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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 | |
---|---|---|---|---|---|---|---|---|---|---|
-0.10 | -2.90% | 3.35 | 3.30 | 3.40 | 3.45 | 3.35 | 3.45 | 878,871 | 14:51:57 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Gold Ores | 0 | -2.86M | -0.0016 | -20.94 | 61.24M |
TIDMSAV
RNS Number : 5256M
Savannah Resources PLC
22 September 2021
22 September 2021
Savannah Resources Plc
Interim Results
Savannah Resources plc (the "Company" or "Savannah"), the European lithium development company, is pleased to announce its interim financial results for the six months ended 30 June 2021.
First half and recent highlights include:
Corporate
-- Cash balance: Stood at GBP9.7m as at 30 June (31 December 2020: GBP2.0m) after the oversubscribed placing completed in April 2021, raising gross proceeds of GBP10.3m
-- Net loss from continuing operations: Reported at GBP1.4m (2020: GBP1.1m). The total attributable loss reduced to GBP1.2m (2020: GBP6.0m) as there was no repeat of the non-cash write-down (GBP5.5m) associated with the Oman project divestment
-- Corporate Environmental and Social Management System ("ESMS"): Initiated our Corporate ESMS which is being aligned with internationally recognised ESG standards
-- Recruitment: To support the Company's continued growth, key new staff with a range of skills have been added to our project and corporate teams in Portugal and the UK respectively
-- COVID-19: Mitigation measures continued with staff and stakeholder wellbeing a priority
Mina do Barroso, Portugal
Technical:
-- Environmental Impact Assessment ("EIA"): The Portuguese environmental regulator extended the public consultation phase of the review from 2 June 2021 to 16 July 2021. We understand the regulator is now reviewing the submissions received and we expect to receive news on the EIA review process in the final quarter of 2021
-- Lab and Field work: Lab-based process design work continued in Australia throughout the period. We expect to be able to return to meaningful fieldwork before the end of the year following the lifting of COVID-related restrictions
-- Definitive Feasibility Study ("DFS"): The DFS is now expected to be completed in 2022 following ongoing COVID-restrictions on fieldwork and the definition of EIA requirements from the ongoing EIA process
Commercial:
-- Offtake and Investment: Encouraging discussions were ongoing with multiple, well credentialed commercial counterparties during the period and are continuing into the 2H 2021. Useful precedents have been set by the significant number of offtake, investment and M&A transactions in the lithium sector in the year to date
-- EV sales: EV-volumes.com reported global 1H 2021 EV sales of 2.65m units (+168% vs. 1H 2020) including 1m vehicles sold in Europe. Full year sales forecast at 6.4m units (2020: 3.2m units)
-- Lithium prices: 1H 2021 lithium chemical prices in China rose on average by 80% vs. year-end 2020 and spodumene prices doubled to around US$800/t (source: S&P Global Platts). On 14 September 2021, Pilbara Minerals achieved a price of over US$2,200/t for 5.5% spodumene concentrate at its second online auction
-- Partnerships: Savannah became a founding member of the Portuguese Association for the Battery Cluster, created to maximise Portugal's potential across the battery value chain and promoting the country as a future leader in European lithium production
Public and Government Relations:
-- Local stakeholder engagement: Savannah continued to engage and inform the local community about the Project through multiple channels; support was also maintained for local ventures and services
-- Wider stakeholder engagement: As travel restrictions eased, interaction with civil society, business and academic leaders, and journalists was stepped up. We expect to increase our market and stakeholder engagement activities in the remainder of the year
-- Post-COVID Government funding: Savannah is currently assessing the possibility of applying for funding from the Portuguese Government following approval of the country's EUR16.6bn Recovery & Resilience facility funding by the European Commission
Mutamba Minerals Sands Project, Mozambique
-- Fieldwork and studies: Continued during the period dominated by landowner identification and communication programmes, collecting a bulk sample for metallurgical test work by Rio Tinto, and initiating baseline studies for the EIA on each licence
-- Business review: A comprehensive review of the project's technical parameters and its future corporate positioning has been undertaken since last October. We remain on track to inform shareholders of the outcome of this review by year end.
CHAIRMAN'S STATEMENT
Savannah has continued to establish its position in the new European lithium value chain effectively, despite the ongoing challenges posed by the COVID pandemic during the first half of 2021. Forecasts of a significant lithium shortage by the middle of this decade and associated higher prices have been in the market for some years but it is still remarkable how rapidly this market has tightened, and prices have risen since late last year. Growing EV uptake is underpinning lithium's recovery with global first half sales, as reported by EV-volumes.com, reaching 2.65m units (+168% vs. 1H20), including over 1m vehicles sold in Europe and 1.15m in China. Lithium chemical prices in China rose on average by 80% in the first half while spodumene prices in Australia doubled to around US$800/t (source: S&P Global Platts). Savannah was able to utilise this step change in the market to complete an oversubscribed placing to new and existing shareholders to provide greater working capital for the exciting period that lies ahead. We were also able to broaden our commercial negotiations with multiple parties all keen to secure exposure to Mina do Barroso's lithium.
With EV sales expected to accelerate during the second half of the year to reach 6.4m units, almost double 2020's annual sales, and scant lithium inventory available, prices have continued to rise in the second half of the year. Lithium chemical prices in China are now up on average 170% versus. December 2020, and the price of Australian spodumene concentrate as reported by Pilbara Minerals at its second online auction on 14 September is more than 460% higher at over US$2,200/t. Shareholders will remember that our 2018 Scoping Study on Mina do Barroso assumed an average sales price for spodumene of US$685/t, so from an economic perspective, the future of Mina do Barroso looks ever brighter. Our focus therefore remains on turning that potential into reality and developing the project in a responsible manner which minimises its impact and shares economic and other benefits with local communities.
With the COVID-restrictions now easing, we look forward to getting back in the field to resume gathering the data we need to complete the Definitive Feasibility Study ("DFS"). To this end, we have added to our in-country technical team. We are also aware that the technical robustness of the project is only one factor in our future success, and that we must work equally hard to ensure sufficient support for the project among the key stakeholder groups. Hence, we have added capacity to our governmental and public relations efforts in Portugal and expanded our investor relations and media team in the UK. I take this opportunity to welcome our new staff members and advisers to the Savannah family and we look forward to announcing more appointments as we continue to grow the business and move towards construction and production in Portugal.
In Mozambique, we remain active on the ground as we continue to progress the key tasks as the joint venture with Rio Tinto moves the project forward towards development. We have been also voluntarily playing our part in the in-country COVID vaccination programme and have maintained our strong links with our stakeholder communities and key administrators.
Overarching our work on each project is the progress we are making in formalising, expanding and equalising our Corporate Social Responsibility ("CSR") and Environmental, Social & Governance ("ESG") activities through our Corporate Environmental and Social Management System ("ESMS") which we announced in May. Savannah has always made a firm commitment to CSR but by formalising our efforts across the Company we will be best placed not only to deliver effective CSR programmes for our project stakeholders but also effectively measure our performance and therefore meet and surpass the expectations of investors and lenders who are increasingly focusing on these parameters.
Mina do Barroso, Portugal
At Mina do Barroso during the first half of the year, we continued to move ever closer to the next three major project milestones: the Environmental Impact Assessment ("EIA"), an offtake agreement, and the DFS. COVID restrictions aside, the Board and I acknowledge that reaching these milestones is taking longer than we had first envisaged. However, Mina do Barroso and its significant lithium production represents a wholly new endeavour for Portugal, the European Union, and Savannah. Hence, it is vital that the project is executed in a way that demonstrates that this new industry is one that can be conducted responsibly, and which brings far-reaching benefits. There can be no doubt that the recent price movements in lithium which I have already highlighted, give a clear indication of how important it is for Europe to begin to develop its domestic supply of such critical raw materials if it is to meet its own long term energy transition and climate change goals.
Regarding the EIA, as we flagged in the 2020 Annual Report, Agência Portuguesa do Ambiente ("APA"), the Portuguese environmental regulator, revised the closing date for the public consultation phase of the review programme from 2 June 2021 to 16 July 2021. We welcomed the opportunity for all interested parties to register their views on the project and will respond to APA as quickly and comprehensively as we can if it requests any further information from us. We understand APA is now reviewing the submissions received and we expect to receive news on the EIA review process in the final quarter of 2021. Should we receive a 'Declaration of the Environmental Impact' this milestone won't represent the conclusion of the environmental licencing process as approval of detailed final designs is subsequently required, but it will demonstrate the Regulator's satisfaction with the project's operating parameters and Savannah's innovative plans to eliminate, mitigate and manage any environmental and social impacts, and to utilise the project to create meaningful long-term benefits for stakeholders throughout Portugal and beyond.
As we have highlighted previously, conducting the outstanding fieldwork required for the DFS has been severely impacted by COVID-related restrictions in the past 18 months. Pleasingly, as restrictions lift and contractor availability improves, we expect to be able to return to meaningful field work before the end of the year. We have also talked previously about the need for APA to state its preferences on several features of the project on which it required Savannah to present it with options in our EIA submission. Until these decisions are made as part of the EIA approval process, Savannah won't be able to fully finalise the project design and encapsulate that in the DFS. A brighter point for the DFS's progression has been the lab-based process design work in Australia which has been continuing with little disruption throughout the period. Overall, however, after much effort internally to revise and rework the DFS schedule, shareholders should expect its conclusion next year and not by the end of 2021 as previously guided. Alongside the DFS we have also begun to engage with Portugal's leading power companies around the provision of wholly renewable energy to the project and some leading manufacturers of mobile mining plant and equipment regarding the potential to supply electrically powered units to the project in the future.
While referring to fieldwork, I am also pleased to report that our programme of land acquisition across the C-100 Mining Lease area which covers the project has progressed well since the turn of the year and will be continuing alongside our other project commitments for the remainder of 2021 and beyond. We have been delighted to be able to strike mutually beneficial agreements with a number of local landowners which will allow Savannah to own, manage and remediate these areas responsibly during the project's life, before returning them to the community once the project has ceased operating.
On a commercial front, buoyed by the much stronger lithium price environment, encouraging discussions are ongoing around offtake and associated investment with multiple, well credentialed counterparties. This includes with Galp Energia, SGPS, S.A. ("Galp") and other European and non-European industrial groups. A significant number of offtake, investment and M&A transactions have been completed in the lithium sector during the year to date which set useful precedents for Savannah in its own commercial discussions. We hope to bring more news on the project's future commercial arrangements later in the year.
Away from the project itself, we continue to consolidate our position in Portugal's commercial and political spheres as we receive growing recognition for the critical position Savannah will play as the main supplier of raw material to the country's much anticipated new lithium industry. In June we announced that we had become a founding member of the new Portuguese Association for the Battery Cluster which brings together a large group of industrial, academic and government bodies to work together to develop a new lithium-ion battery industry in Portugal under the co-ordination of the International Nanotechnology Laboratory.
Portugal has also been the first country to have its post-COVID Recovery and Resilience facility funding plan approved by the European Commission with EUR2.2bn of the EUR16.6bn package already received. With nearly EUR1bn of this package earmarked for business innovation and green agendas, Savannah is currently assessing the possibility of applying for funding from this facility to put towards the project's capital expenditure.
With travel restrictions now easing, David Archer, our CEO, has been spending an extended period of time on the ground in Portugal in recent weeks working closely with our in-country team and our public and governmental relationship advisers. This has resulted in a series of meetings with key government officials, leaders from the business and academic communities, potential commercial partners and journalists from national and international publications. We expect to increase our marketing and stakeholder engagement activities still further in the remainder of the year.
We continue to believe that our proposals for the development and operation of Mina do Barroso combined with our proposals around sharing the project's economic and social benefits with stakeholders represent a modern and responsible approach to managing the production of a raw material essential to the transition to cleaner energy provision and reduced transport-related greenhouse gas emissions. The Portuguese Government has stated its desire to create a new lithium industry in the country based on its enviable resources of the mineral and the European Commission, through its 2020 Action Plan on Critical Raw Materials, has set forward its target of securing access to reliable sources of raw materials to support Europe's Green Deal and to maintain Europe's leadership in technologies of the future. Savannah would be delighted to be part of making these targets into a reality.
Mineral Sands Project, Mozambique
As I outlined in my statement in the 2020 Annual Results in June, there are three elements to Savannah's work on the Mutamba Minerals sands project in Mozambique; licence-related studies and fieldwork; our engagement programmes; and the business and project review.
Despite ongoing COVID-related restrictions and cases amongst our own staff, work on the ground has continued (with appropriate safety protocols) as we seek to ensure compliance with the requirements set by the Mining Licences the consortium was awarded in late 2019 and early 2020. Identification and communication with relevant landowners to secure land use and utilisation agreements (DUATs) has been the major work programme, but the team has also been able to produce a bulk sample of material for a metallurgical test work programme being run by Rio Tinto overseas and is underway with baseline studies for the EIA work on each of the licences.
Regarding the business review we initiated last autumn, we continue to work very closely on this with our consultant, Bruce Griffin of Farview Solutions, and Rio Tinto. Since that time, we have carried out a comprehensive review of the project's technical parameters and its future corporate positioning. As a result, we believe that we have identified a suitable course of action and remain on track to inform shareholders of the outcome before the end of the year.
Corporate Social Responsibility
Our Corporate ESMS is being aligned with internationally recognised ESG standards, namely the requirements of the International Finance Corporation's Performance Standards on Environmental and Social Sustainability, as well as the World Bank Group's Environmental Health & Safety, Mining and General Guidelines. As a UK listed entity, the policy will also reflect the principles and provisions of the Quoted Companies Alliance's Corporate Governance Code. Savannah's operating subsidiaries will be responsible for ESG management and performance at their respective projects, through the development and implementation of project-specific ESMSs, aligned with the Corporate ESMS, and in compliance with all applicable ESG-related laws, regulations and permits of the host country.
In Portugal during the first half of the year, we were delighted to be able to re-open our local Information Centre in May, staffed by a new recruit from the Boticas area, after its closure due to COVID-related restrictions. The Information Centre is currently displaying a 3D model of the proposed project, so that residents can get a better understanding of the project's layout and the steps being taken to minimise its impact on the local environment. While the EIA review process is ongoing (there were two public sessions held in May hosted by APA), Savannah continues to engage with the local community keeping residents informed about APA's review process, the Benefit Sharing and the Good Neighbour Plans that have been proposed, and by making further donations of locally purchased provisions to the area's firefighting team. We have also maintained our multi-channel communication through newsletters, content in local publications and radio announcements. I have already touched on our engagement with national level media and we will continue this engagement in the remainder of the year as interest builds in Portugal's lithium battery chain, while maintaining our locally focused communication efforts as well as sponsorship of local rally car and mountain biking teams.
In Mozambique, the Company made COVID-19 vaccinations available to all staff and their adult family members, and also purchased and donated 200 double vaccines to the Ministry of Health in Inhambane Province to help protect vulnerable individuals. We were also delighted to provide support to the Provincial Environment Day which helped to raise awareness of Environmental issues in the Province and we remain committed to, and supportive of, other community interventions in Jangamo and Inharrime districts
Financial Summary
Savannah recorded a first half net loss from continuing operations of GBP1.4m (2020: GBP1.1m) with much of the GBP0.3m increase the result of a move from an exchange rate gain in 1H 2020 to an exchange rate loss in 1H 2021. However, without the one-off write-down (GBP5.5m) associated with the Oman project divestment, which was recorded in last year's accounts, the total attributable loss reduced significantly to GBP1.2m (2020: GBP6.0m).
Of greater interest to shareholders will be the Group's cash balance which stood at GBP9.7m on 30 June (2020: GBP2.0m, 31 December 2020) after the oversubscribed placing, raising GBP10.3m gross proceeds in April. This stronger cash position, along with a GBP0.6m increase in Intangible Assets to GBP17.8m resulted in a 42% increase in Savannah's Net Assets to GBP29.1m (2020: GBP20.5m).
Outlook
The Board and I are very grateful for the ongoing interest and commitment shown towards the Company by its shareholders. With the capital now in reserves, Savannah is well placed to press ahead with its work programmes at Mina do Barroso and its engagement with all stakeholders and relevant commercial groups. We also have sufficient capital available to meet our ongoing commitments in Mozambique. As ever, our dedicated staff will undertake this work and I thank them for their efforts to date and for their efforts in the future.
The lithium market is proving to be an exciting and rapidly developing sector with Europe set to be a major part of the world's new lithium battery industry. Savannah is determined to take its place in this market and we look forward to reporting on developments relating to the three project milestones I have outlined above from 4Q 2021 onwards. We also look forward to updating the market on Mutamba, so that the project's stakeholders and our shareholders are clear on its future direction and that of Savannah.
Matthew King
Chairman
Date: 21 September 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2021
Unaudited Unaudited Audited Six months Six months Year ended Notes to 30 June to 30 June 31 December 2021 2020 2020 GBP GBP GBP CONTINUING OPERATIONS Revenue - - - Other Income - - 26,099 Administrative Expenses (1,443,120) (1,080,385) (2,988,663) OPERATING LOSS (1,443,120) (1,080,385) (2,962,564) Finance Income 12,711 21,789 38,747 Finance Costs (3,671) (448) (765) ---------------------------------------- -------- ------------ ------------ ------------- LOSS FROM CONTINUING OPERATIONS BEFORE AND AFTER TAX (1,434,080) (1,059,044) (2,924,582) LOSS ON DISCONTINUED OPERATIONS BEFORE AND AFTER TAX - (5,469,581) (5,401,176) LOSS BEFORE AND AFTER TAX ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT (1,434,080) (6,528,625) (8,325,758) ---------------------------------------- -------- ------------ ------------ ------------- 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 100,060 (13,210) 320,151 Items that will or may be reclassified to Profit or Loss: Exchange Gains / (Losses) arising on translation of foreign operations 131,362 589,230 (163,284) ---------------------------------------- -------- ------------ ------------ ------------- OTHER COMPREHENSIVE INCOME FOR THE PERIOD 231,422 576,020 156,867 ---------------------------------------- -------- ------------ ------------ ------------- TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT (1,202,658) (5,952,605) (8,168,891) ---------------------------------------- -------- ------------ ------------ ------------- Loss per share attributable to Equity Owners of the parent expressed in pence per share: Basic and Diluted From Operations 3 (0.09) (0.50) (0.62) From Continued Operations 3 (0.09) (0.08) (0.22) From Discontinued Operations 3 - (0.42) (0.40) ---------------------------------------- -------- ------------ ------------ -------------
The notes form part of this Interim Financial Report.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
Unaudited Unaudited Audited Notes 30 June 30 June 31 December 2021 2020 2020 GBP GBP GBP ASSETS NON-CURRENT ASSETS Intangible Assets 4 17,836,604 16,893,437 17,246,222 Right-of-Use Assets 12,256 31,237 21,709 Other Intangible Assets - 8,920 6,682 Property, Plant and Equipment 5 1,064,198 1,259,197 973,528 Other Non-Current Assets 7 70,803 83,648 73,530 Bank Deposits 7 687,467 698,411 590,175 -------------------------------------- -------- ------------- ------------- ------------- TOTAL NON-CURRENT ASSETS 19,671,328 18,974,850 18,911,846 CURRENT ASSETS Investments 66,002 25,333 606,245 Trade and Other Receivables 6 423,513 173,688 194,301 Other Current Assets 7 16,137 16,141 13,670 Cash and Cash Equivalents 9,659,326 1,714,040 2,000,209 Assets in Disposal Groups Classified as Held for Sale - 437,007 - -------------------------------------- -------- ------------- ------------- ------------- TOTAL CURRENT ASSETS 10,164,978 2,366,209 2,814,425 -------------------------------------- -------- ------------- ------------- ------------- TOTAL ASSETS 29,836,306 21,341,059 21,726,271 -------------------------------------- -------- ------------- ------------- ------------- EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY Share Capital 9 16,889,598 12,989,598 14,309,910 Share Premium 41,695,948 33,538,187 34,474,884 Merger Reserve 6,683,000 6,683,000 6,683,000 Foreign Currency Reserve (62,179) 558,973 (193,541) Warrant Reserve 12,157 942,802 12,157 Share Based Payment Reserve 152,335 370,695 393,865 FVTOCI Reserve (14,120) (56,649) 276,712 Retained Earnings (36,214,631) (34,604,250) (35,450,713) TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 29,142,108 20,422,356 20,506,274 LIABILITIES NON-CURRENT LIABILITIES Lease Liabilities - 6,728 1,130 -------------------------------------- -------- ------------- ------------- ------------- TOTAL NON-CURRENT LIABILITIES 6,728 1,130 -------------------------------------- -------- ------------- ------------- ------------- CURRENT LIABILITIES Lease Liabilities 6,477 15,422 11,608 Trade and Other Payables 8 687,721 793,409 1,207,259 Liabilities Directly Associated with Assets in Disposal Groups Classified as Held for Sale - 103,144 - -------------------------------------- -------- ------------- ------------- ------------- TOTAL CURRENT LIABILITIES 694,198 911,975 1,218,867 TOTAL LIABILITIES 694,198 918,703 1,219,997 -------------------------------------- -------- ------------- ------------- -------------
TOTAL EQUITY AND LIABILITIES 29,836,306 21,341,059 21,726,271 -------------------------------------- -------- ------------- ------------- -------------
The Interim Financial Report was approved by the Board of Directors on 21 September 2021 and was signed on its behalf by:
........................................................
David 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 2021
Share Merger Foreign Based Share Share Reserve Currency Warrant Payment FVTOCI Retained Total Capital Premium GBP Reserve Reserve Reserve Reserve Earnings Equity GBP GBP GBP GBP GBP GBP GBP GBP At 1 January 2020 12,974,598 33,511,787 6,683,000 (30,257) 975,679 410,121 (43,439) (28,163,712) 26,317,777 --------------- ----------- ----------- ---------- ---------- ---------- --------- ----------------- ------------- ------------ Loss for the period - - - - - - - (6,528,625) (6,528,625) Other Comprehensive Income - - - 589,230 - - (13,210) - 576,020 --------------- ----------- ----------- ---------- ---------- ---------- --------- ----------------- ------------- ------------ Total Comprehensive Income for the period - - - 589,230 - - (13,210) (6,528,625) (5,952,605) Exercised Options 15,000 26,400 - - - (16,650) - 16,650 41,400 Lapse of Options - - - - - (38,560) - 38,560 - Lapse of Warrants - - - - (32,877) - - 32,877 - Share Based Payment charges - - - - - 15,784 - - 15,784 At 30 June 2020 12,989,598 33,538,187 6,683,000 558,973 942,802 370,695 (56,649) (34,604,250) 20,422,356 --------------- ----------- ----------- ---------- ---------- ---------- --------- ----------------- ------------- ------------ Loss for the period - - - - - - - (1,797,133) (1,797,133) Other Comprehensive Income - - - (752,514) - - 333,361 - (419,153) --------------- ----------- ----------- ---------- ---------- ---------- --------- ----------------- ------------- ------------ Total Comprehensive Income for the period - - - (752,514) - - 333,361 (1,797,133) (2,216,286) Issue of Share Capital (net of expenses) 1,300,113 920,537 - - - - - - 2,220,650 Shares issued in lieu 20,199 16,160 - - - - - - 36,359 Share Based Payment charges - - - - - 43,195 - - 43,195 Exercise of options Lapse of Options - - - - - (20,025) - 20,025 - Lapse of Warrants - - - - (930,645) - - 930,645 - At 31 December 2020 14,309,910 34,474,884 6,683,000 (193,541) 12,157 393,865 276,712 (35,450,713) 20,506,274 --------------- ----------- ----------- ---------- ---------- ---------- --------- ----------------- ------------- ------------ Loss for the period - - - - - - - (1,434,080) (1,434,080) Other Comprehensive Income - - - 131,362 - - (290,832) 390,892 231,422 --------------- ----------- ----------- ---------- --------- ------- ---------- ---------- ------------- ------------ Total Comprehensive Income for the period - - - 131,362 - - (290,832) (1,043,188) (1,202,658) Issue of Share Capital (net of expenses) 2,579,688 7,221,064 - - - - - - 9,800,752 Lapse of Options - - - - - (279,270) - 279,270 - Share Based Payment charges - - - - - 37,740 - - 37,740 At 30 June 2021 16,889,598 41,695,948 6,683,000 (62,179) 12,157 152,335 (14,120) (36,214,631) 29,142,108 --------------- ----------- ----------- ---------- --------- ------- ---------- ---------- ------------- ------------
The notes form part of this Interim Financial Report.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHSED 30 JUNE 2021
Notes Unaudited Unaudited Audited Six months Six months Year ended to June to June December 2021 2020 2020 GBP GBP GBP Cash Flows used in Operating Activities Loss for the period (1,434,080) (6,528,625) (8,325,758) Depreciation and Amortisation charges 5 19,626 23,904 44,663 Impairment of Assets classified as Held for Sale - 5,370,130 - Impairment of Other Intangible Assets 5,948 - - Share Based Payments Reserve charge 37,740 15,784 58,979 Shares issued in lieu of payments to suppliers - - 36,359 Finance Income (12,711) (21,789) (38,747) Finance Expense 3,671 448 765 Exchange Losses / (Gains) 120,501 (133,412) (37,580) Loss on sale of discontinued operations - - 5,373,633 Cash Flow from Operating Activities before changes in Working Capital (1,259,305) (1,273,560) (2,887,686) Decrease in Trade and Other Receivables 29,212 119,010 176,312 (Decrease) / Increase in Trade and Other Payables (464,981) 149,116 443,541 --------------------------------------- -------- ------------- ------------- ------------- Net Cash used in Operating Activities (1,695,074) (1,005,434) (2,267,833) --------------------------------------- -------- ------------- ------------- ------------- Cash flow used in Investing Activities Purchase of Intangible Exploration Assets (685,970) (912,101) (1,577,532) Purchase of Right-of-Use assets (798) - - Purchase of Tangible Fixed Assets (20,027) (680) (2,721) Purchase of Investments - (1,782) - Proceeds from sale of Investments 462,115 - 3,272 Bank Deposits for Mining Licences - - 57,319 Interest received 12,711 21,789 38,747 Proceeds from sale of discontinued operations - - 27,543 --------------------------------------- -------- ------------- ------------- ------------- Net Cash used in Investing Activities (231,969) (892,774) (1,453,372) --------------------------------------- -------- ------------- ------------- ------------- Cash Flow from/(used in) Financing Activities Proceeds from issues of Ordinary Shares (net of expenses) 9,704,501 41,400 2,220,650 Proceeds from exercise of share options - - 41,400 Principal paid on Lease Liabilities (6,263) (8,900) (18,310)
Interest paid (3,671) (448) (765) --------------------------------------- -------- ------------- ------------- ------------- Net Cash from Financing Activities 9,694,567 32,052 2,242,975 --------------------------------------- -------- ------------- ------------- ------------- Increase / (Decrease) in Cash and Cash Equivalents 7,767,524 (1,866,156) (1,478,230) Cash and Cash Equivalents at beginning of period 2,000,209 3,484,781 3,484,781 Exchange (Losses) / Gains on Cash and Cash Equivalents (108,407) 95,415 (6,342) --------------------------------------- -------- ------------- ------------- ------------- Cash and Cash Equivalents at end of period 9,659,326 1,714,040 2,000,209 --------------------------------------- -------- ------------- ------------- -------------
The notes form part of this Interim Financial Report.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL REPORT
FOR THE SIX MONTHSED 30 JUNE 2021
1. BASIS OF PREPARATION
The financial information set out in this report is based on the Consolidated Financial Statements of Savannah Resources Plc (the 'Company') and its subsidiary companies (together referred to as the 'Group'). The Interim Financial Report of the Group for the six months ended 30 June 2021, which is unaudited, was approved by the Board on 21 September 2021. 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 2020 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 2020. New standards and amendments to IFRS effective as of 1 January 2021 have been reviewed by the Group and there has been no material impact on the financial information set out in this report as a result of these standards and amendments.
The Group Interim Financial Report is presented in Pound Sterling.
Going Concern
In common with many mineral exploration companies, the Company has raised equity finance to fund its activities. The Group had cash balance of GBP9.7m at 30 June 2021.
The Directors have reviewed the cash-flow projection for the Group and concluded that it has sufficient finance in place to meet its financial commitments for at least 12 months.
In forming their view, the directors have considered the impacts of COVID-19 related restrictions and potential future delays on the work schedule. Whilst the potential future impacts are unknown, the Board has considered the effect that additional delays in the work schedule could have on the Group's available cash resources. Having factored in reasonably plausible scenarios and reasonable mitigating actions (for example, the ability to reduce its uncommitted future expenditure), the director's consider sufficient cash balance are maintained under each scenario and that the Company will be able to meet its obligations as they fall due.
Accordingly, the Directors have concluded that these circumstances form a reasonable expectation that the Group has adequate resources to continue in operational existence, for the foreseeable future. For these reasons, the Directors continue to adopt the going concern basis in preparing the Annual Report and Accounts.
2. SEGMENTAL REPORTING
The Group complies with IFRS 8 Operating Segments, which requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker, which the Company considers to be the Board of Directors. In the opinion of the Directors, the operations of the Group are comprised of exploration and development in Portugal, exploration and development in Mozambique, headquarter and corporate costs and the Company's third party investments and the discontinued operation in Oman.
Based on the Group's current stage of development there are no external revenues associated to the segments detailed below. For exploration and development in Portugal, Mozambique and the discontinued operation in Oman 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 (including transfer price charge) and included in each segment below. Inter-company loans are eliminated to zero and not included in each segment below.
Mozambique Portugal HQ and Investments Elimination Total Mineral Lithium Corporate Sands GBP GBP GBP GBP GBP GBP Period 30 June 2021 Revenue (1) - 539,496 385,655 - (925,151) - Finance Costs (3,557) (114) - - - (3,671) Interest Income 12,356 - 355 - - 12,711 Share Based Payments - - (37,740) - - (37,740) Impairment of Assets - - (5,948) - - (5,948) Loss for the period (209,550) (589,510) (635,020) - - (1,434,080) Total Assets 6,097,829 13,790,051 9,882,424 66,002 - 29,836,306 Total Non-Current Assets 5,975,203 13,689,348 6,777 - - 19,671,328 Additions to Non-Current Assets 255,871 468,602 - - - 724,473 Total Current Assets 122,626 100,703 9,875,647 66,002 - 10,164,978 Total Liabilities (23,671) (171,796) (498,731) - - (694,198) ------------------- ------------- ----------- ------------ -------------- -------------- ------------ Discontinued Mozambique Portugal HQ and Invest-ments Elimination Total Operation Mineral Lithium corporate Oman Copper Sands GBP GBP GBP GBP GBP GBP GBP Period 31 December 2020 Revenue (1) - 30,198 691,100 582,304 - (1,303,602) - Finance Costs - - (317) - - - (317) Interest Income - 16,475 - 483 - - 16,958 Share based payments - - - (43,195) - - (43,195) Loss for the year 68,405 (198,827) (748,551) (918,160) - - (1,797,133) Total Assets - 5,403,090 13,917,231 1,799,705 606,245 - 21,726,271 Total Non-Current Assets - 5,274,621 13,624,502 12,723 - - 18,911,846 Additions to Non-Current Assets - 37,203 539,374 - - - 576,577 Total Current Assets - 128,469 292,729 1,786,982 606,245 - 2,814,425 Total Liabilities - (65,977) (260,023) (893,997) - - (1,219,997) ------------------- ------------- ----------- ----------- ----------- ------------- ------------ ------------ Discontinued Mozambique Portugal HQ and Invest-ments Elimination Total Operation Mineral Lithium Corporate Oman Copper Sands GBP GBP GBP GBP GBP GBP GBP Period 30 June 2020 Revenue (1) - 27,409 419,730 344,515 - (791,654) - Finance Costs - - (448) - - - (448) Interest Income - 17,453 - 4,336 - - 21,789 Share Based Payments - - - (15,784) - - (15,784) Impairment of Assets (5,370,130) - - - - - (5,370,130) Loss for the period (5,469,581) (197,750) (470,576) (390,718) - - (6,528,625) Total Assets 437,007 5,803,639 13,417,870 1,657,210 25,333 - 21,341,059 Total Non-Current Assets - 5,724,855 13,228,272 21,723 - - 18,974,850 Additions to Non-Current
Assets 79,122 49,139 555,937 - - - 684,198 Total Current Assets 437,007 78,784 522,951 1,302,134 25,333 - 2,366,209 Total Liabilities (103,144) (34,119) (290,951) (490,489) - - (918,703) -------------- -------------- ------------- ----------- ------------ -------------- -------------- ------------
(1) Revenues included in the Portugal Lithium segment include GBP539,496 (31 December 2020: GBP691,000; 30 June 2020: GBP419,730) related to intercompany recharges within this segment and therefore eliminated in the Elimination column
3. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
In accordance with IAS 33 as the Group is reporting a loss for both this and the preceding period the share options are not considered dilutive because the exercise of share options and warrants would have the effect of reducing the loss per share.
Reconciliations are set out below:
Unaudited Unaudited Audited Year Six months Six months ended 31 to 30 June to 30 June December 2021 2020 2020 Basic and Diluted Loss per Share: Losses attributable to Ordinary Shareholders (GBP): Total Loss for the period (GBP) (1,434,080) (6,528,625) (8,325,758) Total Loss for the period from Continuing Operations (GBP) (1,434,080) (1,059,044) (2,924,582) Total Loss for the period from Discontinued Operations (GBP) - (5,469,581) (5,401,176) Weighted average number of shares (number) 1,518,176,396 1,295,376,368 1,343,743,432 Loss per share - total loss for the period from Operations (GBP) (0.00094) (0.0050) (0.0062) Loss per share - total loss for the period from Continuing Operations (GBP) (0.00094) (0.0008) (0.0022) Loss per share - total loss for the period from Discontinued Operations (GBP) - (0.0042) (0.0040) ----------------------------------- -------------- -------------- -------------- 4. INTANGIBLE ASSETS Exploration and Evaluation Assets GBP Cost At 1 January 2020 21,208,400 Additions 734,616 Transfer from Other Intangible Assets (279,850) Disposal assets on liquidation (140,024) Exchange differences 740,425 ---------------------------------- ---------------- At 30 June 2020 22,263,567 Additions 774,178 Transfer to Assets classified as Held for Sale (5,370,130) Exchange difference (421,393) ---------------------------------- ---------------- At 31 December 2020 17,246,222 ---------------------------------- ---------------- Additions 687,447 Exchange differences (97,065) ---------------------------------- ---------------- At 30 June 2021 17,836,604 ---------------------------------- ---------------- Depreciation and Impairment At 1 January 2020 140,024 Reverse on disposal of assets on liquidation (140,024) Impairment charge related to assets transferred to held for sale 5,370,130 At 30 June 2020 5,370,130 Transfer to Assets classified as Held for Sale (5,370,130) At 31 December 2020 - At 30 June 2021 - ------------------------------- ------------ Net Book Value At 1 January 2020 21,068,376 At 30 June 2020 16,893,437 At 31 December 2020 17,246,222 -------------------------------- ------------ At 30 June 2021 17,836,604 -------------------------------- ------------
In 2018 the Group started the process of divesting its investment in Finkallio Oy, and at 31 December 2018 the Exploration and Evaluation Assets held by the Company were fully impaired. In 2019 the Group started the process to liquidate Finkallio Oy, which was completed on 4 May 2020.
In 2018 the Board announced that a strategic review was being conducted in respect of the Oman assets to identify the best outcome for Savannah and its shareholders. In 2020 the progress towards an agreement for sale was substantial with the disposal expected to be completed prior to the end of 2020, and therefore the assets and liabilities of the Omani operations were classified as Held for Sale at 30 June 2020 with the disposal completed in October 2020.
5. PROPERTY, PLANT AND EQUIPMENT Motor Plant and Vehicles Office Equipment Machinery Land Total GBP Cost At 1 January 2020 87,902 43,026 1,241,756 53,332 1,426,016 Additions - 680 - - 680 Transfer to Assets classified as Held for Sale (36,770) (10,293) - - (47,063) Exchange differences 10,173 1,061 (69,084) 3,783 (54,067) ---------------------- ---------- ----------------- ----------- -------- ---------------- At 30 June 2020 61,305 34,474 1,172,672 57,115 1,325,566 ---------------------- ---------- ----------------- ----------- -------- ---------------- Additions 1,662 379 - - 2,041 Exchange difference (4,741) (2439) (180,785) (778) (188,743) ---------------------- ---------- ----------------- ----------- -------- ---------------- At 31 December 2020 58,226 32,414 991,887 56,337 1,138,864 ---------------------- ---------- ----------------- ----------- -------- ---------------- Additions - 20,027 - - 20,027 Exchange differences (2,591) 425 157,227 (2,506) 152,555 ---------------------- ---------- ----------------- ----------- -------- ---------------- At 30 June 2021 55,635 52,866 1,149,114 53,831 1,311,446 ---------------------- ---------- ----------------- ----------- -------- ---------------- Depreciation At 1 January 2020 54,548 34,239 - - 88,787 Charge for the period 14,081 3,276 - - 17,357 Transfer to Assets classified as Held for Sale (36,770) (10,293) - - (47,063) Exchange differences 6,251 1,037 - - 7,288 ---------------------- --------- --------- -------- --------- At 30 June 2020 38,110 28,259 - - 66,369 ---------------------- --------- --------- -------- --------- Charge for the period 318 4,632 99,189 - 104,139 Exchange difference (2,560) (2,612) - - (5,172) ---------------------- --------- --------- -------- --------- At 31 December 2020 35,868 30,279 99,189 - 165,336 ---------------------- --------- --------- -------- --------- Charge for the period 6,127 4,211 57,456 - 67,794 Exchange differences (492) (1,113) 15,723 - 14,118 ---------------------- --------- --------- -------- --------- At 30 June 2021 41,503 33,377 172,368 - 247,248 ---------------------- --------- --------- -------- --------- Net Book Value At 30 June 2020 23,195 6,215 1,172,672 57,115 1,259,197 At 31 December 2020 22,358 2,135 892,698 56,337 973,528 ----------------- ------- ------- ---------- ------- ---------- At 30 June 2021 14,132 19,489 976,746 53,831 1,064,198 ----------------- ------- ------- ---------- ------- ----------
Plant and Machinery depreciation amounting to GBP57,456 (31 December 2020: GBP99,189) is capitalised in Exploration and Evaluation assets (Note 4).
6. TRADE AND OTHER RECEIVABLES Unaudited Unaudited Audited 30 June 2021 30 June 2020 31 December 2020 GBP GBP GBP Current VAT recoverable 63,253 108,155 98,852 Other Receivables 360,260 65,533 95,449 -------------- -------------- ------------- Total Current Trade and Other Receivables 423,513 173,688 194,301 -------------- -------------- ------------- 7. OTHER CURRENT AND NON-CURRENT ASSETS Unaudited Unaudited Audited 30 June 2021 30 June 2020 31 December 2020 GBP GBP GBP Non-Current Guarantees 62,674 66,497 65,592 Cash deposits 687,467 698,411 590,175 Other 8,129 17,151 7,938 -------------- -------------- ------------- Total Other Non-Current Assets 758,270 782,059 663,705 -------------- -------------- ------------- Current Other 16,137 16,141 13,670 Total Other Current Assets 16,137 16,141 13,670 ------- ------- ------- 8. TRADE AND OTHER PAYABLES Unaudited Unaudited Audited 30 June 2021 30 June 2020 31 December 2020 GBP GBP GBP Current Trade Payables 398,923 438,300 357,247 Other Payables 100,315 160,587 136,935 Accruals and Deferred Income 188,483 194,522 713,077 Total Current Trade and Other Payables 687,721 793,409 1,207,259 -------------- -------------- ------------- 9. SHARE CAPITAL
Allotted, issued and fully paid
Six months to Six months to Six months to 30 June 2021 30 June 2020 31 December 2020 GBP0.01 GBP0.01 GBP0.01 ordinary ordinary ordinary shares number shares number shares number GBP GBP GBP At beginning of period 1,430,991,035 14,309,910 1,297,459,820 12,974,598 1,298,959,820 12,989,598 Issued during the period: Share placement 257,968,785 2,579,688 - - 130,011,270 1,300,113 Exercise of Share Options - - 1,500,000 15,000 - - In lieu of cash for professional services - - - - 2,019,945 20,199 Settlement deferred consideration Oman - - - - - - --------------------- --------------- ----------- --------------- ----------- --------------- ----------- At end of period 1,688,959,820 16,889,598 1,298,959,820 12,989,598 1,430,991,035 14,309,910 --------------------- --------------- ----------- --------------- ----------- --------------- -----------
The par value of the Company's shares is GBP0.01.
10. GROUP CONTINGENT LIABILITIES
Details of contingent liabilities where the probability of future payments is not considered remote are set out below, as well as details of contingent liabilities, which although considered remote, the Directors consider should be disclosed. The Directors are of the opinion that provisions are not required in respect of these matters, as at the reporting date it is not probable that a future sacrifice of economic benefits will be required and the amount is not capable of reliable measurement.
Consideration payable in relation to the acquisition of Mining Lease Application for lithium, feldspar and quartz (Portugal lithium project)
In June 2019 the Company exercised its option to acquire a Mining Lease Application for lithium, feldspar and quartz from private Portuguese company, Aldeia & Irmão, S.A.. The total purchase price for the acquisition is EUR EUR3,250,000 ( GBP GBP2,790,000), which will only become due once the Mining Lease Application has been granted and the Mining Rights transferred to an entity within the Group, at which point the agreed payment schedule will consist of an initial EUR EUR55,000 ( GBP GBP47,000) payment with the balance due in 71 equal monthly instalments. Upon delivery of the request for transfer of the Mining Rights to an entity within the Group, the Group shall provide with a bank guarantee of EUR EUR3,195,000 ( GBP GBP2,740,000) that will be reduced in accordance with the 71 monthly instalments. As at 30 June 2021 the mining lease has not been granted.
11. EVENTS AFTER THE REPORTING DATE
There were no Events After the Reporting Date to report.
Regulatory Information
This Announcement contains inside information for the purposes of the UK version of the market abuse regulation (EU No. 596/2014) as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").
**ENDS**
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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/ Tim Redfern WH Ireland Limited (Joint Broker) Tel: +44 20 7220 1698 Jessica Cave/ Ben Good (Corporate Finance) Adam Pollock/ Jasper Berry (Corporate Broking) Camarco (Financial PR) Tel: +44 20 3757 4980 Nick Hennis / Gordon Poole
About Savannah
Savannah is a diversified resources group (AIM: SAV) with two development stage projects, Mina do Barroso, a hardrock lithium project in Portugal which has the largest spodumene lithium resource in Europe, and 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".
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