REG - Beowulf Mining PLC - PFS results support GAMP development in GigaVaasa

Beowulf MiningAnnouncement

20/07/2023 07:00

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RNS Number : 5848G  Beowulf Mining PLC  20 July 2023

20 July 2023

Beowulf Mining Plc

 

("Beowulf" or the "Company")

 

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.

 

Preliminary economic results support the development of the Graphite Anode
Materials Plant in the GigaVaasa area

 

Beowulf (AIM: BEM; Spotlight: BEO), is pleased to announce that its wholly
owned Finnish subsidiary Grafintec Oy ("Grafintec") has completed the first
stage of the process design, including a preliminary review of the economics,
as part of the Pre Feasibility Study ("PFS") for a Graphite Anode Materials
Plant ("GAMP")  located in the GigaVaasa area, in the municipality of
Korsholm on the west coast of Finland. The study, prepared by the engineering
consultancy RB Plant Construction Ltd ("RB Plant"), is based on an industrial
plant with a total production capacity of 20,000 tonnes per annum ("tpa") of
Coated Spherical Graphite ("CSPG").

 

Highlights

 

·    The initial results of the study confirm the technical and financial
feasibility of the GAMP, including robust preliminary economics as follows:

o  Post-tax NPV(8) of US$242 million (Pre-tax NPV(8) of US$313 million)

o  Post-tax IRR of 39% (Pre-tax IRR of 45%)

o  Payback period of 2.4 years from commencement of operation

o  Plant capacity of 20,000tpa

o  Initial operating period of 10 years with the potential to be longer

o  Realised price for CSPG of US$9,000 per tonne

o  Initial capital expenditure of US$117 million

o  Annual EBITDA of US$79m

 

 

The study confirms that the GAMP is technically and financially feasible and
supports the progress of the project to the next stage of development,
including coating testwork at laboratory and pilot plant scale in combination
with optimisation of the process design. Further studies also include, but are
not limited to, equipment selection, continued discussions and cooperation
with technology partners, raw-material sourcing, engagement and
pre-qualification testing with battery cell manufacturers.

 

Rasmus Blomqvist, Managing Director of Grafintec, commented:

"I am very pleased with the positive financial and technical outcomes of the
study which highlights the good progress made by the team over the past year.
We now progress to the next steps of the project, having secured the extension
to the advance reservation for Plot 1, Block 3017 in the GigaVaasa area,
appointed AFRY Finland Oy to undertake the Environmental Impact Assessment,
and completed this first important phase of the PFS for the GAMP."

 

Beowulf's Chairman, Johan Röstin, commented:

 "An important milestone has been achieved by our Finnish subsidiary,
Grafintec, in its journey to establish itself as one of Europe's first
producers of graphite anode materials for the fast-developing European battery
market.

 

"I look forward to updating the market on further progress over the coming
months."

 

 

PFS First Stage Process Design

 

The aim of the PFS is to investigate the technical feasibility of the GAMP in
the GigaVaasa area, initially designed to import spherical graphite ("SPG")
from third parties and coat the material to produce CSPG (see Figure 1 for
Process Flow Diagram).  Grafintec has identified the coating stage as the
most value adding step of the graphite anode materials value-chain and has
therefore formed a strategy in the short-term to focus on this part of the
value-chain which brings most value to the business. The longer-term strategy
is to incorporate a fully integrated value-chain from mine to CSPG production,
securing a long-term sustainable supply of raw-materials from domestic sources
including Grafintec's existing graphite resources.

 

Figure 1: Process Flow Diagram

 

 

Review of Preliminary Economics

 

In addition to the first stage process design, RB Plant undertook a review of
preliminary economics of the GAMP to assess the economic viability of the
plant. Based on a conservative economic approach, the review shows extremely
positive economics for the GAMP. The review also identified areas of
sensitivity, especially the price of the CSPG that has the potential to
significantly improve the economics.

 

Further coating testwork at laboratory and pilot plant scale, in combination
with optimisation of the process design, is now under planning.

 

The key-project metrics shown in Table 1 has been estimated from benchmark
information from similar projects and analysts.

 

Table 1: Key Financial Metrics

* Production costs estimates are currently to +/- 50% accuracy but will be
refined during the Front End Engineering Design ("FEED") studies.

 

Economic Sensitivity

 

The economic sensitivity to NPV and IRR has been tested, and reflects how
changes in sales prices ("revenue"), Operational Costs ("OPEX") and Capital
Costs ("CAPEX") affects these economic parameters. The sensitivity analysis
shows that the project is most sensitive to the sales prices of the CSPG
(Figure 2).

 

 

 

 

 

Figure 2: NPV and IRR Sensitivity Analysis

 

In addition, it is anticipated that the plant will continue to operate well
beyond the currently modelled 10 years. If the operation continues for 15
years, the projected cash flows will generate a Post-tax NPV(8) of US$341.9
million and Post-tax IRR of 40.1%.

 

 

Cautionary Statement Regarding Forward-Looking Statements

This RNS contains forward-looking statements. Forward-looking statements are
subject to risks, uncertainties and assumptions. Forward looking statements
include, among other things, statements concerning the construction and
operation of the GAMP production facility and the costs and sales associated
with them. The Company cautions that there are certain factors that could
cause actual results to differ materially from the forward-looking information
that has been provided. The reader is cautioned not to put undue reliance on
this forward-looking information, which is not a guarantee of future
performance and is subject to a number of uncertainties and other factors,
many of which are outside the control of the Company; accordingly, there can
be no assurance that such suggested results will be realized.

 

The Company's ability to successfully construct and operate a commercial-scale
plant capable of producing CSPG in quantities consistent with the GAMP`s
business plan is subject to (a) the Company's ability to raise additional
capital in the future including the ability to utilize existing financing
facilities; (b) spot price and long-term contract price of CSPG; (c) risks
associated with our operations and the operations of our partners; (d)
government regulation of the graphite and energy storage battery industry; (e)
world-wide graphite and anode materials supply and demand, including the
supply and demand for energy storage  batteries; (f) regulatory and legal or
other problems the Company may encounter in the jurisdictions where the
Company operates or intends to operate, including but not limited to Finland;
(g) the ability of the Company to enter into and successfully close
acquisitions or other material transactions.

 

 

 

Enquiries:

 Beowulf Mining plc
 Johan Röstin, Chairman                     johan.rostin@beowulfmining.com (mailto:johan.rostin@beowulfmining.com)

 Grafintec Oy

 Rasmus Blomqvist, MD                       rasmus.blomqvist@grafintec.com
 SP Angel

 (Nominated Adviser & Broker)
 Ewan Leggat / Stuart Gledhill / Adam Cowl  Tel: +44 (0) 20 3470 0470
 BlytheRay
 Tim Blythe / Megan Ray                     Tel: +44 (0) 20 7138 3204

 

About Beowulf Mining plc

Beowulf Mining is a mining company with main activities in exploration and
development in Sweden, Finland and Kosovo. Beowulf's portfolio is diversified
by commodity, geography and stage of development of the projects. Development
consists primarily of iron ore, graphite, gold and other base metals. Beowulf
Mining was founded in 1988 and is headquartered in London, England.

 

 

 

 

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