The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation ("MAR") (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.

22 August 2022

Beowulf Mining plc

("Beowulf" or the "Company")

Exploration Drilling in Kosovo Discovers Large Polymetallic Epithermal System

Beowulf (AIM: BEM; Spotlight: BEO), the mineral exploration and development company, is pleased to announce the first exploration results from the Majdan Peak ("MP") prospect, within the Mitrovica licence, in Kosovo and the discovery of a large polymetallic epithermal system.  Polymetallic epithermal deposits (copper, gold and lead-zinc) form at shallow depths within the earth's crust and are important sources of base and precious metals and therefore constitute highly desirable exploration targets.

Highlights:

·    11 widely spaced diamond drillholes covering an area 1,400 metres by 700 metres ("m").

·    All drillholes intersected abundant sulphides, intense alteration, and multiple generations of veining which are all factors indicative of a large polymetallic epithermal system.

·    In particular, drillhole MP0006, which produced highly anomalous gold-copper-silver intersections is extremely encouraging and is interpreted by the Vardar Minerals ("Vardar") team to be on the periphery of potential feeder structure(s), providing the source of the abundant metals being found.

·    Significant gold-copper-silver, lead-zinc-silver and gold intersections include:

o  Drillhole MP006 (Figure 2): 10.8m at 0.48 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 & 50 g/t Ag;

o  Drillhole MP006 (Figure 2): 6.8m at 4.1 per cent lead ("Pb"), 0.6 per cent zinc ("Zn") and 15 g/t Ag; and

o  Drillhole MP013 (Figure 5): 16.1m at 0.21 g/t Au.

·    The above supports the belief in the potential for epithermal mineralisation of economic grades to be present.

·    Mineralisation is similar to that seen at the Chelopech copper-gold deposit in Bulgaria, owned by Dundee Precious Metals (https://www.dundeeprecious.com/). The orebodies at Chelopech range from 40-200 metres in length, are 20-130 metres in thickness and can extend for up to 400 metres down plunge.  Based on the similarities in the style of mineralisation at Majdan Peak, the Vardar team considers Chelopech to be a potential analogue deposit formed in this geological environment (Chelopech copper-gold deposit: Proven and Probable ore reserves of 1.6 million ounces of gold and 336 million pounds of copper).

Beowulf's Investment in Vardar

Since Beowulf's first investment in Vardar in November 2018, the Company has now committed approximately £3.1 million and owns 59.5 per cent of Vardar. Vardar gives Beowulf exposure to the highly prospective exploration potential of the Tethyan Belt, a major orogenic metallogenic province for gold and base metals. 

Throughout the last four years, the Vardar team has delivered exciting results for both the Mitrovica licence which has several exploration targets, including lead, zinc, copper and gold, and also the Viti licence which is showing potential for copper-gold porphyry mineralisation and lithium. With Beowulf's support, Vardar is focused on making a discovery and these latest results for Majdan Peak are another step forwards to achieving that goal. 

The world-class Stan-Terg deposit is a neighbour to Vardar's Mitrovica licence (63 million tonnes at 3.5 per cent lead, 2.3 per cent zinc and 80 grammes per tonne ("g/t") silver - based on past production and estimated remaining reserves at the same grade).

Looking to the future, Beowulf has several options as it continues to develop Vardar, which include further investments by Beowulf, or in the event of a discovery the introduction of third-party investors or, if the right exploration package is created and supports a standalone business, then the possibility of spinning-out Vardar. Beowulf is keeping these options under review.  

Kurt Budge, Chief Executive Officer of Beowulf, commented:

"These results represent a fantastic start to our exploration drilling on Majdan Peak, having discovered the presence of a large polymetallic epithermal system.

"To be drawing an analogue comparison with the Chelopech copper-gold deposit in Bulgaria, on the basis of the evidence being presented, and the potential for epithermal mineralisation of economic grades to be present at Majdan Peak, is a massive step forward.

"We made the right call in 2018 to invest in Vardar, backing a credible exploration team with in-country presence, and adding diversification to Beowulf's portfolio and the opportunity to create additional value for both the Company and our shareholders.

"Sincere congratulations to the Vardar team in Kosovo. Their strong efforts ensured that the drilling programme was completed on time and under budget, despite very difficult conditions.

"Over the next few weeks, we will complete our analysis of all drilling data, but there's a real prospect that we can get back on the ground in Kosovo and complete a second round of drilling before winter arrives. These very promising results show that Vardar has great potential.

Adam Wooldridge, Director of Vardar Minerals, who led the exploration programme, commented:

"We're delighted with the results from the first drilling into Majdan Peak, which has confirmed the presence of a large polymetallic epithermal system.

"While it was initially thought to be purely a gold target, it is now clearly a large multi-phase polymetallic prospect. The fact that every drillhole into the 1,400 metres by 700 metres area at Majdan Peak intersected significant sulphide mineralisation, is testament to the scale and volume of metals in this extensive system, and it should be remembered that the world-class Stan Terg deposit is located only one kilometre to the southeast.

"So far, the intersections drilled are typical of the peripheral zones of a large epithermal system, which would be controlled by higher-grade feeder structures and potential economic mineralisation. This provides us with clear targets for the next phase of drilling."

Majdan Peak ("MP") - Additional Technical Information

The MP prospect is located in the central portion of the Mitrovica licence area, defined by a zone of intense argillic alteration capped by an extensive blanket of advanced argillic alteration which forms the ridge tops. Exceptional gold and base metal soil and rock sampling results are associated with the 1,400 metres by 700 metres MP prospect. A full 3D Induced Polarisation and Resistivity (IP/DC) survey delineated prominent high-chargeability anomalies within the prospect, which provided the first set of drill targets for the 2022 programme. A locality map illustrating the 2022 drill collar locations and extent of the alteration system is provided in Figure 1.

A total of 11 diamond core holes, totalling 2,497 metres, were drilled into MP between April and July of 2022. All drillholes intersected intense argillic alteration with zones of advanced argillic alteration. Abundant pyrite (often in excess of 10 per cent by volume), typical of large-scale epithermal systems, provides the causative source for the prominent IP anomalies.

All drill core was cut along the orientation line before selecting half-core samples for analysis. Samples were prepared and analysed at ALS Laboratories along with appropriate reference material and duplicates using multi-element ICP-MS, gold fire assay and SWIR spectrometry.

Drilling Results

Drillholes were targeted using a combination of IP anomalies, soil sampling and outcrop mapping to test a variety of possible target types and to assist with navigation through the larger hydrothermal system. Based on drill results, alteration and intersected base and precious metal concentrations appear to follow steeply dipping structures which splay out along more porous, mainly volcaniclastic host rocks forming a layer cake of intense and advanced argillic alteration zones. Mineralisation is likely to relate to multiple episodes of hydrothermal activity with distinct assemblages of gold, gold-silver-copper-antimony, lead-zinc-silver and zinc. This finding, together with clay mineralogy and alteration mapping, provides a vector to higher-temperature portions of the system. According to classic epithermal models, the gold-silver-copper-antimony mineralisation is likely to occur within, and in proximity to, hydrothermal breccias related to feeder structures. The latter are the main targets for follow-up drilling. Given the size and complexity of the system, it is expected that several polymetallic targets will be identified rather than a simple gold target as initially envisaged.

Drill results have already defined the first significant polymetallic target (MP-T1) which was intersected in drillholes MP006 and MP009 (Figure 2). The target follows a distinct WNW trend evidenced in geophysical and soil sampling datasets. Mineralisation in this target includes several distinct phases, such as a gold-copper-silver-antimony and a lead-zinc-silver phase. In both intersections, mineralisation is largely stratabound, likely reflecting the dispersion of metal-rich fluids from a proximal feeder structure into the surrounding intensely altered host rock. The mineralisation intersected in MP006 is typical of what can be expected on the margins of a high-grade feeder zone which is further supported by resistivity data (Figure 3). For comparison, a section illustrating the metal distribution at the Chelopech deposits is shown in Figure 4. Note the limited spatial extent of the copper-gold-antimony mineralisation providing support for the proximal (with respect to the feeder zone) location of the intersection in drillhole MP006.

In addition to gold-copper-silver anomalies, drilling has intersected numerous shallow zones of gold mineralisation (Figure 4) associated with advanced argillic alteration. These zones may represent leakage into the upper portion of the mineralising system on the periphery of proximal higher-grade feeder structures, the existence of which is interpolated from anomalous grades in rock grab samples assays (with values of up to 14 g/t Au). Using SWIR results, the advanced argillic zones with gold intersections typically have a kaolinite-dickite-alunite signature, indicative of being proximal to the target vuggy-quartz facies rather than higher in the system. The quartz-alunite facies intersected in MP013 is considered particularly close to vuggy zones where high-grade gold is anticipated.

Follow-up drilling will initially focus on intersecting thicker and/or higher-grade extensions to gold-copper-silver mineralisation intersected in drillhole MP006.

Tables of significant intersections

https://beowulfmining.com/wp-content/uploads/2022/08/BEM_Figure1.jpg

Figure 1. Locality map illustrating the extent of the alteration system (grey) from field mapping with high-chargeability IP anomalies overlain (pink). Drill collars are illustrated as green circles. An example of the scale of a 2 Mt gold deposit (yellow) has been illustrated for comparison purposes only. Ideally the epithermal system would host several of these deposits in proximity to feeder structures. Note the position of the Stan Terg skarn/carbonate-replacement deposits on the periphery of the system. The current announcement discusses results from Majdan Peak highlighted as the area of interest.

https://beowulfmining.com/wp-content/uploads/2022/08/BEM_Figure2.jpg

Figure 2. Plan (top) and oblique 3D view (bottom) illustrating intersections into the MP-T1 target.

https://beowulfmining.com/wp-content/uploads/2022/08/BEM_Figure3.jpg

Figure 3. Section through drill holes MP006, MP007 and MP008. Profile plots of gold (yellow), copper (green), silver (light blue), lead (dark blue) and zinc (grey-blue). Resistivity data from 3D survey with interpreted bounding feeder structure and target model illustrated.

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Figure 4. Geological target model for the Chelopech deposit^[1].

Note the limited extent of the copper-gold-antimony mineralisation and association with underlying lead-zinc-manganese. MP006 is likely very close to target.

https://beowulfmining.com/wp-content/uploads/2022/08/BEM_Figure5.jpg

Figure 5. Plan (top) and oblique 3D view (bottom) illustrating intersections into shallow gold mineralisation associated with advanced argillic zones.

Glossary

g/t - grammes per tonne

Hydrothermal Alteration - also referred to as wallrock alteration, is a general term that encompasses many processes by which rock-forming minerals are altered due to reactions accompanying the flow of heated aqueous fluids along fractures and grain boundaries.

Induced Polarisation (IP) - Variations in chargeability can be diagnostic, for example, when aiming to characterise a mineral deposit, where the chargeability of the mineralised zone is often higher than the host rock. Often an Induced Polarisation (IP) experiment is performed with the Direct Current Resistivity (DCR) hence they are often called IP-DC survey. Both conductivity and chargeability distribution can be recovered from an IP-DC survey.

Inductively coupled plasma mass spectrometry (ICP-MS) is a type of mass spectrometry that uses an inductively coupled plasma to ionize a sample.

Shortwave infrared (SWIR) spectroscopy is a non-destructive and rapid technique used to identify alteration minerals and approximate their composition, detecting minerals such as phyllosilicates, clays, carbonates, and selected sulphates. 

Qualified Person Review

The information in this announcement has been reviewed by Mr. Chris Davies, a Qualified Person ("QP"), who is a Fellow of the Australasian Institute of Mining and Metallurgy.  Mr. Davies has conducted a desktop review of source documents and data which underpin the technical statements disclosed herein and approves the disclosure of technical information in the form and context in which it appears in this announcement, in his capacity as a QP as required under the AIM rules.  Mr. Davies has visited Vardar's Mitrovica and Viti projects in Kosovo.

Mr. Davies has sufficient experience, that is relevant to the content of this announcement, to qualify as a Competent Person ("CP") as defined in the 2012 Edition of the "Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves".

Mr. Davies BSc (Hons) Geology, MSc DIC Mineral Exploration, FAusIMM, is a Non-executive Director of Beowulf and is an exploration/economic geologist with more than 35 years' experience in the mining sector.

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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.