Beowulf Mining PLC
24 October 2006
BEOWULF MINING PLC
Independent Conceptual Study on Ruoutevare Iron Titanium Deposit in Northern
Sweden
London, 24 October 2006. Beowulf Mining PLC (AIM : BEM) the AIM quoted resource
company with iron, titanium, gold and copper projects in Sweden, is pleased to
announce that Raw Materials Group (RMG) of Sweden has completed a conceptual
study of the Ruoutevare iron/titanium deposit. RMG suggest an extraction rate of
10 million tonnes per annum as an economic production rate, requiring further
cost analysis work to be undertaken on ore transportation.
RMG produced a simplified cash flow analysis for an eight year open pit
extracting 10 million tons per year. This produced a positive study with a cash
flow of just over US$50M per year from US$218 million per year of generated
revenues, using various assumptions. (Full report is on www.beowulfmining.com ).
Ruoutevare is 5 km outside the Sareks Nation Park, and careful attention to the
landscaping of the mine and associated facilities will be required. RMG suggest
this may cause a delay in permitting of the deposit.
The study used current forecasts of revenues, capital costs and operational
costs applied to a life of mine financial model.
The Ruoutevare deposit is located in northern Sweden in the county of
Norrbotten, and is approximately 8 km NW of the small village of Kvikkjokk. The
project is at an altitude of 610 meters above sea level and will require for
transport purposes a new 15 km road to be built from the site to Kvikkjokk. Here
it would link up with the existing 180 km road to Murjek and onward road
transport or product reloading for rail shipment to the Gulf of Bothnia sea port
of Lulea. The Swedish iron ore mining company LKAB is shipping out from Lulea
annually some 4 Mt of magnetite concentrates and pellets to steel plants in
Finland and Sweden.
The deposit was originally discovered in the 18th Century. It was assessed by
Sveriges Geologiska Undersonkning (SGU) in the early 1970s during which time
ground geophysics, metallurgical test work and detailed diamond drilling were
completed. SGU determined a resource for the deposit of 116 Mt grading 38% iron
and 5.6% titanium. This data was reviewed by Snowden Mining Industry Consultants
Limited (Snowden) in 2006 for Beowulf and they reported a slightly higher
tonnage and a slightly lower grade.
The mineralization occurs within outcropping shallowly dipping anorthosite as
several separate tabular bodies in an area approx 1500m long and 200-300m wide.
Snowden concluded that there are probably two lenses lying one above the other.
Detailed geological mapping by Beowulf also found two over lying mineralised
lenses. Snowden and Beowulf both conclude that there is reason to believe that
the resource estimates can be increased by additional drilling.
The metallurgical test work was completed by LKAB and Rautaruukki during 1973
and gives potential recoveries, using magnetic separation and flotation to
produce an iron ore concentrate and an ilmenite concentrate. The metallurgical
recoveries are outlined below:
Grade Recovery
Ore feed to process plant 38% iron 5.6% titanium
Magnetite concentrate 65%iron 65%
Ilmenite 44% titanium dioxide 45%
A price FOB for magnetite concentrate is estimated to be US$52 per tonne and the
price FOB for ilmenite is estimated to be US$36 per tonne.
The capital expenditure plus mine operation costs are not a major impact on what
would be an open pit mine and are estimated to be 15% over the total eight year
mine life. Estimated costs are however relatively high mainly due to the cost of
transport and port handling charges.
Commenting on the conceptual study, Dr. Jan Ola Larsson, Beowulf's Swedish
Manager, stated:
'Initial indications on the economics of Ruoutevare are positive, but we need to
address the transportation costs by negotiations with the State bodies in
Sweden. It is believed from geological studies that the tonnage of the
Ruoutevare reserves can be increased by additional drilling, thus extending the
mine life and reducing overall unit costs. Selective mining of the deposit can
also be achieved to increase cash flow in the early years of operation, as the
SGU suggests that there is a 20 million tonne section grading 47% iron and 11%
titanium oxide. Metallurgical testing work to improve the concentrate grade is
ongoing'.
For further information :-
Dr. Robert Young, Chairman
Beowulf Mining plc Tel: +44-(0)1353 649 701
Gavin Burnell
Ruegg & Co. Limited Tel: +44-(0)207 584 3663
Nick Bealer
King & Shaxson Tel: +44-(0)207 426 5986
Charles Dampney
City Capital Securities Limited Tel: +44-(0)207 822 7107
Gary Middleton
St Swithin's Public Relations Tel: +44 (0) 207 429 4391
This information is provided by RNS
The company news service from the London Stock Exchange