Kallak Iron Ore Update

RNS Number : 3071F

Beowulf Mining PLC

21 April 2011

 



21 April 2011

Beowulf Mining Plc

("Beowulf" or the "Company")

Update re Kallak Iron Ore Project

Recent drillholes completed on Kallak South further confirm the substantial

width and depth of the deposit

Commencement of Environmental Impact Study on the Kallak deposits and commissioning of an updated and expanded conceptual study

Highlights:

·      Of the total planned Kallak South programme of 3,500 metres, 1,850 metres of drilling has been 
completed to date. Drill programme remains on course for completion by the end of Q2 2011 following which a further planned 1,500 metres drilling campaign will commence at Kallak North.

·      Recently completed drillhole sections are located more than 1,000 metres south of the formerly drilled sections thereby confirming the substantial N-S extension and E-W width of the Kallak South deposit, which from detailed ground magnetic data is indicated to extend over 2,400 metres in length in a N-S direction with a maximum width of 400 metres in its central zone.

·      Drilling results for the central part of Kallak South further confirm the presence of wide sections 
of high grade magnetite iron mineralisation of a similar type and quality to that encountered in the Company's Kallak North deposit. Magnetite mineralisation is confirmed to be up to 400 metres wide and extending from surface to more than 180 metres depth.

·      Assay results for the 7 recently completed drillholes are expected to be received in May 2011. Ongoing drilling at E-W extending sections in the central part of deposit, are testing indicated mineralisation at depths of up to 250 metres.

·      Results of ongoing bench scale metallurgical tests, including DTR (Davis Tube Recovery) tests, on ore grade material from Kallak South being conducted by MINPRO AB are expected in late Q2 2011. 

·      Raw Materials Group (RMG) in Stockholm commissioned to update its 2010 conceptual study on the Company's iron ore assets and expand it to include Kallak South. Report anticipated to be completed in Q3 2011.

·      Swedish consulting company, Hifab AB, in Luleå appointed to complete all of the reports 
required to achieve the transfer of the Company's existing exploration permit for the Kallak project area into an exploitation (mining) licence which, inter alia, will involve the preparation by Hifab of an Environmental Impact Study (EIS).

·      The Company has now registered a wholly owned subsidiary, Beowulf Mining AB, in Stockholm to facilitate the process of securing an exploitation concession for Kallak and the other formalities required by Swedish law.

Clive Sinclair-Poulton, Executive Chairman of Beowulf, commented:

"We are delighted to report that more than half of our Kallak South drilling programme has now been completed with drilling remaining on schedule for completion by the end of this quarter. We look forward to receiving the next set of assay results in May and announcing the findings of RMG's updated and expanded conceptual study later this year."

Beowulf (AIM: BEM; Aktietorget: BEO), the AIM and Aktietorget traded mineral exploration company which owns several exploration projects in Sweden, is pleased to announce that 1,850 metres of its total planned 3,500 metres drilling programme on its Kallak South deposit has now been completed. The Company successfully completed a similar programme to outline its Kallak North deposit in August 2010 and, together, the two deposits form its Kallak Iron Ore Project.

The Kallak South drill programme comprises a total of 32 holes to be drilled in a grid pattern of twelve drill profiles in an E-W direction at 200 metres spacing covering the N-S extension of the deposit as noted from ground magnetic data. Drilling commenced in late 2010, but was temporarily disrupted by unexpected severe winter weather conditions. Drilling is now progressing on schedule with the programme expected to be completed by the end of Q2 2011.

The drillholes completed to date have tested approximately 1,500 metres of the extension of the Kallak South deposit, which from detailed ground magnetic data is indicated to extend in a N-S direction over 2,400 metres in length with a maximum width of 400 metres in its central zone. Assay results for the seven recently completed drillholes are expected to be received in May 2011. Based on the initial drilling results and measured size of the detailed ground magnetic anomaly, the deposit is estimated to contain more than 400 million tonnes of iron ore.

The ongoing drilling programme is currently being carried out on planned E-W extending drill sections which cross cut the central zone of the deposit approximately 1,000 metres south of the formerly drilled sections of the deposit. Initial drill results for these sections confirm the presence of high grade iron mineralisation over significant widths of up to 400 metres. To date, the vertical depth of the Kallak South iron mineralisation has been confirmed to 180 metres, but the ongoing programme will test to depths of up to 250 metres.

Bench scale metallurgical tests, including DTR (Davis Tube Recovery) tests on ore grade material from Kallak South are currently being conducted by MINPRO AB's research laboratory at Stråssa, Central Sweden in order to further assess the quality of the iron ore. The metallurgical tests are being carried out on selected large samples of ore grade drill core sections of the deposit and will be directed towards the production of a high grade magnetite pellet feed product similar to that obtained from the Kallak North deposit. Test results are currently expected to be received in late Q2 2011.

Both the Kallak North and the Kallak South iron ore deposits are located in close proximity to each other, being separated by only some few hundred metres on strike,within the same highly altered, Proterozoic volcanic bedrock structure. As such, the deposits are interpreted to possibly be geologically connected at greater depth to form one very large iron ore resource of more than 600 million tonnes with a total extension of more than four kilometres.

Significant additional tonnages of iron ore are anticipated from planned future drilling at Kallak North as its total N-S extension is not currently defined. High grade drill core intercepts, both at the northern and southern ends of the Kallak North deposit, have shown that the iron mineralisation extends well beyond the present drill confirmed extension area. A further 1,500 metres drilling programme will commence on Kallak North following the completion of the current Kallak South campaign.

The Company has recently commissioned Raw Materials Group (RMG) in Stockholm to update its 2010 conceptual study on the Company's Ruoutevare and Kallak North iron ore assets and expand it to include Kallak South. This new study is expected to be completed in Q3 2011 as we progress our work towards a Bankable Feasibility Study and test mining which is currently anticipated to commence in early 2012.

In addition, the Swedish consulting company, Hifab AB, in Luleå has been selected and appointed to complete all of the reports required for the formal application to achieve the transfer of the Company's existing exploration permit for the Kallak project area into an exploitation (mining) licence which, inter alia, will involve the preparation by Hifab of an Environmental Impact Study (EIS). In connection with this work, meetings are presently being held with the principal municipial authorities of Jokkmokk and locally affected organisations to enable the Company to outline its future plans for the Kallak project area.

The Company has now registered a wholly owned subsidiary, Beowulf Mining AB, in Stockholm to facilitate the process of securing an exploitation concession for Kallak and the other formalities required by Swedish law.

Upon completion and submission of an EIS and a Technical Report, and subject to the approval of such reports, it is anticipated that the Mines Inspector will, in due course, grant an exploitation licence and the requisite regulatory approvals, thereby enabling the Company to commence pilot mining surveys and collect large scale samples from the Kallak deposits for mining and further metallurgical tests. It is expected that a large quantity of high quality pellet feed material can then be produced for delivery as test material to potential steel customers.

Dr Jan Ola Larsson (Fil. Kand, PhD, DIC), has reviewed and approved the technical information contained within this announcement in his capacity as a qualified person, as required under the AIM rules. Dr Larsson is Technical Director of the Company and has over 30 years relevant experience within the natural resources sector.

Enquiries:

Beowulf Mining Plc
Clive Sinclair-Poulton, Chairman	Tel: [phone]
Strand Hanson Limited
Matthew Chandler / Simon Raggett	Tel: [phone]
Alexander David Securities Limited
David Scott / Nick Bealer	Tel: [phone]
Lothbury Financial Services Limited
Gary Middleton / Michael Padley	Tel: [phone]
or visit http://www.beowulfmining.net

 

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