TIDMSAV
RNS Number : 5404G
Savannah Resources PLC
18 March 2020
18 March 2020
Savannah Resources Plc ('Savannah' or the 'Company')
Annual Report and Financial Statements for the Year Ended 31
December 2019
Savannah Resources Plc ('Savannah' or the 'Company') is pleased
to announce its audited financial results for the year ended 31
December 2019.
2019 Summary
Mina do Barroso Lithium Project, Portugal
-- Became sole project owner through the acquisition of the minority 25% stake
-- Executed an option to acquire an adjacent lithium Mining Lease Application area
-- Advanced negotiations around the project's future
commercialisation and financing including engagement with several
of the European Commission's lithium battery-related
initiatives
-- Progressed the Environmental Impact Assessment ('EIA') and
Definitive Feasibility Study ('DFS')
-- Expanded the DFS' metallurgical test programme to further
de-risk the project's future production
-- Increased the Li(2) O resource by 37% y-o-y and announced a maiden 14.4Mt co-product resource
Mutamba Mineral Sands Project, Mozambique
-- Received three 25-year Mining Concession Licences covering the project's 4.4Bt resource
Block 4 & 5 Copper Projects, Oman
-- Received notice of the Oman authorities' 'intention to grant' two Mining Licences on Block 5
-- Initiated a strategic review reflecting the lower priority ranking now given to these assets
Corporate
-- Completed a GBP5m (gross) equity financing to allow expansion of the Mina do Barroso DFS
-- Loss of GBP3.8m (2018: GBP3.4m)
-- Year-end cash position of GBP3.5m
2020 Outlook
Mina do Barroso Lithium Project, Portugal
-- Submit the project's EIA and other licencing related
documents to the authorities for review and approval, plus expand
the community engagement activities
-- Commercialise the project by partnering with customers and other strategic groups
-- Complete the project's DFS in support of securing construction financing
Mutamba Mineral Sands Project, Mozambique
-- Progress the Project's Pre-Feasibility Study
Block 4 & 5 Copper Projects, Oman
-- Complete the strategic review of these assets and action the conclusions
To view the press release with the illustrative maps and
diagrams please use the following link:
http://www.rns-pdf.londonstockexchange.com/rns/5404G_1-2020-3-17.pdf
David Archer, Savannah's Chief Executive Officer said: "I
believe the efforts of Savannah's staff during 2019 and the first
quarter of 2020 have resulted in meaningful progress being made
across our project portfolio which will ultimately result in
Savannah being a more robust company, better able to offer
beneficial outcomes for all our stakeholders. As a shareholder
myself, I understand it may be difficult for our investors to
appreciate this based on Savannah's current share price. However,
the project updates we have provided over the last 12 months, along
with those we hope to share with you during 2020, have, and will,
evidence this. During 2019, the Company continued to deal
resourcefully with the specific project challenges it faced as part
of its ongoing project evaluation and development exercises.
However, we could do little to nullify the negative external trends
which emerged in the lithium sector, the broader commodities space,
and now in the wider markets as a result of the Coronavirus
pandemic.
"Coronavirus is, first and foremost, a deeply concerning global
public health crisis which we all hope to see contained quickly,
and Savannah has acted promptly itself to safeguard the wellbeing
of both its employees and other stakeholders. One of its many
secondary effects is the impact it has had on global supply chains
which incorporate China and other Asian countries. Lithium
batteries are one such supply chain, and we believe this indirect
impact further highlights the need for a sustainable lithium
battery supply chain to emerge in Europe. This would ensure the
region has the security of raw material supply it needs to produce
the batteries required to tackle climate change by curbing
emissions from the transport sector.
"The car sales statistics show that the EV revolution is well
underway in Europe and we are in the process of positioning Mina do
Barroso, and Portugal, at the heart of the future lithium battery
supply chain into this market. I'm pleased to report that Savannah
made good progress during the year with the commercialisation of
the project and is currently at an advanced stage of confidential
negotiations with several counterparties regarding offtake
agreements, provision of key services to the project and strategic
partnerships. Investors should be assured that in the Board's
opinion the groups we are negotiating with represent ideal
counterparties for the project and we are confident of formalising
commercial terms with them in a timely manner. We look forward to
providing further details on these agreements once they are
finalised.
"In the meantime, our focus remains firmly on completing the
other aspects of the project's pre-development phase as soon as
possible. This means lodging the EIA and other licence related
documentation with the Portuguese authorities, finishing the DFS,
obtaining popular acceptance for the project based on the social
and economic benefits it can bring, and making preparations to
secure the finance required to build the project.
"At nearly 3,000 pages combined, the EIA and accompanying Mine
Plan document we are preparing to submit as part of the project's
licencing process represent a huge effort by Savannah's staff and
consultants. Not only are these documents critical for the
project's approval by the Portuguese authorities, but they will be
of great benefit in our continued development of our community
relations plan and provide a significant amount of content for the
DFS which we plan to complete later this year.
"Away from Portugal, we are making preparations to accelerate
our work on the Mutamba Pre-Feasibility Study after three key
Mining Concessions were awarded during December and January
covering the project's 4.4Bt resource. We were delighted by the
licence awards after the extensive review conducted by the
Mozambique authorities during 2018 and 2019, and believe they add
significant value to the project overall.
"There was also progress with the Mining Licence applications in
Oman during the year. Although, the full award of these licences
was not achieved, the announcement in August by Oman's Public
Authority of Mining of its 'intention' to grant the licences leaves
the fixing (and payment) of fees under the new Mining Law as the
only impediment to their approval. We welcomed this news as we
continued the strategic review of these assets which was first
announced in our annual results last year. We expect to conclude
the review and undertake any related actions during the year.
"While further uncertainty must be expected over the coming
months, primarily due to the Coronavirus outbreak and its impact on
so many facets of everyday life, a recent $200m financing package
in our peer group provides an encouraging backdrop to the sector.
We hope that the work and progress Savannah intends to complete
during 2020, backed by growing demand in the lithium and mineral
sands markets, will place the Company in a strong position to
become a sustainable and responsible mine operate in the near
future".
Availability of Annual Report and Financial Statements
Copies of the Company's full Annual Report and Financial
Statements are expected to be posted to shareholders shortly and
will also be made available to download today from the Company's
website www.savannahresources.com .
Annual General Meeting
Notice of the Company's AGM will be announced in due course.
Regulatory Information
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further information please visit www.savannahresources.com
or contact:
Savannah Resources PLC Tel: +44 20 7117 2489
David Archer, CEO
SP Angel Corporate Finance LLP (Nominated Tel: +44 20 3470 0470
Advisor)
David Hignell / Charlie Bouverat
finnCap Ltd (Joint Broker) Tel: +44 20 7220 0500
Christopher Raggett
Whitman Howard (Joint Broker) Tel: +44 20 7659 1225
Grant Barker
St Brides Partners Ltd (Financial PR) Tel: +44 20 7236 1177
Charlotte Page / Cosima Akerman
About Savannah
Savannah is an energy metals group focussed on becoming the
first lithium raw material producer in Europe. A fast-paced
development strategy is being implemented at the Mina do Barroso
Project in Portugal, which hosts Western Europe's most significant
spodumene lithium resource (currently 27Mt at 1.06% Li(2) O).
Following completion of a positive Scoping Study on the project in
June 2018, which was based on the then 14Mt resource, an 11 year
operation producing an average of 175,000t per annum of spodumene
concentrate, the Company is currently undertaking a Definitive
Feasibility Study and an Environmental Impact Assessment on the
project. The Mina do Barroso project could produce enough lithium
annually for approximately 500,000 electric vehicle battery
packs.
The Company also has a Consortium Agreement with Rio Tinto on
the world class Mutamba Mineral Sands Project in Mozambique and has
rights to two blocks in the copper-rich Semail Ophiolite Belt in
the Sultanate of Oman.
Savannah 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) and the Börse Stuttgart (SWB) under
the ticker "SAV".
Competent Person and Regulatory Information
The information in this announcement that relates to exploration
results is based upon information compiled by Mr Dale Ferguson,
Technical Director of Savannah Resources plc. Mr Ferguson is a
Member of the Australasian Institute of Mining and Metallurgy
(AusIMM) and has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent
Person as defined in the December 2012 edition of the "Australasian
Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves" (JORC Code). Mr Ferguson consents to the inclusion in
the report of the matters based upon the information in the form
and context in which it appears.
The Information in this report that relates to Mineral Resources
and Exploration Targets is based on information compiled by Mr Paul
Payne, a Competent Person who is a Fellow of the Australasian
Institute of Mining and Metallurgy (AusIMM). Mr Payne is a
full-time employee of Payne Geological Services. Mr Payne has
sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity being undertaken to qualify as a Competent Person as
defined in the 2012 Edition of the "Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves". Mr
Payne consents to the inclusion in the report of the matters based
on his information in the form and context in which it appears.
This announcement is based upon information compiled by Mr Colin
Rothnie, an independent consultant. Mr Rothnie is a Member of the
Australasian Institute of Mining and Metallurgy (AusIMM) and has
sufficient experience, which is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person
as defined in the December 2012 edition of the "Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves" (JORC Code). Mr Rothnie consents to the inclusion in the
report of the matters based upon the information in the form and
context in which it appears.
Chairman's Statement
2019 was another important year for Savannah and the lithium
industry, of which the Group aims to be an integral part.
Undeniably, lithium raw materials and the Savannah share price both
performed poorly during 2019. Nonetheless, our company made
significant progress last year in developing the potential of our
Mina do Barroso asset, and we regard the fall in lithium raw
material and chemical prices as an over-correction, masking the
underlying global trend towards an electrified future in which
lithium ion batteries will have a key role. The year was also
marked by the award of the three, key mining licences in
Mozambique. We look forward to providing further updates regarding
the major milestones for all our projects in the coming months.
Mina do Barroso and Savannah have a vital, long term, role to
play in the European lithium battery industry and have the
potential to bring Portugal to the forefront of European lithium
supply. Our next objectives are to complete the Environmental
Impact Assessment ("EIA") and the Definitive Feasibility Study
("DFS") on the project, and obtain the legal authority and social
acceptance required for its development, which will provide the
foundation to secure construction finance.
Progress in Mozambique was confirmed towards the end of the year
and into 2020 with the award of the three mining licences which are
critical to the ultimate development of the Mutamba mineral sands
project. These licence awards also coincided with a continuing
improvement in the market price of mineral sands products. We are
now making preparations to accelerate work on the Mutamba
Pre-Feasibility Study.
We also made progress in Oman, where the authorities announced
last August that they intended to issue the mining licences we
submitted applications for in 2016 on the Block 5 project.
Meanwhile, we have continued to examine our options under the
strategic review we initiated last year, and we expect to complete
this and commence a course of action during this year.
In respect of the Coronavirus pandemic we are proud to have
already taken actions to safeguard the wellbeing of both our
employees and other stakeholders at all our operating sites ahead
of official recommendations or requirements by governments.
Notwithstanding the current impact of the Coronavirus pandemic
on all international stock exchanges, we hope that completion of
our objectives in 2020, while remaining cost conscious at all
times, will provide support for the share price as the markets
recognise the critical role future lithium producers such as
Savannah will play in the developing EV revolution.
Portugal
Having become sole owner of the Mina do Barroso project through
the acquisition of the residual 25% stake last June, Savannah
immediately expanded the project's footprint by 50% by executing
its option to acquire the adjacent three block " Aldeia " mining
lease application. With the project's resource expanded last May to
27Mt (+37% vs. September 2018), the focus since summer 2019 has
been on completing the project's technical appraisal, its
permitting process, and the development of associated commercial
relationships.
As we explained at the time of the fundraising last September,
we concluded that further technical evaluation work was required in
light of the challenges experienced in the commissioning of new
spodumene operations in Australia. This work is now moving toward a
conclusion and will be drawn together with all aspects of the
project in the DFS due later this year. The development decision we
hoped to make last year will now be taken once the DFS has been
completed.
The permitting process is underpinned by the project's EIA
study. Hence, we will be shortly submitting this for review by APA
(the Portuguese Environment Agency). This will be a major
milestone. I would draw the attention of all our stakeholders to
the comprehensive nature of the study, which is expected to extend
to over 2,000 pages. In simple terms the study identifies the
potential impacts the project may have on the natural environment
and local communities, and provides detailed plans for eliminating
or minimizing these impacts through project design, and for
monitoring and mitigating these impacts during the project's
operation and beyond. Hence, the study's content gives us the first
real opportunity to provide fact-based answers to the questions
local stakeholders have had about how the project will look and
feel and what impact, if any, it will have on their daily lives and
the environment. We welcome this engagement and the opportunity to
work with all stakeholders to ensure the study's mitigating
measures are fully utilised once it receives approval.
We are also in the process of planning and designing a series of
programmes which, we hope, will see Savannah's lithium project
become a significant support to the local economy and communities
in the Boticas municipality in which we operate, as well as the
wider region. Around the world, the mining industry has initiated,
funded and operated a wide range of tailored programmes which have
generated long lasting economic and social benefits for the
communities that live alongside projects. This has always been
Savannah's intention with Mina do Barroso, and we look forward to
presenting our plans to the project stakeholders over the coming
months.
Details of our more recent Corporate Social Responsibility
("CSR") programmes undertaken across all our projects can be found
in the CSR section included in the Company's full Annual Report and
Financial Statements.
For these benefits to be realised however, the project must
become a commercial reality. This can only happen by having
customers for our products. In that regard Savannah is making
significant progress in positioning itself as Europe's most
attractive project partner for industrial groups looking to build
spodumene mineral conversion plants in Europe for the production of
lithium hydroxide. Lithium hydroxide is a key component in lithium
batteries.
We are also receiving interest from major Portuguese industrial
groups around forming strategic partnerships with Savannah on what
is planned to be a sustainable mine development, which puts
Portugal at the heart of Europe's fast growing and highly strategic
battery supply chain. We expect the project to generate significant
direct and indirect economic benefits for Portugal and we continue
to enjoy solid support for the project from the Portuguese
Government. This has been further enhanced by our partnership with,
and inclusion in, various EU-backed ventures relating to the
development of our project and an end-to-end lithium battery supply
chain in Europe.
The electric vehicle revolution is well underway, and 2020 will
likely see EV penetration levels rise notably as the global market
moves towards the expected c.10m sales in 2025 and c.30m in 2030
(source: Bloomberg NEF Electric Vehicle Outlook 2019). These
numbers may seem staggering to some, but with growing consumer
interest now adding to the impetus created by tightening emissions
legislation, car companies globally are about to expand their EV
model ranges significantly.
On 16 March 2020 the Portuguese government's guidelines came
into force and include requiring all universities, schools,
nurseries, public places, and bars be closed at least until the end
of March, and request that the population avoid travelling and stay
at home as much as possible.
To sum up, notwithstanding undue disruption from Coronavirus,
2020 should bring the evaluation and planning phase of the Mina do
Barroso project to a close. During the year we expect to have
completed the DFS and, assuming the development decision is
positive, to have entered into offtake agreements, and advanced our
financing and our long-term community relationship plans. We look
forward to continuing to develop our relationships with all
stakeholders.
Mozambique
Our effort in maintaining an open dialogue and a good
relationship with the Government of Mozambique proved its worth
with the award of full Mining Licences over the three contiguous
concessions which cover the key resource-bearing ground on our
Mutamba mineral sands joint venture. It is simply not possible to
construct and operate a mine without the necessary licences being
granted. Hence, we and our partner on the project, Rio Tinto, view
these licence awards as a significant de-risking step for the
project's ultimate development.
While the review and approval period extended beyond our
original expectations, the long-term impact on the project was
minimal in our view. In the intervening period, the market dynamics
within the titanium feedstock sector remained favourable for the
development of new, large scale, long life sources of supply such
as Mutamba.
Furthermore, a mining operation in this region of Mozambique
could provide the long-term foundation for meaningful economic and
social development, and I again refer readers to the CSR section
included in the Company's full Annual Report and Financial
Statements for further details of our community programmes in the
area.
Savannah will continue to work on the Mutamba project with Rio
Tinto, focusing on the best way to draw value from the project for
our stakeholders. The current task for Savannah is the
Pre-Feasibility study on the project. Completion of that study
would lift our ownership of the project from the current 20% to
35%.
Oman
We noted with sadness the passing of Oman's leader for nearly 50
years, His Majesty, Sultan Qaboos bin Said Al Said, in January and
sent our condolences to all our Omani stakeholders at that
time.
While we haven't enjoyed the same licencing success to date in
Oman on the Mahab 4 and Maqail South project applications as we
have in Mozambique, we announced in August that we had been advised
by the Public Authority for Mining in Oman ("PAM") that it intends
to grant the licences under the new mining law. Savannah maintains
its dialogue with PAM and other relevant government departments and
agencies, with the licence grants now only reliant on the
government deciding on the licence fee schedule and these fees
being paid.
During the year, work in the field was limited to ground
programmes such as mapping with the emphasis placed firmly on cost
control to reflect the lower priority now placed on these
projects.
As discussed, Savannah's focus remains firmly on Portugal, but
the award of the Block 5 mining licences remains important in our
view as it would greatly de-risk the overall project. Resolution on
the renewal of the Block 4 exploration licence applied for in 2018
is also deemed as important for the same reason. To this end, the
strategic review initiated last year on these assets continues. On
a more positive note, Savannah did receive interest from a number
of groups regarding the potential acquisition of these projects and
discussions are continuing. Savannah expects to conclude its
strategic review this year and provide a resolution for our
shareholders, employees and stakeholders on these assets.
Corporate Update
We were delighted to receive a UK Department of International
Trade's Overseas Direct Investment Award for Portugal in November
2019. The recognition of our commitment to the country to date by
the UK Government, in addition to the Portuguese Government, is
highly appreciated.
At the time of last year's annual report Savannah was in the
process of finalising the acquisition of the minority 25% stake in
Mina do Barroso to take sole ownership of the project. This was
duly completed in June 2019 with the project's minority
shareholders agreeing to receive USD $11.9m worth of equity in
Savannah as opposed to cash to maintain their own exposure to this
exciting project. As a result, resource investment specialist
Slipstream Resources Investments Pty Ltd ("Slipstream"), which was
an existing shareholder in Savannah, significantly increased its
interest to 12.9%. Furthermore, the vendors of the 25% stake,
including Slipstream, agreed to a 12-month lock-in arrangement on
the shares received and a further 9-month orderly market
restriction, following completion of the transaction.
The deal has maximised our shareholders' exposure to one of the
most important lithium projects in Europe and gives Savannah
greater control and optionality in any future negotiations
regarding project finance and strategic partnerships on the
project.
A small issue of Savannah shares was also used in June 2019 in
an Agreement with Gentor Resources Inc (' Gentor ') to settle the
USD $3m deferred consideration element of the original 2014
acquisition of the Block 5 licence in Oman. USD $200,000
(GBP158,000) of stock, subject to a six-month orderly market
agreement, was issued to Gentor along with a cash payment of USD
$100,000 (GBP79,000).
Financial Overview
With its project evaluation programmes continuing throughout the
year, Savannah is reporting a loss before and after tax of GBP3.8m
for 2019 (2018: GBP3.4m). The higher amount reflects an increase in
administration costs associated with the corporate transactions
completed during the year, a temporary modest increase in staff
levels, additional professional advisory services and an adverse
foreign exchange loss driven by the strengthening of the GBP,
though these expenses were partially offset by no staff bonuses
being awarded and a reduction in travel costs.
Cash spent on exploration activity fell to GBP4.2m (2018:
GBP6.3m) overall. However, if the one-off GBP2.0m milestone
payments made last year in relation to the original acquisition of
a 75% stake in Savannah Lithium Lda, owner of the Mina do Barroso
project, is taken into account, exploration expenditure was broadly
unchanged. An amount of GBP294,000 relating to the Non-Controlling
Interest value applicable to the additional 25% stake in Savannah
Lithium Lda, which the Group acquired in June 2019 through the
issue of 163m new ordinary shares in the Company, is reported in
Exploration and Evaluation Assets. The agreed transaction value as
per the signed term sheet was USD $11.9m, however in accordance
with the financial reporting requirements of IFRS only the value of
the Non-controlling interest ("NCI") is recognised in intangible
assets.
The Group finished the year with Cash and Cash Equivalents of
GBP3.5m (2018: GBP7.7m). The cash position includes the GBP5m
(GBP4.83m net of expenses) placement completed last September. As
highlighted at the time, these additional funds are being used
primarily to complete the DFS on the Mina do Barroso lithium
project in the current year. Availability of funds from the equity
capital markets for the mining sector was much reduced in 2019 due
to a number of factors including the potential impact on the global
economy of a US-China trade war.
Hence, we were extremely pleased to raise this sum which is
understood to have been the sixth largest fundraise by an AIM
listed mining company in 2019. As in other recent placings, the
cornerstone of the financing was our largest shareholder, Al Marjan
Limited (20.7%), with a GBP1.24m commitment. Al Marjan's ongoing
commitment to Savannah is greatly appreciated, and we were also
pleased with the additional investment received from our existing
institutional shareholders as well as a number of new
investors.
Corporate Social Responsibility ('CSR')
Following on from our maiden Corporate Social Responsibility
("CSR") section included in the Company's full Annual Report and
Financial Statements last year, here we provide an update on our
Health & Safety record and our continuing community engagement
programmes across our projects.
Health & Safety
The Health & Safety of our staff, contractors and visitors
remains a top priority for Savannah. One incident was reported and
subsequently reviewed in 2019 (2018: 1 incident) across all our
projects and offices. We are pleased to report the member of staff
involved made a quick and full recovery and was able to return to
work.
Portugal
As we move nearer to a development decision point for the Mina
do Barroso project, our CSR programmes are evolving as is our
general engagement with all stakeholders in our project from those
living in the villages nearby through to local administrators,
government ministers and EU agencies.
On the ground, our Information Centre in Covas do Barroso
village, which opened last April, continued to provide a fixed
point where local people can meet with staff and receive
information on the project. We also kept up our regular community
newsletter correspondence (also available on our website), hosted
community meetings, sponsored local events and made a donation to
the local fire brigade, which is so vital in this area due to
frequent forest fires.
From January 2020 we have been offering regular project visits
for interested parties during which small groups are given a tour
of the project and can discuss Savannah's plans with our staff.
As outlined in the Chairman's statement above, the submission of
the project's EIA study will allow us to provide stakeholders with
a fact-based analysis and a comprehensive outline of our project
plan. To complement this, we expect to present comprehensive
community programmes and the Benefit Sharing Plans that we intend
to follow during the development and operating phase of the Mina do
Barroso project. We also hope that the Portuguese language website
we launched last year, www.minadobarroso.com has been an additional
source of useful information.
Savannah was also delighted to become a sponsor to FST Lisboa, a
team of engineering students from Instituto T é cnico de Lisboa,
University of Lisbon, which has entered an electric vehicle and a
driverless vehicle of their own design in the international Formula
Student competitions, including the FS series. The team's
innovative efforts on the racetrack perhaps represent the very
furthest downstream part of the lithium battery value chain and
goes to demonstrate that Portugal has the opportunity to
encapsulate the whole chain from mine to motorway if the country so
desires.
Savannah is looking forward to involving the local community and
the wider Portuguese population in the Mina do Barroso project
which could represent the country's first step into Europe's new
lithium battery industry.
Mozambique
Savannah continued to contribute to community and social
programmes in the Inhambane province where the Mutamba JV project
is located. 2019 was the final year of our initial 3-year
partnership on community programmes with the German Society for
International Collaboration ('GIZ'). During the three years the
partnership focused on the following key areas in its work within
the communities which surround the project:
-- Vocational training: 400 young people from the Inhambane
province completed training in trades such as electrical
maintenance, carpentry, plumbing and civil construction at the
training centres in Inhambane and Jangamo which were funded by the
partnership. Around 80% of the local youth trained to date have
gained employment, and the electrical maintenance training
programme curriculum that was initiated under this scheme is now
being implemented at training centres across Mozambique.
-- Value chain development: Small scale agriculture was a key
pillar of the partnership with the focus on coconut and cassava
production. 4,700 residents of Jangamo and Inharrime received
coconut seedlings during the programme as part of the coconut palm
reforestation programme. A coconut palm nursery with capacity for
20,000 seedlings was also set up during the project while a 'seeds
for seedlings' exchange programme remains in place to ensure the
reforestation project is sustained. The partnership also supported
the formation of a cassava mill, managed by a newly formed
Association which represents the 120 local small-scale farmers who
have received training in cassava production. Overall, over 400
local small-scale farmers have seen a minimum 10% increase in
income as a result of the training and support received from the
partnership.
-- Access to energy: 3,000 families have gained access to off
grid solar systems through the partnership under a low cost 'Pay as
you Go' model.
Following the success of the first phase of support, a new
partnership with GIZ will be considered in 2020.
In addition, Savannah will also join with six other national and
international groups including government agencies, NGOs and
private sector entities in the new, five year, "IWAMAMBA" project.
Through the project, the groups will share information and develop
collaborative models for further community programmes in the
Mutamba river basin. Savannah will contribute USD $10,000/year as
well as relevant water data and staff time.
Oman
With the initiation of the strategic review, work in the field
on our projects in Oman was very limited in 2019. However,
Savannah's Omani team maintained its engagement with the relevant
communities and project stakeholders, keeping them informed of
Savannah's activities and attending important community events to
maintain a clear presence on the ground.
Outlook
We will continue to monitor developments relating to the
Coronavirus pandemic and will take the appropriate and
proportionate actions to safeguard both our employees' and other
stakeholders' well-being. Such actions may impact the speed of
delivering on our objectives. However, at Mina do Barroso our focus
remains firmly on completing the pre-development phase as soon as
possible. This means lodging the EIA, finishing the DFS, obtaining
the necessary licences and commercial agreements, and making
preparations to secure the offers of finance required to build the
project. Work on the PFS at Mutamba continues and whilst firm cost
controls are in place in respect of the Oman projects, we continue
to shepherd our licence applications through the Oman
administration.
My thanks go to all our staff. Their continuing efforts to
progress our project portfolio in order to create value for
shareholders and benefits for all our stakeholders is very much
appreciated by myself and the Board. I would also like to express
the Board's thanks to our many shareholders who have continued to
support the company over the last year. We hope to repay your
continuing support by growing Savannah into a valuable business
based on responsible, sustainable mining operations which bring
benefits to all stakeholders.
Matthew King
Chairman
Date: 17 March 2020
Chief Executive's Report
Savannah experienced some challenges during 2019 but our company
worked hard to meet these market and operational challenges and we
continued to make progress with our projects. This has resulted in
a number of milestones which should provide the basis for the
further progress and value creation during the year ahead.
At Mina do Barroso we are now busy with the project's EIA, the
DFS, discussions with potential commercial partners and financing
groups, and finalising our proposals for social and economic
programmes for the communities living close to the project. The
commercial agreements we are working towards and the imminent
submission of the EIA confirm the project' s status as Portugal 's
first significant contribution to the upstream part of Europe's
developing lithium battery value chain.
Savannah is more than just the Mina do Barroso project, however,
and the licence awards on the Mutamba mineral sands project after a
thorough review period by the Mozambican authorities have changed
the complexion of that project significantly. As a result, we are
now increasing our work on the Mutamba Pre-Feasibility study.
Progress with the mine licence awards in Oman has been slower
than in Mozambique but we continue our dialogue with the Omani
authorities on this point alongside our own strategic review of the
options available to Savannah on these assets. Concluding and
actioning the findings of that review, ideally after the award of
the Block 5 related mining licences and renewal of the Block 4
exploration licence, is a goal for the year. However, this remains
a lower priority for the management team relative to permitting and
financing the Mina do Barroso project and advancing the PFS on
Mutamba.
Portugal
Mina do Barroso remains our flagship asset as its risk-reward
profile continues to be the most attractive amongst our current
portfolio. Despite the weakening of lithium prices in 2019 we
believe the project's profile has been greatly enhanced over the
past year by a number of factors including; a further increase in
its lithium resource, the simplification of its ownership structure
through Savannah's acquisition of the residual 25% stake, the
addition of the adjacent Aldeia mining lease application ground;
and the advanced nature of the discussions we are having with
potential lithium and co-product customers/offtakers and other
Portuguese strategic partners.
We believe that owing to the advanced nature of the offtake
discussions our shareholders can take particular confidence that an
offtake agreement with a significant and well positioned
counterparty is within our grasp. From a wider market perspective,
it also reiterates the view held by informed lithium consumers that
the potential for supply shortages in the market exists in the
medium term despite the inventory surplus which appeared last year.
Furthermore, it also confirms the views of many, including the
European Commission, that a European battery manufacturing industry
must be supported by domestic raw materials as competition grows
globally for access to lithium and risk associated with long supply
chains are brought into stark relief by unexpected events such as
the Coronavirus pandemic. Mina do Barroso would offer an excellent
foundation for a short, low carbon, lithium supply chain in
Europe.
I understand these long-term market trends were difficult to
credit during 2019 when reduced subsidies on electric vehicles in
China and increased inventories of lithium raw materials and
chemicals were driving down the share prices of lithium companies.
However, the short-term events masked the relentless evolution and
expansion of the lithium battery industry driven by the transition
to electrification in the transport sector, and growth in other
applications such as energy storage. In hindsight, 2019 should
perhaps be seen as a transitionary year in the automotive industry
and the discomfort in the immature and rapidly expanding lithium
supply industry, akin to growing pains.
We believe the 2019 sales figures for the world's car market
will bear this out with some analysis. While global car and light
duty vehicle sales fell 4.4% to 90.3m (source: LMC Automotive) with
Western Europe the only major growth market (+1.2%), website
EV-volumes.com reports that this overall fall masked a 9% rise in
plug-in vehicles sales to 2.3m. This lifts EV penetration in global
new vehicle sales to 2.5% from 2.2% in 2018.
At present forecasts appear to be for a further decline in
overall light vehicles sales in 2020 (e.g. Centre for Automotive
Research, Germany), with this trend potentially exacerbated further
by the impact of the Coronavirus on all markets. However, may
present another opportunity for EVs to take market share as more
models are released at a range of price points.
Digging deeper into the global EV market shows that China, still
the largest market for EVs, saw sales impacted noticeably by the
reduction in state subsidies in July, but sales in China still grew
by 3% to 1.2m. Encouragingly the Chinese Government has
subsequently confirmed that the planned subsidy reduction for 2020
would not be implemented. Sales in the US showed a fall
year-on-year of 11%. However, this is believed to reflect the poor
availability of affordable EVs in that market as opposed to a wider
rejection of the technology, with 2020 expected to bring a return
to EV sales growth. The real 2019 EV success story was Europe, the
market in which Savannah believes Mina do Barroso has such an
important role to play.
Website EV-volumes.com reports European sales of plug in
vehicles reached 590,000 in 2019, 44% higher than 2018 with the
overall penetration rate rising to 3.4% vs. 2.1% for 2018.
Furthermore, 2020 could see plug-in EV sales in Europe approach 1m
(3-7% of total sales; source: Transport & Environment) and
comfortably surpass that level in 2021 (7-12% of total sales) as
European auto manufacturers begin the multi-year roll out of
numerous new models to avoid the significant fines faced if new
emission targets are missed. Furthermore, with legislation then due
to tighten from 2025 and again in 2030, the framework for mass
adoption of EVs in the region is already in place. Overall,
Transport & Environment estimate that the total investment in
EVs by European car makers, which is already in the tens of
billions of Euros, will equate to approximately 50% of the total
fines that would be due if they took no action on the make up of
their fleets. Based on those metrics it's very difficult to think
that the EV revolution won't take place.
The advanced discussions we are in with offtakers is not
Savannah's only commitment to the European lithium battery value
chain. During the past year we have significantly strengthened our
own ties with the European Union through a number of its agencies
and initiatives.
We have also become a project partner in two initiatives run by
EIT RawMaterials, which has a mission to enable sustainable
competitiveness of the European minerals, metals and materials
sector along the value chain. The first, the Certification of Raw
Materials ("CERA") project has the brief to produce a standardised
certification scheme ensuring environmental, social and economic
sustainability in extraction, processing, trading and manufacturing
of all mineral raw materials. Savannah's Mina do Barroso project
has been chosen as the pilot mining project for evaluation to
achieve the CERA standard, and we believe meeting this rigorous EU
standard should give the project significant credit with potential
industrial customers and Europe-based financiers.
The second project, " LiRef ", is validating two conversion
processes with the target to develop one robust and flexible
process to transform spodumene concentrate into battery grade
lithium chemical. If a common processing technology can be found it
could be used in European-based spodumene conversion plants with
the capacity to treat ores from multiple sources including Mina do
Barroso.
Back at the project, our focus for 2019 was on progressing the
EIA, the Mine Plan Study, which is another report required in the
project licencing process, and DFS. Hence, following the intense
resource delineation campaigns of 2017 and 2018, there was less
drilling on the project in 2019 (69 holes for 5,887m taking the
total to date to 335 holes for 31,407m). However, the company was
still able to publish two resource upgrades with the second
estimate in May representing a 37% increase over the September 2018
estimate in terms of contained Li (2) O (286kt). A 25% increase in
the midpoint of the additional Exploration Target* estimate (15Mt
vs. 12Mt) was also made in May, indicating the long-term potential
to increase the project's resource towards 50Mt. While resource
expansion may have only modest significance to equity markets
currently, to industrial consumers of lithium, the possibility of
securing access to what may become decades of stable supply is very
valuable. Savannah was also able to declare its first co-product
resource on the project for the Grandao deposit. Further details of
the resource estimates can be found in the Project Overviews
section included in the Company's full Annual Report and Financial
Statements.
(* Cautionary Statement: The potential quantity and grade of the
Additional Resource Targets is conceptual in nature, there has been
insufficient prospecting work to estimate a mineral resource and it
is uncertain if further prospecting will result in defining a
mineral resource. )
As highlighted at the time of the fundraise last September, and
based on the operating performances of new spodumene projects in
Australia, we took the decision to expand the original DFS
metallurgical test work programme to allow us to identify and
optimise a lithium recovery process that would work effectively
across all five orebodies on the project. This work has advanced
and will be concluded by a final phase of pilot scale testing.
As we outlined in September, many of the DFS workstreams are at
an advanced point, and the next task will be to re-evaluate what
remains to be done once the EIA and the associated Mine Plan Study
have been completed as much of the work prepared for those studies
is relevant to the DFS.
In regard to the EIA, the submission will represent a huge
effort on the part of Savannah's project team and consultants
following a long period of data collection, interpretation, design
and planning. We expect the consultation and approval process
should take some six months during which time we plan a
comprehensive programme of stakeholder engagement outlining and
discussing specific areas of the EIA and our project plans.
To confirm, it is Savannah's intention to develop the project
with the minimum of impact on the natural environment and local
communities. We are also committed to making our operation as
sustainable as feasibly possible to attach the greatest
environmental benefit we can to the lithium concentrate we
produce.
To this end, Savannah is looking to form strategic partnerships
with some of the high quality service providers available within
Portugal to help move Mina do Barroso into development and bring
maximum benefits to the local economy and population, and Portugal
as a whole.
We are also very pleased with the continued strong support the
project enjoys from the Portuguese Government, which remains keen
to develop an in-country lithium industry based on Portugal's
substantial lithium resources. Management has met with a number of
ministers in the last year and we were delighted to host the
Secretary of State for Energy, Jo ã o Galamba, at the project site
during the year. We were also delighted to welcome to the project
the British Ambassador to Portugal, Chris Santy, and to win the UK
Department of International Trade' s Overseas Direct Investment
Award for Portugal.
We expect Mina do Barroso to dominate our news flow in the next
12 months and look forward to the much-anticipated mass market EV
ramp up in Europe in 2020 providing the sector with fresh momentum.
Lithium inventories, as well as external factors such as the
Coronavirus outbreak, may remain a drag on prices in the first half
of the year at least and further volatility in this rapidly
developing market must be considered 'normal' by lithium industry
investors. However, we hope that stock specific news will outweigh
these factors. Maintaining the progress of the project towards a
development decision point remains our goal and to get there we
must obtain all the necessary project approvals, complete the DFS,
enter into offtake agreements and financing commitments, and gain
social acceptance of the project's development by clearly
demonstrating the many benefits it can bring.
Mozambique
The final four months of 2019 and January 2020 marked a
significant period for Savannah's Mutamba mineral sands joint
venture with Rio Tinto in Mozambique. During that period the joint
venture was granted first conditional and then full Mining Licences
for the three contiguous concessions which cover the 4.4Bt
Indicated and Inferred resources currently estimated on the
project. These Mining Concession licences, granted by the Minister
of Mineral Resources and Energy in Mozambique, are valid for an
initial 25-year period (expiring in 2044) with the possibility of
being extended for a further 25 years.
The Mining Licence application submitted for the standalone
Chilubane concession, located approximately 180km southeast of the
main Mutamba project concession, remains under consideration by the
Minister.
We have long flagged the potential of the Mutamba project based
on the scale of its resource, the commercial significance of the
mineral sands sector to our JV partner, Rio Tinto and the positive
findings of the 2017 Scoping Study. The investment case for the
project continues to be further enhanced by the encouraging
long-term outlook for underlying demand.
The market dynamics within the titanium feedstock have remained
favourable for the development of new sources of supply such as
Mutamba. Ilmenite is the dominant titanium mineral in the Mutamba
deposit, and established Mozambique-based mineral sands producer,
Kenmare Resources, reported in January 2020 that prices received
for its ilmenite product resumed their previous upward trend in
2019, having eased in the second half of 2018, with second half
2019 prices more than 10% above those in the first half. We believe
this reflects the continuing decline in supply from existing
operations which began in 2015. The higher purity, higher value
titanium mineral, rutile, which also features in the Mutamba ore
has seen prices increase since 2017 as well, again reflecting the
decline in production from existing operations. This trend is
expected to continue over the next 3-4 years while demand,
primarily from the pigment industry, is expected to remain robust
and grow in-line with the global economy.
Mutamba 's potential cannot be realised without the foundation
of valid mining licences. The project now has these and given the
risk perceived in the mining industry around 'licence to operate'
these awards carry significant weight in our view. There remains
much work to do in respect of making Mutamba an operating mine,
beginning with the completion of a Pre-Feasibility Study, which
would increase Savannah's stake in the project from 20% to 35%. We
continue with our efforts on this front, but reiterate that our
prime focus remains the Mina do Barroso lithium project with the
majority of our finite cash reserves committed to moving that
project forward.
Oman
I reiterate the condolences expressed by our Chairman to all our
Omani stakeholders on the passing of His Majesty Sultan Qaboos bin
Said Al Said in January.
It is expected by observers that Oman's new leader, His Majesty
Sultan Haithum bin Tariq Al Said, who succeeded to the throne on
the death of his cousin, will maintain the former Sultan's focus on
domestic, economic and social reform. However, it also must be
expected that the change of leadership is likely to impact the
operation of Oman's ministries in the short term.
Hence it will not surprise our shareholders to know that there
is little further to report at this stage in regard to final mining
licence awards over the Mahab 4 and Maqail South copper projects
(Block 5) since we announced in August that we had been advised by
PAM that it intends to grant them. Savannah maintains its dialogue
with PAM and other relevant government departments with only
confirmation of the licence fee structure and relevant payment
required for the licences to be issued. During the year, work in
the field was limited to 'surface' programmes such as mapping, with
the emphasis placed firmly on cost control to reflect the lower
priority now placed on these projects.
As discussed, Savannah's focus remains on Portugal and
Mozambique, with the strategic review initiated last year on our
Oman assets continuing. We intend to conclude this review and begin
actioning its conclusions during the year and would welcome the
award of the Block 5 mining licences and the renewal of the Block 4
exploration licence (which is pending due to certain areas that are
required for further exploration currently not being included in
the proposed licence renewal) as it would help to clarify the
options available to us. As highlighted in the Chairman's
statement, Savannah has received interest from a number of groups
regarding the potential acquisition of these assets and discussions
are ongoing.
Summary
My thanks go to Savannah's staff who have demonstrated enormous
commitment during 2019 in dealing with the challenging setting.
We continue to welcome these challenges believing that the
projects which Savannah manages can bring benefits to all our
stakeholders, and in the case of Mina do Barroso play an important
role in Europe's climate change action plan. 2020 is set to be
another pivotal year for Savannah.
David Archer
Chief Executive Officer
Date: 17 March 2020
Financial Results
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December 2019
2019 2018
GBP GBP
CONTINUING OPERATIONS
Revenue - -
Other Income 35,325 -
Administrative Expenses (3,861,344) (3,258,458)
Impairment of Intangible Assets - (140,024)
OPERATING LOSS (3,826,019) (3,398,482)
Finance Income 25,621 17,321
Finance Costs (1,528) -
------------ --------------
LOSS BEFORE AND AFTER TAX ATTRIBUTABLE
TO EQUITY OWNERS OF THE PARENT (3,801,926) (3,381,161)
------------ --------------
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 2,496 (73,345)
Items that will or may be reclassified to
profit or loss:
Exchange Gains / (Losses) arising on translation
of foreign operations (609,228) 384,248
------------ --------------
OTHER COMPREHENSIVE INCOME FOR THE YEAR (606,732) 310,903
------------ --------------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT (4,408,658) (3,070,258)
============ ==============
Loss per share attributable to equity owners
of the parent expressed in pence per share:
Basic and diluted
From Operations (0.36) (0.44)
============ ==============
Consolidated Statement of Financial Position
as at 31 December 2019
2019 2018
GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible Assets 21,068,376 17,413,168
Right-of-Use Assets 37,785 -
Other Intangible Assets 10,804 342,881
Property, Plant and Equipment 1,337,229 1,437,068
Other Non-Current Assets 248,275 253,188
Bank Deposits 742,363 -
------------- -------------
TOTAL NON-CURRENT ASSETS 23,444,832 19,446,305
------------- -------------
CURRENT ASSETS
Investments 36,762 18,007
Trade and Other Receivables 285,699 330,774
Other Current Assets 19,171 223,733
Cash and Cash Equivalents 3,484,781 7,715,435
------------- -------------
TOTAL CURRENT ASSETS 3,826,413 8,287,949
TOTAL ASSETS 27,271,245 27,734,254
============= =============
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share Capital 12,974,598 8,814,518
Share Premium 33,511,787 31,060,554
Merger Reserve 6,683,000 -
Foreign Currency Reserve (30,257) 579,126
Warrant Reserve 975,679 1,000,221
Share Based Payment Reserve 410,121 508,051
FVTOCI Reserve (43,439) (58,737)
Retained Earnings (28,163,712) (16,485,626)
------------- -------------
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE PARENT 26,317,777 25,418,107
------------- -------------
LIABILITIES
NON-CURRENT LIABILITIES
Loans and Borrowings - 25,813
Lease Liabilities 12,059 -
------------- -------------
TOTAL NON-CURRENT LIABILITIES 12,059 25,813
------------- -------------
CURRENT LIABILITIES
Loans and Borrowings - 16,895
Lease Liabilities 18,990 -
Trade and Other Payables 922,419 2,273,439
------------- -------------
TOTAL CURRENT LIABILITIES 941,409 2,290,334
------------- -------------
TOTAL LIABILITIES 953,468 2,316,147
------------- -------------
TOTAL EQUITY AND LIABILITIES 27,271,245 27,734,254
============= =============
Company Statement of Financial Position
as at 31 December 2019
2019 2018
GBP GBP
ASSETS
NON-CURRENT ASSETS
Investments in Subsidiaries 894,993 458,667
Other Intangible Asset 5,948 333,353
Other Receivables 33,265,297 20,844,330
Other Non-Current Assets 41,068 36,800
------------- -------------
TOTAL NON-CURRENT ASSETS 34,207,306 21,673,150
------------- -------------
CURRENT ASSETS
Investments 33,935 17,225
Trade and Other Receivables 70,338 130,438
Other Current Assets - 202,180
Cash and Cash Equivalents 3,277,943 7,368,469
------------- -------------
TOTAL CURRENT ASSETS 3,382,216 7,718,312
TOTAL ASSETS 37,589,522 29,391,462
============= =============
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share Capital 12,974,598 8,814,518
Share Premium 33,511,787 31,060,554
Merger Reserve 6,683,000 -
Warrant Reserve 975,679 1,000,221
Share Based Payment Reserve 410,121 508,051
FVTOCI Reserve (43,439) (58,737)
Retained Earnings (17,341,234) (12,883,510)
TOTAL EQUITY 37,170,512 28,441,097
------------- -------------
LIABILITIES
CURRENT LIABILITIES
Trade and Other Payables 419,010 950,365
TOTAL LIABILITIES 419,010 950,365
------------- -------------
TOTAL EQUITY AND LIABILITIES 37,589,522 29,391,462
============= =============
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2019
Share
Foreign Based
Share Share Merger Currency Warrant Payment FVTOCI Retained Total
Capital Premium Reserve Reserve Reserve Reserve Reserve Earnings Equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January
2018 6,358,504 18,105,108 - 194,878 1,405,958 691,194 - (13,612,758) 13,142,884
----------------- ----------- ----------- ---------- ---------- ---------- ---------- --------- ------------- ------------
Loss for the
year - - - - - - - (3,381,161) (3,381,161)
Other
Comprehensive
Income - - - 384,248 - - (58,737) (14,608) 310,903
Total
Comprehensive
Income
for the year - - - 384,248 - - (58,737) (3,395,769) (3,070,258)
Issue of share
capital (net
of expenses) 2,056,014 12,967,604 - - - - - - 15,023,618
Contingent
consideration - - - - - 283,283 - - 283,283
Contingent
consideration
shares issued 400,000 - - - - (283,283) - (116,717) -
Share based
payment charges - - - - - 38,580 - - 38,580
Exercised
options - - - - - (202,521) - 202,521 -
Lapse of options - - - - - (19,202) - 19,202 -
Issue of
warrants - (12,158) - - 12,158 - - - -
Exercised
warrants - - - - (326,755) - - 326,755 -
Lapse of
warrants - - - - (91,140) - - 91,140 -
At 31 December
2018 8,814,518 31,060,554 - 579,126 1,000,221 508,051 (58,737) (16,485,626) 25,418,107
----------------- ----------- ----------- ---------- ---------- ---------- ---------- --------- ------------- ------------
Loss for the
year - - - - - - - (3,801,926) (3,801,926)
Other
Comprehensive
Income - - - (609,383) - - 15,298 (12,802) (606,887)
----------------- ----------- ----------- ---------- ---------- ---------- ---------- --------- ------------- ------------
Total
Comprehensive
Income
for the year - - - (609,383) - - 15,298 (3,814,728) (4,408,813)
Issue of share
capital (net
of expenses) 2,500,000 2,326,400 - - - - - - 4,826,400
Consideration
for acquisition
of
non-controlling
interest 1,630,000 - 6,683,000 - - - - (8,019,000) 294,000
Consideration
for
settlement
deferred
consideration 30,080 124,833 - - - - - - 154,913
Share based
payment charges - - - - - 33,170 - - 33,170
Lapse of options - - - - - (131,100) - 131,100 -
Lapse of
warrants - - - - (24,542) - - 24,542 -
At 31 December
2019 12,974,598 33,511,787 6,683,000 (30,257) 975,679 410,121 (43,439) (28,163,712) 26,317,777
================= =========== =========== ========== ========== ========== ========== ========= ============= ==============
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share Capital Amounts subscribed for share capital at nominal value.
Share Premium Amounts subscribed for share capital in excess of nominal
value less costs of fundraising.
Merger Reserve Amounts subscribed for share capital in excess of nominal
value in respect of the consideration paid in an acquisition
arrangement, when the issuing company takes its interest
in another company from below 90% to 90% or above equity
holding.
Foreign Currency Gains/losses arising on retranslating the net assets of
Reserve group operations into Pound Sterling.
Warrant Reserve Fair value of the warrants issued.
Share Based Represents the accumulated balance of share based payment
Payment Reserve charges recognised in respect of asset acquired and share
options granted by Savannah Resources Plc, less transfers
to retained losses in respect of options exercised, lapsed
and forfeited.
FVTOCI Reserve Cumulative changes in fair value of equity investments classified
at fair value through other comprehensive income (FVTOCI).
Retained Earnings Cumulative net gains and losses recognised in the Consolidated
Statement of Comprehensive Income and other transactions
recognised directly in Retained Earnings.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2019
Share
Based
Share Share Merger Warrant Payment FVTOCI Retained Total
Capital Premium Reserve Reserve Reserve Reserve Earnings Equity
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January 2018 6,358,504 18,105,108 - 1,405,958 691,194 - (11,058,857) 15,501,907
------------------- ----------- ----------- ---------- ---------- ---------- --------- ------------- ------------
Loss for the year - - - - - - (2,449,663) (2,449,663)
Other
Comprehensive
Income - - - - - (58,737) (14,608) (73,345)
------------------- ----------- ----------- ---------- ---------- ---------- --------- ------------- ------------
Total
Comprehensive
Income for the
year - - - - - (58,737) (2,464,271) (2,523,008)
Issue of share
capital
(net of expenses) 2,056,014 12,967,604 - - - - - 15,023,618
Shares issued 400,000 - - - - - - 400,000
Share based
payment
charges - - - - 38,580 - - 38,580
Exercised options - - - - (202,521) - 202,521 -
Lapse of options - - - - (19,202) - 19,202 -
Issue of warrants - (12,158) - 12,158 - - - -
Exercised warrants - - - (326,755) - - 326,755 -
Lapse of warrants - - - (91,140) - - 91,140 -
------------------- ----------- ----------- ---------- ---------- ---------- --------- ------------- ------------
At 31 December
2018 8,814,518 31,060,554 - 1,000,221 508,051 (58,737) (12,883,510) 28,441,097
------------------- ----------- ----------- ---------- ---------- ---------- --------- ------------- ------------
Loss for the year - - - - - - (4,600,564) (4,600,564)
Other
Comprehensive
Income - - - - - 15,298 (12,802) 2,496
Total
Comprehensive
Income for the
year - - - - - 15,298 (4,613,366) (4,598,068)
Issue of share
capital
(net of expenses) 2,500,000 2,326,400 - - - - - 4,826,400
Consideration for
acquisition of
non-controlling
interest 1,630,000 - 6,683,000 - - - - 8,313,000
Consideration for
settlement
deferred
consideration 30,080 124,833 - - - - - 154,913
Share based
payment
charges - - - - 33,170 - - 33,170
Lapse of options - - - - (131,100) - 131,100 -
Lapse of warrants - - - (24,542) - - 24,542 -
At 31 December
2019 12,974,598 33,511,787 6,683,000 975,679 410,121 (43,439) (17,341,234) 37,170,512
=================== =========== =========== ========== ========== ========== ========= ============= ============
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share Capital Amounts subscribed for share capital at nominal value.
Share Premium Amounts subscribed for share capital in excess of nominal
value less costs of fundraising.
Merger Reserve Amounts subscribed for share capital in excess of nominal
value in respect of the consideration paid in an acquisition
arrangement, when the issuing company takes its interest
in another company from below 90% to 90% or above equity
holding.
Warrant Reserve Fair value of the warrants issued.
Share Based Represents the accumulated balance of share based payment
Payment Reserve charges recognised in respect of asset acquired and
share options granted by Savannah Resources Plc, less
transfers to retained losses in respect of options
exercised, lapsed and forfeited.
FVTOCI Reserve Cumulative changes in fair value of equity investments
classified at fair value through other comprehensive
income (FVTOCI).
Retained Earnings Cumulative net gains and losses recognised in the Consolidated
Statement of Comprehensive Income and other transactions
recognised directly in Retained Earnings.
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2019
2019 2018
GBP GBP
Cash flows used in operating activities
Loss for the year (3,801,926) (3,381,162)
Depreciation and amortisation charges 40,872 31,194
Impairment of assets - 140,024
Share based payment charge 33,170 38,580
Finance income (25,621) (17,321)
Finance expense 1,528 -
Exchange losses / (gains) 196,229 (54,076)
Cash flow from operating activities before
changes
in working capital (3,555,748) (3,242,761)
Decrease/(Increase) in trade and other
receivables 254,550 (179,376)
(Decrease)/Increase in trade and other
payables (589,705) 562,925
------------ ------------
Net cash used in operating activities (3,890,903) (2,859,212)
Cash flow used in investing activities
Purchase of intangible exploration assets (4,169,238) (6,317,118)
Purchase of other intangible assets (1,278) (131,173)
Purchase of tangible fixed assets (21,296) (328,768)
Purchase of investments (28,371) (695)
Proceeds from sale of investments 12,112 104,461
Bank deposits for mining licences (742,363) -
Guarantees for acquisition of intangible
exploration assets - (202,180)
Interest received 25,621 17,321
Net cash used in investing activities (4,924,813) (6,858,152)
------------
Cash flow from financing activities
Proceeds from issues of ordinary shares
(net of expenses) 4,826,400 14,986,546
Principal paid on lease liabilities (20,488) -
Interest paid on lease liabilities (1,528) -
------------
Net cash from financing activities 4,804,384 14,986,546
------------
(Decrease)/Increase in cash and cash equivalents (4,011,332) 5,269,182
Cash and cash equivalents at beginning
of year 7,715,435 2,455,968
Exchange losses on cash and cash equivalents (219,322) (9,715)
------------
Cash and cash equivalents at end of year 3,484,781 7,715,435
============ ============
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2019
2019 2018
GBP GBP
Cash flows used in operating activities
Loss for the year (4,600,564) (2,449,736)
Impairment of financial assets 1,035,627 1,325,790
Share based payment reserve charge 33,170 38,580
Finance income (25,514) (17,321)
Exchange losses / (gains) 1,718,168 (628,473)
------------ ------------
Cash flow from operating activities before
changes in working capital (1,839,113) (1,731,160)
Decrease/(Increase) in trade and other
receivables 182,233 (103,289)
(Decrease)/Increase in trade and other
payables (512,038) 477,736
------------ ------------
Net cash used in operating activities (2,168,918) (1,356,713)
------------ ------------
Cash flow used in investing activities
Investment in subsidiaries (27,195) (115,784)
Loans to subsidiaries (6,512,623) (8,049,798)
Purchase of other intangible assets - (131,173)
Guarantees for acquisition of intangible
exploration assets - (202,180)
Purchase of investments (26,326) -
Proceeds from sale of investments 12,112 104,461
Interest received 25,514 17,321
Net cash used in investing activities (6,528,518) (8,377,153)
------------ ------------
Cash flow from financing activities
Proceeds from issues of ordinary shares
(net of expenses) 4,826,400 14,986,546
Net cash from financing activities 4,826,400 14,986,546
------------ ------------
(Decrease)/Increase in cash and cash
equivalents (3,871,036) 5,252,680
Cash and cash equivalents at beginning
of year 7,368,469 2,125,504
Exchange losses on cash and cash equivalents (219,490) (9,715)
------------
Cash and cash equivalents at end of year 3,277,943 7,368,469
============ ============
** ENDS **
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR MZGMFZNKGGZZ
(END) Dow Jones Newswires
March 18, 2020 03:00 ET (07:00 GMT)
Grafico Azioni Savannah Resources (LSE:SAV)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Savannah Resources (LSE:SAV)
Storico
Da Apr 2023 a Apr 2024