TIDMSAV
RNS Number : 1225I
Savannah Resources PLC
31 March 2020
31 March 2020
Savannah Resources Plc ('Savannah' or the 'Company')
Operational Update
Coronavirus Pandemic Mitigation
Savannah Resources Plc ('Savannah', the 'Group' or the
'Company') provides an operational update regarding its recent and
future activities in relation to the current Coronavirus pandemic
(the 'pandemic'). To view the announcement with the illustrative
maps and diagrams, please use the following link:
http://www.rns-pdf.londonstockexchange.com/rns/1225I_1-2020-3-30.pdf
Savannah has taken the following action across its operations in
response to the Coronavirus pandemic:
-- Temporarily closed all offices and arranged for all staff to work remotely
-- Temporarily suspended all field activities
-- Temporarily reduced the staff at the Mutamba Project camp in
Mozambique to essential personnel only
-- Suspended all non-essential travel
-- Rearranged meetings to take place via telephone, video
conferencing or online where possible
This action has helped ensure that, to date, none of Savannah's
employees have shown symptoms consistent with the Coronavirus
Current work programmes:
Savannah has been able to continue with many of its key current
activities although with some degree of disruption, this
includes:
Mina do Barroso Lithium Project, Portugal
-- Finalising the Environmental Impact Assessment & Mine
Plan for submission to the national regulator shortly
-- Developing a project Benefits Sharing Plan with the
assistance of external, independent consultants
-- Continuing advanced negotiations with potential partners
regarding the commercialisation and financing of the project
(offtake agreements, contract services, strategic partnerships, EU
battery-related initiatives)
Mutamba Mineral Sands Project, Mozambique
-- Reviewing data from recent Pre-Feasibility Study ('PFS')
related fieldwork, ongoing discussions with Rio Tinto regarding PFS
project scope
Block 4 & 5 Copper Projects, Oman
-- Continuing the strategic review and discussions with
potential acquirers of the projects
Corporate
-- Presenting to institutional shareholders following 2019 Annual Results
Current cash & future financing:
-- The Group reported a cash position of GBP3.5m at year end 2019 and has no debt
-- The Group's working capital position is sufficient to
maintain current work programmes
-- Budgets are being reviewed in light of the pandemic and
working capital will be closely managed, with cash conservation
plans being implemented
David Archer, Savannah's Chief Executive Officer said, "We
highlighted in our 2019 Annual Results, released on 18 March, that
Savannah had already taken prompt action to protect its staff and
other project stakeholders against the threat of the Coronavirus
pandemic. In many cases, our decisions to close offices and cease
work in the field were taken in advance of the relevant government
guidelines being issued.
"Savannah routinely manages its operations using remote work
practices, so the enforced temporary closure of our various offices
has had minimal impact to date. Furthermore, only modest
field-based activities were underway or scheduled for the short
term, so Savannah is fortunate that many of its current critical
tasks can be continued and completed whilst staff are working
remotely. These tasks include the Mina do Barroso Environmental
Impact Assessment and Mine Plan, which our team is currently
finalising. Once completed, these documents will be submitted to
the Portuguese regulator for consideration. At this point the Mina
do Barroso team's focus will switch back to advancing the
Definitive Feasibility Study('DFS'), much of which also involves
desk-based tasks using data already collected. However, the current
emergency may impact on our ability to take bulk samples for
metallurgical test work and to complete infill drilling as may be
required for the DFS. The team will also be able to work on
preparing our expanded community engagement programmes, including a
Benefits Sharing Plan, which can be presented to our stakeholders
in person when it is safe to do so.
"Alongside the technical work, the executive team has been able
to continue negotiations with Mina do Barroso's potential
commercial and strategic partners regarding lithium and co-product
offtake agreements, the provision of multiple services to the
project and potential investment. While these counterparties are
all also dealing with Coronavirus-related challenges in their own
businesses, we have observed no decline in their interest in
building long term relationships with Savannah. Discussions are
also continuing with EU focussed battery-related initiatives; as we
have highlighted previously, Savannah is expecting to position Mina
do Barroso as an important upstream component of the rapidly
developing European lithium battery chain industry.
"Unfortunately, as a health necessity, fieldwork for the Mutamba
Pre-Feasibility Study has been suspended at the current time.
Despite the suspension of fieldwork at Mutamba, the in-country team
is able to review the data collected during the recently completed
initial fieldwork phase and will be liaising with our project
partner, Rio Tinto, to finalise the scope and key themes of the
PFS. Negotiations have also been maintained with potential
acquirers of our Oman projects, which we have engaged with as part
of the ongoing strategic review.
"In terms of financing our ongoing work, Savannah finished 2019
with GBP3.5m of cash and no debt, so we retain an adequate working
capital position to fund our current work schedules during this
challenging period. Looking further ahead, it has always been
Savannah's intention to blend a number of sources of finance to
develop the Mina do Barroso Lithium Project and we are confident
that the formalisation of the commercial agreements and strategic
partnerships which we are currently negotiating will help with that
process. This will be either via providing capital directly for the
project, or by providing the commercial structure around the
project, which will help to de-risk the opportunity sufficiently to
attract other forms of finance such as debt and royalties. We are
also hopeful of accessing additional funding through our
strengthening ties with the EU's battery-related initiatives.
"The Coronavirus pandemic is a global health crisis which we all
hope will be contained in the near future. However, the duration of
its impact on all facets of society is uncertain and further
Coronavirus-related market volatility must be expected, as must its
potential impact on the Company achieving milestone events.
Savannah will continue to closely monitor guidance on mitigating
the virus' impacts and will act appropriately as guidance changes.
We will also closely manage the Group's budgets and working capital
position but remain confident that the Group will be able to
finance and deliver on its short- and long-term goals.
"We will continue to update the market as developments
emerge."
Other information
Annual General Meeting Update
The Company continues to monitor guidance and developments in
respect of the holding of physical AGMs and will make an
announcement in due course in respect of this. Currently, the
Company's AGM must be held no later than 30 June 2020 and Savannah
will respect the Government's Coronavirus guidelines and advice to
avoid any infection risk to its employees, shareholders or
professional advisers.
Corporate Presentation
Savannah has updated its corporate presentation which is
available for download on the Company's website at
www.savannahresources.com/investor-relations/presentations-and-reports
Regulatory Information
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
**ENDS**
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 a diversified resources group (AIM: SAV) with a
portfolio of energy metals projects - lithium in Portugal and
copper in Oman - together with the world-class Mutamba Heavy
Mineral Sands Project in Mozambique, which is being developed in a
consortium with the global major Rio Tinto. The Board is committed
to serving the interests of its shareholders and to delivering
outcomes that will improve the lives of the communities we work
with and our staff.
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".
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
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