02330496
43
BEOWULF MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BEOWULF MINING PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
component by a local Finnish audit firm. The Group audit team performed additional procedures in respect of
certain significant risk areas that represented Key Audit Matters.
Our involvement with component auditors
For the work performed by component auditors, 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 involvement with 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 the area that was considered to be a Key Audit
Matter). 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.
This matter was 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 this matter.
In addition to the matter described in the Material Uncertainty related to going concern section, we have
determined the matters described below to be the key audit matter to be communicated in our report.
Key audit matter
Carrying value of
assets
exploration
(Please refer
to
Notes
1 and 7)
The Group’s total exploration assets
at 31 December 2022 were £13.0
million (2020: £11.2 million). This
class of asset is the most significant
to
financial
statement of
position.
the
have
Management
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 and in the
related disclosures and hence this is
considered to be a key audit matter.
How the scope of our audit addressed
the key audit matter
Our work
the
indicators of impairment assessment
included the following:
in connection with
• Performing
a
review
of
Management’s impairment indicator
assessment and considered whether
there are any indicators of impairment
in line with criteria set out under IFRS
6. As part of this we considered
results of recent exploration work
performed in the year, future planned
expenditure as well as publicly
available information.
• Holding
discussions
with
Management and reviewing relevant
correspondence with the Swedish
licencing authorities around
the
awarded Kallak north exploration
concession.
Registered Number: 02330496
44
BEOWULF MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BEOWULF MINING PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
• For the other licences reviewing
the Finnish,
correspondence with
licencing
Kosovan and Swedish
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
financial
management
in
statements and annual report on the
critical
the
carrying value of exploration assets..
judgements
around
the
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.
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:
for
Materiality
Basis
determining
materiality
Rationale
benchmark applied
for
the
Group financial statements
Parent company financial statements
2022
2021
2022
2021
£230,000
£220,000
£172,500
£165,000
Restricted to 75% of Group materiality
1.5% of total assets
Total Assets was determined as an
appropriate basis as the principal
remains
focus of
the Group,
fundamentally
on
exploration activities in Sweden,
Finland and Kosovo and as such
total assets are considered to be the
focussed
Restricted at 75% (2021: 75%) of Group
materiality given the assessment of
aggregation risk.
Registered Number: 02330496
45
BEOWULF MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BEOWULF MINING PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
most significant determinant of the
Group’s performance considered by
users of the financial statements.
Performance
materiality
Basis
determining
performance
materiality
£173,000
£165,000
£129,000
£124,000
for
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.
Component materiality
We set materiality for each component of the Group in the range from £110,000 to £161,000 (2021: £110,000 to
£116,000) 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) (2021: 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% (2021: 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
£4,600 (2021: £4,400). 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.
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.
•
Registered Number: 02330496
46
BEOWULF MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BEOWULF MINING PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
Matters
on
which we are
to
required
report
by
exception
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.
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, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent
Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee 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:
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which it operates;
• Discussion with management and those charged with governance.
• Obtaining and understanding of the Group’s policies and procedures regarding compliance with laws and
regulations; and
• 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;
Registered Number: 02330496
47
BEOWULF MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BEOWULF MINING PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
We also considered the significant laws and regulations to be the applicable accounting framework, UK law and
regulations, the AIM Listing Rules and the associated mining, environmental and taxation laws and regulations of
Sweden.
The Group is also subject to laws and regulations where the consequence of non-compliance could have a material
effect on the amount or disclosures in the financial statements, for example through the imposition of fines or
litigations. We identified such laws and regulations to be the health and safety legislation, licensing and
environmental regulations.
Our procedures in respect of the above included:
• Review of minutes of meeting of those charged with governance for any instances of non-compliance
with laws and regulations;
• Review of correspondence with regulatory and tax authorities for any instances of non-compliance with
laws and regulations;
• Review of financial statement disclosures and agreeing to supporting documentation;
• Review of legal expenditure accounts to understand the nature of expenditure incurred; and
• Testing the financial statement disclosures to supporting documentation; and
• Reviewing of the Kallak north exploration concession awarded on 22 March 2022 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.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk
assessment procedures included:
• Enquiry with management and those charged with governance also considered Audit Committee
regarding any known or suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to:
- Detecting and responding to the risks of fraud; and
-
Internal controls established to mitigate risks related to fraud.
• Review of minutes of meeting of those charged with governance for any known or suspected instances
of fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in the financial
statements;
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate
risks of material misstatement due to fraud; and
• Considering remuneration incentive schemes and performance targets and the related financial statement
areas impacted by these.
Based on our risk assessment, we considered the area’s most susceptible to fraud to be management override of
controls.
Our procedures in respect of the above included:
• Testing a sample of journal entries throughout the year, which met a defined risk criterion, by agreeing
to supporting documentation.
• 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 matter noted above.
• Testing consolidation entries to assess their validity.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team
members including component engagement teams who were all deemed to have appropriate competence and
capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout
the audit. For component engagement teams, we also reviewed the result of their work performed in this regard.
Registered Number: 02330496
48
BEOWULF MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BEOWULF MINING PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
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
2 June 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Registered Number: 02330496
49
BEOWULF MINING PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
CONTINUING OPERATIONS
Administrative expenses
Impairment of property, plant and equipment
Impairment of exploration assets
OPERATING LOSS
Gain on disposal of investment
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
2022
£
2021
£
9
8
3
3
6
5
(1,806,582)
-
(36,988)
(1,503,049)
(48,966)
-
(1,843,570)
(1,552,015)
21,951
(304,806)
176
84,797
-
(256)
71
66,589
(2,041,452)
(1,485,611)
-
-
(2,041,452)
(1,485,611)
15
(1,948,459)
(92,993)
(1,351,179)
(134,432)
(2,041,452)
(1,485,611)
Loss per share attributable to the ordinary equity holder of the
parent:
Basic and diluted (pence)
7
(0.23)
(0.16)
The notes on pages 58 to 92 form part of these financial statements
Registered Number: 02330496
50
BEOWULF MINING PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
LOSS FOR THE YEAR
(2,041,452)
(1,485,611)
Note
2022
£
2021
£
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or
loss:
Exchange losses arising on translation of foreign operations
(32,945)
(794,368)
(32,945)
(794,368)
TOTAL COMPREHENSIVE LOSS
(2,074,397)
(2,279,979)
Total comprehensive loss attributable to:
Owners of the parent
Non-controlling interests
15
(2,020,889)
(53,508)
(2,110,892)
(169,087)
(2,074,397)
(2,279,979)
The notes on pages 58 to 92 form part of these financial statements
Registered Number: 02330496
51
BEOWULF MINING PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
ASSETS
NON-CURRENT ASSETS
Intangible assets
Property, plant and equipment
Loans and other financial assets
Right-of-use asset
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY
SHAREHOLDERS' EQUITY
Share capital
Share premium
Capital contribution reserve
Share based payment reserve
Merger reserve
Translation reserve
Accumulated losses
Non-controlling interests
TOTAL EQUITY
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Deferred income
Lease liability
Borrowings
NON-CURRENT LIABILITIES
Lease liability
TOTAL LIABILITIES
Note
2022
£
2021
£
8
9
11
12
13
14
16
18
18
18
18
18
18
15
19
20
21
22
13,002,465
129,715
5,181
19,279
13,156,640
220,427
1,776,556
1,996,983
11,235,656
133,428
5,247
7,401
11,381,732
183,139
3,336,134
3,519,273
15,153,623
14,901,005
8,317,106
24,689,311
46,451
516,098
137,700
(1,289,415)
(20,323,414)
12,093,837
8,317,106
24,689,311
46,451
668,482
137,700
(1,216,985)
(18,470,675)
14,171,390
568,732
325,039
12,662,569
14,496,429
625,730
-
10,840
1,845,947
2,482,517
8,537
8,537
2,491,054
357,236
39,849
7,491
-
404,576
-
-
404,576
TOTAL EQUITY AND LIABILITIES
15,153,623
14,901,005
The financial statements were approved and authorised for issue by the Board of Directors on 2 June 2023 and were
signed on its behalf by:
Mr J Rostin - Director
Company Number 02330496
The notes on pages 58 to 92 form part of these financial statements
Registered Number: 02330496
52
BEOWULF MINING PLC
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Investments
Loans and other financial assets
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
Deferred income
Borrowings
TOTAL LIABILITIES
Note
2022
£
2021
£
9
10
11
13
14
16
18
18
18
18
18
19
20
22
834
3,645,181
11,084,289
14,730,304
53,284
1,667,840
1,721,124
1,112
2,377,988
10,179,650
12,558,750
41,185
3,075,741
3,116,926
16,451,428
15,675,676
8,317,106
24,689,311
46,451
516,098
137,700
(19,317,455)
14,389,211
8,317,106
24,689,311
46,451
668,482
137,700
(18,337,714)
15,521,336
216,270
-
1,845,947
2,062,217
114,491
39,849
-
154,340
TOTAL EQUITY AND LIABILITIES
16,451,428
15,675,676
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 £1,372,662
(2021: loss £1,233,298).
These financial statements were approved and authorised for issue by the Board of Directors on 2 June 2023 and
were signed on its behalf by:
Mr J Rostin - Director
Company Number 02330496
The notes on pages 58 to 92 form part of these financial statements
Registered Number: 02330496
53
BEOWULF MINING PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Share
capital
£
Share
premium
£
Note
Merger
reserve
£
Capital
contribution
reserve
£
Share based
payments
reserve
£
Translation
reserve
£
Accumulated
losses
£
Non –
controlling
interest
£
Totals
£
Totals
£
At 1 January 2021
Loss for the year
Foreign exchange translation
Total comprehensive income
Transactions with owners
Issue of share capital
16
Cost of issue
16
Step up interest in subsidiary 10
Transfer of reserve on option
exercised
At 31 December 2021
Loss for the year
Foreign exchange translation
Total comprehensive income
Transactions with owners
Equity-settled share-based
payment transactions
Step up interest in subsidiary 10
Transfer of reserve on option
lapsed
At 31 December 2022
17
8,281,752
24,684,737
137,700
46,451
732,185
(457,272)
(17,083,186)
16,342,367
394,113
16,736,480
-
-
-
35,354
-
-
-
-
-
-
23,334
(18,760)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(63,703)
-
(1,351,179)
(1,351,179)
(134,432)
(1,485,611)
(759,713)
-
(759,713)
(34,655)
(794,368)
(759,713)
(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
-
-
-
-
8,317,106
24,689,311
137,700
46,451
668,482
(1,216,985)
(18,470,675)
14,171,390
325,039
14,496,429
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,948,459)
(1,948,459)
(92,993)
(2,041,452)
(72,430)
(72,430)
-
(72,430)
39,485
(32,945)
(1,948,459)
(2,020,889)
(53,508)
(2,074,397)
240,537
-
(392,921)
-
-
-
-
(297,201)
240,537
(297,201)
-
297,201
240,537
-
392,921
-
-
-
8,317,106
24,689,311
137,700
46,451
516,098
(1,289,415)
(20,323,414)
12,093,837
568,732
12,662,569
The notes on pages 58 to 92 form part of these financial statements
Registered Number: 02330496
54
BEOWULF MINING PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Note
Share
capital
£
Share
premium
£
Merger
reserve
£
Capital
contribution
reserve
£
Share based
payment
reserve
£
Accumulated
Losses
£
Totals
£
At 1 January 2021
8,281,752
24,684,737
137,700
46,451
732,185
(17,168,119)
16,714,706
Loss for the year
Total comprehensive income
Transactions with owners
Issue of share capital
Cost of issue
Transfer pf reserve on option exercised
At 31 December 2021
Loss for the year
Total comprehensive income
Transactions with owners
Equity-settled share-based payment
transactions
Transfer of reserve on option lapsed
At 31 December 2022
-
-
35,354
-
-
-
-
23,334
(18,760)
-
-
-
-
-
-
-
-
-
-
-
8,317,106
24,689,311
137,700
46,451
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,317,106
24,689,311
137,700
46,451
16
16
17
-
-
(1,233,298)
(1,233,298)
(1,233,298)
(1,233,298)
-
-
(63,703)
668,482
-
-
63,703
58,688
(18,760)
-
(18,337,714)
15,521,336
-
-
(1,372,662)
(1,372,662)
(1,372,662)
(1,372,662)
240,537
(392,921)
516,098
-
240,537
392,921
-
(19,317,455)
14,389,211
The notes on pages 58 to 92 form part of these financial statements
Registered Number: 02330496
55
BEOWULF MINING PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
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
Gain on sale of property, plant and equipment
Gain on sale of investment
Amortisation of right-of-use assets
Unrealised foreign exchange losses
Increase in trade and other receivables
Decrease 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
Disposal of investments
Grant receipt
Grant repaid
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, net of issue costs
Interest paid
Note
4
4
9
3
3
6
12
8
9
4
20
3
16
16
21
21
22
2022
£
(2,041,452)
45,133
240,537
36,988
-
(176)
304,806
(84,797)
-
(21,951)
6,384
55,337
(1,459,191)
(36,535)
(43,827)
2021
£
(1,485,611)
36,790
23,334
-
48,966
(71)
256
(66,589)
(17,414)
-
5,630
292,452
(1,162,257)
(12,796)
(174,732)
(1,539,553)
(1,349,785)
(1,536,674)
(34,397)
-
21,951
84,797
(39,849)
176
(735,847)
(86,219)
24,806
-
24,031
-
71
(1,503,996)
(773,158)
-
-
-
(6,347)
(264)
1,554,381
(10)
1,392,081
35,354
(18,760)
(5,594)
(256)
-
-
Net cash from financing activities
1,547,760
1,402,825
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
(1,495,789)
3,336,134
(63,789)
(720,118)
4,329,414
(273,162)
Cash and cash equivalents at end of year
1,776,556
3,336,134
The notes on pages 58 to 92 form part of these financial statements
Registered Number: 02330496
56
BEOWULF MINING PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
Cash flows from operating activities
Loss before income tax
Expected credit losses
Equity-settled share-based transactions
Depreciation of property, plant and equipment
Finance income
Finance cost
Gain on disposal of investment
Unrealised foreign exchange losses
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Note
11
3
2022
£
(1,372,662)
5,336
173,344
278
(170)
304,529
(21,951)
55,337
2021
£
(1,233,298)
187,340
23,334
371
(71)
-
-
293,304
(855,959)
(729,020)
(12,099)
101,779
43,490
(166,371)
Net cash used in operating activities
(766,279)
(851,901)
Cash flows from investing activities
Loans to subsidiaries
Interest received
Financing of subsidiary
Grant repaid
Disposal of investments
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
Proceeds from borrowings
11
3
10
20
4
16
22
(909,975)
170
(1,200,000)
(39,849)
21,951
(1,122,845)
71
(300,000)
-
-
(2,127,703)
(1,422,774)
-
-
-
1,554,381
1,392,081
35,354
(18,760)
-
Net cash from financing activities
1,554,381
1,408,675
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
(1,339,601)
3,075,741
(68,300)
(866,000)
4,421,426
(299,685)
Cash and cash equivalents at end of year
1,667,840
3,075,741
The notes on pages 58 to 92 form part of these financial statements
Registered Number: 02330496
57
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
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 2022, the Group had a cash balance of £1.78 million (2021: £3.34 million) and the Company had
a cash balance of £1.67 million (2021: £3.08 million).
Management prepared cash flow forecasts which indicate that although there is no immediate short term funding
requirement, the Group would need to raise further funds within a short period of the 12 months used in the going
concern cashflow model for corporate overheads and to advance its key projects and investments. This conclusion
has been reached following management’s review of both cost and foreign exchange sensitivities and potential
key hires required to advance projects. Management is confident the Group will have sufficient cash after taking
into account a reasonable movement in these currencies.
On 20 December 2022, the Company secured a Rights Issue in Sweden and a PrimaryBid Offer and Placing in
the UK As part of this the Company received underwriting commitments to the value of a maximum of SEK 60
million, or approximately 70 per cent of the intended Rights Issue. Therefore, at the year end, the Directors were
confident that the Group would be able to raise sufficient capital to fund the Group’s key projects and investments.
Since the year end, the Group have completed the Rights Issue raising SEK 62.8 million (approximately £5
million) before expenses and the PrimaryBid Offer and Placing raising an aggregate of £1.3 million before
expenses. As a result, the underwriting commitments were not activated.
Following the year end, it became apparent that due to the timing of the receipt of the funds from the Rights Issue
the Company will not be in a position to pay back the bridging loan facility at its maturity. The outcome of this is
that the holder of the loan enforced the penalty interest for entering another 30-day period, which was circa 1
million SEK. The loan principal and interest totalling £2.13m was repaid via a deduction to the gross proceeds
from the Rights Issue.
The net funds raised after the loan repayment and share issue transaction costs are £3.72 million.
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.
Registered Number: 02330496
58
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
1. ACCOUNTING POLICIES (continued)
Basis of preparation
The consolidated and individual Company financial statements have been prepared in accordance with UK adopted
international accounting standards. The policies have been consistently applied to both the parent Company and
Group. The financial statements are presented in GB Pounds Sterling. They are prepared on the historical cost
basis or the fair value basis where the fair valuing of relevant assets and liabilities has been applied.
Merger relief under s612 of the Companies Act 2006 removes the requirement to credit the share premium account
and where the conditions are met, the relief must be applied. However, it allows the investment to be accounted
for at the nominal value of the shares issued or the fair value of the consideration. Where the investment is to be
recorded at fair value, then the credit will be to the merger relief reserve.
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 Grafintec, in which the Company obtained 100% of the
share capital of Grafintec for shares issued by the Company. Further details of this acquisition are outlined in note
10.
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 and Company annual
report and accounts is provided below:
• 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).
These standards have no material impact on the Group or Company.
Standards, amendments and interpretations that are not yet effective
There are a number of 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 following amendments are effective for the period beginning 1 January 2023:
• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or
Non-current and Amendments to IAS 1: Classification of Liabilities as Current or Non-current – Deferral
of Effective Date – effective 1 January 2023*
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure
of Accounting Policies – effective 1 January 2023
• Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors –Definition of
Accounting Estimates – effective 1 January 2023
• Amendments to IAS 12 Income Taxes – Deferred Tax Related to Assets and Liabilities arising from a
Single Transaction - effective 1 January 2023
•
•
The following amendments are effective for the period beginning 1 January 2024:
IFRS 16 Leases (Amendment – Liability in a Sale and Leaseback)
IAS 1 Presentation of Financial Statements (Amendment – Classification of Liabilities as Current or Non-
current)
IAS 1 Presentation of Financial Statements (Amendment – Non-current Liabilities with Covenants)
•
Registered Number: 02330496
59
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
1. ACCOUNTING POLICIES (continued)
Significant accounting judgements, estimates and assumptions
Beowulf Mining Plc is currently assessing the impact of these new accounting standards and amendments.
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. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to
accounting estimates are recognised in the period in which the revision is made.
Critical judgements
Loan treatment
The loan agreement provides that in the event of default the lender the option to convert the outstanding principal
and accumulated interest into shares in the Company at a discounted valuation. The Directors considered whether
the definition of default is genuine or whether, in substance, it represents an option granted to the lender which
can be exercised at any time. The Directors are satisfied that the default provisions are genuine and therefore there
the loan does not contain an embedded derivative.
The bridging loan constitutes a financial liability as in the event of default the Company settles its loan obligation
using its own equity instruments, which are variable depending on the loan balance and share price and therefore
does not include an equity component.
Control of Vardar Group
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 2022.
Exploration costs capitalisation
The Group has to apply judgement in determining whether exploration and evaluation expenditure should be
capitalised within intangible assets as exploration costs or expensed. The Group has a policy of capitalising all
costs which relate directly to exploration costs (as set out above). Management apply judgement in determining if
Directors’ remuneration costs are directly attributable to a specific exploration area (project) and should be
capitalised or expensed as incurred. The total value of exploration costs capitalised as at each of the reporting dates
is set out in Note 8.
Exploration assets
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 8).
Registered Number: 02330496
60
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
1. ACCOUNTING POLICIES (continued)
Significant accounting judgements, estimates and assumptions (continued)
Sources of estimation and uncertainty
Åtvidaberg licence
The Åtvidaberg licence is located in the Bergslagen area, southern Sweden. It was renewed during 2019 due to
COVID-19, the exploration permit was awarded an additional year to the existing term and now expires on 30
May 2024.
Bergslagen is one of Europe's oldest mining districts and yielded a substantial portion of Sweden's mineral wealth
in the 1800-1900s, with several large mines and hundreds of smaller mines producing copper, zinc, lead, gold,
silver, and iron ore. Current operating mines in the area include Boliden's Garpenberg and Lundin Mining's
Zinkgruvan. Most of southern Bergslagen has seen little modern exploration, yet it hosts Bersbo, one of Sweden's
largest early copper mines, and Zinkgruvan, Sweden's most important zinc mine. During the year, no fieldwork
was undertaken, due to COVID-19 restrictions and as the Company’s exploration focus moved to Kosovo.
However, the Company is now in discussions with potential partners to continue with the next stage of work on
the licence. At the date of this report the Company will have two years remaining on the term of the licence.
Expected credit losses
The 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 both
the downside scenarios of failure and fire-sale of 3% would result in further impairment of £626,927 (2021:
£624,464).
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.
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.
Registered Number: 02330496
61
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
1. ACCOUNTING POLICIES (continued)
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.
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, exploration costs in respect of that project are
deemed to be impaired and written off to the statement of comprehensive income. Once the decision for investment
is taken, the assets will be assessed for impairment and to the extent that these are not impaired, will be classified
as development assets. At the point that production commences these assets will be depreciated.
Impairment
Whenever events or changes in circumstance indicate that the carrying amount of an asset may not be recoverable
an asset is reviewed for impairment. An asset’s carrying value is written down to its estimated recoverable amount
(being the higher of the fair value less costs to sell and value in use) if that is less than the asset’s carrying amount.
Impairment reviews for exploration costs 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)
(ii)
(iii)
(iv)
(v)
unexpected geological occurrences that render the resource uneconomic;
title to the asset is compromised;
variations in mineral prices that render the project uneconomic;
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.
Registered Number: 02330496
62
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
1. ACCOUNTING POLICIES (continued)
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 - 20 to 25 per cent on reducing balance
- 25 per cent on reducing balance
- 25 per cent on reducing balance
- 20 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.
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 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.
Registered Number: 02330496
63
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
1. ACCOUNTING POLICIES (continued)
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 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.
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.
Registered Number: 02330496
64
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
1. ACCOUNTING POLICIES (continued)
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.
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.
Registered Number: 02330496
65
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
2. EMPLOYEES AND DIRECTORS
2022
£
794,969
138,192
10,691
943,852
Group
2021
£
437,990
98,783
16,211
552,984
Wages and salaries
Social security costs
Other benefits
Directors’ remuneration is as follows:
Directors’ emoluments, including salary and fees
Shared-based payments
Share settled expenses
2022
£
308,543
45,632
6,554
360,729
2022
£
315,097
173,345
-
488,442
Company
2021
£
243,541
60,764
13,877
318,182
2021
£
257,418
-
103,281
360,699
Further details pertaining to Directors’ remuneration can be found in the Directors’ remuneration report on page
37.
The remuneration of the highest paid Director who served during the year was £210,000 which consisted of base
salary of £210,000 (2021: £172,500) and a gain from the net settlement of options of £Nil (2021: £103,281).
The average monthly number of employees and Directors during the year was as follows:
Directors
Employees
2022
Group
Number
3
10
2021
Group
Number
3
7
2022
Company
Number
2021
Company
Number
3
2
3
2
3. FINANCE INCOME AND COSTS
Group
Company
Finance income:
Deposit account interest
Finance costs:
Interest on lease liabilities
Interest on loans and borrowings
Other interest paid
Registered Number: 02330496
2022
£
176
176
267
304,529
10
304,806
2021
£
71
71
256
-
-
256
2022
£
170
170
-
304,529
-
304,529
2021
£
71
71
-
-
-
-
66
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
4. LOSS BEFORE TAX AND AUDITOR’S REMUNERATION
a. The loss before tax is stated after charging:
Depreciation of property, plant and equipment (note 9)
Amortisation of right-of-use asset (note 12)
Share-based payment expense
Foreign exchange differences
Gain on disposal of investment1
Impairment of property, plant and equipment (note 9)
Impairment of exploration costs (note 8)
2022
£
45,133
6,353
240,537
68,302
21,951
-
36,988
2021
£
36,790
5,631
-
298,442
-
48,966
-
1Gain on disposal of investment relates to shares held in Sunvest Corporation Limited, which were
previously impaired in full.
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
5. INCOME TAX
Analysis of tax expense
2022
£
2021
£
57,005
41,457
6,000
3,208
11,826
78,039
6,000
2,153
6,232
55,842
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2022 or for the
year ended 31 December 2021.
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:
2022
£
2021
£
Loss on ordinary activities before income tax
(2,041,452)
(1,485,611)
Tax thereon at a UK corporation tax rate of 19% (2021: 19%)
Effects of:
Non-deductible expenditure
Tax losses not recognised
Losses of overseas subsidiaries to be carried forward
(387,876)
(282,266)
32,936
241,390
113,550
-
-
236,039
46,227
-
Registered Number: 02330496
67
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
5. INCOME TAX (continued)
The main rate of UK corporation tax during the year ended 31 December 2022 was 19 per cent (2021: 19 per cent).
The Group has estimated UK losses of £14,993,653 (2021: £13,723,180) and foreign losses of £4,659,376 (2021:
£4,452,690) available to carry forward against future trading profits. The value of unrecognised deferred tax assets
in respect of the UK losses amounts to £3,748,413 (2021: £3,430,795) and foreign losses of £804,730 (2021:
£785,196). 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.
6. GRANT INCOME
Project Pacific
Business Finland
2022
£
-
84,797
84,797
2021
£
42,558
24,031
66,589
Grafintec is 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
(approximately £700,000) for Phase 2 and €224,900 (approximately £200,000) Phase 1. 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 2022, £84,797 has been recognised as grant income (2021: £24,031 netted against intangible asset
additions).
In the prior year, the Company received grant income in relation to Project Pacific (see note 20).
7. BASIC AND DILUTED LOSS PER SHARE
The calculation of basic and diluted loss per share at 31 December 2022 was based on the loss attributable to
ordinary shareholders of £1,948,459 (2021: £1,351,179) and a weighted average number of Ordinary Shares
outstanding during the year ended 31 December 2022 of 831,710,636 (2021: 829,879,971) calculated as follows:
2022
£
2021
£
Loss attributable to ordinary shareholders
(1,948,459)
(1,351,179)
Weighted average number of ordinary shares
Number of shares in issue at the beginning of the year
Effect of shares issued during year
Weighted average number of ordinary shares in issue for the year
2022
Number
2021
Number
831,710,636
-
831,710,636
607,815,562
222,064,409
829,879,971
The diluted earnings per share is identical to the basic loss per share as the exercise of warrants and options would
be anti-dilutive.
Registered Number: 02330496
68
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
8. INTANGIBLE ASSETS - Group
COST
At 1 January 2021
Additions for the year
Foreign exchange movements
At 31 December 2021
At 1 January 2022
Additions for the year – cash
Additions for the year – non-cash
Foreign exchange movements
Impairment
At 31 December 2022
NET BOOK VALUE
At 31 December 2022
At 31 December 2021
Exploration
Costs
£
11,371,916
682,367
(818,627)
11,235,656
11,235,656
1,536,674
314,272
(47,149)
(36,988)
13,002,465
13,002,465
11,235,656
The net book value of exploration costs is comprised of expenditure on the following projects:
Kallak
Åtvidaberg
Ågåsjiegge
Pitkäjärvi
Karhunmaki
Rääpysjärvi
Merivaara
Mitrovica
Viti
Emas
Luopioinen
2022
£
2021
£
7,666,563
358,694
7,718
1,641,836
56,089
148,430
-
2,430,150
687,065
1,663
4,257
13,002,465
7,210,380
363,131
6,482
1,457,826
51,622
73,859
36,096
1,376,598
659,662
-
-
11,235,656
Total Group exploration costs of £13,002,465 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 £262,684 was recorded against the projects for services provided by the Directors during the
year (2021: £121,226).
In Sweden, on 22 March 2022, the Swedish Government awarded an Exploitation Concession for Kallak North
Iron Ore Project, then, in June 2022, the Company appointed Ulla Sandborgh as CEO of JIMAB, since starting,
she has commenced the development of the Company's application for an Environmental Permit for Kallak North.
The Company anticipates the start of Kallak North Pre-feasibility work in Q2 2023.
Registered Number: 02330496
69
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
8. INTANGIBLE ASSETS – Group (continued)
The Åtvidaberg licence is located in the Bergslagen area, southern Sweden.
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 as the Company focused resources and expenditure on Grafintec
and Vardar. The Company continues to evaluate partnering options for Åtvidaberg.
In Finland, the development of downstream capabilities is a key part of Grafintec's strategy and the Company
continues to form partnerships with other companies to achieve this. On 26 September 2022, Beowulf announced
that Grafintec had signed a Memorandum of Understanding with Qingdao Hensen Graphite Ltd, which includes
an agreed framework and key terms on which both companies are collaborating with regards to establishing an
anode materials hub in Finland.
To support a sustainable graphite anode value chain in Finland, Grafintec is focused on expanding its resource
footprint and increasing its raw materials' inventory, primary and recycled, feeding downstream processing,
leveraging renewable power, targeting net zero CO2 emissions across the supply chain.
The Company's most advanced natural flake graphite project, Aitolampi, has an Indicated and Inferred Mineral
Resource of 26.7 Mt at 4.8 per cent TGC for 1,275,000 tonnes of contained graphite. In addition to Aitolampi, the
Company has other graphite exploration prospects, including Rääpysjärvi for which positive exploration results
were announced during Q4 2022.
In Kosovo, Vardar has two exploration licence areas, Mitrovica and Viti. Significant progress continues to be
made in Kosovo. The Company has also made further investments to fund drilling and taking the Company’s
ownership of Vardar to approximately 59.5 per cent.
In 2022, the focus was on drilling at the Mitrovica licence area and this resulted in the discovery of a large
polymetallic epithermal deposit and new exploration targets for drilling.
In the year, an impairment provision of £36,988 was recognised for project costs capitalised for projects at
Merivaara (2021: £Nil) on the basis that the licence was not renewed. In respect of the other licence areas, no
impairment indicators have been identified. The impairment is charged as an expense and included within the
consolidated income statement.
Registered Number: 02330496
70
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
9. PROPERTY, PLANT AND EQUIPMENT
GROUP
COST
At 1 January 2021
Additions
Disposals
Impairment
Foreign exchange movements
At 31 December 2021
DEPRECIATION
At 1 January 2021
Charge for year
Disposals
Impairment
Foreign exchange movements
At 31 December 2021
GROUP
COST
At 1 January 2022
Additions
Impairment
Foreign exchange movements
At 31 December 2022
DEPRECIATION
At 1 January 2022
Charge for year
Foreign exchange movements
At 31 December 2022
NET BOOK VALUE
At 31 December 2022
At 31 December 2021
Office
Equipment
£
2,611
364
-
-
-
2,975
1,119
668
-
-
-
1,787
Office
Equipment
£
2,975
-
-
(21)
2,954
1,787
1,006
36
2,829
125
1,188
Motor
Vehicles
£
102,209
63,262
(11,720)
-
(7,206)
146,545
58,270
16,932
(5,266)
-
(4,125)
65,811
Motor
Vehicles
£
146,545
2,730
-
(579)
148,696
65,811
19,796
(6,018)
79,589
69,107
80,734
Machinery
&
Equipment
£
156,466
22,594
(1,422)
(74,681)
(4,127)
98,830
58,286
18,820
(484)
(25,715)
(2,471)
48,436
Machinery
&
Equipment
£
98,830
31,667
-
3,349
133,846
48,436
24,053
1,708
74,197
59,649
50,394
Computer
Equipment
£
1,499
-
-
-
-
1,499
16
371
-
-
-
387
Computer
Equipment
£
1,499
-
-
-
1,499
387
278
-
665
Total
£
262,785
86,220
(13,142)
(74,681)
(11,333)
249,849
117,691
36,791
(5,750)
(25,715)
(6,596)
116,421
Total
£
249,849
34,397
-
2,749
286,995
116,421
45,133
(4,274)
157,280
834
1,112
129,715
133,428
Registered Number: 02330496
71
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
9. PROPERTY, PLANT AND EQUIPMENT (continued)
PARENT
COST
At 1 January 2021
Additions
Disposals
At 31 December 2021
DEPRECIATION
At 1 January 2021
Charge for year
At 31 December 2021
PARENT
COST
At 1 January 2022
At 31 December 2022
DEPRECIATION
At 1 January 2022
Charge for year
At 31 December 2022
NET BOOK VALUE
At 31 December 2022
At 31 December 2021
Computer
Equipment
£
1,499
-
1,499
16
371
387
Computer
Equipment
£
1,499
1,499
387
278
665
834
1,112
Total
£
1,499
-
1,499
16
371
387
Total
£
1,499
1,499
387
278
665
834
1,112
Registered Number: 02330496
72
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
10. INVESTMENTS
COST
At 1 January 2021
Acquisitions
At 31 December 2021
At 1 January 2022
Acquisitions
At 31 December 2022
Company
Shares in
subsidiaries
£
2,077,988
300,000
2,377,988
2,377,988
1,267,193
3,645,181
Further investments in the share capital of subsidiaries of Vardar constitute additions during the year of £1,200,000
(2021: £300,000) to increase the Company’s shareholding in Vardar from 49.4% to 59.5%. 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 additional investment during the year includes a share-based payment expense of £67,193 in relation to share
options granted to employees of the Company’s subsidiaries Grafintec and JIMAB.
Included within the brought forward investment is 100 per cent of the share capital of 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 Grafintec 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 2022, (2021:
£Nil). No further share-based payment expense for the consideration shares was capitalised to intangibles in the
year ended 31 December 2022 (2021: £Nil).
The remaining investment includes the share capital of the Company’s directly owned subsidiaries, listed on page
75.
Registered Number: 02330496
73
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
10. INVESTMENTS (continued)
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
2022,
- On 1 March 2022, a further investment of £200,000 was made to increase the Company’s shareholding
in Vardar from 49.4% to 51.4%.
- On 30 March 2022, a further investment of £1,000,000 as made to increase the Company’s shareholding
in Vardar from 51.4% to 59.5%.
Further investments in Vardar have been recognised as an increase to accumulated losses of £297,201 (2021:
£100,013).
Registered Number: 02330496
74
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
10. INVESTMENTS (continued)
The Group consists of the following subsidiary undertakings:
Name
Grafintec Oy
Jokkmokk Iron Mines AB
Beowulf Mining Sweden AB
Wayland Copper Limited
Wayland Sweden AB
Vardar Minerals Ltd
Vardar Geoscience BVI Ltd
Vardar Geoscience Kosovo L.L.C
Vardar Exploration Kosovo L.L.C
(1) Indirectly held
(2) Effective interest
Incorporated
Finland
Sweden
Sweden
UK
Sweden
UK
British Virgin
Islands
Kosovo
Kosovo
Activity
Mineral exploration
Mineral exploration
Mineral exploration
Holding company
Mineral exploration
Mineral exploration
Holding company
2022
% holding
100%
100%
100%
65.25%
(1)(2)65.25%
59.5%
(1)(2)59.5%
2021
% holding
100%
100%
100%
65.25%
(1)(2)65.25%
49.4%
(1)(2)49.4%
Mineral exploration
Mineral exploration
(1)(2)59.5%
(1)(2)59.5%
(1)(2)49.4%
(1)(2)49.4%
The registered offices of the subsidiary undertakings as are follows:
Name
Grafintec Oy
Jokkmokk Iron Mines AB
Beowulf Mining Sweden AB
Wayland Copper Limited
Wayland Sweden AB
Vardar Minerals Limited
Vardar Geoscience BVI Ltd
Vardar Geoscience Kosovo L.L.C
Vardar Exploration Kosovo L.L.C
Registered office
Plåtslagarevägen 35 A 1, 20320 Turku, Finland
Storgatan 36, 921 31, Lycksele, Sweden
Storgatan 36, 921 31, Lycksele, Sweden
201 Temple Chambers, 3-7 Temple Avenue, London
Storgatan 36, 921 31, Lycksele, Sweden
35-39 Maddox Street, London, England
Trident Chambers, P.O. Box 146, Wickhams Cay 1 Road Town,
British Virgin Islands
Rifat Berisha 23/10, Pristina, Republic of Kosovo
Rifat Berisha 23/10, Pristina, Republic of Kosovo
Details on the non-controlling interest in subsidiaries is given in note 15.
Registered Number: 02330496
75
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
11. LOANS AND OTHER FINANCIAL ASSETS
Group
At 1 January 2021
Foreign exchange movements
At 31 December 2021
At 1 January 2022
Foreign exchange movements
At 31 December 2022
Company
At 1 January 2021
Advances made in the year
ECLs in year
At 31 December 2021
At 1 January 2022
Advances made in the year
ECLs in year
At 31 December 2022
Financial
fixed
assets
£
5,468
(221)
5,247
5,247
(66)
5,181
Loans to
group
undertakings
£
9,338,531
1,025,675
(187,340)
10,176,866
10,176,866
909,975
(5,336)
11,081,505
Financial
assets
£
2,784
-
-
2,784
2,784
-
-
2,784
Total
£
9,341,315
1,025,675
(187,340)
10,179,650
10,179,650
909,975
(5,336)
11,084,289
Reconciliation of provisions against receivables arising from lifetime ECLs
ECLs
Total provision arising from ECLs
31
December
2021
£
2,100,913
2,100,913
Current year
movement
£
31
December
2022
£
5,336
5,336
2,106,249
2,106,249
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 award of the exploitation concession has increased the likelihood of a favourable
outcome resulting in a significantly reduced provision for this year. A reasonable change in the probability
weightings of 3% to failure and fire-sale would result in further impairment of £626,927 (2021: £624,464).
Further details of the transactions in the year are shown within related parties disclosure note 26.
Registered Number: 02330496
76
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
12. 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
2022
£
Group
2021
£
Buildings
Buildings
11,100
17,506
-
1,169
29,775
3,701
6,353
-
442
10,496
12,562
10,852
(11,822)
(490)
11,102
10,625
5,631
(11,822)
(733)
3,701
19,279
7,401
13. TRADE AND OTHER RECEIVABLES
Other receivables
VAT
Prepayments and accrued income
Group
Company
2022
£
78,148
121,284
20,995
220,427
2021
£
122,701
37,195
23,243
183,139
2022
£
-
32,289
20,995
53,284
2021
£
-
17,942
23,243
41,185
Included in other receivables is a deposit of £17,724 held by Finnish regulatory authorities (2021: £16,810).
14. CASH AND CASH EQUIVALENTS
Group
2022
£
2021
£
Company
2022
£
2021
£
Bank accounts
1,776,556
1,776,556
3,336,134
3,336,134
1,667,840
1,667,840
3,075,741
3,075,741
Registered Number: 02330496
77
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
15. 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
2022
£
325,039
(53,508)
297,201
568,732
2022
£
(163,666)
732,398
568,732
2021
£
394,113
(169,087)
100,013
325,039
2021
£
(162,484)
487,523
325,039
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 loss allocated to NCI
Total comprehensive loss allocated to NCI
Current assets
Current liabilities
Net liabilities
Net cash outflow
Non-controlling interest
2022
£
(2,931)
(2,931)
(1,019)
(155)
(1,174)
2021
£
(1,212)
(1,212)
(422)
(396)
(818)
15,298
(486,280)
(470,982)
17,498
(485,102)
(467,604)
(725)
(25)
(163,666)
(162,484)
Registered Number: 02330496
78
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
15. NON-CONTROLLING INTERESTS (continued)
Vardar Minerals Limited, a 59.5% 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/(loss) allocated to NCI
Total comprehensive loss allocated to NCI
Current assets
Non-Current assets
Current liabilities
Net assets
Net cash inflow/(outflow)
Non-controlling interest
2022
£
(199,197)
(199,197)
(91,974)
39,640
(52,334)
109,099
2,186,253
(214,294)
2,081,058
2021
£
(248,093)
(248,093)
(134,011)
(34,259)
(168,270)
55,793
1,098,746
(160,940)
993,599
34,043
(24,984)
732,398
487,523
Registered Number: 02330496
79
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
16. SHARE CAPITAL
Allotted, called up and fully paid
At 1 January
Issued for cash
At 31 December
2022
Number
2022
£
2021
Number
831,710,636
-
831,710,636
8,317,106
-
8,317,106
828,175,224
3,535,412
831,710,636
2021
£
8,281,752
35,354
8,317,106
All issues are for cash unless otherwise stated.
Number
Share
Capital
£
Share
Premium
£
Total
£
At 1 January 2022
At 31 December 2022
831,710,636
831,710,636
8,317,105
8,317,105
24,689,311
24,689,311
33,006,416
33,006,416
Number
828,175,224
3,535,412
831,710,636
Share
Capital
£
8,281,751
35,354
8,317,105
Share
Premium
£
24,684,737
4,5741
24,689,311
Total
£
32,966,488
39,928
33,006,416
At 1 January 2021
8 July - Issue of new shares
At 31 December 2021
1Includes issue costs of £18,760.
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.
There were no shares issued in 2022.
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.
Registered Number: 02330496
80
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
17. SHARE-BASED PAYMENTS
During the year ended 31 December 2022, 23,250,000 options were granted (2021: Nil). The options outstanding
as at 31 December 2022 have an exercise price in the range of 1.00 pence to 7.35 pence (2021: 7.35 pence to
12.00 pence) and a weighted average remaining contractual life of 7 years, 98 days (2021: 1 year, 144 days).
The share-based payments expense for the options for the year ended 31 December 2022 was £240,537 (2021:
£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
2022
3.12p
4.00p
5.25p
100.0%
10 years
4.480%
2022
3.59p
4.00p
1.00p
100.0%
10 years
4.520%
2019
1.15p
5.65p
7.35p
51.89%
5 years
0.718%
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
Outstanding at 1 January
Granted during the year
Exercised during the year
Lapsed during the year
Outstanding at 31 December
Exercisable at 31 December
Weighted
average
exercise
price(£’s)
2022
0.089
0.048
-
0.120
0.055
0.060
Number
2022
13,750,000
23,250,000
-
(4,500,000)
32,500,000
11,750,000
Weighted
average
exercise
price(£’s)
2021
0.060
-
0.017
-
0.089
0.089
Number
2021
22,750,000
-
(9,000,000)
-
13,750,000
13,750,000
No warrants were granted during the year (2021: Nil).
Registered Number: 02330496
81
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
18. RESERVES
The following is a description of each of the reserve accounts that comprise equity shareholders' funds:
Share capital
The share capital comprises the issued ordinary shares of the Company at par.
Share premium
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.
19. TRADE AND OTHER PAYABLES
Current:
Trade payables
Social security and other taxes
Other payables
Accruals
Group
Company
2022
£
448,045
34,493
24,834
118,358
625,730
2021
£
263,062
11,976
17,114
65,084
357,236
2022
£
148,567
22,771
2,142
42,790
216,270
2021
£
62,215
8,693
3,600
39,983
114,491
Registered Number: 02330496
82
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
20. DEFERRED INCOME
Grants
2022
£
2021
£
-
39,849
The grant held as deferred income represents grant income received in accordance with the Company’s
participation of Project Pacific, a component of the European Union’s Horizon 2020 program which ended in
November 2021 and the remaining unused funds of £39,849 were repaid during the year ended 31 December 2022.
21. 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
Non-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 2022
Additions
Interest expense
Lease payments
Foreign exchange movements
At 31 December 2022
Registered Number: 02330496
31 Dec
2022
No.
1
31 Dec
2022
£
10,840
8,537
19,377
31 Dec
2021
No
1
31 Dec
2021
£
7,491
-
7,491
Lease
liability
£
2,026
10,852
302
(5,896)
207
7,491
Lease
liability
£
7,491
17,506
264
(6,611)
727
19,377
83
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
21. LEASE LIABILITY (continued)
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 2022
The total cash outflow for leases in 2022 was £6,611 (2021: £5,850).
22. BORROWINGS
Opening balance
Funds advanced, net of commission
and transaction costs
Finance costs
Effect of FX
Group
Company
2022
£
-
1,554,381
304,529
(12,963)
1,845,947
2021
£
-
-
-
-
-
2022
£
-
1,554,381
304,529
(12,963)
1,845,947
31 Dec
2022
£
10,840
8,537
-
19,377
2021
£
-
-
-
-
-
On 3 July 2022, the Company secured a bridging loan from Nordic investors of SEK 22 million, gross of
commission and transaction costs (approximately: £1.76 million). The loan has a fixed interest rate of 1.5 percent
per stated 30-day period during the duration. Accrued interest is compounding. The loan has a commitment fee
of 5 per cent and a maturity date of 28 February 2023.
The loan and accrued interest is repayable at any time prior to the maturity date. If the loan and accrued interest is
not repaid by maturity date, at the latest, the creditors have the right to offset a minimum of SEK 1 million at a
time of the loan and accrued interest into SDRs at a price per SDR calculated with a 15 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.
Following the year end, it became apparent that due to the timing of the receipt of the funds from the Rights Issue
the Company will not be in a position to pay back the bridging loan facility at its maturity. The outcome of this is
that the holder of the loan enforced the penalty interest for entering another 30-day period, which was circa 1
million SEK. The loan principal and interest totalling £2.13m was repaid via a deduction to the gross proceeds
from the Rights Issue subsequent to the year-end (refer note 28).
Registered Number: 02330496
84
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
23. CHANGES IN LIABILITIES FROM FINANCING ACTIVITIES
Group
Opening balance 1 January 2022
Cash movements
Borrowings advances
Lease payments
Total
Non-cash movements
Lease additions
Finance cost
Effect of FX
Closing balance 31 December 2022
Group
Opening balance 1 January 2021
Cash movements
Lease payments
Total
Non-cash movements
Lease additions
Finance cost
Effect of FX
Closing balance 31 December 2021
Company
Opening balance 1 January 2022
Cash movements
Borrowings advances
Total
Non-cash movements
Finance cost
Effect of FX
Closing balance 31 December 2022
Leases Borrowings
£
-
£
7,491
Total
£
7,491
-
(6,611)
880
1,554,381
-
1,554,381
1,554,381
(6,611)
1,555,261
17,506
264
727
19,377
-
304,529
(12,963)
1,845,947
17,506
304,793
(12,236)
1,865,324
Leases Borrowings
£
-
£
2,026
(5,850)
(3,824)
10,852
256
207
7,491
-
-
-
-
-
-
Borrowings
£
-
Total
£
2,026
(5,850)
(3,824)
10,852
256
207
7,491
Total
£
-
1,554,381
1,554,381
1,554,381
1,554,381
304,529
(12,963)
1,845,947
304,529
(12,963)
1,845,947
The Company had no liabilities from financing activities in the prior year.
Registered Number: 02330496
85
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
24. 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, borrowings and lease liabilities that arise directly
from its operations.
The Group and Company hold the following financial instruments:
At 31 December 2022
Financial assets
Cash and cash equivalents
Trade and other receivables
Loans to group undertakings
Other financial assets
Financial liabilities
Trade and other payables
Borrowings
Lease liability
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
Group
Company
Held at
amortised
cost
£
1,776,556
78,148
-
5,181
1,859,885
591,237
1,845,947
19,377
2,456,561
Total
£
1,776,556
78,148
-
5,181
1,859,885
591,237
1,845,947
19,377
2,456,561
Held at
amortised
cost
£
1,667,840
-
11,081,505
2,784
12,752,129
Total
£
1,667,840
-
11,081,505
2,784
12,752,129
195,328
1,845,947
-
2,041,275
195,328
1,845,947
-
2,041,275
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
The carrying values of the Group’s financial liabilities measured at amortised cost represents a reasonable
approximation of their fair values.
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.
Registered Number: 02330496
86
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
24. FINANCIAL INSTRUMENTS (continued)
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 manages foreign currency risk by
paying for foreign denominated invoices in the currency in which they are denominated. The Group’s and
Company’s net exposure to foreign currency risk at the reporting date is as follows:
Group
2022
£
2021
£
Company
2022
£
2021
£
1,560,383
(32,396)
1,527,987
2,693,547
251,115
2,944,662
1,655,334
(2,906)
1,652,428
2,695,521
4,528
2,700,049
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 2022 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
2022
£
(156,038)
3,240
(152,798)
2021
£
(269,355)
(25,112)
(294,467)
Equity
2022
£
(156,038)
3,240
(152,798)
Profit or loss
Equity
2022
£
(165,533)
291
(165,242)
2021
£
(269,552)
(453)
(270,005)
2022
£
(165,533)
291
(165,242)
2021
£
(269,355)
(25,112)
(294,467)
2021
£
(269,552)
(453)
(270,005)
A 10 per cent weakening of sterling against the Group’s primary currencies at 31 December 2022 would have an
equal but opposite effect on the amounts shown above.
ii) Interest rate risk
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.
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 liability in the year is the bridging loan
finance entered into in the year; this is at a fixed rate of interest. There were no interest-bearing financial liabilities
in the prior year.
87
Registered Number: 02330496
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
24. FINANCIAL INSTRUMENTS (continued)
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 11.
The amounts used by the subsidiaries are as follows:
Jokkmokk Iron Mines AB
Beowulf Sweden AB
Grafintec Oy
Gross
Reconciliation of provisions against receivables arising from lifetime ECLs
2022
£
2021
£
8,407,039
368,306
2,304,786
11,080,131
7,692,987
360,887
2,122,991
10,176,865
ECLs
Total provision arising from ECLs
31
December
2021
£
2,100,913
2,100,913
Current year
movement
£
31
December
2022
£
5,336
5,336
2,106,249
2,106,249
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. A reasonable change in the probability weightings of 3% would result in further
impairment of £626,927 (2021: £624,464).
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. The Board looks to mitigate this risk through the
diversification of different prospective minerals.
c) Liquidity risk
To date the Group and Company have relied on shareholder funding and loan 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 and in the case of borrowings through the presence of
underwriting agreements. The Group and Company have exposure to liquidity risk as borrowings and trade and
other payables all have a maturity of less than one year, the only exception being the lease liability per note 21.
The rationale for the preparation of the accounts on a going concern basis is detailed in the Report of the Directors.
Registered Number: 02330496
88
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
25. FINANCIAL INSTRUMENTS (continued)
The undiscounted contractual maturities of the Group’s financial liabilities are set out below:
31 December 2022
Trade and other payables
Borrowings
Lease liabilities
31 December 2021
Trade and other payables
Deferred income
Lease liabilities
d) Capital management
Less than 3
months
£
625,730
1,845,947
3,912
2,475,589
Less than 3
months
£
357,236
-
140
357,376
Between 3
and 12
months
£
-
-
7,685
7,685
Between 3
and 12
months
£
-
39,848
420
40,268
Between 1
and 2 years
£
-
-
8,773
8,773
Between 1
and 2 years
£
-
-
187
187
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. The Group and Company’s net debt ratio for the year ended 31 December 2022 was below what the
Board would consider to be sustainable, furthermore, this ratio should be considered an outlier as it arose due to
the timing of the fundraising completed. This is further discussed in Note 28.
The Group does not have any externally imposed capital requirements.
Group
Net working capital
Cash and cash equivalents
Trade and other payables
Borrowings
Grant income
Net (debt)/cash
Total equity
Net (debt)/cash to equity ratio
Registered Number: 02330496
2022
£
1,776,556
(625,730)
(1,845,947)
-
(695,121)
2021
£
3,336,134
(263,062)
-
(39,849)
3,033,223
12,662,569
14,496,429
(5.49%)
20.92%
89
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
24. FINANCIAL INSTRUMENTS (continued)
Company
Net working capital
Cash and cash equivalents
Trade and other payables
Borrowings
Grant income
Net (debt)/cash
Total equity
Net (debt)/cash to equity ratio
25. SEGMENT REPORTING
2022
£
1,667,840
(216,270)
(1,845,947)
-
(394,377)
2021
£
3,075,741
(62,215)
-
(39,849)
2,973,677
14,389,211
15,521,336
(2.74%)
19.16%
The Group has only one primary business activity being 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.
2022
Intangible assets
Other non-current assets
Current assets
Liabilities
Finance income
Finance costs
Grant income
Gain on disposal of investment
Impairment
Expenses
Loss for the year
Total comprehensive loss
2021
Intangible assets
Other non-current assets
Current assets
Liabilities
Finance income
Finance costs
Impairment
Expenses
Loss for the year
Total comprehensive loss
Registered Number: 02330496
Sweden
£
8,032,977
2,674
83,341
(178,095)
(6)
10
-
-
-
160,268
160,262
386,566
Finland
£
1,852,274
-
88,542
(29,339)
-
-
(84,797)
-
36,988
379,748
294,951
196,831
Kosovo
£
3,117,214
146,752
72,381
(166,475)
-
267
-
-
-
157,829
157,829
62,591
UK
£
-
4,749
1,752,719
(2,117,145)
(170)
304,529
-
(21,951)
-
1,450,531
1,428,410
1,428,409
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
Total
£
13,002,465
154,175
1,996,983
(2,491,054)
(176)
304,806
(84,797)
(21,951)
36,988
2,148,376
2,041,452
2,074,397
11,235,656
146,076
3,518,548
(403,826)
(71)
256
48,966
1,552,246
1,485,586
2,279,954
90
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
26. RELATED PARTY DISCLOSURES
Transactions with subsidiaries
During the year, cash advances of £524,614 (2021: £356,613) were made to Jokkmokk Iron Mines AB and net
settled costs of £194,754 with the Company (2021: incurred costs of £12,310). 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
£9,991,673 (2021: £9,272,305).
Beowulf Sweden AB received cash advances of £7,320 (2021: £Nil) and net settled costs of £118 (2021: net settled
costs of £2,338). 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 £781,071 (2021: £773,633).
Grafintec Oy received cash advances of £180,287 (2021: £687,845) and net settled costs of £1,507 (2021: incurred
costs of £17,883) 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 £2,741,305 (2021: £2,559,511).
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 11.
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)
Post-retirement benefits
Share-based payments
Share settled expense
Insurance
2022
£
711,962
44,764
173,345
-
887
930,958
2021
£
482,895
27,749
-
103,281
877
614,802
Registered Number: 02330496
91
BEOWULF MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
27. CAPITAL COMMITMENTS
As an exploration and development company, the Company has a portfolio of exploration projects held through
subsidiary companies relevant to the local operations of the business. All of the Company’s business interests carry
financial commitments to remain in good standing which are funded directly by the Company.
All the subsidiary companies require timely submission of regulatory filings, financial accounts and tax
submissions. All exploration projects are held under exploration licences and permits, against which during the
year renewals are expected to be processed with associated renewal fees attaching.
28. EVENTS AFTER THE REPORTING DATE
On 12 January 2023, the Company announced further investment in Vardar Minerals Limited of £250,000. The
investment increases the Company's ownership in Vardar from 59.5 per cent to 61.1 per cent approximately. This
funding will be used to start preparations for the 2023 exploration programme.
On 28 February 2023, the Company announced the outcome of the Rights Issue and Primary Bid Offer. The Rights
Issue raised approximately SEK 62.8 million (approximately £5 million) before expenses. The PrimaryBid Offer
raised approximately £0.8 million before expenses. In addition to the PrimaryBid Offer, the Placing raised
approximately £0.4 million. Members of the Board and executive management also subscribed to an agreed
amount of £181,000.
Following the year end, it became apparent that due to the timing of the receipt of the funds from the Rights Issue
the Company will not be in a position to pay back the bridging loan facility at its maturity. The outcome of this is
that the holder of the loan enforced the penalty interest for entering another 30-day period, which was circa 1
million SEK. The loan principal and interest totalling £2.13m was repaid via a deduction to the gross proceeds
from the Rights Issue.
The net funds raised after the loan repayment and share issue transaction costs are £3.72 million.
On 30 May 2023 there were 907,945,973 Swedish Depository Receipts representing 79 per cent of the issued share
capital of the Company. The remaining issued share capital of the Company is held in the UK.
On 3 May 2023, Mr Kurt Budge resigned as Chief Executive Officer (“CEO”) and director of the Plc and its
subsidiaries. Mr Johan Röstin assumed the role of Executive Chairman and acting CEO on the same date.
Registered Number: 02330496
92
Company Information
Directors
Secretary
Registered Number & Office
Mr C Davies
Mr J Röstin
Davies
ONE Advisory Limited
Finnish Office
Swedish Registered Address
Grafintec Oy
Akademigatan 1,
20500 Åbo
Finland
All subsidiary companies
Storgatan 36,
921 31 LYCKSELE
Sweden
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
Auditors
Nominated Adviser & Broker
Swedish Custodian Bank
BDO LLP
55 Baker Street
London
W1U 7EU
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London
W1S 2PP
Skandinaviska Enskilda
Banken AB
ST M7
106 40 Stockholm
Sweden
UK Bank
Public Relations UK
The Royal Bank of
Scotland
Piccadilly Circus Branch
48 Haymarket
London
SW1Y 4SE
BlytheRay Communications
Limited
4-5 Castle Court
London
EC3V 9DL
Solicitors
BHW Solicitors
1 Smith Way
Grove Park
Enderby
Leicestershire
LE19 1SX
Website:
https://beowulfmining.com/
Registered Number: 02330496
93