TIDMSAV
RNS Number : 3957V
Savannah Resources PLC
05 April 2023
5 April 2023
Savannah Resources Plc
(AIM: SAV, FWB: SAV and SWB: SAV) ('Savannah', or the
'Company')
Financial Results for the Year Ended 31 December 2022
Savannah Resources, the European lithium development company, is
pleased to announce its audited financial results for the year
ended 31 December 2022.
2022 Summary
Corporate
-- Dale Ferguson appointed as Interim Chief Executive Officer in
July after David Archer stepped down. The search for a permanent
CEO replacement was initiated and remains ongoing
-- Mary Jo Jacobi and Diogo da Silveira joined the Board as
Independent Non-Executive Directors with Manohar Shenoy (formerly
Alternate Director to Maqbool Ali Sultan) appointed as a
Non-Executive Director; Maqbool Ali Sultan (Non-Executive Director)
and Murtadha Ahmed Sultan (Alternate Director for Imad Sultan)
retired from the Board
-- Finances robust: Loss from continuing operations reduced to
GBP2.7m (2021: GBP3.5m) and year end cash reserves of GBP7.2m
(2021: GBP13.0m). If a positive decision on the Project's
Environmental Report is received from the Portuguese environmental
regulator ('APA') , cash reserves will carry the Company into the
second phase of the environmental licencing process and allow
Savannah to progress the Definitive Feasibility Study ('DFS') on
the Barroso Lithium Project (the 'Project')
Barroso Lithium Project, Portugal
Technical
-- Agreed with APA to progress its review of the Project's
Environmental Impact Assessment ('EIA') via the time-controlled and
more interactive 'Article 16' process
-- A number of constructive meetings were held with APA and
members of its Evaluation Committee as part of the Article 16
process. Feedback from these meetings and other stakeholders was
used by Savannah and its consultants to optimise a range of design
elements which were captured in its revised Environmental Report
and Mine Plan for the Project
-- Design of process flowsheet finalised, based on standard
plant and environmentally friendly reagent regime
-- Decarbonisation Study initiated with results for the first
phase of the study announced in February 2023
Stakeholder and Government Engagement:
-- Relationships with a number of key stakeholders refreshed
after initiation of the Article 16 process and team changes within
Savannah
-- Opened an additional information centre in the local area,
recruited new staff from the local population, continued to give
preference to local suppliers of goods and services, and provided
support to local groups and events
-- Commissioned social performance consultancy, Community
Insights Group ('CIG'), to support with stakeholder engagement and
produce a Social Impact Assessment
-- Met with European Commission officials and Portuguese
Government Ministers and Secretaries of State responsible for
Economy, Environment, Energy and Infrastructure portfolios
Commercial
-- Offtake & Investment: Third party commercial interest in
the Project remains strong and Savannah maintained discussions with
multiple parties around future offtake and partnership
opportunities
-- Memberships: Savannah added to its memberships of relevant
trade bodies being accepted as a member of the European Association
of Mining, Metal Ores & Industrial Minerals ('Euromines')
-- EV sales: Global sales increased by 55% to reach 10.5m
vehicles during 2022. Europe remained the second largest market
behind China (6.2m vehicles), seeing growth of 15% to nearly 2.7m
vehicles.
-- Lithium prices: All three key lithium raw materials,
spodumene concentrate, lithium carbonate and lithium hydroxide saw
their prices more than double during 2022 as demand remained
extremely robust and supply challenged. The spodumene concentrate
price increased by over 150% to nearly US$7,000/t in December
2022
2023 Year to date summary
Barroso Lithium Project, Portugal
-- Article 16 process:
o Environmental Report, Mine Plan and associated documentation
for revised Barroso Lithium Project completed and submitted to APA
on 16 March 2023
o Submission of the documents initiated 50 business day
assessment period available to APA. Deadline for the notice of
APA's Environmental Impact Statement set at 31 May 2023
o Project documents made public by APA initiating public
consultation period
o Series of in-person Project-related meetings held with local
stakeholder groups
o Community Information Sheet summarising revised Project design
and operating plan posted to all households in Boticas Municipality
and made available on the Company's website; series of Fact Sheets
on the key individual elements of the Project's design and
Savannah's plans made available on the Company website and at
various locations within the local communities
o New corporate video released following submission of the
documents to APA
-- Social Impact Assessment: Completion of first phase 'Social
Issues Scoping Report' by CIG. Findings used to shape Savannah's
ongoing interaction and communication with stakeholders as well as
the specifics of its Project-related benefit-sharing plan
-- Decarbonisation study: First stage of study completed.
Concluded battery powered electric mining equipment represented
Savannah's best route to zero Scope 1 emissions. Scope 2 emissions
had already benefitted significantly from increasing renewable
energy contribution to Portuguese grid power and further work
should be undertaken to secure 100% renewable power for the
Project
-- European Critical Raw Materials ('CRM') Act: New Act
introduced by the European Commission seeking at least 10% of
Europe's future consumption of CRMs, including lithium, to be
supplied from domestic sources, such as the Barroso Lithium
Project
-- Project Scoping Study: Assuming APA issues a favourable
Environmental Impact Statement after the current review period,
Savannah will publish a new Scoping Study based on the revised
Project design submitted to APA which incorporates current
consensus spodumene concentrate price forecasts. Savannah would
expect to publish this study in early H2 2023.
Electronic Communications
The Company's full Annual Report and Financial Statements are
available for download on the Company's website at:
https://www.savannahresources.com/investors/corporate-documents/
In accordance with the Company's Articles of Association and
both section 1143 and 1259 of the Companies Act 2006, the Company
is to elect to distribute company communications electronically or
via a website rather than by sending printed copies of all
documents by post. This will reduce the Company's carbon footprint
and as a result, in future all company communications, including
the Annual Report and Financial Statements and Notice of AGMs will
only be mailed to shareholders who elect to opt out of receiving
electronic communication. The Company's Share Registrars will be
distributing letters to registered shareholders to obtain their
preference for future Company communications.
Notice of the Company's AGM will be announced in due course.
Regulatory Information
This Announcement contains inside information for the purposes
of the UK version of the market abuse regulation (EU No. 596/2014)
as it forms part of United Kingdom domestic law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR").
Savannah - Enabling Europe's energy transition.
Follow @SavannahRes on Twitter
Follow Savannah Resources on LinkedIn
For further information please visit www.savannahresources.com
or contact:
Savannah Resources PLC Tel: +44 20 7117 2489
Dale Ferguson, CEO
SP Angel Corporate Finance LLP (Nominated Tel: +44 20 3470 0470
Advisor & Joint Broker)
David Hignell/ Charlie Bouverat (Corporate
Finance)
Grant Barker/Abigail Wayne (Sales & Broking)
RBC Capital Markets (Joint Broker) Tel: +44 (0) 20 7653 4000
Farid Dadashev/ Jamil Miah
Camarco (Financial PR) Tel: +44 20 3757 4980
Gordon Poole/ Emily Hall / Fergus Young
CHAIRMAN'S STATEMENT
The energy transition accelerates
The global energy transition, in which lithium is set to play
such a critical role, moved forward rapidly in 2022. Russia's
invasion of Ukraine, which is now sadly into its second year, has
led western nations to rapidly reduce their reliance on Russia's
production of oil & gas. As energy prices have soared as a
result, this has placed even greater emphasis on the need for
significant, and rapid, increases in domestic renewable energy
generation capacity and accompanying energy storage methods.
Lithium batteries have a key role to play in renewable energy
storage, in addition to the critical role they are already playing
in the ever-growing electric vehicle market.
This global geopolitical backdrop continues to create a
favourable economic environment for Savannah's planned development
of the Barroso Lithium Project (the 'Project') in Portugal. As was
the case in 2021, EV sales have seen significant year-on-year
growth (55% to 10.5m worldwide) and the suite of lithium raw
material products - spodumene concentrate, lithium carbonate and
lithium hydroxide saw further notable price rises during the year,
as supply struggled to keep pace with the rising level of demand.
The price rises weren't quite as marked as those seen as the global
economy began to reawaken in 2021 (+250%-500%). However, all three
key raw materials saw their prices more than double during 2022,
with the spodumene concentrate price, which is the particular focus
of Savannah, increasing by over 150% (source: S&P Global
Platts) to nearly US$7,000/t in December 2022.
During 2022, there was also a notable change in the level of
government support in certain western countries for strategic
mineral production and industries key to the energy transition. The
US, Canada and Australia began to catalyse the energy transition
they are targeting for their economies, with the provision of
funding for projects deemed critical to its successful execution.
The EU's 'Critical Raw Materials Act' which was published in
mid-March 2023 identifies lithium as both a critical and a
strategic raw material and calls for at least 10% of the EU's
annual demand for strategic raw materials, such as lithium, to be
sourced from domestic supplies by 2030. Among many other measures
the Act also talks of selected 'Strategic Projects' benefiting from
support for access to finance and shorter permitting timeframes.
Whether our own Project receives financial support will come down
to specific factors no doubt, but we were pleased to see that a
clear message in support of domestic, responsibly managed
production of critical raw materials for use in Europe was given by
the region's governing body. We firmly believe that our industry,
particularly when focused on provision of the 'new' raw materials
which society so desperately needs if it is to effectively tackle
climate change, can sit comfortably alongside communities and other
industries and earn a valued place in society.
Transition within a transition
While the market backdrop to our efforts grew stronger in 2022,
and commercial interest in the Project remained very encouraging,
two events specific to our own situation last July required us to
adapt rapidly and effect our own transition to keep our goal of
responsible lithium raw material production on track. As
shareholders will remember, the first event was the proposal from
Portugal's environmental regulator that the evaluation process of
the Project's Environmental Impact Assessment ('EIA'), the major
step in obtaining the Environmental licence required, should
continue under 'Article 16' of the relevant legislation. Following
the previous phases of the EIA review process, which began in 2020,
we took the decision to accept this proposal as this option
featured both a fixed time period, 180 working days, and provided
Savannah with greater opportunity to engage directly with
Portugal's environmental regulator, Agência Portuguesa do Ambiente
('APA') than in previous phases. The second event was the departure
of David Archer from the CEO role, after nearly nine years at the
helm. Both events created a sizeable challenge for our Company but
pleasingly, as I discuss below, our team have shown great fortitude
and commitment when it has been needed and have led us to the point
we have now reached, awaiting a decision on the Project's future in
just a few weeks.
Taking responsibility and moving forward
During his long tenure as CEO, David Archer did much to progress
Savannah to a point where it wholly owns, in a stable European
jurisdiction, one of the most significant projects in one of the
market's most prized commodities. After his departure, it was
important that those remaining make the most of this opportunity.
It was also important that we quickly appointed a new CEO who could
not only take on the CEO's duties around market and stakeholder
engagement, but also take a leading role in the upcoming engagement
with APA in the Article 16 process.
Dale Ferguson, Savannah's long time Technical Director and a
significant shareholder, was the ideal candidate and I was
delighted he accepted the role on an interim basis to steer the
Company through the then unknown process of Article 16. With so
much to be done against the clock, it has been equally pleasing to
see other members of the team also step up and take on new and
greater responsibility. In many cases this has meant managing
relationships with key stakeholders and potential partners in
addition to other duties. While we don't shy away from the reality
of the challenge that faces us in terms of wider acceptance, I
believe that many of our relationships with key stakeholders are
improving, even when views on the Project may not always be
shared.
Beyond the CEO change, we have also made other changes to our
board with the focus on broadening the knowledge and relevant
experience of the Group in readiness for the much-desired move
towards production.
As Maqbool Ali Sultan (Non-Executive Director) and Murtadha
Ahmed Sultan (Alternate Director for Imad Sultan) retired from the
Board, Manohar Shenoy (Alternate Director to Maqbool Sultan) became
a Non-Executive Director and Mary Jo Jacobi joined last April as an
Independent Non-Executive Director. Mary Jo brings a wealth of
experience in business and ESG matters gained through time with
major energy companies and banks, as well as periods working in the
public sector both in the UK as a member of the UK Advisory
Committee on Business Appointments, and the US as Assistant United
States Secretary of Commerce, and Special Assistant to US President
Ronald Reagan. Mary Jo has already made a valuable contribution
providing sage advice around communication of our key messages and
helping to orientate our focus in the rapidly evolving landscape of
ESG guidelines and reporting.
In November, Diogo da Silveira joined as another Independent
Non-Executive Director. As a former McKinsey Partner, CEO of
Portuguese forestry operator, Navigator, and current Chair of
Floene Energias, the leading Gas Distribution System Operators in
Portugal, Diogo has significant business experience, particularly
within Portugal. As a result, he has a comprehensive network among
Portugal's leading players in multiple industries as well as
amongst politicians, key decision makers, and opinion leaders.
Diogo is now taking a leading role in communicating the key
messages from the revised EIA to the Portuguese political and
business communities and the media.
Meanwhile the search for a permanent CEO continues. If we are
fortunate enough to receive a positive decision from APA and can
move ahead with the Project's ongoing evaluation and development,
it would be ideal to have a new CEO in place as early as possible
for that journey. However, we are looking for a very specific
combination of skills, not least the ability to lead what is
effectively a Portuguese business, making sure it integrates
effectively into Portuguese business and social frameworks, while
also being comfortable with the technical and social challenges of
mining and dealing with international investors and other
stakeholders. We look forward to making an appointment during
2023.
EIA: We listened and responded
When writing my statement for last year's Annual Report I said
that our key focus for 2022 would be on getting the approval of the
EIA for the Barroso Lithium Project in Portugal. It was indeed the
main focus of all of 2022, but not in the way we expected at the
beginning of the year. At the start of 2022, we had expected to
receive a decision on the initial EIA during the year. However, as
shareholders will now be very well aware, the regulator, APA,
suggested in July that in order to progress its review of the EIA,
the application should move into the so-called 'Article 16'
process. Updates on this process are given throughout our Annual
Report but as we stated in our 6 July announcement, after the
extended previous phases of the review process we welcomed this
phase's strict time-control element and the opportunity it brings
to engage regularly in-person with APA. Having submitted our
revised EIA by the 17 March deadline set by the Article 16 process,
we now expect a decision from APA on or before 31 May 2023.
Dale Ferguson and his team have certainly taken on board the
feedback received from APA and have adapted the Project's design to
reflect these preferences including with respect to the road
layout, the storage of mine waste and tailings, protection of water
courses and aquatic ecosystems and shorter hours of operation in
the mining operations. We hope our team's effort has resulted in a
final design which is to APA's satisfaction so we can move forward
with the Project.
Being responsible and respectful to stakeholders
We have persistently tried to engage with all stakeholders,
particularly local communities, through a variety of formats during
our time on the Project. During the year, for example, we increased
the number of information centres in the area with shop space taken
in the centre of Boticas town and we were pleased to recruit new
staff from the local population to staff the centres and to
represent Savannah in the community. However, during this extended
period of EIA review, it has been difficult to provide
comprehensive and timely information on the Project and its status
while significant uncertainties persist.
Pleasingly, some good progress is being made with a Social
Impact Assessment (the 'Assessment' or the 'SIA') in relation to
the Project. In the first phase of the study, completed in Autumn
2022, Community Insights Group were on the ground in the local
area, listening to views of local people on the Project and their
expectations and preferences for benefit sharing from the Project.
The resulting 'Social Issues Scoping Report' was submitted to APA
as part of Savannah's revised EIA submission and Savannah has used
these findings to shape its current and future communication with
stakeholders now that the revised EIA has been resubmitted and its
details made public.
Some of the new formats being tried as a result of the study are
a comprehensive series of fact sheets which summarise the key
topics in the EIA as well as a second community information sheet
which summarises the Project and highlights the new features which
have been introduced to further reduce the Project's impact
following feedback from stakeholders.
Financial Overview
Starting 2022 with a cash balance of GBP13.0m put Savannah in a
strong position to begin its plans to progress the Barroso Lithium
Project Definitive Feasibility Study (' DFS ') . The unexpected
development in the environmental licencing process caused by the
movement into the additional Article 16 phase caused Savannah to
change its planned activities somewhat. However, continuing prudent
cost management has resulted in a year end cash balance of GBP7.2m.
Importantly, throughout the period, the Company continued to invest
in its asset base in Portugal (GBP2.6m; 2021: GBP1.9m). Hence, our
opening cash position for 2023 is more than sufficient to see us
through the Article 16 process, and will carry us into the second
phase of the environmental licencing process and allow us to
progress the DFS, which would follow a positive decision from APA
on the EIA.
In terms of the broader financial performance, Savannah recorded
a loss from continuing operations of GBP2.7m (2021: GBP3.5m) with a
GBP0.8m exchange rate gain resulting from treasury management
(2021: loss GBP0.2m). Administration fees were relatively flat over
the period at GBP3.5m (2021: GBP3.3m), however H2 2022
Administration fees were GBP0.3m lower than in H1 2022, resulting
from a reduction in professional fees plus the remuneration costs
eliminated following the departure of David Archer who stepped down
as CEO in July.
Outlook
Our team has worked tremendously hard over recent months to make
the revisions to the Project's design and I thank them sincerely
for all their efforts. We hope the resulting EIA will meet with
approval from APA's Evaluation Committee and the wider stakeholder
group as well. We are currently undertaking a fresh communication
campaign in the local communities to explain the changes we have
made to the Project and to explain the potential benefits it can
bring to local society. Assuming that Savannah receives a positive
decision from APA, we will look to move forward with the Project in
a responsible way, being sure to communicate its plans to all
stakeholders.
As we look towards the future, your board will continue to
follow the same responsible approach it has adopted up to now in
the overall management and positioning of Savannah. As we all know,
the continuation of the conflict in Ukraine and wider global
geopolitical tensions are placing considerable strain on the global
economy in the near term through rising cost inflation and risks to
supply chains. While the underlying market drivers for the
development of the Barroso Lithium Project remain positive,
Savannah's board will continue to closely monitor both internal and
external risks to the business, and make decisions with a clear
focus on the long term stability and growth of the business.
For 2023, subject to receipt of the EIA, the next steps in the
overall Project development process would include; re-commencing
the fieldwork required for the DFS and advancing the Study,
initiating the second, Environmental Compliance Report of the
Execution Project ('RECAPE') phase of the environmental licencing
process, and progressing with the decarbonisation study and offtake
discussions. We also plan to provide a new Scoping Study on the
Project based on the latest design and updated lithium price
forecasts. Putting an initial offtake agreement or strategic
partnership in place would then, along with the completion of all
outstanding technical studies in 2024, allow Savannah to move into
project financing and initiating construction of the Project in
2025. 2026 would bring the completion of construction and the long
awaited first production of spodumene concentrate from the Barroso
Lithium Project. With that agenda ahead, 2023 could be Savannah's
most exciting year to date. My thanks also go to our shareholders
for their own commitment to being part of Savannah's journey.
Matthew King
Chairman
Date: 4 April 2023
CHIEF EXECUTIVE'S REPORT
It is an exciting time to be writing my first CEO report because
in a few short weeks we will reach a defining moment for our
Company. By the end of May the decision from the Portuguese
environmental regulator on the Barroso Lithium Project
Environmental Impact Assessment is due to be announced. If we
receive a positive decision at that point, the development of the
Project as a source of responsibly produced lithium raw material in
Europe, and for Europe, will move a significant step closer.
Everyone at Savannah along with our consultants and advisers has
worked fantastically hard to get the Company to this point. Whether
it has been working on the revised EIA submission itself, producing
communication materials in support of the EIA, meeting with
stakeholders and shareholders, maintaining relationships with
potential commercial partners, or managing our spending and cash
flow, everyone has played their part. Many of the dedicated
employees and Directors are also shareholders, including
myself.
If the award of an environmental licence was based on effort
alone, I'm sure Savannah would receive one. However, as part of
taking a responsible approach I should reiterate that we cannot
provide a guarantee that the regulator will give a positive
decision. If we receive a negative decision, we would be required
to submit a wholly new EIA for the Project. Equally, I am keen to
point out, particularly to the population living near the Project,
what a positive decision would mean in respect of Project
construction timelines and other associated work streams. I have
outlined the 'next steps' in the process below, so that everyone is
clear about what lies ahead and when to expect each step to take
place. Stakeholders can be assured that Savannah will match the
outstanding technical work that must be completed before we reach a
Final Investment Decision with ongoing community and stakeholder
engagement.
While much of the talk over the past year has been about the
EIA, it is important to highlight that from a commercial
perspective, the Project remains the same. There has been no change
to the overall JORC compliant resources present on the Project
across the C-100 Mining Lease (23.5Mt at 1.02% Li(2) O) and Aldeia
Mining Lease Applications areas (3.5Mt at 1.3% Li(2) O). The Mine
Plan submitted to APA is still based on the sequential mining of
four spodumene lithium bearing orebodies on the C-100 Mining Lease
and the assumed tonnage of 'mineable material' is also unchanged at
17.3Mt. The central plant will utilise conventional technology and
an environmentally sensitive processing circuit to produce
spodumene concentrate and a quartz-feldspar by-product. The annual
mining rate and spodumene concentrate annual production rate are
retained at around 1.5Mtpa and c.200ktpa, respectively, or
approximately 15% larger than the Project perceived for the 2018
Scoping Study.
Environmental Impact Assessment - Work done, decision
awaited
While the extension to the EIA review process was not something
we had planned for, I'm hopeful that the additional time spent will
ultimately prove to be a good investment for all stakeholders in
the Project and deliver the full opportunity for all which this
project can offer. Most importantly, the Article 16 process has
allowed us the direct engagement with APA and the other groups on
its Evaluation Committee which was very limited in the previous
parts of the EIA review process. I trust this engagement in turn
has resulted in us producing a revised design which gives the
decision makers the additional reassurances and peace of mind they
need to make an informed decision on the Project. We believe that
the revised design addresses the feedback we have received during
our constructive meetings with APA and its Evaluation Committee
while retaining many of the key components and features of the
original design, which have always made it a Project which tries to
balance the production of a mineral critical to Europe's efforts to
tackle climate change with being sympathetic to the local
environment and population.
Savannah has provided a series of updates in recent times on the
revised design and I briefly summarise just four of the key areas
below.
Waste management: Dry stack tailings storage to be maintained,
waste rock used for backfill
The original design included an 'Integrated Waste Landform'
approach to onsite waste storage, which would have seen the inert
waste rock from the mine workings stored together with the inert,
dried, and compacted tailings from the processing plant in a highly
stable 'dry stack' structure. This innovation meant that there
would be no traditional, upstream 'wet' tailings dam. In the
revised design, the same innovative, stable dry stack approach is
maintained for the tailings, however, waste rock and tailings will
be stored separately. Furthermore, despite the inert nature of the
tailings, the storage facility will be lined with an impermeable
membrane, eliminating the possibility of any solutions from the
tailings percolating into the subsoil and entering groundwater.
Furthermore, the natural groundwater flow direction from the
tailings storage facility ('TSF') is back towards the Pinheiro pit,
which would contain any fluids moving away from the TSF if the
lining was compromised. This represents another degree of
environmental protection which the new design provides.
Simulation of the Grandao pit, tailings storage facility,
processing plant and water storage facilities during the operating
phase (left) and following rehabilitation, landscaping,
revegetation and closure (right):
Source: Company
To meet with the additional requirements of APA, significant
quantities of waste rock will now be stored in Waste Rock
Facilities ('WRFs') and then used for backfill purposes. Savannah
has taken an extremely cautious approach to this aspect of the
design and ensured that in the unlikely event of any failure of the
largest WRF adjacent to the Grandao pit, it can be contained in the
valley immediately surrounding the structure and no material will
reach the Covas River. Under the new plan, the smaller Pinheiro and
NOA pits will be completely backfilled, while the larger Grandao
and Reservatorio pits will be backfilled to above the local water
table to avoid the formation of a waterbody at each pit. In
addition, any watercourses impacted by the workings will be
remediated and reinstated. A proposed WRF to the north of the
Grandao deposit has now been moved to avoid impact on marshland in
that area. There is no risk from acid mine drainage as test work
shows that the waste rock is inert and that any trace elements will
not be leached out. Sediment runoff from the WRFs reporting to the
Covas River is considered the main risk associated but detailed
designs have been drawn up to ensure that this will not happen. The
residual, permanent WRFs will be landscaped into the natural
topography and revegetated with native species.
Water: Local supply and aquatic environment to be unaffected due
to Project's self-sufficiency & recycling
In our design we have carefully considered both the Project's
own water requirements and its impact on the area's water
ecosystem.
The Project will be its own water source with water collected
from within or beneath mine workings and from the wider Project
footprint. The water will then be stored in dedicated facilities on
the Project (see image on 'Waste management: Dry stack tailings
storage to be maintained, waste rock used for backfill' section)
which will also act as sediment control structures and have been
designed to withstand a once in a 100 year storm event. This
approach means there will be no requirement to extract water from
the Covas River. The Project's water system is made more efficient
by the 85% recycling level expected to be achieved in the
processing plant, which accounts for 80% of the Project's overall
water requirement. With this level of recycling, which includes
using recycled water in the Project's buildings for drinking, means
that once the system is filled (a process which can begin during
the construction phase) the annual requirement for 'top up' water
will equate to less than half of the Project's total water
requirement.
In terms of protecting the local water ecosystem, the Project's
water system will be a closed network, with significant water
treatment infrastructure and recycling capacity installed. Process
water will not be discharged to the environment, and any water that
does need to be released will meet with the Portuguese Government's
regulations. Furthermore, due to the local geology and poor flow
rates in the area's aquifers, the Project is not expected to
influence groundwater abstraction for either public supply (the
nearest extraction point is 1.3km upstream from the nearest pit) or
agricultural use. However, Savannah has committed to install a
replacement water source of equal size if there is any impact.
As highlighted above, Savannah has committed to avoiding impact
on watercourses wherever possible to protect these important
habitats and to preserve water quality. Where location of workings
or infrastructure makes this avoidance impossible, Savannah has
designed to minimise impact. For example, the new river crossing
that will be required to access the Reservatorio and NOA deposits
will feature a single span bridge to avoid infrastructure in the
river and to minimise disturbance on the riverbank. Savannah will
rehabilitate watercourses on a progressive basis where they have
been impacted.
Road access: Avoiding local villages and towns, improving access
to the area
A detailed Traffic Study in accordance with the regulations of
the Municipal Master Plan (PDM de Boticas) and Infraestruturas de
Portugal, S.A. (IP, SA) was completed into access options for the
planned Project for both light and heavy vehicles and to access
potential impacts. Based on this study and stakeholder consultation
a transport plan was developed including two new roads which will
further limit the movement of Project-related traffic through local
communities. Savannah has committed to limiting road transport to
weekdays only between 7am and 8pm and by accessing the Project from
the north of the concession with a new purpose built 11.6km access
road, which connects the Project to the R311 highway, all
communities to the north of the Project would be bypassed and no
water crossings would be required. Furthermore, a section of this
road will be available for use by the public. A second proposed
17km bypass section connecting to the A24 highway would also avoid
traffic passing through Boticas, Granja and Sapiaos which will mean
that no Project traffic will pass through any villages or towns
between the Project and the A24 freeway.
Rehabilitation
The revised EIA sees Savannah reiterating its previous
commitment to rehabilitation of the Project area. Our objective at
the end of the project is to leave the land rehabilitated, safe,
valued and with new opportunities for different uses by the
population. Savannah commits to ensuring future sustainable use,
whether for tourism, agriculture, or other purposes. Today, of the
271 hectares (2.71km(2) ) which will be temporarily or permanently
impacted by the Project's development is 95% forest or scrub
vegetation with just 14 hectares, or 5%, consisting of agricultural
land and pastures. Hence, the operation's impact on local
agricultural land is very limited. Furthermore, one of the key
advantages of the Barroso Lithium Project is that mining will take
place in a sequential fashion which will allow for continual
rehabilitation from early in the Project's life. Hence, the Project
will never have large, disturbed areas and only essential operating
areas will be left open at the end of the Project's operating life
for the final phase of rehabilitation. Soil removed from working
areas will be carefully stored, maintained and enhanced to allow
its use during the landscape recovery phase.
Barroso Lithium Project: Proposed new road layout avoids
Project-related traffic passing through local villages:
Source: Company
Focus will be placed on harmonising the Project area back into
the local landscape by contouring landforms and backfilling the
pits, replanting with native species of plants and trees, some of
which have been lost in forest fires. In turn, this will encourage
local fauna to recolonise previously impacted areas.
On closure, the processing plant, other supporting facilities,
semi-mobile and fixed equipment will all be dismantled and removed
from site. Structures used to deviate existing water courses will
also be removed, and water courses reinstated as close to their
original orientation as reasonably possible. Office buildings and
other facilities could be retained for subsequent alternative use
by the local community or local businesses.
Monitoring of key environmental performance indicators, such as
water quality, will be maintained over the long term once
rehabilitation is completed. The Project area will be offered to
the respective Parish Councils, making it available for use by the
communities for agriculture, tourism, and community owned
businesses.
Stakeholder Engagement - As critical as the mineral itself
The extra time added by the Article 16 process, as well as the
management and responsibility changes that we have made amongst our
team in the past nine months, has allowed us to refresh and
strengthen our relationships with key contacts within local and
national government, associated agencies and the broader
stakeholder group. As a result, we are pleased with the greater
level of engagement we are achieving with key contacts.
As the Chairman outlined, we have also been undertaking more
'hands on' interaction with local communities under the banner of
the Social Impact Assessment via Community Insights Group ('CIG').
As part of this exercise, CIG will be training our own staff to
make for more effective engagement with community members going
forward. We have also been proactive in our provision of
information about the revised EIA for the community. The community
information sheet, mentioned by the Chairman, was delivered to
every residence in the Municipality, and the follow up fact sheets
on individual EIA topics hopefully press home the key messages we
are keen to make regarding the responsible manner in which we have
designed and plan to operate the Project. We are looking forward to
feedback on these publications as the Social Impact Assessment work
continues.
Although they do not represent examples of the positive
stakeholder engagement we are trying to generate, we are also
equally comfortable to provide an update on the two legal cases
which have been brought involving our Project.
In the civil claim lodged by the Management Commission of the
Covas do Barroso Baldios (the 'Baldios Commission') against certain
private landowners in respect of some land packages at the Project
which they sold to Savannah (RNS 25 July 2022), Savannah and the
private owners submitted their contestation to the lawsuit at the
end of October 2022. The claimant had until 13 January 2023 to
reply to our contestation, which it did not. On 24 January 2023,
the Vila Real district court provided an additional timeline of 10
working days for the Baldios Commission to reply, this time only
applies to the legal protocols (i.e., not the legal arguments in
the lawsuit). During that extension the Baldios Commission
requested the judge to provide a minimum of 30 days to allow it to
correct some documentation and a response is awaited from the
judge. Assuming this request is granted, and the Baldios Commission
is permitted to amend its documentation, we would then have to wait
for the Vila Real district court to set a date for a preliminary
hearing (expected mid-2023).
In the case brought by the Parish of Covas do Barroso ('Parish
Council') against the Republic of Portugal and the Ministry of
Economy as defendants in which Savannah's wholly owned subsidiary,
Savannah Lithium Unipessoal Lda, was joined as the
counter-interested party (not a defendant), the Mirandela Fiscal
and Administrative Court acquitted the defendants and Savannah's
subsidiary in February 2023 having ruled that the defendants were
not the legitimate parties in the lawsuit. The case was
subsequently extinguished in March 2023 after the period available
for the Parish Council to appeal expired. The litigation was
seeking to nullify certain administrative actions taken 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 lawsuits have neither impacted the Barroso Lithium Project's
activities nor the current environmental impact assessment process
which is moving to a conclusion. 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. The advice from
Savannah's lawyers was and remains that the both the extinguished
and ongoing claim are without foundation.
Next steps - The Barroso Lithium Project through to
production
Ongoing licencing:
As we have flagged in our recent releases, if we receive a
positive 'DIA' decision from APA at this stage, we expect it will
be conditional upon us fulfilling some further specific design
requirements which will be set out with the decision. This is a
normal aspect of the environmental licencing process, which
Savannah has planned for, and this will be managed through the
remainder of the licencing process.
The DIA award is the first approval in a multi-stage
environmental licencing process. Receipt of the DIA would allow the
approval process to move on to the subsequent Environmental
Compliance Report of the Execution Project (' RECAPE') and
environmental licence stages during which approval of the Project's
detailed final designs are received ('DCAPE') and the Project's
environmental title is awarded. These stages are expected to run in
parallel. If Savannah receives a positive DIA decision, we expect
the RECAPE phase to take approximately 9-12 months, meaning the TUA
could be awarded in second half of 2024.
Once the DCAPE declaration has been made and environmental
licence received, Savannah will then be able to apply for the
remainder of the licences required for the Project's development
and operation. These licences cover permissions for construction
and use of services on site such as power and water. The conditions
set by the DIA and the agreement of the Project's final designs in
the RECAPE phase will also provide important input parameters for
the DFS.
Updated Scoping Study:
The extended timetable on EIA and the accompanying Definitive
Feasibility Study has meant we have not been able to publish an
update to the 2018 Project Scoping Study. If the DIA decision is
positive, we will prepare and publish a new Scoping Study in the
second half of 2023 based on the revised EIA and Mine Plan. This
study won't reflect all of the details which will come through the
RECAPE phase, however it will act as a useful prelude to the
Definitive Feasibility Study for all stakeholders. As many
shareholders will know, cost inflation in the mining sector over
the last 12 months has been running at over 20%, and Savannah will
need to reflect this in our modelling, along with any additional
costs (and savings) that result from the latest Project design.
Overall, between inflation and the Project's expansion and the EIA
revisions, we expect this to result in an increase in capex from
the c.US$125m (including contingencies) estimate in the Scoping
Study nearly five years ago. However, no amount of cost inflation,
however sizeable, has matched the 1300% inflation seen in lithium
prices since the low of US$375/t in August-October 2020. While we
will not run our models using today's spot price of US$4,750/t over
the long term, we will be able to incorporate a spodumene price
deck which reflects updated forecasts from banks, brokers and
market commentators, which all far exceed the average US$685/t we
used in the 2018 Study. I am confident, the new Scoping Study level
economics will remain highly positive.
Definitive Feasibility Study:
In terms of timing, a ssuming a positive DIA decision is
received, work to complete the DFS will be undertaken in parallel
with the remainder of the environmental licensing process.
Alongside the final Project designs which will come through the
RECAPE phase of the ongoing environmental licencing process, a
modest fieldwork programme is also required. This will include
drilling for reserve and resource delineation and geotechnical
purposes. This programme has been planned and Savannah would look
to initiate it during H2 2023, subject to the DIA decision.
Savannah expects the DFS to be completed no later than 12 months
following the restart of the required fieldwork , so in H2
2024.
Importantly, the process flowsheet for the concentrator plant
was finalised in Q1 2022. Based on industry standard equipment and
processing techniques and an environmentally friendly reagent
regime, which complies with all relevant regulations and allows
both mica and spodumene flotation to operate at near neutral pH,
the plant will be capable of producing a high quality, spodumene
concentrate grading >=5.5% Li(2) O with low levels of
impurities.
Decarbonisation Study:
We are excited and committed to decarbonising the Project and
achieving our goal of net zero carbon over the life of the Project.
The first phase of the Decarbonisation Study took longer than we
had expected, but we have been pleased by its findings, including
the 54% reduction in the calculated Scope 2 emissions the Project
before we initiate any changes. We have also been very pleased by
the interest we have generated with a number of OEMs (vehicle
manufacturers), which are developing new zero emissions surface
mining vehicles. As we announced in early 2023, we will be further
investigating some of the key recommendations from the first phase
of the study in the second phase, with the assistance of our
consultants and ABB. This will include our options around
increasing the renewable power supply to the Project and forging
commercial partnerships with one or more of the OEMs which has
expressed interest in working with Savannah. We look forward to
providing further updates on the study during the year and
incorporating its final recommendations into our DFS and subsequent
operations.
Commercial discussions:
With our focus on the EIA in recent months, we have not been
looking to finalise offtake agreements during the period. Equally,
for most of the counterparties we have been in discussions with,
the uncertainty regarding the EIA has checked their own willingness
to commit to a long term commercial arrangement. Importantly
though, the level of underlying interest in Savannah's future
production of spodumene concentrate has not waned, despite the EIA
process. We continued to receive new commercial inquiries
throughout the year and that has also continued into 2023. This is
clear evidence, along with the persistent high price levels, that
sourcing of lithium raw materials, particularly from low risk
jurisdictions remains a significant challenge for downstream
users.
EV sales have remained very strong with European EV sales
growing again to 2.7m units (+15%) as part of global sales of 10.5m
(+55%, source EV-volumes.com). Hence, when Savannah is in a
position to proceed to finalise commercial arrangements, which we
expect to do next year, we will be pushing hard to secure deals
which meet our criteria including working with a partner or
partners committed to using Savannah's product within the European
battery value chain, willing to talk about pricing levels in line
with reported spot prices at the time, and prepared to contribute
significantly towards the CAPEX of our Project as part of the
offtake's financial arrangements.
European Electric Vehicle Sales Global Electric Vehicle
Sales
Source: EV-volumes.com
Construction & Production: 2025, 2026 and beyond:
If the above timetable can be met, Savannah should be in a
position to make its final investment decision on the Project in
late 2024 / early 2025 and move on with securing the finance
required to construct the Project. Construction could then begin in
H2 2025, and is expected to take approximately 15 months.
Commissioning of the plant, ramp up of production, and delivery of
Savannah's first product to a European customer could then all take
place in H2 2026.
Outlook
Getting Savannah to this point, where we are just a few weeks
away from receiving a DIA decision that we have waited for since
2020, has been a huge effort for everyone in the Company. I would
like to take this opportunity to thank them for their hard work and
resolve. My thanks also go to our shareholders for their patience
and support, and to those stakeholders who have been willing to
engage with us over the past year. Savannah hopes to bring benefits
to all as it looks to make its contribution to Europe's efforts to
tackle climate change through the provision of responsibly sourced,
low carbon, European lithium.
Dale Ferguson
Chief Executive Officer
Date: 4 April 2023
The Financial Statements below should be read in conjunction
with the Notes contained within the full Annual Report which is
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 2022
2022 2021
GBP GBP
CONTINUING OPERATIONS
Revenue - -
Other Income - -
Administrative Expenses (3,531,894) (3,305,649)
Foreign Exchange Gain/(Loss) 814,468 (213,088)
OPERATING LOSS (2,717,426) (3,518,737)
Finance Income 34,695 671
Finance Costs (265) (139)
------------ ------------
LOSS FROM CONTINUING OPERATIONS BEFORE
TAX (2,682,996) (3,518,205)
Tax expense - -
LOSS FROM CONTINUING OPERATIONS AFTER
TAX (2,682,996) (3,518,205)
(LOSS)/GAIN ON DISCONTINUED OPERATIONS
NET OF TAX (176,396) 2,371
------------ ------------
LOSS AFTER TAX ATTRIBUTABLE
TO EQUITY OWNERS OF THE PARENT (2,859,392) (3,515,834)
------------ ------------
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 (19,598) 82,006
Items that will or may be reclassified
to profit or loss:
Exchange Gains arising on translation
of foreign operations 665,656 154,815
------------ ------------
OTHER COMPREHENSIVE INCOME FOR THE
YEAR 646,058 236,821
------------ ------------
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
ATTRIBUTABLE TO EQUITY OWNERS OF THE
PARENT (2,213,334) (3,279,013)
============ ============
Loss per share attributable to equity
owners of the parent expressed in pence
per share:
Basic and diluted
From Operations (0.17) (0.22)
From Continued Operations (0.16) (0.22)
From Discontinued Operations (0.01) 0.00
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2022
2022 2021
GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible Assets 16,459,599 14,137,817
Right-of-Use Assets 17,627 5,390
Property, Plant and Equipment 1,583,944 676,536
Other Receivables 454,651 -
Other Non-Current Assets 77,667 69,542
TOTAL NON-CURRENT ASSETS 18,593,488 14,889,285
------------- -------------
CURRENT ASSETS
Equity instruments at FVTOCI 11,977 31,575
Trade and Other Receivables 560,060 962,058
Other Current Assets 1,036 19,300
Cash and Cash Equivalents 7,202,334 13,002,084
------------- -------------
TOTAL CURRENT ASSETS 7,775,407 14,015,017
TOTAL ASSETS 26,368,895 28,904,302
============= =============
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share Capital 16,889,598 16,889,598
Share Premium 41,693,178 41,693,178
Merger Reserve 6,683,000 6,683,000
Foreign Currency Reserve 626,930 (38,726)
Share Based Payment Reserve 403,749 305,095
FVTOCI Reserve (41,035) (21,437)
Retained Earnings (40,999,879) (38,284,665)
------------- -------------
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE PARENT 25,255,541 27,226,043
------------- -------------
LIABILITIES
NON-CURRENT LIABILITIES
Lease Liabilities 12,263 -
------------- -------------
TOTAL NON-CURRENT LIABILITIES 12,263 -
------------- -------------
CURRENT LIABILITIES
Lease Liabilities 5,364 1,132
Trade and Other Payables 1,085,778 1,677,127
Other Current Liabilities 9,949 -
------------- -------------
TOTAL CURRENT LIABILITIES 1,101,091 1,678,259
------------- -------------
TOTAL LIABILITIES 1,113,354 1,678,259
------------- -------------
TOTAL EQUITY AND LIABILITIES 26,368,895 28,904,302
============= =============
The Financial Statements were approved and authorised for issue
by the Board of Directors on 4 April 2023 and were signed on its
behalf by:
Dale Ferguson
Chief Executive Officer
Company number: 07307107
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2022
2022 2021
GBP GBP
ASSETS
NON-CURRENT ASSETS
Investments in Subsidiaries 333,740 333,831
Other Receivables 31,877,211 26,184,402
Other Non-Current Assets 6,776 6,776
------------- -------------
TOTAL NON-CURRENT ASSETS 32,217,727 26,525,009
------------- -------------
CURRENT ASSETS
Equity instruments at FVTOCI 11,977 31,575
Trade and Other Receivables 238,189 207,129
Cash and Cash Equivalents 6,241,356 11,085,944
------------- -------------
TOTAL CURRENT ASSETS 6,491,522 11,324,648
TOTAL ASSETS 38,709,249 37,849,657
============= =============
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share Capital 16,889,598 16,889,598
Share Premium 41,693,178 41,693,178
Merger Reserve 6,683,000 6,683,000
Share Based Payment Reserve 403,749 305,095
FVTOCI Reserve (41,035) (21,437)
Retained Earnings (27,442,644) (28,707,640)
TOTAL EQUITY 38,185,846 36,841,794
------------- -------------
LIABILITIES
CURRENT LIABILITIES
Trade and Other Payables 523,403 1,007,863
TOTAL LIABILITIES 523,403 1,007,863
------------- -------------
TOTAL EQUITY AND LIABILITIES 38,709,249 37,849,657
============= =============
The Company total comprehensive income for the financial year
was GBP1,101,220 (2021: loss GBP7,851,723).
The Financial Statements were approved and authorised for issue
by the Board of Directors on 4 April 2023 and were signed on its
behalf by:
Dale Ferguson
Chief Executive Officer
Company number: 07307107
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31
DECEMBER 2022
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
2021 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
--------------- ----------- ----------- ---------- ---------- --------- ---------- ---------- ------------- ------------
Loss for the
year - - - - - - - (2,859,392) (2,859,392)
Other
Comprehensive
Income - - - 665,656 - - (19,598) - 646,058
--------------- ----------- ----------- ---------- ---------- --------- ---------- ---------- ------------- ------------
Total
Comprehensive
Income for
the
year - - - 665,656 - - (19,598) (2,859,392) (2,213,334)
Share based
payment
charges - - - - - 242,832 - - 242,832
Lapse of
options - - - - - (144,178) - 144,178 -
At 31 December
2022 16,889,598 41,693,178 6,683,000 626,930 - 403,749 (41,035) (40,999,879) 25,255,541
=============== =========== =========== ========== ========== ========= ========== ========== ============= ============
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 the net assets of
Reserve 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 2022
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
2021 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
---------------- ----------- ----------- ---------- --------- ---------- ---------- ------------- ------------
Profit for the
year - - - - - - 1,120,818 1,120,818
Other
Comprehensive
Income - - - - - (19,598) - (19,598)
Total
Comprehensive
Income for the
year - - - - - (19,598) 1,120,818 1,101,220
Share based
payment
charges - - - - 242,832 - - 242,832
Lapse of
options - - - - (144,178) - 144,178 -
At 31 December
2022 16,889,598 41,693,178 6,683,000 - 403,749 (41,035) (27,442,644) 38,185,846
================ =========== =========== ========== ========= ========== ========== ============= ============
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 YEAR ENDED 31
DECEMBER 2022
2022 2021
GBP GBP
Cash flows used in operating activities
Loss for the year (2,859,392) (3,515,834)
Depreciation and amortisation charges 23,456 35,369
Impairment of Other Assets - 5,948
Share based payment charge 242,832 200,800
Finance Income (34,695) (671)
Finance Costs 265 139
Foreign Exchange (Gains)/Losses (858,679) 213,088
Gain on relinquishment of the rights
and obligations of discontinued operations - (627,078)
------------ ------------
Cash flow used in operating activities
before changes
in working capital (3,486,213) (3,688,239)
Increase in Trade and Other receivables (78,217) (267,267)
(Decrease)/Increase in Trade and Other
Payables (538,972) 451,801
------------ ------------
Net cash used in operating activities (4,103,402) (3,503,705)
------------ ------------
Cash flow used in investing activities
Purchase of Intangible Exploration Assets (1,771,821) (1,603,208)
Purchase of Right-of-Use Assets - (798)
Purchase of Tangible Fixed Assets (852,127) (633,090)
Proceeds from sale of Investments - 654,347
Interest received 28,438 671
Proceeds from relinquishment of the
rights and obligations of discontinued
operations 89,981 6,506,852
------------ ------------
Net cash (used in)/from investing activities (2,505,529) 4,924,774
------------ ------------
Cash flow from financing activities
Proceeds from issues of ordinary shares
(net of expenses) - 9,797,982
Proceeds from exercise of share options - -
Principal paid on Lease Liabilities (5,022) (11,607)
Interest paid on Lease Liabilities (265) (139)
------------ ------------
Net cash (used in)/from financing activities (5,287) 9,786,236
------------ ------------
(Decrease)/Increase in Cash and Cash
Equivalents (6,614,218) 11,207,305
Cash and Cash Equivalents at beginning
of year 13,002,084 2,000,209
Exchange gains/(losses) on Cash and
Cash Equivalents 814,468 (205,430)
------------ ------------
Cash and Cash Equivalents at end of
year 7,202,334 13,002,084
============ ============
COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER
2022
2022 2021
GBP GBP
Cash flows used in operating activities
Gain/(loss) for the year 1,120,818 (7,933,729)
Impairment Investment in Subsidiaries 17,821 -
Impairment of Financial Assets 102,988 39,215
Impairment of Other Assets - 5,948
Share based payment reserve charge 242,832 200,800
Dividends Income (811,572) -
Finance Income (34,695) (671)
Foreign Exchange (Gains)/Losses (2,274,357) 1,756,702
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 (1,636,165) (1,492,506)
Decrease/(Increase) in Trade and Other
Receivables 168,209 (181,160)
(Decrease)/Increase in Trade and Other
Payables (488,024) 34,184
------------ ------------
Net cash used in operating activities (1,955,980) (1,639,482)
------------ ------------
Cash flow used in investing activities
Loans to subsidiaries (5,204,762) (4,784,700)
Proceeds from repayment of loans to
subsidiaries 799,772 6,014,021
Proceeds from sale of Investments - 654,347
Proceeds from dividends from subsidiaries 811,572 -
Interest received 28,438 671
------------ ------------
Net cash (used in)/from investing activities (3,564,980) 1,884,339
------------ ------------
Cash flow from financing activities
Proceeds from issues of ordinary shares
(net of expenses) - 9,797,982
------------ ------------
Net cash from financing activities - 9,797,982
------------ ------------
(Decrease)/Increase in Cash and Cash
Equivalents (5,520,960) 10,042,839
Cash and Cash Equivalents at beginning
of year 11,085,944 1,237,876
Exchange gains/(losses) on Cash and
Cash Equivalents 676,372 (194,771)
------------ ------------
Cash and Cash Equivalents at end of
year 6,241,356 11,085,944
============ ============
**ENDS**
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END
FR UPUWWCUPWPGC
(END) Dow Jones Newswires
April 05, 2023 02:00 ET (06:00 GMT)
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