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High hopes are being placed on mineral resources explorer Beowulf Mining plc (LSE:BEM) with the release of assay results from its iron ore project in Sweden.
Shares soared 10.5% in early morning trading today and settled at 10.25 pence by 12:00 PM GMT, after the Sweden-focussed “guardian of treasure” said significant high-grade iron mineralisation reaching up to 54.6% was encountered at the southern extension of its Kallak North deposit, taken from nine out of 16 holes drilled.
“The initial results received are better than anticipated, with high grade sections of iron mineralisation of significant widths being encountered at substantial depths,” the company said in a statement.
Beowulf is conducting a tw0-part exploration programme comprising about 7,000 metres at its 100% owned Kallak North deposit. The first part of the drilling campaign was concluded in July 2012, with about 1,572 metres drilled and over 4,300 metres out of the 5,400 metres have already been drilled for the whole of the programme.
The 500-hectare licence was reported to initially contain 121 million tonnes of iron ore with average grades between 35%-42%, as assessed independently, and hopes to increase the resource after the drilling campaign concludes.
Test mining will be conducted once the Environmental Impact Assessment is approved, expected by the fourth quarter of 2012, to provide samples for future customers, Beowulf stated.
The company hopes to become a producer in time for the renewed demand for the steelmaking ingredient in the United States as well as to fill in the potential decline of production in Brazil, affected by the country’s infrastructure programme.
Also, according to Beowulf, while China’s growth slowed down, iron ore demand will still be sizable especially with the Chinese Government’s Five-Year Plan to stimulate growth, and also the deteriorating production of the mineral in India.
“As such, the Company remains positive on the medium and longer term trends and outlook for iron and confident of the prospects for its flagship Kallak iron ore project,” Beowulf’s Executive Chairman, Clive, Sinclair-Poulton stated within the half year results released today, which reveals the company is yet to make money out of its business.
Company Spotlight
Beowulf Mining plc is a UK-incorporated mineral exploration company focussing on iron, copper, gold, and uranium deposits with a primary base of operation in Sweden.
Share of the company are traded on both the Alternative Investment Market of the London Stock Exchange, where it has primary listing, and the Stockholm Stock Exchange under the ticker “BEM”.
