UPDATE: Beowulf Mining Says Kallak Ore Deeper Than Thought

12th Jul 2010 10:58

(Adds background, share price) By Jason Douglas Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Iron ore explorer Beowulf Mining PLC (BEM.LN) said Monday the latest drilling results from its Kallak project in Sweden show ore is present at much deeper levels than previously thought. The company has completed roughly half of a 3,500 meter drilling program at Kallak North and said results are highly encouraging, as they show the ore body extends much deeper than expected. A study of the Kallak iron ore deposit published in March said the project contains a significant resource and would be suitable for open pit mining. The study, by consultants Raw Materials Group, or RMG, estimated a mining operation at Kallak could produce 10 million metric tons of iron ore a year, and generate revenue of $6.8 billion over 15 years, based on a forecast market price of $1.39 for each iron unit. The current drilling program is designed to better assess Kallak with the aim of defining a formal resource estimate. It is scheduled to finish this month and analysis of samples will be completed in September, Beowulf said. At 0947 GMT, shares in Beowulf were up 0.38 pence, or 9.7%, at 4.25 pence, outperforming a 0.2% lower Alternative Investment Market. Also Monday, Beowulf said it agreed to acquire Iron of Sweden Ltd., a unit of Tasman Metals Ltd. (TASXF), for C$40,000 in Beowulf shares. The deal will give Beowulf three more permits just to the south of Kallak, the company said. -By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; [email protected] (END) Dow Jones Newswires July 12, 2010 05:58 ET (09:58 GMT)