TIDMSAV
RNS Number : 6246Z
Savannah Resources PLC
21 May 2019
21 May 2019
Savannah Resources Plc
Financial Results for the Year Ended 31 December 2018
and
Notice of Annual General Meeting
Savannah Resources plc (AIM: SAV, FWB: SAV and SWB: SAV)
('Savannah', the 'Company' or the 'Group'), the AIM quoted resource
development company focused on developing the Mina do Barroso
lithium mine in Portugal, and projects in Mozambique and Oman, is
pleased to announce its audited financial results for the year
ended 31 December 2018.
The Company also gives notice that its Annual General Meeting
('AGM') will be held on 18 June 2019 at St. James 1 Room, Institute
of Directors, 116 Pall Mall, London, SW1Y 5ED at 10:00am.
Overview:
-- Mina do Barroso now confirmed as the largest resource of
spodumene lithium in Western Europe with a current resource of
23.5Mt at 1.02% Li(2) O for 241,000t of contained Li(2) O:
o Post-tax NPV(8) of US$241m and IRR of 48.6% published in
Scoping Study
o Feasibility Study commissioned with results expected in H2
2019
o Purchased an option to acquire a suite of adjacent tenement
blocks ('Aldeia') which are currently subject to a separate Mining
Lease application
o Drilling on Aldeia Block A returned the highest assay to date
from the Project area with an intersection of 45m at 1.67% Li O
from 89m, including 22m at 2.00%
o Mina do Barroso strategically positioned as an economically
attractive source of significant lithium supply for Europe's
rapidly developing lithium ion battery industry with potential to
supply c.40% of the forecast lithium demand from Europe's
automotive industry in 2025
o Discussions initiated with potential offtake and strategic
partners and providers of project finance
o Portuguese Government-announced lithium strategy demonstrates
commitment to creating a new national industry based on the
country's significant lithium resources and the growing lithium
demand forecast from the EU
o Agreement to acquire the remaining 25% of the Project from the
minority owners resulting in 100% ownership
-- Progress continues at Mutamba Mineral Sands Project in Mozambique:
o First phase of the Pre-Feasibility Study continued on the
joint venture with Rio Tinto
o Upon completion, the study will increase Savannah's stake from
20% to 35%
o Submissions made for mining leases covering the adjacent
Jangamo and Dongane/Ravene blocks and the Chilubane deposit in Q1
2018
o Mining lease application made over area EL3617L in Q3 2018
-- In Oman Copper projects:
o Open dialogue maintained with the Public Authority for Mining
for the award of outstanding licence applications submitted in
2016
o Extended the second capital contribution period for Al Thuraya
Mining LLC (owner of Block 4) by eighteen months
o Undertaking a strategic review to determine the best course of
action in regard to these projects for the Company and its
shareholders
-- Strong support received from existing shareholders and new institutional investors:
o GBP14.7m raised in 2018 through two placements to new and
existing shareholders at an average share price issue of 8.25p,
representing an issue price increase of 57% compared to 2017
o Al Marjan Limited remained Savannah's largest shareholder
through its investments in the 2018 fundraisings, with a year-end
position of 23.63% (2017: 29.39%)
o Specialist resource investor Slipstream Resources Investments
Pty Ltd set to become the second largest shareholder, at 16%
following all share deal to increase SAV's holding in the Mina do
Barroso Project to 100%
o Funds raised principally committed to Mina do Barroso for
continuing mineral resource definition and to initiate workstreams
relating to the Definitive Feasibility Study
David Archer, Savannah's Chief Executive Officer said, "I am
delighted with the substantial progress made at the Mina do Barroso
lithium project throughout 2018 and extending into 2019.
Development progress has been excellent and recognition of the
importance of the Project was underscored by the GBP14.7m cash
investment we received from existing and new institutional
shareholders.
"In just two years, we have taken the Project from an early
stage, pre-resource exploration prospect to being the leading
conventional hard rock spodumene lithium project in Europe, with a
current Mineral Resource of 23.5Mt at 1.02% Li O. Results from the
active workflow, including the highest grades ever reported being
2% lithium over 22m highlight Mina do Barroso's significance and
its potential particularly in the European context - it has the
potential to supply a significant portion of the continent's
lithium battery raw material requirement over the next decade.
"Moreover, the recent Franco-German initiative to establish a
European battery cell consortium with an initial investment of up
to EUR6bn in order to progress the development of batteries for
electric vehicles marks a clear commitment from the EU to increase
its investment in the European lithium battery industry. I am
confident that Savannah will play an integral role in helping
Europe achieve its goal of decarbonising its transport sector to
combat climate change.
"On a wider level we continue to progress the Mutamba minerals
sands project and await the grant of mining leases. It remains a
valuable long-term asset to Savannah given its scale, our project
partner, and the opportunity for us to continue to add value with
further study work. We remain hopeful that the mining leases will
be approved by the Mozambique authorities in the near future.
"2019 is set to be another defining year for the now 100% owned
Mina do Barroso lithium project, with the expected conclusion of
the Definitive Feasibility Study, as well as significant
developments in relation to permitting, funding and offtake
agreements. I look forward to providing regular updates as we look
to rapidly advance into production and build shareholder
value."
Availability of Annual Report and Financial Statements
Copies of the Company's full Annual Report and Financial
Statements are expected to be posted to shareholders shortly and
will also be made available to download today from the Company's
website www.savannahresources.com.
Annual General Meeting
The Company's next AGM will be held at: St. James 1 Room,
Institute of Directors, 116 Pall Mall, London, SW1Y 5ED. A formal
Notice of AGM and proxy form will be posted with the annual report
and will be available to download today from the Company's website
at www.savannahresources.com.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further information please visit www.savannahresources.com
or contact:
David Archer Savannah Resources Tel: +44 20 7117 2489
plc
David Hignell / Charlie SP Angel Corporate Tel: +44 20 3470 0470
Bouverat (Nominated Adviser) Finance LLP
Christopher Raggett (Broker) finnCap Ltd Tel: +44 20 7220 0500
Grant Barker (Equity Adviser) Whitman Howard Tel: +44 20 7659 1225
Melissa Hancock / Cosima St Brides Partners Tel: +44 20 7236 1177
Akerman (Financial PR) Ltd
About Savannah
Savannah is a diversified resources group (AIM: SAV) with a
portfolio of energy metals projects - lithium in Portugal and
copper in Oman - together with the world-class Mutamba Heavy
Mineral Sands Project in Mozambique, which is being developed in a
consortium with the global major Rio Tinto. The Board is committed
to serving the interests of its shareholders and to delivering
outcomes that will improve the lives of the communities we work
with and our staff.
The Company is listed and regulated on AIM and the Company's
ordinary shares are also available on the Quotation Board of the
Frankfurt Stock Exchange (FWB) under the symbol FWB: SAV, and the
Börse Stuttgart (SWB) under the ticker "SAV".
To view the press release with the illustrative maps and
diagrams please use the following link:
http://www.rns-pdf.londonstockexchange.com/rns/6246Z_1-2019-5-20.pdf.
Chairman's Statement
2018 was the year in which our spodumene lithium project at Mina
do Barroso in northern Portugal ("Mina do Barroso") was firmly
established as our flagship asset due to its strategic importance
and impressive value potential for shareholders. Management
therefore focused its efforts on developing this asset, while our
mining lease applications in Mozambique and Oman continued to be
shepherded through the governmental processes in those countries.
Our work was supported by an oversubscribed fundraise in the third
quarter of 2018 and we are very grateful for the support
demonstrated by our shareholders in that exercise.
For 2019, our objective is to reach a development decision point
on the Mina do Barroso project during the year once the underway
Definitive Feasibility Study is completed. The anticipated award of
the mining leases we applied for in Mozambique last year will allow
us to accelerate the work programme on the current Pre-Feasibility
Study and allow the market to reassess the value of that project in
our portfolio. Award of the mining licences we have applied for in
Oman would also provide greater clarity on those projects. However,
with Savannah's focus firmly on our more prospective projects in
Portugal and Mozambique, our Oman projects are now seen as lower
priority and we are undertaking a strategic review to identify
Savannah's best course of action in regard to these projects.
Portugal
Following the rapid delineation of a sizeable Mineral Resource
at Mina do Barroso (now over 23Mt at 1.02% Li(2) O) and completion
of a highly positive Scoping Study, multiple work streams were
initiated during 2018. These workstreams should clearly define all
aspects of the project and take us to a decision point on its
potential development later this year. You will find more details
of the work which was completed and is continuing in the following
Chief Executive's Report.
Our work at Mina do Barroso coincides with the rapid
developments that are taking place across Europe (including in the
UK) in relation to the development of a comprehensive, regionally
focused, lithium battery industry. This industry will combine
extraction and processing of key battery raw materials, such as
lithium, with large scale battery manufacturing. Once established,
this supply chain will provide the rechargeable, zero emission,
batteries which are expected to play a key role in the EU's efforts
to decarbonise Europe's economy.
The European Union has embraced the challenge presented by the
climate change targets set by the 2015 Paris Agreement and the IPCC
2018 Special Report and is calling for significant reductions in
greenhouse gas emissions from transport. Based on these targets the
EU is forecasting annual sales of Zero and Low emissions vehicles
(essentially fully electric and hybrid vehicles) to rise from 0.7M
in 2017 to at least 4M in 2030, making Europe the second largest
market for electric vehicles ("EVs") behind China and North
America. Savannah plans to play its part in supporting the region's
efforts to meet its emission goals by providing a sustainable,
local supply of lithium concentrate from its Portuguese operation
which would be sufficient for 0.25-0.55M EVs per annum.
Our development plan for Mina do Barroso also complements
Portugal's own stated 'Lithium Strategy' which targets the
development of Portugal's in-ground lithium resources to support
the creation of a new lithium-based industry in the country. The
country is already Europe's largest producer of lithium, and the
sixth largest producer in the world, with the material used in the
country's large ceramics industry. However, the emergence of
lithium ion battery applications, first in mobile technology and
now on a much larger scale for electric vehicles, provides Portugal
with a great opportunity to create many more jobs and greater tax
revenues from its lithium resources.
We believe that the acquisition (subject to shareholder approval
at the forthcoming AGM) of the minority 25% stake in the project,
which we announced on 15 April 2019 and which would take Savannah's
ownership to 100% clearly demonstrates our belief in Mina do
Barroso and reiterates our objective to become the most significant
producer of spodumene lithium in Europe. However, we are also
conscious of our wider community, social and environmental
responsibilities and we are developing a range of programmes and
initiatives that will underscore our commitment to deliver not only
jobs and prosperity to the region but the very best environmental
and social outcomes too.
We are very conscious of our responsibilities to the local
community and we are committed to addressing any concerns in a
pro-active way so that the impacts of a potential mine development
on the local community and environment are minimised, while at the
same time contributing to the development of the local economy and
the achievement of the continent's climate change goals.
Mozambique
As one of the world's largest resource bearing Heavy Mineral
Sands ("HMS") projects remaining to be put into production, we
believe our Mutamba consortium project with Rio Tinto ("Mutamba")
("Consortium") is a valuable and strategic long-term asset within
the HMS industry. The titanium minerals and zircon found in HMS
deposits are used to manufacture inert white pigments and opacifers
which have many applications in society ranging from white paint
through to pharmaceuticals. The prices of these minerals have
recovered well from the lows seen in 2015 as previously high
inventory levels have been worked down and global economic growth
rates have been maintained. Hence, Savannah remains committed to
progressing its appraisal work on Mutamba.
The 2017 Scoping study results, the involvement of Rio Tinto as
joint venture partner and offtaker, Mutamba's location close to Rio
Tinto's processing facilities at Richards Bay in South Africa, and
the recovery and positive outlook for the underlying commodity
prices, all lead us to believe that Mutamba could provide
Mozambique with decades of social and economic benefits.
Three Mining Lease applications were submitted in January 2018.
To date, the Consortium is yet to receive a final decision on the
applications, or on the additional mining lease application which
was made on an adjoining tenement area submitted last September. We
have maintained an open and constructive dialogue with the
Mozambique Government from which we understand that our
applications continue to transit through the application process.
Based on the feedback received, we are hopeful that the mining
leases will be issued in the coming months.
Once mining leases are granted the next step will be to progress
and complete the current Pre-Feasibility Study. This would see our
ownership in the joint venture increase from 20% to 35%. Assuming
the results support the positive conclusions of the 2017 Scoping
Study, we expect to then complete a Bankable Feasibility Study
which would lift our ownership in the Consortium to a final and
majority position of 51%.
Oman
As in Mozambique, progress on our copper projects in Oman was
also impacted by delays to the award of the relevant mining
licences. We had hoped with the news that the last Ministerial
letter of 'no objection' had been received in May 2018, that a
positive decision on our application from Oman's Public Authority
for Mining ("PAM") would be forthcoming in the second half of the
year, however this has not proved to be the case. Also, the renewal
of the Block 4 exploration licence has been delayed due to claims
by a party in relation to certain areas within Block 4. According
to our legal advisers in Oman, the Group has the right to renew the
Block 4 exploration licence area in full, without any exclusions.
Hopefully, 2019 will bring resolution for the Group with respect to
the mining licence applications but in the meantime we maintain
regular dialogue with PAM and have provided additional information
at PAM's request.
As stated above, the combination of the licence delays
experienced in Oman and the rapid progress at Mina do Barroso has
meant that our copper projects now have a lower priority in our
overall portfolio. While award of the outstanding mining licences
would significantly advance these projects, Savannah must evaluate
the risk/reward opportunity currently presented by Oman against
those available elsewhere. Hence we are undertaking a strategic
review to identify Savannah's best course of action with regards to
these projects.
Corporate Update
Savannah is fortunate to have a large number of long-term
supportive shareholders. It was pleasing to see all of the four
largest holders in 2017 increasing their share positions in 2018,
primarily through our record oversubscribed GBP12.6m fundraise in
July. Al Marjan Limited remained the Company's largest shareholder
during the year, increasing its ownership by over 21m shares to
208.3m. As the largest of the vendors of the Mina do Barroso
project, Slipstream Resources saw its stake in Savannah rise to
5.1% as various milestones in the project acquisition agreement
were passed. (It should be noted that the issue of shares to the
Mina do Barroso vendors reduced Al Marjan's percentage stake in
Savannah from 29.4% to 23.6%). It was also pleasing to welcome a
number of institutional shareholders onto our register through the
fundraise.
In line with the increasing significance of Mina do Barroso in
our portfolio, Savannah took up a Secondary listing on the
Frankfurt Stock Exchange (Quotation Board Segment of the Open
Market; FWB: SAV) last September to increase the company's
visibility to investors in mainland Europe. The Frankfurt Exchange
is the largest of the seven regional security exchanges in Germany
and is the third largest stock exchange in Europe behind London and
Euronext, based in Amsterdam. While trading volumes in our shares
on FWB have been modest to date, we plan to increase our marketing
efforts into Germany and other European countries in 2019 to
leverage the opportunity created by the listing.
We also continued to grow our team in 2018 with a number of new
hires across differing parts of the business. In November we
welcomed James Leahy to the Board of Savannah as an Independent
Non-Executive Director. On top of his significant recent listed
company board experience, including time as Interim Chairman of the
listed lithium company, Bacanora Minerals Ltd, James spent over 30
years working in the capital markets with much of his time spent
specialising in natural resources and commodity related activities.
We look forward to James' input in our capital market activities in
2019 as we continue to move the Mina do Barroso project towards the
development decision point and potential financing.
Supported by KPMG LLP, the Remuneration Committee undertook a
review of remuneration packages and developed a new remuneration
policy aimed at rewarding performance, encouraging retention of key
staff and aligning their interests with those of shareholders. As
announced on 6 March 2019, a new long-term incentive plan ("LTIP")
intended to support this policy was implemented. The LTIP, which
was prepared with advice from KPMG LLP, replaces the Company's
prior long-term incentive plan which was implemented in April 2018
(the "2018 Plan") and for which all awards under it were terminated
with no rewards being granted.
Furthermore, we strengthened our Corporate Governance with the
adoption of the Quoted Companies Alliance's Corporate Governance
Code in September 2018.
Financial Overview
As is to be expected with an active and expanding resource
development group, the Group is reporting a loss for the year of
GBP3.4m (2017: GBP2.8m). During the year net assets have increased
to GBP25.4m (2017: GBP13.1m) predominantly due to the increase in
the exploration activity, the completion of the scoping study and
the ongoing execution of the Definitive Feasibility Study in the
Mina do Barroso lithium project, with additions in Exploration and
evaluation assets in the lithium project of GBP6.1m, of which
GBP2.0m are payments of the contingent consideration milestones
triggered during the year. Another significant driver in the
increase of the net assets is the increase in Cash and cash
equivalents by GBP5.3m as a result of well supported equity
fundraisings during the year, with a strong cash position at year
end of GBP7.7m. In April and July 2018, the Company raised a total
of GBP14.7m cash (before expenses) through the issue of 177,640,185
new ordinary shares at a significantly increased average issue
price of 8.25p per ordinary share (2017: 5.25p), representing a 57%
increase compared to 2017. As part of these equity fundraises, the
Company's largest shareholder, Al Marjan Ltd, acquired 21,383,839
shares for GBP1.6m in cash.
Corporate Social Responsibility ("CSR")
We have included a separate Corporate Social Responsibility
section in our Annual Report for the first time this year (see
Annual Report). CSR considerations have always been important
aspects of how Savannah does business, but as we move towards a
development decision on our Mina do Barroso project, and hopefully
operating our first producing asset, we believe there is a need to
formalise our CSR agenda for the benefit of all stakeholders in the
Group's projects.
We look forward to providing more information on our CSR
programmes in the future, and trust in the meantime that the
information provided in the community sections of our website,
which were introduced in late 2017, have proved to be a useful
source of additional information for all our project
stakeholders.
Outlook
2019 is set to be another critical year for Savannah. If we are
able to execute our plans across our project portfolio our company
could see material changes in its size, status and, potentially,
its value.
Our immediate next steps across our projects are clear: to
conclude the appraisal process at Mina do Barroso, taking us to a
development decision point on the project; to receive the award of
the outstanding mining lease applications in Mozambique and
complete the Pre-Feasibility on the Mutamba HMS project; and to
conduct a strategic review on our Omani copper projects, which will
allow us to provide shareholders with clarity on our plans for
those properties in due course.
As ever, I am extremely thankful for the continued efforts of
our management and operational teams which drive the evolution of
Savannah. Equally, their efforts could not be maintained without
the ongoing support of our shareholders. My thanks to you all, and
we look forward to continuing to build the value of our company for
the benefit of all stakeholders throughout 2019.
Matthew King
Chairman
Date: 20 May 2019
Chief Executive's Report
I reiterate the Chairman's comment that 2018 was a very
important year for the company.
We made exceptional progress with the Mina do Barroso Lithium
Project in northern Portugal where we have shaped what was a
relatively early stage, greenfields exploration opportunity in 2017
into Europe's most significant lithium spodumene Mineral Resource
by the 2018-year end. Hundreds of billions of Euros are now being
invested by the European battery and electric vehicle industry to
transform European transport to electric mobility. Mina do Barroso
will play a key role in these developments. We anticipate strong
growth for lithium from increasingly high-energy-density batteries
and increasing sales of EVs based on consumer preferences,
government encouragement and a broadening EV model range from car
manufacturers.
At the same time, while the lengthy approval processes for our
mining lease application approvals in Mozambique and Oman have been
frustrating, they did enable us to focus our resources on our
project in Portugal where we now have a full Definitive Feasibility
Study underway.
Portugal - Mina do Barroso Lithium Project
Our strategic move in 2017 into Portugal's nascent lithium
spodumene sector appeared to be followed last year by a growing
realisation among EU law makers and Europe's wider society that
more decisive action must be taken for the region to meet its
long-term goal of reducing greenhouse gas emissions to limit
climate change. Road transport is the second largest producer of
greenhouse gases in Europe behind power generation, and legislators
are keen to hasten the reduction in vehicle emissions. As a result,
increasingly tough emission targets and zero and low emission
vehicle ("ZLEV") related incentives are being used to stimulate
action by automobile manufacturers. The EU is also aware of the
pressure on the supply of 'battery technology' metals globally
caused by the introduction of similar emission targets in the
developed economies around the world. As a result, there is a
growing realisation that Europe must be able to manufacture zero
emission battery packs for its automobile industry from raw
materials sourced locally to obviate potential problems from long
supply chains and supply bottlenecks. We believe that Portugal will
likely take the lead in lithium production within Europe and Mina
do Barroso is likely to be the vanguard project.
The European Commission is vitally concerned about the
competitive position of the European car industry which is a key
sector for the European economy. The industry is stepping up to the
plate with heavy investments in EVs - Volkswagen ("VW") is
investing EUR80billion and Daimler EUR42billion in their EV model
roll-outs. This is matched by heavy investments by both European
and international groups in battery manufacturing and battery pack
plants. The figure below outlines the massive transformation that
is currently underway which, on an industry scale, is of similar
significance to the funds invested under the Marshall Plan in the
post-war period.
Electric Vehicle plans of selected global car brands:
At the national level there is a clear focus by the Portuguese
government to foster the development of the country's lithium
resources. A government study was completed on the subject in 2017
and a series of areas in northern Portugal that are regarded as
having excellent lithium prospectivity will be offered by
international tender later in 2019. Savannah is conscious of the
government's objective to maximize the value add from its lithium
resources and an important feature will be the development of
lithium refining capacity in the country. Savannah is in dialogue
with groups that are interested in a mineral conversion plant in
Portugal which would refine Mina do Barroso concentrates as a
baseload supplemented potentially by other local or imported
concentrates. This could be the nucleus for a whole range of new
industries for Portugal in the downstream lithium value chain.
At a global level we are already seeing significant increases in
global EV sales. Sales volumes are up by 63% year on year, for 2018
to two million units. The Boston Consulting Group is forecasting
that EV sales will move to 25 million vehicles by 2025 a true
tipping point for the industry. China is preparing itself and its
installed manufacturing capacity for lithium-ion batteries rose by
35.6GWh in January to October 2018, up 90% year on year. Meanwhile
Europe is the second largest EV market with just over 409,000 units
sold.
To the project itself, over the year, our in-house team and
supporting consultants took Mina do Barroso from an early stage
prospect with a modest 3Mt resource as assessed in late 2017 to an
advanced development project on which a well-defined 20Mt Mineral
Resource (as at 2018 year end and now 23.5Mt) was established along
with very attractive initial economics which justified
commissioning of a full Definitive Feasibility Study. In simple
terms, I believe we demonstrated that the project is the most
significant spodumene lithium project in Europe. Our task now is to
prove this to the level for financing of the project's construction
supplemented with offtake arrangements for the spodumene
concentrates, and to show that the project can be developed and
managed in a disciplined and sustainable manner that will bring
benefit for all stakeholders.
An example of our innovative approach to the project is the
recycling of water used in the lithium concentration process. This
includes recovering water from the inert waste product stream
allowing the storage of dry waste only and negating the need for
the construction of dams to retain water-bearing waste.
The Scoping Study in June helped to quantify the scale of the
opportunity presented by Mina do Barroso for both the investment
market along with potential strategic investors and off takers and
drove our decision to fast track the project into a full Definitive
Feasibility Study. Based on initial capex of US$109m (excluding
contingencies) and average annual production of 175,000t of
spodumene lithium concentrate over an 11 year life, the Scoping
Study returned a pre-tax NPV8% of US$356m, pre-tax IRR of 63% (post
tax US$241m and 48.6% respectively), pre-tax payback of 1.7 years,
and annual average EBITDA of US$72m. All in all, an impressive
investment case for a mining project and a major factor in our
decision in April 2019 to propose the acquisition of the
outstanding 25% minority shareholding in the project to give
Savannah 100% ownership of Mina do Barroso ahead of the development
decision point.
With our balance sheet strengthened by the oversubscribed
GBP12.6m equity cash fundraise in July (a company record and 7(th)
largest fundraise by an AIM mining company in 2018), we appointed
the very experienced Primero Group as the primary engineering group
and lead on the Feasibility Study. Alongside Primero we have added
a portfolio of leading specialist consultancy firms covering the
range of technical workstreams required for both a Definitive
Feasibility Study and the associated Environmental Impact
Assessment. Importantly, the firms consulting on our project study
have recent experience of working on major international lithium
projects and/or in Portugal. Hence, while every project is unique,
we feel satisfied that we are receiving the most relevant and
expert guidance available.
The drilling campaign which began in mid-2017 continued at pace
during the year. Ongoing data collection through drilling (and
surface sampling) is a key input into many of the Feasibility Study
workstreams, such as resource and reserve definition, mine
planning, groundwater assessment, geotechnics and the layout of
site infrastructure. By year end, the drill hole count had reached
300 across eight lithium deposits since the programme began in 2017
and totalled 25,470 metres drilled. The drilling programme was one
of the most extensive programmes undertaken in Europe in recent
years and is a testament to the commitment and skills of our
resource evaluation team.
The drilling to date has been highly successful with respect to
all its key goals which include:
-- JORC Mineral Resource expansion: By September we were able to
publish the third resource upgrade for the year with the JORC
Mineral Resource estimate across just the Grandao, Reservatorio and
NOA orebodies reaching 20.1Mt at 1.04% Li(2) O (209,000t Li(2) O
contained), and including 50% of the contained Li(2) O in the
Measured and Indicated categories. This was subsequently upgraded
again in April 2019 to 23.5Mt at 1.02% Li(2) O with 57% of the
contained lithium in the Measured and Indicated categories and
included the maiden resource estimate for the Pinheiro deposit
(2.0Mt at 1.0% Li(2) O). This larger resource will now form the
basis for our maiden JORC Reserve estimate expected later this
year.
-- Confirmation of additional mineralisation: As stated, the
current 23Mt resource is spread across only four of the eight
pegmatite deposits on the Mina do Barroso (C-100) Mining Lease area
identified to date. We plan to add to these resources over time to
extend the anticipated production life of the mine past the 11
years used in the Scoping Study.
While we continue to add to the Project's Mineral Resource
inventory and identify new deposits on the Mina do Barroso Mining
Lease area, we also purchased an option to acquire a suite of
adjacent tenement blocks last September which are currently subject
to a separate Mining Lease application. In total the three blocks
(blocks A to C), currently owned by private Portuguese company
Aldeia & Irmão, S.A. ("Aldeia") cover an area of 2.94km(2). Our
initial reconnaissance work identified a number of similarities to
the deposits on the Mina do Barroso Mining Lease and our intensive
due diligence drilling has now consistently intersected a lithium
bearing, spodumene dominant pegmatite with grades up to 2.0% Li(2)
O over a strike length of more than 250m and a vertical depth of
over 120m from near surface. We believe the potential for the
presence of a significant mineralised body has been indicated.
Furthermore, we are confident the Mining Lease application area
could provide further significant resource upside to the overall
Project. The blocks could also help to provide more flexibility for
the layout of the mine infrastructure on what is currently an
irregularly shaped Lease area.
The Option runs to 25 June 2019 by which time we would be
required to commit to the purchase of the tenements. If we choose
to exercise the option and a Mining Lease is granted by September
2024, the total purchase price for the acquisition is EUR3.3m
payable over a c. 6-year period. These payments would likely be
made whilst the overall Mina do Barroso project is in
production.
In addition to the potential to produce significant volumes of
spodumene lithium concentrate, we are fortunate that Mina do
Barroso is not simply a single commodity project. We also plan to
produce and sell feldspar and quartz co-products into Portugal's
and Spain's large ceramics and glass industries. This will have the
dual benefit of reducing the amount of waste material which the
project produces while providing additional revenue streams which
significantly improve the net production costs of the lithium
concentrate and will temper overall average commodity price
volatility for the project.
In December, the ongoing metallurgical test work confirmed that
three saleable products; high grade feldspar, high grade quartz and
an unrefined mixed feldspar and quartz product, could be produced
from the waste stream of the lithium concentrate recovery process.
A simultaneous market study by an industry expert also reported
that current market prices for these products range from
US$65-100/t, US$60-100/t and US$40-45/t respectively. This is
highly encouraging for our ongoing economic studies as the prices
quoted were significantly higher than those used in our 2018
Scoping Study (US$39/t for feldspar and US$33/t for quartz).
Further bulk test work is now planned to produce feldspar and
quartz samples for evaluation by potential customers as well as
detailed studies into the market and capital and operating costs
associated with producing these additional commodities. Work is
also underway on the possibility of producing a high value mica
product to assess its suitability for use in building
materials.
The year also brought the formalisation of the relationships we
have been building with the University of Porto and Laboratorio
Nacional de Energia e Geologia ("LNEG"), a governmental research
and development institution. The University of Porto has a notable
history in Portugal's lithium industry with staff member, Professor
Noronha responsible for first identifying the presence of lithium
in Portugal at the Grandao deposit on our project around thirty
years ago. The new "Protocol of Cooperation" between our groups
formalises the existing working relationship which to date has
included preliminary mineralogical studies and a first draft
processing flowsheet for the treatment, recovery and concentration
of spodumene at Mina do Barroso. This agreement is the latest in a
growing number of contracts and relationships we have established
with Portuguese groups since the start of our involvement with Mina
do Barosso in 2017. At present we have Portuguese companies
conducting the Environmental Impact Assessment on the project,
providing us with legal services, advice on public and investor
relations, and community and governmental engagement.
Away from the project itself, 2018 also saw us begin the process
of engaging with a wide range of groups seeking to secure long term
supplies of lithium. Given the rapid evolution of this sector, the
universe includes a diverse range of potential counterparties
including intermediary lithium conversion businesses, industrial
chemical manufacturers, automotive companies, battery
manufacturers, specialist finance groups and trading houses. These
discussions, along with associated due diligence programmes will
continue during 2019 in parallel with the ongoing project
evaluation and permitting programmes and we continue to receive
enquiries from further groups keen to also be part of Europe's
growing lithium industry.
It is worthwhile briefly mentioning the market and pricing for
spodumene concentrates. Some suggest that burgeoning lithium demand
from the fast growing EV sector will encourage a supply response
overreaction by the lithium hard rock and brines producers.
However, brines producers operating in South America have not been
able to step up production to meet demand and the Australian hard
rock, spodumene producers now lead global production. The overall
investment climate has become more challenging for developers
although capital is going to those with good quality products from
mines that operate at the lower end of the cost curve. In our case,
Mina do Barroso is a robust project with low costs as can be seen
from the figure below. Additionally, the project is located in the
European setting where we are seeing strong investment
interest.
Savannah's Mina do Barroso project is set to be a low cost
spodumene operation:
During the balance of the year we expect to submit the project's
Environmental Impact Assessment report for comment and approval by
government and other stakeholders, complete the Definitive
Feasibility Study, execute supply contracts with customers for our
lithium concentrate and co-products, which are pre-requisites to
securing the finance required to construct the mine. We also intend
to expand our team to equip us with all the skills necessary to
build and operate Portugal's first lithium focused mine. To date
the work on the Definitive Feasibility Study has taken longer than
originally expected as we incorporate key learnings from the
Australian spodumene miners into our process flow sheet design and
factor the Pinheiro discovery into the mining schedule.
We look forward to making further progress with the Mina do
Barroso project in 2019 and in delivering beneficial outcome to our
shareholders, our local communities and stakeholders and
Portugal.
Mozambique - Mutamba Mineral Sands Project
Following the conclusion of the Consortium Agreement with Rio
Tinto in late 2016, and the encouragement provided by the positive
Scoping Study concluded in 2017 on the Consortium project, activity
in 2018 was principally focused on shepherding the Mining Lease
applications submitted at the beginning of the year through the
governmental approval processes.
The process has been rigorous and extensive involving District
and Provincial inputs and we remain hopeful based on recent
discussions with the Ministry of Mineral Resources and Energy, that
Mining Leases will be granted in coming months. No guarantees can
be given, but if this proves correct, our Consortium with Rio Tinto
will be on a firm footing from which to take the project through
the pre-feasibility and feasibility stages and into anticipated
production.
As outlined in the Chairman's Statement the market backdrop to
our HMS project has continued to strengthen. The supply of
high-grade mineral sands (ilmenite, rutile and zircon) in 2018
remained tight due to a combination of grade decline and production
disruptions - and this has underpinned robust prices. Our joint
venture partner, Rio Tinto, expects long-term demand growth to be
solid at 3% per year, driven by growth in emerging economies. We
are fortunate that in Rio Tinto we are partnered with the market's
single largest participant.
Oman - Mahab and Maqail Copper Mines
As with Mozambique, our efforts have been focused on obtaining
the necessary Mining Licences for the joint development of the
Mahab 4 and Maqail South copper deposits on Block 5, applications
for which were submitted in June 2016. We were pleased in May 2018
to receive the last (of the eight) ministerial letters of 'no
objection' required for both projects. This final 'no objection',
which followed the previous submission of all the other
documentation required, should allow Oman's Public Authority for
Mining ("PAM") to process and approve the Licence applications.
Having recently provided additional information to PAM as part of
its own approval process we are hopeful there will be a resolution
in the coming months. We understand that the grant of mining
licenses for both projects would be made under the newly announced
mining law once fully implemented.
While we await definitive responses to our two mining licence
applications, we demonstrated our commitment to the projects by
completing a drill programme across two prospects which have the
potential to provide further material to the central processing
facility outlined in our licence applications. The drilling carried
out in late 2018 identified narrow zones of copper mineralisation.
The results are still being analysed and a further announcement
will be made when the process has concluded.
In relation to Block 4, Savannah recently executed a deed of
variation to extend the second capital contribution period in the
earn-in agreement (to Al Thuraya Mining LLC) by eighteen months,
from four years to five years and six months, thus Savannah has
until May 2020 to earn a stake of 65%. Also, the renewal of the
Block 4 exploration licence has been delayed due to claims by a
party in respect of certain areas within Block 4. According to our
legal advisers in Oman, the Group has the right to renew the Block
4 exploration licence area in full, without any exclusions.
After the frustrations caused by the continuing
licencing-related delays, particularly in respect of the Block 5
mining licence applications in 2018, we hope that the mining
licenses will issue and the exploration licences will renew. We
will continue to engage with PAM and other key groups in Oman in a
constructive and open manner to move the licencing processes
forward. However, as the Chairman has stated, our Oman copper
assets must now be deemed as a lower priority in our overall
project portfolio given the success we have achieved in Portugal,
and the scale of the opportunity available in Mozambique. Hence are
conducting a strategic review in respect of the Oman assets to
identify the best outcome for Savannah and its shareholders.
Summary
My thanks go to the Savannah staff for their efforts across all
aspects of our business in 2018 and to our shareholders for their
ongoing support.
We continue to take the Mina do Barroso Feasibility Study and
the Environmental Impact Statement forward while intensive offtake
and financing activities continue so that we will be in a position
to make a Decision to Mine by the year-end.
Achieving all the goals we have set ourselves for 2019 means the
year is likely to be even busier and more important for the company
than 2018. We welcome that challenge and look forward to providing
Savannah's shareholders with regular updates on our progress.
David S Archer
Chief Executive Officer
Date: 20 May 2019
Competent Person and Regulatory Information
The information in this announcement that relates to exploration
results is based upon information compiled by Mr Dale Ferguson,
Technical Director of Savannah Resources plc. Mr Ferguson is a
Member of the Australasian Institute of Mining and Metallurgy
(AusIMM) and has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent
Person as defined in the December 2012 edition of the "Australasian
Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves" (JORC Code). Mr Ferguson consents to the inclusion in
the report of the matters based upon the information in the form
and context in which it appears.
The Information in this report that relates to Mineral Resources
and Exploration Targets is based on information compiled by Mr Paul
Payne, a Competent Person who is a Fellow of the Australasian
Institute of Mining and Metallurgy (AusIMM). Mr Payne is a
full-time employee of Payne Geological Services. Mr Payne has
sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity being undertaken to qualify as a Competent Person as
defined in the 2012 Edition of the "Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves". Mr
Payne consents to the inclusion in the report of the matters based
on his information in the form and context in which it appears.
This announcement is based upon information compiled by Mr Colin
Rothnie, an independent consultant. Mr Rothnie is a Member of the
Australasian Institute of Mining and Metallurgy (AusIMM) and has
sufficient experience, which is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person
as defined in the December 2012 edition of the "Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves" (JORC Code). Mr Rothnie consents to the inclusion in the
report of the matters based upon the information in the form and
context in which it appears.
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2018
2018 2017
GBP GBP
CONTINUING OPERATIONS
Revenue - -
Administrative expenses (3,258,458) (2,835,684)
Impairment of intangible assets (140,024) -
OPERATING LOSS (3,398,482) (2,835,684)
Finance income 17,321 948
Finance costs - (7,549)
------------------ ---------------
LOSS BEFORE AND AFTER TAX ATTRIBUTABLE
TO EQUITY OWNERS OF THE PARENT (3,381,161) (2,842,285)
------------------ ---------------
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 (73,345) 45,644
Items that will or may be reclassified
to profit or loss:
Exchange gains / (losses) arising on
translation of foreign operations 384,248 (197,120)
------------------ ---------------
OTHER COMPREHENSIVE INCOME FOR THE YEAR 310,903 (151,476)
------------------ ---------------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
ATTRIBUTABLE TO EQUITY OWNERS OF THE
PARENT (3,070,258) (2,993,761)
================== ===============
Loss per share attributable to equity
owners of the parent expressed in pence
per share:
Basic and diluted
From Operations (0.44) (0.53)
================== ===============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2018
2018 2017
GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible assets 17,413,168 9,809,994
Other intangible assets 342,881 -
Property, plant and equipment 1,437,068 1,196,084
Other receivables - 239,300
Other non-current assets 253,188 220,213
-------------- --------------
TOTAL NON-CURRENT ASSETS 19,446,305 11,465,591
-------------- --------------
CURRENT ASSETS
Investments 18,007 170,203
Trade and other receivables 330,774 155,959
Other current assets 223,733 20,011
Cash and cash equivalents 7,715,435 2,455,968
-------------- --------------
8,287,949 2,802,141
Assets classified as held for sale - 138,543
TOTAL CURRENT ASSETS 8,287,949 2,940,684
TOTAL ASSETS 27,734,254 14,406,275
============== ==============
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 8,814,518 6,358,504
Share premium 31,060,554 18,105,108
Foreign currency reserve 579,126 194,878
Warrant reserve 1,000,221 1,405,958
Share based payment reserve 508,051 691,194
FVTOCI Reserve (58,737) -
Retained earnings (16,485,626) (13,612,758)
-------------- --------------
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE PARENT 25,418,107 13,142,884
-------------- --------------
LIABILITIES
NON-CURRENT LIABILITIES
Loans and borrowings 25,813 22,847
-------------- --------------
TOTAL NON-CURRENT LIABILITIES 25,813 22,847
-------------- --------------
CURRENT LIABILITIES
Loans and borrowings 16,895 10,276
Trade and other payables 2,273,439 1,228,757
-------------- --------------
2,290,334 1,239,033
Liabilities classified as held for sale - 1,511
TOTAL CURRENT LIABILITIES 2,290,334 1,240,544
-------------- --------------
TOTAL LIABILITIES 2,316,147 1,263,391
-------------- --------------
TOTAL EQUITY AND LIABILITIES 27,734,254 14,406,275
============== ==============
The Financial Statements were approved by the Board of Directors
on 20 May 2019 and were signed on its behalf by:
D S Archer
Chief Executive Officer
Company number: 07307107
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2018
2018 2017
GBP GBP
ASSETS
NON-CURRENT ASSETS
Investments in subsidiaries 458,667 342,883
Other intangible asset 333,353 -
Other receivables 20,844,330 13,699,270
Other non-current assets 36,800 19,035
------------- --------------
TOTAL NON-CURRENT ASSETS 21,673,150 14,061,188
------------- --------------
CURRENT ASSETS
Investments 17,225 170,116
Trade and other receivables 130,438 44,841
Other current assets 202,180 -
Cash and cash equivalents 7,368,469 2,125,504
------------- --------------
TOTAL CURRENT ASSETS 7,718,312 2,340,461
TOTAL ASSETS 29,391,462 16,401,649
============= ==============
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 8,814,518 6,358,504
Share premium 31,060,554 18,105,108
Warrant reserve 1,000,221 1,405,958
Share based payment reserve 508,051 691,194
FVTOCI Reserve (58,737) -
Retained earnings (12,883,510) (10,502,403)
TOTAL EQUITY 28,441,097 16,058,361
------------- --------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 950,365 343,288
TOTAL LIABILITIES 950,365 343,288
------------- --------------
TOTAL EQUITY AND LIABILITIES 29,391,462 16,401,649
============= ==============
The Company total comprehensive loss for the financial year was
GBP2,523,008 (2017: GBP1,886,723).
The Financial Statements were approved by the Board of Directors
on 20 May 2019 and were signed on its behalf by:
D S Archer
Chief Executive Officer
Company number: 07307107
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2018
Share
Foreign based
Share Share currency Warrant payment FVTOCI Retained Total
capital premium reserve reserve reserve reserve earnings equity
GBP GBP GBP GBP GBP GBP GBP GBP
At January
2017 4,509,465 11,226,706 391,998 386,794 455,309 - (10,900,327) 6,069,945
---------------- ----------- ------------- ----------- ----------- ----------- ---------- -------------- -------------
Loss for the
year - - - - - - (2,842,285) (2,842,285)
Other
comprehensive
income - - (197,120) - - - 45,644 (151,476)
Total
comprehensive
income for
the
year - - (197,120) - - - (2,796,641) (2,993,761)
Issue of share
capital (net
of expenses) 1,849,039 7,897,566 - - - - - 9,746,605
Share based
payment
charges - - - - 320,095 - - 320,095
Lapse of
options - - - - (84,210) - 84,210 -
Issue of
warrants - (1,019,164) - 1,019,164 - - - -
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
year - - - - - - (3,381,161) (3,381,161)
Other
comprehensive
income - - 384,248 - - (58,737) (14,608) 310,903
---------------- ----------- ------------- ----------- ----------- ----------- ---------- -------------- -------------
Total
comprehensive
income for
the
year - - 384,248 - - (58,737) (3,395,769) (3,070,258)
Issue of share
capital (net
of expenses) 2,056,014 12,967,604 - - - - - 15,023,618
Contingent
consideration - - - - 283,283 - - 283,283
Contingent
consideration
shares issued 400,000 - - - (283,283) - (116,717) -
Share based
payment
charges - - - - 38,580 - - 38,580
Exercised
options - - - - (202,521) - 202,521 -
Lapse of
options - - - - (19,202) - 19,202 -
Issue of
warrants - (12,158) - 12,158 - - - -
Exercised
warrants - - - (326,755) - - 326,755 -
Lapse of
warrants - - - (91,140) - - 91,140 -
At 31 December
2018 8,814,518 31,060,554 579,126 1,000,221 508,051 (58,737) (16,485,626) 25,418,107
================ =========== ============= =========== =========== =========== ========== ============== =============
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share capital Amounts subscribed for share capital at nominal
value.
Share premium Amounts subscribed for share capital in excess
of nominal value less costs of fundraising.
Foreign currency Gains/losses arising on retranslating
reserve the net
assets of group operations into Pound
Sterling.
Warrant reserve Fair value of the warrants issued.
Share based Represents the accumulated balance of share based
payment reserve payment charges recognised in respect of asset
acquired and share options granted by Savannah
Resources Plc, less transfers to retained losses
in respect of options exercised, lapsed and forfeited.
FVTOCI Reserve Cumulative changes in fair value of equity investments
classified at fair value through other comprehensive
income (FVTOCI).
Retained earnings Cumulative net gains and losses recognised in
the consolidated Statement of Comprehensive Income.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2018
Share
based
Share Share Warrant payment FVTOCI Retained Total
capital premium reserve reserve reserve earnings equity
GBP GBP GBP GBP GBP GBP GBP
At 1 January 2017 4,509,465 11,226,706 386,794 455,309 - (8,699,890) 7,878,384
--------------------- ----------- ------------- ----------- ----------- ---------- -------------- -------------
Loss for the year - - - - - (1,932,367) (1,932,367)
Other comprehensive
income - - - - - 45,644 45,644
--------------------- ----------- ------------- ----------- ----------- ---------- -------------- -------------
Total comprehensive
income for the
year - - - - - (1,886,723) (1,886,723)
Issue of share
capital (net of
expenses) 1,849,039 7,897,566 - - - - 9,746,605
Share based payment
charges - - - 320,095 - - 320,095
Lapse of options - - - (84,210) - 84,210 -
Issue of warrants - (1,019,164) 1,019,164 - - - -
--------------------- ----------- ------------- ----------- ----------- ---------- -------------- -------------
At 31 December
2017 6,358,504 18,105,108 1,405,958 691,194 - (10,502,403) 16,058,361
--------------------- ----------- ------------- ----------- ----------- ---------- -------------- -------------
Change in
accounting
policy - IFRS 9 - - - - - (556,454) (556,454)
--------------------- ----------- ------------- ----------- ----------- ---------- -------------- -------------
At 1 January 2018 6,358,504 18,105,108 1,405,958 691,194 - (11,058,857) 15,501,907
--------------------- ----------- ------------- ----------- ----------- ---------- -------------- -------------
Loss for the year - - - - - (2,449,663) (2,449,663)
Other comprehensive
income - - - - (58,737) (14,608) (73,345)
Total comprehensive
income for the
year - - - - (58,737) (2,464,271) (2,523,008)
Issue of share
capital (net of
expenses) 2,056,014 12,967,604 - - - - 15,023,618
Shares issued 400,000 - - - - - 400,000
Share based payment
charges - - - 38,580 - - 38,580
Exercised options - - - (202,521) - 202,521 -
Lapse of options - - - (19,202) - 19,202 -
Issue of warrants - (12,158) 12,158 - - - -
Exercised warrants - - (326,755) - - 326,755 -
Lapse of warrants - - (91,140) - - 91,140 -
At 31 December
2018 8,814,518 31,060,554 1,000,221 508,051 (58,737) (12,883,510) 28,441,097
===================== =========== ============= =========== =========== ========== ============== =============
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share capital Amounts subscribed for share capital at nominal
value.
Share premium Amounts subscribed for share capital in excess
of nominal value less costs of fundraising.
Warrant reserve Fair value of the warrants issued.
Share based Represents the accumulated balance of share based
payment reserve payment charges recognised in respect of asset
acquired and share options granted by Savannah
Resources Plc, less transfers to retained losses
in respect of options exercised, lapsed and forfeited.
FVTOCI Reserve Cumulative changes in fair value of equity investments
classified at fair value through other comprehensive
income (FVTOCI).
Retained earnings Cumulative net gains and losses recognised in
the consolidated Statement of Comprehensive Income.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2018
2018 2017
GBP GBP
Cash flows used in operating activities
Loss for the year (3,381,162) (2,842,285)
Depreciation and amortisation charges 31,194 14,895
Impairment of assets 140,024 -
Share based payment charge 38,580 320,095
Shares issued in lieu of payments
to extinguish liabilities - 98,630
Finance income (17,321) (948)
Finance expense - 7,549
Exchange (gains) / losses (54,076) 75,156
Cash flow from operating activities before changes
in working capital (3,242,761) (2,326,908)
Increase in trade and other receivables (179,376) (71,288)
Increase in trade and other payables 562,925 39,620
------------- -------------
Net cash used in operating activities (2,859,212) (2,358,576)
------------- -------------
Cash flow used in investing activities
Purchase of intangible exploration
assets (6,317,118) (3,276,715)
Purchase of other intangible assets (131,173) -
Purchase of tangible fixed assets (328,768) (1,069,056)
Purchase of investments (695) (87)
Proceeds from sale of investments 104,461 -
Payments for guarantees for mining
activity - (199,755)
Guarantees for acquisition of intangible
exploration assets (202,180) -
Interest received 17,321 948
Net cash used in investing activities (6,858,152) (4,544,665)
-------------
Cash flow from financing activities
Interest paid - (7,549)
Proceeds from issues of ordinary
shares (net of expenses) 14,986,546 8,257,418
-------------
Net cash from financing activities 14,986,546 8,249,869
-------------
Increase in cash and cash equivalents 5,269,182 1,346,628
Cash and cash equivalents at beginning
of year 2,455,968 1,172,347
Exchange losses on cash and cash
equivalents (9,715) (63,007)
-------------
Cash and cash equivalents at end
of year 7,715,435 2,455,968
============= =============
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
2018 2017
GBP GBP
Cash flows used in operating activities
Loss for the year (2,449,736) (1,932,367)
Impairment of financial assets 1,325,790
Share based payment reserve charge 38,580 320,095
Shares issued in lieu of payments
to extinguish liabilities - 98,630
Finance income (17,321) (948)
Finance expense - 4,348
Exchange (gains) / losses (628,473) 75,156
------------ -------------
Cash flow from operating activities
before changes in working capital (1,731,160) (1,435,086)
Increase in trade and other receivables (103,289) (21,078)
Increase in trade and other payables 477,736 44,228
------------ -------------
Net cash used in operating activities (1,356,713) (1,411,936)
------------ -------------
Cash flow used in investing activities
Investment in subsidiaries (115,784) (51,643)
Loans to subsidiaries (8,049,798) (5,631,693)
Purchase of other intangible assets (131,173) -
Guarantees for acquisition of intangible
exploration assets (202,180) -
Proceeds from sale of investments 104,461 -
Interest received 17,321 948
Net cash used in investing activities (8,377,153) (5,682,388)
------------ -------------
Cash flow from financing activities
Interest paid - (4,348)
Proceeds from issues of ordinary
shares 14,986,546 8,257,418
Net cash from financing activities 14,986,546 8,253,070
------------ -------------
Increase in cash and cash equivalents 5,252,680 1,158,746
Cash and cash equivalents at beginning
of year 2,125,504 1,029,765
Exchange losses on cash and cash
equivalents (9,715) (63,007)
-------------
Cash and cash equivalents at end
of year 7,368,469 2,125,504
============ =============
**ENDS**
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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