Molybdenum Exploration Licenc

RNS Number : 0238D

Beowulf Mining PLC

25 November 2009

 



Beowulf Mining Plc

("Beowulf" or the "Company")

Exploration licence granted in respect of the largest molybdenum deposit in Sweden

Highlights:

• New exploration licence area hosts Sweden´s largest molybdenum deposit

• Substantial potential indicated by historic drilling results

• Munka licence strengthens the Company's focus on the steel industry

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 it has recently been granted a new exploration licence by the Swedish Mining Registrar, in Bergsstaten, in respect of the Munka area.  The licence area, which covers 800 hectares, and hosts Sweden´s largest, drill confirmed deposit of molybdenum, is located in the Rappen geological district of the Arjeplog County in northern Sweden.  The Arctic Circle passes through the area.

The Munka licence has been granted for an initial period of three years to 3 November 2012 and thereafter can be renewed and extended for two further three year intervals (i.e. a total extension of six years), after which an application for a mining licence would need to be made. A nominal fee was paid by the Company on application to cover the initial three year licence period. 

The licence covers the Munka molybdenum deposit and surrounding ground.  The deposit, confirmed by historic drilling, extends over 800m in length with parallel mineralised lenses, of varying width in excess of 20m.  Based on these historic drilling results, the Geological Survey of Sweden (SGU) estimated resources for the Munka deposit up to 100m depth to be 1.7 million tonnes at 0.156% molybdenum (Mo).  This historic estimate does not comply with current JORC or 43-101 international standards.  At the estimated tonnage, the Munka deposit is the largest molybdenum deposit in Sweden, with the available data indicating that the deposit may be significantly larger.

Discoveries of several large size, high grade boulders containing more than 2% molybdenum immediately east of the drill tested mineralisation indicate the presence of, as yet, further undiscovered high grade molybdenum mineralisation located close to the present known extension.  The highest grade boulders (> 5% Mo) display a type of mineralisation, which has not yet been identified in drill cores. 

Mineralisation at Munka comprises disseminated molybdenite (molybdenum sulphide, MoS2) hosted mainly in aplitic dykes formed in contact zones between younger granite intrusives and gneissic supracrustal rocks of possibly sedimentary origin.  Fluorite (CaF2) is sometimes associated with the mineralised sections.

The deposit was discovered in the course of large scale exploration surveys for steel alloy metals in Arjeplog County carried out by the SGU.  Geochemical surveys followed by detailed boulder tracing and ground magnetic surveys, guided the initial discovery through drilling in 1973.  Between 1973 & 1977 a total of 67 holes were drilled for approximately 10,000 metres.  More than 75% of the drill holes penetrated mineralised sections of three metres in length or more with grades higher than 0.10% of molybdenum.  Grades of up to 2% of molybdenum over one metre- sections have been encountered in drill cores.

Beowulf has reviewed all of the available data on the Munka deposit registered at the SGU's offices at Malå.  Parts of this material have not previously been reviewed.  All drill cores presently stored at the SGU's offices are being rechecked with the analysis subject to Beowulf's control.  With additional control studies in the field and some further limited drilling, Beowulf anticipates being able to rapidly achieve a JORC compliant resource estimate.

Traditionally, molybdenum has mainly been used in the steel industry to produce high quality steel alloys.  Molybdenum has been shown to be a metal which can significantly enhance the quality of steel in a variety of applications and, in particular, for the automotive and oil & gas industries.

The addition of the Munka molybdenum deposit to the Company's existing iron ore exploration assets at Ruoutevare and Kallak, positions Beowulf well to potentially become a future supplier of raw materials to the European steel industry.  

Beowulf's ongoing metallurgical studies on iron ore concentrates from its Ruoutevare deposit are progressing well, and testing has recently  been extended to assess the possibility of producing a high grade pellet feed from the ore.

The updated conceptual study on the Ruoutevare iron ore deposit commissioned from the international consultancy, Raw Materials Group (RMG) of Stockholm, Sweden is also progressing well and is considering both conventional transport of ore concentrates as well as other options, including the potential long distance pipe line transportation of slurry concentrate.

Clive Sinclair-Poulton, Chairman of Beowulf, commented:

"We are always looking for additional complementary assets to add to our existing quality portfolio.  With our excellent iron ore projects at Ruoutevare and Ballek, it is logical that we should be interested in Munka, as it has excellent molybdenum potential.  Iron and molybdenum are both part of the steel making process, a key target market for Beowulf."

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 also a listed "qualified person" according Swedish Mining Association rules. Dr Larsson is Technical Director of the Company and has over 30 years relevant experience within the natural resources sector. He is also a Competent Person according to the Swedish Mining Society.

Enquiries:

Beowulf Mining Plc
Mr Clive Sinclair-Poulton, Chairman	[phone]
Strand Hanson Limited
Matthew Chandler / Simon Raggett	[phone]
Alexander David Securities Limited
David Scott / Nick Bealer	[phone]
Lothbury Financial Ltd
Gary Middleton / Ron Marshman	+ 44 (0) 207 011 9411
or visit http://www.beowulfmining.com

Notes to editors:

In 2007, the annual global production of molybdenum was estimated at 213,000 tonnes.  As a consequence, of the well documented global economic and industrial slowdown, the price of molybdenum has fallen back to its historic trading levels of approximately US$10 per pound, but there has recently been evidence of improving prices. Most molybdenum is commonly produced as a by-product of the copper mining industry, with the principal source mines for molybdenum located principally in the America's.  There is no significant mine production in Europe and consequently almost all molybdenum has to be imported by the European steel industry.

Traditionally, molybdenum has been consumed by the steel industry as an alloy metal for the production of high quality stainless steel. It has the ability to withstand extreme temperatures and has a high resistance to corrosion. It is also used to manufacture aircraft parts and industrial motors.

Car manufacturers are increasingly turning to molybdenum-bearing steels to achieve various objectives, including reduced weight - which allows better performance and fuel-mileage - and enhanced passenger safety. Cars produced 20 years ago used mostly mild carbon steels without molybdenum.  Today, advanced steels containing molybdenum are displacing these legacy steels and it is estimated that a typical modern day vehicle contains just under one pound of molybdenum.

A number of recent developments in the automotive industry indicate increased usage of molybdenum in cars, including in the body and structural components, engine blocks, exhaust manifolds, wheels and high-performance motor oils.

As a result of the increased industrial focus on molybdenum the London Metal Exchange (LME) has announced that it will start trading molybdenum contracts by February 2010.

 

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