It is a difficult time for the mining sector
losing over 20% since the start of the year
and commodity prices falling worldwide against a stronger US dollar
and rising profitable equities. Iron ore prices, in particular, tumbled this
week amid fear spreading through the Chinese steel industry.
Companies find it hard to attract nervous
and sceptical investors, glossing over the risk with confidence in their projects
and expectations for positive change in the commodities market.
One of the answers can be to stick with companies
that can promise stability and certainty.
Here is the Story of Beowulf Mining. The
company operating in Sweden can be proud of a fully funded 2013 work programme
at its iron ore projects at Kallak North and Kallak South,
moving away from exploration towards development and potential
future production.
Presenting at Proactive Evening Event at
Chesterfield Hotel in London, Clive Sinclair-Poulton, CEO of Beowulf Mining,
stressed the advantage of operating in a country like Sweden: politically
stable and keen to invest in mining.
Sweden:
Best environment and destination for the European market
Sweden is a promising land, a mineral-rich
country with a long tradition of mining and the
infrastructure to support it.
Accordingly to the annual survey by
the Fraser Institute, Canada's leading public policy think-tank,
Sweden emerged as one of the top worldwide mining destinations of 2013, with
Quebec falling dramatically to N11th from N1 in just three years. The document,
which compiles the answers of international mining executives, notes that
mining companies are pessimistic about short-term commodity prices, expecting
nearly level or reduced prices for silver, copper, diamonds, coal, zinc,
nickel, potash, and platinum this year. However, it also shows that investment
opportunities in the industry and environmental protection can, in fact, go
hand in hand, said Kenneth Green, Fraser Institute senior director of energy
and natural resources and director of the survey.
“In
order to compete for investment on the global mining stage, jurisdictions need
not only stellar resource potential but also a stable, certain, straightforward
mining policy framework,” Green said.
“Reduce red tape, minimize risk with
regard to policy changes and tax increases, respect negotiated contracts:
that’s how you woo the global mining sector,” he added.
This is where Beowulf Mining finds its
advantage. As we said, in the long term investors are looking for stability and
moderate prices with favourable mining and government polices. Beowulf
Mining has a winning power: total support from local authorities in a country
politically risk-free and stable country. The big African competitors can be
proud of large projects but the political risk is higher.
Business Sweden- The Swedish Trade & Investment Council
states how a transparent mining legislation and a supportive government in
Sweden encourage mineral development and exploration in a sustainable manner,
giving the country a leading role in metallurgical R&D as well as in the
development of advanced and ecological underground mining.
Through the years, Sweden has built an extensive
geological database and has the world’s largest drill core sampling available
for research.
Clive Sinclair-Poulton, CEO of Beowulf Mining,
showed his confidence in future opportunities, as Sweden is the
largest producer of iron ore in Europe, the second largest producer of silver,
gold, lead and zinc and the third largest producer of copper.
Sweden’s strength is the opportunity to satisfy
Iron ore demand from Europe, which is currently importing 130 mill ton of Iron
from outside Europe.
Kallak projects: a
profitable and safe investment
Clive Sinclair-Poulton, Beowulf Mining CEO, is very pleased with good
results coming from new sampling and drilling exploration at it Kallak projects
looking ahead into production.
In an interview with Proactive Investors,
Sinclair-Poulton stated: “Every dollar we have put in the ground so far at
Kallak has been a very worthwhile investment
because we’re getting very good returns. The tonnage keeps on increasing. Next
step is test mining coming on soon, which will go ahead and show the
commerciality of the project,”
The Beowulf boss is confident the company will get
an exploitation concession – the Swedish equivalent of a mining licence – and
says the company is moving “away from aspiration to exploitation”.
The
geologic environment is really good. Mineralisation comprises
a significant proportion of the Kallak North and Kallak South deposits
designated as an Area of National Interest by the Swedish authorities. Iron is extracted from
magnetite but going below there is hematite, which is even higher in grade and
requires fewer processing stages.
"We’ve
got 400 tonnes being taken out of the ground to be analysed, so we’re moving
away from the laboratory, or, as I say, we’re moving away from aspiration,
where everything’s being done in the laboratory to a situation where we’re
basically going to be going into production.” Sinclair-Poulton
said.
Strategic
location and logistic
Mining is not just a matter of location: logistics
also play an important role. Access to infrastructures can save lots of money
and CAPEX spending.
Beowulf Mining doesn’t have these problems.
Kallak projects are an open pit and they are just
40 km from Narvik, Norway.That is only 4 days’ travel to Amsterdam, from whichCanada
is 14 days and Shangai 48 days.
Kallak relies also on a cheap Hydroelectric energy
as it is close to the second largest power station in the country.
Conclusions
Beowulf Mining is moving away from exploration to
exploitation and a potential future production concentrated on certainty.
Important milestones have been completed during
2013 and other developments are in place and on schedule.
The company is well funded with £2,5M of cash, and
good prospects for investors.
So, the logic of Sinclair-Poulton's case seems to
be that it is good discipline to operate in an environment where you can't rely
on a perpetually rising commodity price to bail you out.
Here the last world from Clive Sinclair-Poulton
:"Over the remainder of 2013 I look forward to announcing positive
news from our exploration work programmes, including the test mining sampling
programme expected to commence this summer at Kallak North, the ongoing
exploratory drilling at both Kallak North and Kallak South and, towards the end
of the year, planned drilling at Ballek."
However statistics warn via Bloomberg Swedish
Industry sees falling investment as exports struggle “The most investment
intensive industry, the mining industry, will decrease its volumes by 10
percent.”
Industry in the $500 billion economy plans
to reduce spending to 53.7 billion kronor ($8.12 billion) from 56.9 billion
kronor last year, according to a survey of about 8,000 companies published last
week. The Stockholm-based statistics office uses the survey to estimate
investment volume as the actual numbers differ from company forecasts in a
“somewhat systematic way,” it said in a statement.
Saami
communities
After the presentation one question raised
was about the relationship with the Saami communities, who delayed Beowulf
Mining’ drilling campaign last year due to ongoing issues with the company.
The communities declared their opposition to
Beowulf’s mining plans because Beowulf Mining has allegedly conducted
exploration drilling in their area without a relevant permit.
”Any mining developments on our lands entail major negative impacts on the reindeer
husbandry in the area, which is our traditional livelihood,” says Bengt-Åke
Kuljok, Chairman of Sirges Saami community. ”There is absolutely no confidence
in this company from the perspective of the Saami communities” concludes Jon –
Mikko Länta, Chairman of Jåhkågaska tjiellde Saami community. SSR and the Sami
communities have now turned to the Sami Council for support.
Beowulf has to tread carefully has it can easily lose
its credibility towards investors if it doesn’t respect the Saami rights.
