REG - Beowulf Mining PLC - Vardar Consolidation of Ownership and Update

Beowulf MiningAnnouncement

04/03/2024 07:00

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RNS Number : 4141F  Beowulf Mining PLC  04 March 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.

 

 

4 March 2024

Beowulf Mining plc

("Beowulf" or the "Company")

Vardar Minerals Limited ("Vardar"): Consolidation of Ownership and Operational
Update

 

Beowulf (AIM: BEM; Spotlight: BEO) is pleased to announce the planned
consolidation of 100 per cent ownership of Vardar Minerals Limited ("Vardar")
from the currently held 61.1 per cent interest in an all-share transaction,
and to provide an operational update.

 

 

Highlights

 

Consolidation of ownership:

·      Beowulf has agreed terms with the minority shareholders of Vardar
Minerals to acquire their shares and move to 100% ownership in an all-share
transaction. The Company currently owns a 61.1 per cent interest in Vardar and
will issue 52,326,761 Beowulf shares to the Vardar minority holders.

·      The transaction remains conditional on the consolidation of 100
per cent ownership of the underlying Vardar subsidiaries and is expected to
complete by 15 March 2024.

·      The new Beowulf shares are subject to a 12-month lock-in
agreement from the date of satisfaction of the conditions and will be issued
at the same time as shares issued in connection with the proposed capital
raise announced to the market on 16 February 2024 ("Capital Raise"), and not
later than 30 April 2024.

·      The consolidation of 100 per cent of Vardar will provide Beowulf
with full control and flexibility to drive the development of Vardar including
reviewing acquisition, divestment, joint venture and strategic investment
opportunities.

·      In connection with the transaction, Ismet Krasniqi, Vardar's
local partner in Kosovo, will join the Board of Vardar and continue to support
the company's development.

 

Operational update

·      Vardar has submitted applications, and received confirmation of
receipt on 22 February 2024, for new licences covering the original Mitrovica,
Viti East and Viti North licence areas all of which expired on 27 January 2024
in accordance with their terms.

·      Encouraging preliminary assay results have been received from
Vardar's sampling programmes on the Shala East licence with rock chip samples
assaying up to 3.84 grammes per tonne ("g/t") gold ("Au"), 117 g/t silver
("Ag"), 5.5% zinc ("Zn") and 5.4% lead ("Pb").

·      Sampling of water springs on the Viti North licences has returned
highly anomalous lithium ("Li") and boron ("B") results of 1,260 microgrammes
per litre ("μg/l") and 10,500 μg/l respectively from a single sample.
Further sampling and exploration is planned.

 

 

Ed Bowie, Chief Executive Officer of Beowulf, commented:

 

"Consolidating the ownership of Vardar is a significant advancement for
Beowulf, providing the Company with full operational control. We remain
committed to advancing the exploration portfolio in Kosovo, and this
transaction will enable us to align our technical aspirations with our
financial resources, while at the same time providing greater flexibility to
consider other opportunities for the business.

 

"We have adopted a conservative approach to our exploration strategy,
completing further low-cost exploration and analysis to better refine targets
before we embark on drilling campaigns. Our initial results have been
encouraging and it is very pleasing that we have had confirmation of receipt
of applications for new licences over the key Mitrovica and Viti areas. We
will update the market in due course once the award of these licenses has been
confirmed.

 

"It is a pleasure to have Ismet Krasniqi join the Board of Vardar. Ismet has
been instrumental in lodging our recent licence applications and supporting
our continued development in Kosovo. With his support, we will continue to
advance the Vardar portfolio, but also review other opportunities across the
Balkans."

 

 

Consolidation of Ownership

 

Since its initial investment in Vardar in November 2018, Beowulf has invested
a total of £3.34 million taking its ownership to 61.1 per cent. The two
founders of Vardar, Luke Bryan and Adam Wooldridge, each hold a 13.6 per cent
interest with the remaining 11.7 per cent being held by private individuals.

 

Vardar holds 100 per cent of two direct subsidiaries, Vardar Exploration
Kosovo LLC ("VEK") in Kosovo and Vardar Geoscience Ltd in the British Virgin
Islands, which itself holds a 95 per cent interest in Vardar Geoscience Kosovo
LLC ("VGK") in Kosovo. The remaining 5 per cent interest in VGK is held by
Ismet Krasniqi, Vardar's local partner who is also a director of VGK.

 

The initial step in the proposed transaction is the consolidation of the
ownership in VGK. Ismet Krasniqi, in consideration for his interest in VGK
will receive new shares in Vardar representing approximately 5 per cent of the
enlarged share capital of Vardar.

 

The second stage in the transaction is the consolidation of 100 per cent
ownership of Vardar in an all-share transaction. The Company currently owns a
61.1 per cent interest in Vardar and will issue of 52,326,761 Beowulf shares,
representing 4.3 per cent of the enlarged Beowulf share capital (excluding any
shares issued pursuant to the Capital Raise), to the Vardar minority holders.
The transaction remains conditional on the consolidation of 100 per cent
ownership of VGK and is expected to complete by 15 March 2024. The new Beowulf
shares are subject to a 12-month lock-in agreement from the date of
satisfaction of the conditions and will be issued at the same time as shares
issued in connection with the proposed Capital Raise, and not later than 30
April 2024.

 

On completion of the transaction, Luke Bryan and Adam Wooldridge will resign
as directors of Vardar and its subsidiaries and Ismet Krasniqi will be
appointed as a Director of Vardar.

 

The consolidation of 100 per cent ownership provides Beowulf with full
strategic and operational control of Vardar. Vardar holds and has submitted
new applications for a portfolio of exploration licences that are prospective
for a range of precious and base metals as well as lithium. The Company is
focused on advancing this portfolio, further testing a number of the high
priority targets and reviewing strategic opportunities in the region.

 

 Vardar Shareholder            Number of new Beowulf shares to be issued

 (post consolidation of VGK)
 Luke Bryan                    16,206,387
 Adam Wooldridge               16,206,387
 Ismet Krasniqi                6,190,080
 Other                         13,723,907
 Total                         52,326,761

 

 

Operational Update

 

The original Mitrovica, Viti North and Viti East licences expired on 24
January 2024 in accordance with their terms. Following dialogue with the
Independent Commission for Mines and Minerals ("ICMM") in Kosovo,

applications for new licences were submitted and formal conformation of
receipt was provided by the ICMM 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. With
the licence applications formally lodged with ICMM, no other party may apply
for licences over the same area. The Company is confident that the licences
will be granted by ICMM in due course and will update the market accordingly.
As these applications are for new licences, 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 per
cent on each occasion.

 

Following the 2023 field season, the Company has received initial assay
results from the independent and certified laboratory, ALS Life Sciences, from
a number of sampling programmes. In the Shala East prospect, systematic
mapping and soil geochemical and rock-chip sampling was undertaken during the
second half of 2023 focusing on three primary target areas. Target 1 in the
north of the Shala East licence returned assay results including 3.21 g/t Au,
3.84 g/t Au and 73.8 g/t Ag over a 1km-by-1km area. Further south in Target 2,
grab samples assayed up to 5.5% Zn and 5.4% Pb with anomalous silver grades.
The southernmost Target 3 returned results including 117 g/t Ag. Further
results are expected and will be incorporated with the Company's soil
geochemical results and mapping.

 

 

 

In the Viti North licence, water samples were collected from springs and
assayed by ALS. One of the samples returned highly anomalous lithium grades of
1,260 μg/l and boron grades of 10,500 μg/l. The sample was collected from a
spring located in the centre of the Viti North licence, an area that is
believed to be a basinal margin structure with lacustrine sediments that have
the potential to host lithium-boron mineralisation, which is the geological
setting of Rio Tinto's lithium-boron Jadar deposit in Serbia. Further spring
water sampling will be undertaken in the area and a gravity survey will be
considered to better define the basin margin.

 

Related Party Transaction

 

Each of Luke Bryan, Adam Wooldridge and Ismet Krasniqi, as directors of
subsidiaries of the Company, are classified as Related Parties of the Company
in accordance with the AIM Rules for Companies. The Related Party Share
Issuance therefore represents a related-party transaction for the purposes of
Rule 13 of the AIM Rules for Companies. The directors of Beowulf independent
of the Related Party Share Issuance being the full board, consider, having
consulted with SP Angel Corporate Finance LLP, the Company's nominated
adviser, that the Related Party Share Issuance is fair and reasonable in so
far as Beowulf's shareholders are concerned.

 

 

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

 

 

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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