2 December 2021

Beowulf Mining plc

("Beowulf" or the "Company")

Letter to Minister of Enterprise and Innovation

Beowulf (AIM: BEM; Spotlight: BEO), the mineral exploration and development company, has sent a letter from its CEO, Kurt Budge, to Sweden's Minister of Enterprise and Innovation, Karl-Petter Thorwaldsson, following positive comments by the new Swedish Prime Minister about the need for more mines in Sweden and Minister Thorwaldsson about 'taking action' in the matter of Kallak. 

The letter is reproduced below:

CEO's letter to the Minister of Enterprise and Innovation:

London 2021.12.01

Statsrådet Mr. Thorwaldsson

Näringsdepartementet

Minister,

Jokkmokk Iron Mines AB, Kallak nr 1, Jokkmokks kommun, Norrbottens län - Application for an Exploitation Concession

May I congratulate you on your appointment as Minister of Enterprise and Innovation and thank you for the immediate attention that you have given to the Kallak case.

The recent political changes in the composition of the Government and the public statements by you and the Prime Minister have caused excitement amongst Beowulf shareholders.

Beowulf is a public company listed in Stockholm since 2008 and is over 73 per cent owned by Nordic investors. The balance of ownership and trading in the Company's shares takes place in London.

If a decision is made, I request that the Company is notified when markets are closed, such that we can prepare an announcement and ensure all market participants are in possession of the full facts when trading resumes.

The first exploration licence at Kallak was granted in 2006 and the Company's 100 per cent owned subsidiary, Jokkmokk Iron Mines, has been permitted to invest over SEK 80 million and define iron ore mineralisation of approximately 389 million tonnes. This tonnage includes Kallak North, for which we submitted an application for an Exploitation Concession in 2013, Kallak South and our Parkijaure exploration licences. This year, we have also been awarded an additional exploration licence near Kallak, Agåsjiegge nr 3, which the Geological Survey of Sweden ("SGU") estimates contains 75 million tonnes of magnetite iron ore mineralisation.

Your predecessor Mr Baylan often spoke of the complexity of the Kallak case. It is the handling of the case that has exacerbated perceived complexity, in no small part the inconsistent role played by Länsstyrelsen Norrbotten.  All the evidence in Sweden is that industrial activity and reindeer herding coexist. This includes the mining sector, where despite differences, agreements are made and all stakeholders benefit.

Since I joined Beowulf in late 2014, the Company has addressed all outstanding issues and been as proactive as we can be in demonstrating that our application is good and that we have done all required to get the Concession. Otherwise, what is the point of Bergsstaten, part of SGU a Government Office, in October 2015, recommending to the Government that the Concession be awarded for Kallak and continuing to issue the Company with exploration licences. 

If now, after 15 years of investment, defining a significant iron ore resource, from which a market-leading iron concentrate can be produced, which can ensure the integrity of a developing fossil-free supply chain for steelmaking in Norrbotten, and creating a business opportunity that can positively transform a rural community, that approval is not given, then this would be a damning message to send to investors.

Mr Baylan presented in March 2020 at the Mining Nordic Day in Toronto; at which event he saved his biggest welcome for investors. I reminded him that Beowulf has been invested in Sweden and working on Kallak since 2006.  He said that I was welcome to do business in Sweden.

It continues to be the case, that Beowulf is unable to do business in Sweden, because we cannot get a decision on Kallak and play our part in the Country's sustainable mining future.

Your predecessors have made many false promises. Mr Baylan said that a decision on Kallak would be made once UNESCO comments are received, and now that is the case, he has left you to decide.

In September 2017, Mr Damberg said that Swedish law is enough for testing the Kallak application and that the permitting process should be "by the book". 

With the Concluding Statement, submitted to the Government by the Company's lawyers in November 2019, we robustly demonstrated that under judicial review the Company's application would satisfy all requirements for being granted a Concession. Only for that Statement to be met by silence and inaction on the part of the Government.

It is more than 2 years since Mr Baylan wrote to me, in September 2019, explaining that my request for a meeting at that time "concerns a forthcoming Government decision - a dossier that is currently under preparation" and for those reasons the Government was unable to meet or comment with regard to its "ongoing review".

It is over a year since The Constitutional Committee ("KU"), in its review of the Government's handling of the Company's application for an Exploitation Concession for Kallak, made the following statement (translation):

"KU has examined the application for a processing concession for Kallak. In the Government case, no visible administrative measures were implemented for almost three years. This means a delay that is not acceptable, according to KU.

It also appears that the applicant has on several occasions asked the Ministry of Trade and Industry for a meeting. The Ministry has then stated that this is not possible because the issue concerns a forthcoming Government decision and is a matter under consideration.

KU notes that the Ministry management's statement does not seem to be in line with what the Prime Minister has stated. The Government Offices thus seem to lack a common approach to the possibility for parties in administrative matters to have a meeting with the responsible ministry."

Fossil-free steel making in Sweden is in the ascendency.  Yet when it comes to permitting, there is no visible understanding exhibited by authorities or the Government that steel plants need sustainably produced high quality iron ore, like Kallak's market-leading 71.5 per cent magnetite iron concentrate, and that competitive sources of supply, alternatives to the state iron ore company LKAB, are positive dynamics for developers and investors.

Jokkmokk desperately needs investment and jobs. Kallak will bring billions of SEK in investment and hundreds of jobs to the municipality that will keep people employed and support families for decades.

The application you have on your desk is for Kallak North.  Yet the Company has continued to invest, explore and assess the potential in the Kallak area, and our licences indicate iron ore mineralisation that could support mining for 30-40 years. More than doubling the current estimated life of Kallak North.

As with Kiruna or Aitik, the full potential of any mining development is not presented with the first application. Mines last longer than first envisaged, workers hold jobs for longer, taxes get paid for longer, municipalities like Jokkmokk recover and thrive, and minerals and metals get produced under the right conditions.

Investors in capital projects across sectors need to see transparency and predictability in permitting processes, which the Government has spoken of and which define competitive jurisdictions, yet no action has been taken to effect any change.

I appreciate you will be a busy man and most likely unavailable for a meeting, but please do not hesitate to contact me if you have any questions regarding the Kallak case.

Yours sincerely,

Kurt Budge

Chief Executive Officer, Beowulf Mining plc

Director, Jokkmokk Iron Mines AB

Copies:

Sven Otto Littorin, Chairman, Beowulf Mining plc

Christopher Davies, Non-executive Director, Beowulf Mining plc

Enquiries:

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.

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.

Beowulf's purpose to be a responsible and innovative company that creates value for our shareholders, wider society and the environment, through sustainably producing critical raw materials, which includes iron ore, graphite and base metals, needed for the transition to a Green Economy and to address the Climate Emergency.

The Company's asset portfolio is diversified by commodity, geography and the development stage of its various projects.

The Company's most advanced project is the Kallak iron ore asset in northern Sweden from which testwork has produced a 'market leading' concentrate of 71.5% iron content.  Across the Company's exploration licences, 389 million tonnes of iron ore mineralisation has been estimated, which represents a potential source of supply for fossil-free steel production in Norrbotten for decades to come.

Grafintec (previously Fennoscandian Resources), a wholly-owned subsidiary, through its Memorandum of Understanding ("MoU") with Epsilon Advance Materials Limited ("EAMPL") is enhancing its position within the Finnish battery ecosystem, collaborating with a strong and innovative technology/processing partner, with plans to develop an anode materials plant in Finland to supply the growing lithium-ion battery sector.

In Kosovo, the Company owns approximately 49.4% 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. With Beowulf's support, Vardar is focused on making a discovery.

Kallak is the foundation asset of the Company, but with Vardar and Grafintec, the Company has many opportunities to grow, each business area displaying strong prospects.