REG - Beowulf Mining PLC - Update for the development of GAMP in GigaVaasa

Beowulf MiningAnnouncement

17/01/2024 07:00

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RNS Number : 9164Z  Beowulf Mining PLC  17 January 2024

The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulation (EU) No.
596/2014, as incorporated into UK law by the European Union (Withdrawal) Act
2018. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.

 

17 January 2024

 

Beowulf Mining Plc

 

("Beowulf" or the "Company")

 

Update for the development of Graphite Anode Materials Plant in the GigaVaasa
area

 

Beowulf (AIM: BEM; Spotlight: BEO), and its wholly owned Finnish subsidiary
Grafintec Oy ("Grafintec"), are pleased to provide an update for the Graphite
Anode Materials Plant ("GAMP") in the GigaVaasa area.

 

 

Highlights

 

·    Updated strategy to fast-track full GAMP process to capture more of
the anode material production value-chain and provide greater supply-chain
security following the export controls imposed by China on graphite materials
in December 2023.

·    The full GAMP process consists of Spheronisation, Purification and
Coating to produce Coated Spherical Graphite ("CSPG") for sale to anode
manufacturers.

·    Initially graphite concentrate will be sourced from third parties but
ultimately the intention is to develop the Company's own deposits in Finland
where preliminary metallurgical test-work has returned very encouraging
results.

·    An enhanced Pre-Feasibility Study ("PFS") on the full GAMP process is
expected to be concluded during 2024, building on the PFS of the Coating stage
of the process previously notified in July 2023 that demonstrated robust
economics with a post-tax NPV(8) of US$242 million and a post-tax IRR of 39%.

·    This enhanced PFS will be followed by a Definitive Feasibility Study
("DFS") during 2025 with first production still planned from 2027.

 

 

Ed Bowie, Chief Executive Officer of Beowulf, commented:

 

"Given the fast-moving nature of the global graphite market and the increasing
need for supply-chain security, the Company has updated its development
strategy for GAMP, fast-tracking the development of the full processing
facility. This updated strategy builds on the PFS completed last year and,
through capturing more of the value-chain, is expected to improve the already
excellent economics. We look forward to updating the market with our ongoing
test-work results and progress with the PFS in due course."

 

 

Rasmus Blomqvist, Managing Director of Grafintec, commented:

 

"I am very pleased with the progress we have made over the last 12 months.
While the timeline for the Environmental Impact Assessment and PFS work has
been extended due to Grafintec's change in strategy, I am pleased that the
overall timeline to production will remain the same. Introducing the full
process chain from the start of production will significantly reduce our
raw-materials supply risk and is likely to improve the project economics."

 

 

GAMP Strategy Update

 

The development plan for GAMP, announced on 26(th) September 2023, considered
a three-phase development with the initial phase focused on the final
processing stage in the production of graphite anode materials, namely the
Coating stage. The plan for Phase 1 envisaged the import of spherical graphite
("SPG") from third parties, coating this material to produce 20,000 tonnes of
anode material per year of Coated Spherical Graphite ("CSPG") for sale to
anode manufacturers. Phase 2 of the development plan was to incorporate the
full process comprising three stages into the plant. Graphite concentrate
would be imported from third parties and this would then be Spheronised,
Purified and Coated, producing 20,000 tonnes per year of CSPG. Phase 3 of the
original plan envisaged an expansion of production to 60,000 tonnes per year
of product.

 

The updated strategy for GAMP is to build the three-stage processing plant at
the outset comprising Spheronisation, Purification and Coating effectively
bypassing the previous Phase 1. Graphite concentrate feed will initially be
sourced from third-party mines and the Company has letters of intent for this
supply. The GAMP will then process this material and produce 20,000 tonnes of
CSPG per year for sale to anode manufacturers for the battery industry. A
future expansion to 60,000 tonnes per year of CSPG is then planned.

 

Figure 1: Updated GAMP strategy

 

Rationale for the Update in Strategy

 

The update in the Company's strategy has been driven by two principal factors.
Firstly, the full process will capture a larger portion of the value chain.
While the full process will have a higher initial capital cost than the
Coating stage, which was estimated at US$117 million in the PFS released in
July 2023, the full process is expected to be very value accretive, based on
the development studies of comparable projects in the market. The updated GAMP
plan is therefore also expected to be more attractive for potential funding
partners.

 

Secondly, the full process provides greater supply chain security. China
retains a significant market share in the production of graphite materials for
anodes and, in particular, controls approximately 99% of global spherical
graphite refining capacity. In December 2023, the Chinese government announced
export controls on graphite products. While the full impact of these controls
is not yet known, they do highlight the current dependence of the global
battery industry on China. Graphite concentrate sourced from mines outside of
China is, by contrast, more readily available and there are multiple potential
sources. In line with the objectives of the EU's Critical Raw Materials Act,
the Company's updated strategy seeks to mitigate the key supply chain risks.

 

 

Revised Development Plan

 

The Technical workstream comprises the following:

·    The updated PFS technical workstream builds on the PFS completed for
the Coating plant released in July 2023 which demonstrated robust preliminary
economics with a post-tax NPV(8) of US$242 million and a post-tax IRR of 39%.

·    Optimisation test-work and techno-economic studies of the full
process are ongoing including state-of-the-art Spheronisation and chemical
Purification technologies with our technology partner Dorfner Anzaplan GmbH
("Anzaplan").

·    On the conclusion of the PFS by end of 2024, the Definitive
Feasibility Study ("DFS") will be launched.

·    The DFS is expected to take six to nine months to complete, and
during this period, test-work will continue, generating product for battery
manufacturers to complete pre-qualification testing.

 

The ongoing Environmental workstream comprises the following:

·    As previously announced, Grafintec has appointed Finnish Engineering
Consultancy AFRY Finland Oy ("AFRY") to undertake the Environmental Impact
Assessment ("EIA"). The EIA will reflect the updated scope of the development
plan and is aimed to be completed by the end of 2024.

·    Following its submission, the local authority, the Centre for
Economic Development, Transport and the Environment ("ELY"), will review the
EIA before making a statement of their findings. The review process by ELY is
anticipated to take approximately three months.

·    Following completion and submission of the EIA, work will commence
towards the Environmental Permit. The preparation of the Environmental Permit
application, which will take approximately six months to compile, can partly
be done as a parallel workstream with the EIA with the aim to speed-up the
overall process.

·    The Environmental Permit application is then submitted to the
Regional State Administrative Agency. The processing of the Environmental
Permit is expected to take approximately nine months, with the final decision
anticipated towards the end of 2025.

 

 

 

Figure 2: Updated GAMP timeline

 

The changes in Grafintec's development strategy will extend the time for the
ongoing EIA process and PFS to include the Spheronisation and Purification
process stages, however, the overall timeline for the GAMP remains on track
for first production in 2027.

 

 

Sourcing Strategy Update

 

Grafintec initially plans to import natural graphite concentrate from third
parties to feed the GAMP, with the longer-term strategy to be self-sufficient
in raw-materials production from its 100% owned domestic natural graphite
projects.

 

Aitolampi is one of Europe's largest known natural flake graphite resources
with a reported Indicated and Inferred Mineral Resource Estimate of 26.7
million tonnes at 4.8% Total Graphitic Carbon ("TGC") for 1,275,000 tonnes of
contained graphite (reported in accordance with the 2012 JORC Code).
Previous Spheronisation and Purification test-work on Aitolampi graphite
concentrate has proven that a purified SPG that meets industrial standards can
be produced reaching a purity of minimum 99.95% TGC with low amounts of
detrital impurities.

 

Grafintec is also investigating possible synergies between Aitolampi and
Rääpysjärvi. Rääpysjärvi is an early-stage exploration project located
only eight kilometres to the north-north-west of Aitolampi. Given their
proximity, there are anticipated to be synergies for future development of
these two sites, such as shared processing infrastructure. Previous results
from fieldwork and laboratory test-work confirmed large extensive conductive
zones associated with high-grade graphite (see
polaris.brighterir.com/public/beowulf_mining_plc/news/rns/story/x5gz62w
(https://polaris.brighterir.com/public/beowulf_mining_plc/news/rns/story/x5gz62w)
). Test-work from composite grab samples of boulders and outcrops with a head
grade of 19.8% TGC was tested by SGS Mineral Services in Canada in 2017
producing a combined concentrate grade of 97.4% TGC, with 18.8% in the large
and jumbo flake fraction (+180 micron). The concentrate grades from the
Rääpysjärvi composite sample are similar to grades produced from Aitolampi
drill core samples indicating that Rääpsyjärvi graphite should also be a
suitable feed for anode materials production.

 

 

 

Enquiries:

Beowulf Mining plc

Ed Bowie, Chief Executive
Officer
ed.bowie@beowulfmining.com

 

SP Angel

(Nominated Adviser & Joint Broker)

Ewan Leggat / Stuart Gledhill / Adam Cowl           Tel: +44 (0) 20
3470 0470

 

Alternative Resource Capital

(Joint Broker)

Alex
Wood
                Tel: +44 (0) 20 7186 9004

 

BlytheRay

Tim Blythe / Megan Ray
                                Tel: +44 (0) 20
7138 3204

 

 

 

About Beowulf Mining plc

 

Beowulf Mining is a mining company with main activities in exploration and
development in Sweden, Finland and Kosovo. Beowulf's portfolio is diversified
by commodity, geography and stage of development of the
projects and consists primarily of iron ore, graphite, gold and base metals.
Beowulf Mining is headquartered in London, England.

 

 

Cautionary Statement

 

Statements and assumptions made in this document with respect to the Company's
current plans, estimates, strategies and beliefs, and other statements that
are not historical facts, are forward-looking statements about the future
performance of Beowulf. Forward-looking statements include, but are not
limited to, those using words such as "may", "might", "seeks", "expects",
"anticipates", "estimates", "believes", "projects", "plans", strategy",
"forecast" and similar expressions. These statements reflect management's
expectations and assumptions in light of currently available information. They
are subject to a number of risks and uncertainties, including, but not limited
to , (i) changes in the economic, regulatory and political environments in the
countries where Beowulf operates; (ii) changes relating to the geological
information available in respect of the various projects undertaken; (iii)
Beowulf's continued ability to secure enough financing to carry on its
operations as a going concern; (iv) the success of its potential joint
ventures and alliances, if any; (v) metal prices, particularly as regards iron
ore. In the light of the many risks and uncertainties surrounding any mineral
project at an early stage of its development, the actual results could differ
materially from those presented and forecast in this document. Beowulf assumes
no unconditional obligation to immediately update any such statements and/or
forecast.

 

 

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