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2017-05-26

Beowulf: Unaudited Interim Statement and Management Update for the Period Ended 31 March 2017

The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in the
public domain.

26 May 2017

Beowulf (AIM: BEM; Aktietorget: BEO), the mineral exploration and
development company, focused on the Kallak magnetite iron ore project
and the Åtvidaberg polymetallic exploration licence in Sweden, and
its graphite portfolio in Finland, announces its unaudited
consolidated financial results for the three months ended 31 March
2017 and provides a management update.

The unaudited interim financial results for six months ending 30 June
2017 and the next management update will be released on or before 31
August 2017.

Overview of Activities in the Quarter

· The Company announced, on 25 January 2017, testwork results for
composite samples taken from its Haapamäki, Pitkäjärvi and Aitolampi
graphite prospects located in eastern Finland.

· On 1 February 2017, the County Administrative Board ("CAB") for
the County of Norrbotten made an announcement, in which the CAB
referred the Company's application for an Exploitation Concession for
Kallak North ("Kallak") back to the Mining Inspectorate, with respect
to matters regarding the effects of a mining operation at Kallak on
Laponia.

· Beowulf received a letter from the Mining Inspectorate, on 2
February 2017, asking the Company if it had any comments on the CAB's
announcement and, on 15 February 2017, the Company wrote to the
Mining Inspectorate and provided comments on the announcement.

· The Company met with the Mining Inspectorate on 20 February 2017,
and discussed the next steps in the application review process for
Kallak. Following this meeting, Beowulf confirmed that it had been
invited to supplement its existing Environmental Impact Assessment
("EIA") for Kallak even further, should it wish to do so, before the
Mining Inspectorate sent all information to the Swedish National
Heritage Board (Riksantikvarieämbetet, "RAÄ") and the Swedish
Environmental Protection Agency (Naturvårdsverket, "NV") for their
review and opinions on the sufficiency of information provided, with
respect to the interaction between Kallak and Laponia. The Company
declined to make any further supplements and remains of the opinion
that the EIA has met the requirements of the Swedish Minerals Act and
Environmental Code.

· On 22 February 2017, Beowulf started drilling at its Aitolampi
graphite prospect in Finland.

· Beowulf wrote to the Mining Inspectorate on 24 February 2017, and
stated that it did not agree with the Mining Inspectorate on
consulting with the RAÄ and NV, as both these agencies had already
reviewed the Company's application and provided comments.

· On 13 March 2017, the Company provided an update on its Aitolampi
drilling, with four diamond drill holes completed as part of an
eight-hole programme. The Company provided a further update on
drilling at Aitolampi, on 27 March 2017, following the completion of
drilling of approximately 1,197 metres ("m"). The first four drill
holes, AITDD17001-004, extended 350m along strike for the main
conductive zone, and drill holes AITDD17005-008 tested the extent of
mineralisation down-dip of the main conductive zone.

· On 27 March 2017, the Company was notified that the Mining
Inspectorate had received comments and opinions from Swedish
agencies, RAÄ and NV. Following this, the Mining Inspectorate wrote
to the Company, and gave it the opportunity to submit its own
comments and supplementary information further to the RAÄ and NV's
comments.

· On 29 March 2017, the Company met with the Mining Inspectorate in
Luleå to discuss the next steps in the application process. During
the meeting, the Company outlined its interpretation of the RAÄ and
NV's comments, specifically that: the focus of the agencies' response
is the effect of Kallak on Laponia; it is acknowledged that Kallak
does not directly affect Laponia; and it is suggested that the
Company should provide more details, to describe the possible
indirect effects of a mining operation at Kallak on Laponia, the
interaction of mining and reindeer herding, and matters related to
transport. The agencies failed to be specific, as requested by the
Mining Inspectorate, as to where the Company's EIA is insufficient in
the detail it provides.

· Loss before and after taxation attributable to the owners of the
parent of £207,747 (2016: loss of £166,559).

· Cash and cash equivalents at 31 March 2017 of £1,249,594, are
£243,430 below the corresponding period last year and £359,625 below
the level at 31 December 2016.

Post Period End

· On 28 April 2017, the Company submitted a Heritage Impact
Assessment ("HIA") to the Mining Inspectorate in response to the
comments made by Swedish agencies, RAÄ and NV. The Company presented
an analysis of the indirect effects of a mining operation at Kallak
on Laponia with respect to reindeer herding, and the effects of
transport on Laponia. The analysis followed United Nations
Educational, Scientific and Cultural Organisation ("UNESCO")
guidelines for conducting a HIA. Typically, a HIA is not required
with an application for an Exploitation Concession, but the Company
voluntarily produced one, with the support of its expert Swedish
technical team and Swedish Advisory Board.

· The Company was notified, on 8 May 2017, that the Mining
Inspectorate had written to the CAB, asking the CAB to give an
opinion on the Company's application by 1 June 2017. Subsequently,
the CAB requested, and was granted, an extension to 16 June 2017.

· The Company announced on 17 May 2017 a subscription for new
ordinary shares to raise £1.5 million before expenses, an issue of
23,076,923 new ordinary shares at a price of 6.5 pence per new
ordinary share.

The Company stated that proceeds would be used for general working
capital purposes and to support activities across its three main
business areas, which are Kallak, graphite exploration, and the
Åtvidaberg exploration licence. More specifically: a Scoping Study on
Kallak, to be conducted after the award of the Exploitation
Concession; exploration and development activities across the
graphite portfolio, Haapamäki, Pitkäjärvi and Aitolampi, Kolari, and
Viistola, including geophysics, sampling, assays, and metallurgical
testwork; and the 2017 exploration programme at Åtvidaberg,
comprising re-interpretation of historical data, ground geophysics,
and geological mapping.

· On 24 May 2017, the Company announced further results from its
recently completed eight-hole diamond drill programme at Aitolampi.

Drilling confirms that EM anomalies identified at Aitolampi are
associated with wide zones of graphite mineralisation, with a
mineralised strike length of at least 350m along the main conductive
zone drill-tested, dipping between 40 and 50 degrees to the
southwest. The main EM zone extends for 700m.

Kurt Budge, CEO, commented:

"When reviewing the chronology of our Kallak North application, who
said what and when, it is impossible to comprehend that we are still
waiting for an Exploitation Concession. We have been waiting to
restart investing in Kallak, to initiate a Scoping Study, drill the
Kallak South exploration target, which we believe will significantly
boost the Kallak resource, and form the local partnerships that will
deliver a modern and sustainable mining operation.

"I have been in Jokkmokk many times this year. The town is looking
for investors who want to build businesses. We have invested over
SEK72 million in Kallak to date, but despite authorities stating our
application meets the requirements, and that our project could
deliver significant economic benefits, we continue to face delays in
being awarded an Exploitation Concession. However, we are not giving
up, our determination is unwavering. There is plenty of support from
stakeholders that want to see economic growth and a bright future for
Jokkmokk, with mining as part of that future, and that gives us real
encouragement.

"On 12 May, we completed an expedient fundraise of £1.5 million at a
price of 6.5 pence per ordinary share, over 54 per cent higher than
the price of our December 2016 fundraise, and 100 per cent higher
than the price of our February 2016 fundraise.

"When Bevan Metcalf and I joined the Company in September 2014, we
inherited a financially distressed business, and we have no interest
in letting the Company return to that state. We are active on our
graphite exploration, and have exciting plans for Åtvidaberg and
Kallak. Those programmes, plus corporate overheads, and the Kallak
process need funding.

"I look forward to updating shareholders on progress across our three
main business areas in due course."

An interview with Kurt Budge, CEO, discussing the management update
can be viewed at the following link:

https://www.brrmedia.co.uk/broadcasts-embed/5926d7f2f9cd13506f8e06a9/eve...

Operational

Kallak North Exploitation Concession

In 2017, movement with the Kallak application started on 1 February,
when the CAB made a surprise announcement, in which it referred the
Company's application for an Exploitation Concession for Kallak back
to the Mining Inspectorate, with respect to matters regarding the
effects of a mining operation at Kallak on Laponia.

The CAB announcement followed the Mining Inspectorate's request to the
CAB on 24 October 2016 to answer several questions:

· Does the Kallak EIA contain the information required under Chapter
6 of the Environmental Code?

· Does the information contained within the EIA, for both mining and
ancillary activities applied for by the Company, meet the
requirements of Chapters 3 and 4 of the Environmental Code?

· Does the CAB wish to put conditions, that could be attached to an
Exploitation Concession if one is granted by the Mining Inspectorate,
on the Company?

On 15 February 2017, the Company announced that it had written to the
Mining Inspectorate and provided comments on the CAB's statement made
on 1 February 2017. The Company's letter stated that:

· The Company's application for an Exploitation Concession for
Kallak includes a technical description, covering the Concession
Area, the actual deposit to be mined, and the operational facilities
necessary to support mining. It also includes a comprehensive EIA,
where all activities and their potential effects have been described.

· The EIA and other relevant documents have already been reviewed by
the CAB, and other stakeholders, during the period from April 2013 to
Octo...

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