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Savannah Resources PLC

29 September 2023

29 September 2023

Savannah Resources Plc

(AIM: SAV, FWB: SAV and SWB: SAV) ('Savannah', or the 'Company')

Interim Results for Six Months Ended 30 June 2023

Savannah Resources, the European lithium development company, is pleased to announce its interim results for the six months ended 30 June 2023.

First half and recent highlights include:

Corporate:

-- Experienced Portuguese and international business leader, Emanuel Proença appointed as Chief Executive Officer ('CEO') in September with Interim CEO, Dale Ferguson, returning to his previous role of Technical Director

-- Experienced mining executive, Bruce Griffin appointed as an Independent Non-Executive Director in September

-- Experienced energy sector and strategy executive, Mohamed Sulaiman appointed as a Non-Executive Director in September, replacing the retiring Imad Sultan as the Board representative of Savannah's largest shareholder, Al Marjan Ltd

   --    Technical team expanded in line with increasing workload 
   --    GBP6.5 million (gross) fundraise completed at market price in July 
   --    The sad passing of former Non-Executive Director, Manohar Pundalik Shenoy 

Barroso Lithium Project (the 'Project'):

Technical:

-- The Portuguese environmental regulator ('APA') gave its endorsement ('DIA') to the Project in May. This was the successful culmination of the Article 16 phase of the overall environmental impact assessment ('EIA') process which Savannah agreed to enter in July 2022

-- Following the DIA, work to complete the environmental licencing process ('RECAPE' phase) and Definitive Feasibility Study ('DFS') is underway with key contractors either appointed or to be appointed shortly. We expect to complete the environmental licencing process and DFS in H2 2024

-- A new Scoping Study was published in June 2023 incorporating the DIA approved Mine Plan and Project design. Based on average production of 191,000tpa of spodumene concentrate, the Study returned post-tax free cash flow of US$1.7 billion, net present value at an 8% discount rate of US$953m (41p/share), internal rate of return of 77%, and payback period of just 1.3 years

-- The initial phase of the decarbonisation study showed electric mining equipment provides the best opportunity to reduce the Project's Scope 1 emissions and that a number of viable options exist to secure 100% renewable energy supply to reduce the Project's Scope 2 emissions to zero. More detailed analysis of these and other initiatives will be explored over the next 12 months

Stakeholder Engagement:

-- The EIA submission was accompanied by a 'Social Issues Scoping Report', incorporating the views of local people about the Project and Savannah, the proposed frameworks for the Benefit Sharing Plan and Good Neighbour Plan, and the financial proposals to acquire access to land required for the Project from two relevant Baldios Community groups

-- To assist local stakeholders' understanding, Savannah held a number of community meetings, produced two Community Information Sheets, 17 Fact Sheets and a new corporate video in parallel with the EIA submission

-- Community Insights Group has begun work on two elements of the RECAPE which relate to the Project's interaction with local communities and stakeholders

Commercial:

-- Following the DIA and Scoping Study there has been additional interest in the Project and potential partnership collaborations with Savannah from groups across the lithium value chain

-- The Company is currently working through an orderly process to shortlist potential strategic partners for the Project, focusing on groups willing to assist with the Project's financing and which could bring complementary skills or additional opportunities to Savannah

Next steps/future news flow:

-- Cash balance of GBP11.4m (July 2023) and expanding team provides capacity to move the Project towards a final investment decision

-- Environmental licencing and DFS related work to continue (with regular updates provided) and be completed in H2 2024

   --    Continuation of orderly process to identify a shortlist of potential strategic partners 

-- Continue to secure the land or access to the land needed for the Project, which we hope to do via negotiation and agreement with relevant parties

-- Wider stakeholder engagement programme to continue, focused on reaching mutually beneficial resolution on tailoring the Project's Benefit Sharing Plan to meet the area's specific needs

-- Continue efforts to have more of the Project's value reflected in the Company's share price through achievement of milestones and ongoing investor marketing

CHAIRMAN'S STATEMENT FOR THE SIX MONTHSED 30 JUNE 2023

The first half of 2023 was one of the busiest and most successful periods during Savannah's ownership of the Barroso Lithium Project in Portugal (the "Project"). The milestones are already well known to shareholders, namely the endorsement of the Project ('DIA') by Portugal's environmental regulator in May, followed swiftly by the new Scoping Study in June, which highlighted the Project's near US$1 billion value. These milestones then paved the way for Savannah to complete a successful fundraise at market price in July, which has given us the cash balance needed to accelerate the work required to take the Project towards a final investment decision.

The work completed in the period also gives us the platform to move forward on other fronts. We can identify those strategic partners who are committed to building a long-term relationship with Savannah and supporting us with financing the Project. It provides a catalyst to increase our engagement with stakeholders as we look to make firm commitments on benefit sharing and give clear guidance on the Project's development. Finally, it has given us long-term confidence to build out our team to make this Project and its value a reality.

However, before speaking of those who have joined Savannah and the Company's exciting future it is important to remember those who are no longer with us. It was with deep sadness that we learnt of the passing of Mr. Manohar Pundalik Shenoy, Non-Executive Director of the Company earlier in September. Manohar was a dedicated member of the Savannah Board who commanded great respect for his business acumen and human decency. We will miss his valued contributions, particularly as Chairman of our Audit and Risk Committee and extend our deepest sympathies again to his family and friends.

Turning to Savannah's future, I would like to take this opportunity to welcome again our new CEO, Emanuel Proença and Non-Executive Directors, Bruce Griffin and Mohamed Sulaiman, who all joined earlier in September and provide new key skills and experience for developing the Project into a strategic part of Europe's energy transition. I also express again my great appreciation to Dale Ferguson, who led us so successfully through the last 15 months as Interim CEO. He now assumes his former role as Savannah's Technical Director and will lead the current work programmes we have underway on the Project's environmental licencing and Definitive Feasibility Study ('DFS'). He will also retain his seat on Savannah's Board as an Executive Director.

Emanuel brings us a wealth of Portuguese and international business experience gained across a range of industries and disciplines. He joins Savannah from his role as CEO of the industrial businesses of Prio, one of Portugal's 20 largest companies and the country's largest green fuels and biodiesel producer, and its second largest provider of electricity for mobility and a network of charging points. The subsidiaries under Emanuel's leadership experienced rapid growth with revenues and profitability more than tripling in 7 years, resulting in over EUR1.5 billion in revenue and accounting for approximately 80% of the group's profitability in 2022. Thus, Emanuel is well placed to lead the Company through significant change and growth as it delivers the Project into production for the benefit of its stakeholders.

His arrival adds new energy and a fresh approach to our corporate culture and business practices as we look to press forward with the Project. As Savannah's first Portuguese CEO, located in Lisbon, Emanuel can give Savannah the constant, high level, presence in Portugal, which it has not fully enjoyed to date. He will be prioritising our engagement with all Portuguese stakeholders including national and local government and local communities. The Board and I all look forward to working with him.

Mr Proença's appointment as CEO will initially be in a non-Board capacity but the Company envisages that he will formally join Savannah's Board during H1 2024. In the interim, we have made two appointments to the Board as we look to add individuals to our leadership team with the specific knowledge and experience needed by a Company developing its first major natural resource project. Over the next 2-3 years Savannah will be required to significantly increase its interaction with all stakeholders including governments, service providers, customers and communities, as well as effectively assessing and executing financing and partnership options. Hence, we must have the experience and capacity in our team to allow us to do this successfully.

As part of this scale up we welcomed Bruce Griffin as an additional, independent Non-Executive Director. Bruce may be familiar to some shareholders from the period he spent advising Savannah during its strategic review of its Mutamba mineral sands project in 2021, which resulted in a successful transaction with Rio Tinto. Bruce has over 20 years of mining sector experience which crucially includes recent mining project construction. As the Executive Chairman of Sheffield Resources Limited, Bruce is playing a key role in commissioning the 10Mtpa Thunderbird minerals sands project in Australia, which the Company has recently constructed with its 50/50 JV partner YGH Australia Investment Pty Ltd (Yansteel).

Al Marjan Ltd ("Al Marjan"), Savannah's largest shareholder, also chose to change its representative on the Board. We give our thanks to Imad Sultan who is stepping down from the Board after seven years of valuable service and contribution. We wish him well with his many other business interests. Going forward, Al Marjan will be represented by Mohamed Sulaiman, Head of Strategy at the Omani conglomerate business, Towell Group and the former lead for Strategy and Performance at OQ, the Omani energy company. As with Bruce's mining experience, Mohamed's experience in strategy leadership, including in the energy sector, and his familiarity with directorship roles from the Boards of other public and private companies will be invaluable to Savannah and we look forward to his contribution.

Importantly we are not just adding strength to our executive and Board teams. We are actively recruiting for roles to ensure delivery of the Project and have recently recruited a project management expert, an Environmental Officer, and a new group of geologists and technicians. This includes three new members of staff from the local community, to be part of the team for the new field programmes we are about to start as part of efforts to conclude both the Environmental Licencing process and the DFS. It is an exciting and defining time at Savannah, and I look forward to us continuing with our current recruitment drive as we move to deliver the Project for our shareholders, stakeholders and Portugal's economic benefit.

As Savannah delivered on its stated goals in the first half of the year, we were pleased to see the share price responding positively, increasing by over 115% from the start of the year to reach its recent peak of 4.95p on 6 June 2023. However, we all recognise that the share price started from a low base following the additional uncertainty placed on the Project by the Article 16 process between July 2022 and the end of May 2023. As I have highlighted before, the Board believes the current share price remains wholly unreflective of the underlying project value (e.g., NPV/share of 41p/share) and we continue to flag this anomaly to investors whenever possible. Equally, our share price and that of many of our direct peers has not been helped by the significant correction experienced in lithium prices during the year to date and the wider macroeconomic issues impacting capital markets recently.

Lithium raw material prices, including for spodumene concentrate, all fell by over 40% during the first half of the year but this must be seen in the context of the 1,200% to 2,000% increases seen in prices in the two years up to November 2022. We must be prepared to expect such volatility in a small volume commodity and speciality chemical market like lithium. On prices it is important to note that, despite the correction, the current price of US$2,750/t for spodumene remains nearly twice the average price we used in our Scoping Study.

The recent downtrend was likely driven by the temporary slowdown in EV sales in the first quarter of the year, cooling buying sentiment along the lithium battery supply chain. This was predominantly the result of COVID lockdowns, New Year celebrations and the removal of vehicle purchasing incentives in China, the world's largest EV market, during January and February. Pleasingly, sales have subsequently improved with EVvolumes.com reporting that over 6 million plug-in vehicles were sold globally in the first half of the year, representing a 39% increase on the first half of 2022. Encouragingly, that website is forecasting annual sales of 14 million plug-in vehicles for the full year (+33% vs. 2022), implying an increase in sales of 33% for 2H 2023 over the first half.

While stock markets often tend to respond badly, and quickly, to falling commodity prices, groups within the commodity sector in question usually continue to take a much more pragmatic view, seeing strategic value in assets based on a longer-term perspective. This is true in the lithium sector, and is reflected in the amount of commercial interest we continue to receive about the Project. Following the progress which we have made recently, I believe that many in the lithium sector, and many keen to enter it, see significant strategic value in a partnership with Savannah. Our job is now to identify from the many groups who have approached us, a shortlist which are really committed to helping make the Barroso Lithium Project a reality.

Furthermore, with Sibanye-Stillwater's integrated spodumene and lithium hydroxide Keliber project now in construction in Finland and following the publication of the European Commission's Critical Raw Material Act ('CRMA') in March, lithium raw material production in Europe should be seen as a very likely reality in coming years. Among a number of positive initiatives, the CRMA calls for at least 10% of Europe's future demand for critical materials, including lithium, to be met from domestic supply sources such as the Barroso Lithium Project.

To sum up, given the progress we have made in the first half of the year, the personnel we have added and the robust cash position we have, the Company can move forward to deliver its plans with real confidence.

You will find further brief summaries of the major work streams and topics below.

Barroso Lithium Project, Portugal

Environmental Licencing process

On 31 May Savannah announced the Portuguese environmental regulator ('APA') had issued a positive Environmental Impact Statement, the DIA, on the Project. This was the successful culmination of the Article 16 phase of the overall Environmental Impact Assessment ('EIA') process which Savannah agreed to enter in July 2022.

Achieving the DIA award is the most challenging part of the overall environmental licencing process. We can now say that the regulator has agreed to the design of the Project and that Savannah and APA have mutually agreed a set of accompanying conditions for the Project's construction and operation. For the remaining 'RECAPE' phase (the Environmental Compliance Report of the Execution Project), we are required to produce a final design which complies with the DIA and its associated conditions.

Completion of the Article 16 process and award of the DIA required a huge effort by all our team and our consultants. Approval of the design shows that we have successfully captured and responded to all of the feedback received from APA, the groups on its evaluation committee, and other key stakeholders during the Article 16 process. As a result, everyone can be assured that every effort has been taken by all involved in the process to minimise the Project's environmental and social impact while allowing the production of over 2.5 million tonnes of lithium-bearing concentrate which Europe so greatly needs for its energy transition.

We are now underway with the work for the RECAPE phase, which we expect to complete in the second half of 2024. The consultancy, Quadrante, a major contributor to our successful DIA, has been awarded the contract for the RECAPE work on the Project itself and we expect to award the contract for the separate RECAPE on the new bypass road shortly.

Scoping Study

The new Scoping Study published in June 2023, the first in five years, combined the DIA approved Mine Plan and Project design with a conservative average spodumene price of US$1,464/t (5.5% Li(2) O grade) over the life of the Project versus the current spot price of US$2,750/t (6% Li(2) O grade). I believe the post-tax free cash flow of US$1.7 billion, net present value at an 8% discount rate of US$953m, internal rate of return of 77%, and payback period of just 1.3 years, clearly demonstrate the outstanding economics of the Project. Furthermore, it is satisfying for Savannah that this level of value creation can be achieved while also: providing a tax and royalty income for Portugal of over US$900m; generating over 300 new jobs; investing over US$40m in infrastructure, which will either directly benefit local communities (e.g., the new bypass road) or further reduce the Project's impact for them; the EUR0.5m/year which we have committed to providing to a new foundation focused on funding community initiatives; and over US$100m in rehabilitation costs.

We now look forward to confirming the Project's potential in the Definitive Feasibility Study, which our team is currently working on and which we expect to complete in the second half of 2024. I hope this will give the market the greater level of confidence it appears to need to allow more of the underlying value of this Project (e.g., NPV/share of 41p) to be reflected in Savannah's share price.

Definitive Feasibility Study & Decarbonisation Study

While we did not receive APA's positive decision on the Project until the end of May, preparations were being made during the first half of the year for the potential restart of work relating to the DFS. It is pleasing that work is soon to get underway again with the restart of drilling on Savannah owned land at the Project after a near four-year break. This is the first of two phases of drilling, scheduled for around 6 months in total, focused on upgrading existing mineral resources, providing further samples for metallurgical test work and geotechnical drilling for the final open pit designs.

We were also pleased to announce recently that the DFS processing work package was awarded to a collaboration between the plant construction experts Sedgman Pty Ltd ('Sedgman') and the processing experts Minsol Engineering Pty Ltd ('Minsol'). Shareholders will be familiar with Minsol, which has already played a key role in the Project, producing the plant's final processing circuit design which combines conventional spodumene processing methodologies with near neutral pH conditions and environmentally friendly reagents suitable for use under Portuguese and European legislation. We look forward to building a strong relationship with Sedgman, which will also see us working with their sister company, the Spanish engineering group, DRAGADOS.

We look forward to awarding the contract for the DFS' infrastructure package soon, following completion of that tendering process over the summer.

In parallel with the DFS, Savannah will also be continuing with its decarbonisation study work. As announced in February, the initial study showed that battery powered electric mining equipment will provide the most effective and flexible means to reduce Scope 1 emissions at the Project to zero. It also concluded that a number of viable options are available to secure 100% renewable energy supply to the Project including regional solar and wind generation, on market purchase, direct Power Purchase Agreements, or a combination of these. Portugal's grid power already features a contribution from renewables of over 70%, but use of 100% renewable energy would reduce the Project's Scope 2 emissions to zero.

Over the next 12 months, Savannah and its consultants will conduct a more detailed analysis of these and other initiatives and Studies, with a number of mining equipment manufacturers to determine a site-specific solution for a future transition to a battery-operated mining fleet as and when appropriate equipment becomes available.

Savannah has also committed to reducing its Scope 3 emissions as much as possible and looks forward to working with its future suppliers, customers and haulage partners on that front.

Stakeholder Engagement

Management of the Project's social impact as well as effective sharing of its socio-economic benefits with stakeholders was a major theme within the overall environmental impact assessment process conducted by APA.

As a result, the 'Social Issues Scoping Report', written by Community Insights Group ('Community Insights') and incorporating the views of local people about the Project and Savannah, accompanied Savannah's revised EIA submission in March alongside Savannah's proposed frameworks for its Benefit Sharing Plan, its Good Neighbour Plan and its financial proposals to acquire access to land required for the Project from two relevant Baldios Community groups in the area (see Land acquisition and land access section below).

Stakeholder feedback collected by Community Insights during 2022 included requests for more information on the Project. Therefore, to accompany the EIA submission and public consultation period in the EIA process, Savannah held a number of community meetings, produced two Community Information Sheets, 17 Fact Sheets and a new corporate video (the documents and video can be found on Savannah's website and at our local Information Centres), all aimed at explaining the key aspects of the new Barroso Lithium Project.

Savannah remains firmly committed to ongoing stakeholder engagement and remains open for dialogue on any aspect of the Project which stakeholders would like to discuss. There are also some formal actions which Savannah has been requested to undertake in relation to the Project's stakeholders as part of the RECAPE process. Community Insights has been selected to provide support in responding to two elements within the RECAPE which relate to the Project's interaction with local communities and stakeholders. Work is now underway on these and is expected to take around 8 months to complete.

Commercial Discussions

As our shareholders will know, the Project contains the largest JORC (2012) Compliant spodumene resource in Europe making it hugely strategic in the continent's plans for a domestic lithium battery value chain. Savannah owns 100% of the Project with no offtake committed to date, giving it full leverage to the potential value that can be created by advancing the Project in this supportive environment.

While there has always been significant commercial interest in the Project, following the endorsement of the DIA and publication of the new positive Scoping Study, there has been additional interest received from groups across the lithium value chain. From the dozens of commercial inquiries which Savannah has received, the Company is currently working through an orderly process to shortlist potential strategic partners for the Project. Savannah is focusing on identifying groups which are willing to assist with the financing of the Project's construction and bring complementary skills or additional opportunities to a long-term partnership with Savannah. We expect to provide an update on this later in the year.

Land acquisition & access arrangements

To develop the Project, Savannah must either own or have agreed access rights to the land which is to be developed. Due to the distance of the Project from the communities in the area, there is no requirement to purchase any houses or other buildings from local people for the Project to progress. Nor is there a requirement for any resident to leave their home. All agreements and proposed agreements relate only to land.

From an extensive mapping exercise, Savannah estimates that the total area of land that is required for the Project, spread across the Mining Lease, the proposed road, and ancillary areas is approximately 840 hectares (8.4km(2) ) with private landowners holding around 24% of the total. The remainder is managed on behalf of the community by management groups ('Baldios'). The land is spread across four parishes.

Since 2021, Savannah has been operating a land acquisition programme. To date more than 40 private landowners have sold, or agreed to sell, their land to Savannah and Savannah has acquired, or is in the process of acquiring, over 90 hectares of land in the local area for which it has paid approximately EUR1.8m (including relevant taxes). Based on the attractive rates which Savannah is offering, prior to mine construction the Company expects to spend approximately EUR5m in total on acquisition of land identified to date, with the money going directly to local people. Further investment on private land will depend on matters including the progress of private property identification and the completion of agreements.

Savannah has also engaged with the local Baldios communities from Covas do Barroso and Dornelas, and presented financial proposals to access the Baldios lands. The Company has benchmarked its offer against other relevant land access agreement and transactions in Portugal and believes it to be a highly attractive figure. For its total financial proposal, Savannah has added to its land access fee, a royalty linked to the volume of spodumene concentrate production and compensation for drilling platforms. Savannah is also offering: direct payments to all the community members in the impacted parishes, compensation for anyone losing agricultural grants as a result of the Project, and financial support for the local firefighters. Overall, Savannah estimates it will pay approximately EUR10m for access to the community lands managed by the Baldios over the Project's life, with approximately EUR4m being paid directly to community members.

Savannah remains open to discussions with private landowners, Baldios representatives, and other stakeholders around its land acquisition programme and land access proposals. The Company's preferred option is to secure the land or access to the land it needs to develop the Project through direct negotiation and agreement.

The 30-year Mining Lease granted in 2006 safeguards Savannah's access to land that may be necessary for the development of the Barroso Lithium Project. This condition applies to both private land and land managed by the representatives of the Baldios. Despite the existing legal coverage, Savannah will always favour direct agreement with the owners of the lands and representatives of the Baldios. The Company will use the mechanisms provided in Portuguese law but only when it is not possible to reach an agreement.

As shareholders will know, Savannah is committed to responsible land management and will be comprehensively rehabilitating, relandscaping and revegetating impacted areas during the operating life of the Project (beginning in the second year of operation) and after it closes. At the end of the Project's life, the land will be returned to the community for its own use.

Legal Proceedings

The use of 'lawfare' is a common tool used by parties seeking to disrupt project developments, and there are three such cases relating to the Project, for which the Company has continued to provide updates when appropriate. Two of these cases relate to challenges by the Parish of Covas do Barroso to the Portuguese Government (including the environmental regulator, APA) and seek to nullify administrative acts relating to changes to the C-100 mining lease (which contains the BLP) and the grant of the DIA to the Project. In respect of the former case, Savannah has contested the claim and is awaiting news from the court, and in respect of the latter case, Savannah is preparing the contestation which it shall submit to the court by the end of October 2023. Importantly:

   --      the lawsuits do not impact the Company's activities at the Project 

-- the C-100 mining lease is fully granted, has a term of 30 years to 2036 and remains in good standing

   --      the DIA remains in force 
   --      the advice from Savannah's lawyers is that the lawsuits are without foundation. 

A third case relates to the Management Commission of the Covas do Barroso Baldios' challenge against certain private landowners and Savannah in respect of some land packages at the Project which were purchased by Savannah. The challenge relates to alleged minor land border disputes, and no date has been set by the court for a preliminary hearing.

Financials

Despite continuing prudent cost management contributing to a 28% reduction in administrative expenses to GBP1.4m during the period (30 June 2022: GBP1.9m), Savannah recorded an 18% increase in net losses from continuing operations to GBP1.5m (30 June 2022: GBP1.3m) due to a swing from a GBP0.6m exchange rate gain in first half 2022 to a GBP0.1m exchange rate loss in the current period. The Company finished the period with cash of GBP4.8m (30 June 2022: GBP9.4m) but pro-forma cash reserves were subsequently increased to GBP11.4m in July 2023 via the successful completion of a GBP6.5m equity fundraise.

July's fundraise, which was successfully completed at 4.67p/share, representing a discount of just 0.6% to the Company's closing share price the day prior to its launch, combined three elements, a subscription, a placing and, for the first time, an offer to private investors via the PrimaryBid platform. Seeking to raise in excess of GBP5.8m, GBP6.1m was raised via the subscription and placing with a number of existing shareholders taking part including Savannah's two largest shareholders Al Marjan (now 15.1%) and Slipstream Resources (now 8.1%) and members of the Board. Alongside investments from our existing institutional shareholders, two natural resource focused funds joining the register for the first time invested a total of GBP3.4m. With good demand via the PrimaryBid offer raising a further GBP0.4m at the same price, the gross total of GBP6.5m was achieved.

Outlook

The remainder of 2023 and 2024 is set to be another very busy and exciting period for Savannah as our growing team, under the new leadership of Emanuel Proença, look to take the Company towards a final investment decision on the Barroso Lithium Project. To get there we must complete the Project's licencing process and DFS, identify the strategic partners we wish to work with, and leverage our valuable Project and its spodumene concentrate to attract the finance we need for construction.

We will continue to secure the land or access to the land we need for the Project, which we hope to do via negotiation and agreement with relevant parties. This will be part of our wider stakeholder engagement programme through which we aim to reach mutually beneficial resolution on how our commitments to benefit sharing from the Project are tailored to the area's specific needs, and then delivered.

We will also continue our efforts to have more of the Project's value reflected in the Company's share price. Significant strides to de-risk the Project have been made in the first half of 2023 and more are expected to follow over the coming months. I remain hopeful that the backdrop to our strong investment case will also improve with global EV sales expected to accelerate in the second half of the year, which should in turn improve the recent negative trend in lithium prices. Progress should be made in the adoption of the European Commission's Critical Raw Materials Act, which is targeting 10% of European demand to be met by domestic supply by 2030, and hopefully wider sentiment in stock markets will also improve. I believe a broader pool of investors should see a compelling backdrop to complement Savannah's investment case. In the meantime, I would like to thank our old and new shareholders alike for their ongoing support and enthusiasm for the Company and its goal to become a major supplier of responsibly sourced lithium raw material for Europe.

Matthew King

Chairman

Date: 28 September 2023

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHSED 30 JUNE 2023

 
                                                        Unaudited      Unaudited         Audited 
                                                       Six months     Six months      Year ended 
                                                       to 30 June     to 30 June     31 December 
                                                             2023           2022            2022 
                                             Notes            GBP            GBP             GBP 
 
  CONTINUING OPERATIONS 
  Revenue                                                       -              -               - 
  Other Income                                                  -              -               - 
  Administrative Expenses                             (1,383,467)    (1,932,032)     (3,531,894) 
  Foreign Exchange (Loss) / Gain                        (148,008)        628,980         814,468 
  OPERATING LOSS                                      (1,531,475)    (1,303,052)     (2,717,426) 
  Finance Income                                           32,588            341          34,695 
  Finance Costs                                                 -              -           (265) 
-----------------------------------------  -------  -------------  -------------  -------------- 
  LOSS FROM CONTINUING OPERATIONS 
   BEFORE TAX                                         (1,498,887)    (1,302,711)     (2,682,996) 
  Tax Expense                                                   -              -               - 
  LOSS FROM CONTINUING OPERATIONS 
   AFTER TAX                                          (1,498,887)    (1,302,711)     (2,682,996) 
  LOSS ON DISCONTINUED OPERATIONS 
   NET OF TAX                                            (48,060)       (50,838)       (176,396) 
-----------------------------------------  -------  -------------  -------------  -------------- 
  LOSS AFTER TAX ATTRIBUTABLE 
   TO EQUITY OWNERS OF THE PARENT                     (1,546,947)    (1,353,549)     (2,859,392) 
-----------------------------------------  -------  -------------  -------------  -------------- 
  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                                     (4,111)       (13,844)        (19,598) 
  Items that will or may be reclassified 
   to Profit or Loss: 
  Exchange (Loss) / Gains arising 
   on translation of foreign operations                 (414,958)        397,464         665,656 
-----------------------------------------  -------  -------------  -------------  -------------- 
  OTHER COMPREHENSIVE INCOME FOR 
   THE PERIOD                                           (419,069)        383,620         646,058 
-----------------------------------------  -------  -------------  -------------  -------------- 
  TOTAL COMPREHENSIVE LOSS FOR 
   THE PERIOD ATTRIBUTABLE TO EQUITY 
   OWNERS OF THE PARENT                               (1,966,016)      (969,929)     (2,213,334) 
-----------------------------------------  -------  -------------  -------------  -------------- 
  Loss per Share attributable 
   to Equity Owners of the parent 
   expressed in pence per share: 
  Basic and Diluted 
  From Operations                              3           (0.09)         (0.08)          (0.17) 
  From Continued Operations                    3           (0.09)         (0.08)          (0.16) 
  From Discontinued Operations                 3           (0.00)         (0.00)          (0.01) 
-----------------------------------------  -------  -------------  -------------  -------------- 
 

The notes form part of this Interim Financial Report.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2023

 
                                                   Unaudited       Unaudited         Audited 
                                                     30 June         30 June     31 December 
                                                        2023            2022            2022 
                                       Notes             GBP             GBP             GBP 
  ASSETS 
  NON-CURRENT ASSETS 
  Intangible Assets                      4        16,660,692      15,235,815      16,459,599 
  Right-of-Use Assets                                 14,515          18,052          17,627 
  Property, Plant and Equipment          5         1,598,389       1,366,935       1,583,944 
  Other Receivables                      6           434,350               -         454,651 
  Other Non-Current Assets               7            92,398          74,863          77,667 
  TOTAL NON-CURRENT ASSETS                        18,800,344      16,695,665      18,593,488 
  CURRENT ASSETS 
  Equity Instruments at FVTOCI                         7,866          17,731          11,977 
  Trade and Other Receivables            6           408,502       1,035,356         560,060 
  Other Current Assets                   7               395          18,211           1,036 
  Cash and Cash Equivalents                        4,839,155       9,433,689       7,202,334 
  TOTAL CURRENT ASSETS                             5,255,918      10,504,987       7,775,407 
-----------------------------------  -------  --------------  --------------  -------------- 
  TOTAL ASSETS                                    24,056,262      27,200,652      26,368,895 
-----------------------------------  -------  --------------  --------------  -------------- 
  EQUITY AND LIABILITIES 
  SHAREHOLDERS' EQUITY 
  Share Capital                          9        16,889,598      16,889,598      16,889,598 
  Share Premium                                   41,693,178      41,693,178      41,693,178 
  Merger Reserve                                   6,683,000       6,683,000       6,683,000 
  Foreign Currency Reserve                           211,972         358,738         626,930 
  Share Based Payment Reserve                        495,612         425,019         403,749 
  FVTOCI Reserve                                    (45,146)        (35,281)        (41,035) 
  Retained Earnings                             (42,546,826)    (39,606,088)    (40,999,879) 
  TOTAL EQUITY ATTRIBUTABLE 
   TO EQUITY HOLDERS OF THE PARENT                23,381,388      26,408,164      25,255,541 
  LIABILITIES 
  NON-CURRENT LIABILITIES 
  Lease Liabilities                                    9,306          11,051          12,263 
-----------------------------------  -------  --------------  --------------  -------------- 
  TOTAL NON-CURRENT LIABILITIES                        9,306          11,051          12,263 
-----------------------------------  -------  --------------  --------------  -------------- 
  CURRENT LIABILITIES 
  Lease Liabilities                                    5,210           5,214           5,364 
  Trade and Other Payables               8           638,389         776,223       1,085,778 
  Other Current Liabilities                           21,969               -           9,949 
  TOTAL CURRENT LIABILITIES                          665,568         781,437       1,101,091 
  TOTAL LIABILITIES                                  674,874         792,488       1,113,354 
-----------------------------------  -------  --------------  --------------  -------------- 
  TOTAL EQUITY AND LIABILITIES                    24,056,262      27,200,652      26,368,895 
-----------------------------------  -------  --------------  --------------  -------------- 
 

The Interim Financial Report was approved by the Board of Directors on 28 September 2023 and was signed on its behalf by:

........................................................

Dale Ferguson

Executive Director

Company number: 07307107

The notes form part of this Interim Financial Report.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHSED 30 JUNE 2023

 
                                                                               Share 
                                                    Merger      Foreign        Based 
                         Share         Share       Reserve     Currency      Payment               FVTOCI        Retained          Total 
                       Capital       Premium           GBP      Reserve      Reserve              Reserve        Earnings         Equity 
                           GBP           GBP     6,683,000          GBP          GBP                  GBP             GBP            GBP 
  At 1 January 
   2022             16,889,598    41,693,178                   (38,726)      305,095             (21,437)    (38,284,665)     27,226,043 
----------------  ------------  ------------  ------------  -----------  -----------  -------------------  --------------  ------------- 
  Loss for the 
   period                    -             -             -            -            -                    -     (1,353,549)    (1,353,549) 
  Other 
   Comprehensive 
   Income                    -             -             -      397,464            -             (13,844)               -        383,620 
----------------  ------------  ------------  ------------  -----------  -----------  -------------------  --------------  ------------- 
  Total 
   Comprehensive 
   Income for 
   the 
   period                    -             -             -      397,464            -             (13,844)     (1,353,549)      (969,929) 
  Share Based 
   Payment 
   charges                   -             -             -            -      152,050                    -               -        152,050 
  Lapse of 
   Options                   -             -             -            -     (32,126)                    -          32,126              - 
  At 30 June 
   2022             16,889,598    41,693,178     6,683,000      358,738      425,019             (35,281)    (39,606,088)     26,408,164 
----------------  ------------  ------------  ------------  -----------  -----------  -------------------  --------------  ------------- 
  Loss for the 
   period                    -             -             -            -            -                    -     (1,505,843)    (1,505,843) 
  Other 
   Comprehensive 
   Income                    -             -             -      268,192            -              (5,754)               -        262,438 
----------------  ------------  ------------  ------------  -----------  -----------  -------------------  --------------  ------------- 
  Total 
   Comprehensive 
   Income for 
   the 
   period                    -             -             -      268,192            -              (5,754)     (1,505,843)    (1,243,405) 
  Share Based 
   Payment 
   charges                   -             -             -            -       90,782                    -               -         90,782 
  Lapse of 
   Options                   -             -             -            -    (112,052)                    -         112,052              - 
  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 
----------------  ------------  ------------  ------------  -----------  -----------  -------------------  --------------  ------------- 
  Loss for the 
   period                    -             -             -            -            -                    -     (1,546,947)    (1,546,947) 
  Other 
   Comprehensive 
   Income                    -             -             -    (414,958)            -              (4,111)               -      (419,069) 
----------------  ------------  ------------  ------------  -----------  -----------  -------------------  --------------  ------------- 
  Total 
   Comprehensive 
   Income for 
   the 
   period                    -             -             -    (414,958)            -              (4,111)     (1,546,947)    (1,966,016) 
  Share Based 
   Payment 
   charges                   -             -             -            -       91,863                    -               -         91,863 
  At 30 June 
   2023             16,889,598    41,693,178     6,683,000      211,972      495,612             (45,146)    (42,546,826)     23,381,388 
----------------  ------------  ------------  ------------  -----------  -----------  -------------------  --------------  ------------- 
 

The notes form part of this Interim Financial Report.

CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHSED 30 JUNE 2023

 
 
                                                          Unaudited       Unaudited         Audited 
                                                         Six months      Six months      Year ended 
                                                            to June         to June        December 
                                                               2023            2022            2022 
                                              Notes             GBP             GBP             GBP 
  Cash Flows used in Operating 
   Activities 
  Loss for the period                                   (1,546,947)     (1,353,549)     (2,859,392) 
  Depreciation and Amortisation 
   charges                                     5              5,472          12,137          23,456 
  Share Based Payments Reserve 
   charge                                                    91,863         152,050         242,832 
  Finance Income                                           (32,588)        (12,697)        (34,695) 
  Finance Expense                                                 -           3,557             265 
  Exchange Losses / (Gains)                                 166,683       (628,090)       (858,679) 
  Cash Flow from Operating Activities 
   before changes in Working Capital                    (1,315,517)     (1,826,592)     (3,486,213) 
  Decrease / (Increase) in Trade 
   and Other Receivables                                    137,471        (97,472)        (78,217) 
  Decrease in Trade and Other 
   Payables                                               (396,205)       (765,133)       (538,972) 
----------------------------------------  ---------  --------------  --------------  -------------- 
  Net Cash used in Operating Activities                 (1,574,251)     (2,689,197)     (4,103,402) 
----------------------------------------  ---------  --------------  --------------  -------------- 
  Cash flow used in Investing 
   Activities 
  Purchase of Intangible Exploration 
   Assets                                      4          (607,380)       (939,423)     (1,771,821) 
  Purchase of Tangible Fixed Assets            5           (63,940)       (665,952)       (852,127) 
  Interest received                                          32,589          12,697          28,438 
  Proceeds from Relinquishment 
   of the Rights and Obligations 
   of Discontinued Operations                                     -          86,675          89,981 
----------------------------------------  ---------  --------------  --------------  -------------- 
  Net Cash used in Investing Activities                   (638,731)     (1,506,003)     (2,505,529) 
----------------------------------------  ---------  --------------  --------------  -------------- 
  Cash Flow used in Financing 
   Activities 
  Principal paid on Lease Liabilities                       (2,605)         (2,275)         (5,022) 
  Interest paid                                                   -         (3,557)           (265) 
----------------------------------------  ---------  --------------  --------------  -------------- 
  Net Cash used in Financing Activities                     (2,605)         (5,832)         (5,287) 
----------------------------------------  ---------  --------------  --------------  -------------- 
  Decrease in Cash and Cash Equivalents                 (2,215,587)     (4,201,032)     (6,614,218) 
  Cash and Cash Equivalents at 
   beginning of period                                    7,202,334      13,002,083      13,002,084 
  Exchange (Losses) / Gains on 
   Cash and Cash Equivalents                              (147,592)         632,638         814,468 
----------------------------------------  ---------  --------------  --------------  -------------- 
  Cash and Cash Equivalents at 
   end of period                                          4,839,155       9,433,689       7,202,334 
----------------------------------------  ---------  --------------  --------------  -------------- 
 

The notes form part of this Interim Financial Report.

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL REPORT FOR THE SIX MONTHSED 30 JUNE 2023

   1.    BASIS OF PREPARATION 

The financial information set out in this report is based on the Consolidated Financial Statements of Savannah Resources Plc (the 'Company') and its subsidiary companies (together referred to as the 'Group'). The Interim Financial Report of the Group for the six months ended 30 June 2023, which is unaudited, was approved by the Board on 28 September 2023. The financial information contained in this interim report does not constitute statutory accounts as defined by s434 of the Companies Act 2006. The statutory accounts for the year ended 31 December 2022 have been filed with the Registrar of Companies. The Auditors' Report on those accounts was unqualified and did not contain a statement under section 498 (2) or 498 (3) of the Companies Act 2006.

The financial information set out in this report has been prepared in accordance with the accounting policies set out in the Annual Report and Financial Statements of Savannah Resources Plc for the year ended 31 December 2022. New standards and amendments to IFRS effective as of 1 January 2023 have been reviewed by the Group and there has been no material impact on the financial information set out in this report as a result of these standards and amendments.

The Group Interim Financial Report is presented in Pound Sterling.

Going Concern

In common with many mineral exploration companies, the Company has in the past raised equity to fund its exploration activities and to date has not earned any revenues from its exploration projects.

In July 2023 the Company raised GBP6.5m (before expenses), effectively at market price, providing a pro-forma cash balance of GBP11.4m. T he Company confirmed that it would use this to focus on the completion of the DFS drilling programmes, the Mineral Resource Estimate upgrade, the RECAPE submission, the processing plant and infrastructure design, plus team expansion and community relations development. The Directors prepared cash flow forecasts for the period to December 2024. This indicates that additional funding will be required in 2024 in order to fund through Final Investment Decision and into Project construction. The Directors believe that following the granting of the DIA the Group's Barroso Lithium Project and the publication of the Company's new Scoping Study it is attractive to investors and are confident that funding for the Project's development would be obtained through options which may include equity, strategic partnership or offtake, in a lithium market with a bright outlook as the green energy revolution is driven by burgeoning EV demand and the increasing emergence of ESS (energy storage systems).

While the Company has been successful at raising equity finance in the past, and while the Directors are confident of raising additional funding should it be required, their ability to do this is not completely within their control and the lack of a binding agreement means there can be no certainty that the additional funding required by the Group and the Company will be secured within the necessary timescale. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Group and the Company's ability to continue as a Going Concern, and its ability to realise its assets and discharge its liabilities in the normal course of business. The Financial Statements do not include any adjustments that would result if the Group and Company were unable to continue as a going concern.

   2.      SEGMENTAL REPORTING 

The Group complies with IFRS 8 Operating Segments, which requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker, which the Company considers to be the Board of Directors. In the opinion of the Directors, the operations of the Group are comprised of exploration and development in Portugal, headquarter and corporate costs and the discontinued operation in Mozambique.

Based on the Group's current stage of development there are no external revenues associated to the segments detailed below. For exploration and development in Portugal and the discontinued operation in Mozambique the segments are calculated by the summation of the balances in the legal entities which are readily identifiable to each of the segmental activities. Recharges between segments are at cost (including transfer price charge) and included in each segment below. Inter-company loans are eliminated to zero and not included in each segment below.

 
 
                                  Discontinued 
                                     Operation 
                                    Mozambique 
                                 Mineral Sands        Portugal           HQ and 
                                           (2)         Lithium        Corporate      Elimination           Total 
                                           GBP             GBP              GBP              GBP             GBP 
  Period 1 January 2023 
   to 30 June 2023 
  Revenue (1)                                -         429,358          321,171        (750,529)               - 
  Interest Income                            -               -           32,588                -          32,588 
  Share Based Payments                       -               -         (91,863)                -        (91,863) 
  Loss for the period                 (48,060)       (571,419)        (927,468)                -     (1,546,947) 
  Total Assets                         601,133      18,694,198        4,760,931                -      24,056,262 
  Total Non-Current 
   Assets                              434,350      18,365,994                -                -      18,800,344 
  Additions to Non-Current 
   Assets                                    -         638,991                -                -         638,991 
  Total Current 
   Assets                              166,783         328,204        4,760,931                -       5,255,918 
  Total Liabilities                   (46,971)       (237,496)        (390,407)                -       (674,874) 
---------------------------  -----------------  --------------  ---------------  ---------------  -------------- 
 
 
 
                                    Discontinued 
                                       Operation 
                                      Mozambique        Portugal           HQ and 
                                Mineral Sands(2)         Lithium        Corporate      Elimination           Total 
                                             GBP             GBP              GBP              GBP             GBP 
  Period 1 July 2022 
   to 31 December 2022 
  Revenue (1)                                  -         843,542          500,566      (1,344,108)               - 
  Finance Costs                                -           (265)                -                -           (265) 
  Interest Income                              -               -           34,354                -          34,354 
  Share Based Payments                         -               -        (394,882)                -       (394,882) 
  Loss for the period                  (125,558)       (729,413)        (650,872)                -     (1,505,843) 
  Total Assets                           607,124      18,575,420        7,186,351                -      26,368,895 
  Total Non-Current 
   Assets                                456,490      18,130,222            6,776                -      18,593,488 
  Additions to Non-Current 
   Assets                                454,651       1,150,536                -                -       1,605,187 
  Total Current 
   Assets                                150,635         445,197        7,179,575                -       7,775,407 
  Total Liabilities                    (111,567)       (326,564)        (675,223)                -     (1,113,354) 
---------------------------  -------------------  --------------  ---------------  ---------------  -------------- 
 
 
 
 
                                     Discontinued        Portugal           HQ and      Elimination           Total 
                                        Operation         Lithium        Corporate 
                                       Mozambique 
                                 Mineral Sands(2) 
                                              GBP             GBP              GBP              GBP             GBP 
  Period 1 January 2022 
   to 30 June 2022 
  Revenue (1)                                   -       1,065,095          471,016      (1,536,111)               - 
  Finance Costs                                 -               -                -                -               - 
  Interest Income                               -               -              341                -             341 
  Share Based Payments                          -               -        (152,050)                -       (152,050) 
  Impairment of Assets                          -               -                -                -               - 
  Loss for the period                    (50,838)       (932,463)        (370,248)                -     (1,353,549) 
  Total Assets                            752,409      17,298,526        9,149,717                -      27,200,652 
  Total Non-Current 
   Assets                                   1,831      16,687,058            6,776                -      16,695,665 
  Additions to Non-Current 
   Assets                                       -       1,516,978                -                -       1,516,978 
  Total Current Assets                    750,578         611,468        9,142,941                -      10,504,987 
  Total Liabilities                      (96,113)       (315,723)        (380,652)                -       (792,488) 
---------------------------  --------------------  --------------  ---------------  ---------------  -------------- 
 
 

(1) Revenues included in the Portugal Lithium segment include GBP429,358 (31 December 2022: GBP843,542; 30 June 2022: GBP1,065,096) related to intercompany recharges within this segment and therefore eliminated in the Elimination column.

(2) This is including costs related to the Company's Mozambican subsidiary, Matilda Minerals Lda.

   3.            EARNINGS PER SHARE 

Basic earnings per share is calculated by dividing the earnings attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

In accordance with IAS 33 as the Group is reporting a loss for both this and the preceding period the share options are not considered dilutive because the exercise of share options and warrants would have the effect of reducing the loss per share.

Reconciliations are set out below:

 
                                            Unaudited        Unaudited     Audited Year 
                                           Six months       Six months         ended 31 
                                           to 30 June       to 30 June         December 
                                                 2023             2022             2022 
  Basic and Diluted Loss per 
   Share: 
  Losses attributable to Ordinary 
   Shareholders (GBP): 
  Total Loss for the period 
   (GBP)                                  (1,546,947)      (1,353,549)      (2,859,392) 
  Total Loss for the period 
   from Continuing Operations 
   (GBP)                                  (1,498,887)      (1,302,711)      (2,682,996) 
  Total Loss for the period 
   from Discontinued Operations 
   (GBP)                                     (48,060)         (50,838)        (176,396) 
  Weighted average number of 
   shares (number)                      1,688,959,820    1,688,959,820    1,688,959,820 
  Loss per Share - Total Loss 
   for the period from Operations 
   (GBP)                                    (0.00092)        (0.00080)        (0.00169) 
  Loss per Share - Total Loss 
   for the period from Continuing 
   Operations (GBP)                         (0.00089)        (0.00077)        (0.00159) 
  Loss per Share - Total Loss 
   for the period from Discontinued 
   Operations (GBP)                         (0.00003)        (0.00003)        (0.00010) 
------------------------------------  ---------------  ---------------  --------------- 
 
   4.            INTANGIBLE ASSETS 
 
                                  Exploration 
                               and Evaluation 
                                       Assets 
                                          GBP 
  Cost 
  At 1 January 2022                14,137,817 
  Additions                           840,532 
  Exchange differences                257,466 
-------------------------  ------------------ 
  At 30 June 2022                  15,235,815 
  Additions                           890,791 
  Exchange difference                 332,993 
-------------------------  ------------------ 
  At 31 December 2022              16,459,599 
-------------------------  ------------------ 
  Additions                           557,175 
  Exchange differences              (356,082) 
-------------------------  ------------------ 
  At 30 June 2023                  16,660,692 
-------------------------  ------------------ 
 
 
  Amortisation and Impairment 
  At 1 January 2022                          - 
  At 30 June 2022                            - 
  At 31 December 2022                        - 
  At 30 June 2023                            - 
------------------------------    ------------ 
 
  Net Book Value 
  At 30 June 2022                   15,235,815 
 At 31 December 2022                16,459,599 
--------------------------------  ------------ 
  At 30 June 2023                   16,660,692 
--------------------------------  ------------ 
 

All Exploration and Evaluation Assets relate to the Barroso Lithium Project.

   5.         PROPERTY, PLANT AND EQUIPMENT 
 
                             Motor        Office 
                            Vehicles     Equipment      Land            Total 
                                                                                GBP 
  Cost 
  At 1 January 2022           54,401        37,748      649,180             741,329 
  Additions                        -         8,068      657,884             665,952 
  Exchange differences         1,350         1,106       30,477              32,933 
-----------------------  -----------  ------------  -----------  ------------------ 
  At 30 June 2022             55,751        46,922    1,337,541           1,440,214 
-----------------------  -----------  ------------  -----------  ------------------ 
  Additions                        -         1,027      185,148             186,175 
  Exchange difference          1,604         1,259       37,127              39,990 
-----------------------  -----------  ------------  -----------  ------------------ 
  At 31 December 2022         57,355        49,208    1,559,816           1,666,379 
-----------------------  -----------  ------------  -----------  ------------------ 
  Additions                        -         1,521       62,419              63,940 
  Exchange differences       (1,648)       (4,197)     (46,010)            (51,855) 
-----------------------  -----------  ------------  -----------  ------------------ 
  At 30 June 2023             55,707        46,532    1,576,225           1,678,464 
-----------------------  -----------  ------------  -----------  ------------------ 
 
 
  Depreciation 
  At 1 January 2022          46,333     18,460    -     64,793 
  Charge for the period       5,767        971    -      6,738 
  Exchange differences        1,276        472    -      1,748 
------------------------  ---------  ---------  ---  --------- 
  At 30 June 2022            53,376     19,903    -     73,279 
------------------------  ---------  ---------  ---  --------- 
  Charge for the period       2,425      4,473    -      6,898 
  Exchange difference         1,554        704    -      2,258 
------------------------  ---------  ---------  ---  --------- 
  At 31 December 2022        57,355     25,080    -     82,435 
------------------------  ---------  ---------  ---  --------- 
  Charge for the period           -      2,817    -      2,817 
  Exchange differences      (1,648)    (3,529)    -    (5,177) 
------------------------  ---------  ---------  ---  --------- 
  At 30 June 2023            55,707     24,368    -     80,075 
------------------------  ---------  ---------  ---  --------- 
 
 
  Net Book Value 
  At 30 June 2022         2,375    27,019    1,337,541    1,366,935 
  At 31 December 2022         -    24,128    1,559,816    1,583,944 
----------------------  -------  --------  -----------  ----------- 
  At 30 June 2023             -    22,164    1,576,225    1,598,389 
----------------------  -------  --------  -----------  ----------- 
 

The additions in land reflect the land acquisition program that Savannah has in place in Portugal to acquire the land required for the future development of the Barroso Lithium project.

All Property, Plant and Equipment Assets relate to the Barroso Lithium Project.

   6.         TRADE AND OTHER RECEIVABLES 
 
                                    Unaudited        Unaudited         Audited 
                                      30 June     30 June 2022     31 December 
                                         2023                             2022 
                                          GBP              GBP             GBP 
  Non-Current 
  Other Receivables                   434,350                -         454,651 
                                  -----------  ---------------  -------------- 
  Total Non-Current 
   Trade and Other Receivables        434,350                -         454,651 
                                  -----------  ---------------  -------------- 
 
 
                              Unaudited        Unaudited         Audited 
                                30 June     30 June 2022     31 December 
                                   2023                             2022 
                                    GBP              GBP             GBP 
  Current 
  VAT Recoverable               125,078          109,117         155,205 
  Other Receivables             283,424          926,239         404,855 
                            -----------  ---------------  -------------- 
  Total Current Trade 
   and Other Receivables        408,502        1,035,356         560,060 
                            -----------  ---------------  -------------- 
 
   7.         OTHER CURRENT AND NON-CURRENT ASSETS 
 
                               Unaudited        Unaudited         Audited 
                                 30 June     30 June 2022     31 December 
                                    2023                             2022 
                                     GBP              GBP             GBP 
  Non-Current 
  Guarantees                      62,755           66,257          64,611 
  Other                           29,643            8,606          13,056 
                             -----------  ---------------  -------------- 
  Total Other Non-Current 
   Assets                         92,398           74,863          77,667 
                             -----------  ---------------  -------------- 
 
 
  Current 
  Other                    395    18,211    1,036 
  Total Other Current 
   Assets                  395    18,211    1,036 
                         -----  --------  ------- 
 
   8.           TRADE AND OTHER PAYABLES 
 
                           Unaudited        Unaudited         Audited 
                             30 June     30 June 2022     31 December 
                                2023                             2022 
                                 GBP              GBP             GBP 
  Current 
  Trade Payables             392,612          276,820         618,805 
  Other Payables              16,385           54,646          56,745 
  Accruals                   190,829          435,275         410,228 
  Taxes                       38,563            9,482               - 
  Total Current Trade 
   and Other Payables        638,389          776,223       1,085,778 
                         -----------  ---------------  -------------- 
 
   9.         SHARE CAPITAL 
 
                              Six months to                   Six months to                   Six months to 
                               30 June 2023                    30 June 2022                  31 December 2022 
                          GBP0.01           GBP           GBP0.01           GBP           GBP0.01           GBP 
                          ordinary                        ordinary                        ordinary 
                        shares number                   shares number                   shares number 
  Allotted, issued 
   and fully paid 
  At beginning 
   of period            1,688,959,820    16,889,598     1,688,959,820    16,889,598     1,688,959,820    16,889,598 
  Issued during 
   the period: 
  Share placement                   -             -                 -             -                 -             - 
-------------------  ----------------  ------------  ----------------  ------------  ----------------  ------------ 
  At end of period      1,688,959,820    16,889,598     1,688,959,820    16,889,598     1,688,959,820    16,889,598 
-------------------  ----------------  ------------  ----------------  ------------  ----------------  ------------ 
 

The par value of the Company's shares is GBP0.01.

   10.      GROUP CONTINGENT LIABILITIES 

Details of contingent liabilities where the probability of future payments is not considered remote are set out below, as well as details of contingent liabilities, which although considered remote, the Directors consider should be disclosed. The Directors are of the opinion that provisions are not required in respect of these matters, as at the reporting date it is not probable that a future sacrifice of economic benefits will be required and the amount is not capable of reliable measurement.

Consideration payable in relation to the acquisition of Mining Lease Application for lithium, feldspar and quartz (Portugal lithium project)

In June 2019 the Company exercised its option to acquire a Mining Lease Application for lithium, feldspar and quartz from private Portuguese company, Aldeia & Irmão, S.A.. The total purchase price for the acquisition is EUR EUR3,250,000 ( GBP GBP2,794,000), which will only become due once the Mining Lease Application has been granted and the Mining Rights transferred to an entity within the Group, at which point the agreed payment schedule will consist of an initial EUR EUR55,000 ( GBP GBP47,000) payment with the balance due in 71 equal monthly instalments. Upon delivery of the request for transfer of the Mining Rights to an entity within the Group, the Group shall provide with a bank guarantee of EUR EUR3,195,000 ( GBP GBP2,747,000) that will be reduced in accordance with the 71 monthly instalments. As at 30 June 2023 the mining lease has not been granted.

Contingent tax liability in relation to the relinquishment of the rights and obligations of discontinued operations in Mozambique

In October 2016 the Savannah Group and Rio Tinto entered into a Consortium Agreement ('CA'), whereby both Savannah Group and Rio Tinto combined their respective projects in Mozambique to form an unincorporated consortium. On the 1 December 2021 Savannah signed a Deed of Termination relating to the CA. Under the Deed of Termination, a compensation amounting to $9.5m (GBP7.0m) cash was agreed (the "Transaction"). The advice received from the Company's tax advisers was clear that the Transaction was not in scope for tax under Mozambique law, and this continues to be the Company's and its advisers' view. However, the Mozambican Tax Authority has indicated that it considers that the Transaction is in scope for Mozambican tax. The Company is working with its tax and legal advisers on this matter, and notes that in the 2021 Audited Consolidated Financial a gain on relinquishment of the rights and obligations of discontinued operations in Mozambique of GBP627,078, was recorded.

   11.      EVENTS AFTER THE REPORTING DATE 

In July 2023 the Company approved a share placement and subscription of GBP6.5m (before expenses) through the issue of 139,190,084 ordinary shares at an issue price of 4.67 pence per share.

On 12 September 2023 the Company appointed two new Non-Executive Directors. Bruce Griffin joined as an Independent Non-Executive Director, and Mohamed Sulaiman joined as Non-Executive Director, replacing the retiring Imad Sultan (Non-Executive Director) as the Board representative of Savannah's largest shareholder, Al Marjan Ltd. Mohamed Sulaiman has become the Chairman of the Board's Audit and Risk Committee and a member of the Nomination Committee, and Bruce Griffin has become a member of the Remuneration Committee.

On 18 September 2023 Emanuel Proença was appointed as the Company's new Chief Executive Officer.

It was with deep sadness that the Board of Savannah announced on 19 September 2023 the passing of Manohar Pundalik Shenoy, Non-Executive Director of the Company. He also was Chairman of the Board's Audit and Risk Committee and served on the Remuneration Committee.

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.

**ENDS**

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For further information please visit www.savannahresources .com or contact:

 
  Savannah Resources PLC                                   Tel: +44 20 7117 2489 
   Emanuel Proença, CEO 
 
    SP Angel Corporate Finance LLP (Nominated Advisor        Tel: +44 20 3470 0470 
    & Joint Broker) 
    David Hignell/ Charlie Bouverat (Corporate Finance) 
    Grant Barker/Abigail Wayne (Sales & Broking) 
  RBC Capital Markets (Joint Broker)                       Tel: +44 20 7653 4000 
   Farid Dadashev/ Jamil Miah 
                                                           Tel: +44 20 3757 4980 
    Camarco (Financial PR) 
    Gordon Poole/ Emily Hall / Fergus Young 
 
  LPM (Portugal Media Relations)                           Tel: +351 218 508 110 
   Herminio Santos/ Jorge Coelho 
 

About Savannah

Savannah Resources is a mineral resource development company and sole owner of the Barroso Lithium Project in northern Portugal.

Savannah is focused on the responsible development and operation of the Barroso Lithium Project so that its impact on the environment is minimised and the socio-economic benefits that it can bring to all its stakeholders are maximised. Through the Barroso Lithium Project, Savannah can help Portugal to play an important role in providing a long-term, locally sourced, lithium raw material supply for Europe's rapidly developing lithium battery value chain. Production is targeted to begin in 2026, producing enough lithium for approximately half a million vehicle battery packs per year.

The Company is listed and regulated on AIM and the Company's ordinary shares are also available on the Quotation Board of the Frankfurt Stock Exchange (FWB) under the symbol FWB: SAV, and the Börse Stuttgart (SWB) under the ticker "SAV".

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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(END) Dow Jones Newswires

September 29, 2023 02:00 ET (06:00 GMT)

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