Beowulf Mining has unveiled plans to raise up to GBP 2 million cash that will be used to further explore and develop its Kallak iron ore project in northern Sweden.

The company has already placed GBP 1.6 million worth of stock with investors, including its leading shareholder, Lanstead Capital, which is making a GBP 1 million investment.

Existing shareholders are being offered the chance to participate in the cash call via an open offer. The equity is being sold for 3p a share, which represents a relatively modest 14% discount to Wednesday’s closing price of 3.5p.

The placing and open offer were unveiled as Beowulf updated on progress. The mining exploration group unveiled what it described as very promising assay results from the first four holes of the second phase of drilling of the Kallak North deposit. There were significant long intercepts in all holes, including one from surface to 250 metres that averaged 30.68% iron.

Meanwhile, encouraging initial assay results have been received for seven holes located at the most northerly end of the Kallak South deposit. A long and significant intercept returned 150 meters of mineralisation at 26.43% iron.

Mr Clive Sinclair Poulton chairman of Beowulf Mining said that "Amid a challenging environment for financing junior mining companies I am pleased to announce the capital raising today, coupled with intended board and advisory changes. In particular we are pleased to have secured the continued support of our major shareholder, Lanstead Capital.”

Mr Sinclair Poulton said that “We are committed to respond positively to uncertain markets and re position the company to continue its development. I look forward to presenting further updates in due course as we look to move our projects into the development phase. We are grateful for the continued support of shareholders and I hope that the inclusion of an open offer is viewed favourably.”

(Source - www.steelguru.com)