TIDMSAV
RNS Number : 6225A
Savannah Resources PLC
30 September 2015
Savannah Resources Plc / Index: AIM / Epic: SAV / Sector:
Mining
30 September 2015
Savannah Resources Plc
Interim Results
Savannah Resources plc (AIM: SAV) ('Savannah' or 'the Company')
announces its interim financial results for the six months ended 30
June 2015. To view the press release with the illustrative maps
please use the following link:
http://www.rns-pdf.londonstockexchange.com/rns/6225A_-2015-9-29.pdf
HIGHLIGHTS:
OPERATIONS
-- Focussed on the development of multi-commodity portfolio:
copper in Oman, with additional gold upside potential, and heavy
mineral sands in Mozambique
-- Agreement signed with Rio Tinto for the combination of Rio's
Mutamba and Savannah's adjacent Jangamo project in a joint venture
in this world-class heavy minerals sands province in Mozambique
-- Targeting early stage open-pit mining in Mozambique with an
initial production rate of +600,000tpa of ilmenite and 40,000tpa of
rutile plus zircon concentrate
-- Significant potential to expand on current Oman total
Indicated and Inferred Mineral Resources of 1.7Mt @ 2.2% copper
-- Completed the first ever VTEM survey over Block 4, Oman,
which identified a number of high priority brown and greenfield
targets for drill testing in Q4 2015
-- Trenching and rock chipping programme at Block 4 highlighted
high grade oxide gold at surface over multiple areas including
72.2g/t gold
-- Completion of drill programmes at Sarami West (Block 5) and
Ghayth (Block 4) prospects identified prospective targets for
follow up drilling
-- Board re-alignment with the successful transformation of Company
FINANCIAL
-- Operating loss of GBP1.01m includes realised loss of GBP0.28m
on the sale of Alecto shares and reflects the high tempo of
exploration activities being conducted
-- Other comprehensive loss for the period attributable to the
equity owners of Savannah Resources Plc loss of GBP0.62m
attributable principally to losses of GBP0.8m relating to a write
down of the value of the Company's investments primarily in Alecto
Minerals Plc that adversely impacted net assets accordingly, and
for which the Company divested 18.6% of its holding in the
period
-- Augmented cash balances with a GBP0.55m cash share subscription
-- Investments in intangible and exploration project assets of GBP928,591 during the period
CHAIRMAN'S STATEMENT
This has been a period of significant progress for Savannah in
building a diversified mining group focussed on heavy mineral sands
('HMS') in Mozambique and a high calibre portfolio of copper-gold
projects in Oman. During the period we achieved notable successes
in both countries as we look to positon Savannah as a leading
junior exploration and development company on the AIM market with
the corporate objective of building a solid portfolio of assets,
which demonstrate early production potential and superior
economics.
To this end, in June we were delighted to report a pivotal joint
venture agreement with the mining major Rio Tinto ('Rio') to
combine our Jangamo Heavy Minerals Sands Project with Rio's world
class Mutamba Project, which has an Exploration Target of 7-12Bt
with high grades up to 4.5% Heavy Mineral Sands ("HMS"). The
objective of the joint venture is to develop a significant dry
mining project in a world-class province in Mozambique with good
access to the nearby ports of Inhambane and Maxixie.
Additionally, major advances in terms of exploration and
discovery have been made at our 1,270km(2) copper-gold blocks 4, 5
and 6 in Oman*, where we are looking to build on our existing high
grade copper Mineral Resource base to support high margin, low cost
copper production for the Company by 2017. Additionally high grade
gold mineralisation has been identified in the period on Block 4,
offering the potential for gold production.
Mozambique
Prior to signing the joint venture agreement with Rio, Savannah
had already defined a maiden Inferred Mineral Resource of 65Mt at
4.2% HMS over a number of zones within the eastern part of the
Jangamo exploration licence. This was a significant development
that validated our exploration concept and marked a major milestone
in highlighting the value potential of Jangamo. Importantly, the
Mineral Resource Estimate was defined from a modest initial round
of resource drilling over a small area of the eastern part of the
large Jangamo licence. The mineralisation remains open along
strike.
In June 2015 we were delighted to announce a joint venture with
Rio to combine the companies' minerals sands projects, which both
contain thick zones of ilmenite dominant heavy mineral sands from
surface. The combined project has the potential for the definition
of a large orebody able to sustain a significant mining operation
for over 20 years.
Under the terms of the agreement Savannah will operate the joint
venture and can earn up to 51% of the combined Mutamba-Jangamo
Project as it moves towards production through scoping,
pre-feasibility and feasibility studies. Rio will be providing all
its existing camp, facilities and associated equipment, which will
help accelerate activity, and, significantly, will enter into an
offtake sales agreement for 100% of the production from any mine
that may be developed.
Initially, we are focussed on targeting early stage open-pit
mining, with an initial production rate of +600,000tpa of ilmenite
and 40,000tpa of rutile plus zircon ("non-mag") concentrate, either
as final products or a bulk heavy mineral concentrate ('HMC')
containing 400-500,000tpa of ilmenite dominant HMC.
In terms of exploration, at Mutamba, Rio has completed over
80,000 metres of drilling producing over 35,000 samples from
approximately 4,000 reverse circulation ('RC'), sonic and auger
drill holes to define heavy mineral-bearing sand units that vary in
thickness from 15 to +70 metres. Eight large, separate mineralised
bodies have been identified within the three Rio areas and have
been the subject of Order of Magnitude Studies.
The joint venture is conditional upon approval from the Ministry
of Mineral Resources and Energy of the Republic of Mozambique, and
evaluation work will commence over the new combined licence areas
once approval is obtained. The phase 1 work programme will include
an initial reconnaissance exploration programme, which will be
completed to detect zones of high grade HMS. Follow-up scout
Reverse Circulation ("RC") drilling focusing on coherent zones of
high grade HMS will then be conducted based on the results of this.
In conjunction with the drilling, interpretation and analysis, we
will look to deliver a Scoping Study on the viability of a high
grade, low capital intensity HMS operation. We currently anticipate
that delivery of the Scoping Study will take approximately six
months from commencement and importantly for Savannah, on
completion of the Scoping Study, our participating interest will
increase to 20%.
Our phase 2 exploration and evaluation work programme will look
to support the completion of a pre-feasibility study on the
Mutamba-Jangamo Project, including further scout RC drilling,
resource definition RC drilling, mineralogy and metallurgy testing,
preliminary process flow sheet and plant design, and the initiation
of baseline environmental, community, infrastructure, product and
market studies. Following delivery of the pre-feasibility study,
our participating interest in the joint venture will increase to
35%.
Thereafter we envisage undertaking a third phase exploration and
evaluation work programme to support completion of a feasibility
study on the Mutamba-Jangamo Project, including infill and
extension resource drilling to increase the categorisation of the
resource to JORC 2012-compliant Measured and Indicated for
conversion to an Ore Reserve; mineralogy and metallurgy tests on
composite drill hole samples and multiple bulk excavation samples;
mine design and scheduling; including definitive process flow sheet
and fully costed process plant and ancillary infrastructure; and
definitive environmental, community, infrastructure, product and
market studies. This would mark the final stage under the terms of
the joint venture agreement and on delivery of the feasibility
study our participating interest would increase to 51%.
Following delivery of the feasibility study Savannah and Rio
will assess timings regarding the commencement of an initial mine
construction and will be entitled to maintain their respective
participating interests in the joint venture by contributing to
funding pro-rata to such interests, or be diluted.
We anticipate receiving the required Government approval for the
new venture shortly and from there will commence our first phase
exploration programme as we look to advance Mutamba-Jangamo, with
the ultimate goal of early production.
Figure 1: Map of Mozambique Mineral Sands Projects - please see
the PDF link
Oman
Last year your Company made the transformational move into
mineral rich Oman by securing interests in three highly prospective
copper blocks (*Block 4 earning up to 65%, Block 5 65% interest,
Block 6 40% interest and earning up to 65%) spanning some 1,270
km(2) in the northeast of the country. Importantly, these assets
have total Indicated and Inferred Mineral Resources totalling 1.7Mt
@ 2.2% Cu. The projects feature significant advantages, including a
supportive, pro-mining Government, attractive fiscal terms (five
year tax holiday and 12% corporation tax thereafter), good
infrastructure and a proximal commercial port and copper float
plant and smelter. Furthermore, Oman has one of the best preserved
copper-rich Ophiolite Belts in the world. The deposits, while
smaller in size, have generally medium to higher grades of copper.
These attractive fundamentals, coupled with the underexplored
nature of the region and especially Block 4, made Oman a highly
attractive setting for Savannah in which to operate.
(MORE TO FOLLOW) Dow Jones Newswires
September 30, 2015 02:01 ET (06:01 GMT)
It is our objective to become the partner of choice in Oman and
a favoured mining operator in the region. With this in mind we are
continuing to build a strategic foothold in the country to
consolidate isolated volcanic massive sulphide ('VMS') deposits,
such as those displayed at our Block 4, 5 and 6 projects, which are
deemed highly prospective for copper discoveries; implement defined
exploration and development programmes to help build our existing
resource base; and establish a central copper processing facility
targeting commercial production by late 2017.
Since acquiring the Projects, we have been active at Blocks 4
and 5, with the aim of expanding the established Indicated and
Inferred Mineral Resource Estimate of 1.7Mt at 2.2% Cu defined at
the Mahab 4 and Maqail South deposits on Block 5. To achieve this,
we have undertaken drilling at both Blocks, which we believe are
prospective for the definition of additional resources, and have
focused on identifying both brownfield and new, greenfield drill
targets. In line with this, we acquired an extensive, digitised
exploration database relating to Block 4 in January 2015; conducted
a heliborne Versatile Time Domain Electromagnetic ('VTEM') survey
programme to identify potential clusters of VMS targets, and
completed a rock chipping and geological mapping programme
targeting near surface gold mineralisation associated with
copper.
As noted above, Block 5 has an existing near surface Indicated
and Inferred Mineral Resource Estimate of 1.7Mt @ 2.2% Cu with
37,000t of contained copper. This has been defined from the Mahab 4
Prospect (1.51Mt at 2.1%) and Maqail South Prospect (0.16Mt at
3.8%). Importantly, the Mahab 4 deposit remains open along strike
to the north, and both up and down dip. High priority resource
targets at Mahab 4 have returned intersections of up to 56.4m at
6.2% Cu (GRB5D035), whilst Maqail South has returned intersects of
6.68m at 7.42% Cu (GRB5D024). Consequently, we are optimistic that
there is excellent potential to further expand our Mineral Resource
inventory.
Block 4, which includes over 35km of prospective strike, covers
four significant historic mines (Aarja, Lasil, Lasil West and
Bayda), which produced over 212,000t of contained copper from
mining operations that commenced in 1983 and concluded in 1994.
These mines and the areas around them have excellent potential for
further mineralised extensions to be identified both down dip and
along strike.
During the period we outlined significant gold mineralisation
within Block 4, with associated copper and zinc. High levels of
gold mineralisation have been identified around the Gaddamah West
Prospect, where individual 1m trench samples produced results of up
to 60.7g/t gold, 9.1% zinc and 1% copper. Furthermore, the Salahi 1
Prospect has been identified as highly prospective for gold, with
individual trench/rock chip, channel and grab samples returning
results of up to 72.2g/t gold. It is our aim to aggregate high
grade deposits for early gold production. Indeed, the Rakah Mine,
which is located west of Block 4, profitably mined some 700,000t at
an average grade of 6.73g/t gold and 6.9g/t silver between 1994 to
2001.
Figure 2: Map of Oman Copper Projects - please see the PDF
link
Exploration at Block 4 and 5
During the period under review we conducted a five hole, diamond
drilling programme totalling 779m, which tested a series of high
calibre ground electromagnetic (EM) anomalies at the Sarami West
(Block 5) and Ghayth (Block 4) Prospects. Drilling at the Ghayth
Prospect confirmed the presence of VMS mineralisation intersecting
both massive and disseminated copper sulphides with best results
including 1.15m at 3.6% copper from 35.5m (15B4GD001). Following
these results, further drilling is now planned at Block 4 to define
the full extent of mineralisation and potentially establish a JORC
2012 compliant Mineral Resource Estimate. At the Sarami West
target, whilst drilling intersected a strong alteration system
similar to those seen around the margins of VMS deposits, it failed
to locate the targeted EM anomalies. Planning is now underway for a
downhole EM survey to optimise targeting for further drilling at
Block 5.
Also at Block 4 we completed and received positive results from
the VTEM survey programme, which indicated potential clusters of
VMS mineralisation within the project area. The VTEM flight survey
lines were spaced at 100m spaced and were run from east to west,
for a total of 3,727 line kilometres covering an area of 336km(2)
.
We received the results from this programme at the end of June
2015. The programme identified a total of 10 Priority 1, 33
Priority 2 and 146 Priority 3 VTEM anomaly targets, in addition to
three major potential VMS clusters. The VTEM anomalies are
prioritised from 1 to 3 based on geophysical and geological
criteria. Interestingly, the selected anomalies possess similar
electromagnetic anomaly responses to the known VMS deposits of the
Semail Ophiolite Belt, such as Maqail South (Block 4), Mahab 4
(Block 5) and Ghayth (Block 4). A string of strong, Priority 1 VTEM
anomaly responses were clustered around the old copper mines at
Aarja and Bayda and further south in the greenfields Zuha area at
Block 4, confirming the prospectivity of Block 4 to host further
VMS style copper mineralisation. The success of these results
demonstrates the efficacy of the VTEM to quickly generate high
quality exploration targets. We are developing an RC drill
programme over select targets to further define the mineralisation
potential and aim to start drilling in Q4 2015.
We also completed a rock chipping and geological mapping
programme at Block 4, which as previously mentioned, highlighted a
series of anomalies with significant gold mineralisation, with
associated copper and zinc. In March 2015 rock chip sampling
produced results of up to 5.7% copper and 3.7g/t gold (not from the
same rock sample) from the Gaddamah Prospect. Further results were
reported in June 2015, highlighting individual trench/rock chip,
channel and grab sample results of up to 72.2g/t gold from the
Salahi 1 Prospect, located approximately 20km away from the
Gaddamah Prospect at Block 4. A significant trench sampling result
included 12m at 11.87g/t gold and results from the programmes have
identified anomalous gold results over 1km along strike, with
widths of up to 26m and remains open to the north and south
providing significant further upside potential.
Notably, at this early stage we are seeing some fantastic gold
grades, which we are highly encouraged by, making the newly
identified Salahi 1 Prospect attractive. Additionally these gold
prospects suggest there is potential for other metals within Block
4 in addition to its copper potential. Additional sampling is now
being planned to further define the extent of the mineralisation as
a precursor to drilling to define the strike and depth extents of
the mineralisation and we look forward to reporting on this in due
course.
Additionally at Block 4 we have identified new high grade copper
mineralisation at the Aarja Prospect following a detailed collation
of historical data. A new copper mineralisation model produced for
the Aarja Main, Dogs Bone and Aarja South Zones demonstrates high
grade copper mineralisation under the Aarja pit and along strike.
Newly identified, historical results include 18.58m at 4.7% copper
from 143m from the Aarja Main Prospect and 33.8m at 3.35% copper
from 153.1m from the Dog's Bone Prospect. A series of holes will be
drilled to confirm the historic results prior to the calculation of
a JORC compliant Mineral Resource Estimate, targeted during Q4
2015.
Board
During the period under review I was delighted to join the Board
of Savannah as the Company's new Non-Executive Chairman. With more
than 27 years' experience in the financial services industry, I
have had extensive dealings with regulators on a global basis and
have proven experience with a number of effective boards, risk and
audit committees and management committees, and am well placed to
help Savannah in achieving its objectives of building a successful
exploration and development company that will transition into
production over the next few years. Additionally I have operational
experience in Oman, which I hope will prove extremely beneficial as
we look to advance our portfolio of copper and gold projects in the
country.
My appointment followed Professor Mike Johnson's retirement from
the Board in February 2015. We would like to again take this
opportunity to thank Mike for his very significant contribution
towards Savannah during his two year tenure as Non-Executive
Chairman and wish him well in all his future endeavours.
After the reporting date we announced that Charlie
Cannon-Brookes, who served as Non-Executive Director since February
2013, has retired from the Board. His retirement, alongside Mike
Johnson's, is a result of having successfully steered the Company
through its strategic transformation which was evidenced in October
2013, where we exited our West African gold projects and acquired
interests in projects Mozambique and subsequently in Oman. Again we
would like to thank Charlie for his significant contribution and
wish him well in all his future endeavours.
We are now in the process of seeking a new Non-Executive
Director to support us in our active growth strategy as we advance
into our next phase of development and look forward to updating
shareholders on our progress in due course.
Financial
We were pleased to report in June 2015 that we raised
approximately GBP0.55 million (before costs) to contribute towards
our exploration and development activities that are designed to
result in the achievement of a series of major milestones in 2015.
For example, in the case of the newly announced Mutamba-Jangamo
Project, the definition of a JORC Mineral Resource and, later in
the year, the completion of a scoping study that will define the
high level parameters around a potential mine development. We
believe we are well placed to deliver on our 2015 objectives in
both Mozambique and Oman.
(MORE TO FOLLOW) Dow Jones Newswires
September 30, 2015 02:01 ET (06:01 GMT)
Additionally, Savannah has a holding in AIM quoted Alecto
Minerals ('Alecto'), an African focussed gold company. During the
period we sold approximately 18.6% of our shareholding in Alecto
for gross proceeds of GBP73k. Following the sale we now own
approximately 10% of Alecto's issued share capital.
Outlook
It has been a highly active start to 2015; one that has seen us
add considerable value to our portfolio of heavy minerals sands and
copper assets in Mozambique and Oman as we continue to position
ourselves as a leading junior exploration and development company.
With our recent joint venture agreement with Rio in Mozambique and
the very promising results from Oman, including the identification
of associated gold mineralisation, we are very confident in the
good sense of Savannah's approach. We look to maintain a strong
news flow for the rest of 2015 and look forward to reporting on our
progress in line with our commitment to maintaining active
correspondence with shareholders.
Finally, I would like to take this opportunity to thank my
fellow Directors, employees and our shareholders for their
continued support.
Chairman
Matthew King
29 September 2015
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2015
Unaudited Unaudited Audited
Six months Six months Year ended
Notes to 30 June to 30 June 31 December
2015 2014 2014
GBP GBP GBP
Operations
Revenue - - -
Loss on disposal of investments (285,399) - -
Administrative expenses (724,135) (630,877) (1,444,157)
Operating loss (1,009,534) (630,877) (1,444,157)
Finance income 2 1,628 157,385 18,818
Finance expense 2 (1,107) (445,761) (491,851)
Loss for the period before tax (1,009,013) (919,253) (1,917,190)
Taxation - - -
---------------------------------------- -------- ------------ ------------ -------------
Loss for the period attributable
to equity owners of the parent (1,009,013) (919,253) (1,917,190)
---------------------------------------- -------- ------------ ------------ -------------
Other comprehensive income
Change in market value of investments 5 (766,208) (1,762,261) (2,223,222)
Transfer to realised loss on
disposal of investments 285,399 - -
Exchange (losses)/gains on translating
foreign operations which may
be reclassified to profit and
loss (142,988) (14,531) 31,350
---------------------------------------- -------- ------------ ------------ -------------
Other comprehensive income for
the period (623,797) (1,776,792) (2,191,872)
---------------------------------------- -------- ------------ ------------ -------------
Total comprehensive income for
the period attributable to the
equity owners of the parent (1,632,810) (2,696,045) (4,109,062)
---------------------------------------- -------- ------------ ------------ -------------
Loss per share attributable
to equity owners of the parent
expressed in pence per share
---------------------------------------- -------- ------------ ------------ -------------
Basic and diluted
From operations 3 (0.45) (0.60) (1.14)
---------------------------------------- -------- ------------ ------------ -------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
Unaudited Unaudited Audited
Notes 30 June 30 June 31 December
2015 2014 2014
GBP GBP GBP
Assets
Non-current assets
Intangible assets 4 2,625,449 845,725 1,974,128
Property, plant and equipment 26,005 - 30,245
Investments 5 - 1,318,174 -
Other receivables 6 20,421 8,359 17,049
Other non-current assets 7 174,552 - -
--------------------------------- -------- ------------ ------------ -------------
Total non-current assets 2,846,427 2,172,258 2,021,422
Current assets
Investments 5 353,512 - 1,129,602
Loan receivables 8 - 290,321 -
Trade and other receivables 6 658,354 225,888 82,590
Cash and cash equivalents 396,547 1,784,760 1,778,338
Total current assets 1,408,413 2,300,969 2,990,530
--------------------------------- -------- ------------ ------------ -------------
Total assets 4,254,840 4,473,227 5,011,952
--------------------------------- -------- ------------ ------------ -------------
Equity and liabilities
Shareholders' equity
Share capital 9 2,275,016 1,673,294 2,231,697
Share premium 8,591,547 6,876,841 8,539,626
Foreign currency reserve (106,817) (9,709) 36,171
Share-based payment and warrant
reserve 985,365 1,571,496 981,675
Other reserves 515,425 - -
Retained earnings (8,524,177) (6,154,957) (7,034,355)
Total equity 3,736,359 3,956,965 4,754,814
Liabilities
Current liabilities
Trade and other payables 518,481 321,485 257,138
Loan payables 10 - 194,777 -
--------------------------------- -------- ------------ ------------ -------------
Total liabilities 518,481 516,262 257,138
--------------------------------- -------- ------------ ------------ -------------
Total equity and liabilities 4,254,840 4,473,227 5,011,952
--------------------------------- -------- ------------ ------------ -------------
The interim financial statements were approved and authorised
for issue by the Board of Directors on 29 September 2015 and were
signed on its behalf by:
........................................................
D S Archer
Executive Director
Company number: 07307107
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2015
Share
based
payment
Foreign and warrant
Share Share currency reserve Retained Other Total
capital premium reserve GBP earnings reserves equity
GBP GBP GBP GBP GBP GBP
At 1 January 2014 1,383,658 5,460,305 35,578 1,347,792 (4,045,757) 572,314 4,753,890
-------------------- ---------- ---------- ------------ ------------- -------------- ----------- --------------
Loss for the period - - - - (919,253) - (919,253)
Other comprehensive
income - - (14,531) - (1,762,261) - (1,776,792)
-------------------- ---------- ---------- ------------ ------------- -------------- ----------- --------------
Total comprehensive
income for the
period - - (14,531) - (2,681,514) - (2,696,045)
Foreign currency
reserve on
disposal
of subsidiaries - - (30,756) - - - (30,756)
Disposal of
subsidiaries - - - - 572,314 (572,314) -
Issue of share
capital 289,636 1,507,676 - - - - 1,797,312
Issue of warrants - (91,140) - 91,140 - - -
Share based
payments - - - 132,564 - - 132,564
-------------------- ---------- ---------- ------------ ------------- -------------- ----------- --------------
At 30 June 2014 1,673,294 6,876,841 (9,709) 1,571,496 (6,154,957) - 3,956,965
(MORE TO FOLLOW) Dow Jones Newswires
September 30, 2015 02:01 ET (06:01 GMT)
-------------------- ---------- ---------- ------------ ------------- -------------- ----------- --------------
Loss for the period - - - - (997,937) - (997,937)
Other comprehensive
income - - 45,880 - (460,961) - (415,081)
-------------------- ---------- ---------- ------------ ------------- -------------- ----------- --------------
Total comprehensive
income for the
period - - 45,880 - (1,458,898) - (1,413,018)
Issue of share
capital 558,403 1,662,785 - - - - 2,221,188
Expiry of warrants - - - (579,500) 579,500 - -
Share based
payments - - - (10,321) - - (10,321)
-------------------- ---------- ---------- ------------ ------------- -------------- ----------- --------------
At 31 December
2014 2,231,697 8,539,626 36,171 981,675 (7,034,355) - 4,754,814
-------------------- ---------- ---------- ------------ ------------- -------------- ----------- --------------
Loss for the period - - - - (1,009,013) - (1,009,013)
Other comprehensive
income - - (142,988) - (480,809) - (623,797)
-------------------- ---------- ---------- ------------ ------------- -------------- ----------- --------------
Total comprehensive
income for the
period - - (142,988) - (1,489,822) - (1,632,810)
Issue of share
capital 43,319 51,921 - - - - 95,240
Shares to be issued
(net of costs) - - - - - 515,425 515,425
Share based
payments - - - 3,690 - - 3,690
-------------------- ---------- ---------- ------------ ------------- -------------- ----------- --------------
At 30 June 2015 2,275,016 8,591,547 (106,817) 985,365 (8,524,177) 515,425 3,736,359
-------------------- ---------- ---------- ------------ ------------- -------------- ----------- --------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2015
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.
Foreign currency reserve Gains/losses arising on retranslating
the net assets of Group operations into Pound Sterling.
Warrant reserve Fair value of the warrants issued.
Share based payment reserve Represents the accumulated balance
of share based payment
charges recognised in respect of share options granted by
Savannah Resources Plc, less transfers to retained losses in
respect of options exercised and lapsed.
Retained earnings Cumulative net gains and losses recognised in
the consolidated statement of comprehensive income.
Other reserves Merger Reserve- Amounts resulting from
acquisitions under common control. The balance of the reserve is
nil following the subsidiary disposal in 2014.
Shares to be issued reserve- shares subscribed for at the period
end but not yet allotted. The balance of the reserve is GBP515,425
at June 2015.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2015
Notes Unaudited Unaudited Audited
Six months Six months Year ended
to June 2015 to June 2014 December
GBP GBP 2014
GBP
Cash flows used in operating
activities
Loss for the period (1,009,013) (919,253) (1,917,190)
Depreciation and amortisation
charges - 1,455 12,254
Loss on disposal of current 285,399 - -
asset investments
Share-based payments charge 3,690 132,564 122,242
Shares issued in lieu of payments
to extinguish liabilities 36,950 99,940 75,290
Foreign currency reserve on
disposal of subsidiary - (30,756) -
Finance income (1,628) (157,385) (18,818)
Finance expense 1,107 445,761 491,851
--------------------------------------- -------- --------------- --------------- -------------
Cash flow used in operating
activities before changes in
working capital (683,495) (427,674) (1,234,371)
(Increase)/decrease in trade
and other receivables (12,469) (118,685) 10,574
(Decrease)/increase in trade
and other payables 131,848 (69,156) (106,739)
--------------------------------------- -------- --------------- --------------- -------------
Net cash used in operating activities (564,116) (615,515) (1,330,536)
--------------------------------------- -------- --------------- --------------- -------------
Cash flow used in investing
activities
Purchase of intangible assets (790,710) (346,630) (1,429,884)
Purchase of tangible fixed assets - - (37,733)
Purchase of other non-current (21,000) - -
assets
Purchase of investments 5 (63,004) - -
Proceeds from sale of investments 5 72,886 - -
Interest received 1,628 2,911 4,842
--------------------------------------- -------- --------------- --------------- -------------
Net cash used in investing activities (800,200) (343,719) (1,462,775)
--------------------------------------- -------- --------------- --------------- -------------
Cash flow from financing activities
Proceeds from issues of ordinary
shares - 1,648,623 3,769,095
Proceeds from financing 10 - 237,925 -
Interest paid (1,107) - (2,768)
--------------------------------------- -------- --------------- --------------- -------------
Net cash from financing activities (1,107) 1,886,548 3,766,327
--------------------------------------- -------- --------------- --------------- -------------
Movement in cash and cash equivalents (1,365,423) 927,314 973,016
Cash and cash equivalents at
the beginning of the period 1,778,338 859,616 859,616
Exchange differences (16,368) (2,170) (54,294)
--------------------------------------- -------- --------------- --------------- -------------
Cash and cash equivalents at
end of period 396,547 1,784,760 1,778,338
--------------------------------------- -------- --------------- --------------- -------------
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2015
1. BASIS OF PREPARATION
The financial information set out in this report is based on the
consolidated financial statements of Savannah Resources Plc and its
subsidiary companies (together referred to as the 'Group'). The
interim financial statements of the Group for the six months ended
30 June 2015, which are unaudited, were approved by the Board on 29
September 2015. 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 2014 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.
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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 2014.
The Group financial statements are presented in Pound
Sterling.
Going Concern
Having considered all available information including cashflows
prepared by management, the Directors believe the Company will be
required to secure further funding within the next 12 months. In
order to secure additional funding the Company will need to either
raise further equity or funding through other forms of financing.
The capital market conditions for small mining exploration
companies are currently difficult and not helped by recent declines
in the copper and mineral sands prices. Notwithstanding this the
Directors are confident that the project portfolio is highly
attractive and the announcement to establish a joint venture with
Rio Tinto to combine the Mutamba and Jangamo projects in
Mozambique, supports this. The Directors are therefore confident
that in current market conditions funding can be secured and
therefore it is appropriate to prepare the financial statements on
a going concern basis. However, the Directors appreciate that the
lack of formal agreements means there can be no certainty that the
additional funding will be secured within the necessary
timescale.
2. FINANCE INCOME AND EXPENSE
Six months Six months Year ended
to 30 June to 30 June 31 December
2015 2014 2014
Finance income
Deposit account interest 1,628 2,911 4,842
Accretion and accrued interest
on convertible - 95,732 13,976
Movement on the valuation of - 58,742 -
derivatives
-------------------------------- ------------ ------------ -------------
Total finance income 1,628 157,385 18,818
-------------------------------- ------------ ------------ -------------
Finance expense
Bank charges (1,107) - (2,769)
Accretion in convertible - (18,220) -
Movement on the valuation of
derivatives - (427,541) (489,082)
-------------------------------- ------------ ------------ -------------
Total finance expense (1,107) (445,761) (491,851)
-------------------------------- ------------ ------------ -------------
Net finance (expense)/income 521 (288,376) (473,033)
-------------------------------- ------------ ------------ -------------
In the 2014 financial year the Group had a loan receivable in
relation to the purchase of convertible loan notes in Alecto
Minerals plc ("Alecto") and a loan payable in relation to a
convertible loan note issued to Bergen Global Opportunity Fund LP
("Bergen"). These derivatives were recognised at fair value using
the Black Scholes valuation technique and the movement in the
derivatives were reported in finance income and expenses. The loan
receivable was converted in July 2014 (refer to Note 8) and the
loan payable was exercised in November 2014 (refer to note 10).
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 Six months Six months Year ended
below: to 30 June to 30 June 31 December
2015 2014 2014
Loss per share:
Loss from operations attributable
to ordinary shareholders (GBP) (1,009,013) (919,253) (1,917,190)
Loss attributable to ordinary
shareholders (GBP) (1,009,013) (919,253) (1,917,190)
----------------------------------- -------------- -------------- --------------
Weighted average number of shares
(number) 225,899,817 152,189,612 167,870,908
----------------------------------- -------------- -------------- --------------
Loss per share from operations
(pence) 0.45 0.60 1.14
Basic loss per share basic and
diluted (pence) 0.45 0.60 1.14
----------------------------------- -------------- -------------- --------------
4. INTANGIBLE ASSETS
Exploration Other Total
and evaluation
assets costs
GBP GBP GBP
Cost
At 1 January 2014 2,035,909 11,640 2,047,549
Additions 422,744 - 422,744
Disposals (1,575,601) - (1,575,601)
Exchange differences (39,025) - (39,025)
------------------------------ ----------------- ----------------- -----------------
At 30 June 2014 844,027 11,640 855,667
Additions 1,051,178 - 1,051,178
Exchange difference 78,923 - 78,923
------------------------------ ----------------- ----------------- -----------------
At 31 December 2014 1,974,128 11,640 1,985,768
------------------------------ ----------------- ----------------- -----------------
Additions 754,039 - 754,039
Exchange differences (102,718) - (102,718)
------------------------------ ----------------- ----------------- -----------------
At 30 June 2015 2,625,449 11,640 2,637,089
------------------------------ ----------------- ----------------- -----------------
Amortisation and impairment
At 1 January 2014 1,339,924 8,487 1,348,411
Charge for the period - 1,455 1,455
On disposals (1,318,299) - (1,318,299)
Exchange differences (21,625) - (21,625)
------------------------------ ----------------- ----------------- -----------------
At 30 June 2014 - 9,942 9,942
------------------------------ ----------------- ----------------- -----------------
Charge for the period - 1,698 1,698
------------------------------ ----------------- ----------------- -----------------
At 1 January 2015 - 11,640 11,640
------------------------------ ----------------- ----------------- -----------------
At 30 June 2015 - 11,640 11,640
------------------------------ ----------------- ----------------- -----------------
Net Book Value
At 30 June 2014 844,027 1,698 845,725
------------------------------ ----------------- ----------------- -----------------
At 31 December 2014 1,974,128 - 1,974,128
------------------------------ ----------------- ----------------- -----------------
At 30 June 2015 2,625,449 - 2,625,449
------------------------------ ----------------- ----------------- -----------------
The additions to cost in 2015 relate to the Mineral Sands
Project in Mozambique of GBP35,007 (December 2014: GBP758,065)
(June 2014: GBP289,317) and the Company's Copper Projects in Oman
of GBP719,032 (December 2014: GBP293,113) (June 2014: GBP133,427).
The disposal in the June 2014 period relates to the sale of New
Mines Holdings Limited.
5. INVESTMENTS
Shares in listed
investments
GBP
Non Current
At 1 January 2014 2,830,435
Additions 250,000
Change in market value of shares (1,762,261)
---------------------------------- -----------------
At 30 June 2014 1,318,174
---------------------------------- -----------------
Conversion of loan note 272,389
Change in market value of shares (460,961)
Transfer to current (1,129,602)
---------------------------------- -----------------
At 31 December 2014 -
---------------------------------- -----------------
Current
At 1 January 2014 -
Transfer from non current 1,129,602
---------------------------------- -----------------
At 31 December 2014 1,129,602
---------------------------------- -----------------
Additions 63,004
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Disposals (72,886)
Total change in market value
of shares (766,208)
At 30 June 2015 353,512
---------------------------------- -----------------
All shares held are quoted and traded in an active market. The
change in market value represents the fair value of shares held at
the reporting date less the cost. When shares are disposed during a
period, their change in market value is up to the date of disposal.
The fair value of the shares is the quoted value at the reporting
date.
The additions during the period are for listed investments
purchased on market. In March 2014 the Company sold its subsidiary
New Mines Holding Limited to Alecto Minerals, the consideration
payable was GBP250,000 which was satisfied by the issue of
20,000,000 ordinary shares in Alecto Minerals. In July 2014 the
Company converted its unsecured convertible loan held in Alecto
Minerals (refer to note 8).
The investments have been disclosed as current at June 2015 and
December 2014 as they are freely tradeable with the exception of
shares of approximately GBP193,000 that are subject to an orderly
market period until 4 October 2015. The investments were disclosed
as non-current at 30 June 2014 as they were subject to a lock-in
period.
For shares disposed of during the period, the realised loss to
date of GBP285,399 has been transferred from Other Comprehensive
Income.
6. TRADE AND OTHER RECEIVABLES
Unaudited Unaudited Audited
30 June 2015 30 June 2014 31 December
2014
GBP GBP GBP
Non-Current
Other receivables 20,421 8,359 17,049
20,421 8,359 17,049
============== ============== =============
Current
VAT recoverable 40,501 32,489 46,331
Other receivables 617,853 193,399 36,259
658,354 225,888 82,590
======== ======== =======
Included in Other receivables at 30 June 2015 are the placement
proceeds of GBP547,500 from the issue of shares to new and existing
investors per subscription agreements entered into on 28 June 2015.
The shares were allotted on 2 July 2015 and the funds were received
by the Group on 3 July 2015. See Note 12, Events After the
Reporting Date, for further details.
7. OTHER NON-CURRENT ASSETS
Unaudited Unaudited Audited
30 June 2015 30 June 2014 31 December
2014
GBP GBP GBP
Prepayment - costs incurred
on resource projects 174,552 - -
174,552 - -
============== ============== =============
Other non-current assets represent prepayments with respect to
ongoing resource projects.
8. LOANS RECEIVABLE
Unaudited Unaudited Audited
30 June 2015 30 June 2014 31 December
2014
GBP GBP GBP
Loan - 324,206 -
Derivative - (33,885) -
- 290,321 -
============== ============== =============
The loans receivable at 30 June 2014 related to the purchase of
convertible loan notes in Alecto Minerals Plc. The loan was
converted in July 2014 into Alecto's shares at a fixed price of
1.15 pence through the issue of 30,434,783 ordinary Alecto shares.
This derivative had been recognised at fair value using the Black
Scholes valuation technique. There are no loans receivable at 30
June 2015.
9. SHARE CAPITAL
Allotted, issued and fully paid
Six months to Six months to Year ended
30 June 2015 30 June 2014 31 December 2014
GBP0.01 GBP0.01 GBP0.01
ordinary ordinary ordinary
shares shares shares
number GBP number GBP number GBP
At beginning
of period 223,169,714 2,231,697 138,365,781 1,383,658 138,365,781 1,383,658
Issued during
the year:
Share placement - - 20,000,000 200,000 55,173,104 551,731
Bergen financing
arrangement - - 7,214,100 72,141 26,244,600 262,446
In lieu of cash
for professional
services 3,694,478 36,945 1,749,578 17,495 3,386,229 33,862
Acquisition
of geological
database 637,381 6,374 - - - -
------------------- ------------ ---------- ------------ ---------- ------------- ----------
At end of period 227,501,573 2,275,016 167,329,459 1,673,294 223,169,714 2,231,697
------------------- ------------ ---------- ------------ ---------- ------------- ----------
10. LOANS PAYABLE
Unaudited Unaudited Audited
30 June 2015 30 June 2014 31 December
2014
GBP GBP GBP
Loan - 163,289 -
Derivative - 31,488 -
- 194,777 -
============== ============== =============
The Company issued an Unsecured Convertible Instrument to Bergen
on 10 April 2014 with a nominal value of US$400,000 (GBP237,925 at
date of issue), which was convertible at Bergen's election into
ordinary shares in the Company (the "Convertible Security"). This
Convertible Instrument was fair valued using the Black-Scholes
valuation technique and in November 2014 the Convertible Security
was exercised by Bergen. There are no loans payable as at 30 June
2015.
11. 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 the trigger event has not yet occurred.
Deferred consideration payable in relation to the acquisition of
80% shareholding in Matilda Minerals Lda
In consideration for acquiring 80% shareholding in Matilda
Minerals Lda, the Company paid initial consideration of AUD$400,000
(GBP GBP185,000) in ordinary shares and a cash payment for cost
reimbursements of AUD$125,000 (GBP GBP61,000). Additionally
milestone payments, to be satisfied by the issue of ordinary shares
in the Company are payable as follows: (a) AUD$500,000 (GBP
GBP231,000) upon the establishment of a JORC Inferred Resource of
150Mt @ 3% THM; (b) AUD$500,000 (GBP GBP231,000) upon the
establishment of a JORC Indicated Resource of 350Mt @ 3% THM; (c)
AUD$500,000 (GBP GBP231,000) upon the establishment of a JORC
Indicated Resource of 500Mt @ 3% THM.
Deferred consideration payable in relation to the acquisition of
Oman Copper
In 2014 the Company completed the acquisition of interests in
the highly prospective Block 5 and Block 6 copper projects in the
Semail Ophiolite belt in the Sultanate of Oman from the TSX-Venture
listed Gentor Resources Inc. The Company paid initial consideration
of USD $800,000 (GBP GBP510,000) with the following deferred
consideration required to complete the acquisition of 100% of the
issued share capital of Gentor Resources Ltd ("GRL"):
1. Deferred Consideration (up to 50% payable in Savannah shares)
(a) a milestone payment of USD $1,000,000 (GBP GBP637,000) upon
a formal final investment decision for the development of the Block
5 Licence;
(b) a milestone payment of USD $1,000,000 (GBP GBP637,000) upon
the production of the first saleable concentrate or saleable
product from ore derived from the Block 5 Licence; and
(c) a milestone payment of USD $1,000,000 (GBP GBP637,000)
within six months of the payment of the Deferred Consideration in
(b).
2. Other Information
(a) the Company will be responsible for all of the funding of
the projects. This funding will be in the form of a loan which
would be reimbursed prior to any dividend distribution to
shareholders.
12. EVENTS AFTER THE REPORTING DATE
Placement
On 2 July 2015 the Company issued 21,900,000 new ordinary shares
at a Placing price of 2.5p per ordinary share with funds raised of
approximately GBP0.55 million cash (before expenses) received on 3
July 2015. The Placement was to both new and existing investors and
RFC Ambrian Limited acted as broker.
Board Change
On 7 August 2015 Charlie Cannon-Brookes retired from the Board
having served as a Non-Executive Director since February 2013.
Competent Person
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