Long Term Incentive Plan and Grant of Options

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (”MAR”) (EU) No. 596/2014, as incorporated into UK law by the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

8 July 2022

Beowulf Mining plc

(“Beowulf” or the “Company”)

Long Term Incentive Plan and Grant of Options

Beowulf (AIM: BEM; Spotlight: BEO) announces that the Board has approved the implementation of a new long-term incentive plan available to eligible employees of the Company (“LTIP” or the “Plan”).

In establishing the LTIP, the Company’s Remuneration Committee has taken advice from a leading independent consultancy specialising in the planning, design, and implementation of business-driven pay and reward strategies, on the following matters: identifying comparable companies for pay benchmarking; collecting, analysing and presenting data on executive remuneration in comparable companies; and assisting with the development of the Plan.

The Company’s remuneration policies are designed to retain and incentivise key employees.  Given the history of the Company, the award of options has to date been ad-hoc. Moving forwards and following the positive decision with regards to the Kallak North Exploitation Concession, the Company’s remuneration policies will be developed on a systematic basis and matched to performance metrics, such as achieving important business milestones and ESG objectives.

The key terms of the LITP are summarised below:

• Eligible participants may be granted share awards in the form of share options at the discretion of the Company’s Remuneration Committee. The Remuneration Committee may determine the specific vesting conditions of individual awards, including vesting period, strike price, expiry date and any performance conditions as it determines reasonable.
• The total number of options under award will not exceed 10 per cent. of the Company’s issued ordinary share capital at the grant date.
• Vesting of awards could occur earlier than their vesting date if the award holder ceased employment on good leaver terms as detailed within the LTIP, if considered appropriate by the Remuneration Committee, or on the occurrence of a change of control of the Company.

Initial award of share options under the Plan

The following table sets out the initial award of options granted under the LTIP to certain directors and senior management:

In addition to the above, 750,000 Share Options have been awarded to certain other employees of the Company.

The above Share Options are exercisable at a price of 5.25 pence per share, being the closing mid-share price on 7 July 2022. The Share Options vest over three years, in three equal proportions, a third on each subsequent anniversary of the date of grant.  The Share Options are valid for 10 years from the date of grant.  

The initial award of options is for a total of 23,250,000 ordinary shares of 1 pence each in the capital of the Company (”Share Options”), representing approximately 2.8 per cent of the issued share capital.

Bonus Options

In addition to the LTIP award, Kurt Budge has been awarded an additional 2,500,000 bonus options (“Bonus Options”) further to the positive decision with regards to the Kallak North Exploitation Concession. The Bonus Options have a nominal exercise cost and are fully vested on the date of the grant.  The Bonus Options are valid for 10 years from the date of grant.  

Following the award of Share Options and Bonus Options, there will be 32,499,999 ordinary shares of 1 pence each of the Company under option to directors, senior management and employees of the Company, representing 3.9 per cent of the existing issued share capital of the Company.

Related Party Transaction

Kurt Budge and Christopher Davies are directors of Beowulf and Rasmus Blomqvist is a director of a subsidiary of Beowulf, Grafintec Oy, and are therefore regarded as related parties as defined by the AIM Rules for Companies (the ”AIM Rules”). The grant of Share Options and Bonus Options to each of them as applicable is being treated as a related party transaction for the purposes of Rule 13 of the AIM Rules. Mr Sven Otto Littorin, being the independent director for the purposes of Rule 13, considers, having consulted with the Company’s Nominated Adviser, SP Angel Corporate Finance LLP, that the terms of the related party transaction are fair and reasonable insofar as the shareholders of the Company are concerned.

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