TIDMSAV
RNS Number : 4795B
Savannah Resources PLC
21 September 2018
21 September 2018
Savannah Resources Plc
Interim Results
Savannah Resources plc (AIM: SAV, FWB: AFM and SWB: SAV)
('Savannah' or the 'Company'), the AIM quoted resource development
company, is pleased to announce its interim financial results for
the six months ended 30 June 2018.
HIGHLIGHTS
-- Portugal:
o Mineral Resource at the Mina do Barroso Lithium Project ("the
MdB Project") increased to over 20Mt (over 200,000t contained Li(2)
O) underpinning the project as the largest of its kind in Western
Europe
o Positive Scoping Study completed on the MdB Project - study
reports a base case pre-tax NPV(8%) of US$356m and pre-tax IRR of
63% generated from 175,000tpa of 6% spodumene concentrate
production over an 11 year life of mine
o Feasibility Study for the MdB Project on track for completion
Q2-2019
o MdB Project development decision expected Q2-2019
o Strong expansion potential - due diligence underway on option
to acquire Mining Lease application adjacent to the MdB Project and
rolling drill programme underway targeting resource upgrades and
expansions at the MdB Project
-- Oman: Awaiting anticipated decisions for Mining Lease
applications - Letters of No Objection received from all eight
Ministries for development of the Mahab 4 and Maqail South copper
projects
-- Mozambique: Mining Lease Applications submitted for Heavy
Mineral Sands project, and scoping phase of Pre-Feasibility Study
progressing
-- Corporate:
o Investments in intangible and exploration project assets of
GBP3.98m, primarily related to the MdB Project in Portugal
o Greatly strengthened cash position following GBP2.1m (gross)
equity raise completed at 5.5p per share in April 2018 and record
GBP12.5m (gross) equity raise at 9.0p per share in July 2018, which
included funds from existing shareholders and Tier 1 institutional
investors (Current cash position GBP11.4m)
o SAV now fully financed to development decision point for the
MdB Project
o Operating loss of GBP1.20m reflects the continued high tempo
of mine development activities
o Secondary listing completed on the Frankfurt Stock Exchange in
September 2018 to support increased European marketing
activities
CHAIRMAN'S STATEMENT
2018 to date has been a pivotal period for Savannah with the
acceleration of our work programmes at the Mina do Barroso lithium
Project ("the MdB Project"), culminating in a highly positive
Scoping Study on the asset and a 500%+ increase in its resource
base. The momentum created by this rapid and successful appraisal
programme allowed us to complete a record GBP12.5m equity financing
in July raised principally from existing shareholders and new
institutional investors. This will provide funding for the work
necessary to reach a mine development decision on the MdB Project,
and to progress our projects in Mozambique and Oman.
Mina do Barroso, Portugal
As the recent Scoping Study showed, the MdB Project's lithium
mineralogy and grade, along with its scale, near surface position
and geographical location combine to produce a very attractive
opportunity. Following the July 2018 fundraise, Savannah is now
fully financed past the expected mine development decision point in
Q2-2019 which is when the recently commissioned Feasibility Study
is due to have been completed.
This project is taking shape at a time of increasing pressure to
replace petrol and diesel cars with electric vehicles. For example,
the UK Government has set a target that three-fifths of new cars
should be electric by 2030 and that sales of conventional petrol
and diesel vehicles should be phased out by 2040. To deliver on
these targets, locking in supplies of key battery raw materials
such as lithium is critical.
With no current European producer of spodumene concentrate, the
dominant lithium mineral product traded internationally, we believe
the fast-tracked development of the MdB Project could help Savannah
become Western Europe's first major domestic spodumene supplier,
giving us a strong commercial advantage. Our recent secondary
listing on the Frankfurt Stock Exchange is the latest step in our
strategy to build our brand and investor base on the continent.
Critical to the viability of any mining project is its deposit.
The MdB Project has been proven to host Western Europe's largest
new spodumene (hard rock) lithium discovery. The Company recently
published its fourth Mineral Resource Estimate since acquiring the
project in May 2017. In that time Savannah has been able to
increase the overall Mineral Resource Estimate at the project by
over 500% to 20.1Mt with the contained lithium (Li O) inventory
growing by a similar percentage to 209,000t. This significant
increase in overall Mineral Resource Estimate tonnage and contained
metal has been accompanied by an equally significant increase in
the statistical confidence of the Mineral Resource Estimate. For
example, the latest estimate, announced on 10 September 2018,
placed over 50% of the 20.1Mt total in the higher, Measured and
Indicated JORC Resource categories, including 90% of the mining
inventory of Stage 1 of the Grandao pit as defined in the June 2018
Scoping Study. This bodes well for the maiden JORC-2012 Mineral
Reserve Estimate that will be taken from the Measured and Indicated
Resource Estimate as part of the Feasibility Study due for
completion in Q2-2019. Furthermore, the current JORC Exploration
Target* of 9-15Mt only includes the Grandao and Reservatorio
deposits. There is further upside potential from the other high
priority exploration targets within the project area.
*Cautionary Statement: The potential quantity and grade of the
Exploration Targets is conceptual in nature, there has been
insufficient exploration work to estimate a mineral resource and it
is uncertain if further exploration will result in defining a
mineral resource.
In June 2018, we completed a Scoping Study based on the then
current resource estimate of 13.9Mt. The study returned a base case
pre-tax NPV(8%) of US$356m and pre-tax IRR of 63%, with a Life of
Mine ('LOM') EBITDA of US$805m, annual average EBITDA of US$72m and
a pre-tax payback period of 1.7 years. These results are a very
positive indication of the project's commercial potential,
particularly given the increase in the resource estimate to 20.1 Mt
since the Scoping Study was carried out.
Drilling continues to advance across all three of our primary
target areas from which we have delineated the Mineral Resource
Estimate to date - Grandao, Reservatorio and NOA. In particular,
drilling results to date at Grandao have been very encouraging with
lithium mineralisation intersected over significant widths and
extensions to the known mineralised pegmatites, leading to the
discovery of a new Grandao Extended area. These extensions support
our belief in the potential for further increases in the Mineral
Resource Estimate. Experienced lithium consulting engineers,
Primero Group have been commissioned to lead a Feasibility Study
which is now underway to advance the project to the next point of
economic confidence so that a development decision can be made in
Q2-2019. Primero is a global leader in the evaluation, design and
construction of hard rock, open-cut, spodumene mines such as Mina
do Barroso.
In support of development, the project's estimated C1 cash costs
of US$210/t spodumene concentrate produced in the first four years
and US$271/t LOM average, put the project at the lower end of the
spodumene lithium cost curve. The initial CAPEX is estimated to be
US$109m. Based on these results, we are on track to become a
low-cost producer of quality spodumene lithium concentrate by
early-2020. We are working hard to deliver on this objective and
maximise shareholder value.
Looking at wider market dynamics, while some commentators have
suggested lithium prices will be affected by supply outweighing
demand, we remain confident in the commodity's prospects. We see a
need for several new mines to come into operation to meet projected
demand now and in the future. Even with new supply this year,
global contract prices for lithium salts remain strong. It is also
noteworthy that 28% of world's cumulative EV sales in H1-2018 have
been in Europe, but the continent currently has no lithium
production for battery grade chemicals, meaning all materials are
imported. Additionally, leading battery producers, like LG Chem and
Samsung SDI have opened or are planning to open battery plants in
Europe this year. Whilst there are a number of new lithium projects
vying to come on stream internationally, we believe our near-term
production potential, low cost profile, high quality product and
strategic location gives us a competitive edge.
Finally, looking at further growth opportunities, in July 2018
we entered into an exclusive due diligence and option agreement
with Aldeia & Irmão, S.A. ('Aldeia'), a private Portuguese
company, with a view to increasing our tenement holdings in the MdB
Project area. Under the terms of the agreement, we are looking to
acquire a Mining Lease, which, once granted, will include over
2.94km(2) of land abutting the southern end of the Reservatorio
target area. At least five known spodumene bearing lithium
pegmatites occur on these areas, and if acquired, this tenement not
only provides further resource expansion potential but also further
space to optimise the layout for any potential mine development.
Due diligence is now underway. All payments for the potential
acquisition will be on a staged basis and are expected to be made
principally from anticipated revenues generated from the MdB
Project mine, once developed.
Copper Projects, Oman
In Oman two high-grade, low CAPEX copper mine developments are
currently awaiting final licencing approval. Letters of approval or
"No Objection" have been received from all eight Ministries and we
are now working on concluding the mine licencing process with the
Public Authority of Mining for the issuance of the two Mining
Licences. In support of the overall strategy of developing a hub
and spoke copper development in Oman we have a drilling programme
underway on the promising Bayda and Hara Kilab copper deposits on
respectively Block 4 and Block 5 in Oman. These deposits could
provide further tonnages for the overall development.
Heavy Mineral Sands Projects, Mozambique
In Mozambique we are continuing to work on the world class
Mutamba Mineral Sands Project under a Consortium Agreement with Rio
Tinto. Three mining lease applications, covering a total area of
417km(2) for the Jangamo, Dongane, Ravene and Chilubane deposits,
are currently being considered by the Mozambican mines department.
Alongside this, work continues on several fronts in the lead up to
the anticipated grant of mining leases, with the scoping phase of
the Pre-Feasibility Study ('PFS') now well advanced and the initial
key studies underway. These studies include hydrology studies, port
options and the collection of a 10 tonne bulk sample, which will be
processed at our recently constructed and commissioned pilot plant.
The results from this test work and the PFS will guide us in the
infrastructure, power, mine planning and process plant
requirements, allowing us to progress to the next stage of
commercialisation.
Financial Summary
As is to be expected for an active and expanding resource
development group, Savannah is reporting a loss for the period of
GBP1.20m (30 June 2017: GBP1.53m) (31 December 2017: GBP2.84m),
which reflects the continued high tempo of mine development
activities. The decrease compared to the prior year is mainly due
to the non-cash costs relating to share options issued as long-term
incentives in H1-2017 amounting to GBP0.28m. Net assets have
increased to GBP15.68m (30 June 2017: GBP9.26m) (31 December 2017:
GBP13.14m) due to the increase in exploration activity during the
period, predominantly with the lithium project in Portugal, which
also saw the first of two milestones at the MdB Project being
triggered and settled, with additions to non-current assets
amounting to GBP3.61m.
In April 2018 Savannah raised GBP2.10m cash (before expenses)
that contributed towards the ongoing development of the Company's
projects in Portugal, Oman and Mozambique. After the reporting
date, in July 2018 the Company raised GBP12.5m cash (before
expenses). This has provided a current cash balance of GBP11.4m.
The Company's strong cash position means Savannah is fully funded
to deliver on the feasibility study of a mine development and to
add to the Mineral Resource inventory via a continuing programme of
resource drilling at the MdB Project, and to progress our projects
in Mozambique and Oman.
Outlook
The upcoming six months will be active for Savannah as we
finalise key economic studies at our MdB lithium project so that we
are able to make a development decision in Q2-2019. With low
technical risk thanks to its open pit mining and conventional
processing model, a quality resource that is proven to be highly
sought after by electric vehicle manufacturers, and a defined
development schedule that will see us commence concentrate
production in 2020, we are firmly focused on realising the full
value potential of this significant, near-term production
asset.
We believe that the MdB Project's spodumene lithium concentrate
will be highly sought after by end-users and look forward to
progressing discussions currently being undertaken with potential
offtake partners as part of our commercialisation process.
Alongside this, we will continue to prove up the resource potential
of the project, with drilling continuing to progress at pace, and
we are also completing due diligence with a view to increasing the
project area further via the proposed Aldeia acquisition. Both of
these work programmes have the potential to extend the current
11-year life of mine as defined in the Scoping Study and enhance
the already attractive economics of the project.
We look forward to updating shareholders on progress as we
advance the MdB Project further, maintaining the active development
approach we have implemented since first acquiring the project in
May 2017.
Finally, I would like to thank our long-term shareholders for
their continued support and also welcome the new investors to
Savannah's share register following our recent fundraise. We look
forward to continuing to build the value of our company for the
benefit of all stakeholders.
I would also like to give my thanks to our highly committed
management and operational team who have already proven their
ability to execute multiple fast-track work programmes to rapidly
build the value of our resource portfolio.
We look forward to delivering on the next commercial milestones
in the upcoming months.
Chairman
Matthew King
20 September 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2018
Unaudited Unaudited Audited
Six months Six months Year ended
Notes to 30 June to 30 June 31 December
2018 2017 2017
GBP GBP GBP
CONTINUING OPERATIONS
Revenue - - -
Administrative expenses (1,126,994) (1,529,071) (2,835,684)
Impairment of assets classified
as held for sale (140,024) - -
Gain on disposal of investments 68,717 - -
OPERATING LOSS (1,198,301) (1,529,071) (2,835,684)
Finance income 342 - 948
Finance costs (3,841) (2,256) (7,549)
LOSS BEFORE AND AFTER TAX ATTRIBUTABLE
TO EQUITY OWNERS OF THE PARENT (1,201,800) (1,531,327) (2,842,285)
---------------------------------------- -------- ------------ ------------ -------------
OTHER COMPREHENSIVE INCOME
Items that will or may be reclassified
to profit or loss:
Change in market value of investments (58,665) (16,656) 45,644
Transfer to realised gain on
disposal of investments (68,717) - -
Exchange (losses)/gains on translation
of foreign operations 159,009 (54,052) (197,120)
---------------------------------------- -------- ------------ ------------ -------------
OTHER COMPREHENSIVE INCOME FOR
THE YEAR 31,627 (70,708) (151,476)
---------------------------------------- -------- ------------ ------------ -------------
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR (1,170,173) (1,602,035) (2,993,761)
---------------------------------------- -------- ------------ ------------ -------------
Loss per share attributable
to equity owners of the parent
expressed in pence per share:
---------------------------------------- -------- ------------ ------------ -------------
Basic and diluted
From operations 3 (0.18) (0.31) (0.53)
---------------------------------------- -------- ------------ ------------ -------------
The notes form part of this Interim Financial Report.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
Unaudited Unaudited Audited
Notes 30 June 30 June 31 December
2018 2017 2017
GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible assets 4 13,907,901 7,888,034 9,809,994
Property, plant and equipment 5 1,195,292 197,729 1,196,084
Other receivables 6 270,876 165,852 239,300
Other non-current assets 7 215,681 - 220,213
---------------------------------- -------- ------------- ------------- -------------
TOTAL NON-CURRENT ASSETS 15,589,750 8,251,615 11,465,591
CURRENT ASSETS
Investments 32,168 107,816 170,203
Trade and other receivables 6 191,300 459,971 155,959
Other current assets 7 251,752 - 20,011
Cash and cash equivalents 786,764 1,294,539 2,455,968
---------------------------------- -------- ------------- ------------- -------------
1,261,984 1,862,326 2,802,141
Assets classified as held
for sale - - 138,543
TOTAL CURRENT ASSETS 1,261,984 1,862,326 2,940,684
---------------------------------- -------- ------------- ------------- -------------
TOTAL ASSETS 16,851,734 10,113,941 14,406,275
---------------------------------- -------- ------------- ------------- -------------
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 9 7,016,155 5,345,401 6,358,504
Share premium 21,100,658 14,849,523 18,105,108
Foreign currency reserve 353,887 337,946 194,878
Warrant reserve 1,278,846 419,671 1,405,958
Share based payment reserve 600,416 752,523 691,194
Shares to be issued reserve 30,000 - -
Retained earnings (14,702,504) (12,448,310) (13,612,758)
TOTAL EQUITY ATTRIBUTABLE
TO EQUITY HOLDERS OF THE PARENT 15,677,458 9,256,754 13,142,884
LIABILITIES
NON-CURRENT LIABILITIES
Loans and borrowings 22,401 - 22,847
---------------------------------- -------- ------------- ------------- -------------
TOTAL NON-CURRENT LIABILITIES 22,401 - 22,847
---------------------------------- -------- ------------- ------------- -------------
CURRENT LIABILITIES
Loans and borrowings 6,630 - 10,276
Trade and other payables 8 1,145,245 857,187 1,228,757
---------------------------------- -------- ------------- ------------- -------------
1,151,875 857,187 1,239,033
Liabilities classified as
held for sale - - 1,511
---------------------------------- -------- ------------- ------------- -------------
TOTAL CURRENT LIABILITIES 1,151,875 857,187 1,240,544
TOTAL LIABILITIES 1,174,276 857,187 1,263,391
---------------------------------- -------- ------------- ------------- -------------
TOTAL EQUITY AND LIABILITIES 16,851,734 10,113,941 14,406,275
---------------------------------- -------- ------------- ------------- -------------
The interim financial report was approved by the Board of
Directors on 20 September 2018 and was signed on its behalf by:
........................................................
D S Archer
Chief Executive Officer
Company number: 07307107
The notes form part of this Interim Financial Report.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2018
Share Shares
Foreign based to be
Share Share currency Warrant payment issued Retained Total
capital premium reserve reserve reserve reserve earnings equity
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January
2017 4,509,465 11,226,706 391,998 386,794 455,309 - (10,900,327) 6,069,945
--------------- ------------ ------------ ------------ ---------- --------- --------- -------------- --------------
Loss for the
period - - - - - - (1,531,327) (1,531,327)
Other
comprehensive
income - - (54,052) - - - (16,656) (70,708)
--------------- ------------ ------------ ------------ ---------- --------- --------- -------------- --------------
Total
comprehensive
income for
the
period - - (54,052) - - - (1,547,983) (1,602,035)
Issue of share
capital (net
of expenses) 835,936 3,655,694 - - - - - 4,491,630
Issue of share
options - - - 297,214 - - 297,214
Lapse of - - - - - - -
options
Issue of
warrants - (32,877) - 32,877 - - - -
--------------- ------------ ------------ ------------ ---------- --------- --------- -------------- --------------
At 30 June
2017 5,345,401 14,849,523 337,946 419,671 752,523 - (12,448,310) 9,256,754
--------------- ------------ ------------ ------------ ---------- --------- --------- -------------- --------------
Loss for the
period - - - - - - (1,310,958) (1,310,958)
Other
comprehensive
income - - (143,068) - - - 62,300 (80,768)
--------------- ------------ ------------ ------------ ---------- --------- --------- -------------- --------------
Total
comprehensive
income for
the
period - - (143,068) - - - (1,248,658) (1,391,726)
Issue of share
capital (net
of expenses) 1,013,103 4,241,872 - - - - - 5,254,975
Issue of share
options - - - - 22,881 - - 22,881
Lapse of
options - - - - (84,210) - 84,210 -
Issue of
warrants - (986,287) - 986,287 - - - -
--------------- ------------ ------------ ------------ ---------- --------- --------- -------------- --------------
At 31 December
2017 6,358,504 18,105,108 194,878 1,405,958 691,194 - (13,612,758) 13,142,884
--------------- ------------ ------------ ------------ ---------- --------- --------- -------------- --------------
Loss for the
period - - - - - - (1,201,800) (1,201,800)
Other
comprehensive
income - - 159,009 - - - (127,382) 31,627
--------------- ------------ ------------ ------------ ---------- --------- --------- -------------- --------------
Total
comprehensive
income for
the
period - - 159,009 - - - (1,329,182) (1,170,173)
Issue of share
capital (net
of expenses) 657,651 2,995,550 - - - - - 3,653,201
Issue of share
options - - - - 21,546 - - 21,546
Exercise of
options - - - - (95,797) - 95,797 -
Lapse of
options - - - - (16,527) - 16,527 -
Exercise of
warrants - - - (35,972) - - 35,972 -
Lapse of
warrants - - - (91,140) - - 91,140 -
Warrants
pending
exercise - - - - - 30,000 - 30,000
--------------- ------------ ------------ ------------ ---------- --------- --------- -------------- --------------
At 30 June
2018 7,016,155 21,100,658 353,887 1,278,846 600,416 30,000 (14,702,504) 15,677,458
--------------- ------------ ------------ ------------ ---------- --------- --------- -------------- --------------
The notes form part of this Interim Financial Report.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHSED 30 JUNE 2018
Notes Unaudited Unaudited Audited
Six months Six months Year ended
to June to June December
2018 2017 2017
GBP GBP GBP
Cash flows used in operating
activities
Loss for the period (1,201,800) (1,531,327) (2,842,285)
Depreciation and amortisation
charges 5 10,427 728 14,895
Impairment of assets classified
as held for sale 140,024 - -
Gain on disposal of investments (68,717) - -
Share based payments reserve
charge 21,546 297,214 320,095
Shares issued in lieu of payments
to extinguish liabilities - 82,431 98,630
Finance income (342) - (948)
Finance expense 3,841 2,256 7,549
Exchange losses (23,111) 47,925 75,156
Cash flow from operating activities
before changes in working capital (1,118,132) (1,100,773) (2,326,908)
Increase in trade and other
receivables (32,286) (466,095) (71,288)
(Decrease)/Increase in trade
and other payables (51,903) 218,251 39,620
--------------------------------------- -------- ------------- ------------- -------------
Net cash used in operating activities (1,202,321) (1,348,617) (2,358,576)
--------------------------------------- -------- ------------- ------------- -------------
Cash flow used in investing
activities
Purchase of intangible exploration
assets (2,487,352) (1,471,957) (3,276,715)
Purchase of tangible fixed assets (221,885) (120,816) (1,069,056)
Purchase of investments - - (87)
Proceeds from sale of investments 104,283 - -
Payments for guarantees for
mining activity (231,741) - (199,755)
Interest received 342 - 948
--------------------------------------- -------- ------------- ------------- -------------
Net cash used in investing activities (2,836,353) (1,592,773) (4,544,665)
--------------------------------------- -------- ------------- ------------- -------------
Cash flow from / (used in) financing
activities
Proceeds from issues of ordinary
shares (net of expenses) 2,348,287 3,093,000 8,257,418
Proceeds from warrants pending
exercise 30,000 - -
Interest paid (3,841) (2,256) (7,549)
--------------------------------------- -------- ------------- ------------- -------------
Net cash from financing activities 2,374,446 3,090,744 8,249,869
--------------------------------------- -------- ------------- ------------- -------------
(Decrease)/Increase in cash
and cash equivalents (1,664,228) 149,354 1,346,628
Cash and cash equivalents at
beginning of period 2,455,968 1,172,347 1,172,347
Exchange (losses)/gains on cash
and cash equivalents (4,976) (27,162) (63,007)
--------------------------------------- -------- ------------- ------------- -------------
Cash and cash equivalents at
end of period 786,764 1,294,539 2,455,968
--------------------------------------- -------- ------------- ------------- -------------
The notes form part of this Interim Financial Report.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL REPORT
FOR THE SIX MONTHSED 30 JUNE 2018
1. BASIS OF PREPARATION
The financial information set out in this report is based on the
consolidated financial statements of Savannah Resources Plc and its
subsidiary companies (together referred to as the 'Group'). The
interim financial report of the Group for the six months ended 30
June 2018, which is unaudited, was approved by the Board on 20
September 2018. The financial information contained in this interim
report does not constitute statutory accounts as defined by s434 of
the Companies Act 2006. The statutory accounts for the year ended
31 December 2017 have been filed with the Registrar of Companies.
The auditors' report on those accounts was unqualified and did not
contain a statement under section 498 (2) or 498 (3) of the
Companies Act 2006.
The financial information set out in this report has been
prepared in accordance with the accounting policies set out in the
Annual Report and Financial Statements of Savannah Resources Plc
for the year ended 31 December 2017. New standards and amendments
to IFRS effective as of 1 January 2018, including IFRS 15 and IFRS
9, have been reviewed by the Group and there has been no material
impact on the financial information set up on this report as a
result of these standards and amendments.
The Group interim financial report is presented in Pound
Sterling.
Going Concern
The financial statements have been prepared on a going concern
basis. Following the cash subscriptions approved in July 2018,
amounting to GBP12.5m (before expenses) (Note 12), the Group had a
cash balance of GBP11.4m on 20 September 2018. The Directors have
reviewed the cashflow projection for the Group and consider that it
has sufficient ability to meet its financial commitments for at
least 12 months.
2. SEGMENTAL REPORTING
The Group complies with IFRS 8 Operating Segments, which
requires operating segments to be identified on the basis of
internal reports about components of the Group that are regularly
reviewed by the chief operating decision maker, which the Company
considers to be the Board of Directors. In the opinion of the
Directors, the operations of the Group comprise of exploration and
development in Oman, exploration and development in Mozambique,
exploration and development in Portugal, former exploration in
Finland, headquarter and corporate costs and the Company's third
party investments.
Based on the Group's current stage of development there are no
external revenues associated to the segments detailed below. For
exploration and development in Oman, Mozambique, Portugal and
former exploration in Finland the segments are calculated by the
summation of the balances in the legal entities which are readily
identifiable to each of the segmental activities. In the case of
the Investments, this is calculated by analysis of the specific
related investment instruments. Recharges between segments are at
cost and included in each segment below. Inter-company loans are
eliminated to zero and not included in each segment below.
Oman Mozambique Portugal Finland HQ and Invest-ments Elimination Total
Copper Mineral Lithium Lithium Corporate
Sands
GBP GBP GBP GBP GBP GBP GBP GBP
Period 30
June 2018
Revenue - - - - 434,235 - (434,235) -
Interest
income - - - - 342 - - 342
Finance
costs - (3,841) - - - - - (3,841)
Share based
payments - - - - 21,546 - - 21,546
(Loss) for
the year (122,251) (249,791) (184,437) (144,196) (569,842) 68,717 - (1,201,800)
Total assets 4,632,337 4,928,165 6,558,838 2,343 697,883 32,168 - 16,851,734
Total
non-current
assets 4,510,283 4,619,171 6,449,096 - 11,200 - - 15,589,750
Additions
to
non-current
assets 201,272 206,447 3,609,894 - - - - 4,017,613
Total
current
assets 122,055 308,994 109,741 2,343 686,683 32,168 - 1,261,984
Total
liabilities (100,964) (105,335) (734,360) (2,098) (231,519) - - (1,174,276)
------------- ---------- ------------ ---------- ---------- ----------- -------------- ------------- ------------
Oman Mozambique Portugal Finland HQ and Invest-ments Elimination Total
Copper Mineral Lithium Lithium Corporate
Sands
GBP GBP GBP GBP GBP GBP GBP GBP
Period 31
December
2017
Revenue - - - - 639,108 (639,108) -
Interest
income - - - - 948 - - 948
Finance
costs (2,035) (1,166) - - (4,348) - - (7,549)
Share based
payments - - - - 320,095 - - 320,095
(Loss) for
the year (308,616) (631,731) (171,056) (8,164) (1,722,718) - - (2,842,285)
Total assets 4,365,898 4,640,081 2,902,257 138,543 2,189,293 170,203 - 14,406,275
Total
non-current
assets 4,224,672 4,387,977 2,833,907 - 19,035 - - 11,465,591
Additions
to
non-current
assets 951,312 2,801,960 2,823,802 - 19,035 - - 6,596,109
Total
current
assets 141,226 252,104 68,350 138,543 2,170,258 170,203 - 2,940,684
Total
liabilities (112,807) (398,825) (411,302) (1,511) (338,946) - - (1,263,391)
------------- ---------- ------------ ---------- --------- ------------ -------------- ------------- ------------
Oman Mozambique Portugal Finland HQ and Elimination Total
Copper Mineral Lithium Lithium Corporate
Sands
GBP GBP GBP GBP GBP GBP
Period 30
June 2017
Revenue - - - - 254,214 (254,214) -
Finance costs - 1,370 - - 886 - 2,256
Share based
payments 11,963 44,370 - - 240,881 - 297,214
(Loss) /
Gain for
the year (187,211) (281,801) (25,600) (4,980) (1,031,735) - (1,531,327)
Total assets 3,939,037 2,695,063 2,120,317 132,740 1,226,784 - 10,113,941
Total
non-current
assets 3,844,054 2,177,590 2,094,898 127,690 7,383 - 8,251,615
Additions
to
non-current
assets 457,852 640,400 2,094,128 5,103 7,382 - 3,204,865
Total current
assets 94,982 517,474 25,419 5,050 1,219,401 - 1,862,326
Total
liabilities (110,431) (395,701) (92,244) (4,831) (253,980) - (857,187)
--------------- ------------ ------------- ------------ ---------- -------------- -------------- --------------
3. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings
attributable to the ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
In accordance with IAS 33 as the Group is reporting a loss for
both this and the preceding period the share options are not
considered dilutive because the exercise of share options and
warrants would have the effect of reducing the loss per share.
Reconciliations are set out below:
Unaudited Unaudited Audited
Six months Six months Year ended
to 30 June to 30 June 31 December
2018 2017 2017
Basic loss per share:
Loss from operations attributable
to ordinary shareholders (GBP) (1,201,800) (1,531,327) (2,842,285)
Loss attributable to ordinary
shareholders (GBP) (1,201,800) (1,531,327) (2,842,285)
----------------------------------- -------------- -------------- --------------
Weighted average number of shares
(number) 667,935,800 490,020,180 538,585,436
----------------------------------- -------------- -------------- --------------
Loss per share from operations
(pence) 0.18 0.31 0.53
Basic and diluted loss per share
(pence) 0.18 0.31 0.53
----------------------------------- -------------- -------------- --------------
4. INTANGIBLE ASSETS
Exploration
and evaluation
assets
GBP
At 1 January 2017 5,066,750
Additions 2,897,871
Exchange differences (76,587)
--------------------------------- ----------------
At 30 June 2017 7,888,034
Additions 2,142,425
Transfer to Assets classified
as Held for Sale (118,804)
Exchange difference (101,661)
--------------------------------- ----------------
At 31 December 2017 9,809,994
--------------------------------- ----------------
Additions 3,984,416
Exchange differences 113,491
--------------------------------- ----------------
At 30 June 2018 13,907,901
--------------------------------- ----------------
5. PROPERTY, PLANT AND EQUIPMENT
Motor Plant and
vehicles Office Equipment Machinery Land Total
GBP
Cost
At 1 January
2017 36,607 11,401 - - 48,008
Additions 6,991 1,735 119,081 44,819 172,626
Exchange difference (2,833) (174) 9,528 1,116 7,637
---------------------- ---------- ----------------- ----------- ------- ----------------
At 30 June 2017 40,765 12,962 128,609 45,935 228,271
---------------------- ---------- ----------------- ----------- ------- ----------------
Additions 34,206 11,025 924,940 837 971,008
Exchange difference 392 (75) 40,916 (497) 40,736
---------------------- ---------- ----------------- ----------- ------- ----------------
At 31 December
2017 75,363 23,912 1,094,465 46,275 1,240,015
---------------------- ---------- ----------------- ----------- ------- ----------------
Additions - 7,853 590 - 8,443
Exchange differences 557 354 1,430 (170) 2,171
---------------------- ---------- ----------------- ----------- ------- ----------------
At 30 June 2018 75,920 30,412 1,096,485 46,105 1,250,629
---------------------- ---------- ----------------- ----------- ------- ----------------
Depreciation
At 1 January 2017 21,164 10,674 - - 31,838
Charge for the
year 728 - - - 728
Exchange difference (1,598) (426) - - (2,024)
---------------------- -------- ------- --------
At 30 June 2017 20,294 10,248 - - 30,542
---------------------- -------- ------- --------
Charge for the
year 11,811 2,356 - - 14,167
Exchange difference (461) (317) - - (778)
---------------------- -------- ------- --------
At 31 December
2017 31,644 12,287 - - 43,931
---------------------- -------- ------- --------
Charge for the
year 9,290 1,137 - - 10,427
Exchange differences 774 205 - - 979
---------------------- -------- ------- --------
At 30 June 2018 41,708 13,629 - - 55,337
---------------------- -------- ------- --------
Net Book Value
At 30 June 2017 20,471 2,714 128,609 45,935 197,729
At 31 December
2017 43,719 11,625 1,094,465 46,275 1,196,084
----------------- ------- ------- ---------- ------- ----------
At 30 June 2018 34,212 16,783 1,096,485 46,105 1,195,292
----------------- ------- ------- ---------- ------- ----------
6. TRADE AND OTHER RECEIVABLES
Unaudited Unaudited Audited
30 June 2018 30 June 2017 31 December
2017
GBP GBP GBP
Non-Current
Other receivables
- VAT 270,876 82,551 239,300
Other receivables
- Deposits - 83,301 -
-------------- -------------- -------------
270,876 165,852 239,300
-------------- -------------- -------------
Current
VAT recoverable 96,880 25,263 51,069
Other receivables 94,420 434,708 104,890
-------- -------- --------
191,300 459,971 155,959
-------- -------- --------
7. OTHER NON-CURRENT ASSETS
Unaudited Unaudited Audited
30 June 2018 30 June 2017 31 December
2017
GBP GBP GBP
Non-Current
Guarantees 202,237 - 199,755
Other receivables
- Deposits 13,444 - 20,458
-------------- -------------- -------------
215,681 - 220,213
-------------- -------------- -------------
Current
Guarantees 251,752 - 20,011
251,752 - 20,011
-------- -------
8. TRADE AND OTHER PAYABLES
Unaudited Unaudited Audited
30 June 2018 30 June 2017 31 December
2017
GBP GBP GBP
Current
Trade payables 647,636 286,985 481,436
Other payables 30,403 25,431 45,054
Accruals and deferred
income 467,206 544,771 702,267
1,145,245 857,187 1,228,757
-------------- -------------- -------------
9. SHARE CAPITAL
Allotted, issued and fully paid
Six months to Six months to Year ended
30 June 2018 30 June 2017 31 December 2017
GBP0.01 GBP0.01 GBP0.01
ordinary ordinary ordinary
shares shares shares
number GBP number GBP number GBP
At beginning of period 635,850,386 6,358,504 450,946,455 4,509,465 450,946,455 4,509,465
Issued during the
period:
Share placement 38,181,818 381,818 61,904,764 619,047 161,423,950 1,614,239
Bonus paid in shares - - 1,688,870 16,889 1,688,870 16,889
Exercise of share
options 4,708,336 47,083 - - - -
Exercise of warrants 1,875,000 18,750 - - - -
In lieu of cash for
acquisition of Portugal
lithium project 20,000,000 200,000 20,000,000 200,000 21,791,111 217,911
Issued as condition
of JV agreement 1,000,000 10,000 - - - -
-------------------------- ------------ ---------- ------------- ---------- ------------ ----------
At end of period 701,615,540 7,016,155 534,540,089 5,345,401 635,850,386 6,358,504
-------------------------- ------------ ---------- ------------- ---------- ------------ ----------
The par value of the Company's shares is GBP0.01.
10. GROUP CONTINGENT LIABILITIES
Details of contingent liabilities where the probability of
future payments is not considered remote are set out below, as well
as details of contingent liabilities, which although considered
remote, the Directors consider should be disclosed. The Directors
are of the opinion that provisions are not required in respect of
these matters, as at the reporting date have not been triggered, it
is not probable that a future sacrifice of economic benefits will
be required or the amount is not capable of reliable
measurement.
Deferred consideration payable in relation to the acquisition of
Gentor Resources Ltd (Oman copper project)
On 15 July 2014 the Company completed an acquisition of
interests in the highly prospective Block 5 and Block 6 copper
projects in the Semail Ophiolite belt in the Sultanate of Oman from
the TSX-Venture listed Gentor Resources Inc. The Company paid
initial consideration of USD $800,000 (GBP GBP615,000) with the
following deferred consideration (up to 50% payable in Savannah
shares) required to complete the acquisition of 100% of the issued
share capital of Gentor Resources Ltd ("GRL"):
(a) a milestone payment of USD $1,000,000 (GBP GBP769,000) upon
a formal final investment decision for the development of the Block
5 Licence;
(b) a milestone payment of USD $1,000,000 (GBP GBP769,000) upon
the production of the first saleable concentrate or saleable
product from ore derived from the Block 5 Licence; and
(c) a milestone payment of USD $1,000,000 (GBP GBP769,000)
within six months of the payment of the Deferred Consideration in
(b).
Deferred consideration payable in relation to the acquisition of
Slipstream PORT Pty Ltd (Portugal lithium project)
On 24 May 2017 the Group acquired a series of highly prospective
lithium projects with near-term production potential in the north
of Portugal. The Group paid an initial consideration of AUD$
1,000,000 (GBP GBP591,000) in cash and issued 20,000,000 ordinary
shares in the Company. Additional milestone payments, to be
satisfied by cash and the issue of ordinary shares in SAV, are
payable as follows:
(a) AUD$ 1,500,000 (GBP GBP886,500) cash and a further
20,000,000 ordinary shares of SAV upon the announcement by SAV of a
JORC-compliant Indicated Mineral Resource Estimate of 7.5 million
tonnes at no less than 1% Li(2) O. In February 2018 the Company
announced the completion of a revised JORC 2012 - Compliant
Inferred Mineral Resource Estimate of 9.1Mt at 1.03% Li(2) O and
this milestone was triggered. The Company paid AUD$ 1,500,000 (GBP
GBP842,028) in cash and issued 20,000,000 ordinary shares in the
Company in March 2018. This has been accounted for in this
financial report.
(b) AUD$1,500,000 (GBP GBP886,500) cash and an additional
20,000,000 ordinary shares of SAV upon the announcement by SAV of a
further JORC-compliant Indicated Mineral Resource Estimate of a
minimum of 7.5m tonnes at no less than 1% Li(2) O. In September
2018 the Company announced the completion of a revised JORC 2012 -
Compliant Inferred Mineral Resource Estimate of 20.1Mt at 1.04%
Li(2) O and this milestone was triggered (Note 12). This has not
been accounted for in this financial report as the milestone was
reached after the reporting date.
11. SHARE OPTIONS AND WARRANTS
Share options and warrants to subscribe for Ordinary Shares in
the Company are granted to certain employees, Directors and
investors. Some of the options issued vest immediately and others
over a vesting period and may include performance conditions.
Options are forfeited if the employee leaves the Group before the
options vest.
The Directors' interests in the share options and warrants of
the Company are as follows:
At 30 June 2018
Quantity Quantity Lapsed Options Exercise Date of First Final
at granted during / Warrants price the grant date date
1 Jan 2018 during the at of exercise of exercise
the period period 30 Jun
2018
Share
Options
Dale
Ferguson 5,321,776 - - 5,321,776 3.0p 21/07/13 20/07/14 20/07/18
Dale
Ferguson 2,000,000 - - 2,000,000 7.59p 01/03/17 01/03/17 28/02/21
Matthew
King 1,500,000 - - 1,500,000 3.0p 16/03/16 16/03/16 15/03/20
David Archer 7,000,000 - - 7,000,000 7.59p 01/03/17 01/03/17 28/02/21
Investor
Warrants
David Archer 11,111,112 - - 11,111,112 3.0p 24/09/13 24/09/13 19/07/18
David Archer 2,857,143 - - 2,857,143 6.0p 14/07/17 14/07/17 14/07/20
At 31 December 2017
Quantity Quantity Lapsed Options Exercise Date of First Final
at granted during / Warrants price the grant date date
30 June during the at of exercise of exercise
2017 the period period 31 Dec
2017
Share
Options
Dale
Ferguson 5,321,776 - - 5,321,776 3.0p 21/07/13 20/07/14 20/07/18
Dale
Ferguson 2,000,000 - - 2,000,000 7.59p 01/03/17 01/03/17 28/02/21
Matthew
King 1,500,000 - - 1,500,000 3.0p 16/03/16 16/03/16 15/03/20
David Archer 7,000,000 - - 7,000,000 7.59p 01/03/17 01/03/17 28/02/21
Warrants
David Archer 11,111,112 - - 11,111,112 3.0p 24/09/13 24/09/13 19/07/18
David Archer - 2,857,143 - 2,857,143 6.0p 14/07/17 14/07/17 14/07/20
At 30 June 2017
Quantity Quantity Lapsed Options Exercise Date of First Final
at granted during / Warrants price the grant date date
1 Jan 2017 during the at of exercise of exercise
the period period 30 Jun
2017
Share
Options
Dale
Ferguson 5,321,776 - - 5,321,776 3.0p 21/07/13 20/07/14 20/07/18
Dale
Ferguson - 2,000,000 - 2,000,000 7.59p 01/03/17 01/03/17 28/02/21
Matthew
King 1,500,000 - - 1,500,000 3.0p 16/03/16 16/03/16 15/03/20
David Archer 7,000,000 - 7,000,000 7.59p 01/03/17 01/03/17 28/02/21
Investor
Warrants
David Archer 11,111,112 - - 11,111,112 3.0p 24/09/13 24/09/13 19/07/18
12. EVENTS AFTER THE REPORTING DATE
In July 2018 the Company approved a cash Placing and
Subscription of GBP11.5m (before expenses) through the issue of
128,347,256 ordinary shares at an issue price of 9 pence per share.
Additionally, the Company received letter of intent for an
additional GBP1m cash subscription from Directors' related party
(Al Marjan Ltd) for when the Company is not in a "close period".
Subsequently Al Marjan acted upon this letter of intent and
subscribed for 11,111,111 ordinary shares at a price of 9 pence per
share, giving gross proceeds of GBP12.5m (together with the Placing
and Subscription).
In July 2018 the Company issued 860,000 new ordinary shares in
respect of 2016 Investors warrants at an exercise price of 6 pence
per share following the exercise of warrants, for proceeds of
GBP0.05m.
In July 2018 the Company issued 19,382,888 new ordinary shares
following the exercise of options and warrants over Ordinary
Shares. David Stuart Archer exercised Warrants over 11,111,112
Ordinary Shares at 3 pence each. Dale John Ferguson exercised
Options over 5,321,776 Ordinary Shares at 3 pence each. Other
employees exercised 1,200,000 Options, 1,500,000 Options and
250,000 Options at an exercise price of 4.62, 3.00 and 6.75 pence
each respectively, for proceeds of GBP0.61m.
In August 2018, the Company granted 343,432 warrants over
ordinary shares in the Company to a financial advisor of the
Company in connection with the Company's fundraise in July
2018.
In September 2018 the Company announced the completion of a
revised JORC 2012 - Compliant Inferred Mineral Resource Estimate of
20.1Mt at 1.04% Li(2) O. This triggered the second deferred
consideration (Milestone (b)) to be paid under the acquisition
agreement of Slipstream PORT Pty Ltd (Note 10). The Company is due
to pay AUD$ 1,500,000 (GBP GBP834,000) in cash and issue 20,000,000
ordinary shares in the Company in October 2018.
SHAREHOLDING
Shareholders as at 31 August 2018 which hold more than 3% in the
Company is disclosed as follows:
Beneficial owners (the ultimate underlying shareholders holding
shares either directly or indirectly through a bank, broker-dealer,
trust, or combination of these, which are the registered
shareholders):
Percentage
of Issued
Shareholder Shares Held Capital
Al Marjan Limited 208,262,589 24.18%
Husain Salman Ghulam Al-Lawati 42,019,792 4.88%
David Archer 41,756,649 4.85%
Slipstream Resources Investments
Pty Ltd 30,000,000 3.48%
Mr Karl-Erik von Bahr 30,052,525 3.49%
Total 352,091,555 40.88%
---------------------------------- ------------ -----------
Total Number of shares on issue 861,316,795
Registered shareholders (the shareholders holding shares
directly with the Company, either on its behalf or on behalf of the
beneficiary owner):
Percentage
of Issued
Shareholder Shares Held Capital
Al Marjan Limited 208,262,589 24.18%
Hargreaves Lansdown (nominees)
Limited 78,840,653 9.15%
Interactive Investor Services
Nominees Limited 47,702,560 5.54%
Hussain Salman Ghulam Al- Lawati 42,019,792 4.88%
Nortrust Nominees Limited 36,781,138 4.27%
Barclays Direct Investing Nominees
Limited 34,514,062 4.01%
Slipstream Resources Investments
Pty Ltd 30,000,000 3.48%
Securities Services Nominees
Limited 28,196,462 3.27%
------------------------------------ ------------ -----------
Total 506,317,256 58.78%
------------------------------------ ------------ -----------
Total Number of shares on issue 861,316,795
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
Competent Person and Regulatory Information
The information in this announcement that relates to exploration
results is based upon information compiled by Mr Dale Ferguson,
Technical Director of Savannah Resources Limited. Mr Ferguson is a
Member of the Australasian Institute of Mining and Metallurgy
(AusIMM) and has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent
Person as defined in the December 2012 edition of the "Australasian
Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves" (JORC Code). Mr Ferguson consents to the inclusion in
the report of the matters based upon the information in the form
and context in which it appears.
The Information in this report that relates to Mineral Resources
is based on information compiled by Mr Paul Payne, a Competent
Person who is a Fellow of the Australasian Institute of Mining and
Metallurgy. Mr Payne is a full-time employee of Payne Geological
Services. Mr Payne has sufficient experience that is relevant to
the style of mineralisation and type of deposit under consideration
and to the activity being undertaken to qualify as a Competent
Person as defined in the 2012 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves". Mr Payne consents to the inclusion in the report of the
matters based on his information in the form and context in which
it appears.
**ENDS**
For further information please visit www.savannahresources.com
or contact:
David Archer Savannah Resources Tel: +44 20 7117
plc 2489
David Hignell / Dugald Northland Capital Tel: +44 20 3861
J. Carlean (Nominated Partners Ltd 6625
Adviser)
Christopher Raggett finnCap Ltd Tel: +44 20 7220
/ Camille Gochez (Broker) 0500
Grant Barker (Equity Whitman Howard Tel: +44 020 7659
Adviser) 1225
Charlotte Page / Lottie St Brides Partners Tel: +44 20 7236
Wadham (Financial PR) Ltd 1177
About Savannah
We are a diversified resources group (AIM: SAV) with a portfolio
of energy metals projects - lithium in Portugal and copper in Oman
- together with the world-class Mutamba Heavy Mineral Sands Project
in Mozambique, which is being developed in a consortium with the
global major Rio Tinto. We are committed to serving the interests
of our shareholders and to delivering outcomes that will improve
the lives of our staff and the communities we work with.
The Company is listed and regulated on AIM and the Company's
ordinary shares are also available on the Quotation Board of the
Frankfurt Stock Exchange (FWB) under the symbol FWB: AFM, and the
Börse Stuttgart (SWB) under the ticker "SAV".
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR SEIESSFASESU
(END) Dow Jones Newswires
September 21, 2018 02:00 ET (06:00 GMT)
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