TIDMSAV
RNS Number : 3992H
Savannah Resources PLC
06 April 2022
6 April 2022
Savannah Resources plc
("Savannah" or the "Company")
Financial Results for the Year Ended 31 December 2021
Savannah Resources plc, the European lithium development
company, is pleased to announce its audited financial results for
the year ended 31 December 2021.
2021 Summary
Corporate
-- Portfolio streamlined: Savannah has a singular focus as a
European lithium "pure play" following the amicable exit from the
Consortium Agreement with Rio Tinto on the Mutamba Mineral Sands
Project in Mozambique
-- Cash balance: Stood at GBP13.0m as at 31 December (31 December 2020: GBP2.0m), driven by the significantly oversubscribed GBP10.3m (gross) equity financing and the Consortium Agreement Cash Termination Compensation (US$9.5m)
-- ESG: Corporate Environmental and Social Management System
("ESMS") designed to aid implementation of Savannah's ESG goals
-- Decarbonisation commitment: Committed to moving towards Scope
1 and 2 net zero emissions goals during the operating phase of the
Barroso Lithium Project, and additionally targeting the reduction
of Scope 3 emissions
-- COVID-19: Mitigation measures continued with staff and stakeholder wellbeing a priority
-- Net loss from continuing operations: Reported at GBP3.5m
(2020: GBP2.5m). The total attributable loss reduced to GBP3.3m
(2020: GBP8.2m) as there was no repeat of the non-cash write-down
(GBP5.5m) associated with the Oman project divestment
-- Recruitment: To support the Company's continued growth, key
new staff with a range of skills have been added to our project and
corporate teams in Portugal and the UK respectively
Barroso Lithium Project (the "Project"), Portugal
Technical
-- Environmental Impact Assessment ("EIA"): During the year the
conformity of the content of the EIA was declared by the
environmental regulator ("APA") and the Public Consultation
exercise on the EIA was completed. Savannah believes the calling of
a snap general election in Portugal in early November 2021 for 30
January 2022 impacted the decision-making processes in government
agencies such as APA during that period. The Board remains hopeful
that the Environmental Impact Declaration ("DIA") for the Project
will be made in coming months
-- Definitive Feasibility Study ("DFS"): Metallurgical process
design work continued in Australia throughout the period leading to
finalisation of the Project's process flowsheet in February 2022.
Field work in Portugal was limited as a result of COVID-related
restrictions and the ongoing EIA review process. The DFS is now
expected to be completed within twelve months of approval of the
EIA
Commercial
-- Offtake and Investment: Received increasing investment and
offtake interest in parallel with the major improvement in lithium
pricing and growing expectations of future lithium raw material
supply shortages
-- Partnerships: Savannah was pleased to become a member of the
International Lithium Association, the Portuguese Association for
the Battery Cluster; and the Business Council for Sustainable
Development Portugal
-- EV sales: European car sales saw strong annual growth again
to 2.33m units (+66%) as part of global sales of 6.75m (+108%,
source EV-volumes.com)
-- Lithium prices: In 2021 lithium chemical prices rose on
average by 410% vs. year-end 2020 and spodumene spot prices rose by
over 500% and are currently reported to be trading at $5,000/t
(source: S&P Global Platts)
Public and Government Relations:
-- Local stakeholder engagement: Savannah continued to engage
and inform the local community about the Project through multiple
channels; support was also maintained for local ventures and
services
-- Wider stakeholder engagement: As travel restrictions eased,
interaction with civil society, business and academic leaders, and
journalists was stepped up
-- Future community engagement and environment planning:
Savannah continued to develop its planned programmes including the
Benefit Sharing Programme, Good Neighbour Plan, Community Owned
Service Providers, and Land Stewardship Programme
Mutamba Mineral Sands Project, Mozambique
-- Strategic review: Following completion of its strategic
review the Company amicably exited the Consortium Agreement with
Rio Tinto in December 2021 in return for US$9.5m Cash Termination
Compensation
2022 Year to Date Summary
-- Decarbonisation: To support its commitments made in 2021, a
decarbonisation strategy has been initiated, led by consultants
ECOPROGRESSO and in association with leading global technology
company ABB
-- Definitive Feasibility Study: Finalisation of environmentally
enhanced process flowsheet to produce high quality spodumene
concentrate
-- ESMS: Expanding the overarching Corporate Environmental and
Social Management System to specifically cover Barroso Lithium
Project
-- Broker appointment: RBC Capital Markets appointed as Joint Corporate Broker
-- Rebrand: Rebrand of the Company and the launch of its new website
To view the press release with the images and diagrams please
use the following link:
http://www.rns-pdf.londonstockexchange.com/rns/3992H_1-2022-4-5.pdf
Availability of Annual Report and Financial Statements
Copies of the Company's full Annual Report and Financial
Statements are expected to be posted to shareholders shortly and
will also be made available to download today from the Company's
website www.savannahresources.com .
Regulatory Information
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Savannah - Enabling Europe's Energy Transition
Follow @SavannahRes on Twitter
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For further information please visit www.savannahresources.com
or contact:
Savannah Resources PLC Tel: +44 20 7117 2489
David Archer, CEO
SP Angel Corporate Finance LLP (Nominated Tel: +44 20 3470 0470
Advisor)
David Hignell / Charlie Bouverat
finnCap Ltd (Joint Broker) Tel: +44 20 7220 0500
Christopher Raggett/ Tim Redfern
RBC Capital Markets (Joint Broker) Tel: +44 20 7653 4000
Marcus Jackson/ Farid Dadashev/ Jamil
Miah
WH Ireland Limited (Joint Broker) Tel: +44 20 7220 1666
Jessica Cave/ Ben Good (Corporate Finance)
Aimee McCusker (Corporate Broking)
Camarco (Financial PR) Tel: +44 20 3757 4980
Gordon Poole/Emily Hall/Tessa Gough-Allen
CHAIRMAN'S STATEMENT
The global events of 2021, while difficult and often tragic for
many, have conversely served to reinforce my view that your Company
owns a vital strategic asset via its Barroso Lithium Project , (the
'Project') . Furthermore, the geopolitical consequences of the
invasion of Ukraine in February seem likely to increase its
importance. Following the sale of our interest in the Mutamba
project in Mozambique to the Rio Tinto Group ('Rio'), Savannah is
now a "pure lithium" company and is well-placed to benefit from the
drive to identify alternatives to fossil fuels and increase in
electrification. Moreover, the US$9.5m termination compensation
from Rio along with the GBP10.3m gross proceeds from the
over-subscribed April placing helped take Savannah's year-end cash
position to GBP13m, putting us in a good financial position for the
year ahead. It is therefore particularly frustrating that these
matters are not reflected in our share price.
In terms of market forces, 2021 sa w a continuation of the same
market drivers which first triggered the lithium sector's strong
recovery in the second half of 2020. Supply again failed to keep up
with the demand created by increasing battery manufacturing and
electric vehicle sales around the world. As a result, lithium raw
material prices moved to new record highs.
However, as in 2020, the positive news our sector enjoyed was
overshadowed by the spectre of the COVID pandemic. Though COVID's
impact ebbed and flowed during the period, the rise of the Omicron
variant late in the year acted as a stark reminder that Europe and
the rest of the world still has some way to go to be fully free of
the impacts of this virus. Savannah must continue to play its part
in protecting our staff and those with whom we work and associate
by mitigating risk accordingly. Hence, we will continue to manage
COVID-related risk as actively as possible and adhere to relevant
laws and guidance for as long as is necessary.
Responsibility is embedded in our corporate strategy
The Board is determined that your Company should develop the
Project in a responsible and innovative way. We are pursuing a
number of initiatives to reduce the Project's carbon footprint, as
described more fully in the CEO's Report, and these will all
contribute to our goal of achieving Scope 1 and 2 net zero
emissions during the life of the Project. We are also targeting a
reduction in Scope 3 emissions. These objectives do not take
account of the estimated 100 million tonnes of greenhouse gas
emissions Savannah's lithium can help avoid in Europe's transport
sector. These initiatives will also be tracked as part of your
Company's Environment, Social and Governance ('ESG') programme. An
ESG statement was adopted by the Board during the course of the
year and a comprehensive Environmental and Social Management System
(ESMS) which is in the process of being rolled out at corporate
level will be extended to our Portuguese operations during
2022.
Our key focus in Portugal is on the approval of our EIA
We at Savannah share our shareholders' frustration at the slow
rate of progress in obtaining the necessary approvals required for
the Project to progress. Foremost among these is the approval of
the EIA report we first submitted in 2020 to the Portuguese
regulator, Agência Portuguesa do Ambiente ('APA'). Our report was
declared in conformity with APA's requirements in April 2021 and
this was followed by a public consultation phase, completed in July
2021, when all interested parties had the opportunity to lodge
their comments with APA.
We had expectations that APA's decision would be forthcoming in
the final quarter of 2021, but in October 2021 an impromptu General
Election was called for 30 January 2022, which has evidently
impacted on decision-making processes in the relevant Government
departments. Appointments to the relevant cabinet positions were
made in March 2022 and we are hopeful that the APA decision could
be made in coming months. If APA does approve our EIA, we will
re-initiate the fieldwork required for completion of the Definitive
Feasibility Study ('DFS') and accelerate the build-out of our
in-country team.
Given the uncertainty on when a decision from APA will be
received, it would be imprudent of me to give precise guidance on
timing for completion of the DFS. Furthermore, as our shareholders
will understand, given the second phase of the environmental
licencing process also relates to the Project's final design, it
will have an important bearing on the DFS. However, I can guide to
the time we estimate for the outstanding work required for the DFS'
completion as being approximately no more than 12 months following
APA's approval of the EIA.
Figure 1: Savannah hopes to receive approval for the Barroso
Lithium Project EIA in the coming months:
Source: Company photo
The energy transition endorses our strategic move into
lithium
Despite the delays, I still firmly believe that Savannah's move
into the lithium sector in 2017 remains a good, long term,
strategic decision for our Company. This can be backed-up by
reference to growing electric vehicles sales, the record prices now
seen in key lithium raw materials, and the increased corporate
activity in the lithium market itself, particularly in Europe. We
therefore remain hopeful that the Barroso Lithium Project will
receive environmental regulatory approval, and have backed our
confidence by continuing the land acquisition programme at the
Project throughout the period.
In late 2021 we were delighted to see not one, but two
in-country lithium chemical refinery projects announced by
significant companies in the battery, energy and chemicals sectors.
We also saw the Portuguese Government move closer to initiating the
long-awaited tender process for six exploration areas prospective
for lithium across the country. Hence, the lithium industry in
Portugal is really starting to take shape and Savannah is part of a
growing industrial, academic and governmental community which is
focused on providing materials and products key to the energy
transition i n Europe and has the potential to bring very
significant economic, environmental and social benefits for a large
number of people, while at all times following a responsible
approach to the production of this critical raw material.
Commercial interest in the Project has increased
On a commercial front, 2021 started on a positive note with
announcement of the Heads of Agreement ('HoA') with Galp Energia,
SGPS, S.A ('Galp'), around a 100,000tpa offtake agreement and
project level investment. This provided proof of concept that the
Barroso Lithium Project could attract commercial partners for its
spodumene concentrate but, as the first and second quarters
progressed and sentiment and prices within the lithium sector
improved, Savannah received further commercial inquiries. The
expiry of the HoA at the end of May not only allowed us to continue
negotiations with Galp but also to speak freely with a host of
other parties who have approached us during the year. This includes
European and non-European groups either looking for a new source of
spodumene for existing or new conversion plants, or potential
strategic partners looking for exposure to the lithium battery
value chain.
While we had targeted conclusion of a first offtake agreement by
the end of 2021, it is not a concern to the Board that this
self-imposed deadline was not met. The developments we have seen in
the past eighteen months in the European and global lithium
markets, and the growing concern around future supply among
consumers of lithium feedstock, lead us to believe that the delay
is working out to our benefit and that securing suitable offtakes
and/or partnerships remains eminently achievable, and particularly
as and when a positive decision on the EIA is received. In addition
to these 'direct' commercial relationships and associated
financings, Savannah continues to assess its options on other
sources of development finance such as government or European Union
grants.
Divesting non-core mineral sands asset supports our core
growth
As our shareholders will know, December 2021 marked the end of
Savannah's active involvement in the Mozambiquan mineral sands
sector after eight years including the last five years spent
focused on our role as operator in the unincorporated joint venture
with Rio on the Mutamba Project ('Mutamba'). As time working in
Mozambique went on it became clear to our team that to progress
both the Mutamba and Barroso Lithium Projects under Savannah's
leadership simultaneously would likely overstretch our human and
financial resources. A thorough technical assessment of Mutamba and
a review of the various restructuring and market opportunities
available to us was made assisted by Farview Solutions and its
principal, Bruce Griffin, and it was amicably agreed that
cancelling our unincorporated joint venture was the best option for
both parties and the project.
Rio has assumed full responsibility for the Mutamba project
(Mining Concessions 9228C and 9229C and Mining Concession
application 9230C) and Savannah's in-country staff have transferred
across to Rio to remain with the project. In return Savannah
received a US$9.5m termination compensation from Rio and is now in
the process of divesting its residual Mozambiquan assets (Matilda
Minerals Lda and Mining Concession 9735C). As stated, the cash
received helped to lift Savannah's year end cash position to
GBP13m. During our tenure we and Rio were able to make some notable
progress on the project, publishing a first economic study in 2017,
and being awarded the three, 25-year, Mining Concessions in 2019
and 2020 which covered the vast majority of the project's 4.4
billion tonne resource.
Savannah leaves the Mutamba Mining Concessions in good order for
Rio Tinto with work on securing land use and utilisation agreements
and EIAs progressed during 2021. We wish Rio well with their
ongoing development of the project. Given Rio's long involvement
with Mutamba, I have no doubt they are the most appropriate group
to take the project forward. I would also like to thank our former
team members for all their hard work over the years and wish them
well with their new careers at Rio.
Savannah can also be proud of its legacy in Mozambique which it
has left through its extensive community engagement programmes,
more details of which can be found in the ESG section.
Using our market position to promote a responsible future
During 2021 we have been consciously attempting to consolidate
Savannah's position in Portugal's business environment and the
European and global lithium industry. To that end, we became a
founder member of Portugal's new Association for the Battery
Cluster, as we announced last June, and joined the country's
130-member strong Business Council for Sustainable Development.
Within the lithium sector, we became one of the first 12 Associate
Members of the newly formed International Lithium Association, a
not-for-profit industry association created by major industry
participants as a voice for the lithium industry and to promote ESG
and sustainability practices within the sector.
We also continued to add to our own team across a range of
disciplines such as geology and finance, and we look forward to
growing our team further during 2022.
Figure 2: European and Global sales of electric vehicles reached
new record highs in 2021:
Source: Adobe stock images
Financial Overview
During the year the Board lifted some of the COVID-related cost
control measures it had put in place in early 2020. The
accompanying uptick in corporate activity resulted in a 27%
increase in the Group's administrative expenses to GBP3.3m (2020:
GBP2.6m). Combining this with a GBP0.2m loss on foreign exchange,
resulted in losses from continuing operations increasing by 39% to
GBP3.5m (2020: loss GBP2.5m). However, without a repeat of the
GBP5.8m non-cash adjustments recorded last year in association with
the divestment of our copper projects in Oman, losses before tax of
GBP3.5m (2020: loss GBP8.3m) and the total comprehensive loss for
the year of GBP3.3m (2020: loss GBP8.2m) were approximately 60%
lower than 2020.
The Group's net assets increased by 33% during the year to
GBP27.2m with the 18% reduction in intangible assets to GBP14.1m
(2020: GBP17.3m) associated with the termination of the
unconsolidated joint venture with Rio on the Mutamba project, more
than offset by the 550% increase in the Group's year-end cash
position to GBP13.0m (2020: GBP2.0m). This greatly improved cash
position reflected the income received from the combination of the
oversubscribed GBP10.3m (gross) placing, the US$9.5m termination
compensation from Rio as part of our exit from the Mutamba project
and the GBP0.7m received from the sale of shares in Force
Commodities which Savannah had received as part of the divestment
of its assets in Oman.
Outlook
2022 is shaping up to be another key year for Savannah. I am
sure I speak for all in saying that our current thoughts are with
the people of Ukraine at this terrible time and that our sincerest
hopes are for the conflict in their country to be brought to an end
as soon as possible.
Savannah has no direct exposure to Ukraine or Russian markets
but given the European location of this conflict and the
significance of Russia in global geopolitics and the world's
energy, commodity and financial markets, ongoing impact of the
invasion on international markets must be expected. As a result,
Savannah will continue to monitor the situation closely and be
ready to put plans in place if required. At present it is hard to
accurately predict what the long-term outcomes may be, but this
rapidly deteriorating situation has again shown the risk inherent
in many global supply chains which are based on commodity and
energy production in high sovereign risk jurisdictions. In the
lithium sector at least, Savannah would like to offer Europe a
low-risk alternative.
The Company is now solely focused on lithium and has the capital
at hand to make meaningful progress towards development and
production at the Barroso Lithium Project. Despite the current
uncertainty, the market backdrop remains highly supportive with
high lithium prices, global EV sales forecast to grow year-on-year,
and ever greater emphasis being placed on responsible, low carbon,
manufacturing techniques and products. All these factors mean that
Savannah has real optionality available to it in regard to future
commercial arrangements for the Project.
We remain hopeful that APA will approve our EIA in the coming
months, and this will then allow us to finalise the Project's
design and undertake the remaining work required for the DFS. APA's
decision will also dispel much of the uncertainty which has
bedevilled our share price and bring clarity for all the Project's
stakeholders as to its future status in that it will provide
assurance to our potential commercial customers that Savannah is a
responsible operator and that the Project can be a future source of
low carbon, lithium raw material for their operations and the wider
battery value chain.
As ever, my thanks go to all our staff who continue to make
their very best efforts to move Savannah towards its long-held
goals of responsible production, cash flow generation, benefit
sharing with stakeholders, and creating greater shareholder
value.
I would also like to thank all our shareholders for their
continued interest and support for Savannah and wish them well as
we all try to navigate our way back towards 'normality' through the
residual challenges of the pandemic and the fresh uncertainty and
alarm caused by the conflict in Ukraine.
Matthew King
Chairman
Date: 5 April 2022
CHIEF EXECUTIVE'S REPORT
We have started 2022 in great shape with a strong cash balance,
100% ownership of one of Europe's most strategic lithium projects,
no overriding royalties, no offtakes written at low prices and a
clear and defined path to production as the pre-eminent, pure
lithium play in one of the world's largest lithium consuming
regions.
For the lithium sector as a whole, it was an exceptional year
with the industry's three major raw materials, lithium hydroxide,
lithium carbonate, and spodumene concentrate, seeing spot price
rises of over 370%, 450% and 530% respectively. These large and
rapid price rises show that raw material supply is a major problem
in this market which, in turn, has major implications for the
energy transition and the e-mobility revolution required to
effectively tackle greenhouse gas emissions from the energy and
transport sectors. Simply put, lithium is in great demand and the
companies that supply or will supply lithium are in great demand.
This is a very supportive backdrop for Savannah and its goal of
becoming a major European-based lithium supplier. What Europe needs
now is for the same legislators who rightly seek to affect the
energy transition and cut emissions, to also facilitate the
responsible supply of all the raw materials with the removal of
unnecessary red tape, siloed bureaucracies and the application of
project management tools to make this target achievable.
By this time, I would have liked to have been discussing the
exciting phase of project development that Savannah has underway
following receipt of the Project's environmental approval and
completion of the DFS. However, with market conditions as they now
are and with climate change being front and centre of government
policy, I believe the context for the Project has never been more
promising. In fact, it can be argued that the opportunity presented
by the Barroso Lithium Project is greater now than at any time in
during our ownership, particularly bearing in mind current spot
spodumene lithium prices at US$5,000/t versus the US$685/t assumed
in our 2018 Scoping Study.
The development of the Barroso Lithium Project is designed to
benefit all stakeholders
We are determined that all the relevant stakeholders benefit
from the Project as it progresses. Within Portugal that means from
the National Government, which will benefit from the economic
growth created by a new pan-European industry, through to customers
and suppliers, and individuals in the towns and villages near the
Project. This latter group will see new job opportunities created,
greater demand for local goods and services, improvements to local
infrastructure, and meaningful and long-term financial support
given to community projects and groups. Above all, this brings to
light the necessity to support regional energy autonomy.
I note that the average share price performance during 2021
amongst a large group of lithium development and production
companies principally listed outside of the UK was +218% compared
to the flat performance recorded by Savannah. Our shareholders
should certainly benefit too as we move through value adding
gateways in coming months.
Importantly, our team was agile in the face of the EIA delay and
maintained and adapted plans wherever possible to ensure that not
only was progress made, but that we are prepared to accelerate
quickly as and when a decision from the regulator is received. The
excellent progress we have seen with our metallurgical test work
and our decarbonisation initiatives are key cases in point.
Preparation work on key DFS inputs underway
On a technical front, our team prepared as much as possible for
the next phase of the environmental licencing process ( 'Relatório
de Conformidade Ambiental do Projeto de Execução', 'RECAPE').
During this phase, our team and our panel of consultants will work
on the final detailed design for the Project which adhere to any
conditions set by the regulator.
Preparation work was also undertaken for the drilling campaigns
and fieldwork which is required for input into the Definitive
Feasibility Study. We plan to get back into the field with an
in-fill resource drilling programme once a positive EIA decision
has been received.
While we were not able to create as many of the 'fixed points'
for the DFS as we may have liked during 2021 because of the need
for fieldwork and input from the environmental regulator, the key
elements of the processing route to produce the spodumene
concentrate and associated by-products from Barroso ore have now
been fixed following a successful metallurgical test work programme
in Australia during the year. As announced recently, our expert
consultants and in-house team have been able to design a circuit
which will produce a high quality, commercial spodumene concentrate
based on the use of processes and reagents which meet or exceed all
relevant legislation. We have been able to achieve excellent
lithium recoveries in the high 70s per cent range with coarser
grind sizes which will help reduce energy requirements and
operating costs. Alongside the upcoming pilot testing on the main
processing route, we are also investigating opportunities to
recover additional lithium from some of the waste streams.
Our test work has also involved trade-off studies where we have
examined the trade-off between grade of the product and recovery.
While we can produce a nominal 6% product which is the industry
standard reference, the trade-off studies show that overall
revenues are maximised with a product grade of 5.5%. A 5.5% graded
product is well within acceptable marketing tolerances although
with an arithmetic adjustment for price from the reference price
for 6% material. Rejection limits are for material less than 5.0%.
And we should remember that the Barroso lithium product benefits
from having one of the lowest levels of iron.
The on-going de-carbonisation programme is also a key
work-stream for the DFS and we have already made a great start by
commissioning ECOPROGRESSO, part of the Quadrante Group, to develop
our strategy and with the announcement of a collaboration with the
major global group, ABB, around automation and electrification
aspects.
With the metallurgical work-stream for the DFS largely done and
the de-carbonisation work underway we are well placed to move into
the design phase of the DFS upon receiving EIA approval.
I should hasten to add that the metallurgical work outcomes are
an important de-risking achievement as this area has been
problematic for many of the earlier spodumene developments in
Australia. This will be important from a project financing and
commissioning perspective.
European EV demand is strong and growing even stronger
There is no doubt as to the level of regional demand for the
product Savannah hopes to make. European car sales saw strong
annual growth again to 2.33m units (+66%) as part of global sales
of 6.75m (+108%, source EV-volumes.com), and the latest tally on
capacity of existing or planned European battery plants is
approximately 800GW. This capacity equates to over 600kt of lithium
carbonate equivalent ('LCE'). At present, we estimate total future
supply from European based lithium projects to be approximately
130kt of LCE, including the c.25kt provided by the Barroso Lithium
Project in the form of spodumene concentrate. Hence, all future
supply from Europe, including Savannah's, could easily be consumed
domestically in the future. As further proof of this assumption,
several of Savannah's European peers have announced offtake
agreements in the past year for lithium chemical supply.
Figure 3: European Electric Vehicle Sales Figure 4: Global
Electric Vehicle Sales
Source: EV-volumes.com Source: EV-volumes.com
European industrial development to drive demand for spodumene
concentrate
Amongst our European peer group, we believe Savannah will be the
most significant future supplier of spodumene concentrate, the same
material which has made Australia the world's largest supplier of
lithium raw material. 2021 was the year that the concept of
European 'merchant' lithium conversion plants really gathered pace.
These are plants which are not integrated with a specific mine but
purchase feedstock, such as spodumene concentrate, under long term
offtake agreements or in the spot market from mining companies,
such as Savannah. When we originally secured the Project the major
source of demand for our product was China. Europe is now looking
to build out its processing capacity to help optimise its strategic
autonomy, eliminate potential international bottlenecks and build a
decarbonised lithium value chain in Europe. This is a major shift
which has only benefited Savannah and means our low carbon
spodumene lithium is highly sought after.
Figure 5: Over 2.3m electric vehicles were sold in Europe last
year representing 17% of all new cars sold:
Source: Adobe stock images
Looking just at Portugal alone, Galp has already stated its
intention of moving into lithium chemical production earlier in
2021 with such a plant, but we welcomed the news in December that
it was partnering with Northvolt, the major Swedish battery
manufacturer, to create Aurora, a new 50:50 joint venture, which
will develop a facility in Portugal targeting 35,000tpa of lithium
hydroxide production from 2026. Meanwhile, Portuguese chemical
company Bondalti and Australia's Reed Advanced Materials (70%
Neometals/30% Mineral Resources) are trialling Reed's Eli(R)
processing technology at Bondalti's chemical plant in Estarreja.
This technology can process brine or hard rock concentrate feeds,
and the groups are targeting a plant capacity of 25,000tpa of
lithium hydroxide or carbonate if the initial pilot plant test work
goes well. Barroso's concentrate would represent a natural
feedstock for these proposed plants with the added benefit that its
proximity to the likely site locations would help to minimise the
carbon footprint associated with the lithium chemicals produced.
Having both raw material and chemical production in country would
also maximise the overall economic benefit available to Portugal
from its lithium natural resources. As shareholders will be aware,
our discussions with Galp around possible spodumene supply
continued in the second half of the year, after the expiry of the
previous Heads of Agreement between the companies at the end of
May.
Outside of Portugal, groups in Europe planning to build merchant
plants have reached out to Savannah and a number of high quality
discussions are ongoing. While transport distances would be longer
to these plants than to potential sites in Portugal, any sales
partnerships with these groups would still represent a wholly
European endeavour, and compared to alternative sources of feed
from Africa, the Americas or Australia, these plants would be
producing 'low carbon' lithium chemicals if they took Barroso
concentrate.
Based on our current schedule, we expect to be in production
ahead of any of the conversion plants planned in Europe. If this
proves to be the case, then we may need to make short-term selling
arrangements for our concentrate until the conversion plants are
commissioned. Metal and commodity traders may be the best placed
groups to assist us with this, being able to both market the
Project's concentrate on our behalf and provide financing support
and assistance with logistics. Again, Savannah has already
attracted significant interest from groups in this sector of the
market, many of whom are looking to grow their businesses into the
battery metal space.
Finally, such is the concern about raw material supply among
consumers further downstream in the battery chain that we have also
been contacted in recent months by some of these groups, both
European and non-European. They are seeking to secure raw material
supply which they can then direct through their existing supply
chains. Discussions are continuing.
In summary, regarding offtake agreements, Savannah has multiple
options with national, regional or international avenues remaining
open to us whether it be trading directly with a conversion group,
or a company from downstream in the value chain. With our strong
cash balance, we are in a good position to work patiently at
striking the right agreements and not to just accept the deals that
are available right now.
Responsible Production is core to what we do
While continuing to push on the commercial front, we have also
been preparing to further enhance the Barroso Lithium Project's
environmental credentials as part of our wider formalisation of our
ESG framework. Our EIA speaks for itself in terms of the
commitments Savannah will put into action around either eliminating
or minimising the Project's individual impacts. However, we will be
happy to refine our plans as required based on feedback we receive
from the environmental regulator.
We have an evolving range of programmes to support the community
and the environment including:
-- The Benefit Sharing Programme - provides EUR500,000 per annum to worthy community programmes
-- Good Neighbour Plan - those things that we bring with us and
can have dual use by the community e.g., water from our storages
for firefighting
-- Community Owned Service Providers - community owned companies
to provide services to the Project e.g., progressive
rehabilitation
-- Land Stewardship Programme - reforestation of unused areas of
Project with appropriate native species
Equally we look to all opportunities for continuous improvement
of the Barroso Lithium Project.
A prime example is our major de-carbonisation initiative with
our commitment made in November to move towards net zero Scope 1
and 2 emissions once the Project is in operation, and to also
reduce the Scope 3 (indirect emissions, i.e., road haulage
transport) as much as possible. Following these commitments, we
were pleased to announce the initiation of a Decarbonisation
Strategy in March 2022, led by the Portuguese environmental
consultant, ECOPROGRESSO, part of the Quadrante Group.
This initiative is only the start of the build out of a strong
coalition of European industrial partnerships around the
Project.
On 30 March 2022 we further strengthened our 'decarbonisation'
team with the signature of a MoU with ABB, the global industrial
technology business with revenues of US$28.9b , which is providing
its expertise in automation and electrification in the mineral
production sector to Savannah under MoU . This will help us build
out integrated digital applications for operations, maintenance,
and other processes such as environmental performance optimisation.
The Project will very much be a showcase of European
innovation.
We have also been holding discussions with a number of major
mining equipment manufacturers which are all planning on developing
and commercialising zero or low emission vehicles during the period
the Project will be in operation. In regard to the electrical power
the Project will use, we continue to evaluate the options available
to increase the provision of renewable power above the already
impressive c.60% available through the Portuguese grid. Once our
suppliers and offtake partners are confirmed, we will work with
them to plan reductions of scope 3 emissions associated with
offsite haulage to our customers. Finalisation of the
Decarbonisation Strategy is expected in Q2 2022 and we look forward
to providing more follow-on news later in the year.
Following on from our commissioning of a Corporate ESMS in
Spring 2021, we have now also commissioned the creation of a
project specific system tailored to the Barroso Lithium Project. A
tendering process was initiated in Q1 2022, and the selected
consultants will work with our team to enhance and extend our
existing stakeholder engagement and environmental programmes and
policies to cover the current phase of project development and also
the construction and operating phases of the Project.
Figure 6: Savannah's lithium can play an important role in
reducing emissions from the European transport sector:
Source: Adobe stock images
On the ground in the Barroso
While the more formalised ESMS system for the Project is being
created, we have continued wholeheartedly with a range of ESG
initiatives.
While the pandemic and the associated vulnerability of the aging
local populations tempered our ability to engage directly with many
stakeholders in 2020 and 2021 we did maintain regular contact with
the communities throughout 2021 via advertising in the local press,
radio features and monthly newsletters distributed in local
villages. Regular virtual and physical meetings were held with
community leaders and stakeholders. We maintained a staffed
information centre in the village of Covas do Barroso, supported
local firefighters and helped with repairs to deteriorated local
housing of villagers. We appointed a village ambassador who has
been instrumental in supporting our local activities.
An online presentation of the Project was made to stakeholders
on 12 May 2021 and major community consultation presentation was
held in the Boticas Municipality auditorium on 19 May 2021 to
present and review the Environmental Impact Assessment. This was
supplemented with a site visit the following day.
So far this year we will shortly open a new office and
information centre in the main street of Boticas and we have
launched the "Litio do Barroso" magazine which will provide local
news and information about the Project to local villages in the
area of the Project. A comprehensive community mapping and opinion
gathering programme was completed in the villages of Covas do
Barroso and Dornelas in recent months and the results of the survey
are being compiled.
We have incorporated the Barroso Lithium Foundation which will
be responsible for the investment of up to EUR500,000 per annum,
once construction has begun, in worthy community programmes and
initiatives chosen by local people on the Foundation board. The
Foundation will also build a corpus of capital that will be
deployed following the conclusion of the Project and so provide a
long-term legacy for the region.
We continue to receive excellent support from many members of
the community who are excited about the opportunity that the
Project will bring to their families, their livelihoods and their
businesses. Local, regional and interest in the Project is
underscored by the hundreds of unsolicited job applications that we
are receiving.
Unfortunately, much of this has been obscured with push-back
from a small group of local activists who have tucked in beneath
the umbrella of a number of anti-mining groups, much of which is
led from outside Portugal. This in turn has been picked up in some
press articles. Despite his early support for the Project, the
mayor of Boticas has aligned himself with these groups.
Nevertheless, members of the community appreciate what our
Project offers. Like many parts of the Iberian Peninsula, the
region is suffering from a demographic collapse. The 2011
government census shows that the population of Boticas declined by
13.0% to 5,002 people in the ten years to 2011 while the population
of the village of Covas do Barroso declined by 26.7% to a total of
192 people, the vast majority of whom are elderly. The Boticas
region is one of the poorest in Portugal and has suffered from the
long-term flight of young people to Porto, Lisbon and points
beyond. The Project will help to reverse these trends bringing
prosperity and opportunity to the region, drawing young people to
return or to take up residency and to build quality lives for their
families.
We see strong support from people in the region whose inevitable
question is "When are you going to start?". Their eagerness is
matched by the hundreds of job applications we have received and
the broad support and interest of the Boticas business community in
seeing the Project develop.
Perhaps our most significant progress 'on the ground' was
represented by our land acquisition programme across the C-100
Mining Lease area. This has required significant investigation by
our team and consultants into existing land ownership and has
needed to be handled and transacted with great sensitivity within
the local community setting. To date we have signed 24 purchase and
sale contracts and executed 15 deeds involving 67 individual blocks
of land.
We were joined in litigation filed by the Parish of Covas do
Barroso in the Mirandela Fiscal and Administrative Court in
Portugal against the Republic of Portugal and the Ministry of
Economy as defendants. The litigation seeks to nullify certain
administrative actions by the defendants in June 2016 including the
addition of lithium to and the expansion in the area of the C-100
Mining Lease. The C-100 Mining Lease which contains the Barroso
Lithium Project is fully granted, has a term of 30 years to 2036
and remains in good standing.
Savannah's lawyers have confirmed their initial advice that the
claim by the Parish is without foundation. The claim has been
challenged by Savannah as the counter-interested party alongside
and we will be exploring all potential options, including making a
claim for damages against the plaintiff and its officers. Both the
Republic of Portugal and the Ministry of Economy as defendants have
now filed their defences.
The litigation neither impacts the Project's activities nor the
current Environmental Impact Assessment process which we believe is
moving to a conclusion.
The Environment - we care
Foremost in our plans is the responsible and innovative
development of the Barroso Lithium Project while eliminating or
mitigating individual impacts. Integral to this is our policy of
using best available techniques (BAT) to be a global example of
economy in the management of water, materials, energy and
resources.
The impact assessment carried out in the EIA study, establishes
the control and evolution of the more sensitive environmental
aspects, such as water resources quality and potential
vulnerability (surface and underground), air and sound environment,
vibrations, soils (quality and geochemistry), ecological systems,
landscape, social component, and local heritage.
Operations will be controlled, managed and reported to via a
comprehensive Environmental and Social Management System (ESMS) to
help implement and maintain Savannah's Environmental, Social and
Governance (ESG) commitments for the Project. The ESMS will be
aligned with internationally recognised ESG criteria, namely the
requirements of the International Finance Corporation (IFC)
Performance Standards on Environmental and Social Sustainability,
as well as the World Bank Group's Environmental, Mining and General
Health and Safety Standards.
Some 238 individual mitigation measures will be implemented and
an estimated investment of EUR5-6million in road/transport
infrastructure investment ensuring that the Project's traffic
by-passes local villages. Water trucks will suppress dust in dryer
periods while forestation and landscaping will help contain sound
and visual impacts.
A programme of progressive rehabilitation will be implemented
from day one and throughout the life of the Barroso Lithium
Project. We will be evaluating the potential for the use of the
site for pumped storage of renewable energy generated by wind
and/or solar at the end of the mineral lifecycle.
Our operating times are tailored to minimise discomfort for
local communities and impact on flora and fauna. Detailed computer
simulations show that the operation will meet the more demanding
legal night-time noise limit of 43db at all times of the day. The
only exception to this is blasting, each blast will last between
5-10 seconds and not exceed the legal limit of 55dB. Blasts will
only occur between Monday and Friday, between 12pm and 3pm on 3 to
4 days per week. There will be no blasting at weekends.
The Barroso Lithium Project is specifically designed to be
self-sufficient in and to minimise the amount of water that it
would require to support its operations while at the same time
having no impact on water available for local communities, villages
or towns. Neither will it have any impact on agriculture. In
Savannah's preferred model, water will not need to be abstracted
from any local rivers. Water for the project will be sourced from
surface water collected from part of the project's site footprint.
Savannah is obliged by the Portuguese environmental regulator to
capture surface water from the site footprint (contact water) in
sediment control structures so as to ensure that untreated contact
water does not flow into creeks, streams or rivers. Contact water
collected in the sediment control structures are of the type
commonly seen beside expressways which are designed to capture run
off from road surfaces. There will be no impacts on the ecological
flow of the Covas River in summer months.
The area of the contact water catchments to be developed to
collect surface water for the Project represent only 1.7% of the
area of the local Covas River watershed, 0.3% of the area of the
larger Beça River watershed and an insignificant 0.2% of the main
Tâmega watershed. In overall terms these numbers are not material
to water volumes in the region and, in any case, potentially
overstate the water volumes that will be captured in any year by
the Project.
85% of the water supporting operations will be recycled. In our
preferred model, contact water will be supplemented by water
sourced from the de-watering of the open cuts. Again, this is not
expected to impact community water supplies or local
agriculture.
Questions have been raised concerning the continued status of
the Barroso region as a Globally Important Agricultural Heritage
Systems (GIAHS) area. This status was awarded in 2018 and was not
intended to impact the integrity of existing economic activities in
the area such as mineral production. It is also important to
understand that the total Barroso Lithium Project concession area
occupies just 0.53% GIAHS area in the region and, depending on the
development alternative chosen by APA, the area of actual
disturbance on the concession area will be less than 0.25% of the
GIAHS area. The Project has no impact on the GIAHS classification.
Agricultural areas represent 10% of the Mining Lease land area. Of
the projected area for mining use and associated activities,
agricultural land represents just 3.1% (18.3ha) of the Mining Lease
area. This area is not material to agriculture in the areas around
the Barroso Lithium Project development. Today, one of the main
threats to this territorial dynamic is the depopulation and
abandonment of land, factors that pose a major risk of degradation
of the existing natural, cultural and built heritage, and which are
decisive for the classification of this region as a GIAHS Site. As
part of our plan we will look to implement measures with local
partners to recover agrarian system areas that have deteriorated as
a result of demographic changes in the area.
Preservation of fauna and flora will be a priority for Savannah.
Studies we have supported have shown that the Project area does not
intercept the known territory of any Iberian Wolf packs although
there are packs in surrounding areas. In the case of local water
mole and mussel populations particular care will be taken to
eliminate or at least minimise disturbances to riverbanks.
The quality of the soil will be monitored, managed, and
preserved, since the operation will not use chemical products that
might alter it. Topsoil will be removed, stored, safeguarded, and
cared for appropriately so that it can be re-laid during
rehabilitation as a basis for revegetation of native species.
The Barroso Lithium Project will employ local farmers for
progressive land rehabilitation during the life cycle of operations
and we are evaluating expanding this into a community owned company
to provide rehabilitation services to the Project and so build an
enduring new benefit for the community.
As part of our developing Land Stewardship Programme, land we
are acquiring which will not form an immediate part of the
Project's developed footprint will be reforested with guidance from
local authorities using native species appropriate to the area. We
will also work to the recovery of the site at the conclusion of the
Project's life with the requalification of these areas for
traditional agro-silvan-use e.g., honey, chestnuts, meat, sausages,
aromatic herbs, amongst others.
Intensive management of land is a major cause of biodiversity
loss in Portugal. Creating clear initiatives for removing invasive
non-native species and creating new native woodland will
demonstrate to stakeholders that we have a responsible stewardship
approach and our overall commitment. As part of this programme we
are also developing a Stewardship Policies Handbook so it can be
used in perpetuity.
Finally, as another example of both our commitment and our
transparency we will be implementing a sophisticated, sensor
network that will measure key environmental operating parameters
that will be made available in real time to stakeholders including
regulators via a mobile phone app.
EIA Progressing
The original 6,000-page EIA and Mine Plan documents were lodged
with the regulator in May of 2020. A community consultation process
was undertaken in May of 2021. The completion of APA's evaluation
has however has not been possible while it awaits the result of a
treaty mandated, cross-border consultation process with Spain and
the formation of a new government in Portugal following the calling
of a snap General Election held on 30 January 2022.
As our chairman has said, we are hopeful that the environmental
regulator in Portugal will approve our Project in coming months.
Savannah's team and its large team of subject matter specialists
have put in an amazing effort to design a project to international
standards and best practices, and we hope that the Barroso Lithium
Project will be held up as a positive case study for a new
generation of mining projects in Europe which are sourcing minerals
critical for European society in a responsible, low carbon, way
which brings economic and social benefits for all stakeholders.
While we await the outcome of the regulator's review, there is
much for us to do. In addition to remaining open to dialogue with
APA, we will continue to engage with all stakeholders and elevate
our position in Portuguese civil society and be as prepared as we
can for when a decision is made, and the next exciting phase can
begin.
Divesting Mozambique allows us to focus on our core business
We achieved our target in 2021 of bringing resolution on the
future of our investment in Mozambique with the sale of our
interest in the Mutamba Project to Rio Tinto. The long term and
sizeable financial and resourcing commitment we would have needed
to make to bring Mutamba to a final investment decision would have
made it challenging to achieve alongside the imperatives of the
Barroso Project's development. Our review looked at various styles
of development as well as introducing alternative corporate
structures around the project. After deliberation, the option to
transfer the project back to Rio, and for Savannah to exit
Mozambique with US$9.5m cash termination compensation represented
the best outcome.
I would like to add my sincere thanks to all our former staff
members for their hard work on what has been, at times, a
challenging project, and to wish them and Rio Tinto well for the
exciting journey towards production.
Outlook
Now with a singular focus on lithium in Europe, a strong cash
balance, strong lithium prices and a myriad of inbound investment
and offtake interest makes for an excellent starting position from
which we can push hard on all fronts to make the Barroso Lithium
Project Europe's first major lithium raw material production
centre.
It has not been an easy undertaking in the last two years, a
pandemic and now deeper tension at the heart of our region, and I
thank our staff for their efforts and our shareholders for their
support. There remains much to do but I'm sure we are all in
agreement that the prize is very much worth pursuing.
David Archer
Chief Executive Officer
Date: 5 April 2022
The financial statements below should be read in conjunction
with the notes contained within the full financial report which
will be available online at the Company's website at:
https://www.savannahresources.com/investors/corporate-documents/
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 31
DECEMBER 2021
2021 2020*
GBP GBP
CONTINUING OPERATIONS
Revenue - -
Other Income - 26,099
Administrative Expenses (3,305,649) (2,595,738)
Foreign exchange (loss)/gain (213,088) 37,580
OPERATING LOSS (3,518,737) (2,532,059)
Finance Income 671 4,819
Finance Costs (139) (765)
------------- -------------
LOSS FROM CONTINUING OPERATIONS BEFORE
AND AFTER TAX (3,518,205) (2,528,005)
GAIN/(LOSS) ON DISCONTINUED OPERATIONS
BEFORE AND AFTER TAX 2,371 (5,797,753)
------------- -------------
LOSS BEFORE AND AFTER TAX ATTRIBUTABLE
TO EQUITY OWNERS OF THE PARENT (3,515,834) (8,325,758)
------------- -------------
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified
to profit or loss:
Net change in Fair Value Through Other
Comprehensive Income of Equity Investments 82,006 320,151
Items that will or may be reclassified
to profit or loss:
Exchange Losses arising on translation
of foreign operations 154,815 (163,284)
------------- -------------
OTHER COMPREHENSIVE INCOME FOR THE YEAR 236,821 156,867
------------- -------------
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
ATTRIBUTABLE TO EQUITY OWNERS OF THE
PARENT (3,279,013) (8,168,891)
============= =============
Loss per share attributable to equity
owners of the parent expressed in pence
per share:
Basic and diluted
From Operations (0.22) (0.62)
From Continued Operations (0.22) (0.19)
From Discontinued Operations 0.00 (0.43)
* The disclosures as at 31 December 2020 have been re-presented
so that the operations that are discontinued at the end of the 2021
financial year are classified as discontinued.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2021
2021 2020
GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible Assets 14,137,817 17,246,222
Right-of-Use Assets 5,390 21,709
Other Intangible Assets - 6,682
Property, Plant and Equipment 676,536 973,528
Other Non-Current Assets 69,542 73,530
Bank Deposits - 590,175
-------------- --------------
TOTAL NON-CURRENT ASSETS 14,889,285 18,911,846
-------------- --------------
CURRENT ASSETS
Equity instruments at FVTOCI 31,575 606,245
Trade and Other Receivables 962,058 194,301
Other Current Assets 19,300 13,670
Cash and Cash Equivalents 13,002,084 2,000,209
-------------- --------------
TOTAL CURRENT ASSETS 14,015,017 2,814,425
TOTAL ASSETS 28,904,302 21,726,271
============== ==============
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share Capital 16,889,598 14,309,910
Share Premium 41,693,178 34,474,884
Merger Reserve 6,683,000 6,683,000
Foreign Currency Reserve (38,726) (193,541)
Warrant Reserve - 12,157
Share Based Payment Reserve 305,095 393,865
FVTOCI Reserve (21,437) 276,712
Retained Earnings (38,284,665) (35,450,713)
-------------- --------------
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE PARENT 27,226,043 20,506,274
-------------- --------------
LIABILITIES
NON-CURRENT LIABILITIES
Lease Liabilities - 1,130
-------------- --------------
TOTAL NON-CURRENT LIABILITIES - 1,130
-------------- --------------
CURRENT LIABILITIES
Lease Liabilities 1,132 11,608
Trade and Other Payables 1,677,127 1,207,259
-------------- --------------
TOTAL CURRENT LIABILITIES 1,678,259 1,218,867
-------------- --------------
TOTAL LIABILITIES 1,678,259 1,219,997
-------------- --------------
TOTAL EQUITY AND LIABILITIES 28,904,302 21,726,271
============== ==============
The Financial Statements were approved and authorised for issue
by the Board of Directors on 5 April 2022 and were signed on its
behalf by:
David Archer
Chief Executive Officer
Company number: 07307107
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2021
2021 2020
GBP GBP
ASSETS
NON-CURRENT ASSETS
Investments in Subsidiaries 333,831 621,582
Other Intangible Asset - 5,948
Other Receivables 26,184,402 32,995,016
Other Non-Current Assets 6,776 6,776
------------- --------------
TOTAL NON-CURRENT ASSETS 26,525,009 33,629,322
------------- --------------
CURRENT ASSETS
Equity instruments at FVTOCI 31,575 604,136
Trade and Other Receivables 207,129 47,908
Cash and Cash Equivalents 11,085,944 1,237,876
------------- --------------
TOTAL CURRENT ASSETS 11,324,648 1,889,920
TOTAL ASSETS 37,849,657 35,519,242
============= ==============
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share Capital 16,889,598 14,309,910
Share Premium 41,693,178 34,474,884
Merger Reserve 6,683,000 6,683,000
Warrant Reserve - 12,157
Share Based Payment Reserve 305,095 393,865
FVTOCI Reserve (21,437) 276,712
Retained Earnings (28,707,640) (21,455,793)
TOTAL EQUITY 36,841,794 34,694,735
------------- --------------
LIABILITIES
CURRENT LIABILITIES
Trade and Other Payables 1,007,863 824,507
TOTAL LIABILITIES 1,007,863 824,507
------------- --------------
TOTAL EQUITY AND LIABILITIES 37,849,657 35,519,242
============= ==============
The Company total comprehensive loss for the financial year was
GBP7,851,723 (2020: GBP4,833,165).
The Financial Statements were approved and authorised for issue
by the Board of Directors on 5 April 2022 and were signed on its
behalf by:
David Archer
Chief Executive Officer
Company number: 07307107
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31
DECEMBER 2021
Share
Foreign Based
Share Share Merger Currency Warrant Payment FVTOCI Retained Total
Capital Premium Reserve Reserve Reserve Reserve Reserve Earnings Equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January
2020 12,974,598 33,511,787 6,683,000 (30,257) 975,679 410,121 (43,439) (28,163,712) 26,317,777
---------------- ------------ ------------ ----------- ----------- ----------- ----------- ----------- -------------- -------------
Loss for the
year - - - - - - - (8,325,758) (8,325,758)
Other
Comprehensive
Income - - - (163,284) - - 320,151 - 156,867
------------ ------------ ----------- ----------- ----------- ----------- ----------- -------------- -------------
Total
Comprehensive
Income for
the
year - - - (163,284) - - 320,151 (8,325,758) (8,168,891)
Issue of share
capital (net
of expenses) 1,300,113 920,537 - - - - - - 2,220,650
Shares issued
in lieu 20,199 16,160 - - - - - - 36,359
Share based
payment
charges - - - - - 58,979 - - 58,979
Exercise of
options 15,000 26,400 - - - (16,650) - 16,650 41,400
Lapse of
options - - - - - (58,585) - 58,585 -
Lapse of
warrants - - - - (963,522) - - 963,522 -
------------ ------------ ----------- ----------- ----------- ----------- ----------- -------------- -------------
At 31 December
2020 14,309,910 34,474,884 6,683,000 (193,541) 12,157 393,865 276,712 (35,450,713) 20,506,274
---------------- ------------ ------------ ----------- ----------- ----------- ----------- ----------- -------------- -------------
Loss for the
year - - - - - - - (3,515,834) (3,515,834)
Other
Comprehensive
Income - - - 154,815 - - 82,006 - 236,821
---------------- ------------ ------------ ----------- ----------- ----------- ----------- ----------- -------------- -------------
Total
Comprehensive
Income for
the
year - - - 154,815 - - 82,006 (3,515,834) (3,279,013)
Issue of share
capital (net
of expenses) 2,579,688 7,218,294 - - - - - - 9,797,982
Share based
payment
charges - - - - - 200,800 - - 200,800
Lapse of
options - - - - - (289,570) - 289,570 -
Lapse of
warrants (12,157) - - 12,157 -
Disposal of
FVTOCI
investments - - - - - - (380,155) 380,155 -
At 31 December
2021 16,889,598 41,693,178 6,683,000 (38,726) - 305,095 (21,437) (38,284,665) 27,226,043
================ ============ ============ =========== =========== =========== =========== =========== ============== =============
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share Capital Amounts subscribed for share capital at nominal value.
Share Premium Amounts subscribed for share capital in excess of nominal
value less costs of fundraising.
Merger Reserve Amounts subscribed for share capital in excess of nominal
value in respect of the consideration paid in an acquisition
arrangement, when the issuing company takes its interest
in another company from below 90% to 90% or above equity
holding.
Foreign Currency Gains/losses arising on retranslating
Reserve the net assets of
group operations into Pound Sterling.
Warrant Reserve Fair value of the warrants issued.
Share Based Represents the accumulated balance of share based payment
Payment Reserve charges recognised in respect of asset acquired and share
options granted by Savannah Resources Plc, less transfers
to retained losses in respect of options exercised, lapsed
and forfeited.
FVTOCI Reserve Cumulative changes in fair value of equity investments classified
at fair value through other comprehensive income (FVTOCI).
Retained Earnings Cumulative net gains and losses recognised in the Consolidated
Statement of Comprehensive Income and other transactions
recognised directly in Retained Earnings.
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31
DECEMBER 2021
Share
Based
Share Share Merger Warrant Payment FVTOCI Retained Total
Capital Premium Reserve Reserve Reserve Reserve Earnings Equity
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January
2020 12,974,598 33,511,787 6,683,000 975,679 410,121 (43,439) (17,341,234) 37,170,512
---------------- ------------ ------------ ----------- ----------- ----------- ----------- -------------- -------------
Loss for the
year - - - - - - (5,153,316) (5,153,316)
Other
Comprehensive
Income - - - - - 320,151 - 320,151
----------------
Total
Comprehensive
Income for
the
year - - - - - 320,151 (5,153,316) (4,833,165)
Issue of share
capital (net
of expenses) 1,300,113 920,537 - - - - - 2,220,650
Shares issued
in lieu 20,199 16,160 - - - - 36,359
Share based
payment
charges - - - - 58,979 - - 58,979
Exercise of
options 15,000 26,400 - - (16,650) - 16,650 41,400
Lapse of
options - - - - (58,585) - 58,585 -
Lapse of
warrants - - - (963,522) - - 963,522 -
---------------- ------------ ------------ ----------- ----------- ----------- ----------- -------------- -------------
At 31 December
2020 14,309,910 34,474,884 6,683,000 12,157 393,865 276,712 (21,455,793) 34,694,735
---------------- ------------ ------------ ----------- ----------- ----------- ----------- -------------- -------------
Loss for the
year - - - - - - (7,933,729) (7,933,729)
Other
Comprehensive
Income - - - - - 82,006 - 82,006
Total
Comprehensive
Income for
the
year - - - - - 82,006 (7,933,729) (7,851,723)
Issue of share
capital (net
of expenses) 2,579,688 7,218,294 - - - - - 9,797,982
Share based
payment
charges - - - - 200,800 - - 200,800
Lapse of
options - - - - (289,570) - 289,570 -
Lapse of
warrants - - - (12,157) - - 12,157 -
Disposal of
FVTOCI
investments - - - - - (380,155) 380,155 -
At 31 December
2021 16,889,598 41,693,178 6,683,000 - 305,095 (21,437) (28,707,640) 36,841,794
================ ============ ============ =========== =========== =========== =========== ============== =============
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share Capital Amounts subscribed for share capital at nominal value.
Share Premium Amounts subscribed for share capital in excess of nominal
value less costs of fundraising.
Merger Reserve Amounts subscribed for share capital in excess of nominal
value in respect of the consideration paid in an acquisition
arrangement, when the issuing company takes its interest
in another company from below 90% to 90% or above equity
holding.
Warrant Reserve Fair value of the warrants issued.
Share Based Represents the accumulated balance of share based payment
Payment Reserve charges recognised in respect of asset acquired and
share options granted by Savannah Resources Plc, less
transfers to retained losses in respect of options
exercised, lapsed and forfeited.
FVTOCI Reserve Cumulative changes in fair value of equity investments
classified at fair value through other comprehensive
income (FVTOCI).
Retained Earnings Cumulative net gains and losses recognised in the Consolidated
Statement of Comprehensive Income and other transactions
recognised directly in Retained Earnings.
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARED 31 DECEMBER
2021
2021 2020
GBP GBP
Cash flows used in operating activities
Loss for the year (3,515,834) (8,325,758)
Depreciation and amortisation charges 35,369 44,663
Impairment of other assets 5,948 -
Share based payment charge 200,800 58,979
Shares issued in lieu of payments
to suppliers - 36,359
Finance income (671) (38,747)
Finance expense 139 765
Exchange losses / (gains) 213,088 (37,580)
Loss on sale of discontinued operations - 5,373,633
Gain on relinquishment of the rights
and obligations of discontinued
operations (627,078) -
Cash flow used in operating activities before
changes
in working capital (3,688,239) (2,887,686)
(Increase) /Decrease in trade and
other receivables (267,267) 176,312
Increase in trade and other payables 451,801 443,541
------------- -------------
Net cash used in operating activities (3,503,705) (2,267,833)
------------- -------------
Cash flow used in investing activities
Purchase of intangible exploration
assets (1,603,208) (1,577,532)
Purchase of right-to-use assets (798) -
Purchase of tangible fixed assets (633,090) (2,721)
Proceeds from sale of investments 654,347 3,272
Bank deposits for mining licences - 57,319
Interest received 671 38,747
Proceeds from sale of discontinued
operations - 27,543
Proceeds from relinquishment of
the rights and obligations of discontinued
operations 6,506,852 -
Net cash from/(used in) investing
activities 4,924,774 (1,453,372)
Cash flow from financing activities
Proceeds from issues of ordinary
shares (net of expenses) 9,797,982 2,220,650
Proceeds from exercise of share
options - 41,400
Principal paid on lease liabilities (11,607) (18,310)
Interest paid on lease liabilities (139) (765)
Net cash from financing activities 9,786,236 2,242,975
Increase/(Decrease) in Cash and
Cash Equivalents 11,207,305 (1,478,230)
Cash and Cash Equivalents at beginning
of year 2,000,209 3,484,781
Exchange losses on cash and cash
equivalents (205,430) (6,342)
Cash and Cash Equivalents at end
of year 13,002,084 2,000,209
============= =============
COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER
2021
2021 2020
GBP GBP
Cash flows used in operating activities
Loss for the year (7,933,729) (5,153,316)
Impairment of financial assets 39,215 (404,684)
Impairment of other assets 5,948 -
Share based payment reserve charge 200,800 58,979
Shares issued in lieu of payments
to suppliers - 36,359
Finance income (671) (4,819)
Exchange losses / (gains) 1,756,702 (1,289,781)
Loss on sale of subsidiaries - 5,438,172
Loss on relinquishment of the rights
and obligations of discontinued
operations 4,439,229 -
------------ -------------
Cash flow used in operating activities
before changes
in working capital (1,492,506) (1,319,090)
(Increase)/Decrease in trade and
other receivables (181,160) 258,071
Increase in trade and other payables 34,184 439,527
------------ -------------
Net cash used in operating activities (1,639,482) (621,492)
------------ -------------
Cash flow used in investing activities
Investment in subsidiaries - (36,180)
Loans to subsidiaries (4,784,700) (3,658,442)
Proceeds from repayment of loans
to subsidiaries 6,014,021 -
Proceeds from sale of investments 654,347 -
Proceeds from sale of subsidiaries - 27,543
Interest received 671 4,819
Net cash from/(used in) investing
activities 1,884,339 (3,662,260)
------------ -------------
Cash flow from financing activities
Proceeds from issues of ordinary
shares (net of expenses) 9,797,982 2,220,650
Proceeds from exercise of share
options - 41,400
Net cash from financing activities 9,797,982 2,262,050
------------ -------------
Increase/(Decrease) in Cash and
Cash Equivalents 10,042,839 (2,021,702)
Cash and Cash Equivalents at beginning
of year 1,237,876 3,277,943
Exchange losses on cash and cash
equivalents (194,771) (18,365)
Cash and Cash Equivalents at end
of year 11,085,944 1,237,876
============ =============
** ENDS **
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FR ZZGGDZKGGZZZ
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April 06, 2022 02:01 ET (06:01 GMT)
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