REG - Beowulf Mining PLC - Unaudited Preliminary Financial Results
29/02/2024 07:15
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RNS Number : 8730E Beowulf Mining PLC 29 February 2024
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29 February 2024
Beowulf Mining plc
("Beowulf" or the "Company")
Unaudited Preliminary Financial Results for the year ended 31 December 2023
Beowulf (AIM: BEM; Spotlight: BEO), the mineral exploration and development
company, announces its unaudited preliminary financial results for the year
ended 31 December 2023 (the "Period").
Activities in the Period
Sweden
· Following the announcement of the Scoping Study for Kallak North,
part of the Kallak Iron Ore Project ("Kallak"), in January 2023, the Company,
through its 100 per cent owned subsidiary Jokkmokk Iron Mines AB ("Jokkmokk
Iron"), continued to engage with key stakeholders and advance numerous work
streams. A strategic review for the project, focused on optimising the
development and ultimate value of the asset, was advanced during the Period.
· Environmental baseline studies progressed in preparation for the
completion of the Environmental Impact Assessment ("EIA"). These studies
included monitoring and assessment of nature values, sound and vibration,
hydrology, and cultural heritage.
· The Pre-feasibility Study ("PFS") for Kallak was initiated with
the appointment of SLR Consultant Limited ("SLR") as lead consultant in
October 2023. In addition, samples were selected for metallurgical test work
and the preliminary roadmap for the next phase of the project's development
was defined.
· A formal recruitment process was initiated for a high-calibre
individual to lead the further development of the project.
· Various public meetings with local stakeholders, including four
meetings with the Sami villages and meetings with residents of the villages
closest to the project, were held.
· On the 19 and 20 September 2023, the Supreme Administrative Court
held an oral hearing at which the appeal by two Sami villages, Jåhkågasska
tjiellde and Sirges, and Naturskyddsföreningen, the associations for the
protection of the environment, at municipality, county, and country level
(together the "Applicant"), against the awarding of the Exploitation
Concession by the Government of Sweden (the "Government"), was heard.
Following the oral hearing, the Applicant filed a further submission to the
Court to which the Court invited the Government to respond in January 2024.
The Government responded post Period (highlighted below).
Finland
· During the year, Beowulf, through its wholly-owned Finnish
subsidiary Grafintec Oy ("Grafintec"), completed the PFS for the establishment
of the final Coating stage of a Graphite Anode Materials Plant ("GAMP")
located in the GigaVaasa area, in the municipality of Korsholm on the west
coast of Finland. This initial PFS demonstrated very positive initial
economics with a post-tax net present value (using an 8 per cent discount
rate) of US$242 million and an internal rate of return of 39 per cent.
· The study, prepared by the engineering consultancy RB Plant
Construction Ltd ("RB Plant"), is based on an industrial plant importing
spherical graphite, coating this to produce a total of 20,000 tonnes per annum
of Coated Spherical Graphite ("CSPG") over an initial 10-year period and with
initial capital expenditure of US$117 million.
· The EIA for the GAMP was progressed during the year.
· Following the conclusion of the PFS, bench-scale test work was
initiated.
Kosovo
· On 12 January 2023, Beowulf invested £250,000 in Vardar
Minerals. The investment increased the Company's ownership in Vardar from 59.5
per cent to approximately 61.1 per cent. In addition, Beowulf provided loans
amounting to €75,000 between October and December 2023 to Vardar Minerals to
support ongoing exploration activity.
· Vardar Minerals undertook further low-cost field work including
mapping, soil and grab sampling and reconnaissance work across its tenement
package during the three months ended 31 December 2023.
· The focus of the activity during the first half of the year was
on the Shala Central area where the Company undertook mapping, surface
sampling and a drone magnetic survey.
· Reconnaissance work was undertaken in the second half of the year
on the Shala East and Shala West licences which was followed up with a
systematic mapping and sampling programme.
Corporate
· On 28 February 2023, Beowulf announced the outcome of the
Company's capital raise. In total, Beowulf received approximately SEK 80.8
million (approximately £6.4 million) (gross). Net proceeds from the capital
raise were used to repay bridge loan financing.
· On 10 July 2023, Mikael Schauman was appointed as Non-Executive
Director.
· On 27 July 2023, the settlement in relation to Kurt Budge's
resignation was agreed and paid.
· On 7 August 2023, Ed Bowie joined the Company as Chief
Executive Officer and Director.
· On 16 August 2023, Ulla Sandborgh stepped down as Chief
Executive Officer of Jokkmokk Iron.
· On 28 December 2023, Alternative Resource Capital was appointed
as Joint UK Broker to the Company. Alternative Resource Capital is a trading
name of Shard Capital Partners LLP, which is authorised and regulated by the
Financial Conduct Authority in the UK.
Financial
· The consolidated loss for 2023 of £2,931,295 was higher than
2022 of £2,041,452. This increase is due to increased administrative expenses
of £2,494,650 compared to £1,806,582 for 2022. The increase in
administrative expenses was due to the following: share-based payment expenses
of £387,668 (2022: £240,537); professional fees of £696,247 (2022:
£433,157); foreign currency loss of £150,224 (2022: £36,321); salary costs
of £483,221 (2022: £317,717); audit and accountancy fees of £122,174 (2022:
£86,240).
· The administration expenses of the company of £2,778,142 in 2023
exceeded 2022 of £1,090,254. This increase is primarily due to the expected
credit loss on the intercompany loans of £1,001,537 (2022: £5,336),
share-based payment expenses of £321,534 (2022: £173,345), salary costs of
£481,903 (2022: £250,406), professional fees of £420,536 (2022: £290,760),
P.R. services of £97,515 (2022: £46,493) and legal fees of £83,226 (2022:
£24,238). Professional and legal fees increased primarily due to
non-recurring advisor fees in relation to the group directorship changes
within the Period. The expected credit loss increased due to the impairment of
Ågåsjiegge and Åtvidaberg in the year and a reassessment of expected
recoverability of the loans to the subsidiaries.
· Consolidated basic and diluted loss per share for the quarter
ended 31 December 2023 was 0.05 pence (Q4 2022: loss of 0.09 pence).
· £905,555 in cash was held at 31 December 2023 (31 December 2022:
£1,776,556).
· Exploration assets increased to £14,797,833 at 31 December 2023
compared to £13,002,465 at 31 December 2022.
· The cumulative foreign exchange translation losses held in equity
increased year ended 31 December 2023 to £1,464,486 (31 December 2022: loss
of £1,289,415). Much of the Company's exploration costs are in Swedish Krona
which has weakened against the pound since 31 December 2022.
· At 31 December 2023, there were 922,337,110 Swedish Depository
Receipts in issue representing 79.71 per cent of the issued share capital of
the Company. The remaining issued share capital of the Company is held in the
UK as AIM securities.
Post Period Activities
Corporate
· On 16 February 2024, Beowulf announced its intention to conduct
a preferential rights issue of SDRs in Sweden (the "Rights Issue") and a UK
retail offer of ordinary shares and partially secured capital raise (the
"Capital Raise") up to approximately SEK 100 million (approximately £7.5
million). The Rights Issue is underwritten to a maximum value of SEK 50
million, subject to customary adjustments. The main purpose of the Rights
Issue will be to finance the continued development of Kallak, including
completion of the ongoing PFS and environmental studies in preparation for the
EIA and subsequent application for the environmental permit for Kallak, and
the completion of the ongoing PFS and EIA for the GAMP.
· In conjunction with the Rights Issue, the Company has entered
into a short-term loan agreement with the Underwriters to provide SEK 10
million (approximately £0.75 million) to ensure the Company has sufficient
financial resources to continue advancing its projects over the coming weeks.
The loan carries an interest charge of 1.5 per cent per month and has a
commitment fee of 5.0 per cent. The loan and accrued interest is repayable at
any time prior to the maturity date, being 31 May 2024. If the loan and
accrued interest is not repaid by the maturity date, at the latest, the
creditors have the right to offset a minimum of SEK 1 million at the 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. In case of default,
the loan will accrue additional default interest of 2.5 per cent per month.
Sweden
· On 18 January 2024, the Government formally responded to the
submission. In a comprehensive response the Government endorsed the original
decision to award the Exploitation Concession. The Government further
emphasised their support for the project, stating that the Kallak Project is
of national interest (Beowulf announcement dated 22 January 2024).
· On 5 February 2024, the Company announced that a Project
Director had been appointed to oversee the ongoing studies and development of
Kallak.
Finland
· On 17 January 2024, the Company announced an updated strategy
to fast-track the full GAMP process, capturing more of the anode material
production value-chain and providing 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 CSPG for sale to anode manufacturers. The PFS completed on the Coating
stage of the process in July 2023 will be enhanced to incorporate the full
process and is expected to be completed during 2024.
Kosovo
· In January and February 2024, the Company provided additional
loans to Vardar Minerals amounting to €40,000 to support ongoing exploration
activity.
· The original Mitrovica, Viti North and Viti East licences expired
on 24 January 2024. Following dialogue with Independent Commission for Mines
and Minerals ("ICMM"), applications for new licences were submitted and formal
confirmation of receipt was provided by the ICMM in Kosovo on 22 February
2024. Exploration licence applications are reviewed by the ICMM in Kosovo and
ultimately granted by the Board of ICMM. The Government disbanded the Board of
ICMM in October 2023, thus the licence applications remain pending until the
new Board is appointed. As these applications are for new licences rather than
extensions to the original licence, they will be valid for an initial
three-year period from the date of granting, after which they may be extended
twice for two-year periods with a reduction in the land holding of 50% on each
occasion.
Ed Bowie, Chief Executive Officer of Beowulf, commented:
"The Company is making excellent progress across its three business units.
"At Kallak, we have initiated the PFS and are completing metallurgical
test-work to confirm that the project will produce a market leading iron ore
concentrate. Stakeholder consultations and environmental studies are
continuing in preparation for the EIA and Environmental Permit application.
The Company remains focused on developing a world-class sustainable mining
operation at Kallak and the appointment of the Project Director is a key step
in delivering this.
"In Finland, we delivered the PFS for the Coating phase of the GAMP
demonstrating very robust economics. Following the Chinese export controls
introduced in December 2023, the Company has modified its strategy and is now
focused on developing the full process route. Test-work is ongoing and the PFS
will be completed during 2024. This fast-track development will not only
capture more of the value-chain for the production of anode material but also
offers greater supply-chain security.
"In Kosovo, the detailed mapping and sampling undertaken by Vadar Minerals has
highlighted a number of high-priority targets across the Shala licence
package. Further analysis and interpretation is ongoing as assay results are
beginning to be returned. In addition, assay results from a lithium target on
the Viti North licence are pending.
"The Company's portfolio is well-placed in tier-one
jurisdictions, with strategic commodities that support the Green Transition
and will benefit from the increasing emphasis on resource and supply chain
security. We continue to review opportunities to optimise each project,
enhancing the value and de-risking the future development, whilst reviewing
funding opportunities and strategic partnerships both at the project and
corporate level."
Enquiries:
Beowulf Mining plc
Ed Bowie, Chief Executive Officer Tel: +44 (0) 20 7583 8304
SP Angel
(Nominated Adviser & 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
Cautionary Statement
Statements and assumptions made in this document with respect to the Company's
current plans, estimates, strategies and beliefs, and other statements that
are not historical facts, are forward-looking statements about the future
performance of Beowulf. Forward-looking statements include, but are not
limited to, those using words such as "may", "might", "seeks", "expects",
"anticipates", "estimates", "believes", "projects", "plans", strategy",
"forecast" and similar expressions. These statements reflect management's
expectations and assumptions in light of currently available information. They
are subject to a number of risks and uncertainties, including, but not limited
to , (i) changes in the economic, regulatory and political environments in the
countries where Beowulf operates; (ii) changes relating to the geological
information available in respect of the various projects undertaken; (iii)
Beowulf's continued ability to secure enough financing to carry on its
operations as a going concern; (iv) the success of its potential joint
ventures and alliances, if any; (v) metal prices, particularly as regards iron
ore. In the light of the many risks and uncertainties surrounding any mineral
project at an early stage of its development, the actual results could differ
materially from those presented and forecast in this document. Beowulf assumes
no unconditional obligation to immediately update any such statements and/or
forecasts.
About Beowulf Mining plc
Beowulf Mining plc ("Beowulf" or the "Company") is an exploration and
development company, listed on the AIM market of the London Stock Exchange and
the Spotlight Exchange in Sweden. The Company listed in Sweden in 2008 and, as
at 31 December 2023, was 79.71 per cent owned by Swedish shareholders.
Beowulf's purpose is to be a responsible and innovative company that creates
value for its shareholders, wider society and the environment, through
sustainably producing critical raw materials needed for the transition to a
Green Economy.
The Company has an attractive portfolio of assets, including commodities such
as iron ore, graphite, base and precious metals, with activities in
exploration, the development of mines and downstream production in Sweden,
Finland and Kosovo.
The Company's most advanced project is the Kallak iron ore asset in northern
Sweden from which test work has produced a 'market leading' magnetite
concentrate of 71.5 per cent iron content. In the Kallak area, 389 million
tonnes of iron mineralisation has been estimated, a potential source of high
quality iron ore for fossil-free steel making in the Nordic region for decades
to come.
In Finland, Grafintec, a wholly-owned subsidiary, is developing a resource
footprint of natural flake graphite and the capability to serve the anode
manufacturing. Grafintec is working towards creating a sustainable value chain
in Finland from high quality natural flake graphite resources to anode
material production, leveraging renewable power, targeting Net Zero CO(2)
emissions across the supply chain.
In Kosovo, the Company owns approximately 61.1 per cent of Vardar Minerals
("Vardar"), which is focused on exploration in the Tethyan Belt, a major
orogenic metallogenic province for gold and base metals. Vardar is
delivering exciting results for its Mitrovica licence which has several
exploration targets, including lead, zinc, copper and gold. It also has the
Viti licence which is showing potential for copper-gold porphyry
mineralisation.
Kallak is the foundation asset of the Company, and, with Grafintec and Vardar,
each business area displays strong prospects, presents opportunities to grow,
with near-term and longer-term value-inflection points.
Beowulf wants to be recognised for living its values of Respect, Partnership
and Responsibility. The Company's ESG Policy is available on the website
following the link below:
https://beowulfmining.com/about-us/esg-policy/
(https://beowulfmining.com/about-us/esg-policy/)
BEOWULF MINING PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE TWELVE MONTHS TO 31 DECEMBER 2023 AND THE THREE MONTHS TO 31 DECEMBER
2023
Notes (Unaudited) (Unaudited) (Unaudited) (Audited)
3 months ended 3 months ended 12 months ended 12 months ended
31 December 31 December 31 December 31 December 2022
2023 2022 2023
£
£ £ £
Continuing operations
Administrative expenses (222,974) (605,777) (2,494,650) (1,806,582)
Impairment of exploration assets 7 (341,926) (36,988) (350,158) (36,988)
Operating loss (564,900) (642,765) (2,844,808) (1,843,570)
Gain on disposal of investment - 21,951 - 21,951
Finance costs 3 (1,823) (158,559) (197,724) (304,806)
Finance income 1,813 127 7,924 176
Grant income 12,795 14,579 96,750 84,797
Fair value gain on investment 6,563 - 6,563 -
Loss before and after taxation (545,552) (764,667) (2,931,295) (2,041,452)
Loss attributable to:
Owners of the parent (528,676) (723,801) (2,857,345) (1,948,459)
Non-controlling interests (16,876) (40,866) (73,950) (92,993)
(545,552) (764,667) (2,931,295) (2,041,452)
Loss per share attributable to the owners of the parent:
Basic and diluted (pence) 4 (0.05) (0.09) (0.26) (0.23)
BEOWULF MINING PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
FOR THE TWELVE MONTHS TO 31 DECEMBER 2023 AND THE THREE MONTHS TO 31 DECEMBER
2023
(Unaudited) (Unaudited) (Unaudited) (Audited)
3 months ended 3 months ended 12 months ended 12 months ended
31 December 31 December 31 December 31 December 2022
2023 2022 2023
£
£ £ £
Loss for the period / year (545,552) (764,667) (2,931,295) (2,041,452)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange gain / (loss) arising on translation of foreign operations 338,376 (96,142) (203,564) (32,945)
Total comprehensive loss (207,176) (860,809) (3,134,859) (2,074,397)
Total comprehensive loss attributable to:
Owners of the parent (190,554) (827,485) (3,032,415) (2,020,889)
Non-controlling interests (16,622) (33,324) (102,444) (53,508)
(207,176) (860,809) (3,134,859) (2,074,397)
BEOWULF MINING PLC
CONDENSED COMPANY STATEMENT OF COMPREHENSIVE LOSS
FOR THE TWELVE MONTHS TO 31 DECEMBER 2023 AND THE THREE MONTHS TO 31 DECEMBER
2023
(Unaudited) (Unaudited) (Unaudited) (Audited)
3 months ended 3 months ended 12 months ended 12 months
31 December 31 December 31 December ended
2023 2022 2023 31 December
2022
£ £ £
Notes £
Continuing operations
Administrative expenses (570,383) (253,825) (2,778,142) (1,090,254)
Operating loss (570,383) (253,825) (2,778,142) (1,090,254)
Gain on disposal of investments - 21,951 - 21,951
Finance costs 3 - (158,449) (195,304) (304,529)
Finance income 1,806 122 7,655 170
Fair value gain on investment 6,563 - 6,563 -
Loss before and after taxation and total comprehensive loss (562,014) (390,201) (2,959,228) (1,372,662)
Loss per share attributable to the owners of the parent:
Basic and diluted (pence) 4 (0.05) (0.05) (0.27) (0.17)
BEOWULF MINING PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
(Unaudited) (Audited)
As at As at
31 December 31 December 2022
2023 £
£
ASSETS Notes
Non-current assets
Intangible assets 7 14,873,326 13,002,465
Property, plant and equipment 87,755 129,715
Investments 6,563 -
Loans and other financial assets 5,209 5,181
Right of use asset 63,158 19,279
15,036,011 13,156,640
Current assets
Trade and other receivables 152,004 220,427
Cash and cash equivalents 905,555 1,776,556
1,057,559 1,996,983
TOTAL ASSETS 16,093,570 15,153,623
EQUITY
Shareholders' equity
Share capital 5 11,571,875 8,317,106
Share premium 27,141,444 24,689,311
Capital contribution reserve 46,451 46,451
Share based payment reserve 903,766 516,098
Merger reserve 137,700 137,700
Translation reserve (1,464,486) (1,289,415)
Accumulated losses (23,228,900) (20,323,414)
Total equity 15,107,850 12,093,837
Non-controlling interests 514,430 568,732
TOTAL EQUITY 15,622,280 12,662,569
LIABILITIES
Current liabilities
Trade and other payables 433,662 625,730
Lease liability 22,575 10,840
Borrowings 8 - 1,845,947
456,237 2,482,517
Non-Current liabilities
Lease Liability 15,053 8,537
TOTAL LIABILITIES 471,290 2,491,054
TOTAL EQUITY AND LIABILITIES 16,093,570 15,153,623
BEOWULF MINING PLC
CONDENSED COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Notes (Unaudited) (Audited)
As at As at
31 December 31 December 2022
2023 £
£
ASSETS
Non-current assets
Investments 3,967,878 3,645,181
Loans and other financial assets 12,839,865 11,084,289
Property, plant and equipment 964 834
16,808,707 14,730,304
Current assets
Trade and other receivables 49,155 53,284
Cash and cash equivalents 794,909 1,667,840
844,064 1,721,124
TOTAL ASSETS 17,652,771 16,451,428
EQUITY
Shareholders' equity
Share capital 5 11,571,875 8,317,106
Share premium 27,141,444 24,689,311
Capital contribution reserve 46,451 46,451
Share Based Payment Reserve 903,766 516,098
Merger reserve 137,700 137,700
Accumulated losses (22,276,683) (19,317,455)
TOTAL EQUITY 17,524,553 14,389,211
LIABILITIES
Current liabilities
Trade and other payables 128,218 216,270
Borrowings 8 - 1,845,947
TOTAL LIABILITIES 128,218 2,062,217
TOTAL EQUITY AND LIABILITIES 17,652,771 16,451,428
BEOWULF MINING PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE TWELVE MONTHS TO 31 DECEMBER 2023
Share capital Share premium Capital contribution reserve Share-based payment reserve Merger reserve Translation reserve Accumulated losses Total Non- Total equity
controlling
interest
£ £ £ £ £ £ £ £ £ £
8,317,106 24,689,311 46,451 668,482 137,700 (1,216,985) (18,470,675) 14,171,390 325,039 14,496,429
At 1 January 2022
Loss for the year - - - - - - (1,948,459) (1,948,459) (92,993) (2,041,452)
Foreign exchange translation - - - - - (72,430) - (72,430) 39,485 (32,945)
Total comprehensive loss - - - - - (72,430) (1,948,459) (2,020,889) (53,508) (2,074,397)
Transactions with owners
Equity-settled share-based payment transactions - - - 240,537 - - - 240,537 - 240,537
Step up interest in subsidiary - - - - - - (297,201) (297,201) 297,201 -
Transfer on lapse of options - - - (392,921) - - 392,921 - - -
8,317,106 24,689,311 46,451 516,098 137,700 (1,289,415) (20,323,414) 12,093,837 568,732 12,662,569
At 31 December 2022 (Audited)
Loss for the year - - - - - - (2,857,345) (2,857,345) (73,950) (2,931,295)
Foreign exchange translation - - - - - (175,071) - (175,071) (28,493) (203,564)
Total comprehensive loss - - - - - (175,071) (2,857,345) (3,032,416) (102,443) (3,134,859)
Transactions with owners
Issue of share capital 3,254,769 3,654,829 - - - - - 6,909,598 - 6,909,598
Cost of Issue - (1,202,696) - - - - - (1,202,696) - (1,202,696)
Equity-settled share-based payment transactions - - - 387,668 - - - 387,668 - 387,668
Step acquisition of subsidiary - - - - - - (48,141) (48,141) 48,141 -
At 31 December 2023 (Unaudited) 11,571,875 27,141,444 46,451 903,766 137,700 (1,464,486) (23,228,900) 15,107,850 514,430 15,622,280
BEOWULF MINING PLC
CONDENSED COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE TWELVE MONTHS TO 31 DECEMBER 2023
Share capital Share premium Merger reserve Capital contribution reserve Share-based payment reserve Accumulated losses Total
£ £ £ £ £ £ £
8,317,106 24,689,311 137,700 46,451 668,482 (18,337,714) 15,521,336
At 1 January 2022
Loss for the year - - - - - (1,372,662) (1,372,662)
Total comprehensive loss - - - - - (1,372,662) (1,372,662)
Transactions with owners
Equity-settled share-based payment transactions - - - - 240,537 - 240,537
Transfer on lapse of options - - - - (392,921) 392,921 -
8,317,106 24,689,311 137,700 46,451 516,098 (19,317,455) 14,389,211
At 31 December 2022 (Audited)
Loss for the year - - - - - (2,959,228) (2,959,228)
Total comprehensive loss - - - - - (2,959,228) (2,959,228)
Transactions with owners
Issue of share capital 3,254,769 3,654,829 - - - - 6,909,598
Cost of issue - (1,202,696) - - - - (1,202,696)
Equity-settled share-based payment transactions - - - - 387,668 - 387,668
At 31 December 2023 (Unaudited) 11,571,875 27,141,444 137,700 46,451 903,766 (22,276,683) 17,524,553
BEOWULF MINING PLC
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
AS AT 31 DECEMBER 2023
(Unaudited) (Audited)
31 December 2023 31 December
2022
£ £
Cash flows from operating activities
Loss before income tax (2,931,295) (2,041,452)
Depreciation charges 43,276 45,133
Amortisation of right-of-use asset 29,478 6,384
Loss on disposal of PPE 643 -
Equity-settled share-based payment 387,668 240,537
Impairment of exploration costs 350,158 36,988
Finance income (7,924) (176)
Finance cost 197,724 304,806
Grant income (96,750) (84,797)
Gain on sale of investment - (21,951)
Unrealised foreign exchange 86,637 55,337
Fair value gain on investment (6,563) -
(1,946,948) (1,459,191)
Decrease/(increase) in trade and other receivables 61,395 (36,535)
Decrease in trade and other payables (277,400) (43,827)
Net cash used in operating activities (2,162,953) (1,539,553)
Cash flows from investing activities
Purchase of intangible assets (2,308,473) (1,536,674)
Purchase of property, plant and equipment (4,851) (34,397)
Payments for improvements of right-of-use assets (33,121) -
Proceeds from disposal of investments - 21,951
Interest received 7,923 176
Grant receipt 96,750 84,797
Grant repaid - (39,849)
Net cash used in investing activities (2,241,772) (1,503,996)
Cash flows from financing activities
Proceeds from issue of shares 4,373,056 -
Payment of share issue costs (704,587) -
Lease principal paid (23,201) (6,347)
Lease interest paid (2,420) (264)
Proceeds from borrowings - 1,554,381
Interest paid - (10)
Net cash generated from financing activities 3,642,848 1,547,760
Decrease in cash and cash equivalents (761,877) (1,495,789)
Cash and cash equivalents at beginning of year 1,776,556 3,336,134
Effect of foreign exchange rate changes (109,124) (63,789)
Cash and cash equivalents at end of year 905,555 1,776,556
BEOWULF MINING PLC
CONDENSED COMPANY CASH FLOW STATEMENT
AS AT 31 DECEMBER 2023
(Unaudited) (Audited)
31 December 2023 31 December
2022
£ £
Cash flows from operating activities
Loss before income tax (2,959,228) (1,372,662)
Expected credit losses 1,001,537 5,336
Equity-settled share-based payments 321,534 173,344
Depreciation 233 278
Loss on disposal of PPE 643 -
Finance income (7,655) (170)
Finance cost 195,304 304,529
Gain on disposal of investment - (21,951)
Unrealised foreign exchange 86,636 55,337
Fair value gain on investment (6,563) -
(1,367,559) (855,959)
Decrease/(increase) in trade and other receivables 4,129 (12,099)
(Decrease)/increase in trade and other payables (88,052) 101,779
Net cash used in operating activities (1,451,482) (766,279)
Cash flows from investing activities
Loans to subsidiaries (2,757,112) (909,975)
Financing of subsidiary (250,000) (1,200,000)
Interest received 7,655 170
Grant repaid - (39,849)
Purchase of fixed assets (1,006) -
Proceeds from disposal of investments - 21,951
Net cash used in investing activities (3,000,463) (2,127,703)
Cash flows from financing activities
Proceeds from issue of shares 4,373,056 -
Payment of share issue costs (704,587) -
Proceeds from borrowings - 1,554,381
Net cash generated from financing activities 3,668,469 1,554,381
Decrease in cash and cash equivalents (783,476) (1,339,601)
Cash and cash equivalents at beginning of year 1,667,840 3,075,741
Effect of foreign exchange rate changes (89,455) (68,300)
Cash and cash equivalents at end of year 794,909 1,667,840
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM
FOR THE TWELVE MONTHS TO 31 DECEMBER 2023
1. Nature of operations
Beowulf Mining plc (the "Company") is domiciled in England and Wales. The
Company's registered office is 201 Temple Chambers, 3-7 Temple Avenue, London,
EC4Y 0DT. This consolidated financial information comprises that of 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.
2. Basis of preparation
The condensed consolidated financial information has been prepared on the
basis of the recognition and measurement requirements of UK-adopted
International Accounting Standards (IFRS). The accounting policies, methods of
computation and presentation used in the preparation of the financial
information are the same as those used in the Group's audited financial
statements for the year ended 31 December 2022.
The financial information in this statement does not constitute full statutory
accounts within the meaning of Section 434 of the UK Companies Act 2006. The
financial information for the twelve months ended 31 December 2022 is audited.
The audit of the financial information for the year ended 31 December 2023 is
currently being completed. The auditor's report on the statutory financial
statements for the year ended 31 December 2022 was unqualified but it did
include a material uncertainty relating to going concern.
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.
Management have prepared cash flow forecasts which indicate that the Group
will need to raise further funds within the next 12 months for corporate
overheads and to advance its key projects and investments.
The Directors are confident they are taking all necessary steps to ensure that
the required finance will be available, and they have successfully raised
equity finance in the past. They have therefore concluded that it is
appropriate to prepare the financial statements on a going concern basis.
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.
On 16 February 2024, the Company announced its intention to conduct a
preferential rights issue of SDRs in Sweden and a UK retail offer of ordinary
shares and partially secured capital raise up to approximately SEK 100 million
(approximately £7.5million). The rights issue is underwritten to maximum
value of SEK 50 million, subject to customary adjustments.
Therefore, at the date of this report, the Directors were confident that the
Group would be able to raise sufficient capital to fund the Group's key
projects and investments.
3. Finance cost
(Unaudited) (Unaudited) (Unaudited) (Audited)
3 months 3 months 12 months 12 months
ended ended ended ended
Group 31 December 2023 31 December 31 December 2023 31 December 2022
2022
Bridging loan amortised interest - 158,499 195,304 304,529
Lease liability interest 1,823 60 2,420 267
Other interest paid - - - 10
1,823 158,559 197,724 304,806
(Unaudited) (Unaudited) (Unaudited) (Audited)
3 months 3 months 12 months 12 months
ended ended ended Ended
Parent 31 December 2023 31 December 31 December 2023 31 December 2022
2022
Bridging loan amortised interest - 158,499 195,304 304,529
- 158,499 195,304 304,529
4. Loss per share
Basic and diluted loss per share
The calculation of basic and diluted loss per share is based on the loss
attributable to equity holders divided by the weighted average number of
shares in issue during the period.
The loss incurred by the Group and the Parent means that the effect of any
outstanding warrants and options would be considered anti-dilutive and is
ignored for the purposes of the loss per share calculation.
(Unaudited) (Unaudited) (Unaudited) (Audited)
3 months 3 months 12 months 12 months
ended ended ended ended
Group 31 December 2023 31 December 31 December 2023 31 December 2022
2022
Loss for the Period/year attributable to shareholders of the Company (£'s) (528,676) (723,801) (2,857,345) (1,948,459)
Weighted average number of ordinary shares 1,157,187,463 831,710,636 1,084,958,359 831,710,636
Loss per share (p) (0.05) (0.09) (0.26) (0.23)
Parent
Loss for the Period/year attributable to shareholders of the Company (£'s) (562,014) (390,201) (2,959,228) (1,372,662)
Weighted average number of ordinary shares 1,157,187,463 831,710,636 1,084,958,359 831,710,636
Loss per share (p) (0.05) (0.05) (0.27) (0.17)
5. Share capital
(Unaudited) (Audited)
31 December
2023
31 December 2022
£ £
Allotted, issued and fully paid
Ordinary shares of 1p each 11,571,875 8,317,106
The number of shares in issue was as follows:
Number
of shares
Balance at 1 January 2022 831,710,636
Issued during the year -
Balance at 31 December 2022 831,710,636
Issued during the year 325,476,827
Balance at 31 December 2023 1,157,187,463
During the year, the Company raised £6,909,598 (approx. SEK 80 million)
before expenses. Net proceeds were used to repay bridge loan financing of
£2,038,433. Shares were issued in lieu of cash for issue costs totalling
£498,109. Therefore, the Company received net proceeds of £4,373,056.
6. Share based payments
During the year ended 31 December 2023, 12,250,000 options were granted (2022:
23,250,000). The options outstanding as at 31 December 2023 have an exercise
price in the range of 1.00 pence to 7.35 pence (2022: 1.00 pence to 5.25
pence) and a weighted average remaining contractual life of five years, 294
days (2022: 7 years, 98 days).
The share-based payments expense for the options for the year ended 31
December 2023 was £387,668 (2022: £240,537).
The fair value of share options granted and outstanding were measured using
the Black-Scholes model, with the following inputs:
2023 2022 2019
Number of options 12,250,000 20,750,000 2,500,000 9,250,000
Fair value at grant date 0.52p 3.12p 3.59p 1.15p
Share price 1.68p 4.00p 4.00p 5.65p
Exercise price 2.06p 5.25p 1.00p 7.35p
Expected volatility 55.2% 100% 100% 51.89%
Expected option life 2.5 years 6 years 6 years 2 years
Risk free interest rate 4.800% 4.480% 4.520% 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 Number Weighted average exercise price(£'s) Number Weighted average exercise price(£'s)
2023 2023 2022 2022
Outstanding at 1 January 32,500,000 0.055 13,750,000 0.089
Granted during the year 12,250,000 0.021 23,250,000 0.048
Lapsed during the year - - (4,500,000) 0.120
Outstanding at 31 December 44,750,000 0.046 32,500,000 0.055
Exercisable at 31 December 37,250,000 0.042 11,750,000 0.060
7. Intangible assets: Group
Exploration assets Other Total
intangible
assets
Net book value £ £ £
As at 31 December 2022 (Audited) 13,002,465 - 13,002,465
As at 31 December 2023 (Unaudited) 14,797,833 75,493 14,873,326
Exploration costs (Unaudited) (Audited)
As at As at
31 December 31 December
2023 2022
£ £
Cost
At 1 January 13,002,465 11,235,656
Additions for the year - cash 2,232,694 1,536,674
Additions for the year - non-cash 98,208 314,272
Foreign exchange movements (185,376) (47,149)
Impairment (350,158) (36,988)
Total 14,797,833 13,002,465
The net book value of exploration costs is comprised of expenditure on the
following projects:
(Unaudited) (Audited)
As at As at
31 December 31 December
2023 2022
£ £
Project Country
Kallak Sweden 9,481,130 7,666,563
Ågåsjiegge Sweden - 7,718
Åtvidaberg Sweden - 358,694
Pitkäjärvi Finland 1,667,854 1,641,836
Rääpysjärvi Finland 174,060 148,430
Karhunmäki Finland 55,935 56,089
Luopioinen Finland 4,812 4,257
Emas Finland 41,693 1,663
Shala Kosovo 164,779 -
Mitrovica Kosovo 2,527,239 2,430,150
Viti Kosovo 680,331 687,065
14,797,833 13,002,465
Total Group exploration costs of £14,797,833 are currently carried at cost in
the financial statements. Impairment of £350,158 has been recognised during
the Period for the projects relating to Ågåsjiegge Åtvidaberg (2022:
£36,988 in project Merivaara).
Accounting estimates and judgements are continually evaluated and are based on
a number of factors, including expectations of future events that are believed
to be reasonable under the circumstances. Management is required to consider
whether there are events or changes in circumstances that indicate that the
carrying value of this asset may not be recoverable.
The most significant exploration asset within the Group is Kallak. The Company
applied for an Exploitation Concession for Kallak North in April 2013 and this
was finally awarded in March 2022.
Kallak is included in the condensed financial statements as at 31 December
2023 as an intangible exploration licence with a carrying value of
£9,481,130. Given the Exploitation Concession was awarded, Management have
considered that there is no current risk associated with Kallak and thus have
not impaired the project.
Other intangible assets (Unaudited) (Audited)
As at As at
31 December 31 December
2023 2022
£ £
Cost
At 1 January - -
Additions in the year 75,779 -
Foreign exchange movements (286) -
Total 75,493 -
Other intangible assets capitalised are development costs incurred following
the feasibility of GAMP project. This development has attained a stage that it
satisfies the requirements of IAS 38 to be recognised as intangible asset in
that it has the potential to completed and used, provide future economic
benefits, its costs can be measured reliably and there is the intention and
ability to complete. The development costs will be held at cost less
impairment until the completion of the GAMP project at which stage they will
be transferred to the value of the Plant.
8. Borrowings
(Unaudited) (Audited)
As at As at
31 December 31 December
2023 2022
£ £
Opening balance 1,845,947 -
Funds advanced - 1,554,381
Finance costs 195,304 304,529
Effect of foreign exchange (2,818) (12,963)
Funds repaid (2,038,433) -
- 1,845,947
On 3 July 2022, the Company secured a Bridging loan from Nordic investors of
SEK 22 million (approximately £1.76 million) (the "Loan"). The Loan had a
fixed interest rate of 1.5 percent per stated 30-day period during the
duration. Accrued interest was compounding. The Loan had a commitment fee of
5 per cent and a Maturity Date of 28 February 2023.
The Loan was accounted for using an amortised cost using an effective rate of
interest.
It became apparent that due to the timing of the receipt of the funds from the
Rights Issue the Company was not in a position to pay back the bridging loan
facility at its maturity. The outcome of this was that the holder of the loan
enforced the penalty interest for entering another 30-day period, which was
circa 1 million SEK (approx. £82k). The loan principal and interest totalling
£2.04 million was repaid via a deduction to the gross proceeds from the
Capital Raise in March 2023.
9. Post balance sheet events
On 16 February 2024, in conjunction with the Rights Issue, the Company has
entered into a short-term loan agreement with the Underwriters to provide SEK
10 million to ensure the Company has sufficient financial resources to
continue advancing its projects over the coming weeks. The loan carries an
interest charge of 1.5 per cent per month and has a commitment fee of 5 per
cent. 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. In case of
default, the loan will accrue additional default interest of 2.5 per cent per
month.
10. Availability of announcement
A copy of these results will be made available for inspection at the Company's
registered office during normal business hours on any weekday. The Company's
registered office is at 201 Temple Chambers, 3-7 Temple Avenue, London, EC4Y
0DT. A copy can also be downloaded from the Company's website at
www.beowulfmining.com. Beowulf Mining plc is registered in England and Wales
with registered number 02330496.
** Ends **
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