www.beowulfmining.com
Beowulf has a wide range of exploration projects in a portfolio of different commercially attractive resources.
They are all in Northern Sweden and are being developed to increase their value and so that of the company.
Beowulf Mining shares soar as investors buy into iron ore potential
Investors are once again buying into the potential of Beowulf Mining (LON:BEM) and its iron ore deposits in Sweden.
The stock is up 65 per cent so far this week, with a positive market study lighting the blue touch-paper under a 26 per cent rise in the share price today to 41 pence.
Recent positive broker coverage helped get the ball rolling, while an update yesterday at the Proactive Investors One2One Investor Forum in London delivered a generally upbeat message.
Today the focus was on a release about the main Ruoutevare and Kallak iron ore projects, which are currently being drilled.
A new and updated market study on the two projects from Swedish consultancy firm Raw Materials Group (RMG) demonstrated that over the first 15 years of mining, with a rate of 10 million tonnes per year, Ruoutevare could generate gross revenues of US$9.1 billion while the Kallak deposits could produce gross revenues of US$8.4 billion.
These figures are based on an RMG long term "high" product price forecast of US$126 FOB (Free on Board) per tonne for iron ore concentrate from Ruoutevare and US$132 FOB a tonne for iron ore concentrate from the Kallak deposits.
Total operating costs for concentrate were estimated to be US$41.4 per tonne at Ruoutevare and US$47.4 per tonne at the Kallak deposits, according to the report, which assessed future iron ore pricing trends.
RMG's updated model shows a pay-back period on total investment of as low as 2 years for Ruoutevare and 2.4 years for the Kallak deposits compared to the previous 2010 estimates of 3.1 years and 3.6 years respectively.
The study also confirmed that, based on Beowulf's current unclassified resource estimate of 600 million tonnes for the Kallak deposits, the mine's life could be up to 60 years.
On Monday (October 10), Beowulf shares bounced by almost a third after enduring a long decline that begun from their peak price of 73.25 pence in late February and in mid-afternoon stood at 31.5 pence.
On Friday, a note was published from stockbroker HB Markets that rated the shares as a ‘speculative buy’ and recommended a target price of 60 pence.
The broker pointed out that a new JORC-compliant resource statement due to be published by Beowulf later this month was “very likely to generate new valuation data on Beowulf” and “refocus market attention on the shares”.
It also highlighted that it saw “substantial intrinsic value” in Beowulf’s “highly promising” iron ore projects.
The firm plans to move Ruoutevare and Kallak towards full development and test mining is expected to begin in 2012.
The ongoing drill campaign and assay results have shown that, so far, the two deposits at Kallak may together hold more than 600 million tonnes of iron ore, which Hoodless Brennan said would represent “some of the largest undeveloped iron ore deposits in Scandinavia”.
Meanwhile, at Ruoutevare, the firm has begun a 4,000-metre drilling campaign from which, said Hoodless Brennan, it should be able to demonstrate an inferred resource of more than 200 million tonnes.
As well as highlighting as strengths the impending JORC-compliant resource estimate and the very large potential net profit from Beowulf’s iron ore assets, the broker also highlighted that the firm’s management team appears to be highly qualified and fully committed to developing and maximising the value of the company’s current resources.
