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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Savannah Resources Plc | LSE:SAV | London | Ordinary Share | GB00B647W791 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.35 | 3.30 | 3.40 | 3.35 | 3.35 | 3.35 | 34,866 | 08:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Gold Ores | 0 | -2.86M | -0.0016 | -20.94 | 61.24M |
TIDMSAV
RNS Number : 4795B
Savannah Resources PLC
21 September 2018
21 September 2018
Savannah Resources Plc
Interim Results
Savannah Resources plc (AIM: SAV, FWB: AFM and SWB: SAV) ('Savannah' or the 'Company'), the AIM quoted resource development company, is pleased to announce its interim financial results for the six months ended 30 June 2018.
HIGHLIGHTS
-- Portugal:
o Mineral Resource at the Mina do Barroso Lithium Project ("the MdB Project") increased to over 20Mt (over 200,000t contained Li(2) O) underpinning the project as the largest of its kind in Western Europe
o Positive Scoping Study completed on the MdB Project - study reports a base case pre-tax NPV(8%) of US$356m and pre-tax IRR of 63% generated from 175,000tpa of 6% spodumene concentrate production over an 11 year life of mine
o Feasibility Study for the MdB Project on track for completion Q2-2019
o MdB Project development decision expected Q2-2019
o Strong expansion potential - due diligence underway on option to acquire Mining Lease application adjacent to the MdB Project and rolling drill programme underway targeting resource upgrades and expansions at the MdB Project
-- Oman: Awaiting anticipated decisions for Mining Lease applications - Letters of No Objection received from all eight Ministries for development of the Mahab 4 and Maqail South copper projects
-- Mozambique: Mining Lease Applications submitted for Heavy Mineral Sands project, and scoping phase of Pre-Feasibility Study progressing
-- Corporate:
o Investments in intangible and exploration project assets of GBP3.98m, primarily related to the MdB Project in Portugal
o Greatly strengthened cash position following GBP2.1m (gross) equity raise completed at 5.5p per share in April 2018 and record GBP12.5m (gross) equity raise at 9.0p per share in July 2018, which included funds from existing shareholders and Tier 1 institutional investors (Current cash position GBP11.4m)
o SAV now fully financed to development decision point for the MdB Project
o Operating loss of GBP1.20m reflects the continued high tempo of mine development activities
o Secondary listing completed on the Frankfurt Stock Exchange in September 2018 to support increased European marketing activities
CHAIRMAN'S STATEMENT
2018 to date has been a pivotal period for Savannah with the acceleration of our work programmes at the Mina do Barroso lithium Project ("the MdB Project"), culminating in a highly positive Scoping Study on the asset and a 500%+ increase in its resource base. The momentum created by this rapid and successful appraisal programme allowed us to complete a record GBP12.5m equity financing in July raised principally from existing shareholders and new institutional investors. This will provide funding for the work necessary to reach a mine development decision on the MdB Project, and to progress our projects in Mozambique and Oman.
Mina do Barroso, Portugal
As the recent Scoping Study showed, the MdB Project's lithium mineralogy and grade, along with its scale, near surface position and geographical location combine to produce a very attractive opportunity. Following the July 2018 fundraise, Savannah is now fully financed past the expected mine development decision point in Q2-2019 which is when the recently commissioned Feasibility Study is due to have been completed.
This project is taking shape at a time of increasing pressure to replace petrol and diesel cars with electric vehicles. For example, the UK Government has set a target that three-fifths of new cars should be electric by 2030 and that sales of conventional petrol and diesel vehicles should be phased out by 2040. To deliver on these targets, locking in supplies of key battery raw materials such as lithium is critical.
With no current European producer of spodumene concentrate, the dominant lithium mineral product traded internationally, we believe the fast-tracked development of the MdB Project could help Savannah become Western Europe's first major domestic spodumene supplier, giving us a strong commercial advantage. Our recent secondary listing on the Frankfurt Stock Exchange is the latest step in our strategy to build our brand and investor base on the continent.
Critical to the viability of any mining project is its deposit. The MdB Project has been proven to host Western Europe's largest new spodumene (hard rock) lithium discovery. The Company recently published its fourth Mineral Resource Estimate since acquiring the project in May 2017. In that time Savannah has been able to increase the overall Mineral Resource Estimate at the project by over 500% to 20.1Mt with the contained lithium (Li O) inventory growing by a similar percentage to 209,000t. This significant increase in overall Mineral Resource Estimate tonnage and contained metal has been accompanied by an equally significant increase in the statistical confidence of the Mineral Resource Estimate. For example, the latest estimate, announced on 10 September 2018, placed over 50% of the 20.1Mt total in the higher, Measured and Indicated JORC Resource categories, including 90% of the mining inventory of Stage 1 of the Grandao pit as defined in the June 2018 Scoping Study. This bodes well for the maiden JORC-2012 Mineral Reserve Estimate that will be taken from the Measured and Indicated Resource Estimate as part of the Feasibility Study due for completion in Q2-2019. Furthermore, the current JORC Exploration Target* of 9-15Mt only includes the Grandao and Reservatorio deposits. There is further upside potential from the other high priority exploration targets within the project area.
*Cautionary Statement: The potential quantity and grade of the Exploration Targets is conceptual in nature, there has been insufficient exploration work to estimate a mineral resource and it is uncertain if further exploration will result in defining a mineral resource.
In June 2018, we completed a Scoping Study based on the then current resource estimate of 13.9Mt. The study returned a base case pre-tax NPV(8%) of US$356m and pre-tax IRR of 63%, with a Life of Mine ('LOM') EBITDA of US$805m, annual average EBITDA of US$72m and a pre-tax payback period of 1.7 years. These results are a very positive indication of the project's commercial potential, particularly given the increase in the resource estimate to 20.1 Mt since the Scoping Study was carried out.
Drilling continues to advance across all three of our primary target areas from which we have delineated the Mineral Resource Estimate to date - Grandao, Reservatorio and NOA. In particular, drilling results to date at Grandao have been very encouraging with lithium mineralisation intersected over significant widths and extensions to the known mineralised pegmatites, leading to the discovery of a new Grandao Extended area. These extensions support our belief in the potential for further increases in the Mineral Resource Estimate. Experienced lithium consulting engineers, Primero Group have been commissioned to lead a Feasibility Study which is now underway to advance the project to the next point of economic confidence so that a development decision can be made in Q2-2019. Primero is a global leader in the evaluation, design and construction of hard rock, open-cut, spodumene mines such as Mina do Barroso.
In support of development, the project's estimated C1 cash costs of US$210/t spodumene concentrate produced in the first four years and US$271/t LOM average, put the project at the lower end of the spodumene lithium cost curve. The initial CAPEX is estimated to be US$109m. Based on these results, we are on track to become a low-cost producer of quality spodumene lithium concentrate by early-2020. We are working hard to deliver on this objective and maximise shareholder value.
Looking at wider market dynamics, while some commentators have suggested lithium prices will be affected by supply outweighing demand, we remain confident in the commodity's prospects. We see a need for several new mines to come into operation to meet projected demand now and in the future. Even with new supply this year, global contract prices for lithium salts remain strong. It is also noteworthy that 28% of world's cumulative EV sales in H1-2018 have been in Europe, but the continent currently has no lithium production for battery grade chemicals, meaning all materials are imported. Additionally, leading battery producers, like LG Chem and Samsung SDI have opened or are planning to open battery plants in Europe this year. Whilst there are a number of new lithium projects vying to come on stream internationally, we believe our near-term production potential, low cost profile, high quality product and strategic location gives us a competitive edge.
Finally, looking at further growth opportunities, in July 2018 we entered into an exclusive due diligence and option agreement with Aldeia & Irmão, S.A. ('Aldeia'), a private Portuguese company, with a view to increasing our tenement holdings in the MdB Project area. Under the terms of the agreement, we are looking to acquire a Mining Lease, which, once granted, will include over 2.94km(2) of land abutting the southern end of the Reservatorio target area. At least five known spodumene bearing lithium pegmatites occur on these areas, and if acquired, this tenement not only provides further resource expansion potential but also further space to optimise the layout for any potential mine development. Due diligence is now underway. All payments for the potential acquisition will be on a staged basis and are expected to be made principally from anticipated revenues generated from the MdB Project mine, once developed.
Copper Projects, Oman
In Oman two high-grade, low CAPEX copper mine developments are currently awaiting final licencing approval. Letters of approval or "No Objection" have been received from all eight Ministries and we are now working on concluding the mine licencing process with the Public Authority of Mining for the issuance of the two Mining Licences. In support of the overall strategy of developing a hub and spoke copper development in Oman we have a drilling programme underway on the promising Bayda and Hara Kilab copper deposits on respectively Block 4 and Block 5 in Oman. These deposits could provide further tonnages for the overall development.
Heavy Mineral Sands Projects, Mozambique
In Mozambique we are continuing to work on the world class Mutamba Mineral Sands Project under a Consortium Agreement with Rio Tinto. Three mining lease applications, covering a total area of 417km(2) for the Jangamo, Dongane, Ravene and Chilubane deposits, are currently being considered by the Mozambican mines department. Alongside this, work continues on several fronts in the lead up to the anticipated grant of mining leases, with the scoping phase of the Pre-Feasibility Study ('PFS') now well advanced and the initial key studies underway. These studies include hydrology studies, port options and the collection of a 10 tonne bulk sample, which will be processed at our recently constructed and commissioned pilot plant. The results from this test work and the PFS will guide us in the infrastructure, power, mine planning and process plant requirements, allowing us to progress to the next stage of commercialisation.
Financial Summary
As is to be expected for an active and expanding resource development group, Savannah is reporting a loss for the period of GBP1.20m (30 June 2017: GBP1.53m) (31 December 2017: GBP2.84m), which reflects the continued high tempo of mine development activities. The decrease compared to the prior year is mainly due to the non-cash costs relating to share options issued as long-term incentives in H1-2017 amounting to GBP0.28m. Net assets have increased to GBP15.68m (30 June 2017: GBP9.26m) (31 December 2017: GBP13.14m) due to the increase in exploration activity during the period, predominantly with the lithium project in Portugal, which also saw the first of two milestones at the MdB Project being triggered and settled, with additions to non-current assets amounting to GBP3.61m.
In April 2018 Savannah raised GBP2.10m cash (before expenses) that contributed towards the ongoing development of the Company's projects in Portugal, Oman and Mozambique. After the reporting date, in July 2018 the Company raised GBP12.5m cash (before expenses). This has provided a current cash balance of GBP11.4m. The Company's strong cash position means Savannah is fully funded to deliver on the feasibility study of a mine development and to add to the Mineral Resource inventory via a continuing programme of resource drilling at the MdB Project, and to progress our projects in Mozambique and Oman.
Outlook
The upcoming six months will be active for Savannah as we finalise key economic studies at our MdB lithium project so that we are able to make a development decision in Q2-2019. With low technical risk thanks to its open pit mining and conventional processing model, a quality resource that is proven to be highly sought after by electric vehicle manufacturers, and a defined development schedule that will see us commence concentrate production in 2020, we are firmly focused on realising the full value potential of this significant, near-term production asset.
We believe that the MdB Project's spodumene lithium concentrate will be highly sought after by end-users and look forward to progressing discussions currently being undertaken with potential offtake partners as part of our commercialisation process. Alongside this, we will continue to prove up the resource potential of the project, with drilling continuing to progress at pace, and we are also completing due diligence with a view to increasing the project area further via the proposed Aldeia acquisition. Both of these work programmes have the potential to extend the current 11-year life of mine as defined in the Scoping Study and enhance the already attractive economics of the project.
We look forward to updating shareholders on progress as we advance the MdB Project further, maintaining the active development approach we have implemented since first acquiring the project in May 2017.
Finally, I would like to thank our long-term shareholders for their continued support and also welcome the new investors to Savannah's share register following our recent fundraise. We look forward to continuing to build the value of our company for the benefit of all stakeholders.
I would also like to give my thanks to our highly committed management and operational team who have already proven their ability to execute multiple fast-track work programmes to rapidly build the value of our resource portfolio.
We look forward to delivering on the next commercial milestones in the upcoming months.
Chairman
Matthew King
20 September 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2018
Unaudited Unaudited Audited Six months Six months Year ended Notes to 30 June to 30 June 31 December 2018 2017 2017 GBP GBP GBP CONTINUING OPERATIONS Revenue - - - Administrative expenses (1,126,994) (1,529,071) (2,835,684) Impairment of assets classified as held for sale (140,024) - - Gain on disposal of investments 68,717 - - OPERATING LOSS (1,198,301) (1,529,071) (2,835,684) Finance income 342 - 948 Finance costs (3,841) (2,256) (7,549) LOSS BEFORE AND AFTER TAX ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT (1,201,800) (1,531,327) (2,842,285) ---------------------------------------- -------- ------------ ------------ ------------- OTHER COMPREHENSIVE INCOME Items that will or may be reclassified to profit or loss: Change in market value of investments (58,665) (16,656) 45,644 Transfer to realised gain on disposal of investments (68,717) - - Exchange (losses)/gains on translation of foreign operations 159,009 (54,052) (197,120) ---------------------------------------- -------- ------------ ------------ ------------- OTHER COMPREHENSIVE INCOME FOR THE YEAR 31,627 (70,708) (151,476) ---------------------------------------- -------- ------------ ------------ ------------- TOTAL COMPREHENSIVE INCOME FOR THE YEAR (1,170,173) (1,602,035) (2,993,761) ---------------------------------------- -------- ------------ ------------ ------------- Loss per share attributable to equity owners of the parent expressed in pence per share: ---------------------------------------- -------- ------------ ------------ ------------- Basic and diluted From operations 3 (0.18) (0.31) (0.53) ---------------------------------------- -------- ------------ ------------ -------------
The notes form part of this Interim Financial Report.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
Unaudited Unaudited Audited Notes 30 June 30 June 31 December 2018 2017 2017 GBP GBP GBP ASSETS NON-CURRENT ASSETS Intangible assets 4 13,907,901 7,888,034 9,809,994 Property, plant and equipment 5 1,195,292 197,729 1,196,084 Other receivables 6 270,876 165,852 239,300 Other non-current assets 7 215,681 - 220,213 ---------------------------------- -------- ------------- ------------- ------------- TOTAL NON-CURRENT ASSETS 15,589,750 8,251,615 11,465,591 CURRENT ASSETS Investments 32,168 107,816 170,203 Trade and other receivables 6 191,300 459,971 155,959 Other current assets 7 251,752 - 20,011 Cash and cash equivalents 786,764 1,294,539 2,455,968 ---------------------------------- -------- ------------- ------------- ------------- 1,261,984 1,862,326 2,802,141 Assets classified as held for sale - - 138,543 TOTAL CURRENT ASSETS 1,261,984 1,862,326 2,940,684 ---------------------------------- -------- ------------- ------------- ------------- TOTAL ASSETS 16,851,734 10,113,941 14,406,275
---------------------------------- -------- ------------- ------------- ------------- EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY Share capital 9 7,016,155 5,345,401 6,358,504 Share premium 21,100,658 14,849,523 18,105,108 Foreign currency reserve 353,887 337,946 194,878 Warrant reserve 1,278,846 419,671 1,405,958 Share based payment reserve 600,416 752,523 691,194 Shares to be issued reserve 30,000 - - Retained earnings (14,702,504) (12,448,310) (13,612,758) TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 15,677,458 9,256,754 13,142,884 LIABILITIES NON-CURRENT LIABILITIES Loans and borrowings 22,401 - 22,847 ---------------------------------- -------- ------------- ------------- ------------- TOTAL NON-CURRENT LIABILITIES 22,401 - 22,847 ---------------------------------- -------- ------------- ------------- ------------- CURRENT LIABILITIES Loans and borrowings 6,630 - 10,276 Trade and other payables 8 1,145,245 857,187 1,228,757 ---------------------------------- -------- ------------- ------------- ------------- 1,151,875 857,187 1,239,033 Liabilities classified as held for sale - - 1,511 ---------------------------------- -------- ------------- ------------- ------------- TOTAL CURRENT LIABILITIES 1,151,875 857,187 1,240,544 TOTAL LIABILITIES 1,174,276 857,187 1,263,391 ---------------------------------- -------- ------------- ------------- ------------- TOTAL EQUITY AND LIABILITIES 16,851,734 10,113,941 14,406,275 ---------------------------------- -------- ------------- ------------- -------------
The interim financial report was approved by the Board of Directors on 20 September 2018 and was signed on its behalf by:
........................................................
D S Archer
Chief Executive Officer
Company number: 07307107
The notes form part of this Interim Financial Report.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2018
Share Shares Foreign based to be Share Share currency Warrant payment issued Retained Total capital premium reserve reserve reserve reserve earnings equity GBP GBP GBP GBP GBP GBP GBP GBP At 1 January 2017 4,509,465 11,226,706 391,998 386,794 455,309 - (10,900,327) 6,069,945 --------------- ------------ ------------ ------------ ---------- --------- --------- -------------- -------------- Loss for the period - - - - - - (1,531,327) (1,531,327) Other comprehensive income - - (54,052) - - - (16,656) (70,708) --------------- ------------ ------------ ------------ ---------- --------- --------- -------------- -------------- Total comprehensive income for the period - - (54,052) - - - (1,547,983) (1,602,035) Issue of share capital (net of expenses) 835,936 3,655,694 - - - - - 4,491,630 Issue of share options - - - 297,214 - - 297,214 Lapse of - - - - - - - options Issue of warrants - (32,877) - 32,877 - - - - --------------- ------------ ------------ ------------ ---------- --------- --------- -------------- -------------- At 30 June 2017 5,345,401 14,849,523 337,946 419,671 752,523 - (12,448,310) 9,256,754 --------------- ------------ ------------ ------------ ---------- --------- --------- -------------- -------------- Loss for the period - - - - - - (1,310,958) (1,310,958) Other comprehensive income - - (143,068) - - - 62,300 (80,768) --------------- ------------ ------------ ------------ ---------- --------- --------- -------------- -------------- Total comprehensive income for the period - - (143,068) - - - (1,248,658) (1,391,726) Issue of share capital (net of expenses) 1,013,103 4,241,872 - - - - - 5,254,975 Issue of share options - - - - 22,881 - - 22,881 Lapse of options - - - - (84,210) - 84,210 - Issue of warrants - (986,287) - 986,287 - - - - --------------- ------------ ------------ ------------ ---------- --------- --------- -------------- -------------- At 31 December 2017 6,358,504 18,105,108 194,878 1,405,958 691,194 - (13,612,758) 13,142,884 --------------- ------------ ------------ ------------ ---------- --------- --------- -------------- -------------- Loss for the period - - - - - - (1,201,800) (1,201,800) Other comprehensive income - - 159,009 - - - (127,382) 31,627 --------------- ------------ ------------ ------------ ---------- --------- --------- -------------- -------------- Total comprehensive income for the period - - 159,009 - - - (1,329,182) (1,170,173) Issue of share capital (net of expenses) 657,651 2,995,550 - - - - - 3,653,201 Issue of share options - - - - 21,546 - - 21,546 Exercise of options - - - - (95,797) - 95,797 - Lapse of options - - - - (16,527) - 16,527 - Exercise of warrants - - - (35,972) - - 35,972 - Lapse of warrants - - - (91,140) - - 91,140 - Warrants pending exercise - - - - - 30,000 - 30,000 --------------- ------------ ------------ ------------ ---------- --------- --------- -------------- -------------- At 30 June 2018 7,016,155 21,100,658 353,887 1,278,846 600,416 30,000 (14,702,504) 15,677,458 --------------- ------------ ------------ ------------ ---------- --------- --------- -------------- --------------
The notes form part of this Interim Financial Report.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHSED 30 JUNE 2018
Notes Unaudited Unaudited Audited Six months Six months Year ended to June to June December 2018 2017 2017 GBP GBP GBP Cash flows used in operating activities Loss for the period (1,201,800) (1,531,327) (2,842,285) Depreciation and amortisation charges 5 10,427 728 14,895 Impairment of assets classified as held for sale 140,024 - - Gain on disposal of investments (68,717) - - Share based payments reserve charge 21,546 297,214 320,095 Shares issued in lieu of payments to extinguish liabilities - 82,431 98,630 Finance income (342) - (948)
Finance expense 3,841 2,256 7,549 Exchange losses (23,111) 47,925 75,156 Cash flow from operating activities before changes in working capital (1,118,132) (1,100,773) (2,326,908) Increase in trade and other receivables (32,286) (466,095) (71,288) (Decrease)/Increase in trade and other payables (51,903) 218,251 39,620 --------------------------------------- -------- ------------- ------------- ------------- Net cash used in operating activities (1,202,321) (1,348,617) (2,358,576) --------------------------------------- -------- ------------- ------------- ------------- Cash flow used in investing activities Purchase of intangible exploration assets (2,487,352) (1,471,957) (3,276,715) Purchase of tangible fixed assets (221,885) (120,816) (1,069,056) Purchase of investments - - (87) Proceeds from sale of investments 104,283 - - Payments for guarantees for mining activity (231,741) - (199,755) Interest received 342 - 948 --------------------------------------- -------- ------------- ------------- ------------- Net cash used in investing activities (2,836,353) (1,592,773) (4,544,665) --------------------------------------- -------- ------------- ------------- ------------- Cash flow from / (used in) financing activities Proceeds from issues of ordinary shares (net of expenses) 2,348,287 3,093,000 8,257,418 Proceeds from warrants pending exercise 30,000 - - Interest paid (3,841) (2,256) (7,549) --------------------------------------- -------- ------------- ------------- ------------- Net cash from financing activities 2,374,446 3,090,744 8,249,869 --------------------------------------- -------- ------------- ------------- ------------- (Decrease)/Increase in cash and cash equivalents (1,664,228) 149,354 1,346,628 Cash and cash equivalents at beginning of period 2,455,968 1,172,347 1,172,347 Exchange (losses)/gains on cash and cash equivalents (4,976) (27,162) (63,007) --------------------------------------- -------- ------------- ------------- ------------- Cash and cash equivalents at end of period 786,764 1,294,539 2,455,968 --------------------------------------- -------- ------------- ------------- -------------
The notes form part of this Interim Financial Report.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL REPORT
FOR THE SIX MONTHSED 30 JUNE 2018
1. BASIS OF PREPARATION
The financial information set out in this report is based on the consolidated financial statements of Savannah Resources Plc and its subsidiary companies (together referred to as the 'Group'). The interim financial report of the Group for the six months ended 30 June 2018, which is unaudited, was approved by the Board on 20 September 2018. 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 2017 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 2017. New standards and amendments to IFRS effective as of 1 January 2018, including IFRS 15 and IFRS 9, have been reviewed by the Group and there has been no material impact on the financial information set up on this report as a result of these standards and amendments.
The Group interim financial report is presented in Pound Sterling.
Going Concern
The financial statements have been prepared on a going concern basis. Following the cash subscriptions approved in July 2018, amounting to GBP12.5m (before expenses) (Note 12), the Group had a cash balance of GBP11.4m on 20 September 2018. The Directors have reviewed the cashflow projection for the Group and consider that it has sufficient ability to meet its financial commitments for at least 12 months.
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 comprise of exploration and development in Oman, exploration and development in Mozambique, exploration and development in Portugal, former exploration in Finland, headquarter and corporate costs and the Company's third party investments.
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 Oman, Mozambique, Portugal and former exploration in Finland the segments are calculated by the summation of the balances in the legal entities which are readily identifiable to each of the segmental activities. In the case of the Investments, this is calculated by analysis of the specific related investment instruments. Recharges between segments are at cost and included in each segment below. Inter-company loans are eliminated to zero and not included in each segment below.
Oman Mozambique Portugal Finland HQ and Invest-ments Elimination Total Copper Mineral Lithium Lithium Corporate Sands GBP GBP GBP GBP GBP GBP GBP GBP Period 30 June 2018 Revenue - - - - 434,235 - (434,235) - Interest income - - - - 342 - - 342 Finance costs - (3,841) - - - - - (3,841) Share based payments - - - - 21,546 - - 21,546 (Loss) for the year (122,251) (249,791) (184,437) (144,196) (569,842) 68,717 - (1,201,800) Total assets 4,632,337 4,928,165 6,558,838 2,343 697,883 32,168 - 16,851,734 Total non-current assets 4,510,283 4,619,171 6,449,096 - 11,200 - - 15,589,750 Additions to non-current assets 201,272 206,447 3,609,894 - - - - 4,017,613 Total current assets 122,055 308,994 109,741 2,343 686,683 32,168 - 1,261,984 Total liabilities (100,964) (105,335) (734,360) (2,098) (231,519) - - (1,174,276) ------------- ---------- ------------ ---------- ---------- ----------- -------------- ------------- ------------ Oman Mozambique Portugal Finland HQ and Invest-ments Elimination Total Copper Mineral Lithium Lithium Corporate Sands GBP GBP GBP GBP GBP GBP GBP GBP Period 31 December 2017 Revenue - - - - 639,108 (639,108) - Interest income - - - - 948 - - 948 Finance costs (2,035) (1,166) - - (4,348) - - (7,549) Share based payments - - - - 320,095 - - 320,095 (Loss) for the year (308,616) (631,731) (171,056) (8,164) (1,722,718) - - (2,842,285) Total assets 4,365,898 4,640,081 2,902,257 138,543 2,189,293 170,203 - 14,406,275 Total non-current assets 4,224,672 4,387,977 2,833,907 - 19,035 - - 11,465,591 Additions to non-current assets 951,312 2,801,960 2,823,802 - 19,035 - - 6,596,109 Total current assets 141,226 252,104 68,350 138,543 2,170,258 170,203 - 2,940,684 Total liabilities (112,807) (398,825) (411,302) (1,511) (338,946) - - (1,263,391) ------------- ---------- ------------ ---------- --------- ------------ -------------- ------------- ------------
Oman Mozambique Portugal Finland HQ and Elimination Total Copper Mineral Lithium Lithium Corporate Sands GBP GBP GBP GBP GBP GBP Period 30 June 2017 Revenue - - - - 254,214 (254,214) - Finance costs - 1,370 - - 886 - 2,256 Share based payments 11,963 44,370 - - 240,881 - 297,214 (Loss) / Gain for the year (187,211) (281,801) (25,600) (4,980) (1,031,735) - (1,531,327) Total assets 3,939,037 2,695,063 2,120,317 132,740 1,226,784 - 10,113,941 Total non-current assets 3,844,054 2,177,590 2,094,898 127,690 7,383 - 8,251,615 Additions to non-current assets 457,852 640,400 2,094,128 5,103 7,382 - 3,204,865 Total current assets 94,982 517,474 25,419 5,050 1,219,401 - 1,862,326 Total liabilities (110,431) (395,701) (92,244) (4,831) (253,980) - (857,187) --------------- ------------ ------------- ------------ ---------- -------------- -------------- -------------- 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 Six months Six months Year ended to 30 June to 30 June 31 December 2018 2017 2017 Basic loss per share: Loss from operations attributable to ordinary shareholders (GBP) (1,201,800) (1,531,327) (2,842,285) Loss attributable to ordinary shareholders (GBP) (1,201,800) (1,531,327) (2,842,285) ----------------------------------- -------------- -------------- -------------- Weighted average number of shares (number) 667,935,800 490,020,180 538,585,436 ----------------------------------- -------------- -------------- -------------- Loss per share from operations (pence) 0.18 0.31 0.53 Basic and diluted loss per share (pence) 0.18 0.31 0.53 ----------------------------------- -------------- -------------- -------------- 4. INTANGIBLE ASSETS Exploration and evaluation assets GBP At 1 January 2017 5,066,750 Additions 2,897,871 Exchange differences (76,587) --------------------------------- ---------------- At 30 June 2017 7,888,034 Additions 2,142,425 Transfer to Assets classified as Held for Sale (118,804) Exchange difference (101,661) --------------------------------- ---------------- At 31 December 2017 9,809,994 --------------------------------- ---------------- Additions 3,984,416 Exchange differences 113,491 --------------------------------- ---------------- At 30 June 2018 13,907,901 --------------------------------- ---------------- 5. PROPERTY, PLANT AND EQUIPMENT Motor Plant and vehicles Office Equipment Machinery Land Total GBP Cost At 1 January 2017 36,607 11,401 - - 48,008 Additions 6,991 1,735 119,081 44,819 172,626 Exchange difference (2,833) (174) 9,528 1,116 7,637 ---------------------- ---------- ----------------- ----------- ------- ---------------- At 30 June 2017 40,765 12,962 128,609 45,935 228,271 ---------------------- ---------- ----------------- ----------- ------- ---------------- Additions 34,206 11,025 924,940 837 971,008 Exchange difference 392 (75) 40,916 (497) 40,736 ---------------------- ---------- ----------------- ----------- ------- ---------------- At 31 December 2017 75,363 23,912 1,094,465 46,275 1,240,015 ---------------------- ---------- ----------------- ----------- ------- ---------------- Additions - 7,853 590 - 8,443 Exchange differences 557 354 1,430 (170) 2,171 ---------------------- ---------- ----------------- ----------- ------- ---------------- At 30 June 2018 75,920 30,412 1,096,485 46,105 1,250,629 ---------------------- ---------- ----------------- ----------- ------- ---------------- Depreciation At 1 January 2017 21,164 10,674 - - 31,838 Charge for the year 728 - - - 728 Exchange difference (1,598) (426) - - (2,024) ---------------------- -------- ------- -------- At 30 June 2017 20,294 10,248 - - 30,542 ---------------------- -------- ------- -------- Charge for the year 11,811 2,356 - - 14,167 Exchange difference (461) (317) - - (778) ---------------------- -------- ------- -------- At 31 December 2017 31,644 12,287 - - 43,931 ---------------------- -------- ------- -------- Charge for the year 9,290 1,137 - - 10,427 Exchange differences 774 205 - - 979 ---------------------- -------- ------- -------- At 30 June 2018 41,708 13,629 - - 55,337 ---------------------- -------- ------- -------- Net Book Value At 30 June 2017 20,471 2,714 128,609 45,935 197,729 At 31 December 2017 43,719 11,625 1,094,465 46,275 1,196,084 ----------------- ------- ------- ---------- ------- ---------- At 30 June 2018 34,212 16,783 1,096,485 46,105 1,195,292 ----------------- ------- ------- ---------- ------- ---------- 6. TRADE AND OTHER RECEIVABLES Unaudited Unaudited Audited 30 June 2018 30 June 2017 31 December 2017 GBP GBP GBP Non-Current Other receivables - VAT 270,876 82,551 239,300 Other receivables - Deposits - 83,301 - -------------- -------------- ------------- 270,876 165,852 239,300 -------------- -------------- ------------- Current VAT recoverable 96,880 25,263 51,069 Other receivables 94,420 434,708 104,890 -------- -------- -------- 191,300 459,971 155,959 -------- -------- -------- 7. OTHER NON-CURRENT ASSETS Unaudited Unaudited Audited 30 June 2018 30 June 2017 31 December 2017 GBP GBP GBP Non-Current Guarantees 202,237 - 199,755 Other receivables - Deposits 13,444 - 20,458 -------------- -------------- ------------- 215,681 - 220,213 -------------- -------------- ------------- Current Guarantees 251,752 - 20,011 251,752 - 20,011 -------- ------- 8. TRADE AND OTHER PAYABLES Unaudited Unaudited Audited 30 June 2018 30 June 2017 31 December 2017 GBP GBP GBP Current Trade payables 647,636 286,985 481,436
Other payables 30,403 25,431 45,054 Accruals and deferred income 467,206 544,771 702,267 1,145,245 857,187 1,228,757 -------------- -------------- ------------- 9. SHARE CAPITAL
Allotted, issued and fully paid
Six months to Six months to Year ended 30 June 2018 30 June 2017 31 December 2017 GBP0.01 GBP0.01 GBP0.01 ordinary ordinary ordinary shares shares shares number GBP number GBP number GBP At beginning of period 635,850,386 6,358,504 450,946,455 4,509,465 450,946,455 4,509,465 Issued during the period: Share placement 38,181,818 381,818 61,904,764 619,047 161,423,950 1,614,239 Bonus paid in shares - - 1,688,870 16,889 1,688,870 16,889 Exercise of share options 4,708,336 47,083 - - - - Exercise of warrants 1,875,000 18,750 - - - - In lieu of cash for acquisition of Portugal lithium project 20,000,000 200,000 20,000,000 200,000 21,791,111 217,911 Issued as condition of JV agreement 1,000,000 10,000 - - - - -------------------------- ------------ ---------- ------------- ---------- ------------ ---------- At end of period 701,615,540 7,016,155 534,540,089 5,345,401 635,850,386 6,358,504 -------------------------- ------------ ---------- ------------- ---------- ------------ ----------
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 have not been triggered, it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.
Deferred consideration payable in relation to the acquisition of Gentor Resources Ltd (Oman copper project)
On 15 July 2014 the Company completed an acquisition of interests in the highly prospective Block 5 and Block 6 copper projects in the Semail Ophiolite belt in the Sultanate of Oman from the TSX-Venture listed Gentor Resources Inc. The Company paid initial consideration of USD $800,000 (GBP GBP615,000) with the following deferred consideration (up to 50% payable in Savannah shares) required to complete the acquisition of 100% of the issued share capital of Gentor Resources Ltd ("GRL"):
(a) a milestone payment of USD $1,000,000 (GBP GBP769,000) upon a formal final investment decision for the development of the Block 5 Licence;
(b) a milestone payment of USD $1,000,000 (GBP GBP769,000) upon the production of the first saleable concentrate or saleable product from ore derived from the Block 5 Licence; and
(c) a milestone payment of USD $1,000,000 (GBP GBP769,000) within six months of the payment of the Deferred Consideration in (b).
Deferred consideration payable in relation to the acquisition of Slipstream PORT Pty Ltd (Portugal lithium project)
On 24 May 2017 the Group acquired a series of highly prospective lithium projects with near-term production potential in the north of Portugal. The Group paid an initial consideration of AUD$ 1,000,000 (GBP GBP591,000) in cash and issued 20,000,000 ordinary shares in the Company. Additional milestone payments, to be satisfied by cash and the issue of ordinary shares in SAV, are payable as follows:
(a) AUD$ 1,500,000 (GBP GBP886,500) cash and a further 20,000,000 ordinary shares of SAV upon the announcement by SAV of a JORC-compliant Indicated Mineral Resource Estimate of 7.5 million tonnes at no less than 1% Li(2) O. In February 2018 the Company announced the completion of a revised JORC 2012 - Compliant Inferred Mineral Resource Estimate of 9.1Mt at 1.03% Li(2) O and this milestone was triggered. The Company paid AUD$ 1,500,000 (GBP GBP842,028) in cash and issued 20,000,000 ordinary shares in the Company in March 2018. This has been accounted for in this financial report.
(b) AUD$1,500,000 (GBP GBP886,500) cash and an additional 20,000,000 ordinary shares of SAV upon the announcement by SAV of a further JORC-compliant Indicated Mineral Resource Estimate of a minimum of 7.5m tonnes at no less than 1% Li(2) O. In September 2018 the Company announced the completion of a revised JORC 2012 - Compliant Inferred Mineral Resource Estimate of 20.1Mt at 1.04% Li(2) O and this milestone was triggered (Note 12). This has not been accounted for in this financial report as the milestone was reached after the reporting date.
11. SHARE OPTIONS AND WARRANTS
Share options and warrants to subscribe for Ordinary Shares in the Company are granted to certain employees, Directors and investors. Some of the options issued vest immediately and others over a vesting period and may include performance conditions. Options are forfeited if the employee leaves the Group before the options vest.
The Directors' interests in the share options and warrants of the Company are as follows:
At 30 June 2018
Quantity Quantity Lapsed Options Exercise Date of First Final at granted during / Warrants price the grant date date 1 Jan 2018 during the at of exercise of exercise the period period 30 Jun 2018 Share Options Dale Ferguson 5,321,776 - - 5,321,776 3.0p 21/07/13 20/07/14 20/07/18 Dale Ferguson 2,000,000 - - 2,000,000 7.59p 01/03/17 01/03/17 28/02/21 Matthew King 1,500,000 - - 1,500,000 3.0p 16/03/16 16/03/16 15/03/20 David Archer 7,000,000 - - 7,000,000 7.59p 01/03/17 01/03/17 28/02/21 Investor Warrants David Archer 11,111,112 - - 11,111,112 3.0p 24/09/13 24/09/13 19/07/18 David Archer 2,857,143 - - 2,857,143 6.0p 14/07/17 14/07/17 14/07/20
At 31 December 2017
Quantity Quantity Lapsed Options Exercise Date of First Final at granted during / Warrants price the grant date date 30 June during the at of exercise of exercise 2017 the period period 31 Dec 2017 Share Options Dale Ferguson 5,321,776 - - 5,321,776 3.0p 21/07/13 20/07/14 20/07/18 Dale Ferguson 2,000,000 - - 2,000,000 7.59p 01/03/17 01/03/17 28/02/21 Matthew King 1,500,000 - - 1,500,000 3.0p 16/03/16 16/03/16 15/03/20 David Archer 7,000,000 - - 7,000,000 7.59p 01/03/17 01/03/17 28/02/21 Warrants David Archer 11,111,112 - - 11,111,112 3.0p 24/09/13 24/09/13 19/07/18 David Archer - 2,857,143 - 2,857,143 6.0p 14/07/17 14/07/17 14/07/20
At 30 June 2017
Quantity Quantity Lapsed Options Exercise Date of First Final at granted during / Warrants price the grant date date 1 Jan 2017 during the at of exercise of exercise the period period 30 Jun 2017 Share Options Dale Ferguson 5,321,776 - - 5,321,776 3.0p 21/07/13 20/07/14 20/07/18 Dale Ferguson - 2,000,000 - 2,000,000 7.59p 01/03/17 01/03/17 28/02/21 Matthew King 1,500,000 - - 1,500,000 3.0p 16/03/16 16/03/16 15/03/20 David Archer 7,000,000 - 7,000,000 7.59p 01/03/17 01/03/17 28/02/21 Investor Warrants David Archer 11,111,112 - - 11,111,112 3.0p 24/09/13 24/09/13 19/07/18 12. EVENTS AFTER THE REPORTING DATE
In July 2018 the Company approved a cash Placing and Subscription of GBP11.5m (before expenses) through the issue of 128,347,256 ordinary shares at an issue price of 9 pence per share. Additionally, the Company received letter of intent for an additional GBP1m cash subscription from Directors' related party (Al Marjan Ltd) for when the Company is not in a "close period". Subsequently Al Marjan acted upon this letter of intent and subscribed for 11,111,111 ordinary shares at a price of 9 pence per share, giving gross proceeds of GBP12.5m (together with the Placing and Subscription).
In July 2018 the Company issued 860,000 new ordinary shares in respect of 2016 Investors warrants at an exercise price of 6 pence per share following the exercise of warrants, for proceeds of GBP0.05m.
In July 2018 the Company issued 19,382,888 new ordinary shares following the exercise of options and warrants over Ordinary Shares. David Stuart Archer exercised Warrants over 11,111,112 Ordinary Shares at 3 pence each. Dale John Ferguson exercised Options over 5,321,776 Ordinary Shares at 3 pence each. Other employees exercised 1,200,000 Options, 1,500,000 Options and 250,000 Options at an exercise price of 4.62, 3.00 and 6.75 pence each respectively, for proceeds of GBP0.61m.
In August 2018, the Company granted 343,432 warrants over ordinary shares in the Company to a financial advisor of the Company in connection with the Company's fundraise in July 2018.
In September 2018 the Company announced the completion of a revised JORC 2012 - Compliant Inferred Mineral Resource Estimate of 20.1Mt at 1.04% Li(2) O. This triggered the second deferred consideration (Milestone (b)) to be paid under the acquisition agreement of Slipstream PORT Pty Ltd (Note 10). The Company is due to pay AUD$ 1,500,000 (GBP GBP834,000) in cash and issue 20,000,000 ordinary shares in the Company in October 2018.
SHAREHOLDING
Shareholders as at 31 August 2018 which hold more than 3% in the Company is disclosed as follows:
Beneficial owners (the ultimate underlying shareholders holding shares either directly or indirectly through a bank, broker-dealer, trust, or combination of these, which are the registered shareholders):
Percentage of Issued Shareholder Shares Held Capital Al Marjan Limited 208,262,589 24.18% Husain Salman Ghulam Al-Lawati 42,019,792 4.88% David Archer 41,756,649 4.85% Slipstream Resources Investments Pty Ltd 30,000,000 3.48% Mr Karl-Erik von Bahr 30,052,525 3.49% Total 352,091,555 40.88% ---------------------------------- ------------ ----------- Total Number of shares on issue 861,316,795
Registered shareholders (the shareholders holding shares directly with the Company, either on its behalf or on behalf of the beneficiary owner):
Percentage of Issued Shareholder Shares Held Capital Al Marjan Limited 208,262,589 24.18% Hargreaves Lansdown (nominees) Limited 78,840,653 9.15% Interactive Investor Services Nominees Limited 47,702,560 5.54% Hussain Salman Ghulam Al- Lawati 42,019,792 4.88% Nortrust Nominees Limited 36,781,138 4.27% Barclays Direct Investing Nominees Limited 34,514,062 4.01% Slipstream Resources Investments Pty Ltd 30,000,000 3.48% Securities Services Nominees Limited 28,196,462 3.27% ------------------------------------ ------------ ----------- Total 506,317,256 58.78% ------------------------------------ ------------ ----------- Total Number of shares on issue 861,316,795
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.
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 Limited. 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 is based on information compiled by Mr Paul Payne, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy. 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.
**ENDS**
For further information please visit www.savannahresources.com or contact:
David Archer Savannah Resources Tel: +44 20 7117 plc 2489 David Hignell / Dugald Northland Capital Tel: +44 20 3861 J. Carlean (Nominated Partners Ltd 6625 Adviser) Christopher Raggett finnCap Ltd Tel: +44 20 7220 / Camille Gochez (Broker) 0500 Grant Barker (Equity Whitman Howard Tel: +44 020 7659 Adviser) 1225 Charlotte Page / Lottie St Brides Partners Tel: +44 20 7236 Wadham (Financial PR) Ltd 1177
About Savannah
We are 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. We are committed to serving the interests of our shareholders and to delivering outcomes that will improve the lives of our staff and the communities we work with.
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: AFM, 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
IR SEIESSFASESU
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