Beowulf Mining, the mineral exploration and development company focused on its Kallak iron ore project in Sweden, announced today the acquisition of Oy Fennoscndian Resources AB (Fennoscandian), a privately owned graphite exploration company with projects in Finland. Beowulf will acquire 100% of the share capital of Fennoscandian for consideration of 2.55M ordinary shares of Beowulf with an initial payment of 2.1M shares and a deferred payment of 0.45M shares. In addition, two equal tranches of shares will be issued on achievement of certain performance milestones. The total number of shares issued, should all performance milestones be met, will be 6.75M shares. In return, Beowulf has acquired four early stage exploration projects located in Finland: Viistola, Haapamaki, Piipuaki and Kolari all of which have been explored historically. During 2016, Beowulf will be ranking the projects and prioritising exploration funds with the goal of generating a maiden resource estimate. The Company will also be working with its partners FennoFlake, a collaborative group representing the entire graphite value chain, to generate sample material from each project for testwork and assessment work against applications in potential end-markets.
Beaufort Securities view: We are encouraged with the above acquisition and the potential for high grade graphite mineralisation, while a positive decision on the Exploitation Concession for Kallak iron ore project in northern Sweden is pending. Given the continued pressure on benchmark iron ore prices on the back of continued oversupply and slowing economic activity in China we view Beowulf’s acquisition as an strategic diversification within a well-establish mining jurisdiction. We look forward to continued updates as the Company develops its newly acquired graphite portfolio. As such, we reiterate a Speculative Buy on the stock.
Beaufort Securities acts as corporate broker to Beowulf Mining plc
