The share price of Aim-listed Beowulf slumped 15% on Thursday, after the company announced a £500 000 capital raising at a discounted 5.5p a share.
The mineral exploration and development company’s stock fell to 5.8p each, despite a separate announcement detailing the award of a 1 000 ha exploration licence to the south of the Kallak North and South deposits in Sweden.
"Markets remain challenging for junior natural resource companies, and further uncertainty is created by Brexit, so it is good to have raised funds and modestly strengthen the company's cash position,” said CEO Kurt Budge.
The funds raised would be used for general working capital purposes, as well as legal advice in respect of the Kallak North application and give the company financial flexibility to support Vardar Mineral's plans for the Mitrovica and Viti projects in Kosovo.
Meanwhile, Beowulf also announced that it had been awarded an exploration licence for Parkijaure nr 6, which is prospective for magnetite iron-ore.
The magnetic signature of mineralisation at Kallak, extends southwards from Kallak North to Kallak South, and then beyond to Parkijaure. Interpretation of geophysical data suggests the potential for additional magnetite mineralisation, which could add to the Kallak North and Kallak South resource.
Beowulf has awarded a contract to GeoVista in Sweden to reassess existing geophysical data and determine if an additional exploration target is warranted at Parkijaure, to add to the Kallak South exploration target.
The company also said that it was a partner in the European Union-funded Pacific project, which has received €3.2-million from the EU's Horizon 2020 research and innovation programme and has a 36-month programme of activities being coordinated by Université Grenoble Alpes.
The aim of Pacific is to develop a new, low-cost and environment-friendly tool for exploring for subsurface mineral deposits. The Pacific consortium is conducting fundamental and applied research to develop two radically new and complementary mineral exploration techniques, both based on passive seismic imagery.
Kallak, including Kallak North, Kallak South and the Parkijaure licence, has been chosen as one of two Pacific test sites.
"In anticipation of a decision on the exploitation concession for Kallak North, we have been investigating how we can add to the potential 250-million-tonne global resource defined at Kallak North and South,” said Budge.
"Having been awarded the Parkijaure nr 6 exploration licence, we are reviewing existing geophysics and have already begun testing passive seismic technology at Kallak, with a view to using this non-invasive exploration technology to help define additional iron-ore resource.
"For a typical mining project, the mineral resource increases as the full potential of a deposit is explored and proven-up over time. With iron-ore in Sweden, a good example would be LKAB's Kiruna, established in 1890 and still producing today."