TIDMSAV
RNS Number : 0762O
Savannah Resources PLC
29 September 2023
29 September 2023
Savannah Resources Plc
(AIM: SAV, FWB: SAV and SWB: SAV) ('Savannah', or the
'Company')
Interim Results for Six Months Ended 30 June 2023
Savannah Resources, the European lithium development company, is
pleased to announce its interim results for the six months ended 30
June 2023.
First half and recent highlights include:
Corporate:
-- Experienced Portuguese and international business leader,
Emanuel Proença appointed as Chief Executive Officer ('CEO') in
September with Interim CEO, Dale Ferguson, returning to his
previous role of Technical Director
-- Experienced mining executive, Bruce Griffin appointed as an
Independent Non-Executive Director in September
-- Experienced energy sector and strategy executive, Mohamed
Sulaiman appointed as a Non-Executive Director in September,
replacing the retiring Imad Sultan as the Board representative of
Savannah's largest shareholder, Al Marjan Ltd
-- Technical team expanded in line with increasing workload
-- GBP6.5 million (gross) fundraise completed at market price in July
-- The sad passing of former Non-Executive Director, Manohar Pundalik Shenoy
Barroso Lithium Project (the 'Project'):
Technical:
-- The Portuguese environmental regulator ('APA') gave its
endorsement ('DIA') to the Project in May. This was the successful
culmination of the Article 16 phase of the overall environmental
impact assessment ('EIA') process which Savannah agreed to enter in
July 2022
-- Following the DIA, work to complete the environmental
licencing process ('RECAPE' phase) and Definitive Feasibility Study
('DFS') is underway with key contractors either appointed or to be
appointed shortly. We expect to complete the environmental
licencing process and DFS in H2 2024
-- A new Scoping Study was published in June 2023 incorporating
the DIA approved Mine Plan and Project design. Based on average
production of 191,000tpa of spodumene concentrate, the Study
returned post-tax free cash flow of US$1.7 billion, net present
value at an 8% discount rate of US$953m (41p/share), internal rate
of return of 77%, and payback period of just 1.3 years
-- The initial phase of the decarbonisation study showed
electric mining equipment provides the best opportunity to reduce
the Project's Scope 1 emissions and that a number of viable options
exist to secure 100% renewable energy supply to reduce the
Project's Scope 2 emissions to zero. More detailed analysis of
these and other initiatives will be explored over the next 12
months
Stakeholder Engagement:
-- The EIA submission was accompanied by a 'Social Issues
Scoping Report', incorporating the views of local people about the
Project and Savannah, the proposed frameworks for the Benefit
Sharing Plan and Good Neighbour Plan, and the financial proposals
to acquire access to land required for the Project from two
relevant Baldios Community groups
-- To assist local stakeholders' understanding, Savannah held a
number of community meetings, produced two Community Information
Sheets, 17 Fact Sheets and a new corporate video in parallel with
the EIA submission
-- Community Insights Group has begun work on two elements of
the RECAPE which relate to the Project's interaction with local
communities and stakeholders
Commercial:
-- Following the DIA and Scoping Study there has been additional
interest in the Project and potential partnership collaborations
with Savannah from groups across the lithium value chain
-- The Company is currently working through an orderly process
to shortlist potential strategic partners for the Project, focusing
on groups willing to assist with the Project's financing and which
could bring complementary skills or additional opportunities to
Savannah
Next steps/future news flow:
-- Cash balance of GBP11.4m (July 2023) and expanding team
provides capacity to move the Project towards a final investment
decision
-- Environmental licencing and DFS related work to continue
(with regular updates provided) and be completed in H2 2024
-- Continuation of orderly process to identify a shortlist of potential strategic partners
-- Continue to secure the land or access to the land needed for
the Project, which we hope to do via negotiation and agreement with
relevant parties
-- Wider stakeholder engagement programme to continue, focused
on reaching mutually beneficial resolution on tailoring the
Project's Benefit Sharing Plan to meet the area's specific
needs
-- Continue efforts to have more of the Project's value
reflected in the Company's share price through achievement of
milestones and ongoing investor marketing
CHAIRMAN'S STATEMENT FOR THE SIX MONTHSED 30 JUNE 2023
The first half of 2023 was one of the busiest and most
successful periods during Savannah's ownership of the Barroso
Lithium Project in Portugal (the "Project"). The milestones are
already well known to shareholders, namely the endorsement of the
Project ('DIA') by Portugal's environmental regulator in May,
followed swiftly by the new Scoping Study in June, which
highlighted the Project's near US$1 billion value. These milestones
then paved the way for Savannah to complete a successful fundraise
at market price in July, which has given us the cash balance needed
to accelerate the work required to take the Project towards a final
investment decision.
The work completed in the period also gives us the platform to
move forward on other fronts. We can identify those strategic
partners who are committed to building a long-term relationship
with Savannah and supporting us with financing the Project. It
provides a catalyst to increase our engagement with stakeholders as
we look to make firm commitments on benefit sharing and give clear
guidance on the Project's development. Finally, it has given us
long-term confidence to build out our team to make this Project and
its value a reality.
However, before speaking of those who have joined Savannah and
the Company's exciting future it is important to remember those who
are no longer with us. It was with deep sadness that we learnt of
the passing of Mr. Manohar Pundalik Shenoy, Non-Executive Director
of the Company earlier in September. Manohar was a dedicated member
of the Savannah Board who commanded great respect for his business
acumen and human decency. We will miss his valued contributions,
particularly as Chairman of our Audit and Risk Committee and extend
our deepest sympathies again to his family and friends.
Turning to Savannah's future, I would like to take this
opportunity to welcome again our new CEO, Emanuel Proença and
Non-Executive Directors, Bruce Griffin and Mohamed Sulaiman, who
all joined earlier in September and provide new key skills and
experience for developing the Project into a strategic part of
Europe's energy transition. I also express again my great
appreciation to Dale Ferguson, who led us so successfully through
the last 15 months as Interim CEO. He now assumes his former role
as Savannah's Technical Director and will lead the current work
programmes we have underway on the Project's environmental
licencing and Definitive Feasibility Study ('DFS'). He will also
retain his seat on Savannah's Board as an Executive Director.
Emanuel brings us a wealth of Portuguese and international
business experience gained across a range of industries and
disciplines. He joins Savannah from his role as CEO of the
industrial businesses of Prio, one of Portugal's 20 largest
companies and the country's largest green fuels and biodiesel
producer, and its second largest provider of electricity for
mobility and a network of charging points. The subsidiaries under
Emanuel's leadership experienced rapid growth with revenues and
profitability more than tripling in 7 years, resulting in over
EUR1.5 billion in revenue and accounting for approximately 80% of
the group's profitability in 2022. Thus, Emanuel is well placed to
lead the Company through significant change and growth as it
delivers the Project into production for the benefit of its
stakeholders.
His arrival adds new energy and a fresh approach to our
corporate culture and business practices as we look to press
forward with the Project. As Savannah's first Portuguese CEO,
located in Lisbon, Emanuel can give Savannah the constant, high
level, presence in Portugal, which it has not fully enjoyed to
date. He will be prioritising our engagement with all Portuguese
stakeholders including national and local government and local
communities. The Board and I all look forward to working with
him.
Mr Proença's appointment as CEO will initially be in a non-Board
capacity but the Company envisages that he will formally join
Savannah's Board during H1 2024. In the interim, we have made two
appointments to the Board as we look to add individuals to our
leadership team with the specific knowledge and experience needed
by a Company developing its first major natural resource project.
Over the next 2-3 years Savannah will be required to significantly
increase its interaction with all stakeholders including
governments, service providers, customers and communities, as well
as effectively assessing and executing financing and partnership
options. Hence, we must have the experience and capacity in our
team to allow us to do this successfully.
As part of this scale up we welcomed Bruce Griffin as an
additional, independent Non-Executive Director. Bruce may be
familiar to some shareholders from the period he spent advising
Savannah during its strategic review of its Mutamba mineral sands
project in 2021, which resulted in a successful transaction with
Rio Tinto. Bruce has over 20 years of mining sector experience
which crucially includes recent mining project construction. As the
Executive Chairman of Sheffield Resources Limited, Bruce is playing
a key role in commissioning the 10Mtpa Thunderbird minerals sands
project in Australia, which the Company has recently constructed
with its 50/50 JV partner YGH Australia Investment Pty Ltd
(Yansteel).
Al Marjan Ltd ("Al Marjan"), Savannah's largest shareholder,
also chose to change its representative on the Board. We give our
thanks to Imad Sultan who is stepping down from the Board after
seven years of valuable service and contribution. We wish him well
with his many other business interests. Going forward, Al Marjan
will be represented by Mohamed Sulaiman, Head of Strategy at the
Omani conglomerate business, Towell Group and the former lead for
Strategy and Performance at OQ, the Omani energy company. As with
Bruce's mining experience, Mohamed's experience in strategy
leadership, including in the energy sector, and his familiarity
with directorship roles from the Boards of other public and private
companies will be invaluable to Savannah and we look forward to his
contribution.
Importantly we are not just adding strength to our executive and
Board teams. We are actively recruiting for roles to ensure
delivery of the Project and have recently recruited a project
management expert, an Environmental Officer, and a new group of
geologists and technicians. This includes three new members of
staff from the local community, to be part of the team for the new
field programmes we are about to start as part of efforts to
conclude both the Environmental Licencing process and the DFS. It
is an exciting and defining time at Savannah, and I look forward to
us continuing with our current recruitment drive as we move to
deliver the Project for our shareholders, stakeholders and
Portugal's economic benefit.
As Savannah delivered on its stated goals in the first half of
the year, we were pleased to see the share price responding
positively, increasing by over 115% from the start of the year to
reach its recent peak of 4.95p on 6 June 2023. However, we all
recognise that the share price started from a low base following
the additional uncertainty placed on the Project by the Article 16
process between July 2022 and the end of May 2023. As I have
highlighted before, the Board believes the current share price
remains wholly unreflective of the underlying project value (e.g.,
NPV/share of 41p/share) and we continue to flag this anomaly to
investors whenever possible. Equally, our share price and that of
many of our direct peers has not been helped by the significant
correction experienced in lithium prices during the year to date
and the wider macroeconomic issues impacting capital markets
recently.
Lithium raw material prices, including for spodumene
concentrate, all fell by over 40% during the first half of the year
but this must be seen in the context of the 1,200% to 2,000%
increases seen in prices in the two years up to November 2022. We
must be prepared to expect such volatility in a small volume
commodity and speciality chemical market like lithium. On prices it
is important to note that, despite the correction, the current
price of US$2,750/t for spodumene remains nearly twice the average
price we used in our Scoping Study.
The recent downtrend was likely driven by the temporary slowdown
in EV sales in the first quarter of the year, cooling buying
sentiment along the lithium battery supply chain. This was
predominantly the result of COVID lockdowns, New Year celebrations
and the removal of vehicle purchasing incentives in China, the
world's largest EV market, during January and February. Pleasingly,
sales have subsequently improved with EVvolumes.com reporting that
over 6 million plug-in vehicles were sold globally in the first
half of the year, representing a 39% increase on the first half of
2022. Encouragingly, that website is forecasting annual sales of 14
million plug-in vehicles for the full year (+33% vs. 2022),
implying an increase in sales of 33% for 2H 2023 over the first
half.
While stock markets often tend to respond badly, and quickly, to
falling commodity prices, groups within the commodity sector in
question usually continue to take a much more pragmatic view,
seeing strategic value in assets based on a longer-term
perspective. This is true in the lithium sector, and is reflected
in the amount of commercial interest we continue to receive about
the Project. Following the progress which we have made recently, I
believe that many in the lithium sector, and many keen to enter it,
see significant strategic value in a partnership with Savannah. Our
job is now to identify from the many groups who have approached us,
a shortlist which are really committed to helping make the Barroso
Lithium Project a reality.
Furthermore, with Sibanye-Stillwater's integrated spodumene and
lithium hydroxide Keliber project now in construction in Finland
and following the publication of the European Commission's Critical
Raw Material Act ('CRMA') in March, lithium raw material production
in Europe should be seen as a very likely reality in coming years.
Among a number of positive initiatives, the CRMA calls for at least
10% of Europe's future demand for critical materials, including
lithium, to be met from domestic supply sources such as the Barroso
Lithium Project.
To sum up, given the progress we have made in the first half of
the year, the personnel we have added and the robust cash position
we have, the Company can move forward to deliver its plans with
real confidence.
You will find further brief summaries of the major work streams
and topics below.
Barroso Lithium Project, Portugal
Environmental Licencing process
On 31 May Savannah announced the Portuguese environmental
regulator ('APA') had issued a positive Environmental Impact
Statement, the DIA, on the Project. This was the successful
culmination of the Article 16 phase of the overall Environmental
Impact Assessment ('EIA') process which Savannah agreed to enter in
July 2022.
Achieving the DIA award is the most challenging part of the
overall environmental licencing process. We can now say that the
regulator has agreed to the design of the Project and that Savannah
and APA have mutually agreed a set of accompanying conditions for
the Project's construction and operation. For the remaining
'RECAPE' phase (the Environmental Compliance Report of the
Execution Project), we are required to produce a final design which
complies with the DIA and its associated conditions.
Completion of the Article 16 process and award of the DIA
required a huge effort by all our team and our consultants.
Approval of the design shows that we have successfully captured and
responded to all of the feedback received from APA, the groups on
its evaluation committee, and other key stakeholders during the
Article 16 process. As a result, everyone can be assured that every
effort has been taken by all involved in the process to minimise
the Project's environmental and social impact while allowing the
production of over 2.5 million tonnes of lithium-bearing
concentrate which Europe so greatly needs for its energy
transition.
We are now underway with the work for the RECAPE phase, which we
expect to complete in the second half of 2024. The consultancy,
Quadrante, a major contributor to our successful DIA, has been
awarded the contract for the RECAPE work on the Project itself and
we expect to award the contract for the separate RECAPE on the new
bypass road shortly.
Scoping Study
The new Scoping Study published in June 2023, the first in five
years, combined the DIA approved Mine Plan and Project design with
a conservative average spodumene price of US$1,464/t (5.5% Li(2) O
grade) over the life of the Project versus the current spot price
of US$2,750/t (6% Li(2) O grade). I believe the post-tax free cash
flow of US$1.7 billion, net present value at an 8% discount rate of
US$953m, internal rate of return of 77%, and payback period of just
1.3 years, clearly demonstrate the outstanding economics of the
Project. Furthermore, it is satisfying for Savannah that this level
of value creation can be achieved while also: providing a tax and
royalty income for Portugal of over US$900m; generating over 300
new jobs; investing over US$40m in infrastructure, which will
either directly benefit local communities (e.g., the new bypass
road) or further reduce the Project's impact for them; the
EUR0.5m/year which we have committed to providing to a new
foundation focused on funding community initiatives; and over
US$100m in rehabilitation costs.
We now look forward to confirming the Project's potential in the
Definitive Feasibility Study, which our team is currently working
on and which we expect to complete in the second half of 2024. I
hope this will give the market the greater level of confidence it
appears to need to allow more of the underlying value of this
Project (e.g., NPV/share of 41p) to be reflected in Savannah's
share price.
Definitive Feasibility Study & Decarbonisation Study
While we did not receive APA's positive decision on the Project
until the end of May, preparations were being made during the first
half of the year for the potential restart of work relating to the
DFS. It is pleasing that work is soon to get underway again with
the restart of drilling on Savannah owned land at the Project after
a near four-year break. This is the first of two phases of
drilling, scheduled for around 6 months in total, focused on
upgrading existing mineral resources, providing further samples for
metallurgical test work and geotechnical drilling for the final
open pit designs.
We were also pleased to announce recently that the DFS
processing work package was awarded to a collaboration between the
plant construction experts Sedgman Pty Ltd ('Sedgman') and the
processing experts Minsol Engineering Pty Ltd ('Minsol').
Shareholders will be familiar with Minsol, which has already played
a key role in the Project, producing the plant's final processing
circuit design which combines conventional spodumene processing
methodologies with near neutral pH conditions and environmentally
friendly reagents suitable for use under Portuguese and European
legislation. We look forward to building a strong relationship with
Sedgman, which will also see us working with their sister company,
the Spanish engineering group, DRAGADOS.
We look forward to awarding the contract for the DFS'
infrastructure package soon, following completion of that tendering
process over the summer.
In parallel with the DFS, Savannah will also be continuing with
its decarbonisation study work. As announced in February, the
initial study showed that battery powered electric mining equipment
will provide the most effective and flexible means to reduce Scope
1 emissions at the Project to zero. It also concluded that a number
of viable options are available to secure 100% renewable energy
supply to the Project including regional solar and wind generation,
on market purchase, direct Power Purchase Agreements, or a
combination of these. Portugal's grid power already features a
contribution from renewables of over 70%, but use of 100% renewable
energy would reduce the Project's Scope 2 emissions to zero.
Over the next 12 months, Savannah and its consultants will
conduct a more detailed analysis of these and other initiatives and
Studies, with a number of mining equipment manufacturers to
determine a site-specific solution for a future transition to a
battery-operated mining fleet as and when appropriate equipment
becomes available.
Savannah has also committed to reducing its Scope 3 emissions as
much as possible and looks forward to working with its future
suppliers, customers and haulage partners on that front.
Stakeholder Engagement
Management of the Project's social impact as well as effective
sharing of its socio-economic benefits with stakeholders was a
major theme within the overall environmental impact assessment
process conducted by APA.
As a result, the 'Social Issues Scoping Report', written by
Community Insights Group ('Community Insights') and incorporating
the views of local people about the Project and Savannah,
accompanied Savannah's revised EIA submission in March alongside
Savannah's proposed frameworks for its Benefit Sharing Plan, its
Good Neighbour Plan and its financial proposals to acquire access
to land required for the Project from two relevant Baldios
Community groups in the area (see Land acquisition and land access
section below).
Stakeholder feedback collected by Community Insights during 2022
included requests for more information on the Project. Therefore,
to accompany the EIA submission and public consultation period in
the EIA process, Savannah held a number of community meetings,
produced two Community Information Sheets, 17 Fact Sheets and a new
corporate video (the documents and video can be found on Savannah's
website and at our local Information Centres), all aimed at
explaining the key aspects of the new Barroso Lithium Project.
Savannah remains firmly committed to ongoing stakeholder
engagement and remains open for dialogue on any aspect of the
Project which stakeholders would like to discuss. There are also
some formal actions which Savannah has been requested to undertake
in relation to the Project's stakeholders as part of the RECAPE
process. Community Insights has been selected to provide support in
responding to two elements within the RECAPE which relate to the
Project's interaction with local communities and stakeholders. Work
is now underway on these and is expected to take around 8 months to
complete.
Commercial Discussions
As our shareholders will know, the Project contains the largest
JORC (2012) Compliant spodumene resource in Europe making it hugely
strategic in the continent's plans for a domestic lithium battery
value chain. Savannah owns 100% of the Project with no offtake
committed to date, giving it full leverage to the potential value
that can be created by advancing the Project in this supportive
environment.
While there has always been significant commercial interest in
the Project, following the endorsement of the DIA and publication
of the new positive Scoping Study, there has been additional
interest received from groups across the lithium value chain. From
the dozens of commercial inquiries which Savannah has received, the
Company is currently working through an orderly process to
shortlist potential strategic partners for the Project. Savannah is
focusing on identifying groups which are willing to assist with the
financing of the Project's construction and bring complementary
skills or additional opportunities to a long-term partnership with
Savannah. We expect to provide an update on this later in the
year.
Land acquisition & access arrangements
To develop the Project, Savannah must either own or have agreed
access rights to the land which is to be developed. Due to the
distance of the Project from the communities in the area, there is
no requirement to purchase any houses or other buildings from local
people for the Project to progress. Nor is there a requirement for
any resident to leave their home. All agreements and proposed
agreements relate only to land.
From an extensive mapping exercise, Savannah estimates that the
total area of land that is required for the Project, spread across
the Mining Lease, the proposed road, and ancillary areas is
approximately 840 hectares (8.4km(2) ) with private landowners
holding around 24% of the total. The remainder is managed on behalf
of the community by management groups ('Baldios'). The land is
spread across four parishes.
Since 2021, Savannah has been operating a land acquisition
programme. To date more than 40 private landowners have sold, or
agreed to sell, their land to Savannah and Savannah has acquired,
or is in the process of acquiring, over 90 hectares of land in the
local area for which it has paid approximately EUR1.8m (including
relevant taxes). Based on the attractive rates which Savannah is
offering, prior to mine construction the Company expects to spend
approximately EUR5m in total on acquisition of land identified to
date, with the money going directly to local people. Further
investment on private land will depend on matters including the
progress of private property identification and the completion of
agreements.
Savannah has also engaged with the local Baldios communities
from Covas do Barroso and Dornelas, and presented financial
proposals to access the Baldios lands. The Company has benchmarked
its offer against other relevant land access agreement and
transactions in Portugal and believes it to be a highly attractive
figure. For its total financial proposal, Savannah has added to its
land access fee, a royalty linked to the volume of spodumene
concentrate production and compensation for drilling platforms.
Savannah is also offering: direct payments to all the community
members in the impacted parishes, compensation for anyone losing
agricultural grants as a result of the Project, and financial
support for the local firefighters. Overall, Savannah estimates it
will pay approximately EUR10m for access to the community lands
managed by the Baldios over the Project's life, with approximately
EUR4m being paid directly to community members.
Savannah remains open to discussions with private landowners,
Baldios representatives, and other stakeholders around its land
acquisition programme and land access proposals. The Company's
preferred option is to secure the land or access to the land it
needs to develop the Project through direct negotiation and
agreement.
The 30-year Mining Lease granted in 2006 safeguards Savannah's
access to land that may be necessary for the development of the
Barroso Lithium Project. This condition applies to both private
land and land managed by the representatives of the Baldios.
Despite the existing legal coverage, Savannah will always favour
direct agreement with the owners of the lands and representatives
of the Baldios. The Company will use the mechanisms provided in
Portuguese law but only when it is not possible to reach an
agreement.
As shareholders will know, Savannah is committed to responsible
land management and will be comprehensively rehabilitating,
relandscaping and revegetating impacted areas during the operating
life of the Project (beginning in the second year of operation) and
after it closes. At the end of the Project's life, the land will be
returned to the community for its own use.
Legal Proceedings
The use of 'lawfare' is a common tool used by parties seeking to
disrupt project developments, and there are three such cases
relating to the Project, for which the Company has continued to
provide updates when appropriate. Two of these cases relate to
challenges by the Parish of Covas do Barroso to the Portuguese
Government (including the environmental regulator, APA) and seek to
nullify administrative acts relating to changes to the C-100 mining
lease (which contains the BLP) and the grant of the DIA to the
Project. In respect of the former case, Savannah has contested the
claim and is awaiting news from the court, and in respect of the
latter case, Savannah is preparing the contestation which it shall
submit to the court by the end of October 2023. Importantly:
-- the lawsuits do not impact the Company's activities at the Project
-- the C-100 mining lease is fully granted, has a term of 30
years to 2036 and remains in good standing
-- the DIA remains in force
-- the advice from Savannah's lawyers is that the lawsuits are without foundation.
A third case relates to the Management Commission of the Covas
do Barroso Baldios' challenge against certain private landowners
and Savannah in respect of some land packages at the Project which
were purchased by Savannah. The challenge relates to alleged minor
land border disputes, and no date has been set by the court for a
preliminary hearing.
Financials
Despite continuing prudent cost management contributing to a 28%
reduction in administrative expenses to GBP1.4m during the period
(30 June 2022: GBP1.9m), Savannah recorded an 18% increase in net
losses from continuing operations to GBP1.5m (30 June 2022:
GBP1.3m) due to a swing from a GBP0.6m exchange rate gain in first
half 2022 to a GBP0.1m exchange rate loss in the current period.
The Company finished the period with cash of GBP4.8m (30 June 2022:
GBP9.4m) but pro-forma cash reserves were subsequently increased to
GBP11.4m in July 2023 via the successful completion of a GBP6.5m
equity fundraise.
July's fundraise, which was successfully completed at
4.67p/share, representing a discount of just 0.6% to the Company's
closing share price the day prior to its launch, combined three
elements, a subscription, a placing and, for the first time, an
offer to private investors via the PrimaryBid platform. Seeking to
raise in excess of GBP5.8m, GBP6.1m was raised via the subscription
and placing with a number of existing shareholders taking part
including Savannah's two largest shareholders Al Marjan (now 15.1%)
and Slipstream Resources (now 8.1%) and members of the Board.
Alongside investments from our existing institutional shareholders,
two natural resource focused funds joining the register for the
first time invested a total of GBP3.4m. With good demand via the
PrimaryBid offer raising a further GBP0.4m at the same price, the
gross total of GBP6.5m was achieved.
Outlook
The remainder of 2023 and 2024 is set to be another very busy
and exciting period for Savannah as our growing team, under the new
leadership of Emanuel Proença, look to take the Company towards a
final investment decision on the Barroso Lithium Project. To get
there we must complete the Project's licencing process and DFS,
identify the strategic partners we wish to work with, and leverage
our valuable Project and its spodumene concentrate to attract the
finance we need for construction.
We will continue to secure the land or access to the land we
need for the Project, which we hope to do via negotiation and
agreement with relevant parties. This will be part of our wider
stakeholder engagement programme through which we aim to reach
mutually beneficial resolution on how our commitments to benefit
sharing from the Project are tailored to the area's specific needs,
and then delivered.
We will also continue our efforts to have more of the Project's
value reflected in the Company's share price. Significant strides
to de-risk the Project have been made in the first half of 2023 and
more are expected to follow over the coming months. I remain
hopeful that the backdrop to our strong investment case will also
improve with global EV sales expected to accelerate in the second
half of the year, which should in turn improve the recent negative
trend in lithium prices. Progress should be made in the adoption of
the European Commission's Critical Raw Materials Act, which is
targeting 10% of European demand to be met by domestic supply by
2030, and hopefully wider sentiment in stock markets will also
improve. I believe a broader pool of investors should see a
compelling backdrop to complement Savannah's investment case. In
the meantime, I would like to thank our old and new shareholders
alike for their ongoing support and enthusiasm for the Company and
its goal to become a major supplier of responsibly sourced lithium
raw material for Europe.
Matthew King
Chairman
Date: 28 September 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX
MONTHSED 30 JUNE 2023
Unaudited Unaudited Audited
Six months Six months Year ended
to 30 June to 30 June 31 December
2023 2022 2022
Notes GBP GBP GBP
CONTINUING OPERATIONS
Revenue - - -
Other Income - - -
Administrative Expenses (1,383,467) (1,932,032) (3,531,894)
Foreign Exchange (Loss) / Gain (148,008) 628,980 814,468
OPERATING LOSS (1,531,475) (1,303,052) (2,717,426)
Finance Income 32,588 341 34,695
Finance Costs - - (265)
----------------------------------------- ------- ------------- ------------- --------------
LOSS FROM CONTINUING OPERATIONS
BEFORE TAX (1,498,887) (1,302,711) (2,682,996)
Tax Expense - - -
LOSS FROM CONTINUING OPERATIONS
AFTER TAX (1,498,887) (1,302,711) (2,682,996)
LOSS ON DISCONTINUED OPERATIONS
NET OF TAX (48,060) (50,838) (176,396)
----------------------------------------- ------- ------------- ------------- --------------
LOSS AFTER TAX ATTRIBUTABLE
TO EQUITY OWNERS OF THE PARENT (1,546,947) (1,353,549) (2,859,392)
----------------------------------------- ------- ------------- ------------- --------------
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified
to Profit or Loss:
Net Change in Fair Value through
Other Comprehensive Income of
Equity Investments (4,111) (13,844) (19,598)
Items that will or may be reclassified
to Profit or Loss:
Exchange (Loss) / Gains arising
on translation of foreign operations (414,958) 397,464 665,656
----------------------------------------- ------- ------------- ------------- --------------
OTHER COMPREHENSIVE INCOME FOR
THE PERIOD (419,069) 383,620 646,058
----------------------------------------- ------- ------------- ------------- --------------
TOTAL COMPREHENSIVE LOSS FOR
THE PERIOD ATTRIBUTABLE TO EQUITY
OWNERS OF THE PARENT (1,966,016) (969,929) (2,213,334)
----------------------------------------- ------- ------------- ------------- --------------
Loss per Share attributable
to Equity Owners of the parent
expressed in pence per share:
Basic and Diluted
From Operations 3 (0.09) (0.08) (0.17)
From Continued Operations 3 (0.09) (0.08) (0.16)
From Discontinued Operations 3 (0.00) (0.00) (0.01)
----------------------------------------- ------- ------------- ------------- --------------
The notes form part of this Interim Financial Report.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE
2023
Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
Notes GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible Assets 4 16,660,692 15,235,815 16,459,599
Right-of-Use Assets 14,515 18,052 17,627
Property, Plant and Equipment 5 1,598,389 1,366,935 1,583,944
Other Receivables 6 434,350 - 454,651
Other Non-Current Assets 7 92,398 74,863 77,667
TOTAL NON-CURRENT ASSETS 18,800,344 16,695,665 18,593,488
CURRENT ASSETS
Equity Instruments at FVTOCI 7,866 17,731 11,977
Trade and Other Receivables 6 408,502 1,035,356 560,060
Other Current Assets 7 395 18,211 1,036
Cash and Cash Equivalents 4,839,155 9,433,689 7,202,334
TOTAL CURRENT ASSETS 5,255,918 10,504,987 7,775,407
----------------------------------- ------- -------------- -------------- --------------
TOTAL ASSETS 24,056,262 27,200,652 26,368,895
----------------------------------- ------- -------------- -------------- --------------
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share Capital 9 16,889,598 16,889,598 16,889,598
Share Premium 41,693,178 41,693,178 41,693,178
Merger Reserve 6,683,000 6,683,000 6,683,000
Foreign Currency Reserve 211,972 358,738 626,930
Share Based Payment Reserve 495,612 425,019 403,749
FVTOCI Reserve (45,146) (35,281) (41,035)
Retained Earnings (42,546,826) (39,606,088) (40,999,879)
TOTAL EQUITY ATTRIBUTABLE
TO EQUITY HOLDERS OF THE PARENT 23,381,388 26,408,164 25,255,541
LIABILITIES
NON-CURRENT LIABILITIES
Lease Liabilities 9,306 11,051 12,263
----------------------------------- ------- -------------- -------------- --------------
TOTAL NON-CURRENT LIABILITIES 9,306 11,051 12,263
----------------------------------- ------- -------------- -------------- --------------
CURRENT LIABILITIES
Lease Liabilities 5,210 5,214 5,364
Trade and Other Payables 8 638,389 776,223 1,085,778
Other Current Liabilities 21,969 - 9,949
TOTAL CURRENT LIABILITIES 665,568 781,437 1,101,091
TOTAL LIABILITIES 674,874 792,488 1,113,354
----------------------------------- ------- -------------- -------------- --------------
TOTAL EQUITY AND LIABILITIES 24,056,262 27,200,652 26,368,895
----------------------------------- ------- -------------- -------------- --------------
The Interim Financial Report was approved by the Board of
Directors on 28 September 2023 and was signed on its behalf by:
........................................................
Dale Ferguson
Executive Director
Company number: 07307107
The notes form part of this Interim Financial Report.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHSED
30 JUNE 2023
Share
Merger Foreign Based
Share Share Reserve Currency Payment FVTOCI Retained Total
Capital Premium GBP Reserve Reserve Reserve Earnings Equity
GBP GBP 6,683,000 GBP GBP GBP GBP GBP
At 1 January
2022 16,889,598 41,693,178 (38,726) 305,095 (21,437) (38,284,665) 27,226,043
---------------- ------------ ------------ ------------ ----------- ----------- ------------------- -------------- -------------
Loss for the
period - - - - - - (1,353,549) (1,353,549)
Other
Comprehensive
Income - - - 397,464 - (13,844) - 383,620
---------------- ------------ ------------ ------------ ----------- ----------- ------------------- -------------- -------------
Total
Comprehensive
Income for
the
period - - - 397,464 - (13,844) (1,353,549) (969,929)
Share Based
Payment
charges - - - - 152,050 - - 152,050
Lapse of
Options - - - - (32,126) - 32,126 -
At 30 June
2022 16,889,598 41,693,178 6,683,000 358,738 425,019 (35,281) (39,606,088) 26,408,164
---------------- ------------ ------------ ------------ ----------- ----------- ------------------- -------------- -------------
Loss for the
period - - - - - - (1,505,843) (1,505,843)
Other
Comprehensive
Income - - - 268,192 - (5,754) - 262,438
---------------- ------------ ------------ ------------ ----------- ----------- ------------------- -------------- -------------
Total
Comprehensive
Income for
the
period - - - 268,192 - (5,754) (1,505,843) (1,243,405)
Share Based
Payment
charges - - - - 90,782 - - 90,782
Lapse of
Options - - - - (112,052) - 112,052 -
At 31 December
2022 16,889,598 41,693,178 6,683,000 626,930 403,749 (41,035) (40,999,879) 25,255,541
---------------- ------------ ------------ ------------ ----------- ----------- ------------------- -------------- -------------
Loss for the
period - - - - - - (1,546,947) (1,546,947)
Other
Comprehensive
Income - - - (414,958) - (4,111) - (419,069)
---------------- ------------ ------------ ------------ ----------- ----------- ------------------- -------------- -------------
Total
Comprehensive
Income for
the
period - - - (414,958) - (4,111) (1,546,947) (1,966,016)
Share Based
Payment
charges - - - - 91,863 - - 91,863
At 30 June
2023 16,889,598 41,693,178 6,683,000 211,972 495,612 (45,146) (42,546,826) 23,381,388
---------------- ------------ ------------ ------------ ----------- ----------- ------------------- -------------- -------------
The notes form part of this Interim Financial Report.
CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHSED 30 JUNE
2023
Unaudited Unaudited Audited
Six months Six months Year ended
to June to June December
2023 2022 2022
Notes GBP GBP GBP
Cash Flows used in Operating
Activities
Loss for the period (1,546,947) (1,353,549) (2,859,392)
Depreciation and Amortisation
charges 5 5,472 12,137 23,456
Share Based Payments Reserve
charge 91,863 152,050 242,832
Finance Income (32,588) (12,697) (34,695)
Finance Expense - 3,557 265
Exchange Losses / (Gains) 166,683 (628,090) (858,679)
Cash Flow from Operating Activities
before changes in Working Capital (1,315,517) (1,826,592) (3,486,213)
Decrease / (Increase) in Trade
and Other Receivables 137,471 (97,472) (78,217)
Decrease in Trade and Other
Payables (396,205) (765,133) (538,972)
---------------------------------------- --------- -------------- -------------- --------------
Net Cash used in Operating Activities (1,574,251) (2,689,197) (4,103,402)
---------------------------------------- --------- -------------- -------------- --------------
Cash flow used in Investing
Activities
Purchase of Intangible Exploration
Assets 4 (607,380) (939,423) (1,771,821)
Purchase of Tangible Fixed Assets 5 (63,940) (665,952) (852,127)
Interest received 32,589 12,697 28,438
Proceeds from Relinquishment
of the Rights and Obligations
of Discontinued Operations - 86,675 89,981
---------------------------------------- --------- -------------- -------------- --------------
Net Cash used in Investing Activities (638,731) (1,506,003) (2,505,529)
---------------------------------------- --------- -------------- -------------- --------------
Cash Flow used in Financing
Activities
Principal paid on Lease Liabilities (2,605) (2,275) (5,022)
Interest paid - (3,557) (265)
---------------------------------------- --------- -------------- -------------- --------------
Net Cash used in Financing Activities (2,605) (5,832) (5,287)
---------------------------------------- --------- -------------- -------------- --------------
Decrease in Cash and Cash Equivalents (2,215,587) (4,201,032) (6,614,218)
Cash and Cash Equivalents at
beginning of period 7,202,334 13,002,083 13,002,084
Exchange (Losses) / Gains on
Cash and Cash Equivalents (147,592) 632,638 814,468
---------------------------------------- --------- -------------- -------------- --------------
Cash and Cash Equivalents at
end of period 4,839,155 9,433,689 7,202,334
---------------------------------------- --------- -------------- -------------- --------------
The notes form part of this Interim Financial Report.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL REPORT FOR THE SIX
MONTHSED 30 JUNE 2023
1. BASIS OF PREPARATION
The financial information set out in this report is based on the
Consolidated Financial Statements of Savannah Resources Plc (the
'Company') and its subsidiary companies (together referred to as
the 'Group'). The Interim Financial Report of the Group for the six
months ended 30 June 2023, which is unaudited, was approved by the
Board on 28 September 2023. The financial information contained in
this interim report does not constitute statutory accounts as
defined by s434 of the Companies Act 2006. The statutory accounts
for the year ended 31 December 2022 have been filed with the
Registrar of Companies. The Auditors' Report on those accounts was
unqualified and did not contain a statement under section 498 (2)
or 498 (3) of the Companies Act 2006.
The financial information set out in this report has been
prepared in accordance with the accounting policies set out in the
Annual Report and Financial Statements of Savannah Resources Plc
for the year ended 31 December 2022. New standards and amendments
to IFRS effective as of 1 January 2023 have been reviewed by the
Group and there has been no material impact on the financial
information set out in this report as a result of these standards
and amendments.
The Group Interim Financial Report is presented in Pound
Sterling.
Going Concern
In common with many mineral exploration companies, the Company
has in the past raised equity to fund its exploration activities
and to date has not earned any revenues from its exploration
projects.
In July 2023 the Company raised GBP6.5m (before expenses),
effectively at market price, providing a pro-forma cash balance of
GBP11.4m. T he Company confirmed that it would use this to focus on
the completion of the DFS drilling programmes, the Mineral Resource
Estimate upgrade, the RECAPE submission, the processing plant and
infrastructure design, plus team expansion and community relations
development. The Directors prepared cash flow forecasts for the
period to December 2024. This indicates that additional funding
will be required in 2024 in order to fund through Final Investment
Decision and into Project construction. The Directors believe that
following the granting of the DIA the Group's Barroso Lithium
Project and the publication of the Company's new Scoping Study it
is attractive to investors and are confident that funding for the
Project's development would be obtained through options which may
include equity, strategic partnership or offtake, in a lithium
market with a bright outlook as the green energy revolution is
driven by burgeoning EV demand and the increasing emergence of ESS
(energy storage systems).
While the Company has been successful at raising equity finance
in the past, and while the Directors are confident of raising
additional funding should it be required, their ability to do this
is not completely within their control and the lack of a binding
agreement means there can be no certainty that the additional
funding required by the Group and the Company will be secured
within the necessary timescale. These conditions indicate the
existence of a material uncertainty which may cast significant
doubt about the Group and the Company's ability to continue as a
Going Concern, and its ability to realise its assets and discharge
its liabilities in the normal course of business. The Financial
Statements do not include any adjustments that would result if the
Group and Company were unable to continue as a going concern.
2. SEGMENTAL REPORTING
The Group complies with IFRS 8 Operating Segments, which
requires operating segments to be identified on the basis of
internal reports about components of the Group that are regularly
reviewed by the chief operating decision maker, which the Company
considers to be the Board of Directors. In the opinion of the
Directors, the operations of the Group are comprised of exploration
and development in Portugal, headquarter and corporate costs and
the discontinued operation in Mozambique.
Based on the Group's current stage of development there are no
external revenues associated to the segments detailed below. For
exploration and development in Portugal and the discontinued
operation in Mozambique the segments are calculated by the
summation of the balances in the legal entities which are readily
identifiable to each of the segmental activities. Recharges between
segments are at cost (including transfer price charge) and included
in each segment below. Inter-company loans are eliminated to zero
and not included in each segment below.
Discontinued
Operation
Mozambique
Mineral Sands Portugal HQ and
(2) Lithium Corporate Elimination Total
GBP GBP GBP GBP GBP
Period 1 January 2023
to 30 June 2023
Revenue (1) - 429,358 321,171 (750,529) -
Interest Income - - 32,588 - 32,588
Share Based Payments - - (91,863) - (91,863)
Loss for the period (48,060) (571,419) (927,468) - (1,546,947)
Total Assets 601,133 18,694,198 4,760,931 - 24,056,262
Total Non-Current
Assets 434,350 18,365,994 - - 18,800,344
Additions to Non-Current
Assets - 638,991 - - 638,991
Total Current
Assets 166,783 328,204 4,760,931 - 5,255,918
Total Liabilities (46,971) (237,496) (390,407) - (674,874)
--------------------------- ----------------- -------------- --------------- --------------- --------------
Discontinued
Operation
Mozambique Portugal HQ and
Mineral Sands(2) Lithium Corporate Elimination Total
GBP GBP GBP GBP GBP
Period 1 July 2022
to 31 December 2022
Revenue (1) - 843,542 500,566 (1,344,108) -
Finance Costs - (265) - - (265)
Interest Income - - 34,354 - 34,354
Share Based Payments - - (394,882) - (394,882)
Loss for the period (125,558) (729,413) (650,872) - (1,505,843)
Total Assets 607,124 18,575,420 7,186,351 - 26,368,895
Total Non-Current
Assets 456,490 18,130,222 6,776 - 18,593,488
Additions to Non-Current
Assets 454,651 1,150,536 - - 1,605,187
Total Current
Assets 150,635 445,197 7,179,575 - 7,775,407
Total Liabilities (111,567) (326,564) (675,223) - (1,113,354)
--------------------------- ------------------- -------------- --------------- --------------- --------------
Discontinued Portugal HQ and Elimination Total
Operation Lithium Corporate
Mozambique
Mineral Sands(2)
GBP GBP GBP GBP GBP
Period 1 January 2022
to 30 June 2022
Revenue (1) - 1,065,095 471,016 (1,536,111) -
Finance Costs - - - - -
Interest Income - - 341 - 341
Share Based Payments - - (152,050) - (152,050)
Impairment of Assets - - - - -
Loss for the period (50,838) (932,463) (370,248) - (1,353,549)
Total Assets 752,409 17,298,526 9,149,717 - 27,200,652
Total Non-Current
Assets 1,831 16,687,058 6,776 - 16,695,665
Additions to Non-Current
Assets - 1,516,978 - - 1,516,978
Total Current Assets 750,578 611,468 9,142,941 - 10,504,987
Total Liabilities (96,113) (315,723) (380,652) - (792,488)
--------------------------- -------------------- -------------- --------------- --------------- --------------
(1) Revenues included in the Portugal Lithium segment include
GBP429,358 (31 December 2022: GBP843,542; 30 June 2022:
GBP1,065,096) related to intercompany recharges within this segment
and therefore eliminated in the Elimination column.
(2) This is including costs related to the Company's Mozambican
subsidiary, Matilda Minerals Lda.
3. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings
attributable to the ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
In accordance with IAS 33 as the Group is reporting a loss for
both this and the preceding period the share options are not
considered dilutive because the exercise of share options and
warrants would have the effect of reducing the loss per share.
Reconciliations are set out below:
Unaudited Unaudited Audited Year
Six months Six months ended 31
to 30 June to 30 June December
2023 2022 2022
Basic and Diluted Loss per
Share:
Losses attributable to Ordinary
Shareholders (GBP):
Total Loss for the period
(GBP) (1,546,947) (1,353,549) (2,859,392)
Total Loss for the period
from Continuing Operations
(GBP) (1,498,887) (1,302,711) (2,682,996)
Total Loss for the period
from Discontinued Operations
(GBP) (48,060) (50,838) (176,396)
Weighted average number of
shares (number) 1,688,959,820 1,688,959,820 1,688,959,820
Loss per Share - Total Loss
for the period from Operations
(GBP) (0.00092) (0.00080) (0.00169)
Loss per Share - Total Loss
for the period from Continuing
Operations (GBP) (0.00089) (0.00077) (0.00159)
Loss per Share - Total Loss
for the period from Discontinued
Operations (GBP) (0.00003) (0.00003) (0.00010)
------------------------------------ --------------- --------------- ---------------
4. INTANGIBLE ASSETS
Exploration
and Evaluation
Assets
GBP
Cost
At 1 January 2022 14,137,817
Additions 840,532
Exchange differences 257,466
------------------------- ------------------
At 30 June 2022 15,235,815
Additions 890,791
Exchange difference 332,993
------------------------- ------------------
At 31 December 2022 16,459,599
------------------------- ------------------
Additions 557,175
Exchange differences (356,082)
------------------------- ------------------
At 30 June 2023 16,660,692
------------------------- ------------------
Amortisation and Impairment
At 1 January 2022 -
At 30 June 2022 -
At 31 December 2022 -
At 30 June 2023 -
------------------------------ ------------
Net Book Value
At 30 June 2022 15,235,815
At 31 December 2022 16,459,599
-------------------------------- ------------
At 30 June 2023 16,660,692
-------------------------------- ------------
All Exploration and Evaluation Assets relate to the Barroso
Lithium Project.
5. PROPERTY, PLANT AND EQUIPMENT
Motor Office
Vehicles Equipment Land Total
GBP
Cost
At 1 January 2022 54,401 37,748 649,180 741,329
Additions - 8,068 657,884 665,952
Exchange differences 1,350 1,106 30,477 32,933
----------------------- ----------- ------------ ----------- ------------------
At 30 June 2022 55,751 46,922 1,337,541 1,440,214
----------------------- ----------- ------------ ----------- ------------------
Additions - 1,027 185,148 186,175
Exchange difference 1,604 1,259 37,127 39,990
----------------------- ----------- ------------ ----------- ------------------
At 31 December 2022 57,355 49,208 1,559,816 1,666,379
----------------------- ----------- ------------ ----------- ------------------
Additions - 1,521 62,419 63,940
Exchange differences (1,648) (4,197) (46,010) (51,855)
----------------------- ----------- ------------ ----------- ------------------
At 30 June 2023 55,707 46,532 1,576,225 1,678,464
----------------------- ----------- ------------ ----------- ------------------
Depreciation
At 1 January 2022 46,333 18,460 - 64,793
Charge for the period 5,767 971 - 6,738
Exchange differences 1,276 472 - 1,748
------------------------ --------- --------- --- ---------
At 30 June 2022 53,376 19,903 - 73,279
------------------------ --------- --------- --- ---------
Charge for the period 2,425 4,473 - 6,898
Exchange difference 1,554 704 - 2,258
------------------------ --------- --------- --- ---------
At 31 December 2022 57,355 25,080 - 82,435
------------------------ --------- --------- --- ---------
Charge for the period - 2,817 - 2,817
Exchange differences (1,648) (3,529) - (5,177)
------------------------ --------- --------- --- ---------
At 30 June 2023 55,707 24,368 - 80,075
------------------------ --------- --------- --- ---------
Net Book Value
At 30 June 2022 2,375 27,019 1,337,541 1,366,935
At 31 December 2022 - 24,128 1,559,816 1,583,944
---------------------- ------- -------- ----------- -----------
At 30 June 2023 - 22,164 1,576,225 1,598,389
---------------------- ------- -------- ----------- -----------
The additions in land reflect the land acquisition program that
Savannah has in place in Portugal to acquire the land required for
the future development of the Barroso Lithium project.
All Property, Plant and Equipment Assets relate to the Barroso
Lithium Project.
6. TRADE AND OTHER RECEIVABLES
Unaudited Unaudited Audited
30 June 30 June 2022 31 December
2023 2022
GBP GBP GBP
Non-Current
Other Receivables 434,350 - 454,651
----------- --------------- --------------
Total Non-Current
Trade and Other Receivables 434,350 - 454,651
----------- --------------- --------------
Unaudited Unaudited Audited
30 June 30 June 2022 31 December
2023 2022
GBP GBP GBP
Current
VAT Recoverable 125,078 109,117 155,205
Other Receivables 283,424 926,239 404,855
----------- --------------- --------------
Total Current Trade
and Other Receivables 408,502 1,035,356 560,060
----------- --------------- --------------
7. OTHER CURRENT AND NON-CURRENT ASSETS
Unaudited Unaudited Audited
30 June 30 June 2022 31 December
2023 2022
GBP GBP GBP
Non-Current
Guarantees 62,755 66,257 64,611
Other 29,643 8,606 13,056
----------- --------------- --------------
Total Other Non-Current
Assets 92,398 74,863 77,667
----------- --------------- --------------
Current
Other 395 18,211 1,036
Total Other Current
Assets 395 18,211 1,036
----- -------- -------
8. TRADE AND OTHER PAYABLES
Unaudited Unaudited Audited
30 June 30 June 2022 31 December
2023 2022
GBP GBP GBP
Current
Trade Payables 392,612 276,820 618,805
Other Payables 16,385 54,646 56,745
Accruals 190,829 435,275 410,228
Taxes 38,563 9,482 -
Total Current Trade
and Other Payables 638,389 776,223 1,085,778
----------- --------------- --------------
9. SHARE CAPITAL
Six months to Six months to Six months to
30 June 2023 30 June 2022 31 December 2022
GBP0.01 GBP GBP0.01 GBP GBP0.01 GBP
ordinary ordinary ordinary
shares number shares number shares number
Allotted, issued
and fully paid
At beginning
of period 1,688,959,820 16,889,598 1,688,959,820 16,889,598 1,688,959,820 16,889,598
Issued during
the period:
Share placement - - - - - -
------------------- ---------------- ------------ ---------------- ------------ ---------------- ------------
At end of period 1,688,959,820 16,889,598 1,688,959,820 16,889,598 1,688,959,820 16,889,598
------------------- ---------------- ------------ ---------------- ------------ ---------------- ------------
The par value of the Company's shares is GBP0.01.
10. GROUP CONTINGENT LIABILITIES
Details of contingent liabilities where the probability of
future payments is not considered remote are set out below, as well
as details of contingent liabilities, which although considered
remote, the Directors consider should be disclosed. The Directors
are of the opinion that provisions are not required in respect of
these matters, as at the reporting date it is not probable that a
future sacrifice of economic benefits will be required and the
amount is not capable of reliable measurement.
Consideration payable in relation to the acquisition of Mining
Lease Application for lithium, feldspar and quartz (Portugal
lithium project)
In June 2019 the Company exercised its option to acquire a
Mining Lease Application for lithium, feldspar and quartz from
private Portuguese company, Aldeia & Irmão, S.A.. The total
purchase price for the acquisition is EUR EUR3,250,000 ( GBP
GBP2,794,000), which will only become due once the Mining Lease
Application has been granted and the Mining Rights transferred to
an entity within the Group, at which point the agreed payment
schedule will consist of an initial EUR EUR55,000 ( GBP GBP47,000)
payment with the balance due in 71 equal monthly instalments. Upon
delivery of the request for transfer of the Mining Rights to an
entity within the Group, the Group shall provide with a bank
guarantee of EUR EUR3,195,000 ( GBP GBP2,747,000) that will be
reduced in accordance with the 71 monthly instalments. As at 30
June 2023 the mining lease has not been granted.
Contingent tax liability in relation to the relinquishment of
the rights and obligations of discontinued operations in
Mozambique
In October 2016 the Savannah Group and Rio Tinto entered into a
Consortium Agreement ('CA'), whereby both Savannah Group and Rio
Tinto combined their respective projects in Mozambique to form an
unincorporated consortium. On the 1 December 2021 Savannah signed a
Deed of Termination relating to the CA. Under the Deed of
Termination, a compensation amounting to $9.5m (GBP7.0m) cash was
agreed (the "Transaction"). The advice received from the Company's
tax advisers was clear that the Transaction was not in scope for
tax under Mozambique law, and this continues to be the Company's
and its advisers' view. However, the Mozambican Tax Authority has
indicated that it considers that the Transaction is in scope for
Mozambican tax. The Company is working with its tax and legal
advisers on this matter, and notes that in the 2021 Audited
Consolidated Financial a gain on relinquishment of the rights and
obligations of discontinued operations in Mozambique of GBP627,078,
was recorded.
11. EVENTS AFTER THE REPORTING DATE
In July 2023 the Company approved a share placement and
subscription of GBP6.5m (before expenses) through the issue of
139,190,084 ordinary shares at an issue price of 4.67 pence per
share.
On 12 September 2023 the Company appointed two new Non-Executive
Directors. Bruce Griffin joined as an Independent Non-Executive
Director, and Mohamed Sulaiman joined as Non-Executive Director,
replacing the retiring Imad Sultan (Non-Executive Director) as the
Board representative of Savannah's largest shareholder, Al Marjan
Ltd. Mohamed Sulaiman has become the Chairman of the Board's Audit
and Risk Committee and a member of the Nomination Committee, and
Bruce Griffin has become a member of the Remuneration
Committee.
On 18 September 2023 Emanuel Proença was appointed as the
Company's new Chief Executive Officer.
It was with deep sadness that the Board of Savannah announced on
19 September 2023 the passing of Manohar Pundalik Shenoy,
Non-Executive Director of the Company. He also was Chairman of the
Board's Audit and Risk Committee and served on the Remuneration
Committee.
Regulatory Information
This Announcement contains inside information for the purposes
of the UK version of the market abuse regulation (EU No. 596/2014)
as it forms part of United Kingdom domestic law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR").
Savannah - Enabling Europe's energy transition.
**ENDS**
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For further information please visit www.savannahresources .com
or contact:
Savannah Resources PLC Tel: +44 20 7117 2489
Emanuel Proença, CEO
SP Angel Corporate Finance LLP (Nominated Advisor Tel: +44 20 3470 0470
& Joint Broker)
David Hignell/ Charlie Bouverat (Corporate Finance)
Grant Barker/Abigail Wayne (Sales & Broking)
RBC Capital Markets (Joint Broker) Tel: +44 20 7653 4000
Farid Dadashev/ Jamil Miah
Tel: +44 20 3757 4980
Camarco (Financial PR)
Gordon Poole/ Emily Hall / Fergus Young
LPM (Portugal Media Relations) Tel: +351 218 508 110
Herminio Santos/ Jorge Coelho
About Savannah
Savannah Resources is a mineral resource development company and
sole owner of the Barroso Lithium Project in northern Portugal.
Savannah is focused on the responsible development and operation
of the Barroso Lithium Project so that its impact on the
environment is minimised and the socio-economic benefits that it
can bring to all its stakeholders are maximised. Through the
Barroso Lithium Project, Savannah can help Portugal to play an
important role in providing a long-term, locally sourced, lithium
raw material supply for Europe's rapidly developing lithium battery
value chain. Production is targeted to begin in 2026, producing
enough lithium for approximately half a million vehicle battery
packs per year.
The Company is listed and regulated on AIM and the Company's
ordinary shares are also available on the Quotation Board of the
Frankfurt Stock Exchange (FWB) under the symbol FWB: SAV, and the
Börse Stuttgart (SWB) under the ticker "SAV".
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END
IR GZGZLRRZGFZM
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September 29, 2023 02:00 ET (06:00 GMT)
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