Why Has Beowulf Fallen On Kallak Concession Award? It’s The Details

Trade Beowulf Mining Shares Your Capital Is At Risk
Tim Worstall
Updated: 23 Mar 2022

Key points:

  • Beowulf shares jumped yesterday on the Kallak North Concession Award
  • Beowulf has fallen back 20% today – why?
  • It’s in the details of the licence that was awarded
  • Beowulf Mining Runs Into Greta Thunberg

Beowulf Mining (LON: BEM) shares jumped yesterday on the news that the Kallak North project in Sweden has been granted an exploitation concession. It’s possible to think that this means mining can go ahead, thus that jump in the Beowulf share price.

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This isn’t quite correct, thus that retreat in the price today. For what Beowulf has been granted is one step along the way to being able to mine – there’s still a significant hurdle to clear as yet.

As we’ve said before about Beowulf the actual proposal is just fine. Swedish iron ore has been known to be high quality for many centuries. The test work has shown that very high-quality iron ore can be produced. This can also be delivered to market in a form that allows carbon free (or nearly so, “not using coke or coal” is perhaps better) steel making which is that next big thing in the sector.

So, a good mineral deposit, capable of producing something in demand, why wouldn’t we all get excited?

Also Read: Base & Precious Metal Trading Guide

The answer being that there are still yet more stages in a junior miner’s life after achieving those milestones. The two big ones, after exploration and proving of the deposit, are licensing and finance. The finance question, where the capital is going to come from, always does get answered after that licence one – for who would finance something that doesn’t yet have all the required licences?

The announcement yesterday was that the exploitation concession has been granted. That’s a political decision by the new (-ish) governing coalition in Sweden. It’s a necessary step and a welcome one, but it’s not the end of the process.

The next problem is, as we’ve said about Beowulf Mining before, environmental. As it says in the release itself “we now look forward to environmental permitting” which might be a significant problem. For the Swedish greens – they’ve even brought Greta Thunberg out to protest – are vehemently against allowing the project to proceed. Not, perhaps, on a y great logical grounds but just because it does seem to have caught the wave of the protestors’ interest.

This always being something of a problem for if people haven’t been rationally argued into a position it’s very difficult to rationally argue them out of it. If the complaint is that mining will rape Mother Gaia then talking about how this is a good way to provide the materials to beat climate change might not work.

Whatever the politics – or even the arguments – of that though it’s possible that the fall back in Beowulf today is a result of the market grasping that the exploitation concession isn’t the end of the permitting road, not by a long way. Future movements in the Beowulf share price are likely to be driven by how likely – or unlikely – that environmental permit looks to be at any one time.

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