Yesterday, Beowulf Mining (Beowulf) informed that Lanstead Capital will reduce its shareholding by 3% to 11.9%. Following this, numbers of shares held by Lanstead will stand at 51,134,740 from 63,007,175.
Beaufort Securities view on Beowulf Mining PLC: The aforementioned update regarding Lanstead’s move to reduce shareholding by selling stock is a positive development for Beowulf as it would reduce the overhang. Recently, the company was granted the Exploitation Concession for Kallak North from the Mining Inspectorate of Sweden. We look forward to positive decision by the Government of Sweden which would take the project forward. In the meantime, management would address the points raised by the Mining Inspectorate and the CAB in their responses to the Government. The Kallak North iron ore deposit has high grade hematite with over 68% Fe content. Despite the downward pressure on benchmark iron ore prices on the back of continued oversupply and slowing economic activity in China, we note that high quality iron ore products continue to fetch premiums relative to the benchmark 62% Fe. In light of the above argument, we maintain a Speculative Buy rating on the stock.
Beaufort Securities acts as corporate broker to Beowulf Mining plc
