TIDMSAV
RNS Number : 7375X
Savannah Resources PLC
24 February 2017
Savannah Resources Plc / Index: AIM / Epic: SAV / Sector:
Mining
24 February 2017
Savannah Resources Plc
Financial Results for the Year Ended 31 December 2016
and
Notice of Annual General Meeting
Savannah Resources plc (AIM: SAV) ('Savannah' or the 'Company')
announces the release of its audited financial results for the year
ended 31 December 2016 along with the notice of its Annual General
Meeting, which is to be held in London on 26 April 2017.
HIGHLIGHTS
Operations
-- Signed a landmark Consortium Agreement with Rio Tinto over
the world-class Mutamba heavy mineral sands deposits in
Mozambique;
-- Reported a substantial Indicated and Inferred Mineral
Resource Estimate for the Mutamba Project;
-- Scoping Study of the Mutamba Project commenced in 2016 and is
nearing completion with its focus on defining a potential dry
mining operation for staged, early development;
-- Consistent high-grade drill results from copper projects in
Oman with studies underway ahead of mining, targeted to commence in
late 2017 as copper prices are predicted to increase; and
-- Expanded its project portfolio with the grant of two lithium
exploration licences in Finland in the context of significant
demand and favourable pricing environment due to increasing demand
for Electric Vehicles, off grid storage and lithium-ion
batteries.
Financial
-- Raised a total of GBP4.04m in 2016 including private
placements to both new and existing shareholders in a challenging
funding environment, and, post year end, a further GBP2.24m in
February 2017;
-- Strong support from Al Marjan Limited as a cornerstone shareholder;
-- Operating loss of GBP1.76m reflects the increased tempo of operational activities in 2016;
-- GBP1.9m increase in the book value of our exploration and evaluation assets;
-- Cash position of approximately GBP3.02m following the issue
of new shares to both new and existing shareholders as announced on
22 February 2017.
David Archer, Savannah's Chief Executive Officer said today,
"2016 was a very productive year for Savannah and has enabled us to
start 2017 with three projects each at exciting stages of
development. Thanks to the Consortium Agreement we entered into
with Rio Tinto regarding the Mutamba Project, we have secured and
amalgamated our individual projects in Mozambique into a globally
significant ilmenite project at a time of rising prices, increased
demand and declining inventories. We are delighted that the project
appears to be amenable to dry mining which should provide a faster,
lower-cost and flexible route to production. In parallel, we
continue to make solid progress towards copper production in Oman
from the Mahab and Maqail deposits. In the meantime, we look
forward to providing updates on the lithium potential of the newest
additions to our portfolio in Finland, providing longer-term
potential to our core heavy mineral sands and copper projects where
we expect to see significant milestones being achieved throughout
2017."
Availability of Annual Report and Financial Statements
Copies of the Company's full Annual Report and Financial
Statements are expected to be posted to shareholders shortly and
will also be made available to download today from the Company's
website www.savannahresources.com.
Annual General Meeting
The Company's next Annual General Meeting ('AGM') will be held
at the Collingwood Room at the Company's office at 1 Northumberland
Avenue, Trafalgar Square, London, WC2N 5BW, on 26 April 2017 at
11:00 a.m. A formal Notice of AGM and proxy form are expected to be
posted to shareholders shortly and will be available to download
today from the Company's website at www.savannahresources.com.
For further information please visit www.savannahresources.com
or contact:
David Archer Savannah Resources Tel: +44 20 7117
plc 2489
David Hignell / Gerry Northland Capital Tel: +44 20 3861
Beaney (Nominated Partners Ltd 6625
Adviser)
Jon Belliss / Elliot Beaufort Securities Tel: +44 20 7382
Hance Ltd 8300
(Corporate Broker)
Charlotte Page / St Brides Partners Tel: +44 20 7236
Lottie Brocklehurst Ltd 1177
Chairman's Statement
The mineral resource sector opens 2017 with a much more
favourable outlook compared to 2016, with higher commodity prices
promoting greater optimism. At Savannah we are feeling particularly
energised for the year ahead, having successfully strengthened our
asset base in order to create a clear development pipeline
portfolio, offering the potential for both near and longer term
value accretion.
At the fore of this portfolio is our Mutamba Heavy Mineral Sands
Project in Mozambique, which is being developed under a Consortium
Agreement with Rio Tinto. This provides us with the opportunity to
earn a 51% interest in a world-class heavy mineral sands project in
Mozambique. We established our credentials in the country via our
existing Jangamo licence and the tie-up with Rio Tinto stands as an
endorsement of our highly active development strategy, as evidenced
by having delineated a substantial Mineral Resource Estimate for
the enlarged project within less than a month of signing the
agreement with Rio Tinto in October 2016. We remain committed to
expediting the development of the project.
To this end, a drilling programme has already been completed
targeted at increasing the current Mineral Resource Estimate and
defining areas of high grade mineralisation for potential early
development. Additionally, a scoping study is nearing completion. A
pilot plant is due to be commissioned mid-year so that a proof of
concept bulk sampling programme can be undertaken. Furthermore, the
resource looks amenable to dry mining techniques, and of supporting
phased mining development, which will allow us to commence mining
operations in the near term.
Alongside this, in Oman, we have a notably high grade copper
Indicated and Inferred Mineral Resource at Block 5, which is our
main focus for an initial mine development. Mining licence
applications for the Mahab 4 and Maqail South deposits have been
submitted, targeting the commencement of operations in late 2017,
which I believe strategically positions the Company to take
advantage of stronger copper prices expected in late 2017 and into
2018. Ahead of this, work will be undertaken to determine the best
processing route and finalise feasibility studies. This will build
upon the recent metallurgical work conducted at Mahab 4, which
confirmed the significant commercial appeal of our projects by
indicating that a saleable copper concentrate with recoveries of
over 90% can be produced from a relatively simple float
process.
Block 4 offers further upside potential; the licence hosts a
number of previously producing copper mines and initial exploration
has identified the potential for these assets to host resources to
supplement those already defined at Block 5. The Dog's Bone target
at Aarja in particular is recognised for its resource potential
and, looking ahead, the existing underground access from historical
mining activities should enable rapid development with low capital
expenditures. We will continue to undertake strategic exploration
work at Block 4 in order to further prove up the licence
prospectivity whilst we simultaneously centre our efforts on
achieving production at Block 5 later this year. As a result of the
significant progress that has been made on both Blocks 4 and 5, and
as part of an ongoing portfolio review process, Savannah has
terminated its interest in Block 6 in Oman, which was at a very
early stage of exploration.
Finally, a major development for the year under review was the
expansion of our asset portfolio through the addition of two new
licences in Finland, which are prospective for lithium. Lithium is
popular with investors at present and the emergence of the Electric
Vehicle is powering a surge in lithium-ion batteries and the
battery energy storage on a grid-, industrial-, commercial- and
consumer-scale is reaching commercial viability, suggesting that
the Energy Storage sector could grow materially over the next 10
years, leading to significant demand and a favourable pricing
environment for lithium.
The exploration tenements are at an early stage of evaluation
and initial groundwork has already identified seven pegmatites with
anomalous lithium - two on Somero and five on Erajarvi. The
addition to our portfolio of these highly prospective assets
provides Savannah with the potential for longer-term growth, with a
steady flow of operational activity over the coming years.
Accordingly, we intend to undertake work to improve our
understanding of the resource potential of these areas, but would
like to affirm that our primary focus for 2017 will be on our
Mozambique and Omani assets.
Corporate Update
We are delighted that Al Marjan Ltd ('Al Marjan') increased its
investment in the Company at the start of 2016, taking its interest
in Savannah to 29.99% in March 2016. In light of Al Marjan becoming
our largest shareholder and underpinning their intention to remain
a supportive investor going forward, Mr. Maqbool Ali Sultan (former
Minister of Commerce and Industry in Oman) and Mr. Imad Kamal Abdul
Redha Sultan joined the Board in July 2016 as representatives of Al
Marjan, assuming the roles of Non-Executive Directors of the
Company, with Mr. Manohar Pundalik Shenoy and Mr. Murtadha Ahmed
Sultan appointed as their respective alternates. We are pleased to
welcome them to the Board and they have already materially
contributed to the Company thanks to their proven operating
experience both in Oman and internationally.
Financial Overview
As is to be expected with an active exploration group, the Group
is reporting a loss for the year of GBP1.76m (2015: GBP3.11m). The
significant driver was staff costs amounting to GBP1.02m. Other
Comprehensive Income for the year amount of GBP0.48m (2015:
GBP0.69m) was primarily due to the foreign exchange gain from the
retranslation of the financial statements of subsidiaries with
functional currencies not denominated in the presentation currency,
GBP, and to the revaluation of loans to subsidiaries which have
seen the translated value increase due to the weakness of GBP
against major currencies in 2016 following the UK's referendum on
membership of the EU. Net assets have increased to GBP6.07m (2015:
GBP3.58m) predominantly due to the increase in the exploration
activity during the year with additions in Exploration and
evaluation assets of GBP1.46m as at 31 December 2016, and the
increase in Cash and cash equivalents by GBP0.80m as a result of
well supported capital raisings during the year.
In February and March 2016 Al Marjan increased their investment
in the Company, further endorsing its support of Savannah's growth
strategy, with the placing of 98,295,329 new ordinary shares at a
placement price of 1.78p per ordinary share. This raised a total of
GBP1.75 million (before expenses), resulting in Al Marjan becoming
the Company's largest shareholder with a holding of 29.99% in the
Company's issued share capital. In September 2016 the Company
raised a further GBP1.42m cash (before expenses) through the
placing of 40,708,973 new ordinary shares at a significantly
increased placing price of 3.5p per ordinary share. Following this
placement the Company issued 23,576,741 new ordinary shares at a
price of 3.5p to Al Marjan, David Archer and Matthew King, with
both Al Marjan and David Archer restoring their respective
shareholding percentages in the Company to those prior to the
placement in September which was undertaken whilst the Company was
in a close period. This raised a total of GBP0.83m cash (before
expenses). Finally in November 2016 1,500,000 new ordinary shares
at a price of 3.0p were issued in the exercise of share options by
a former employee.
As of 31 December 2016, the Group had a cash position of GBP1.17
million. On 21 February 2017 the Company agreed a cash subscription
of GBP2.24 million cash (before expenses). The Company will have a
pro-forma cash balance of approximately GBP3.02 million following
the receipt of the Placing and Subscription proceeds. This is
expected to be increased by a further GBP1.01 million cash from
Directors and their related parties (Al Marjan Ltd) when the
Company is not in a "close period", with letters of intent received
to this effect.
Social Responsibility
Maintaining positive relationships with the communities in which
we operate, supporting regional development, and ensuring high
social and environmental standards remains a priority for Savannah
and our operating partners. We have developed a very active
programme of engagement with the communities close to our
operations in Oman and this has already paid dividends via support
for our mining lease applications with a letter of no objection
from the community being received already for the mine development
at Maqail South. We will adopt a similar process of engagement in
Mozambique, focusing on positive interaction with all parties and
honest, timely and transparent communication with all our
stakeholders.
Outlook
Savannah has strategically positioned itself for growth having
established a portfolio of assets offering both near and longer
term prospects in three commodities, each of which have a
favourable pricing outlook at present, albeit this must be tempered
somewhat by the uncertain outlook for global trade growth.
2017 is expected to be a significant year for the Company in
which we transform from a development to a production company, with
copper mining operations scheduled to commence in Oman towards the
end of the year.
In the medium term and of greater significance is the potential
of bringing the globally significant Mutamba Heavy Mineral Sands
Deposit into development via our Consortium Agreement with Rio
Tinto.
Longer term, our lithium assets may enable us to participate in
the renewable energy market.
Our plans are to develop the Omani and Mozambique assets in
sequence - something we are able to achieve thanks to the
experienced operating teams we have established and are developing
in Oman and Mozambique respectively, supported by a
well-credentialed executive management team and Board of
Directors.
We look forward to keeping shareholders updated with our active
development strategy and I would like to take this opportunity to
thank all our stakeholders for their continued support. I would
also like to thank our team for their ever consistent hard-work. We
anticipate making further additions to our team to match the needs
of our growing company in the coming year and alongside this we are
using a well-respected consulting group to help develop a long-term
incentive scheme. I look forward to the opportunities ahead.
Matthew King
Chairman
Date: 23 February 2017
Chief Executive's Report
Savannah has established a multi-commodity development portfolio
spanning heavy mineral sands in Mozambique, copper in Oman and
lithium in Finland. Operations in Oman and Mozambique offer near to
mid-term development potential whilst Finland provides a longer
term development opportunity. By establishing a portfolio of assets
that are at a strategically staged point of their development, the
Company is positioned to have consistently active news flow and
clear and demonstrable value accretive milestones.
Heavy Mineral Sands, Mozambique (Consortium Agreement with Rio
Tinto)
October 2016 saw a landmark achievement for Savannah Resources;
the signing of a new Consortium arrangement with Rio Tinto covering
Savannah's Jangamo Project and Rio Tinto's Chilubane and Mutamba
Projects, including the Jangamo, Dongane and Ravene heavy mineral
sands deposits. The unified project, known as the Mutamba Project
('Mutamba'), marks a significant step in the evolution of these
mineral sands assets, creating an amalgamated project comprising a
globally significant resource.
Savannah operates the Mutamba Project and has an initial 10%
beneficial interest in the combined mineral sands project, with the
potential to increase this up to a 51% beneficial interest on the
achievement of the following milestone developments: delivery of a
scoping study - 20%; delivery of a pre-feasibility study - 35%; and
delivery of a feasibility study - 51%. Additionally, the Consortium
Agreement includes an offtake agreement on commercial terms for the
sale of 100% of production to Rio Tinto (or an affiliate).
Our focus at Mutamba is to define a potential dry mining
operation for staged, early development. In line with this
fast-paced development approach, within less than a month of
finalising the agreement with Rio Tinto, a major milestone was
achieved with the delineation of an initial Indicated and Inferred
Mineral Resource Estimate of 3.5 billion tonnes at 3.8% Total Heavy
Minerals ('THM'), containing 81 million tonnes ('Mt') of ilmenite,
2.2Mt rutile and 3.8Mt zircon, with 52% in the Indicated Category
and 48% in the Inferred Category. This is a significant Mineral
Resource, and highlights the project's potential to be a key
producer of titanium feedstocks.
While Mutamba is already a globally significant accumulation of
heavy mineral sands there is potential to increase the overall
Mineral Resource Estimate for the combined deposits. The initial
Mineral Resource was defined at the Jangamo and Dongane deposits
and a Mineral Resource estimation in respect of the Ravene and
Chilubane deposits is yet to be completed. Drilling has been
completed at Ravene, and data compilation and a detailed review of
the Chilubane is to be undertaken.
Results from drilling at Ravene, together with the Mineral
Resource Estimate will form the focus for the current scoping study
for the evaluation of an initial phase, low capex, long life, dry
mining operation around a potential 200Mt well graded resource.
This will centre on, in particular, large areas of >5%THM that
have been defined. Mineral sands industry expert TZ Minerals
International ('TZMI') has been commissioned to conduct the study,
with completion expected by the end of Q1 / early Q2 2017.
Alongside this, leading Mozambican environmental consultants ERM
and IMPACTO have been appointed to conduct environmental studies
for, respectively, the Mutamba Project North and Chilubane deposit;
an environmental study is a key document which is required for the
lodging of a mining concession for any potential mine development.
Furthermore, by appointing two contractors we are able to ensure
the timely completion of these studies, which are expected to be
finalised by the end of Q1 / early Q2 2017.
The completion of these studies will enable the commencement of
a number of other value accretive initiatives, including marketing,
pre-feasibility and feasibility studies. The Consortium partners
intend to apply for a mining concession later this year. We are
planning to commission a pilot plant which is already on site and
which will enable a proof-of-concept bulk sampling programme to be
undertaken. This bulk sampling programme will help to determine
commercially viable processing routes ahead of commencing mine
construction, which is targeted to commence in 2018.
The Mozambique coastline hosts some of the largest ilmenite
dominant heavy mineral sands deposits in the world. The deposits
that comprise the Mutamba Project are favoured in being close to
existing road, grid power, water and port infrastructure - the ENI
1 highway, the electricity grid and sub-station at Lindela and the
sheltered harbour at Inhambane. The Project also benefits from the
Jangamo and Chilubane camp facilities and equipment. As part of the
Consortium Agreement Rio Tinto's former project team has been
employed by Savannah and integrated into Savannah's existing
in-country team, meaning the Company is ideally poised to deliver
on its targeted development goals.
Copper with additional gold upside, Oman
In Oman we hold a highly prospective asset portfolio covering
1,006km(2) across Block 4 and Block 5. Our focus is on building a
resource inventory to support high margin, low cost copper
production, with mining targeted to commence in late 2017.
Block 5 is the most advanced of our licences in Oman. The
project hosts the Mahab 4 and Maqail South deposits, which
collectively have a current Indicated and Inferred Mineral Resource
of 1.7Mt at 2.2% copper. These targets remain open and drill work
was undertaken during the period to extend the high-grade portions
of both deposits. Results received are consistent and underscore
the high-grade nature of the deposits, including 10.05m at 10.51%
copper, 2.67% zinc and 0.4g/t gold from 34.95m at Mahab 4 and 5.8m
at 4.42% copper and 0.2g/t gold from 58.6m at Maqail South, which
should lead to an updated Mineral Resource estimate in Q1 2017.
Subject to licensing, we continue to target a start to mining
operations in late-2017 in order to produce first copper
concentrate in 2018.
The results of the drilling will feed into feasibility studies
and ultimately Ore Reserves, which will be our focus of development
this year, alongside defining final processing routes. At Maqail
South, an open-cut mine development is planned, whilst at Mahab 4,
where the larger resource is located, underground mining will be
conducted. Whilst underground mining is more expensive than
open-pit mining, the surface area required associated with an
underground development is much smaller and easier to manage,
meaning there is less impact on our neighbours and the
environmental impact is far smaller. Mining licences, based on
these proposed development plans, have been submitted and work has
begun relating to the requisite Environmental Impact Assessment
('EIA'). Commencement of the EIA is a key milestone towards
commencing copper mining and leading Omani Environmental
Consultant, Geo Resources Consultancy, has been contracted to
oversee the work. Discussions with a total of eight Government
ministries have commenced and finalisation of the EIA is expected
in Q2 2017.
Results from preliminary metallurgical test work at Mahab 4,
received post-period end in February 2017, are encouraging in
highlighting the commercial appeal of the deposit, confirming that
floatation test copper recoveries exceeding 90% and that a saleable
copper concentrate can be produced. Importantly, test work points
towards Mahab being a soft ore, with chalcopyrite identified as the
sole copper bearing mineral, which should mean that copper produced
ought to benefit from favourable overall processing costs with work
suggesting a relatively simple float process is required to produce
a clean and desirable copper concentrate. Such a product is likely
to be keenly sought after by off-takers and smelters. Adding to
this, there is potential for both gold and silver by-product
credits. There is also the possibility for a zinc co-product to be
produced, but further work is required to explore this opportunity.
Additional test work is also underway to further refine the
recovery process and try to improve the overall copper concentrate
grades.
Block 4 offers additional upside to our Block 5 production
prospects. This licence hosts four targets - Aarja, Bayda and
Lasail - which were part of previously producing mines commercially
mined between 1980 and 1994. Underground access is still present,
which would facilitate rapid development. During the year under
review, work has been undertaken to better determine the resource
potential of these assets. At Aarja, three primary mineralised
areas have been identified, with Dog's Bone emerging as the
principle zone of specific interest. Drilling at Dog's Bone has
confirmed the location and continuity of known mineralisation, with
results including 5.75m at 1.84% copper and 0.8g/t gold from
109.3m, which we expect could lead to the delineation of a JORC
compliant Mineral Resource. Alongside this, at Bayda, work to date
has identified a significant volume of disseminated sulphide
mineralisation, with a broad mineralised zone of 33.4m at 0.69%
copper, including 4m at 1.56% copper and 5.1m at 1.22% copper. We
believe this prospect could be developed as a larger tonnage, lower
grade operation.
A high-powered ground electromagnetic ('EM') survey commenced at
Lasail and Bayda in November 2016. The surveys were designed to
cover high priority exploration areas adjacent to known
mineralisation to test for depth extensions or repeats. The results
are expected in Q1 2017 and will form the basis for future
development plans, including a potential resource drilling
programme. Alongside this, further drilling is planned at Aarja in
order to better determine the resource potential of Dog's Bone. We
look forward to proving up the resource potential of these assets,
but I would like to affirm that our primary focus and goal is on
realising near term copper production from the development of the
Block 5 deposits, with the development of Block 4 offering second
stage development opportunities.
As shareholders will be aware, we previously held an interest
Block 6 in Oman. Alongside finalising the development strategy for
our Omani assets, during the year under review we took the decision
to terminate our interest in this licence area. Block 6 was at a
very early stage of exploration and as Block 4 and 5 are more
advanced, and, we believe, more prospective, we deemed it prudent
for us to relinquish our interests in Block 6 so that we can
dedicate our efforts to the Blocks 4 and 5 developments.
Lithium, Finland
In June 2016 Savannah was granted Reservation Permits over two
new lithium projects, Somero and Erajarvi, covering an area of
159km(2) of highly prospective lithium terrain in Finland. These
assets, which Savannah holds a 100% interest in through its newly
established Finnish subsidiary, Finkallio Oy, mark a strategic
development in Savannah's growth strategy, strengthening the
Company's pipeline portfolio.
Finland was ranked number one by the Fraser Institute in its
2014 survey of 122 mining jurisdictions around the world
highlighting its attractiveness as an investment destination.
Further to this, the lithium carbonate price rose from around
US$8/kg to over US$25kg in 12 months due to supply shortages and
demand is forecast to continue to rise, with Deutsche Bank
predicting it to rise from 184,000 tonnes per annum in 2015 to
534,000 tonnes per annum by 2025. This is largely fuelled by the
burgeoning battery market, which is experiencing exponential growth
due largely to the lithium-ion battery's critical use in electric
vehicles. In addition to this, new forms of energy storage are
emerging, which are again reliant on lithium; energy storage
represents a small part of current lithium demand, but growth
potential is high, with renewable sources set to potentially rival
electric vehicle growth rates. It is this favourable operating
market combined with compelling market dynamics, which attracted
our attention to Finland and lithium.
Finland is a favourable exploration destination for lithium
opportunities. The country has access to good geological and
exploration data, has a favourable tectonic history for the
formation of Lithium-Cesium-Tantalum ('LCT') pegmatites, and
despite having a history of lithium mining, management believe
that, to date, lithium has been under explored. Our attraction to
these assets appeared justified; initial rock chip sampling has
already proven the resource potential, with seven pegmatites
containing anomalous lithium identified (two on Somero and five on
Erajarvi). At Somero, assays of up to 4.47% lithium oxide ('Li2O')
at the Torkkamaki prospect have been returned, with mineralisation
traced over 150m along strike and remaining open. At Erajarvi,
prospective pegmatites with assays of up to 1.56% Li2O have been
recorded at the Viitaniemi prospect, and mineralisation was traced
for over 350m before it was covered by glacial till. Crucially, key
lithium minerals petalite, spodumene and lepidolite were all
identified in hand specimens and follow up work is now being
planned for Q2 2017, following winter, to further expand and define
the seven anomalous pegmatites in readiness for drilling. To
support our Finnish activity, we are delighted to have retained the
services of experienced Finnish geological consulting groups.
Whilst these assets are still at a very early stage of
development, it is important to note that both projects have
excellent access to high quality infrastructure and are located
close to potential final customers, including battery producers.
This will prove extremely beneficial to production, positively
impacting capital and operating expenditure.
Outlook
Savannah is poised for growth. With mining expected to commence
in Oman and the achievement of value accretive milestones on track
in Mozambique, including further Mineral Resource Estimate
increases and development studies, 2017 is set to be an important
year in the Company's development. Oman is planned to mark our
Company's first venture into production, and I believe Mozambique
has the potential to establish Savannah as a significant mineral
sands producer, due to the importance of the Mutamba Project which
we are evaluating in partnership with Rio Tinto.
Our commitment is for the timely delivery of the outlined
milestone targets. We have a terrific team of industry
professionals who have demonstrated their abilities in delivering a
high tempo of activity over the last year. We have seen commodity
prices continue to improve. Copper is a key Energy Metal and will
continue to play a crucial role in the fast-evolving global energy
matrix. Ilmenite prices have made a strong recovery and we are
looking for further price increases during 2017. Meanwhile we are
seeing increased corporate activity in the mineral sands sector
which underscores the increasing appeal of the sector to
investors.
All that we have achieved to date is testament to the skill set
of our Directors, management and operational teams, and support of
our shareholders, and for this I give my thanks. I look forward to
us continuing to work together to build our Company into a
significant mining group.
David S Archer
Chief Executive Officer
Date: 23 February 2017
Competent Person and Regulatory Information
The information in this document 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 Australian 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 document that relates to the Jangamo
resource estimation is based upon information compiled by Mr Colin
Rothnie who is an independent consultant and a Member of the
Australian Institute of Mining and Metallurgy (AusIMM) and has
sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person
as defined in the December 2012 edition of the "Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves" (JORC Code). Mr Rothnie consents to the inclusion in the
report of the matters based upon the information in the form and
context in which it appears.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
Technical Glossary
Inferred Mineral Resource Estimate - as defined in the December
2012 edition of the "Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves" (JORC Code).
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2016
2016 2015
GBP GBP
CONTINUING OPERATIONS
Revenue - -
Administrative expenses (1,669,203) (1,372,509)
Gain / (Loss) on disposal of
investments 42,871 (666,154)
Impairment of investments - (1,071,374)
Loss on disposal of assets (128,505) -
------------------- -------------------
OPERATING LOSS (1,754,837) (3,110,037)
Finance income - 2,371
Finance costs (4,413) (2,446)
------------------- -------------------
LOSS BEFORE TAX (1,759,250) (3,110,112)
Taxation - -
------------------- -------------------
LOSS FOR THE YEAR ATTRIBUTABLE
TO EQUITY OWNERS OF THE PARENT (1,759,250) (3,110,112)
OTHER COMPREHENSIVE INCOME
Items that will or may be reclassified
to profit or loss:
Change in market value of investments 44,840 (930,213)
Transfer to realised (gain)
/ loss on disposal of investments (42,871) 666,154
Transfer to impairment loss
of investments - 1,071,374
Exchange gains / (losses) arising
on translation of foreign operations 476,018 (120,191)
------------------- -------------------
OTHER COMPREHENSIVE INCOME
FOR THE YEAR 477,987 687,124
------------------- -------------------
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR
ATTRIBUTABLE TO EQUITY OWNERS
OF THE PARENT (1,281,263) (2,422,988)
=================== ===================
Loss per share attributable
to equity owners of the parent
expressed in pence per share:
Basic and diluted
From Operations (0.46) (1.27)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
2016 2015
GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible assets 5,066,750 3,155,242
Property, plant and equipment 16,170 21,892
Other receivables 33,171 23,778
Other non-current assets - 225,668
-------------- -------------
TOTAL NON-CURRENT ASSETS 5,116,091 3,426,580
-------------- -------------
CURRENT ASSETS
Investments 124,472 149,922
Trade and other receivables 126,557 82,472
Cash and cash equivalents 1,172,347 359,296
-------------- -------------
TOTAL CURRENT ASSETS 1,423,376 591,690
-------------
TOTAL ASSETS 6,539,467 4,018,270
============== =============
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 4,509,465 2,858,658
Share premium 11,226,706 9,156,284
Foreign currency reserve 391,998 (84,020)
Warrant reserve 386,794 362,252
Share based payment reserve 455,309 473,178
Retained earnings (10,900,327) (9,187,216)
-------------- -------------
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE PARENT 6,069,945 3,579,136
-------------- -------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 469,522 439,134
-------------
TOTAL LIABILITIES 469,522 439,134
-------------- -------------
TOTAL EQUITY AND LIABILITIES 6,539,467 4,018,270
============== =============
The Financial Statements were approved by the Board of Directors
on 23 February 2017 and were signed on its behalf by:
D S Archer
Chief Executive Officer
Company number: 07307107
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
2016 2015
GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible assets 290,750 55,078
Investments 281 820,655
Other receivables 6,685,753 3,121,824
Other non-current assets - 214,628
------------ -------------
TOTAL NON-CURRENT ASSETS 6,976,784 4,212,185
------------ -------------
CURRENT ASSETS
Investments 124,472 149,922
Trade and other receivables 43,007 41,970
Cash and cash equivalents 1,029,765 316,328
------------ -------------
TOTAL CURRENT ASSETS 1,197,244 508,220
-------------
TOTAL ASSETS 8,174,028 4,720,405
============ =============
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Called up share capital 4,509,465 2,858,658
Share premium 11,226,706 9,156,284
Warrant reserve 386,794 362,252
Share based payment reserve 455,309 473,178
Retained earnings (8,699,890) (8,452,829)
TOTAL EQUITY 7,878,384 4,397,543
------------ -------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 295,644 322,862
TOTAL LIABILITIES 295,644 322,862
------------ -------------
TOTAL EQUITY AND LIABILITIES 8,174,028 4,720,405
============ =============
The Company total comprehensive loss for the financial year was
GBP291,231 (2015: GBP1,864,595).
The Financial Statements were approved by the Board of Directors
on 23 February 2017 and were signed on its behalf by:
D S Archer
Chief Executive Officer
Company number: 07307107
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2016
Share
Foreign based
Share Share currency Warrant payment Retained Total
capital premium reserve reserve reserve earnings equity
GBP GBP GBP GBP GBP GBP GBP
At 1 January
2015 2,231,697 8,539,626 36,171 362,252 619,423 (7,034,355) 4,754,814
-------------------- ------------- ------------- ------------- ---------- ----------- --------------- ---------------
Loss for
the year - - - - - (3,110,112) (3,110,112)
Other
comprehensive
income - - (120,191) - - 807,315 687,124
-------------------- ------------- ------------- ------------- ---------- ----------- --------------- ---------------
Total
comprehensive
income for
the year - - (120,191) - - (2,302,797) (2,422,988)
Issue of
share capital
(net of expenses) 626,961 616,658 - - - - 1,243,619
Issue of
share options - - - - 3,691 - 3,691
Lapse of
options - - - - (149,936) 149,936 -
At 31 December
2015 2,858,658 9,156,284 (84,020) 362,252 473,178 (9,187,216) 3,579,136
-------------------- ------------- ------------- ------------- ---------- ----------- --------------- ---------------
Loss for
the year - - - - - (1,759,250) (1,759,250)
Other
comprehensive
income - - 476,018 - - 1,969 477,987
-------------------- ------------- ------------- ------------- ---------- ----------- --------------- ---------------
Total
comprehensive
income for
the year - - 476,018 - - (1,757,281) (1,281,263)
Issue of
share capital
(net of expenses) 1,650,807 2,094,964 - - - - 3,745,771
Issue of
share options - - - - 26,301 - 26,301
Exercise
of options - - - - (36,600) 36,600 -
Lapse of
options - - - - (7,570) 7,570 -
Issue of
warrants - (24,542) - 24,542 - - -
At 31 December
2016 4,509,465 11,226,706 391,998 386,794 455,309 (10,900,327) 6,069,945
-------------------- ------------- ------------- ------------- ---------- ----------- --------------- ---------------
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share capital Amounts subscribed for share capital at nominal
value.
Share premium Amounts subscribed for share capital in excess of
nominal value less costs of fundraising.
Foreign currency reserve Gains/losses arising on retranslating
the net assets of Group
operations into Pound Sterling.
Warrant reserve Fair value of the warrants issued.
Share based payment reserve Represents the accumulated balance
of share based payment
charges recognised in respect of share options granted by
Savannah Resources Plc, less transfers to retained losses in
respect of options exercised, lapsed and forfeited.
Retained earnings Cumulative net gains and losses recognised in
the consolidated
Statement of Comprehensive Income.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2016
Share
based
Share Share Warrant payment Retained Total
capital premium reserve reserve earnings equity
GBP GBP GBP GBP GBP GBP
At 1 January
2015 2,231,697 8,539,626 362,252 619,423 (6,738,170) 5,014,828
---------------------- ------------- ------------- ----------- ----------- ------------- -------------
Loss for the
year - - - - (2,671,910) (2,671,910)
Other comprehensive
income - - - - 807,315 807,315
---------------------- ------------- ------------- ----------- ----------- ------------- -------------
Total comprehensive
income for
the year - - - - (1,864,595) (1,864,595)
Issue of share
capital (net
of expenses) 626,961 616,658 - - - 1,243,619
Issue of share
options - - - 3,691 - 3,691
Lapse of options - - - (149,936) 149,936 -
At 31 December
2015 2,858,658 9,156,284 362,252 473,178 (8,452,829) 4,397,543
---------------------- ------------- ------------- ----------- ----------- ------------- -------------
Loss for the
year - - - - (859,042) (859,042)
Other comprehensive
income - - - - 567,811 567,811
---------------------- ------------- ------------- ----------- ----------- ------------- -------------
Total comprehensive
income for
the year - - - - (291,231) (291,231)
Issue of share
capital (net
of expenses) 1,650,807 2,094,964 - - - 3,745,771
Issue of share
options - - - 26,301 - 26,301
Exercise of
options - - - (36,600) 36,600 -
Lapse of options - - - (7,570) 7,570 -
Issue of warrants - (24,542) 24,542 - - -
At 31 December
2016 4,509,465 11,226,706 386,794 455,309 (8,699,890) 7,878,384
---------------------- ------------- ------------- ----------- ----------- ------------- -------------
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share capital Amounts subscribed for share capital at nominal
value.
Share premium Amounts subscribed for share capital in excess of
nominal value less costs of fundraising.
Warrant reserve Fair value of the warrants issued.
Share based payment reserve Represents the accumulated balance
of share based payment
charges recognised in respect of share options granted by
Savannah Resources Plc, less transfers to retained losses in
respect of options exercised, lapsed and forfeited.
Retained earnings Cumulative net gains and losses recognised in
the consolidated
Statement of Comprehensive income.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016
2016 2015
GBP GBP
Cash flows used in operating
activities
Loss for the year (1,759,250) (3,110,112)
Depreciation and amortisation 9,536 -
charges
Impairment of investments - 1,071,374
(Gain) / Loss on disposal
of investments (42,871) 666,154
Share based payment reserve
charge 26,301 3,691
Shares issued in lieu of
payments
to extinguish liabilities 20,992 119,521
Finance income - (2,371)
Finance expense 4,413 2,446
Exchange losses 96,036 -
Loss on disposal of assets 128,505 -
Cash flow from operating activities
before changes
in working capital (1,516,338) (1,249,297)
(Increase) / Decrease in
trade and other
receivables (53,476) 29,317
Increase in trade and other
payables 46,089 105,380
--------------- ---------------
Net cash used in operating
activities (1,523,725) (1,114,600)
--------------- ---------------
Cash flow used in investing
activities
Purchase of intangible exploration
assets (1,557,087) (1,245,818)
Purchase of other non-current
assets - (133,824)
Purchase of investments (24,363) (63,004)
Proceeds from sale of investments 94,653 109,415
Interest received - 2,371
--------------- ---------------
Net cash used in investing
activities (1,486,797) (1,330,860)
---------------
Cash flow from financing
activities
Interest paid (4,413) (2,446)
Proceeds from issues of
ordinary shares (net of
expenses) 3,724,778 1,023,514
---------------
Net cash from financing
activities 3,720,365 1,021,068
---------------
Increase / (Decrease) in
cash and cash
equivalents 709,843 (1,424,392)
Cash and cash equivalents
at
beginning of year 359,296 1,778,338
Exchange gains on cash and
cash
equivalents 103,208 5,350
---------------
Cash and cash equivalents
at end of
year 1,172,347 359,296
=============== ===============
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016
2016 2015
GBP GBP
Cash flows used in operating
activities
Loss for the year (859,042) (2,671,910)
Impairment of investments 76,147 1,071,374
(Gain) / Loss on disposal
of investments (42,871) 666,154
Share based payment reserve
charge 26,301 3,691
Shares issued in lieu of
payments to
extinguish liabilities 20,992 119,521
Finance income - (2,371)
Finance expense 4,377 2,446
Exchange Gains (89,175) -
------------ ------------
Cash flow from operating activities
before changes in working
capital (863,271) (811,095)
(Increase) / Decrease in
trade and other
receivables (1,037) 20,079
Increase in trade and other
payables 28,159 116,043
------------ ------------
Net cash used in operating
activities (836,149) (674,973)
------------ ------------
Cash flow used in investing
activities
Investment in subsidiaries (672,355) (820,374)
Loans to subsidiaries (1,610,058) (762,076)
Purchase of investments (24,363) (63,004)
Purchase of intangible exploration
assets (61,900) (7,687)
Purchase of other non-current
assets - (122,783)
Proceeds from sale of investments 94,653 109,415
Interest received - 2,371
------------ ------------
Net cash used in investing
activities (2,274,023) (1,664,138)
------------ ------------
Cash flow from financing
activities
Interest paid (4,377) (2,446)
Proceeds from issues of
ordinary shares 3,724,778 1,023,514
Net cash from financing
activities 3,720,401 1,021,068
------------ ------------
Increase / (Decrease) in
cash and cash
equivalents 610,229 (1,318,043)
Cash and cash equivalents
at beginning of
year 316,328 1,634,371
Exchange gains on cash and 103,208 -
cash
equivalents
------------
Cash and cash equivalents
at end of year 1,029,765 316,328
============ ============
**ENDS**
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EANADAEPXEFF
(END) Dow Jones Newswires
February 24, 2017 02:00 ET (07:00 GMT)