Zinnwald Lithium plc / EPIC: ZNWD.L / Market: AIM / Sector: Mining

10 March 2025

Zinnwald Lithium plc ('Zinnwald Lithium' or the 'Company')

 

Final Results

 

Positioned as a strategic asset in Europe's critical mineral supply chain

 

Zinnwald Lithium plc, the European focused lithium company developing the integrated Zinnwald Lithium Project (the 'Project') in Germany, is pleased to announce its final audited results for the year ended 31 December 2024.

 

The Company's Annual Report and Financial Statements for the year ended 31 December 2024 will be posted to shareholders today and will be available on the Company's website www.zinnwaldlithium.com.

 

HIGHLIGHTS

12 Months to 31 December 2024

·    Announced two updates to the Mineral Resource Estimate ('MRE') - confirmed the Project's position as the second-largest hard rock lithium project in the EU and increasing ore tons in the Measured category. 

·    Explored potential to expand the Project in phases, starting with Phase 1 producing 16,000-18,000 tpa of battery-grade Lithium Hydroxide ("LiOH"), a 50% increase from the 2022 estimate of 12,000 tpa.

·    Agreed to develop a Pre-Feasibility Study ('PFS') to assess the potential for a Phase 2 expansion  and undertake various technical trade-off studies.

·    Advanced processing tests with Metso, which continue to generate encouraging results that potentially offer significant advantages in overall recovery, efficiency and environmental impact reduction. 

·    Applied for the Project to be designated as 'strategic' under the European Critical Raw Materials Act ('CRMA').

·    ERM contracted to provide the Environmental and Social Impact Assessment ('ESIA') Scoping Study.

·    Received strong expressions of support from Federal and State Governments in Germany with invitation to formally apply for federal grant funding strongly backed by the State of Saxony.

·    New CDU-SPD coalition agreement in Saxony highlights the raw material industry as critical to the region's economy, prioritising the simplification and acceleration of mining project approvals, with the Zinnwald Lithium Project being the only project formally referenced.

·    Held productive meetings with German Chancellor Olaf Scholz during his visits to the SOBA.

·    Strengthened the team to support increased activity.

·    Organised events and engaged in regular dialogue with local communities.

·    Engaged InvestorHub to streamline communication with shareholders.

 

Post period end to 7 March 2025

·    The PFS remains on track to be published in Q1 2025.

·    Detailed mine plan finalised to deliver increased production scenarios, following the publication of an updated MRE in June 2024.

·    Metso process engineering and design work in final stages following completion of mineral processing basic engineering and the key calcination, and hydrometallurgical testwork programmes.

·    Site layout design and infrastructure completed indicating sufficient supply of key utilities.

·    The geotechnical drill programme has been completed as part of detailed planning for constructing an exploration adit to access the Zinnwald orebody.

·    Advancing environmental licencing and permitting, with updates to the spatial planning process submitted to Landesdirektion Sachsen.

·    LOI signed with solar development company Solar-Bau to explore the option for long term clean power offtake.

 

For further information visit www.zinnwaldlithium.com or contact:

 

Anton du Plessis Cherif Rifaat	Zinnwald Lithium plc	info@zinnwaldlithium.com
David Hart Dan Dearden-Williams	Allenby Capital Nominated Adviser	+44 (0) 20 3328 5656
Michael Seabrook Adam Pollock	Oberon Capital Ltd Joint Broker	+44 (0) 20 3179 5300
Richard Greenfield Charles Bendon	Tamesis Partner LLP Joint Broker	+44 (0) 20 3882 2868
Isabel de Salis Paul Dulieu	St Brides Partners Financial PR	zinnwald@stbridespartners.co.uk

 

CHAIRMAN'S STATEMENT

Zinnwald Lithium continues to make significant progress in advancing its integrated lithium hydroxide ('LiOH') project in Germany (the 'Project'), the second-largest hard-rock lithium project in the EU. A key milestone achieved during the year was the publication of an updated Mineral Resource Estimate ('MRE') in June 2024, reaffirming the scale and quality of our deposit and reinforcing the Project's potential within Europe's critical mineral supply chain.

 

Securing a stable supply of lithium and other critical minerals is essential for Europe's economic resilience and energy transition. As demand surges with the expansion of renewable energy, electric vehicles ('EVs'), and advanced manufacturing, Europe's reliance on imported critical raw materials leaves it exposed to supply chain vulnerabilities. Developing domestic projects such as ours will not only reduce dependency on imports but also strengthen industrial competitiveness and support sustainability targets.

 

The importance of our Project to Germany and the region was highlighted by its specific mention in the coalition agreement reached between the CDU and SDP in Saxony in December 2024 as part of the region's strategic focus on the raw materials sector.  We were also delighted to be invited to attend two meetings in August and December 2024 with German Federal Chancellor Olaf Scholz to discuss raw material security and the Project's potential.

 

The updated MRE and increased potential scale, longevity, expansion potential and integrated nature of the Project are key elements that underpin its strategic value.  This is particularly relevant when looking at the volatility of lithium pricing demonstrated in recent years, which underlines the importance of a project's ability to sustain long term operations that can withstand multiple market cycles. A long life is also important in justifying the significant investment required for a fully integrated operation.

 

As part of our risk mitigation strategy, we are taking a prudent approach to developing the Project through a phased development approach. In Phase 1, we aim to achieve an annual production of 16-18ktpa of LiOH, up 50% from the 2022 estimate of 12ktpa, with the flexibility to scale up in response to future market demand. Our forthcoming Pre-Feasibility Study ('PFS'), set for publication later this month, will provide further insights into this strategy.

 

Alongside this, we are advancing the permitting process for Phase 1 of the Project. This includes undertaking environmental base line studies, close engagement with regulatory authorities, and finalising our spatial planning submissions. Additionally, we are progressing with our Environmental and Social Impact Assessment ('ESIA') to ensure compliance with both national and international standards of best practice.

 

Minimising our environmental footprint remains a top priority as we look to become a sustainable LiOH producer. In line with this, post-period end, we signed a Letter of Intent with Solar-Bau to explore long-term renewable power solutions for the Project. Furthermore, we are conducting extensive hydrogeological and biodiversity studies to ensure responsible resource management.

 

Delivering a project of this scale requires strong and reliable partners. We continue to collaborate with industry leaders such as Metso, which has played a key role in our process engineering and metallurgical testwork. Our partnerships extend to other world-leading environmental and engineering specialists, ensuring that we develop a project that meets the highest standards of sustainability and operational efficiency.

 

At Zinnwald Lithium, we deeply  value our relationship with the local community, recognising that their support is essential to the success of the Project. We are committed to delivering positive impacts through job creation, economic growth, and sustainable development. To promote open dialogue and transparency, we have established a comprehensive stakeholder engagement and communication programme. This includes regular town hall events and meetings at our new local office in Saxony. These events, hosted by our German Managing Director, Marko Uhlig, a native of the region, offer local stakeholders the chance to engage directly with our team, ask questions, and stay informed about the Project's progress. By fostering ongoing interaction, we remain responsive to local needs and concerns, building a strong foundation of trust and collaboration as we work towards a sustainable future.

 

Although the lithium market has encountered short-term weakness, recent industry forecasts indicate a more balanced supply/demand dynamic in the coming years. Fastmarkets' 2025 Lithium Market Outlook, for instance, forecasts a potential supply deficit by 2026, which could drive restocking and price recovery earlier than previously expected. Such a shift would occur at an opportune time for Zinnwald Lithium as it advances towards the development stage.

 

Despite the challenges facing the lithium sector, Zinnwald Lithium remains well-positioned to develop one of Europe's most advanced battery-grade lithium projects. With the PFS expected very soon, permitting progressing, and government support reinforcing the Project's strategic importance, we are firmly on track to becoming a key supplier to Europe's growing battery sector.

 

In closing, I would like to thank our shareholders and stakeholders for their ongoing support and look forward to providing regular updates as we continue to focus on bringing this exciting project to fruition.

 

Jeremy Martin

Non-Executive Chairman

7 March 2025

 

THE ZINNWALD LITHIUM PROJECT

The Zinnwald Lithium Project is located in east Germany, some 35 km from Dresden and adjacent to the border with the Czech Republic. The Project concept is for a fully integrated underground mine and associated, on site, mineral and chemical processing to produce a battery grade lithium hydroxide. The Company's business model is predicated around utilising its inherent advantages to enable it to become a sustainable project serving the European lithium market. Europe does not currently have a domestic source of lithium supply and there are relatively few projects within the EU. The Project has applied for "strategic project" status under the EU's Critical Raw Materials Act.

 

Geology and License Areas

The Project is in a granite hosted Sn/W/Li belt that has been mined historically for tin, tungsten and lithium at different times over the past 400 years. Lithium is contained in lithium-bearing mica, which is called "zinnwaldite" takings its name from the nearby village. Several lithium focused projects in Europe are focused on the exploitation of zinnwaldite ore. The Project comprises five license areas:

 

The Zinnwald Mining License

The Zinnwald Mining License covers the core project area where a resource has been defined. The license covers 256.5 ha and is valid to 31 December 2047.  In June 2024, the Project published an updated MRE that showed a total Measured category of 36.3Mt @ 2,500ppm Li (91kt contained lithium metal), a total Indicated category of 157.2Mt @ 2,150ppm Li (337kt contained lithium metal) and a total Inferred category of 33.3Mt @ 2,140ppm Li (71kt contained lithium metal). This establishes the Project as the second largest hard rock lithium project by both resource size and contained lithium in the EU and the third largest in Europe. 

 

Falkenhain, Altenberg, Sadisdorf and Bärenstein exploration licence areas

·    Falkenhain - the licence covers an area of 2,957,000 m² and in 2022 the licence was extended for a further three years to 31 December 2025. 

·    Altenberg - the licence covers an area of 42,252,700 m² and in October 2023 the term of the licence was extended to February 2027. 

·    Sadisdorf - the licence covers an area of 2,250,300 m² and is valid to 30 June 2026. Historical exploration work at the Sadisdorf licence by previous licence holders resulted in a December 2017 historic JORC compliant inferred mineral resource of 25 Mt with an average grade of 0.45% Li2O. 

·    Bärenstein - this licence covers an area of 4,934 hectares and was awarded in July 2023 valid to June 2028.  This licence closes the gap between the Falkenhain and Altenberg licences. 

 

Project Plans and Timeline

The Group's strategy is to focus on advancing a scalable fully integrated operation that produces battery-grade lithium products; to optimise the Project from a cost perspective; and to minimise the potential impact on the environment and local communities. All aspects of the Project from mining through to production of the end product are planned to be located near to the deposit itself in an area with developed infrastructure, energy sources, services, facilities, and access roads and rail. Power and water are provided by existing regional supply networks. It is also located close to the heart of the German automotive and chemical industries. 

 

The Project completed its PEA in September 2022 based on the revised plan to produce lithium hydroxide.  It expects to complete its Pre-Feasibility Study in Q1 2025.  The Project published an updated Mineral Resource Estimate in February 2024 and further updated this in June 2024 reflecting greater confidence in the resource, underpinned by the Project's 84 hole, 27,000m in-fill drill programme conducted in 2023. The Mineral Processing Plant basic engineering has already been completed to Definitive Feasibility Study (AACE Class 3) level.  The Project is then targeting completion of the full Project DFS in 2026.

 

Permitting and Environmental Studies

Following engagement and various meetings with the authorities, the Project will follow an integrated permitting procedure. A Spatial Planning Procedure is underway in parallel to the overarching permit, the General Operating Plan ("GOP"). As part of the GOP process, the Project will complete an Environmental Impact Assessment ("EIA"). The Mining Authority of the Federal State of Saxony ("SOBA") will be the single overarching permitting authority for the GOP. The GOP requires a number of supporting documents including the EIA and other related documentation (e.g. Natura 2000 Impact Assessments, Landscape Management Plan and various environmental technical reports). The Project has commenced its work to produce an Environmental and Social Impact Assessment ("ESIA") that will meet both the requirements for permitting under German Federal law as well as being completed to a level suitable for the purposes of seeking finance from International Financing Institutions ("IFIs") who are signatories to the Equator Principles 4 (and related standards).     

 

STRATEGIC REPORT

Extracts from the Company's Strategic Report are set out below.

 

Strategic Review

Company Overview - Background and ownership structure

Zinnwald Lithium Plc ("ZLP" or the "Group") is the ultimate owner of the Project. It is a UK public limited company ("plc") and has been quoted on the AIM market of the London Stock Exchange since December 2017. ZLP is the Project promoter and fund-raising vehicle and provides funding required by the operational subsidiaries in Germany. ZLP owns 100% of Zinnwald Lithium Holdings Ltd ("ZLH"), which is a UK company, that acts as the holding company for the Project.

 

ZLH owns 100% of Zinnwald Lithium GmbH ("ZLG"). ZLG is the main operational company in the Group that is developing the Project.  It owns the various mining and exploration licenses in Germany. ZLG will apply for the General Operating Plan permit that will govern the Project as a whole, as well as the subsidiary Main Operating and Special Operating Permits. 

 

ZLP acquired its initial 50% stake in ZLG in October 2020 by way of reverse takeover from the previous owner, Bacanora Lithium Plc ('Bacanora'). In June 2021, ZLP consolidated its ownership by acquiring the remaining 50% of ZLG from the bankrupt estate of SolarWorld AG.

 

Company Strategy and Business Plan

The Zinnwald Lithium Project, as set out above, is the Company's core development asset and the sole focus. This strategy continues to be underpinned by a technically led team with extensive experience in bringing projects from the feasibility stage through to mine production, as well as the capital markets experience to source the funding required for these types of mining projects.  The Company will focus on further de-risking the Project as it is advanced towards a financing decision.  The overall strategy can be split into the following key work areas across the operational, financing and commercialisation parts.

 

Operational Strategy

The Company will continue to work on scalable production scenarios through resource expansion (both at the core licence area and satellite exploration licences), and optimised mine planning, including the application of bulk mining techniques and infrastructure and site planning.  As part of this, the Project has finalised its preferred processing site selection and will work with relevant landowners and leaseholders to secure the required land.

 

The Project will continue to further refine the processing route (flowsheet) that supports the primary production of battery grade lithium products including improvements in recoveries, reduced waste generation and the production of valuable by-products. This work will include minimising the carbon footprint through project wide optimisation (transport, material flow, energy consumption, site location).

 

The Project will continue to work with its globally recognised consultants and engineers to firstly complete a PFS by Q1 2025. Thereafter, the Project will complete its DFS that will include plant engineering work done to AACE Class 3 specifications. As the Project then moves towards final permitting, it will commence the detailed Front-end Engineering ("FEED") work in done to AACE Class 2 and Class 1 that will underpin construction subject to permitting approvals.

 

Concurrent with this work, the Project is permitting an Exploration Tunnel that, amongst other wider objectives, will enable the extraction of large-scale representative samples direct from the ore body itself.  These bulk samples will provide the feedstock for a continuous pilot plant test to produce large scale (>100kg) battery grade end product samples that can be supplied to potential offtake partners. A continuous pilot scale test is also necessary in order to obtain suitable process guarantees form technology providers which will be critical for debt financing.

 

The Project will also continue to advance the permitting process that commenced in 2023 that will involve the securing of a General Operating Permit under German mining laws.  At the same time, the Project will advance its ESIA work to secure the social license to operate via extensive public participation.  The Company recognises the importance of the general public and NGOs in the permitting processes and has committed to proactively engage with all the stakeholders in its projects.

 

Commercialisation Strategy

As the Project is conceived as an integrated operation from mining to producing a battery-grade lithium product, its commercial strategy will be focussed on securing a commercial offtake partner for that product rather than producing a basic concentrate.  In terms of offtake partners, the lithium industry is unusual in the commodity sector in terms of how offtake arrangements are structured. This is primarily due to the lack of homogeneity in high purity lithium products (different levels of contaminants etc) and the requirement to qualify products with specific customers. The result is that any offtake arrangements entered into too far ahead of final production are necessarily somewhat contingent and therefore do not provide material support for traditional project debt financing.

 

As such, while the Company has held several discussions with potential off-takers in Europe, the strategy has been to keep the off-take "free" for as long as possible such that the value of this strategic aspect of the Project can be maximised. However, the intention is clearly for the material ultimately produced to be supplied to the battery industry in the EU. The demand for this exists in the EU and will also increase significantly in the coming years with the "ramp-up of e-mobility".  Our goal is to find an offtake partner that will commit to either a meaningful advance payment on the offtake and/or a meaningful investment in the Company which it must maintain through to production.  Zinnwald Lithium has had several discussions with potential offtake partners on these terms and continues to be involved in discussions about the progress of the Project.

 

The Project will also, as part of future phases of work, conduct continuous steady-stage pilot plant test runs to demonstrate the production process and the product quality. ZLG believes that this will significantly de-risk the Project by giving both finance providers and potential off-takers comfort that the production of qualifying material is feasible.

 

Financing Strategy and Business Plan

Zinnwald's Board will continue to run the Group with an efficient overhead cost base in order to focus resources on advancing the Project.  The main challenge faced by the Company is securing sufficient funding to execute the development programme for the Project. The Company maintains a tight control on its budgets and reviews spend against budget on a monthly basis. The Directors' extensive experience of mining projects helps to ensure that funds are spent in the most effective way possible both on a cost basis and in relation to targeting the most effective areas to move the Project through to production and revenue generation.

 

The Company's quoted status has enabled the Group to target a wide pool of investors, as demonstrated by the issuance of new equity, for cash and assets, several times over the last three years. In the last four years, since the Company first became involved in the Project, the Company issued shares to the value of circa €11m to acquire the Project and has raised a further €34m in cash from investors to finance the Project's development. 

 

The Company will continue to work to secure short term finance to fund near term expenditures necessary to advance the Project to a construction ready state (preparation of a DFS, advancing permitting, construction of initial infrastructure, the FEED Engineering work, and orders for long lead items). This financing activity will involve existing investors as well as the identification of and negotiation with further long-term cornerstone investors. The Company will also identify and negotiate with potential project financing partners that could include banks and national and transnational development organisations. The Project has also already engaged with German Federal and State bodies with regard to securing grant funding to further de-risk the financing of the Project.

 

Operational Review

2024 saw Zinnwald Lithium accelerate its development strategy for the Project. During the year, the Company's priorities were completion of its MRE, a refinement of its strategy to focus on the PFS and its associated detailed mine planning, flowsheet development and infrastructure planning, and ongoing work towards permitting.

 

MINERAL RESOURCE ESTIMATE ("MRE")

On 21 February 2024, the Company published its updated independent MRE that showed a substantial increase in its Mineral Resource at the Project with a 243% increase in contained lithium in the Measured and Indicated categories versus the 2018 MRE. This establishes the Project as the second largest hard rock lithium project by both resource size and contained lithium in the EU and clearly highlights its scale and strategic importance. 

 

The MRE incorporated 26,911 metres of new diamond core drilling across 84 drill holes and a reinterpreted and updated geological model since the previous MRE, which was released in September 2018.  In addition to the high-grade greisen mineralisation, focus of the recent 2022/2023 drilling was the lithium mineralisation hosted by the broader zone of altered albite granite, which includes internal lenses of higher-grade greisen. The highlights of this initial MRE showed a 445% increase over the previous MRE issued in May 2018, with a total Measured and Indicated resource of 193.5Mt that represents 429,000 tonnes of contained Lithium metal and an Inferred resource of a further 33.3Mt that represents 71,000 tonnes of contained Lithium metal. 

 

On 6 June 2024, the Company announced a further update to the MRE following a geometallurgical testwork programme recommended by Snowden Optiro on 35 variability drill core samples derived from the 2022 / 2023 drilling campaign.  It was undertaken to provide a higher level of confidence in the Mineral Resource within the mineralised albite granite, which surrounds the lenses of higher-grade greisen mineralisation. The result was to add an additional 25.0Mt @ 2,090ppm Li (52kt contained lithium metal), in the Measured category representing an increase of 221% in tonnes and 133% in contained metal in the Measured category compared with the February 2024 MRE. The Project now has sufficient material in Measured category alone to support over 20 years of production. This is a major milestone as it further  de-risks the resource and adds a higher level of confidence in the detailed mine plan, which is key to future financing plans.

 

Overall, the total Measured category increased to 36.3Mt @ 2,500ppm Li (91kt contained lithium metal) while the total Indicated category is now 157.2Mt @ 2,150ppm Li (337kt contained lithium metal), as a result of the increase in the Measured category. The total Measured and Indicated category remains unchanged at 193.5Mt @ 2,220ppm Li (428kt contained lithium metal). The Inferred category remained unchanged at 33.3Mt @ 2,140ppm Li (71kt contained lithium metal).

 

The MRE (detailed below) was prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ("NI 43-101") by independent consulting firm Snowden Optiro Ltd ("Datamine International") of Bristol, United Kingdom.

 

Table ‎0.1          Mineral Resource Statement for Zinnwald Lithium Project, effective 5th June 2024.

 

Classification	Domain	Tonnes	Mean Grade		Contained Metal
		(Mt)	Li (ppm)	Li2O (%)	Li (kt)	LCE (kt)
Measured	External Greisen (1)	11.3	3,420	0.736	39	206
	Mineralised Zone (2)	25.0	2,090	0.449	52	277
	Internal Greisen	1.5	3,240	0.697	5	27
	Mineralised Granite	23.5	2,020	0.434	47	250
	Subtotal (1) and (2)	36.3	2,500	0.538	91	483
Indicated	External Greisen (1)	2.1	3,510	0.756	7	40
	Mineralised Zone (2)	155.1	2,130	0.459	331	1,762
	Internal Greisen	13.2	3,330	0.717	44	234
	Mineralised Granite	141.9	2,019	0.435	287	1,528
	Subtotal (1) and (2)	157.2	2,150	0.463	338	1,802
Measured + Indicated Subtotal		193.5	2,220	0.478	429	2,285
Inferred	External Greisen (1)	0.8	3,510	0.756	3	15
	Mineralised Zone (2)	32.5	2,110	0.454	68	364
	Internal Greisen	0.6	2,880	0.620	2	9
	Mineralised Granite	31.9	2,090	0.450	67	355
	Subtotal (1) and (2)	33.3	2,140	0.461	71	379

 

This updated MRE cemented the Project's position as the second largest resource in the EU and the third largest in Europe as a whole.  The chart below puts the Project in context of the other European hard rock lithium projects.

 

 

PRE-FEASIBILITY STUDY STRATEGY

Mine Planning Activities

During 2024, following completion of the updated MRE, the Company commenced detailed mine planning with Snowden Optiro and completed this work stream in early 2025, which will feed into the PFS. Large scale sub-level stoping with subsequent backfill has previously been determined to be the optimal mining method, which offers higher capacity, lower operating expenditure and easier backfill process than the Room and Pillar-method assumed in earlier studies.  Notably, with 36.3Mt in measured resources and the large dimensions of both the High Grade External Greisen ('HGG') and Albite Granite ('AG') domains now confirmed, significantly larger annual mining volumes can be supported, which will positively impact production of end product.

 

The updated mine plan incorporates the strategy of higher productivity mining methods and focussed on the understanding of key drivers of costs and efficiency across the entire production operation, taking all technical aspects of the Project into consideration. Detailed understanding of geotechnical aspects at Zinnwald as well as downstream process efficiencies and cost assumptions are crucial to adequately determine future metrics defining the Cut-off-Grade ('COG') and optimal production capacity scenarios.

Having completed detailed mine planning, the work is now focused on preparation of the Reserve Statement. The potential of the ore body to support larger scale mining in the future has also been evaluated and incorporated into the PFS.

 

PROCESS DEVELOPMENT / TESTWORK / ENGINEERING

Based on representative samples generated from its exploration programme, including both high grade greisen and albite granite ore types found in the deposit, the Company has continued its mineral processing, calcination and hydrometallurgical testwork programmes. These have been undertaken by Metso, a frontrunner in sustainable technologies, end-to-end solutions and services for the aggregates, minerals processing and metals refining industries globally. 

 

Mineral Processing

Following completion of the pilot scale mineral processing testwork in December 2023 at the GTK pilot facilities in Finland by GTK and Metso, which confirmed the earlier bench scale test work, basic engineering for a feasibility study was initiated later that month.  In H1 2024, Metso completed its mineral processing flowsheet design and equipment selection. This section of the process is a simple mainstream, proven design with a single crushing stage followed by two production lines consisting of grinding and rougher-scavenger wet magnetic separating and dewatering. The Basic Engineering for the mineral processing circuit was completed in early 2025 to a level of accuracy consistent with a definitive feasibility standard.

 

Pyro- and Hydrometallurgy

Pilot scale calcination testwork was undertaken at IBU-tec under Metso's supervision during June 2024.  A further c. 1 tonne sample was sent to Metso's facility in York, Pennsylvania, USA for a further testwork programme focused, inter alia, on equipment sizing.  This testwork was successful and equipment selection has been confirmed.   Basic engineering for the pyrometallurgical stage is well advanced.

 

Calcined material is being used for hydrometallurgical testing at large bench-scale at Metso's facility in Pori, Finland.  The remaining testwork is primarily focused on refining the treatment of effluent streams and the production of saleable by-products.  All of this testwork will help to define the base line hydrometallurgical process and the mass balance, as well as the resultant basic engineering work.

 

The Company and Metso believe that the alkaline processing route has the potential to offer significant advantages in terms of overall recovery, efficiency and reduced impact on the environment.  While the use of this process for zinnwaldite ore is a new application of the process, it has been successfully demonstrated at continuous pilot scale using spodumene feedstock at other operations such as the Keliber lithium project in Finland, which is under construction.

 

A representative sample of zinnwaldite concentrate was also tested by K-Utec using the previously developed sulphation roast process during 2024. This confirmed that the large scale tests previously performed by K-Utec based on HGG concentrate are applicable to the material derived from a combination of both HGG and AG.  As such, the sulphation roast process route that underpinned the PEA published in 2022 remains a viable processing route for the larger scale operation. 

 

Hydrogeology

Water management and hydrogeology is a critical component of both mine design and the permitting process. In 2024, the Company completed its hydrogeological drill programme that comprised eight groundwater ('GW') monitoring wells. These included six deep wells extending to reach the mineralised Albite Granite, and two shallow drill wells intended to penetrate the Rhyolite rock of the hanging wall.   A main operating plan for hydrogeological monitoring in the Zinnwald area was approved by SOBA in November 2024 and is valid until November 2028. This plan outlines a comprehensive framework for evaluating water resources in the area. It includes the establishment and operation of monitoring stations for surface water, groundwater, and mine water, ensuring data collection on water levels, flow, and quality. In 2025, the Project started the conversion of these GW wells to long term ground water monitoring wells to collate the required data on an ongoing basis. 

 

In cooperation with Geomet s.r.o., which is the owner of the Cinovec Project in the Czech Republic, Zinnwald has contracted ERM, the largest global pure play sustainability consultancy, to develop a cross-border hydrogeological model. The model will be used to evaluate the potential impact of mining operations on the hydrogeology.

 

Exploration adit

A geotechnical drill programme was completed in 2024 as part of detailed planning for the construction of an exploration adit to access the Zinnwald ore body. The exploration adit will provide the opportunity to extract a large-scale bulk sample to be used for piloting, as well as providing further detailed information on the ore body.

 

OTHER OPERATIONAL MATTERS

Infrastructure

In 2024, the Company has continued its work on defining the optimal solutions for the required infrastructure based on the potential for higher production levels supported by the results of the drilling campaign and the metallurgical testwork carried out. The Company is using Fichtner GmbH, a major German consulting group with experience concerning materials handling, road, and rail infrastructure as well as all civil works. The Group will, using trade-off studies, evaluate the most suitable, economical and environmentally friendly options for all surface facilities.

 

The Company has also continued with its evaluations for tailings management, supported by Knight Piesold (UK), which specialises in tailings management and engineering. The Company is strongly committed to progress planning for a Dry Stack Facility ('DSF'), for which multiple design and site options are being evaluated.

 

Solar power opportunity

In 2025, the Company has signed a letter of intent ('LOI') with P+S Projektentwicklung Solar-Bau GmbH ('Solar-Bau') to explore the purchase of solar-generated power. Solar-Bau, a solar development company, plans to establish several solar power generation facilities near the Project. This partnership could therefore minimise environmental impact by using solar energy close to its source, thereby reducing energy transfer losses and infrastructure costs, while providing Zinnwald Lithium with a clean energy source to lower the CO2 content of its final product.

 

Exploration Licenses

Whilst the Company's primary focus is on the development of its core Zinnwald Licence, it continues to advance targets on its surrounding 100% owned prospective exploration licence areas, including Falkenhain, Altenberg, Bärenstein and Sadisdorf. Work on these licences has mainly involved relogging and sampling historical data and core. Furthermore, the Company applied for and received an extension of its Altenberg exploration licence, which is now valid until 20 February 2027.

 

In addition, the team is evaluating an extensive historic geological database derived from historical drilling campaigns such as those undertaken by the former Wismut SAG, which has recently been made available to the public. Notably, there is data for over 900 drill holes of various depths within the areas of interest to the Company that has the potential to provide valuable geological and geotechnical information relevant to its licenses and site location options.

 

Staffing in Germany

The Group has further strengthened the team in Germany in 2024. The local Project team now comprises 14 full time staff of which four are female. The Company also employs six full time consultants with expertise across all the areas of the Project's flowsheet and development plan.  In total, the Group has twenty-six full-time professionals (including employees, full time consultants and directors) working across disciplines in both the Dresden and London office locations. In addition to the professionals working directly for the Company, more than 30 professionals work for the Project in partner organisations. 

 

ESG and Sustainability

Progress in relation to Permitting, Environmental, Social and Governmental engagement are covered in detail in the report of the Sustainability Committee below.

 

EUROPEAN UNION AND GERMANY DEVELOPMENTS

Critical Raw Materials Act ("CRMA")

On 23 May 2024, the EU's CRMA passed into law, with its primary emphasis being for material EU production by 2030 with goals for domestic European capacities to be able to extract 10%, process 40% and recycle 25% of its annual consumption of strategic raw materials.  In August 2024, Zinnwald Lithium applied for strategic project designation under the Extraction and Processing categories. The European Commission has confirmed the application has passed the initial evaluation stage and anticipates informing applicants of the final outcome in March 2025, following the high number of applications (170 in total, of which 121 were from within the EU). Zinnwald believes the Project holds significant potential for recognition as a Strategic Project, given its significant contribution to LiOH production in the EU, its resource scale, feasibility, sustainability credentials and broader EU benefits

 

Temporary Crisis and Transition Framework ('TCTF')

In September 2023, the German Federal Ministry for Economic Affairs and Climate Action ('BMWK') announced a new programme for public grant funding under the TCTF, a temporary funding instrument of the EU to promote the production of climate-neutral, strategically important technologies. This specific TCTF programme is to support the "Resilience and Sustainability of the Battery Cell Manufacturing Ecosystem" in Germany. 

 

Zinnwald Lithium submitted an application and, as part of Phase 1 of the application process, underwent a series of detailed reviews with by BMWK's programme management agency, VDI/VDE Innovation + Technology GmbH ('VDI/VDE'). On 27 June 2024, Zinnwald Lithium received an invitation from VDI/VDE to formally apply for the envisaged funding (Phase 2 of the application process) and this review is ongoing. While the invitation does not guarantee funding, it acknowledges the Project's strong potential. Updates will be provided as more information becomes available.

 

If the application is ultimately successful, any funding would be provided 70% by the Federal State Government and 30% by the State of Saxony.  On 4 June 2024, the Saxony Government announced its commitment to provide its portion of any funding, subject in part to receipt of formal approval by the Parliament of the State of Saxony, which was duly received on 21 June 2024.

 

Saxony Government

On 16 December 2024, the Christlich Demokratische Union Deutschlands ('CDU'), which won the highest individual share of the state elections in September 2024, approved a coalition agreement with the Sozialdemokratische Partei Deutschlands ('SPD') to form a minority coalition government. Zinnwald Lithium was delighted that this agreement specifically refers to the importance of the raw material industry to Saxony and establishes as a key goal the ability to simplify and speed up the planning and approval of mining projects. The agreement specifically refers to the Zinnwald Lithium Project in this context and is the only project formally referenced.

 

Visits by Chancellor Scholz

In August and December 2024, Germany's Federal Chancellor, Olaf Scholz, visited the Saxon Mining Authority ('SOBA') in Freiberg to discuss the future raw material security in Germany with the Saxon Minister of Economics, Martin Dulig. Representatives of Zinnwald Lithium GmbH also attended the meetings at which the potential role of Zinnwald Lithium's Project near Altenberg was discussed.

 

Chancellor Scholz was enthusiastic about the possibility of mining lithium in Saxony in an environmentally friendly way.  He said "We are a country that processes modern raw materials.  Germany imports many raw materials from other countries in the world, but some are also available in this country - including lithium. In Saxony, lithium is to be mined on a large scale in an environmentally friendly way in the future. "This creates jobs, prosperity and is therefore a priority", the Chancellor wrote on X after the meeting.

 

Lithium Market in 2024

General Lithium Market in 2024

In 2024, the lithium market was marked by volatility and transformation, with oversupply and weak demand being the dominant themes.  The main trends that shaped the market included:

·    Price Decline: According to Benchmark Mineral Intelligence, Lithium carbonate prices dropped by about 29% in 2024 and lithium hydroxide by around 27%. This decline was attributed to a global surplus of around 4.8% of demand, down from 9.5% in 2023. 

·    Supply Glut: The global supply of lithium increased substantially due to expanded production capacity. Overall lithium production has risen from 0.7m tonnes of LCE in 2022 to almost 1.2m tonnes in 2024.This oversupply, combined with softer demand, particularly from the electric vehicle (EV) sector early in the year, further pressured prices.  A feature of 2024 saw the reduction in planned production or even mothballing of a number of projects from major suppliers, such as Kathleen Valley, Bald Hill, Mt Cattlin and Greenbushes,

·    Mergers and Acquisitions (M&A): The lithium sector saw significant M&A activity. Notable deals included the merger between Livent and Allkem to form Arcadium Lithium, and Rio Tinto's acquisition of Arcadium for $6.7 billion. Additionally, Pilbara Minerals acquired Latin Resources, and Sayona Mining merged with Piedmont Lithium1.

·    Electric Vehicle Market Dynamics: While EV sales were initially weak in North America, they picked up momentum later in the year, especially in China, where record sales were reported. Overall EV sales exceeded 17m in 2024, an increase of 25% from 2023.  However, global EV demand was not strong enough to offset the supply surplus.

·    Battery Energy Storage Systems (BESS) growth:  One of the brighter areas of growth with more than 200 GWh of new installed capacity, with Europe increasing by 110% alone.  This is being driven by the dramatic decline in battery costs (down 40% from 2023) and an increase in storage duration.  Lithium-ion batteries remain the dominant option accounting for 87% of total storage, up from 83% in 2023.  Rho Motion expects these growth trends to continue into 2025 and beyond.

·    Geopolitical Factors: Geopolitical tensions, including trade disputes and tariffs on Chinese EVs; threats by China to restrict export of processing technology; uncertainty in the US around future support for the EV industry and potential tariffs; increased resource nationalism in key supplier countries such as Chile.  These all added complexity and volatility to the market landscape.

 

Lithium Pricing

Definitive and accurate lithium pricing is inherently problematic, due to the opaque nature of what is, in global mining terms, a relatively new and small market by value. Lithium pricing is not quoted on any major exchange. There is no terminal market, although the London Metal Exchange is working to launch a futures contract. There is a spot market visible in China, but this is a small part of the overall lithium market. As there is no industry wide benchmark for pricing, the bulk of the market is sold based on negotiation between buyer and seller on long term contracts with prices fixed on an annual or quarterly revised basis. This is not wholly surprising, as battery grade lithium is a speciality chemical that requires acceptance testing by manufacturers who value the consistency of quality of end product and its impurities and guarantee on supply. 

 

2024 has continued to see ongoing weakness in the price of lithium from the highs of $80,000 per tonne in 2022 to between $10,000-12,000 per tonne in the second half of 2024.  The lithium market has grown very rapidly from being a relatively small niche market from a global perspective. Partly as a consequence of this, the pricing of lithium has historically been quite volatile if looked at over a purely short-term basis.  The price tends to overshoot in the short term on both the high and low side.

 

In terms of longer-term forecasts, the prospects for lithium pricing remain encouraging.  Benchmark forecasts deficits substantially higher than the current surpluses. In 2034, the lithium market is expected to be in deficit by 572,000 tonnes, around seven times larger than the current surplus.  Benchmark takes the view that "lithium will be the bottleneck for the growth of the battery industry more than any other part of the supply chain. Though more than one million tonnes of mined lithium is expected to be produced in 2024, mined supply will need to reach 2.7 million tonnes to meet demand in 2030, the majority of which is driven by the electric vehicle (EV) market."

 

In terms of the pricing forecasts published by integrated lithium projects currently in development (i.e.: excludes concentrate producers). The table below shows the assumed pricing for those projects that have published studies since the beginning of 2023, when lithium prices started to retrace from the abnormal highs in 2022.

 

 

Shareholder Evolution in 2024

During 2024, the Company's underlying shareholder base shows an ever-increasing ownership by German and EU investors.  Based on the latest share register, the Company now shows UK holders at 43.5% (2023: 46%), large German institutional and corporate investors unchanged from 2023 at 31%, other German and EU investors increased to 15.5% (2023: 13%) and Rest of the World unchanged from 2023 at 10%.

 

Outlook

The Company's strategy is centred on developing a project that is not only significant in scale but also economically attractive and founded on a robust technical and sustainable framework. Current and ongoing workstreams are pivotal to this strategy, with significant progress already achieved and several key milestones on the horizon. These include ongoing metallurgical testwork, continuous advancement of hydrogeological drilling campaigns, and detailed mining planning. Concurrently, the team is engaged in permitting and commercial activities.

 

The Project's updated MRE that has shown the potential size and scale of the Project has re-positioned it in terms of its relevance to the German and EU Battery Chain. The Company's near-term priorities are to progress and complete the PFS Study for publication in Q1 2025.  The Company will also continue to advance the work required to successfully permit the Project, including the Spatial Planning submission and the start of its formal ESIA Scoping Study.  Alongside this, advancing the Project from a technical and permitting aspect, the Company will continue to advance its long term financing strategy including discussions with potential financing partners.

 

Financial Review

Notwithstanding that the Company is a UK Plc admitted to trading on AIM, the Company presents its accounts in its functional currency of Euros, since the majority of its expenditure, including that of its subsidiary Zinnwald Lithium, is denominated in this currency.

 

The Group is still at an exploration and development stage and not yet producing minerals, which would generate commercial income.  The Group is not expected to report overall profits until it is able to profitably commercialise its Zinnwald Lithium project in Germany.

 

During the year, the Group made an operating loss of €3.1m compared with a loss of €2.9m in 2023.  In 2024, administrative expenses maintained a consistent level of €2.5m compared with €2.6m in 2023.  It includes the costs related to being a public listed company, including the costs of non-executive directors, brokers, nominated adviser and other advisers. There was also a share-based payment expense of €0.7m in 2024, compared with €0.5m in 2023, arising from the issuance of new Options and RSUs and the first issuance of PSUs. 

 

During the year, the Group made an overall loss before taxation of €2.8m compared with a loss of €2.6m for the year ended 31 December 2023. This included interest income of €0.4m on the Group's cash balances.

 

The Total Net Assets of the Group decreased to €37.7m as at 31 December 2024 from €39.8m at 31 December 2023 due mainly to the operating loss noted above.  The Group spent €6.5m on direct development work on the Project focussed on completion of the Mineral Resource Estimate and the extensive testwork and flowsheet development, engineering, permitting and general work required for the forthcoming PFS. This increased the Group's Intangible asset balance to €34.2m at year end from €27.7m at the end of 2023 and cash balances decreased to €5.2m from €14.3m at the end of 2023.

 

The closing cash balance for the Group at the period end was €5.2m. As at today's date, the Group's cash balance is €3.9m.

 

GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2024

 

		31 December 2024	31 December 2023
	Notes	€	€
Continuing operations
Administrative expenses		(2,526,650)	(2,560,466)
Other operating income	‎7	110,605	183,143
Share based payments charge	‎23	(688,877)	(528,626)
Operating Loss		(3,104,922)	(2,905,949)
Finance income	‎9	380,607	282,229
Loss before taxation		(2,724,315)	(2,623,720)
Tax	‎10	(11,274)	(18,785)
Loss for the financial year	‎27	(2,735,589)	(2,642,505)
Other Comprehensive Income		65	38
Total comprehensive loss for the year		(2,735,524)	(2,642,467)
Earnings per share from continuing operations attributable to the owners of the parent company	‎11
Basic (cents per share)	11	(0.56)	(0.61)

 

Total loss and comprehensive loss for the year is attributable to the owners of the parent company.

 

GROUP STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2024

		31 December 2024	31 December 2023
	Notes	€	€
Non-current assets
Intangible Assets	‎12	34,202,236	27,652,152
Property, plant and equipment	‎13	430,752	386,788
Right of Use Assets	‎14	279,566	-
		34,912,554	28,038,940
Current assets
Trade and other receivables	‎18	371,142	357,463
Right of Use Assets < 1 year	‎14	-	46,131
Cash and cash equivalents		5,216,085	14,306,191
		5,587,227	14,709,785
Total Assets		40,499,781	42,748,725
Current liabilities
Trade and other payables	‎19	(1,106,584)	(1,469,564)
Lease Liabilities	‎14	(118,652)	(47,795)
		(1,225,236)	(1,517,359)
Net current assets		4,361,991	13,192,426
Non-current Liabilities
Deferred tax liability	‎20	(1,382,868)	(1,382,868)
Lease Liabilities > 1 Year	‎14	(164,687)	-
		(1,547,555)	(1,382,868)
Total Liabilities		(2,772,791)	(2,900,227)
Net Assets		37,726,990	39,848,498
Equity
Share capital	‎24	5,377,253	5,365,379
Share premium	‎25	39,476,355	39,403,810
Other reserves	‎26	2,303,850	1,896,531
Retained losses	‎27	(9,430,468)	(6,817,222)
Total equity		37,726,990	39,848,498

 

GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2024

	Notes	Share Capital	Share premium account	Other reserves	Retained earnings	Total
		€	€	€	€	€
Balance at 1 January 2023		3,316,248	20,289,487	1,367,867	(4,174,717)	20,798,885
Year ended 31 December 2023
Loss for the year		-	-	-	(2,642,505)	(2,642,505)
Other comprehensive income:
Currency translation differences		-	-	38	-	38
Total comprehensive loss for the year		-	-	38	(2,642,505)	(2,642,467)
Issue of share capital		2,049,131	19,282,326	-	-	21,331,457
Share issue costs		-	(168,003)	-	-	(168,003)
Credit to equity for equity settled share-based payments	‎23	-	-	528,626	-	528,626
Total transactions with owners recognised directly in equity		2,049,131	19,114,323	528,626	-	21,692,080
Balance at 31 December 2023 and 1 January 2024		5,365,379	39,403,810	1,896,531	(6,817,222)	39,848,498
Year ended 31 December 2024
Loss for the year		-	-	-	(2,735,589)	(2,735,589)
Other comprehensive income
Currency translation differences		-	-	65	-	65
Total comprehensive income for the year		-	-	65	(2,735,589)	(2,735,524)
Issue of share capital	‎24	11,874	72,545	-	-	84,419
Share issue costs		-	-	-	-	-
Credit to equity for equity settled share-based payments	‎23	-	-	407,254	122,343	529,597
Total transactions with owners recognised directly in equity		11,874	72,545	407,254	122,343	614,016
Balance at 31 December 2024		5,377,253	39,476,355	2,303,850	(9,430,468)	37,726,990

 

GROUP STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2024

		Year ended 31 December 2024		Year ended 31 December 2023
	Notes	€	€	€	€
Cash flows from operating activities
Cash used in operations	‎32		(2,583,318)		(1,359,464)
Net cash outflow from operating activities			(2,583,318)		(1,359,464)
Cash flows from investing activities
Exploration expenditure in Germany	‎12	(6,552,094)		(8,687,649)
Purchase of property, plant and equipment	‎13	(128,320)		(112,964)
Interest received		380,607		282,229
Net cash used in investing activities			(6,299,807)		(8,518,384)
Cash flows from financing activities
Proceeds from the issue of shares		-		21,331,457
Share issue costs		-		(168,003)
Costs related to vested RSUs		(74,861)
Lease payments		(132,120)		(144,000)
Net cash generated (used in) / from financing activities			(206,981)		21,019,454
Net decrease) / increase in cash and cash equivalents			(9,090,106)		11,141,606
Cash and cash equivalents at beginning of year			14,306,191		3,164,585
Cash and cash equivalents at end of year			5,216,085		14,306,191

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

 

1.   Accounting Policies

1.1     Company Information

Zinnwald Lithium Plc (the "Company") is a public limited company which is listed on the AIM Market of the London Stock Exchange domiciled and incorporated in England and Wales. The registered office address is 29-31 Castle Street, High Wycombe, Buckinghamshire, United Kingdom, HP13 6RU.

The group consists of Zinnwald Lithium Plc and its wholly owned subsidiaries as follows as at 31 December 2024:

Name of undertaking	Registered office	Nature of business	Class of shares held	Direct holding	Indirect holding
Zinnwald Lithium Holdings Ltd	United Kingdom	Exploration	Ordinary	100.0%	-
Zinnwald Lithium GmbH	Germany	Exploration	Ordinary	-	100.0%
Zinnwald Lithium Services GmbH	Germany	Leasing	Ordinary	-	100.0%

On 1 December 2017, Zinnwald Lithium Plc acquired the entire issued share capital of Zinnwald Lithium Holdings Ltd ("ZLH", formerly known as Erris Resources (Exploration) Ltd) by way of a share for share exchange, ahead of the Company's listing on the AIM Market of the London Stock Exchange.  Its registered office address is 29-31 Castle Street, High Wycombe, Bucks, HP13 6RU.

On 29 October 2020, Zinnwald Lithium Plc acquired 50% of the issued share capital of Zinnwald Lithium GmbH ("ZLG", formerly known as Deutsche Lithium GmbH).  On 24 June 2021, the Company acquired the remaining 50% of the issued share capital of ZLG.  ZLG is a company registered in Germany.  On 21 June 2024, the Company changed its registration from Chemnitz (HRB 23391) to Dresden (HRB 45396) and its statutory seat from Freiberg to Altenberg. Its business office is at Antonstrasse 3a, 01097, Dresden, Germany.

On 22 February 2023, ZLH incorporated a new company, Zinnwald Lithium Services GmbH ("ZLS") for the purpose of holding all rental and similar operational leases for the Group's operations in Germany. ZLS is a company registered in Germany. On 21 June 2024, the Company changed its registration from Chemnitz (HRB 35711) to Dresden (HRB 45386) and its statutory seat from Freiberg to Altenberg. Its business office is at Antonstrasse 3a, 01097, Dresden, Germany

1.2     Basis of preparation

These financial statements have been prepared in accordance with UK-adopted International Accounting Standards and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS (except as otherwise stated).

The financial statements are prepared in euros, which is the functional currency of the company and the group's presentation currency, since the majority of its expenditure, including funding provided to ZLG and ZLS, is denominated in this currency. Monetary amounts in these financial statements are rounded to the nearest €.

The € to GBP exchange rate used for translation as at 31 December 2024 was €1.209256.

The consolidated financial statements have been prepared under the historical cost convention, unless stated otherwise within the accounting policies. The principal accounting policies adopted are set out below.

1.3     Basis of consolidation          

The consolidated financial statements incorporate those of Zinnwald Lithium Plc and all of its subsidiaries (i.e., entities that the group controls when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity).

All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are fully consolidated from the date on which control is transferred to the group.  They are deconsolidated from the date on which control ceases.

1.4     Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group and company have adequate resources to continue in operational existence for the foreseeable future. The Group had a cash balance of €5.2m at the year-end (€3.9m at date of this report) and keeps a tight control over all expenditure. The group is fully financed through to at least the completion of its PFS in 2025 and thereafter into 2026. The  Board maintains an ongoing strategy to enable the curtailing of a number of areas of expenditure to enable it to meet its minimum fixed costs for the next 12 months, even without raising further funds, whilst still maintaining all licenses in good standing.  Thus, the going concern basis of accounting in preparing the Financial Statements continues to be adopted.

1.5     Intangible assets

Capitalised Exploration and Evaluation costs

Exploration and evaluation assets are capitalised as Intangible Assets and represent the costs incurred on the exploration and evaluation of potential mineral resources. They include direct costs (such as permitting costs, drilling, assays and flowsheet testwork done by consulting engineers), licence payments and fixed salary/consultant costs, capitalised in accordance with IFRS 6 "Exploration for and Evaluation of Mineral Resources".  Exploration and Evaluation assets are initially measured at historic cost.  Exploration and Evaluation Costs are assessed for indicators of impairment in accordance with IFRS 6 when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount.  Any impairment is recognised directly in profit or loss.

1.6     Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses. Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold land and buildings  No deprecation is charged on these balances

Plant and equipment               25% on cost

Fixtures and fittings                 25% on cost

Computers                              25% on cost

Motor vehicles                                    16.7% on cost for new vehicles, 33.3% on cost for second-hand vehicles

Low-value assets (Germany) 100% on cost on acquisition for items valued at less than €800

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset and is recognised in the income statement.

1.7     Non-current investments

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

1.8     Impairment of non-current assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets not yet ready to use and not yet subject to amortisation are reviewed for impairment whenever events or circumstances indicate that the carrying value may not be recoverable.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

1.9     Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits held at call with banks with a maturity date of less than 30 days.

1.10   Right of Use Assets and Lease Liabilities

All leases are accounted for by recognising a right-of-use assets due to a lease liability except for:

·    Lease of low value assets; and

·    Leases with duration of 12 months or less

 

The group reviews its contracts and agreements on an annual basis for the impact of IFRS 16. The group has such short duration leases and lease payments are charged to the income statement with the exception of the Group's lease for the Freiberg office and core shed, which expired in April 2024 and have been replaced by new office leases in Dresden and Core Shed in Altenberg that both started on 1 May 2024.

 

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the group's incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate.

 

On initial recognition, the carrying value of the lease liability also includes:

·    amounts expected to be payable under any residual value guarantee;

·    the exercise price of any purchase option granted in favour of the group if it is reasonably certain to assess that option;

·    any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised.

 

Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:

·    lease payments made at or before commencement of the lease;

·    initial direct costs incurred; and

·    the amount of any provision recognised where the group is contractually required to dismantle, remove or restore the leased asset

 

Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term.

1.11   Financial assets

Financial assets are recognised in the group's and company's statement of financial position when the group and company become party to the contractual provisions of the instrument.

Financial assets are classified into specified categories at initial recognition and subsequently measured at amortised cost, fair value through other comprehensive income, or fair value through profit or loss.  The classification of financial assets at initial recognition that are debt instruments depends on the financial assets cash flow characteristics and the business model for managing them.

Financial assets are initially measured at fair value plus transaction costs.  In order for a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are "solely payments of principal and interest SPPI" on the principal amount outstanding.

Financial assets at amortised cost (debt instruments)

Financial assets at amortised cost are subsequently measured using the effective interest rate method and are subject to impairment.  The group's and company's financial assets at amortised cost comprise trade and other receivables and cash and cash equivalents.

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.  The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period.  The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

Financial liabilities

Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.  They are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period.  The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability to the net carrying amount on initial recognition.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.12   Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of direct issue costs.

1.13   Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of non-current assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Termination benefits are recognised immediately as an expense when the group and company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.14   Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15   Equity

Share capital

Ordinary shares are classified as equity.

Share premium        

Share premium represents the excess of the issue price over the par value on shares issued.  Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Merger reserve

A merger reserve was created in 2017 on purchase of the entire share capital of Zinnwald Lithium Holdings Ltd (formerly Erris Resources (Exploration) Ltd) which was completed by way of a share for share exchange and which has been treated as a group reconstruction and accounted for using the reverse merger accounting method.

Share-based payment reserve

The share-based payment reserve is used to recognise the fair value of equity-settled share-based payment transactions.

1.16   Share-based payments

Equity-settled share-based payments with employees and others providing services are measured at the fair value of the equity instruments at the grant date.  Fair value is measured by use of an appropriate pricing model.  Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods and services, except where the fair value cannot be estimated reliably, in which case they are valued at the fair value of the equity instrument granted.

The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest.  A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification.  Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment.  The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

1.17   Foreign exchange

Foreign currency transactions are translated into the functional currency using the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in administrative expenses in the income statement for the period.

The financial statements are presented in the functional currency of Euros since the majority of exploration expenditure is denominated in this currency.

1.18   Exceptional items

Items are disclosed separately in the financial statements where it is necessary to do so to provide further understanding of the financial performance of the group.  They are items that are material, either because of their size or nature, or that are non-recurring.

1.19   Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Executive Officer, who is considered to be the group's chief operating decision-maker ('CODM').

1.20   New standards, amendments and interpretations not yet adopted

There were no new standards or amendments to standards adopted by the group and company during the year which had a material impact on the financial statements.

At the date of approval of these financial statements, the following standards and amendments were in issue but not yet effective, and have not been early adopted:

·    Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rate: Lack of Exchangeability (Effective date 1 January 2025)

·    IFRS 18 Presentation and Disclosure in Financial Statements (Effective date TBC)*

·    Amendments to IFRS 9 Financial instruments and IFRS 7 Financial Instruments: Disclosures: Classification and Measurement of Financial Instruments (Effective date TBC)*

·    Annual Improvements to IFRS standard - Volume 11 (Effective date 1 January 2026)

*subject to UK endorsement

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the group or company.

2.   Judgements and key sources of estimation uncertainty

In the application of the accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements and estimates have had the most significant effect on amounts recognised in the financial statements.

Share-based payments

Estimating fair value for share based payment transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield and making assumptions about them. For the measurement of the fair value of equity settled transactions with employees at the grant date, the group and company use the Black Scholes model.

Impairment of Capitalised Exploration Costs

Group capitalised exploration costs had a carrying value as at 31 December 2024 of €34,202,236  (2023: €27,652,152), which solely relate to the Zinnwald Lithium Project, Management tests annually whether capitalised exploration costs have a carrying value in accordance with the accounting policy stated in note 1.6. Each exploration project is subject to a review either by a consultant or an appropriately experienced Director to determine if the exploration results returned to date warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long-term metal prices, anticipated resource volumes and grades, permitting and infrastructure as well as the likelihood of on-going funding from equity investors or other sources of long term funding. In the event that a project does not represent an economic exploration target and results indicate that there is no additional upside, or that future funding is unlikely, a decision will be made to discontinue exploration.

In Germany, ZLGs core mining license at Zinnwald is valid to 31 December 2047, which underpins the PEA published in September 2022 and the forthcoming PFS.  In February 2024, and further updated in June 2024, the group published an updated Mineral Resource Estimate that showed a materially increased resource that underpins both the size of the Project and its long mine life.  It shows that the Project is the second largest hard-rock lithium project in the EU and the third largest in Europe as a whole. ZLG has additional exploration licenses at Falkenhain valid to 31 December 2025, at Altenberg to 15 February 2027, at Sadisdorf to 30 June 2026 and at Bärenstein, newly granted in 2023 and valid to 30 June 2028.  The 2022 PEA showed a material increase in size and output of the Project and underpinned a pre-tax NPV of $1.6 billion and a post-tax NPV of $1.0 billion and post-tax IRR of 29%.  Accordingly, the Board has concluded that no impairment charge is required for these assets.

Recoverability of investments in and loans to subsidiaries

The Directors review the carrying value of investments in and loans made to subsidiaries for any indications of impairment of potential non-recoverability.  Since all investments and loans ultimately relate solely to funding for the Project in Germany and, as noted above, the Directors do not believe that any impairments is required for that asset, accordingly the Directors do not believe there is any impairment to investment or loan value.

3.   Financial Risk and Capital Risk Management

The Group's and Company's activities expose it to a variety of financial risks: market risk (primarily currency risks), credit risk and liquidity risk.  The overall risk management programme focusses on currency and working capital management.

Foreign Exchange Risk

The Company operates internationally and is exposed to foreign exchange risk arising from one main currency exposure, namely GBP for its Head Office costs and the value of its shares for fund-raising and Euros for a material part of its operating expenditure. The Group's Treasury risk management policy is currently to hold most of its cash reserves in Euros, as the majority of its current and planned expenditure will be on the Project in Germany. 

Credit and Interest Rate Risk

The group and company have no borrowings and a low level of trade creditors and have minimal credit or interest rate risk exposure. The Group's cash and cash equivalents is held at major financial institutions.

Working Capital and Liquidity Risk

Cashflow and working capital forecasting is performed in the operating entities of the group and consolidated at a group level basis for monthly reporting to the Board. The Directors monitor these reports and rolling forecasts to ensure the group has sufficient cash to meet its operational needs. The Board has a policy of maintaining at least a GBP 0.5m cash reserve headroom. The group has no material fixed cost overheads other than its costs of being listed on the AIM market and its leases in Dresden and Altenberg.  None of its employee contracts have notice periods of longer than six months and its development expenditure is inherently discretionary.

4.   Segmental reporting

The Group operates in the UK and Germany.  Activities in the UK include the Head Office corporate and administrative costs whilst the activities in Germany relate to ongoing development work at the group's wholly owned Zinnwald Lithium Project. The reports used by the Board and Management are based on these geographical segments.  Non-core Assets related to the historic Abbeytown Zinc Project, which was sold in April 2023.

	Non-core Assets	Germany	UK	Total
	2024	2024	2024	2024
	€	€	€	€
Administrative expenses	-	(1,013,403)	(1,675,736)	(2,689,139)
Share based payment charge	-	-	(688,877)	(688,877)
Gain/loss on foreign exchange	-	-	170,006	170,006
Other operating income	-	110,605	-	110,605
Finance income	-	1,950	378,657	380,607
Interest paid	-	(7,517)	-	(7,517)
Tax	-	(11,274)	-	(11,274)
Loss from operations per reportable segment	-	(919,639)	(1,815,950)	(2,735,589)
Reportable segment assets	-	34,476,535	6,082,411	40,558,946
Reportable segment liabilities	-	2,429,932	402,024	2,831,956
	Non-core Assets	Germany	UK	Total
	2023	2023	2023	2023
	€	€	€	€
Administrative expenses	(8,837)	(872,958)	(1,717,060)	(2,598,855)
Share based payment charge	-	-	(528,626)	(528,626)
Gain/loss on foreign exchange	-	-	42,240	42,240
Other operating income	-	183,143	-	183,143
Finance income	-	-	282,229	282,229
Interest paid	-	(3,851)	-	(3,851)
Tax	-	(18,785)	-	(18,785)
Loss from operations per reportable segment	(8,837)	(712,451)	(1,921,217)	(2,642,505)
Reportable segment assets	-	27,046,520	15,702,205	42,748,725
Reportable segment liabilities	-	2,436,646	463,581	2,900,227

 

 

5.   Operating loss

	2024	2023
	€	€
Operating loss for the year is stated after charging / (crediting)
Exchange gains	(170,008)	(42,240)
Loss on disposal of subsidiary	-	3,672
Amortisation of intangible assets	2,010	1,662
Depreciation of property, plant and equipment	84,421	53,741
Depreciation of Right of Use Assets	126,711	139,154
Share-based payment expense	688,877	528.626
Operating lease charges	36,641	41,105
Exploration costs expensed	824,709	687,224

 

6.   Auditor's remuneration

Fees payables to the company's auditor	2024	2023
	€	€
For audit services
Annual Audit of group, parent company and subsidiary undertakings	45,914	41,979
Review of interim group financial statements	3,557	3,274
	49,471	45,254
For other services
Taxation compliance services	7,759	5,354

 

7.   Other operating income

	2024	2023
	€	€
Other operating income	110,605	183,143

Other operating income primarily comprised rental and utilities income from sub-lessors at the Group's former offices in Freiberg.

 

8.   Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

	Group		Company
	2024	2023	2024	2023
	Number	Number	Number	Number
Directors	6	6	6	6
Employees	14	20	-	1
	20	26	6	7
Their aggregate remuneration comprised	Group		Company
	2024	2023	2024	2023
	€	€	€	€
Wages and salaries	1,823,149	1,621,204	875,722	819,393
Social security costs	235,368	200,980	137,050	101,657
Pension costs	113,329	139,841	63,370	64,571
	2,191,846	1,962,025	1,076,142	985,621

Aggregate remuneration expenses of the group include €913,998 (2023: €942,695) of costs capitalised and included within non-current assets of the group.

Aggregate remuneration expenses of the company include €Nil (2023: €63,543) of costs capitalised and included within non-current assets of the group.

Directors' remuneration is disclosed in report of Remuneration Committee.

9.   Finance income

	Group
	2024	2023
	€	€
Interest income
Interest on bank deposits	380,607	282,229

10. Taxation

	Group
Income Tax Expense	2024	2023
	€	€
UK Corporation tax expense - current year	-	-
Overseas current tax expense - current year	2,383	18,785
Overseas real estate tax expense - current year	8,891	-
Total current tax expense	11,274	18,785
	€	€
Loss before taxation	(2,735,588)	(2,642,505)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2023: 19.00%)	(519,762)	(502,076)
Disallowable expenses	132,436	119,407
Non-taxable gains	-	-
Unutilised tax losses carried forward	388,786	394,237
Difference in overseas tax rate	922	7,216
Overseas real estate tax expense	8,891	-
Taxation charge for the year	11,274	18,785

Losses available to carry forward amount to €9,578,000 (2023: €7,539,000).  No deferred tax asset has been recognised on these losses, as the probability and timing of available future taxable profits is not something that can currently be estimated.

 

Foreign tax liabilities are calculated at the prevailing tax rates applicable in the overseas tax jurisdictions, being Germany.

 

11. Earnings per share

	2024	2023
	€	€
Weighted average number of ordinary shares for basic earnings per share	474,497,857	430,096,224
Effect of dilutive potential ordinary shares
-     Weighted average number of outstanding share options	22,706,856	6,106,301
Weighted average number of ordinary shares for diluted earnings per share	497,204,713	436,202,525
Earnings
Continuing operations	(2,724,315)	(2,642,505)
Loss for the period for continuing operations
Earnings for basic and diluted earnings per share distributable to equity shareholders of the company	(2,724,315)	(2,642,505)
Earnings per share for continuing operations
Basic and diluted earnings per share
Basic earnings per share - cents	(0.56)	(0.61)

There is no difference between the basic and diluted earnings per share for the period ended 31 December 2024 or 2023 as the effect of the exercise of options would be anti-dilutive.

12. Intangible Assets

Group	Germany	Ireland	Total
	€	€	€
Cost
At 1 January 2023	18,967,989	2,059,272	21,027,261
Additions - group funded	8,687,649	-	8,687,649
Disposals	-	(2,059,272)	(2,059,272)
At 31 December 2023	27,655,638	-	27,655,638
Additions - group funded	6,552,094	-	6,552,094
At 31 December 2024	34,207,732	-	34,207,732
Amortisation and impairment
At 1 January 2023	1,824	2,059,272	2,061,096
Amortisation charged for the year	1,662	-	1,662
Disposals		(2,059,272)	(2,059,272)
At 31 December 2023	3,486	-	3,486
Amortisation charged for the year	2,010	-	2,010
At 31 December 2023	5,496	-	5,496
Carrying amount
At 31 December 2024	34,202,236	-	34,202,236
At 31 December 2023	27,652,152	-	27,652,152

Intangible assets comprise capitalised exploration and evaluation costs (direct costs, licence fees and fixed salary / consultant costs) of the Zinnwald Lithium project in Germany, as well as the fully impaired Ireland Zinc Project that was sold in April 2023. 

The Company has had no directly owned intangible assets since 2020.

13. Property plant and equipment

Group	Leasehold, land and buildings	Fixtures,  fittings and equipment	Motor vehicles	Total
Cost	€	€	€	€
At 1 January 2023	40,990	277,196	66,593	384,779
Additions - group funded	30,000	82,964	-	112,964
Exchange adjustments	-	103	-	103
At 31 December 2023	70,990	360,263	66,593	497,846
Additions - group funded	30,000	98,320	-	128,320
Exchange adjustments	-	331	-	331
At 31 December 2024	100,990	458,914	66,593	626,497
Depreciation and impairment
At 1 January 2023	-	39,638	17,614	57,252
Depreciation charged for the year	-	40,555	13,286	53,741
Exchange adjustments	-	65	-	65
At 31 December 2023	-	80,158	30,900	111,058
Depreciation charged for the year	-	71,135	13,286	84,421
Exchange adjustments	-	266	-	266
At 31 December 2024	-	151,559	44,186	195,745
Carrying amount
At 31 December 2024	100,990	307,355	22,407	430,752
At 31 December 2023	70,990	280,105	35,693	386,788

 

Company				Computers
Cost				€
At 1 January 2023				5,082
Additions - group funded				1,654
Exchange adjustments				103
At 31 December 2023				6,839
Additions - group funded				-
Exchange adjustments				331
At 31 December 2024				7,170
Depreciation and impairment
At 1 January 2023				2,515
Depreciation charged for the year				1,566
Exchange adjustments				65
At 31 December 2023				4,146
Depreciation charged for the year				1,463
Exchange adjustments				266
At 31 December 2024				5,875
Carrying amount at 31 December 2024				1,295
Carrying amount at  31 December 2023				2,693

14. Right of Use Assets and Lease Liabilities

In May 2022, Zinnwald Lithium GmbH entered into a commercial lease agreement and office and core shed property in Freiberg, Germany.  The duration of the lease is for 2 years and expired in April 2024.  The instalments for the lease are €12,000 per month, fixed for the duration of the lease.  The right of use asset and lease liability was recognised on 1 May 2022 on inception of the lease. 

 

In May 2024, Zinnwald Lithium Services GmbH entered into two new commercial lease agreements for an office in Dresden and a Core Shed in Altenberg.  The duration of both leases is for 3 years with no break clauses and expire in April 2027. The Dresden lease can be renewed for two further 3-year periods in 2027 and 2030  The Altenberg lease can be renewed for a further 3-year period in 2027 and a further 4-year period in 2030. The monthly combined leases instalments are €10,515 per month, fixed for the duration of the leases.  The right of use asset and lease liability for each new leases were recognised on 1 May 2024on inception of the leases.  Movements in the year are shown as follows:

 

Group	Leases expired in the year	New Leases in the year	Total
	€	€	€
Right of Use Asset
At 1 January 2023	185,285	-	185,285
Depreciation	(139,154)	-	(139,154)
At 31 December 2023	46,131	-	46,131
Initial recognition in the year	-	360,146	360,146
Depreciation	(46,131)	(80,580)	(126,711)
At 31 December 2024	-	279,566	279,566
Lease Liability
At 1 January 2023	187,944	-	187,944
Interest charged in the year	3,851	-	3,851
Lease payments in the year	(144,000)	-	(144,000)
At 31 December 2023	47,795	-	47,795
Initial recognition in the year	-	360,146	360,146
Interest charged in the year	205	7,313	7,518
Lease payments in the year	(48,000)	(84,120)	(132,120)
At 31 December 2024	-	283,339	283,339
-     Recognised in short-term payables	-	118,652	118,652
-     Recognised in payables > 1 year	-	164,887	164,887

 

 

15. Investments

Company	2024	2023
	€	€
Investments in subsidiaries	14,523,374	14,523,374

 

Investments in subsidiaries are recorded at cost, which is the fair value of the consideration paid.

 

Movement in non-current investments

	Shares in group undertakings
Cost
At 1 January 2023	14,523,375
Disposals	(1)
At 31 December 2023 and 31 December 2024	14,523,374
Carrying amount
At 31 December 2023 and 31 December 2024	14,523,374

The disposal in 2023 relates to the sale of the €1 share capital of Erris Zinc Ltd to Ocean Capital Partners in June 2023.

 

16. Trade and other receivables - credit risk

Fair value of trade and other receivables

The directors consider that the carrying amount of trade and other receivables is equal to their fair value.

 

17. Financial Instruments

	Group		Company
	2024	2023	2024	2023
	€	€	€	€
Financial instruments at amortised cost
Trade and other receivables	235,783	221,114	26,781,242	15,052,474
Cash and bank balances	5,216,085	14,306,191	2,964,450	13,724,866
	5,451,868	14,527,305	29,745,692	28,777,340
Financial liabilities at amortised cost
Trade and other payables	1,106,584	1,469,564	129,058	236,118
	1,106,584	1,469,564	129,058	236,188

 

18. Trade and other receivables

	Group		Company
	2024	2023	2024	2023
Amounts falling due greater than one year:	€	€	€	€
Amounts owed by group undertakings	-	-	26,642,540	-
Amounts falling due within one year:
Amounts owed by group undertakings	-	-	-	15,031,909
Trade receivables	439	4,418	-	-
Other receivables	235,344	216,696	23,576	20,566
Prepayments and accrued income	135,359	136,349	55,961	122,622
	371,142	357,463	79,537	15,175,098

Other receivables primarily comprise VAT recoverable, which were received following the year end. The Company has reclassified its intercompany loan receivable to greater than one year from 2024 onwards.

The carrying amounts of the Group and Company's trade and other receivables are denominated in the following currencies:

 

	Group		Company
	2024	2023	2024	2023
Euros	203,495	210,328	7,371	575,045
British Pounds	167,647	147,135	26,714,706	14,600,052
	371,142	357,463	26,722,077	15,175,097

19. Trade and other payables

	Group		Company
	2024	2023	2024	2023
Amounts falling due within one year:	€	€	€	€
Trade payables	343,391	234,817	18,430	94,945
Other taxation and social security	61,465	54,082	40,231	35,022
Other payables	61,234	30,892	-	275
Accruals and deferred income	640,494	1,149,773	70,397	105,876
	1,106,584	1,469,564	129,058	236,118

All Trade payables have been settled since the year end. 

The carrying amounts of the Group and Company's current liabilities are denominated in the following currencies:

	Group		Company
	2024	2023	2024	2023
Euros	808,725	1,144,295	-	64
British Pounds	297,859	325,268	129,058	236,055
	1,106,584	1,469,563	129,058	236,118

20. Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Group	Liabilities	Liabilities
	2024	2023
	€	€
Zinnwald Lithium intangible assets - fair value adjustment	1,382,868	1,382,868

The deferred tax liability set out above relates to a 25% provision made on the fair value uplift of the company's acquisition of control of Zinnwald Lithium GmbH.

21. Retirement benefit schemes

Defined contribution scheme	2024	2023
	€	€
Charge to profit or loss in respect of defined contribution schemes	63,370	64,571

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

 

22. Share based Incentives

The Directors believe that the success of the Group will depend to a significant degree on the performance of the Group's senior management team.  The Directors also recognise the importance of ensuring that the management team are well motivated and identify closely with the success of the Group.   The Company adopted an initial Share Option Plan in December 2017 and will continue to issue options to key employees, consultants and Non-Executive Directors.  In October 2020, the Company's shareholders approved additional short-term and long-term incentive schemes for Executive Management, the key terms of which are detailed in the Remuneration Committee report.

Share Option Plan (2017)

Movements in the number of share options, under the Share Option Plan (2017), outstanding and their related weighted average exercise prices are as follows:

	Year ended 31 December 2024		Year ended 31 December 2023
	Average exercise price (£/share)	Number of Options	Average exercise price (£/share)	Number of Options
At beginning of year	£0.1487	6,650,000	£0.1748	4,200,000
Granted during the year	£0.0675	4,350,000	£0.1041	2,450,000
Lapsed during the year	£0.0675	(133,332)	-	-
Exercised during the year	-	-	-	-
At end of year	£0.1172	10,866,668	£0.1487	6,650,000
Exercisable at the year end		7,283,335		3,683,333
Weighted average remaining exercise period, years		3.06		3.44
Option classification
	Issue Date	No of Options	Exercise Price	Expiry Date
	29 October 2020	200,000	£0.0500	28 October 2025
	15 January 2022	4,000,000	£0.1810	15 January 2027
	23 March 2023	2,450,000	£0.1041	23 March 2028
	15 January 2024	4,216,668	£0.0675	15 January 2029
		10,866,668	£0.1172

 

RSU Scheme (2020)

Movements in the number of RSUs, under the RSU Plan (2020), outstanding and their related weighted average exercise prices are as follows

	Year ended 31 December 2024		Year ended 31 December 2023
	Average exercise price (£/share)	RSUs	Average exercise price (£/share)	RSUs
Beginning of Period	n/a	5,316,310	n/a	1,909,531
Granted	n/a	4,228,475	n/a	3,406,779
Lapsed	n/a	-	n/a	-
Exercised	£0.0711	(1,909,531)	-	-
At end of period	n/a	7,635,254	n/a	5,316,310
Weighted average remaining exercise period, years		0.68		0.80

 

RSU Classification
Issue Date	No of RSUs	Vesting date
23 March 2023	3,409,779	23 March 2025
15 January 2024	4,228,475	15 January 2026
	7,635,254

PSU Scheme (2020)

Movements in the number of PSUs, under the PSU Plan (2020), outstanding and their related weighted average exercise prices are as follows

	Year ended 31 December 2024		Year ended 31 December 2023
	Average exercise price (£/share)	PSUs	Average exercise price (£/share)	PSUs
Beginning of Period	n/a	-	n/a	-
Granted	n/a	4,500,000	n/a	-
Lapsed	n/a	-	n/a	-
Exercised	-	-	-	-
At end of period	n/a	4,500,000	n/a	-
Weighted average remaining exercise period, years		1.04		-

 

PSU Classification
Issue Date	No of PSUs	Vesting date
15 January 2024	4,500,000	15 January 2026
	4,500,000

 

23. Share based payment transactions

	Group		Company
	2024	2023	2024	2023
	€	€	€	€
Expenses recognised in the year
Options issued under the Share Option Plan (2017)	201,811	174,633	201,811	174,633
RSUs issued under the RSU Scheme (2020)	381,834	353,993	381,834	353,993
PSUs issued under the PSU Scheme (2020)	105,232	-	105,232	-
	688,877	528,626	688,877	528,626

Awards made under the various share incentive schemes will be expensed over the relevant vesting periods for each scheme.  Options and PSUs have been expensed based on a Black Scholes calculation using an option life of 5 years and a risk-free interest rate of 3.9%.  The Company has used a volatility rate of 65.6% looking back 3 years from the date of grant to account for the material distorting event of the Company's readmission to AIM in October 2020 following its reverse takeover acquisition of the Zinnwald Project.  The Company will use a 4 year look-back for the grants made in January 2025 and thereafter a 5 year look back for all future grants going forward.

24. Share Capital

	Group and Company
	2024	2023
Ordinary share capital	€	€
Issued and fully paid
474,536,675 ordinary shares of 1p each	5,377,253	5,365,379
	5,377,253	5,365,379

The Group's share capital is issued in GBP £ but is converted into the functional currency of the Group (Euros) at the date of issue of the shares.

Reconciliation of movements during the year:	Ordinary Number	Ordinary Value
	€	€
Ordinary shares of 1p each
At 1 January 2023	473,524,624	5,365,379
Issue of fully paid shares (vesting of RSUs)	1,012,051	11,874
At 31 December 2023	474,536,675	5,377,253

 

25. Share Premium account

	Group		Company
	2024	2023	2024	2023
	€	€	€	€
At beginning of year	39,403,810	20,289,487	39,403,810	20,289,487
Issue of new shares	-	19,282,326	-	19,282,326
Exercise of share options / RSUs	72,545	-	72,545	-
Share issue expenses	-	(168,003)	-	(168,003)
	39,476,355	39,403,810	39,476,355	39,403,810

26. Other reserves

	Merger reserve	Share based payment reserve	Translation reserve	Total
Group	€	€	€	€
At 1 January 2023	688,731	679,074	62	1,367,867
Additions	-	528,626	38	528,664
At 31 December 2023	688,731	1,207,700	100	1,896,531
Share Option charge for the year	-	688,877	-	688,877
Release of RSU provisions	-	(159,280)	-	(159,280)
Lapsed share incentives	-	(122,343)	-	(122,343)
Other additions	-	-	65	65
At 31 December 2024	688,731	1,614,954	165	2,303,850
		Share based payment reserve	Translation reserve	Total
Company		€	€	€
At 1 January 2023		679,074	62	679,136
Additions		528,626	38	528,664
At 31 December 2023		1,207,700	100	1,207,800
Share Option charge for the year		688,877	-	688,877
Release of provisions		(159,280)	-	(159,280)
Lapsed share incentives		(122,343)	-	(122,343)
Other additions		-	65	65
At 31 December 2024		1,614,954	165	1,615,119

 

27. Retained earnings

	Group		Company
	2024	2023	2024	2023
	€	€	€	€
At the beginning of the year	(6,817,222)	(4,174,717)	(2,787,077)	(1,917,521)
Loss for the year	(2,735,589)	(2,642,505)	278,145	(869,556)
Lapsed share incentives	122,343	-	122,343	-
At the end of the year	(9,430,468)	(6,817,222)	(2,386,589)	(2,787,077)

28. Financial commitments, guarantees and contingent liabilities

Bacanora Royalty Agreement

The company and Bacanora entered into on completion of the Acquisition a royalty agreement which provides that the Company agrees to pay Bacanora a royalty of 2 per cent. of the net profit received by the company pursuant to its 50 per cent. shareholding in Zinnwald Lithium GmbH ("ZLG") and earned in relation to the sale of lithium products or minerals by ZLG's projects on the Zinnwald and Falkenhain licence areas. The royalty fee shall be paid in Euros and paid by ZLG half yearly. The agreement is for an initial term of 40 years and shall automatically extend for additional 20 year terms until mining and processing operations cease at ZLG's projects at the Zinnwald and Falkenhain licence areas. The company has undertaken to Bacanora to abide by certain obligations in relation to ZLG's projects at the Zinnwald and Falkenhain licence areas such as complying with applicable laws and ensure that these projects are operated in accordance with the underlying licences and concessions granted to Zinnwald Lithium.  The company shall have the right, but not the obligation, to extinguish at any time its right to pay a royalty fee to Bacanora prior to the expiry of the term by paying a one-off payment of €2,000,000. 

Whilst the Directors acknowledge this contingent liability, at this stage, it is not considered that the outcome can be considered probable or reasonably estimable and hence no provision has been made in the financial statements.  The Directors note that the Royalty is only applicable to 50% of ZLG's production and does not apply to the additional 50% of ZLG acquired by the Company in June 2021.  The Directors also note that the Royalty obligation remains due to Bacanora, which now a wholly owned subsidiary of Ganfeng Lithium Limited.

Osisko Royalty Agreements

As part of the sale of Erris Zinc Ltd to Ocean Capital Partners on 13 June 2023, the historic royalty due by the group to Osisko Gold Royalties was novated to Erris Zinc ahead of completion. Accordingly, this historic contingent liability has now been removed from the group.  The Osisko royalty did not apply to the Zinnwald Lithium project.

29. Agreements with Ocean Capital Partners

Under the terms of the sale of Erris Zinc Limited to Ocean Capital Partners on 13 June 2023, the Company was granted a 1% Net Smelter Royalty and a €200,000 cash payment due six months after the start of commercial production.  As agreed in the Sale and Purchase Agreement, the company also has the right to buy Erris Zinc Ltd back for €1 if the additional exploration spend of €100,000 over 2024 to 2025 is not made by March 2025.  This deadline has been extended by mutual agreement to August 2025, and it has been confirmed that the licenses remain in good standing. Whilst the Directors acknowledge these contingent assets, at this stage, it is not considered that the outcome can be considered certain to be recognised and receivable and hence no asset has been recognised in the financial statements.

30. Events after the reporting date

On 31 January 2025, the Company made a grant of a total of 2,624,814 RSUs and 3,600,000 Options under the Company's Long-Term Incentive Plans relating to performance in 2024, and a total of 694,081 PSUs relating to performance from 1 January 2022 to 31 December 2024.  The RSUs and PSUs were issued to Executive Management under the relevant schemes approved by shareholders in October 2020. The Options were primarily issued to Employees and Consultants under the terms of the Option Scheme approved by shareholders in 2017.

31. Related party transactions

In 2024, the Company engaged Jeremy Martin in a consultancy agreement to provide specific technical support specific technical support to the operational team with the development of the resource and processing parts of the Project's flowsheet, in light of his professional qualifications and experience (further detail is included in the report of the Remuneration Committee).  No consultancy fees or expenses were incurred with Related Parties in 2023.

32. Cash (used in)/generated from group operations

	2024	2023
	€	€
Loss for the year after tax	(2,735,589)	(2,642,505)
Adjustments for:
Investment income	(380,607)	(282,229)
Lease interest	7,518	3,851
Depreciation of property, plant and equipment	84,421	53,741
Depreciation of Right of Use Assets	126,711	139,154
Amortisation of intangible assets	2,010	1,662
Loss on disposal of subsidiary	-	3,672
Equity-settled share-based payment expense	688,877	528,626
Movements in working capital:
(Increase) in trade and other receivables	(72,843)	(52,089)
(Decrease) / increase in trade and other payables	(303,816)	886,653
Cash used in operations	(2,583,318)	(1,359,464)

33. Cash (used in)/generated from operations - company

	2024	2023
	€	€
Profit / (Loss) for the year after tax	278,145	(869,556)
Adjustments for:
Investment income	(378,657)	(282,229)
Group loan interest	(1,742,846)	(708,861)
Depreciation and impairment of property, plant and equipment	1,463	1,566
Loss on disposal of subsidiary	-	1
Equity-settled share-based payment expense	688,877	528,626
Movements in working capital:
Decrease / (Increase) in trade and other receivables	4,484	(97,029)
(Decrease) / increase in trade and other payables	(47,895)	125,364
Cash used in operations	(1,196,429)	(1,302,118)