SAVANNAH RESOURCES PLC
Company No 07307107
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2016
CONTENTS
BUSINESS REVIEW
Chairman’s Statement
Chief Executive’s Report
Strategic Report
GOVERNANCE
Report of the Directors
Corporate Governance Statement
Statement of Directors’ Responsibilities
Report of the Independent Auditors
FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Consolidated Financial Statements
NOTICE OF ANNUAL GENERAL MEETING
COMPANY INFORMATION
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CHAIRMAN’S STATEMENT
The mineral resource sector opens 2017 with a much more favourable outlook compared to 2016, with higher
commodity prices promoting greater optimism. At Savannah we are feeling particularly energised for the year
ahead, having successfully strengthened our asset base in order to create a clear development pipeline portfolio,
offering the potential for both near and longer term value accretion.
At the fore of this portfolio is our Mutamba Heavy Mineral Sands Project in Mozambique, which is being
developed under a Consortium Agreement with Rio Tinto. This provides us with the opportunity to earn a 51%
interest in a world-class heavy mineral sands project in Mozambique. We established our credentials in the
country via our existing Jangamo licence and the tie-up with Rio Tinto stands as an endorsement of our highly
active development strategy, as evidenced by having delineated a substantial Mineral Resource Estimate for the
enlarged project within less than a month of signing the agreement with Rio Tinto in October 2016. We remain
committed to expediting the development of the project.
To this end, a drilling programme has already been completed targeted at increasing the current Mineral
Resource Estimate and defining areas of high grade mineralisation for potential early development. Additionally,
a scoping study is nearing completion. A pilot plant is due to be commissioned mid-year so that a proof of
concept bulk sampling programme can be undertaken. Furthermore, the resource looks amenable to dry mining
techniques, and of supporting phased mining development, which will allow us to commence mining operations
in the near term.
Alongside this, in Oman, we have a notably high grade copper Indicated and Inferred Mineral Resource at Block
5, which is our main focus for an initial mine development. Mining licence applications for the Mahab 4 and
Maqail South deposits have been submitted, targeting an operational start in late 2017, which I believe
strategically positions the Company to take advantage of stronger copper prices expected in late 2017 and into
2018. Ahead of this, work will be undertaken to determine the best processing route and finalise feasibility
studies. This will build upon the recent metallurgical work conducted at Mahab 4, which confirmed the
significant commercial appeal of our projects by indicating that a saleable copper concentrate with recoveries
of over 90% can be produced from a relatively simple float process.
Block 4 offers further upside potential; the licence hosts a number of previously producing copper mines and
initial exploration has identified the potential for these assets to host resources to supplement those already
defined at Block 5. The Dog’s Bone target at Aarja in particular is recognised for its resource potential and,
looking ahead, the existing underground access from historical mining activities should enable rapid
development with low capital expenditures. We will continue to undertake strategic exploration work at Block
4 in order to further prove up the licence prospectivity whilst we simultaneously centre our efforts on achieving
production at Block 5 later this year. As a result of the significant progress that has been made on both Blocks
4 and 5, and as part of an ongoing portfolio review process, Savannah has terminated its interest in Block 6 in
Oman, which was at a very early stage of exploration.
Finally, a major development for the year under review was the expansion of our asset portfolio through the
addition of two new licences in Finland, which are prospective for lithium. Lithium is popular with investors at
present and the emergence of the Electric Vehicle is powering a surge in lithium-ion batteries and the battery
energy storage on a grid-, industrial-, commercial- and consumer-scale is reaching commercial viability,
suggesting that the Energy Storage sector could grow materially over the next 10 years, leading to significant
demand and a favourable pricing environment for lithium.
The exploration tenements are at an early stage of evaluation and initial groundwork has already identified
seven pegmatites with anomalous lithium – two on Somero and five on Erajarvi. The addition to our portfolio
of these highly prospective assets provides Savannah with the potential for longer-term growth, with a steady
flow of operational activity over the coming years. Accordingly, we intend to undertake work to improve our
understanding of the resource potential of these areas, but would like to affirm that our primary focus for 2017
will be on our Mozambique and Omani assets.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
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CHAIRMAN’S STATEMENT
Corporate Update
We are delighted that Al Marjan Ltd (‘Al Marjan’) increased its investment in the Company at the start of 2016,
taking its interest in Savannah to 29.99% in March 2016. In light of Al Marjan becoming our largest shareholder
and underpinning their intention to remain a supportive investor going forward, Mr. Maqbool Ali Sultan (former
Minister of Commerce and Industry in Oman) and Mr. Imad Kamal Abdul Redha Sultan joined the Board in July
2016 as representatives of Al Marjan, assuming the roles of Non-Executive Directors of the Company, with Mr.
Manohar Pundalik Shenoy and Mr. Murtadha Ahmed Sultan appointed as their respective alternates. We are
pleased to welcome them to the Board and they have already materially contributed to the Company thanks to
their proven operating experience both in Oman and internationally.
Financial Overview
As is to be expected with an active exploration group, the Group is reporting a loss for the year of £1.76m (2015:
£3.11m). The significant driver was staff costs amounting to £1.02m. Other Comprehensive Income for the year
amount of £0.48m (2015: £0.69m) was primarily due to the foreign exchange gain from the retranslation of the
financial statements of subsidiaries with functional currencies not denominated in the presentation currency,
GBP, and to the revaluation of loans to subsidiaries which have seen the translated value increase due to the
weakness of GBP against major currencies in 2016 following the UK’s referendum on membership of the EU.
Net assets have increased to £6.07m (2015: £3.58m) predominantly due to the increase in the exploration
activity during the year with additions in Exploration and evaluation assets of £1.46m as at 31 December 2016,
and the increase in Cash and cash equivalents by £0.80m as a result of well supported capital raisings during the
year.
In February and March 2016 Al Marjan increased their investment in the Company, further endorsing its support
of Savannah’s growth strategy, with the placing of 98,295,329 new ordinary shares at a placement price of 1.78p
per ordinary share. This raised a total of £1.75 million (before expenses), resulting in Al Marjan becoming the
Company’s largest shareholder with a holding of 29.99% in the Company’s issued share capital. In September
2016 the Company raised a further £1.42m cash (before expenses) through the placing of 40,708,973 new
ordinary shares at a significantly increased placing price of 3.5p per ordinary share. Following this placement the
Company issued 23,576,741 new ordinary shares at a price of 3.5p to Al Marjan, David Archer and Matthew
King, with both Al Marjan and David Archer restoring their respective shareholding percentages in the Company
to those prior to the placement in September which was undertaken whilst the Company was in a close period.
This raised a total of £0.83m cash (before expenses). Finally in November 2016 1,500,000 new ordinary shares
at a price of 3.0p were issued in the exercise of share options by a former employee.
As of 31 December 2016, the Group had a cash position of £1.17 million. On 21 February 2017 the Company
agreed a cash subscription of £2.24 million cash (before expenses). The Company will have a pro-forma cash
balance of approximately £3.02 million following the receipt of the Placing and Subscription proceeds. This is
expected to be increased by a further £1.01 million cash from Directors and their related parties (Al Marjan Ltd)
when the Company is not in a “close period”, with letters of intent received to this effect.
Social Responsibility
Maintaining positive relationships with the communities in which we operate, supporting regional development,
and ensuring high social and environmental standards remains a priority for Savannah and our operating
partners. We have developed a very active programme of engagement with the communities close to our
operations in Oman and this has already paid dividends via support for our mining lease applications with a letter
of no objection from the community being received already for the mine development at Maqail South. We will
adopt a similar process of engagement in Mozambique, focusing on positive interaction with all parties and
honest, timely and transparent communication with all our stakeholders.
Outlook
Savannah has strategically positioned itself for growth having established a portfolio of assets offering both near
and longer term prospects in three commodities, each of which have a favourable pricing outlook at present,
albeit this must be tempered somewhat by the uncertain outlook for global trade growth.
2017 is expected to be a significant year for the Company in which we transform from a development to a
production company, with copper mining operations scheduled to commence in Oman towards the end of the
year.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
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CHAIRMAN’S STATEMENT
In the medium term and of greater significance is the potential of bringing the globally significant Mutamba
Heavy Mineral Sands Deposit into development via our Consortium Agreement with Rio Tinto.
Longer term, our lithium assets may enable us to participate in the renewable energy market.
Our plans are to develop the Omani and Mozambique assets in sequence – something we are able to achieve
thanks to the experienced operating teams we have established and are developing in Oman and Mozambique
respectively, supported by a well-credentialed executive management team and Board of Directors.
We look forward to keeping shareholders updated with our active development strategy and I would like to take
this opportunity to thank all our stakeholders for their continued support. I would also like to thank our team
for their ever consistent hard-work. We anticipate making further additions to our team to match the needs of
our growing company in the coming year and alongside this we are using a well-respected consulting group to
help develop a long-term incentive scheme. I look forward to the opportunities ahead.
Matthew King
Chairman
Date: 23 February 2017
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
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CHIEF EXECUTIVE’S REPORT
Savannah has established a multi-commodity development portfolio spanning heavy mineral sands in
Mozambique, copper in Oman and lithium in Finland. Operations in Oman and Mozambique offer near to mid-
term development potential whilst Finland provides a longer term development opportunity. By establishing a
portfolio of assets that are at a strategically staged point of their development, the Company is positioned to
have consistently active news flow and clear and demonstrable value accretive milestones.
Heavy Mineral Sands, Mozambique (Consortium Agreement with Rio Tinto)
October 2016 saw a landmark achievement for Savannah Resources; the signing of a new Consortium
arrangement with Rio Tinto covering Savannah's Jangamo Project and Rio Tinto's Chilubane and Mutamba
Projects, including the Jangamo, Dongane and Ravene heavy mineral sands deposits. The unified project, known
as the Mutamba Project (‘Mutamba’), marks a significant step in the evolution of these mineral sands assets,
creating an amalgamated project comprising a globally significant resource.
Savannah operates the Mutamba Project and has an initial 10% beneficial interest in the combined mineral sands
project, with the potential to increase this up to a 51% beneficial interest on the achievement of the following
milestone developments: delivery of a scoping study - 20%; delivery of a pre-feasibility study - 35%; and delivery
of a feasibility study - 51%. Additionally, the Consortium Agreement includes an offtake agreement on
commercial terms for the sale of 100% of production to Rio Tinto (or an affiliate).
Our focus at Mutamba is to define a potential dry mining operation for staged, early development. In line with
this fast-paced development approach, within less than a month of finalising the agreement with Rio Tinto, a
major milestone was achieved with the delineation of an initial Indicated and Inferred Mineral Resource
Estimate of 3.5 billion tonnes at 3.8% Total Heavy Minerals (‘THM’), containing 81 million tonnes (‘Mt’) of
ilmenite, 2.2Mt rutile and 3.8Mt zircon, with 52% in the Indicated Category and 48% in the Inferred Category.
This is a significant Mineral Resource, and highlights the project’s potential to be a key producer of titanium
feedstocks.
While Mutamba is already a globally significant accumulation of heavy mineral sands there is potential to
increase the overall Mineral Resource Estimate for the combined deposits. The initial Mineral Resource was
defined at the Jangamo and Dongane deposits and a Mineral Resource estimation in respect of the Ravene and
Chilubane deposits is yet to be completed. Drilling has been completed at Ravene, and data compilation and a
detailed review of the Chilubane is to be undertaken.
Results from drilling at Ravene, together with the Mineral Resource Estimate will form the focus for the current
scoping study for the evaluation of an initial phase, low capex, long life, dry mining operation around a potential
200Mt well graded resource. This will centre on, in particular, large areas of >5%THM that have been defined.
Mineral sands industry expert TZ Minerals International ('TZMI') has been commissioned to conduct the study,
with completion expected by the end of Q1 / early Q2 2017. Alongside this, leading Mozambican environmental
consultants ERM and IMPACTO have been appointed to conduct environmental studies for, respectively, the
Mutamba Project North and Chilubane deposit; an environmental study is a key document which is required for
the lodging of a mining concession for any potential mine development. Furthermore, by appointing two
contractors we are able to ensure the timely completion of these studies, which are expected to be finalised by
the end of Q1 / early Q2 2017.
The completion of these studies will enable the commencement of a number of other value accretive initiatives,
including marketing, pre-feasibility and feasibility studies. The Consortium partners intend to apply for a mining
concession later this year. We are planning to commission a pilot plant which is already on site and which will
enable a proof-of-concept bulk sampling programme to be undertaken. This bulk sampling programme will help
to determine commercially viable processing routes ahead of commencing mine construction, which is targeted
to commence in 2018.
The Mozambique coastline hosts some of the largest ilmenite dominant heavy mineral sands deposits in the
world. The deposits that comprise the Mutamba Project are favoured in being close to existing road, grid power,
water and port infrastructure – the ENI 1 highway, the electricity grid and sub-station at Lindela and the
sheltered harbour at Inhambane. The Project also benefits from the Jangamo and Chilubane camp facilities and
equipment. As part of the Consortium Agreement Rio Tinto's former project team has been employed by
Savannah and integrated into Savannah’s existing in-country team, meaning the Company is ideally poised to
deliver on its targeted development goals.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
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CHIEF EXECUTIVE’S REPORT
Copper with additional gold upside, Oman
In Oman we hold a highly prospective asset portfolio covering 1,006km2 across Block 4 and Block 5. Our focus
is on building a resource inventory to support high margin, low cost copper production, with mining targeted to
commence in late 2017.
Block 5 is the most advanced of our licences in Oman. The project hosts the Mahab 4 and Maqail South deposits,
which collectively have a current Indicated and Inferred Mineral Resource of 1.7Mt at 2.2% copper. These
targets remain open and drill work was undertaken during the period to extend the high-grade portions of both
deposits. Results received are consistent and underscore the high-grade nature of the deposits, including
10.05m at 10.51% copper, 2.67% zinc and 0.4g/t gold from 34.95m at Mahab 4 and 5.8m at 4.42% copper and
0.2g/t gold from 58.6m at Maqail South, which should lead to an updated Mineral Resource estimate in Q1 2017.
Subject to licensing, we continue to target a start to mining operations in late-2017 in order to produce first
copper concentrate in 2018.
The results of the drilling will feed into feasibility studies and ultimately Ore Reserves, which will be our focus of
development this year, alongside defining final processing routes. At Maqail South, an open-cut mine
development is planned, whilst at Mahab 4, where the larger resource is located, underground mining will be
conducted. Whilst underground mining is more expensive than open-pit mining, the surface area required
associated with an underground development is much smaller and easier to manage, meaning there is less
impact on our neighbours and the environmental impact is far smaller. Mining licences, based on these
proposed development plans, have been submitted and work has begun relating to the requisite Environmental
Impact Assessment (‘EIA’). Commencement of the EIA is a key milestone towards commencing copper mining
and leading Omani Environmental Consultant, Geo Resources Consultancy, has been contracted to oversee the
work. Discussions with a total of eight Government ministries have commenced and finalisation of the EIA is
expected in Q2 2017.
Results from preliminary metallurgical test work at Mahab 4, received post-period end in February 2017, are
encouraging in highlighting the commercial appeal of the deposit, confirming that floatation test copper
recoveries exceeding 90% and that a saleable copper concentrate can be produced. Importantly, test work
points towards Mahab being a soft ore, with chalcopyrite identified as the sole copper bearing mineral, which
should mean that copper produced ought to benefit from favourable overall processing costs with work
suggesting a relatively simple float process is required to produce a clean and desirable copper concentrate.
Such a product is likely to be keenly sought after by off-takers and smelters. Adding to this, there is potential
for both gold and silver by-product credits. There is also the possibility for a zinc co-product to be produced, but
further work is required to explore this opportunity. Additional test work is also underway to further refine
the recovery process and try to improve the overall copper concentrate grades.
Block 4 offers additional upside to our Block 5 production prospects. This licence hosts four targets – Aarja,
Bayda and Lasail – which were part of previously producing mines commercially mined between 1980 and 1994.
Underground access is still present, which would facilitate rapid development. During the year under review,
work has been undertaken to better determine the resource potential of these assets. At Aarja, three primary
mineralised areas have been identified, with Dog’s Bone emerging as the principle zone of specific interest.
Drilling at Dog’s Bone has confirmed the location and continuity of known mineralisation, with results including
5.75m at 1.84% copper and 0.8g/t gold from 109.3m, which we expect could lead to the delineation of a JORC
compliant Mineral Resource. Alongside this, at Bayda, work to date has identified a significant volume of
disseminated sulphide mineralisation, with a broad mineralised zone of 33.4m at 0.69% copper, including 4m at
1.56% copper and 5.1m at 1.22% copper. We believe this prospect could be developed as a larger tonnage,
lower grade operation.
A high-powered ground electromagnetic (‘EM’) survey commenced at Lasail and Bayda in November 2016. The
surveys were designed to cover high priority exploration areas adjacent to known mineralisation to test for
depth extensions or repeats. The results are expected in Q1 2017 and will form the basis for future development
plans, including a potential resource drilling programme. Alongside this, further drilling is planned at Aarja in
order to better determine the resource potential of Dog’s Bone. We look forward to proving up the resource
potential of these assets, but I would like to affirm that our primary focus and goal is on realising near term
copper production from the development of the Block 5 deposits, with the development of Block 4 offering
second stage development opportunities.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
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CHIEF EXECUTIVE’S REPORT
As shareholders will be aware, we previously held an interest Block 6 in Oman. Alongside finalising the
development strategy for our Omani assets, during the year under review we took the decision to terminate our
interest in this licence area. Block 6 was at a very early stage of exploration and as Block 4 and 5 are more
advanced, and, we believe, more prospective, we deemed it prudent for us to relinquish our interests in Block 6
so that we can dedicate our efforts to the Blocks 4 and 5 developments.
Lithium, Finland
In June 2016 Savannah was granted Reservation Permits over two new lithium projects, Somero and Erajarvi,
covering an area of 159km² of highly prospective lithium terrain in Finland. These assets, which Savannah holds
a 100% interest in through its newly established Finnish subsidiary, Finkallio Oy, mark a strategic development
in Savannah’s growth strategy, strengthening the Company’s pipeline portfolio.
Finland was ranked number one by the Fraser Institute in its 2014 survey of 122 mining jurisdictions around the
world highlighting its attractiveness as an investment destination. Further to this, the lithium carbonate price
rose from around US$8/kg to over US$25kg in 12 months due to supply shortages and demand is forecast to
continue to rise, with Deutsche Bank predicting it to rise from 184,000 tonnes per annum in 2015 to 534,000
tonnes per annum by 2025. This is largely fuelled by the burgeoning battery market, which is experiencing
exponential growth due largely to the lithium-ion battery’s critical use in electric vehicles. In addition to this,
new forms of energy storage are emerging, which are again reliant on lithium; energy storage represents a small
part of current lithium demand, but growth potential is high, with renewable sources set to potentially rival
electric vehicle growth rates. It is this favourable operating market combined with compelling market dynamics,
which attracted our attention to Finland and lithium.
Finland is a favourable exploration destination for lithium opportunities. The country has access to good
geological and exploration data, has a favourable tectonic history for the formation of Lithium-Cesium-Tantalum
('LCT') pegmatites, and despite having a history of lithium mining, management believe that, to date, lithium has
been under explored. Our attraction to these assets appeared justified; initial rock chip sampling has already
proven the resource potential, with seven pegmatites containing anomalous lithium identified (two on Somero
and five on Erajarvi). At Somero, assays of up to 4.47% lithium oxide ('Li2O') at the Torkkamaki prospect have
been returned, with mineralisation traced over 150m along strike and remaining open. At Erajarvi, prospective
pegmatites with assays of up to 1.56% Li2O have been recorded at the Viitaniemi prospect, and mineralisation
was traced for over 350m before it was covered by glacial till. Crucially, key lithium minerals petalite,
spodumene and lepidolite were all identified in hand specimens and follow up work is now being planned for
Q2 2017, following winter, to further expand and define the seven anomalous pegmatites in readiness for
drilling. To support our Finnish activity, we are delighted to have retained the services of experienced Finnish
geological consulting groups.
Whilst these assets are still at a very early stage of development, it is important to note that both projects have
excellent access to high quality infrastructure and are located close to potential final customers, including
battery producers. This will prove extremely beneficial to production, positively impacting capital and operating
expenditure.
Outlook
Savannah is poised for growth. With mining expected to commence in Oman and the achievement of value
accretive milestones on track in Mozambique, including further Mineral Resource Estimate increases and
development studies, 2017 is set to be an important year in the Company’s development. Oman is planned to
mark our Company’s first venture into production, and I believe Mozambique has the potential to establish
Savannah as a significant mineral sands producer, due to the importance of the Mutamba Project which we are
evaluating in partnership with Rio Tinto.
Our commitment is for the timely delivery of the outlined milestone targets. We have a terrific team of industry
professionals who have demonstrated their abilities in delivering a high tempo of activity over the last year. We
have seen commodity prices continue to improve. Copper is a key Energy Metal and will continue to play a
crucial role in the fast-evolving global energy matrix. Ilmenite prices have made a strong recovery and we are
looking for further price increases during 2017. Meanwhile we are seeing increased corporate activity in the
mineral sands sector which underscores the increasing appeal of the sector to investors.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
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CHIEF EXECUTIVE’S REPORT
All that we have achieved to date is testament to the skill set of our Directors, management and operational
teams, and support of our shareholders, and for this I give my thanks. I look forward to us continuing to work
together to build our Company into a significant mining group.
David S Archer
Chief Executive Officer
Date: 23 February 2017
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 7
STRATEGIC REPORT
Section 414A of the Companies Act 2006 (the ‘Act’) requires that the Group inform members as to how the
Directors have performed their duty to promote the success of the Company, by way of a Strategic Report.
Set out below are the applicable reporting requirements under the Act for the purposes of the Strategic Report,
together with guidance to other applicable sections of the 2016 Annual Report, which are incorporated by
reference into the Company’s Strategic Report.
Principal Activities
The principal activity of the Group in the year under review was resource development for its copper projects
in Oman, and commencement of a consortium with Rio Tinto in Mozambique for heavy mineral sands in
Mozambique, and the acquisition of two lithium projects in Finland. Going forwards the Company’s focus will
be on developing its portfolio towards near term production.
Fair Review of the Business
The loss of the Group as set out on page 16 amount to £1,759,250 (2015: £3,110,112), of which £1,669,203
(2015: £1,372,509) was related to administrative costs, £nil (2015: £1,071,374) was due to impairment of the
Group’s investments, £128,505 (2015: £nil) was due to loss on disposal of assets and £42,871 (2015: loss
£666,154) was due to realised gain on disposal of investments. Additionally the Company invested £1,464,373
(2015: £1,264,638) on mineral exploration and evaluation on the licences it owns and operates, this is capitalised
as an intangible asset as set out in Note 9 in the Financial Statements.
A review of the Group’s prospects are included in the Chairman’s Statement on pages 1 to 3 and the Chief
Executive’s Report on pages 4 to 7.
Future Development
This information is contained in the Chairman’s Statement on pages 1 to 3 and the Chief Executive’s Report on
pages 4 to 7 under the heading “Outlook”.
Principal Risks and Uncertainties
The Board has identified various risk factors which taken individually or together may have a materially adverse
effect on the Company's business. The principal risks and how they are managed are as follows:
General Resource Development Risk
Although mineral exploration can be a high risk undertaking for which there can be no guarantee that resource
development will result in the discovery of an economically viable ore body, the Company is focusing its activity
primarily on brownfield locations and existing resources. The exploration tenements have been carefully
selected by experienced experts in regions of proven prospective geology for Blocks 4 and 5 in Oman and
Somero and Erajarvi in Finland, with the area covered by the Consortium with Rio Tinto being supported by
substantial historical exploration databases. As the Company progresses its projects to mine development it is
necessary to go through licencing processes with government departments and secure rights for related
infrastructure. The company engages qualified consultants and in-house expertise to manage this.
Attraction and Retention of Key People
The success of the Company is dependent on the expertise and experience of the Directors and senior
management and the loss of one or more could have a material adverse effect on the Company. The Board has
put in place a remuneration policy which includes a share option scheme in order to motivate and retain key
personnel and the introduction of a long term incentive plan is underway.
Future Funding Requirements
The Company has an ongoing requirement to fund its development activities and may need to obtain finance
from the equity markets and access debt finance for mine development in the future. Senior management and
the Board closely monitor the cashflows of the Group. Cashflow projections are presented regularly to the Board
for review and this assists
is focussed on areas of greatest exploration
potential. Overheads and administration costs are carefully managed.
in ensuring expenditure
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
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STRATEGIC REPORT
Exploration Licence Titles
The licences will be subject to applications for renewal and any renewal is usually at the discretion of the
relevant government authority. The licences in the Company's portfolio have been the subject of legal due
diligence in order to establish valid legal title and regular communication is maintained with the relevant
government authority in both Mozambique and Oman.
Country Risk
At the reporting date, the Company carried out a combination of geological and mine planning development
work in Oman, Mozambique and Finland. Each of these countries presents a very different risk profile. However,
this also means the Company benefits from a diversification of country risk. Country risk is further mitigated by
ensuring the Company maintains active geological programmes, that it prioritises local in-country employment
and that it maintains good relationships at all levels with government, administrative bodies and other
stakeholders. The Board actively monitors relevant political and regulatory developments.
Commodity Price Risk
The Group’s commodity focus is mineral sands, copper, gold and lithium. The market prices for these
commodities fluctuate widely. These fluctuations are caused by numerous factors beyond the Company’s
control. A sustained period of significant price volatility may adversely affect the Group operations in the future.
Commodities risk is mitigated by ensuring the Group maintain a diverse portfolio of projects.
Analysis of the Development and Performance of the Business
This information is contained in the Chairman’s Statement on pages 1 to 3, and the Chief Executive’s Report on
pages 4 to 7.
Analysis of the Position of the Business
This information is contained in the Chairman’s Statement on pages 1 to 3, and the Chief Executive’s Report on
pages 4 to 7.
Analysis Using Key Financial Performance Indicators and Milestones
At the reporting date the Group’s cash balance was £1,172,347 (2015: £359,296). The Company raised gross
proceeds of £4,042,473 (2015: £1,112,060) cash via issuance of ordinary shares, this included a total of
£2,572,659 to the Board and its related parties (2015: £339,060). The Company raised a further £2,241,708 post
year end through the issue of 42.7m shares in February 2017. The trading volumes in the Company’s shares
averaged 1.8 million shares per day in 2016 (2015: 1.9 million).
Analysis Using Other Key Performance Indicators and Milestones
In October 2016 the Company announced a significant Consortium Agreement with mining major, Rio Tinto
(‘Rio’), to combine the Company’s Jangamo Heavy Mineral Sands Project with Rio’s Mutamba Project, with the
objective of developing a significant dry mining project in a world-class mineral sands’ province in Mozambique
with good access to the nearby ports of Inhambane and Maxixie. This resulted in the establishment of an initial
Indicated and Inferred Mineral Resource Estimate of 3.5 billion tonnes at 3.8% THM over the Jangamo and
Dongane deposits in November 2016. Additionally, the Company undertook resource drilling on Block 5 to target
an expansion of the high grade portion as it works towards mine development in 2017.
Approval of the Board
This Strategic Report contains certain forward-looking statements that are subject to the usual risk factors and
uncertainties associated with a mineral development business. While the Directors believe the expectation
reflected herein to be reasonable in view of the information available up to the time of the Board’s approval of
this Strategic Report, the actual outcome may be materially different owing to factors either beyond the Group’s
control or otherwise within the Group’s control but, for example, resulting from a change of strategy.
Accordingly, no reliance may be placed on the forward-looking statements.
On behalf of the Board:
David S Archer
Chief Executive Officer
Date: 23 February 2017
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 9
REPORT OF THE DIRECTORS
The Directors present their report with the Financial Statements of the Company and the Group for the year ended 31
December 2016.
Dividends
The Directors do not recommend the payment of a dividend (2015: £nil).
Events Since the Reporting Date
On 21 February 2017 the Company agreed a cash Placing (£1.55m) and a cash Subscription (£0.69m) totalling £2.24m
(before expenses) through the issue of 42,699,200 ordinary shares at an issue price of £0.0525 per share. Additionally
the Company received letters of intent for additional £1.01m cash subscriptions from Directors and their related
parties (Al Marjan Ltd) for when the Company is not in a “close period”. In connection with the Placing the Company
has granted 1,480,952 warrants with an exercise price of 7.45p to Beaufort Securities.
Directors
The Directors who have held office during the period from 1 January 2016 to the date of this report (unless
otherwise stated) are as follows:
David S Archer
Dale J Ferguson
Matthew J King
Maqbool Ali Sultan (appointed 11 July 2016)
Imad Kamal Abdul Redha Sultan (appointed 11 July 2016)
Manohar Pundalik Shenoy (appointed 11 July 2016)1
Murtadha Ahmed Sultan (appointed 11 July 2016)1
1 Alternate Director
Directors’ Indemnity
The Group has agreed to indemnify its Directors against third party claims which may be brought against them
and has in place a Directors and Officers’ insurance policy.
Financial Instruments Risk
This information is contained in Note 18 to the Financial Statements.
Future Development
This information is contained in the Chairman’s Statement on pages 1 to 3 and the Chief Executive’s Report on
pages 4 to 7 under the heading “Outlook”.
Going Concern
The Financial Statements have been prepared on a going concern basis. Following the receipt of the Placing and
Subscription proceeds, which are contractually committed, the Group will have a pro-forma cash balance of
£3.02m and letters of intent from directors and related parties for a further £1.01m cash subscriptions. The
Directors have reviewed the cashflow projection for the Group and consider that it has sufficient ability to meet
its financial commitments for at least 12 months.
Statement as to Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant audit information (as defined by Section 418 of the
Companies Act 2006) of which the Group's auditors are unaware, and each Director has taken all the steps that
he ought to have taken as a Director in order to make himself aware of any relevant audit information and to
establish that the Group's auditors are aware of that information.
Auditors
The auditors, BDO LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 10
REPORT OF THE DIRECTORS
The Directors’ beneficial interests (including the beneficial interests of their immediate family) in the ordinary
shares of the Company are as follows:
David S Archer
Matthew J King
Dale J Ferguson
Maqbool Ali Sultan*
Imad Kamal Abdul Redha Sultan*
Manohar Pundalik Shenoy*
Murtadha Ahmed A Sultan*
No. of shares held at
31 December 2016
No. of shares held at
31 December 2015
25,931,251
913,552
266,078
-
-
-
-
22,222,224
627,838
266,078
-
-
-
-
* The Directors indicated are representatives of Al Marjan Ltd which held 134,830,329 shares at the reporting
date (2015: 16,953,000 shares).
Details of Directors’ remuneration are disclosed in Note 3.
Details of Directors' interests in the share options and warrants are disclosed in Note 22.
On behalf of the Board:
D S Archer
Chief Executive Officer
Date: 23 February 2017
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 11
CORPORATE GOVERNANCE STATEMENT
The Company, being listed on AIM, is not required to comply with the UK Corporate Governance Code (“the
Code”) issued in September 2014. Although the Company does not comply with the Code, it has given
consideration to the provisions set out in Section 1 of the Code annexed to the Financial Conduct Authority
Listing Rules. The Directors support the objectives of the Code and intend to comply with those aspects that
they consider relevant to the Group’s size and circumstances. Details of these are set out below.
The Board of Directors
The Board currently comprises two executive, three non-executive Directors and two alternate Directors. The
Board formally meets approximately every quarter and is responsible for setting and monitoring Group strategy,
reviewing budgets and financial performance, ensuring adequate funding, examining major acquisition
opportunities, formulating policy on key issues and reporting to the shareholders.
Internal Financial Control
The Board is responsible for establishing and maintaining the Group’s system of internal financial controls.
Internal financial control systems are designed to meet the particular needs of the Group and the risk to which
it is exposed, and by its very nature can provide reasonable, but not absolute, assurance against material
misstatement or loss. The Directors have reviewed the effectiveness of the procedures presently in place and
consider that they are appropriate to the nature and scale of the operations of the Group. The Directors have
implemented necessary controls and procedures to comply with the UK Bribery Act 2010.
The Audit Committee
An Audit Committee has been established which comprises one non-executive and one alternate Director –
Matthew King (who chairs the Committee) and Manohar Shenoy. It is responsible for ensuring that the financial
performance of the Group is properly reported on and monitored, and for meeting the auditors and reviewing
the reports from the auditors relating to accounts and internal controls. The Committee also reviews the Group’s
annual and interim Financial Statements before submission to the Board for approval.
The Remuneration Committee
The Remuneration Committee comprises one non-executive and one alternate Director – Matthew King (who
chairs the Committee) and Manohar Shenoy. It is responsible for reviewing the performance of the executive
Directors and for setting the scale and structure of their remuneration, paying due regard to the interests of
shareholders as a whole and the performance of the Group. The remuneration of the Chairman and any non-
executive Director is determined by the Board as a whole, based on a review of the current practices in other
companies.
AIM Rule Compliance Committee
The AIM Rule Compliance Committee comprises one non-executive and one executive Director – Matthew King
(who chairs the Committee) and David Archer, the CEO. It is responsible for ensuring that resources and
procedures are in place to ensure the Company is at all times in compliance with the AIM Rules for Companies
and ensured the timely implementation of the Market Abuse Regulations in 2016. The Committee is also
responsible for ensuring that the executive Directors are communicating effectively with the Company’s
Nominated Advisor.
Anti-Bribery and Corruption
It is the Company's policy to conduct business in an honest way, and without the use of corrupt practices or acts
of bribery to obtain an unfair advantage in line with the UK Bribery Act 2010. The Company takes a zero-
tolerance approach to bribery and corruption and is committed to acting professionally, fairly and with integrity
in all its business dealings and relationships wherever it operates and implementing and enforcing effective
systems to counter bribery.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 12
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
Directors’ Responsibilities
The Directors are responsible for preparing the Strategic Report, the Report of the Directors and the Financial
Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the
Directors have elected to prepare the Group and Company Financial Statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under Company law the
Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group and Company and of the profit or loss of the Group for that period. The
Directors are also required to prepare Financial Statements in accordance with the rules of the London Stock
Exchange for companies trading securities on the Alternative Investment Market.
select suitable accounting policies and then apply them consistently;
In preparing these Financial Statements, the Directors are required to:
make judgements and accounting estimates that are reasonable and prudent;
state whether they have been prepared in accordance with IFRSs as adopted by the European Union,
subject to any material departures disclosed and explained in the Financial Statements; and
prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the Financial Statements comply with the requirements of the
Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
Website Publication
The Directors are responsible for ensuring the Annual Report and the Financial Statements are made available
on a website. Financial Statements are published on the Company's website in accordance with legislation in the
United Kingdom governing the preparation and dissemination of Financial Statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility
of the Directors. The Directors' responsibility also extends to the ongoing integrity of the Financial Statements
contained therein.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 13
REPORT OF THE INDEPENDENT AUDITORS
TO THE MEMBERS OF SAVANNAH RESOURCES PLC
We have audited the financial statements of Savannah resources Plc for the year ended 31 December 2016
which comprise the consolidated statement of comprehensive income, the consolidated and Company
Statement of Financial Position, the consolidated and Company statement of changes in equity, the
consolidated and Company statement of cash flows and the related notes. The financial reporting framework
that has been applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union and, as regards the parent Company statements, as applied in
accordance with the provisions of the Companies Act 2006.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of Directors’ responsibilities, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements in accordance with applicable law
and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the
Financial Reporting Council’s (FRC’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the FRC’s website at
www.frc.org.uk/auditscopeukprivate
Opinion on financial statements
In our opinion:
the financial statements give a true and fair view of the state of the group’s and the parent Company’s
affairs as at 31 December 2016 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the parent Company financial statements have been properly prepared in accordance with IFRSs as adopted
by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic and Directors’ reports for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic and directors’ report have been prepared in accordance with applicable legal
requirements.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 14
REPORT OF THE INDEPENDENT AUDITORS
TO THE MEMBERS OF SAVANNAH RESOURCES PLC
Matters on which we are Required to Report by Exception
In light of the knowledge and understanding of the group and the parent company and its environment obtained
during the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
adequate accounting records have not been kept by the parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
the parent Company Financial Statements are not in agreement with the accounting records and returns;
or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Stuart Barnsdall (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
55 Baker Street
London
W1U 7EU
United Kingdom
Date 23 February 2017
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 15
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2016
CONTINUING OPERATIONS
Revenue
Administrative expenses
Gain / (Loss) on disposal of investments
Impairment of investments
Loss on disposal of assets
OPERATING LOSS
Finance income
Finance costs
LOSS BEFORE TAX
Taxation
LOSS FOR THE YEAR ATTRIBUTABLE
TO EQUITY OWNERS OF THE PARENT
OTHER COMPREHENSIVE INCOME
Items that will or may be reclassified to profit or loss:
Change in market value of investments
Transfer to realised (gain) / loss on disposal of investments
Transfer to impairment loss of investments
Exchange gains / (losses) arising on translation of foreign operations
Notes
2016
£
2015
£
11
11
4
5
6
11
11
11
-
(1,669,203)
42,871
-
(128,505)
(1,754,837)
-
(4,413)
(1,759,250)
-
-
(1,372,509)
(666,154)
(1,071,374)
-
(3,110,037)
2,371
(2,446)
(3,110,112)
-
(1,759,250)
(3,110,112)
44,840
(42,871)
-
476,018
(930,213)
666,154
1,071,374
(120,191)
OTHER COMPREHENSIVE INCOME FOR THE YEAR
477,987
687,124
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT
(1,281,263)
(2,422,988)
Loss per share attributable to equity owners of the parent
expressed in pence per share:
Basic and diluted
From Operations
8
(0.46)
(1.27)
The notes form part of these Financial Statements
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 16
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
ASSETS
NON-CURRENT ASSETS
Intangible assets
Property, plant and equipment
Other receivables
Other non-current assets
TOTAL NON-CURRENT ASSETS
CURRENT ASSETS
Investments
Trade and other receivables
Cash and cash equivalents
TOTAL CURRENT ASSETS
TOTAL ASSETS
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital
Share premium
Foreign currency reserve
Warrant reserve
Share based payment reserve
Retained earnings
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE PARENT
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Notes
2016
£
2015
£
9
10
13
15
11
13
14
16
5,066,750
16,170
33,171
-
3,155,242
21,892
23,778
225,668
5,116,091
3,426,580
124,472
126,557
1,172,347
149,922
82,472
359,296
1,423,376
591,690
6,539,467
4,018,270
4,509,465
11,226,706
391,998
386,794
455,309
(10,900,327)
2,858,658
9,156,284
(84,020)
362,252
473,178
(9,187,216)
6,069,945
3,579,136
17
469,522
439,134
469,522
439,134
6,539,467
4,018,270
The Financial Statements were approved by the Board of Directors on 23 February 2017 and were signed on
its behalf by:
D S Archer
Chief Executive Officer
Company number: 07307107
The notes form part of these Financial Statements
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 17
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
ASSETS
NON-CURRENT ASSETS
Intangible assets
Investments
Other receivables
Other non-current assets
TOTAL NON-CURRENT ASSETS
CURRENT ASSETS
Investments
Trade and other receivables
Cash and cash equivalents
TOTAL CURRENT ASSETS
TOTAL ASSETS
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Called up share capital
Share premium
Warrant reserve
Share based payment reserve
Retained earnings
TOTAL EQUITY
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Notes
2016
£
2015
£
9
11
13
15
11
13
14
16
290,750
281
6,685,753
-
55,078
820,655
3,121,824
214,628
6,976,784
4,212,185
124,472
43,007
1,029,765
149,922
41,970
316,328
1,197,244
508,220
8,174,028
4,720,405
4,509,465
11,226,706
386,794
455,309
(8,699,890)
2,858,658
9,156,284
362,252
473,178
(8,452,829)
7,878,384
4,397,543
17
295,644
322,862
295,644
322,862
8,174,028
4,720,405
The Company total comprehensive loss for the financial year was £291,231 (2015: £1,864,595) (Note 7).
The Financial Statements were approved by the Board of Directors on 23 February 2017 and were signed on its
behalf by:
D S Archer
Chief Executive Officer
Company number: 07307107
The notes form part of these Financial Statements
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 18
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2016
Share
capital
£
Share
premium
£
Foreign
currency
reserve
£
Warrant
reserve
£
Share
based
payment
reserve
£
Retained
earnings
£
Total
equity
£
At 1 January 2015
Loss for the year
Other comprehensive
income
Total comprehensive
income for the year
Issue of share capital
(net of expenses)
Issue of share options
Lapse of options
At 31 December 2015
Loss for the year
Other comprehensive
income
Total comprehensive
income for the year
Issue of share capital
(net of expenses)
Issue of share options
Exercise of options
Lapse of options
Issue of warrants
At 31 December 2016
2,231,697
-
8,539,626
-
36,171
-
362,252
-
619,423
-
(7,034,355)
4,754,814
(3,110,112) (3,110,112)
-
-
(120,191)
-
626,961
-
616,658
(120,191)
-
-
-
-
-
-
-
807,315
687,124
(2,302,797)
-
(2,422,988)
1,243,619
-
-
2,858,658
-
-
-
9,156,284
-
-
-
(84,020)
-
-
-
362,252
-
3,691
(149,936)
473,178
-
3,691
-
-
149,936
(9,187,216)
3,579,136
(1,759,250) (1,759,250)
-
-
-
-
1,650,807
-
-
-
-
2,094,964
-
-
-
(24,542)
4,509,465 11,226,706
476,018
476,018
-
-
-
-
-
391,998
-
-
-
-
1,969
477,987
(1,757,281)
(1,281,263)
-
-
-
-
24,542
386,794
-
26,301
(36,600)
(7,570)
-
-
-
36,600
7,570
-
455,309 (10,900,327)
3,745,771
26,301
-
-
-
6,069,945
The following describes the nature and purpose of each reserve within owners' equity:
Reserve
Share capital
Share premium
Foreign currency reserve
Description and purpose
Amounts subscribed for share capital at nominal value.
Amounts subscribed for share capital in excess of nominal value
less costs of fundraising.
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
Retained earnings
Represents the accumulated balance of share based payment
charges recognised in respect of share options granted by
Savannah Resources Plc, less transfers to retained losses in respect
of options exercised, lapsed and forfeited.
Cumulative net gains and losses recognised in the consolidated
Statement of Comprehensive Income.
The notes form part of these Financial Statements
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 19
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2016
Share
capital
£
Share
premium
£
Warrant
reserve
£
Share
based
payment
reserve
£
Retained
earnings
£
Total
equity
£
2,231,697
-
8,539,626
-
362,252
-
619,423
-
(6,738,170)
(2,671,910)
5,014,828
(2,671,910)
-
-
-
-
626,961
616,658
-
-
-
-
-
-
807,315
(1,864,595)
807,315
(1,864,595)
-
1,243,619
-
-
2,858,658
-
-
-
9,156,284
-
-
-
362,252
-
3,691
(149,936)
473,178
-
-
149,936
(8,452,829)
(859,042)
3,691
-
4,397,543
(859,042)
-
-
-
-
-
-
-
-
567,811
567,811
(291,231)
(291,231)
1,650,807
-
-
-
-
4,509,465
2,094,964
-
-
-
(24,542)
11,226,706
-
-
-
-
24,542
386,794
-
26,301
(36,600)
(7,570)
-
455,309
-
-
36,600
7,570
-
(8,699,890)
3,745,771
26,301
-
-
-
7,878,384
At 1 January 2015
Loss for the year
Other comprehensive
income
Total comprehensive
income for the year
Issue of share capital (net
of expenses)
Issue of share options
Lapse of options
At 31 December 2015
Loss for the year
Other comprehensive
income
Total comprehensive
income for the year
Issue of share capital
(net of expenses)
Issue of share options
Exercise of options
Lapse of options
Issue of warrants
At 31 December 2016
The following describes the nature and purpose of each reserve within owners' equity:
Reserve
Share capital
Share premium
Description and purpose
Amounts subscribed for share capital at nominal value.
Amounts subscribed for share capital in excess of nominal value
less costs of fundraising.
Warrant reserve
Fair value of the warrants issued.
Share based payment reserve
Represents the accumulated balance of share based payment
charges recognised in respect of share options granted by
Savannah Resources Plc, less transfers to retained losses in respect
of options exercised, lapsed and forfeited.
Retained earnings
Cumulative net gains and losses recognised in the consolidated
Statement of Comprehensive income.
The notes form part of these Financial Statements
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 20
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016
Cash flows used in operating activities
Loss for the year
Depreciation and amortisation charges
Impairment of investments
(Gain) / Loss on disposal of investments
Share based payment reserve charge
Shares issued in lieu of payments to extinguish liabilities
Finance income
Finance expense
Exchange losses
Loss on disposal of assets
Cash flow from operating activities before changes
in working capital
(Increase) / Decrease in trade and other receivables
Increase in trade and other payables
Notes
2016
£
2015
£
10
11
11
3, 22
3,16
5
4
(1,759,250)
9,536
-
(42,871)
26,301
20,992
-
4,413
96,036
128,505
(1,516,338)
(3,110,112)
-
1,071,374
666,154
3,691
119,521
(2,371)
2,446
-
-
(1,249,297)
(53,476)
46,089
29,317
105,380
Net cash used in operating activities
(1,523,725)
(1,114,600)
Cash flow used in investing activities
Purchase of intangible exploration assets
Purchase of other non-current assets
Purchase of investments
Proceeds from sale of investments
Interest received
(1,557,087)
-
(24,363)
94,653
-
11
11
(1,245,818)
(133,824)
(63,004)
109,415
2,371
Net cash used in investing activities
(1,486,797)
(1,330,860)
Cash flow from financing activities
Interest paid
Proceeds from issues of ordinary shares (net of expenses)
Net cash from financing activities
(4,413)
3,724,778
(2,446)
1,023,514
3,720,365
1,021,068
Increase / (Decrease) in cash and cash equivalents
709,843
(1,424,392)
Cash and cash equivalents at beginning of year
Exchange gains on cash and cash equivalents
359,296
103,208
1,778,338
5,350
Cash and cash equivalents at end of year
1,172,347
359,296
The notes form part of these Financial Statements
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 21
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016
Cash flows used in operating activities
Loss for the year
Impairment of investments
(Gain) / Loss on disposal of investments
Share based payment reserve charge
Shares issued in lieu of payments to extinguish liabilities
Finance income
Finance expense
Exchange Gains
Cash flow from operating activities before changes in working
capital
(Increase) / Decrease in trade and other receivables
Increase in trade and other payables
11
11
3, 22
3, 16
2016
£
2015
£
(859,042)
76,147
(42,871)
26,301
20,992
-
4,377
(89,175)
(863,271)
(1,037)
28,159
(2,671,910)
1,071,374
666,154
3,691
119,521
(2,371)
2,446
-
(811,095)
20,079
116,043
Net cash used in operating activities
(836,149)
(674,973)
Cash flow used in investing activities
Investment in subsidiaries
Loans to subsidiaries
Purchase of investments
Purchase of intangible exploration assets
Purchase of other non-current assets
Proceeds from sale of investments
Interest received
11
11
11
(672,355)
(1,610,058)
(24,363)
(61,900)
-
94,653
-
(820,374)
(762,076)
(63,004)
(7,687)
(122,783)
109,415
2,371
Net cash used in investing activities
(2,274,023)
(1,664,138)
Cash flow from financing activities
Interest paid
Proceeds from issues of ordinary shares
Net cash from financing activities
(4,377)
3,724,778
(2,446)
1,023,514
3,720,401
1,021,068
Increase / (Decrease) in cash and cash equivalents
610,229
(1,318,043)
Cash and cash equivalents at beginning of year
Exchange gains on cash and cash equivalents
316,328
103,208
1,634,371
-
Cash and cash equivalents at end of year
1,029,765
316,328
The notes form part of these Financial Statements
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
1.
ACCOUNTING POLICIES
Basis of Preparation
These Financial Statements have been prepared in accordance with International Financial Reporting Standards,
International Accounting standards and Interpretations (collectively “IFRSs”) as adopted by the EU and IFRIC
interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The Financial Statements have been prepared under the historical cost convention.
The consolidated Financial Statements have been prepared by the merger method of accounting on the
historical cost basis except, as explained in the accounting policies below. Historical cost is generally based on
the consideration given in exchange for assets. The principal accounting policies are set out below.
Presentational and Functional Currency
The functional currency of the Company is Pound Sterling. Each entity in the Group determines its own
functional currency and items included in the Financial Statements of each entity are measured using that
functional currency. The presentational currency of the Group is Pound Sterling.
Going Concern
The Financial Statements have been prepared on a going concern basis. Following the receipt of the Placing and
Subscription proceeds, which are contractually committed, the Group will have a pro-forma cash balance of
£3.02m and letters of intent from directors and related parties for a further £1.01m cash subscriptions. The
Directors have reviewed the cashflow projection for the Group and consider that it has sufficient ability to meet
its financial commitments for at least 12 months.
Basis of Consolidation
The Group accounts consolidate the accounts of Savannah Resources Plc and its domestic and foreign
subsidiaries, refer to Note 11. The foreign subsidiaries have been consolidated in accordance with IFRS 10
“Consolidated Financial statements” and IAS 21 "The effects of Foreign Exchange Rates."
Inter-company transactions and balances between Group companies are eliminated in full.
Equity Investments
Equity investments, excluding subsidiaries, are accounted for as available for sale financial instruments and
included on the Statement of Financial Position at fair value with value changes being recognised in other
comprehensive income. All equity investments, excluding subsidiaries, held are quoted and traded in an active
market. The variability in the range of reasonable fair value estimated for these instruments is not significant,
therefore, when there are no active market for these equity investments the fair value will be estimated using
historical market data. The change in market value represents the fair value of shares held at the reporting date
less the cost or fair value at the start of the financial year.
When equity investments are disposed of the cumulative value changes recognised in other comprehensive
income are transferred to the income statement as a realised profit or loss on disposal. Their change in market
value is up to the date of disposal.
An impairment is recognised for equity investments where there is a significant and sustained decrease in the
market value of the investment.
Investments in Subsidiaries and Associates
Investments in subsidiaries, associates and jointly controlled entities are accounted for at cost within the
individual accounts of the parent Company. These investments are classified as non-current assets on the
Statement of Financial Position of the parent Company.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
Foreign Currencies
Transactions in foreign currencies are initially recorded in the functional currency by applying spot exchange
rate ruling at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the functional currency rate of exchange ruling at the reporting date. Exchange differences
arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or
loss, except for foreign currency borrowings qualifying as a hedge of a net investment in a foreign operation, in
which case exchange differences are recognised in other comprehensive income and accumulated in the foreign
exchange reserve along with the exchange differences arising on the retranslation of the foreign operation.
The income statements of individual Group companies with functional currencies other than Pound Sterling are
translated into Pound Sterling at the average rate for the period, on the basis the average rate is a reasonable
approximation of the spot rates throughout the year, and the Statement of Financial Position translated at the
rate of exchange ruling on the reporting date. Exchange differences which arise from retranslation of the
opening net assets and results of such subsidiary undertakings are taken to equity (“foreign currency reserve”).
On disposal of such entities, the deferred cumulative amount recognised in equity relating to that particular
operation is transferred to the consolidated Statement of Comprehensive income as part of the profit or loss
on disposal.
Intangible Assets
Exploration and evaluation assets
Once an exploration licence or an option to acquire an exploration licence has been obtained, all costs
associated with mineral property development and investments are capitalised on a project-by-project basis
pending determination of the feasibility of the project. Costs incurred include appropriate technical and
administrative expenses but not general overheads. If a mining property development project is successful, the
related expenditures will be transferred to property, plant and equipment and subsequently amortised over
the estimated life of the commercial ore reserves on a unit of production basis. Where a licence is relinquished,
a project is abandoned, or is considered to be of no further commercial value to the Savannah Resources Group,
the related costs will be written off.
Unevaluated mineral properties are assessed annually at reporting date for indicators of impairment in
accordance with the policy set out below. For the purposes of assessing indicators of impairment, assets are
grouped at the lowest level for which there are separately identifiable cash flows (cash generating units) as
disclosed in Note 9.
If commercial reserves are developed, the related deferred development and exploration costs are then
reclassified as development and production assets within property, plant and equipment.
Acquisitions of Mineral Exploration Licences
Acquisitions of Mineral Exploration Licenses through acquisition of non-operational corporate structures that
does not represent a business, and therefore do not meet the definition of a business combination, are
accounted for as the acquisition of an asset. Related future consideration is contingent and is not recognised as
an asset or liability.
Property, Plant and Equipment
Tangible non-current assets used in exploration and evaluation are classified within tangible non-current assets
as property, plant and equipment. To the extent that such tangible assets are consumed in exploration and
evaluation the amount reflecting that consumption is recorded as part of the cost of the intangible asset.
Depreciation is provided on all items of property, plant and equipment in order to write off the cost less
estimated residual value of each asset over its estimated useful life.
Plant & Machinery
Office Equipment
Motor Vehicles
4 – 10 years
4 years
4 years
Financial Instruments
Financial assets and financial liabilities are recognised in the Group’s Statement of Financial Position when the
Group becomes a party to the contractual provisions of the instrument.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
Financial Assets
Trade and other receivables
Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They are initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective
interest rate method, less provision for impairment.
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties
on the part of the counterparty or default or significant delay in payment) that the Group will be unable to
collect all of the amounts due under the terms receivable, the amount of such a provision being the differences
between the net carrying amount and the present value of the future expected cash flows associated with the
impaired receivable. For receivables, which are reported net, such provisions are recorded in a separate
allowance account with the loss being recognised within administrative expenses in the Statement of
Comprehensive Income. On confirmation that the receivable will not be collectable, the gross carrying value of
the asset is written off against the associated provision.
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset
expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to
another entity. When a financial asset is derecognised, the cumulative gain or loss in equity (if any) is transferred
to the consolidated income statement.
There is no significant difference between carrying value and fair value of trade and other receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and balances held with banks. Cash equivalents are short
term, highly liquid accounts that are readily converted to known amounts of cash.
Financial Liabilities
Other liabilities
Other liabilities consist of trade and other payables, which are initially recognised at fair value and subsequently
carried at amortised cost, using the effective interest method.
Financial liabilities are derecognised when they are extinguished, that is when the obligation is discharged,
cancelled or has expired. When a financial liability is derecognised, the cumulative gain or loss in equity (if any)
is transferred to the consolidated income statement.
There is no significant difference between the carrying value and fair value of other liabilities.
Taxation
Current taxes are based on the results shown in the Financial Statements and are calculated according to local
tax rules, using tax rates enacted or substantively enacted by the reporting date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the
reporting date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will
be available against which timing differences can be utilised.
Operating Leases
Rentals payable under operating leases are charged to the income statement on a straight-line basis over the
term of the relevant lease.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
Share-based Payments
Where equity settled share options are awarded to Directors and employees, the fair value of the options at
the date of grant is charged to the Consolidated Statement of Comprehensive Income over the vesting period.
Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected
to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is
based on the number of options that eventually vest. Market vesting conditions are factored into the fair value
of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of
whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to
achieve a market vesting condition.
Where the terms and conditions of options are modified before they vest, the change in the fair value of the
options, measured immediately before and after the modification, is also charged to the Consolidated
Statement of Comprehensive Income over the remaining vesting period.
Where equity instruments are granted to persons other than employees for goods and services received, the
Consolidated Statement of Comprehensive Income is charged with the fair value of goods and services received
or where this is not possible at the fair value of the equity instruments granted. Fair value is measured by use
of an option pricing model.
Joint Arrangements
The group is a party to a joint arrangement when there is a contractual arrangement that confers joint control
over the relevant activities of the arrangement to the group and at least one other party. Joint control is
assessed under the same principles as control over subsidiaries.
The group classifies its interests in joint arrangements as either: (a) Joint ventures: where the group has rights
to only the net assets of the joint arrangement; (b) Joint operations: where the group has both the rights to
assets and obligations for the liabilities of the joint arrangement.
In assessing the classification of interests in joint arrangements, the Group considers: (a) The structure of the
joint arrangement; (b) The legal form of joint arrangements structured through a separate vehicle; (c) The
contractual terms of the joint arrangement agreement; and (d) Any other facts and circumstances (including
any other contractual arrangements).
The Group accounts for its interests in joint operations by recognising its share of assets, liabilities, revenues
and expenses in accordance with its contractually conferred rights and obligations.
Key Accounting Estimates and Judgements
The preparation of financial information in conformity with IFRS requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of financial information and the reported
amounts of expenses during the reporting periods. Although these estimates are based on management's best
knowledge of the amounts, event or actions, actual results ultimately may differ from those estimates.
The key accounting estimates and assumptions are set out below:
(a)
Carrying value of exploration and evaluation assets
The Group assesses at each reporting period whether there is any indication that these assets may be
impaired. If such indication exists, the Group estimates the recoverable amount of the asset. In the early
stages of exploration an indication of impairment may arise from drilling and assay results or from
management's decision to terminate the project. The recoverable amount is assessed by reference to
the higher of 'value in use', where a project is still expected to be developed into production (being the
net present value of expected future cash flows of the relevant cash generating unit) and 'fair value less
cost to sell'. Further details are set out in Note 9.
(b)
Share-based payments
In determining the fair value of share-based payments made during the period, a number of assumptions
have been made by management. The details of these assumptions are set out in Note 22.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
(c)
Going concern
In determining the Group’s ability to continue as a going concern the Directors consider a number of
factors including cashflow forecasts prepared by management. The detail of these factors are set out in
Note 1 Going Concern heading.
The key judgements are set out below:
(a)
(b)
(c)
Exploration and evaluation costs
The Group has to apply judgement in determining whether exploration and evaluation expenditure
should be capitalised within intangible assets as exploration and evaluation costs or expensed. The Group
has a policy of capitalising all costs which relate directly to exploration and evaluation costs (as set out
above). The total value of exploration and evaluation costs capitalised as at each of the reporting dates
is set out in Note 9.
Impairment of investments
When assessing the Group’s equity investments for impairment, it must be determined whether a
decline in the market value of the investment represents a fair value decline or an impairment. The group
determines an impairment to be where there is a significant and sustained decline in the market value
of an investment below cost and it is considered unlikely that the value will recover. A fair value decline
however, is determined to be either insignificant or short term in nature.
Classification of Joint Arrangement
In determining the accounting treatment of the agreement signed between the Group and Rio Tinto
(Note 12) management need to determine if joint control exists from both and therefore apply IFRS 11
Joint Arrangements. Also, when applying IFRS 11 it is necessary to evaluate the rights and obligations
relating to the agreement to conclude if it is a Joint Operation or a Joint Venture.
Accounting Developments During 2016
The accounting policies adopted are consistent with those of the previous financial year. New standards and
amendments to IFRS effective as of 1 January 2016 have been reviewed by the Group and there has been no
material impact on the Financial Statements as a result of these standards and amendments.
Accounting Developments Not Yet Adopted
Various new standards and amendments have been issued by the IASB up to the date of this report which are
not applicable until future periods and some have not yet been endorsed by the European Union. The Directors
do not expect these will have a material impact on the Financial Statements of the Group or Company.
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 comprise of exploration and development in Oman, exploration and development in
Mozambique, exploration in Finland, headquarter and corporate costs and the Company’s third party
investments.
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 Oman, Mozambique and Finland the segments are
calculated by the summation of the balances in the legal entities which are readily identifiable to each of the
segmental activities. In the case of the Investments, this is calculated by analysis of the specific related
investment instruments. Recharges between segments are at cost and included in each segment below. Inter-
Company loans are eliminated to zero and not included in each segment below.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 27
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
Oman
Copper
Mozambique
Mineral
Sands
Finland
Lithium
HQ and
corporate
Investments
Elimination
Total
2016
Revenue
Finance costs
Gain on disposal
of investments
Loss on disposal
of assets
Share based
payments
(Loss) / Gain for
the year
Total assets
Total non-
current assets
Additions to
non-current
assets
Total current
assets
Total liabilities
£
-
-
-
(128,505)
20,992
£
-
(36)
-
-
-
£
£
-
-
-
-
-
442,984
(4,377)
-
-
26,301
£
-
-
42,871
-
-
(657,598)
3,667,380
(230,113)
1,546,750
(5,844)
128,486
(908,566)
1,072,379
42,871
124,472
3,558,424
1,438,862
118,805
1,366,465
204,241
118,805
-
-
-
-
108,956
(135,754)
107,495
(34,553)
9,682
(12,304)
1,072,771
(286,911)
124,472
-
£
£
(442,984)
-
-
-
-
-
-
-
-
-
-
-
(4,413)
42,871
(128.505)
47,293
(1,759,250)
6,539,467
5,116,091
1,689,511
1,423,376
(469,522)
Oman
Copper
Mozambique
Mineral Sands
HQ and
corporate
Investments
Elimination
Total
2015
Revenue
Finance costs
Interest income
Loss on disposal
of investments
Impairment of
investments
Share based
payments
Loss for the year
Total assets
Total non-
current assets
Additions to
non-current
assets
Total current
assets
Total liabilities
£
-
-
-
-
-
£
-
-
-
-
-
£
353,132
(2,446)
2,371
-
-
-
(274,795)
2,250,258
-
(137,539)
1,259,691
123,212
(960,250)
358,399
2,191,959
1,234,621
1,237,610
167,549
-
-
(666,154)
(1,071,374)
-
(1,737,528)
149,922
-
-
58,299
(129,122)
25,071
(24,437)
358,398
(285,575)
149,922
-
£
-
-
-
£
£
(353,132)
-
-
-
(2,446)
2,371
-
-
-
-
-
-
-
-
(666,154)
(1,071,374)
123,212
(3,110,112)
4,018,270
3,426,580
1,405,159
591,690
(439,134)
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
3.
EMPLOYEES AND DIRECTORS
The average monthly number of employees during the year was as follows:
Operational
Non-operational
Staff Costs (excluding Directors)
Group
2016
No
2015
No
Company
2016
No
2015
No
12
12
24
6
11
17
1
3
4
1
4
5
Group
2016
£
2015
£
Company
2016
£
2015
£
Salaries
Bonus
Social security
Share based payment expense (see Note 22)
946,731
66,243
38,187
9,651
637,981
10,000
32,678
3,691
338,218
29,051
13,225
9,651
280,348
10,000
4,545
3,691
1,060,812
684,350
390,145
298,584
The Group numbers in the above table includes £486,101 (2015: £294,872) which was capitalised as an
intangible asset.
The Group bonus in 2016 includes £20,992 (2015: £nil) paid in Company shares.
Directors’ Remuneration
Salaries
Bonus
Social security
Share based payment expense (see Note 22)
2016
£
336,892
118,318
45,326
16,650
2015
£
312,4701
26,395
29,212
-
517,186
368,077
1 Includes £15,000 relating to a Director who resigned in 2015 and therefore is not included in the Directors’
remuneration detail below.
The numbers in the above table include £74,663 (2015: £29,797) of Directors’ Remuneration which was
capitalised as an intangible asset in relation to the provision of specific technical services.
The Directors’ remuneration is paid by the Company.
The Directors are considered to be the key management of the Group.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
The remuneration of Directors who held office during the year was as follows:
Executive Directors
Dale J Ferguson
David S Archer
Non-Executive Directors
Matthew J King
Maqbool Ali Sultan
(appointed 11 July 2016)
Imad Kamal Abdul Redha
Sultan
(appointed 11 July 2016)
Manohar Pundalik
Shenoy
(appointed 11 July 2016)
Murtadha Ahmed A
Sultan
(appointed 11 July 2016)
Directors’
emoluments 2016
Directors’
emoluments 2015
Salary
Bonus Non-cash
Total
Salary
Bonus Non-cash
Total
share
options
share
options
106,892
190,000
23,3183
95,0003
-
-
130,210
285,000
73,675
190,000
7,3951
19,000
40,000
-
-
-
-
-
-
-
-
-
16,650
56,650
33,7952
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
81,070
209,000
33,795
-
-
-
-
336,892
118,318
16,650
471,860
297,470
26,395
-
323,865
1 Bonus unpaid as at 31 December 2015
2 £16,667 of M J King’s Director fees were paid in shares
3 Bonuses unpaid as at 31 December 2016
The Remuneration Committee undertook a benchmarking survey of the remuneration packages of the Company’s
senior executives. This included an analysis of short term incentives such as bonuses to help determine an appropriate
maximum potential bonus as a percentage of total salary. The bonuses as determined by the Remuneration
Committee fell well within these ranges. The factors considered by the Remuneration Committee in the determination
of bonuses included the increase in the market capitalisation of the company since 1 January 2016; the introduction
of a cornerstone shareholder to the company; successful capital raisings; securing the world class Mutamba Heavy
Mineral Sands Project in Mozambique; establishing a fast paced development programme for the development of the
Oman copper deposits; the lithium initiative in Finland; the development of a highly professional management team
with superior technical, commercial and corporate abilities; and maintaining a cohesive, collaborative and collegiate
corporate culture.
No Directors accrued pension benefits during any of the periods presented.
4.
LOSS ON DISPOSAL
Consideration
Net assets disposed
2016
£
-
(128,505)
(128,505)
There were no disposal of subsidiaries in 2015.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
On 21 September 2016 the Group withdrew from the joint operation relating to Al Zuhra Mining LLC for the
exploration of Block 6 in Oman. The Group has not received consideration from the existing shareholders, all
existing loans payables by Al Zuhra Mining LLC to the Savannah Resources Group in relation to this were
cancelled and the rights of Savannah Resources Group to a 40% shareholding in Al Zuhra Mining LLC were
waived.
The net assets at the date of disposal comprised:
Intangible assets
Cash
2016
£
127,535
970
128,505 1
1 The net assets in the table above do not include the loans payable to Group companies. These loans were
cancelled and registered a loss in the Group companies that is eliminated in the Consolidated Group Accounts.
5.
LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging
Depreciation and amortisation
Auditors' remuneration:
- Statutory audit of the Group Financial Statements
- Tax advice
Fees payable to associated firms of the auditor for audit of
subsidiaries
Fees payable to associated firms of the auditor for tax
advice
Fees payable to other firms for audit of subsidiaries
Foreign exchange loss / (gain)
Operating lease payments
Share based payments
Bonus paid in shares
2016
£
9,536
35,000
15,100
7,252
2,997
9,549
96,036
46,620
26,301
20,992
2015
£
8,700
32,000
10,325
8,900
3,246
-
(11,789)
103,990
3,691
-
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
6.
INCOME TAX
Analysis of the Tax Charge
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2016 nor for the
year ended 31 December 2015.
Factors Affecting the Tax Charge
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation
tax in the United Kingdom applied to the result for the year are as follows:
2016
£
2015
£
Loss on ordinary activities before tax
(1,759,250)
(3,110,112)
Loss on ordinary activities multiplied by the standard rate
of corporation tax in the UK of 20% (2015- 20%)
(351,850)
(622,022)
Effects of:
Expenses not deductible for tax purposes
Different tax rates applied in overseas jurisdictions
Tax losses carried forward
Total income tax
88,390
45,058
218,402
372,437
-
249,585
-
-
Deferred Tax
The Group has carried forward losses amounting to £5,147,260 as at 31 December 2016 (2015: £4,148,430). As
the timing and extent of taxable profits are uncertain, the deferred tax asset arising on these losses has not
been recognised in the Financial Statements.
7.
8.
LOSS OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent Company is
not presented as part of these Financial Statements. The parent Company's total comprehensive loss for the
financial year was £291,231 (2015: £1,864,595).
EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the
conversion of all dilutive potential ordinary shares.
In accordance with IAS 33 as the Group is reporting a loss for both this and the preceding year the share options,
warrant options and warrants are not considered dilutive because the exercise of share options would have the
effect of reducing the loss per share.
Reconciliations are set out below.
Basic Loss Per Share
Losses attributable to ordinary shareholders:
Total loss for the year
Weighted average number of shares
Loss per share – total loss for the year from continuing
operations
2016
£
2015
£
(1,759,250)
385,212,275
(3,110,112)
243,925,351
0.0046
0.0127
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
9.
INTANGIBLE ASSETS (Group)
Cost
At 1 January 2015
Additions
Exchange differences
At 1 January 2016
Additions
Disposals of assets (Note 4)
Transfers from Other non-current assets (Note 15)
Exchange differences
At 31 December 2016
Amortisation and impairment
At 1 January 2015
At 1 January 2016
At 31 December 2016
Net Book Value
At 31 December 2016
At 31 December 2015
At 1 January 2015
Exploration and
evaluation
£
1,974,128
1,264,638
(83,524)
3,155,242
1,464,373
(127,535)
225,668
349,002
5,066,750
-
-
-
5,066,750
3,155,242
1,974,128
The exploration and evaluation assets referred to in the table above comprise expenditure in relation to
exploration licences in Oman, Mozambique and Finland. The Directors consider that for the purposes of
assessing impairment, the above exploration and evaluation expenditure is allocated to the following licence
areas, representing the Group’s Cash Generating Units (“CGUs”).
Mozambique Minerals Sands
Oman Copper
Finland Lithium
2016
£
1,404,964
3,542,982
118,804
2015
£
983,783
2,171,459
-
5,066,750
3,155,242
The Directors have reviewed the carrying value of the intangible assets and have not identified any indicators
of impairment. Therefore have not included an impairment charge in 2016 and 2015. In 2016 a loss of £127,535
(2015: nil) has been registered due to the disposal of Al Zuhra Minerals LLC (Note 4).
The Directors consider that the remaining carrying value of the intangible assets is not impaired based on an
assessment of the recoverable amount of each of the Group’s CGUs.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
INTANGIBLE ASSETS (Company)
Cost
At 1 January 2015
Additions
At 1 January 2016
Additions
Transfers from Other non-current assets (Note 15)
At 31 December 2016
Amortisation and impairment
At 1 January 2015
At 1 January 2016
At 31 December 2016
Net Book Value
At 31 December 2016
At 31 December 2015
At 1 January 2015
Exploration and
evaluation
£
47,391
7,687
55,078
21,044
214,628
290,750
-
-
-
290,750
55,078
47,391
10.
PROPERTY, PLANT AND EQUIPMENT (Group)
Motor
vehicles
£
Office
Equipment
£
Cost
At 1 January 2015
Additions
Exchange differences
At 1 January 2016
Additions
Exchange differences
At 31 December 2016
Depreciation
At 1 January 2015
Charge for year
Exchange differences
At 1 January 2016
Charge for year
Exchange differences
At 31 December 2016
Net Book Value
At 31 December 2016
At 31 December 2015
29,083
-
1,391
30,474
-
6,133
36,607
2,272
7,389
352
10,013
9,152
1,999
21,164
15,443
20,461
Total
£
39,867
-
1,005
40,872
-
7,136
48,008
9,622
8,700
658
18,980
9,536
3,322
31,838
10,784
-
(386)
10,398
-
1,003
11,401
7,350
1,311
306
8,967
384
1,323
10,674
727
16,170
1,431
21,892
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
11.
INVESTMENTS
Group
At 1 January 2015
Additions at cost
Disposals
Change in market value of investment
At 31 December 2015
Additions at cost
Disposals
Change in market value of investment
At 31 December 2016
Shares in Listed
investments
£
1,129,602
63,004
(112,471)
(930,213)
149,922
24,363
(94,653)
44,840
124,472
In 2016 the Company disposed of 35million (2015: 70.4million) shares in Alecto and recognised a realised gain
on disposal of £1,266 (2015: loss of £666,154) which was transferred from Other Comprehensive Income. On
21 December 2016 Alecto’s shares were suspended in AIM pending the publication of an admission document,
expect to be before July 2017. At 31 December 2016 there was not an active market for these shares, therefore
the management analysed the historical market price and the conditions under the suspension in AIM and
concluded that the quoted price at the suspension date was a reliable fair value at the reporting date. The fair
value hierarchy in 2016 is level 2 as the valuation is based in other observable inputs. In 2015 the fair value
hierarchy was level 1 as the valuation was based wholly on quoted prices at the reporting date.
In 2016 the Company disposed of 5.2million (2015: nil) shares in a listed company and recognised a realised
gain on disposal of £41,605 (2015: £nil) which was transferred from Other Comprehensive Income. The fair
value of the shares is the quoted value at the reporting date. The fair value hierarchy in 2016 and 2015 is level
1 as the valuation is based wholly on quoted prices.
At 31 December 2015 an impairment was recognised for shares where the market value was significantly below
cost for a sustained period, the impairment expense of £1,071,374 was transferred from Other Comprehensive
Income.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
Company
Non Current
At 1 January 2015
Additions
At 31 December 2015
Additions
Disposal to Group company
At 31 December 2016
Current
At 1 January 2015
Additions
Disposals
Change in market value of investment
At 31 December 2015
Additions
Disposals
Change in market value of investment
At 31 December 2016
Shares in
subsidiaries
£
281
820,374
820,655
672,355
(1,492,729)
281
Shares in
listed
investments
£
1,129,602
63,004
(112,471)
(930,213)
149,922
24,363
(94,653)
44,840
124,472
On 11 May 2016 the Group through its subsidiary African Mining & Exploration Limited acquired 100% of
Finkallio Oy, paying a consideration of EUR 6,000 (~£4,754). The Group subsequently obtained through Finkallio
Oy licenses for lithium exploration projects in Finland.
In October 2016 Savannah Resources plc, through its subsidiary AME East Africa Limited (“AME”), entered into
a Consortium Agreement (“CA”) with Rio Tinto Mining and Exploration Limited (“Rio Tinto”) whereby both
parties would combine their respective projects in Mozambique to form an unincorporated consortium. On
signing of this CA AME own 10% of the combined Mutamba Project and Rio Tinto own the remaining 90%. AME
can earn into up to 51% in the Project by achieving prescribed milestones. Based on the terms of the CA both
AME and Rio Tinto have joint control, and therefore this is a joint arrangement under IFRS. Detailed information
about the CA is included in Note 12 and the Chairman’s Statement and CEO Report.
In November 2014 the Group entered into an earn-in agreement (“Earn-in”) to acquire up to a 65% interest in
Al Thuraya LLC (“Al Thuraya”) which wholly owns the highly prospective Block 4 Copper Project in Oman. In
order for the Group to achieve a 51% shareholding in Al Thuraya, they are required to make a capital
contribution of USD $2,000,000 (~GBP £1,620,000) within two years of entering the earn-in agreement and a
further USD $2,600,000 (~GBP £2,106,000) cash within four years to receive a further 14% shareholding in Al
Thuraya. These funds will be used for geological development activities. During the 2016 financial year the
Group made capital contributions of USD $984,454 (GBP £726,126) (2015: USD $1,490,936), being the total
contribution as at 31 December 2016 of USD $2,475,390 (GBP £2,004,998). In September 2016 the Group
acquired the 51% in Al Thuraya after achieving the capital contribution of USD $2,000,000 as per the Earn-in
agreement.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
In October 2016 a novation agreement was executed between Savannah Resources plc, Savannah Resources
B.V. (“SRBV”), Al Thuraya and the existing shareholders of Al Thuraya, in which Savannah Resources plc assigned
to SRBV its rights and obligations pursuant to the Earn-In agreement to acquire up to 65% interest in Al Thuraya.
The consideration to be paid by SRBV for this assignment amount to EUR 1,909,403 (£1,701,983), was calculated
based on the capital contributions made by Savannah Resources Plc to Al Thuraya in USD at that date of
executing the novation agreement of the contract. As the capital contributions were made in USD and Savannah
Resources plc recognised the contributions in GBP a gain arose due to foreign exchange of £209,254 that has
been recognised in Other Comprehensive Income.
In 2014 a new 100% subsidiary Company, SRBV was set up to be the immediate parent Company of Gentor
Resources Limited (“GRL”) with an initial investment of €100 (~£81) in the ordinary share capital. On 10 April
2014 the Group entered into an agreement to acquire 100% of Gentor Resources Inc.’s subsidiary, GRL, which
in turn holds interests in Al Fairuz Mining Co LLC (“Al Fairuz”), Sohar Mining LLC (formerly Gentor Resources
LLC), and Al Zuhra Mining LLC (“Al Zuhra”) (subsequently disposed in 2016) through its subsidiary, SRBV.
GRL has a 65% interest in Al Fairuz (Block 5). In September 2016 SRBV terminated its interest in Al Zuhra (Block
6). In 2016 Savannah Resources Plc recognised an impairment amounting GBP £76,147 (2015: £nil) in relation
to the loan owed by Al Zuhra.
In 2014 as consideration for acquiring 100% of the issued share capital of GRL, the Company initially paid cash
consideration of USD $800,000. Additionally milestone payments, to be satisfied (up to 50% payable in ordinary
shares in the Company) as follows: (a) USD $1,000,000 (~GBP £810,000) upon a formal final investment decision
for the development of the Block 5 Licence; (b) USD $1,000,000 (~GBP £810,000) upon the production of the
first saleable concentrate or saleable product from ore derived from the Block 5 Licence; (c) USD $1,000,000
(~GBP £810,000) within six months of the payment of the Deferred Consideration in (b). The Company will be
responsible for all of the funding of the projects. This funding will be in the form of loans which would be
reimbursed prior to any dividend distribution to shareholders (Note 19).
The Company had the following subsidiary undertakings, either directly or indirectly, at 31 December 2016,
which have been included in the Consolidated Financial Statements.
Subsidiary
Registered office
Nature of business
Class of
share
% Holding
AME East Africa Limited4
Matilda Minerals Limitada5
Panda Recursos Limitada5
Savannah Resources B.V. 4
Gentor Resources Limited5
Al Fairuz Mining L.L.C. 5
Sohar Mining L.L.C 5,6
Al Zuhra Mining L.L.C. 1
Al Thuraya Mining L.L.C. 7
Finkallio Oy5
African Mining & Exploration Limited4 United Kingdom8
United Kingdom8
Mozambique9
Mozambique10
The Netherlands11
British Virgin Is.12
Oman13
Oman13
Oman14
Oman15
Finland16
Holding Company
Mining & exploration
Mining & exploration
Holding Company
Holding Company
Mining & exploration
Dormant
Mining & exploration
Mining & exploration
Mining & exploration
Dormant
100%
Ordinary
80%3
Ordinary
99.99%
Ordinary
100%
Ordinary
100%
Ordinary
65%3
Ordinary
70%3
Ordinary
0%1
Ordinary
51%2, 3
Ordinary
Ordinary 100%
100%
Ordinary
1 The Group disposed of its interest in Al Zuhra in September 2016. The results of Al Zuhra were consolidated
100% up until the date of disposal (Note 4).
2 Al Thuraya was consolidated at 31 December 2015 despite the Group owning 0% as the Group had controlling
rights to the Project via the Earn-in. In 2016 the Group achieved the capital contribution to earn a right to 51%,
the formalities to complete the registration was in process at the reporting date.
3 These entities have been consolidated 100% despite the Group owning less than 100% of the voting rights.
This is due to the Company having earn-in contracts whereby the Company is the only contributing party and
has the ability to control the operations.
4Directly held by Savannah Resources Plc
5Indirectly held by Savannah Resources Plc
6Formerly Gentor Resources L.L.C
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
7Directly held by Savannah Resources Plc until 25 October 2016, afterward Indirectly held by Savannah
Resources Plc
855 Gower Street, London WC1E 6HQ, United Kingdom
9Damiao de Gois, no 438, Sommerschield, Maputo, Mozambique
10Rua 1301, Num 97, Sommerschield, Maputo, Mozambique
11Teleportboulevard 140, 1043 EJ Amsterdam, The Netherlands
12Trident Chambers, P.O. Box 146, Road Town, Tortola, VG1110, Virgin Islands, British
13P.O.Box 1053,P.C.130, Azaiba, Muscat, Sultanate of Oman
14P.O.Box 1880, P.C.112,Muscat, Sultanate of Oman
15P.O.Box 54, P.C.100,Muscat, Sultanate of Oman
16c/o Bokf.byrå Mattans Ab, Storalånggatan 57 A 1, 65100 VASA, Finland
12.
JOINT ARRANGEMENTS
In October 2016 Savannah Resources plc, through its subsidiary AME East Africa Limited (AME), entered into a
consortium agreement (“Consortium Agreement”) with Rio Tinto Mining and Exploration Limited (Rio Tinto)
whereby both parties would combine their respective projects in Mozambique to form an unincorporated
consortium. On signing of this Consortium Agreement AME own 10% of the combined Mutamba Project and
Rio Tinto own the remaining 90%. AME can earn into up to 51% in the Project by achieving the following
milestones:
(a) Upon Savannah Group completing the Phase 1 work programme (Scoping Study) it will have a 20%
participating interest in the Project;
(b) Upon Savannah Group completing Phase 2 of the work programme (Pre-Feasibility study) it will have
a 35% participating interest in the Project;
(c) Upon Savannah completing Phase 3 of the work programme (Feasibility study) it will have a 51%
participating interest in the Project.
The Consortium is managed by a Consortium committee with two representatives from each party, and chaired
by an AME representative. AME is the operator of the Project, and it is responsible for preparing and
implementing the work programme and budget approved by the Consortium committee. Based on the terms
of the agreement both AME and Rio Tinto have joint control, and therefore this is a joint arrangement under
IFRS.
The Consortium is currently unincorporated and each party have rights to the assets, and obligations to the
liabilities, relating to the arrangement, therefore it is considered a Joint Operation. AME is responsible for all
funding related to the combined Project up until the delivery of a Feasibility Study. Since the execution of the
Consortium Agreement the Group has capitalised £309,820 relating to the combined project.
13.
TRADE AND OTHER RECEIVABLES
Non-Current:
Other receivables - VAT
Amounts due from subsidiaries
Current:
VAT recoverable
Other receivables
Group
2016
£
33,171
-
33,171
24,364
102,193
126,557
2015
£
23,778
-
Company
2016
£
2015
£
-
6,685,753
-
3,121,824
23,778
6,685,753
3,121,824
27,188
55,284
82,472
22,311
20,696
43,007
27,188
14,782
41,970
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
The loans to subsidiaries are interest free and are repayable on demand. Repayment of loans is subject to the
Directors’ assessment of the Group’s requirements and availability of appropriate liquid resources.
14.
CASH AND CASH EQUIVALENTS
Group
2016
£
2015
£
Company
2016
£
2015
£
Cash at bank and in hand
1,172,347
359,296
1,029,765
316,328
15. OTHER NON-CURRENT ASSETS
Group
2016
£
2015
£
Company
2016
£
2015
£
Prepayment - costs incurred on
resource projects
-
225,668
-
214,628
Other non-current assets represented prepayments with respect to ongoing resource projects in Mozambique.
These have been reclassified to Intangible Assets after the Consortium Agreement with Rio Tinto was executed
in October 2016 (Notes 9 and 12).
16. SHARE CAPITAL
Allotted, issued and fully paid
At beginning of year
Issued during year:
Share placements
Bonus paid in shares
Exercise of share options
In lieu of cash for professional
services1
2016
2015
£0.01
ordinary
shares
number
£0.01
ordinary
shares
number
£
£
285,865,770
2,858,658
223,169,714
2,231,697
162,581,043
999,642
1,500,000
1,625,811
9,996
15,000
52,117,706
-
-
521,177
-
-
-
-
10,578,350
105,784
At end of year
450,946,455
4,509,465
285,865,770
2,858,658
1 The shares issued in lieu of cash for professional services were valued at the fair value of the services received,
£nil (2015: £114,322) has been recorded in share premium for these transactions.
Refer to Note 3 for details of bonus paid in shares.
Refer to Note 22 for details of share options exercised.
The par value of the Company’s shares is £0.01.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
17.
TRADE AND OTHER PAYABLES
Group
2016
£
Current:
Trade payables
Other payables
Accruals and deferred income
Amounts owing to subsidiaries
155,077
44,414
270,031
-
2015
£
291,298
11,179
136,657
-
Company
2016
£
2015
£
41,827
38,844
206,238
8,735
194,715
11,177
79,682
37,288
469,522
439,134
295,644
322,862
18.
FINANCIAL INSTRUMENTS
Financial Instruments - Risk Management
In common with all other businesses, the Group is exposed to risks that arise from its use of financial
instruments. This note describes the Group's objectives, policies and processes for managing those risks and
the methods used to measure them. Further quantitative information in respect of these risks is presented
throughout these Financial Statements.
There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives,
policies and processes for managing those risks or the methods used to measure them from previous periods
unless otherwise stated in this note.
Principal Financial Instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as
follows:
loan receivables
trade and other receivables
cash at bank
trade and other payables
investments
Trade and other payables fall due for payment within 3 months from the reporting date.
Liquidity Risk
The Group has sufficient funding in place to meet its operational commitments and is not exposed to any
liquidity risk but in common with many non-revenue generating companies, the Company is likely to need to
raise funds for its development activities. The Group’s policy continues to be to ensure that it has adequate
liquidity by careful management of its working capital. The Board receives rolling 18-month cash flow
projections on a regular basis as well as information regarding cash balances. At the reporting date, these
projections indicated that the Group expected to have sufficient liquid resources to meet its financial
obligations.
Foreign Exchange Risk
The Group is exposed through its operations to foreign exchange risk which arises because the Group has
overseas operations located in Mozambique whose functional currency is MZN, in Oman whose functional
currency is OMR which is pegged to the USD at a rate of 1 OMR to 2.6 USD and in Finland whose functional
currency is Euro. The Group’s net assets arising from overseas operations are exposed to currency risk resulting
in gains or losses on retranslation into Pound Sterling.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
Foreign exchange risk also arises when individual Group entities enter into transactions denominated in a
currency other than their functional currency. The Group’s policy is, where possible, to allow Group entities to
settle liabilities denominated in their functional currency (Euro, OMR, MZN or Pound Sterling) with the cash
remitted to their own operations in that currency where practical. Where Group entities have liabilities
denominated in a currency other than their functional currency (and have insufficient reserves of that currency
to settle them) cash already denominated in that currency will, where possible, be transferred from elsewhere
within the Group. To further mitigate foreign exchange risk, larger contracts in Mozambique are denominated
in USD.
Market Risk
The Group holds equity investments in companies traded on active markets (see Note 11). The Directors believe
that the exposure to market price risk from this activity is acceptable in the Group's circumstances.
The effect of a 10% increase in the value of the equity investments held at the reporting date would, all other
variables held constant, have resulted in an increase in other comprehensive income and net assets of £11,713
(2015: increase of the income statement and net assets of £14,992). A 10% decrease in their value would, on
the same basis, have decreased other comprehensive income and net assets by the same amount.
Credit Risk
The Company is exposed to credit risk on its receivables from its subsidiaries. The subsidiaries are exploration
and development companies with no current revenue and therefore, whilst the receivables are due on demand,
they are not expected to be paid until there is a successful outcome on a development project resulting in
revenue being generated by a subsidiary.
Financial instruments by category (Group)
As at 31 December 2016
Investments
Cash and cash equivalents
As at 31 December 2015
Investments
Cash and cash equivalents
Cash at bank
£
Available for sale
£
-
1,172,347
1,172,347
-
359,296
359,296
124,472
-
124,472
149,922
-
149,922
Total
£
124,472
1,172,347
1,296,819
149,922
359,296
509,218
Available for sale assets are measured at fair value. See review of the fair value hierarchy in Note 11.
Financial
liabilities at
amortised
cost
£
Total
£
As at 31 December 2016
Trade and other payables
469,522
469,522
At 31 December 2015
Trade and other payables
439,134
439,134
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
As of 31 December 2016 the Group's net exposure to foreign exchange risk was as follows:
Foreign currency financial assets
USD
EUR
AUD
Total
Foreign currency financial liabilities
USD
AUD
Total
Functional Currency of Entity
MZN
2016
£
Total
2016
£
GBP
2016
£
524,348
30,461
37
554,846
49,612
-
-
49,612
573,960
30,461
37
604,458
GBP
2016
£
7,258
47,626
54,884
Functional Currency of Entity
MZN
2016
£
OMR
2016
£
Total
2016
£
3,568
-
3,568
45,950
48,603
94,553
56,776
96,229
153,005
In 2015 the impact of foreign currency exposure was immaterial and therefore a detail showing exposure
against each functional currency was not provided, however, we provided a table below stating the balances
denominated in foreign currency as at 31 December 2015:
GBP
£
USD
£
AUD
£
OMR
£
MZN
£
Euro
£
Total
£
At 31 December 2015
Cash and cash
equivalents
Trade and other
payables
192,791
144,335
-
16,933
5,237
-
359,296
243,274
87,804
53,565
37,732
12,371
4,388
439,134
The effect of a 10% strengthening of the USD against GBP at the reporting date on the USD denominated cash
and equivalents carried at that date would, all other variables held constant, have resulted in an increase in
pre-tax loss for the year and decrease of net assets of GBP £52,178. A 10% weakening in the exchange rate
would, on the same basis, have decreased pre-tax loss and increased net assets by GBP £63,773.
Capital Disclosures
The Group’s objectives when maintaining capital are:
to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders, and
to provide an adequate return to shareholders by pricing products and services commensurately with the
level of risk.
The Company currently does not have any debt.
19.
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 it is not probable that a future sacrifice of economic benefits will be required or the amount is not
capable of reliable measurement.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
Deferred consideration payable in relation to the acquisition of 80% shareholding in Matilda Minerals Lda
(Mozambique mineral sands project)
In consideration for acquiring 80% shareholding in Matilda Minerals Lda, the Company paid initial consideration
of AUD$400,000 (~GBP £233,000) in ordinary shares and a cash payment for cost reimbursements of
AUD$125,000 (~GBP £73,000). Additionally milestone payments, to be satisfied by the issue of ordinary shares
in the Company are payable as follows: (a) AUD$500,000 (~GBP £290,000) upon the establishment of a JORC
Inferred Resource of 150Mt @ 3% THM; (b) AUD$500,000 (~GBP £290,000) upon the establishment of a JORC
Indicated Resource of 350Mt @ 3% THM; (c) AUD$500,000 (~GBP £290,000) upon the establishment of a JORC
Indicated Resource of 500Mt @ 3% THM.
Deferred consideration payable in relation to the acquisition of Gentor Resources Ltd (Oman copper
project)
On 15 July 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 £650,000) 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 £810,000) upon a formal final investment decision
for the development of the Block 5 Licence;
(b) a milestone payment of USD $1,000,000 (~GBP £810,000) 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 £810,000) 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.
In September 2016 Savannah Resources B.V. terminated its interest in Al Zuhra Mining LLC (Block 6). This has
not impacted the aforementioned deferred consideration.
20.
RELATED PARTY DISCLOSURES
Details of Directors’ remuneration are disclosed in Note 3. During the year £116,051 (2015: £68,547) was
payable to Blue Bone Consulting Pty Ltd (a Company controlled by Dale Ferguson) for consultancy fees and
bonus of which £31,795 (2015: £17,482) remained unpaid. The amounts payable to Blue Bone Consulting Pty
Ltd have been included in the Directors’ remuneration in Note 3.
During the year £nil (2015: £4,763) was payable to Slipstream Resources Pty Ltd (a Company which Dale
Ferguson is a Director and Shareholder) for the provision of business development support. No amounts
remained unpaid.
During the year £6,910 (2015: £17,620) was payable to Lautner Group Limited (a Company which David Archer’s
close family member is a Director) for the provision of office support of which nil (2015: £2,550) remain unpaid.
These transactions were entered into on an arms-length basis.
21.
COMMITMENTS
Operating Lease Commitments
No later than 1 year
Later than 1 year and no later than 5 years
Later than 5 years
2016
£
89,044
-
-
2015
£
15,737
-
-
89,044
15,737
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
The operating lease commitments are for business premises in Oman, Mozambique and the UK.
Other Commitments
In 2014 the Group entered into an agreement to acquire shares in Al Thuraya LLC (“Al Thuraya”), owner of the
highly prospective Block 4 Copper Project. During the 2016 and 2015 financial year the Group made
contributions of USD $2,475,390 (£2,004,998) and therefore achieved the right to a 51% shareholding, at the
reporting date the process to register this was in progress. A further USD $2,124,610 (~GBP £1,720,875) cash
contribution within two years need to be done to receive a further 14% shareholding in Al Thuraya.
These funds have been and will continue to be used for geological activities.
In October 2016 Savannah Resources plc, through its subsidiary AME East Africa Limited (AME), entered into a
consortium agreement (“CA”) with Rio Tinto Mining and Exploration Limited whereby both parties would
combine their respective projects in Mozambique to form an unincorporated consortium. See details of the CA
in Note 12.
22.
SHARE OPTIONS AND WARRANTS
Share options and warrants to subscribe for Ordinary Shares in the Company are granted to certain employees,
Directors and investors. Some of the options issued vest immediately and others over a vesting period and may
include performance conditions. Options are forfeited if the employee leaves the group before the options vest.
2016
2015
Number Weighted
average
exercise
price
Weighted
remaining
life
Number
Weighted
average
exercise
price
Weighted
remaining
life
Share Options
Opening Balance
Granted
Lapsed
Exercised
Closing Balance
22,523,443
3,600,000
(100,000) 1
(1,500,000) 3
24,523,443
4.8p
4.8p
10.4p
3.0p
4.8p
-
3.53
-
-
1.70
24,523,443
-
(2,000,000) 2
-
22,523,443
Brought forward at 1 JanuaryOpening Balance
Share Warrant Options
Lapsed
Closing Balance
Investor Warrants
Opening Balance
Granted
Closing Balance
-
-
-
-
-
-
-
-
-
363,260
(363,260)
-
13,911,112
1,410,449
15,321,561
4.6p
5.0p
4.6p
-
2.75
1.61
13,911,112
-
13,911,112
1 Share Options expired on 26 April 2016
2 Share Options expired on 21 October 2015
3 Share Options exercised on 28 November 2016
5.2p
-
10.0p
-
4.8p
12.5p
12.5p
-
4.6p
-
4.6p
-
-
-
-
2.40
-
-
-
-
-
2.50
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
Share schemes outstanding at 31 December 2016 are as follows:
Share Options
April 2011
February 2013
July 2013
September 2013
September 2013
February 2014
July 2014
September 2014
March 2016
December 2016
Investor Warrants
September 2013
April 2014
September 2016
Outstanding
31 December
2016
Exercisable
31 December
2016
Outstanding
31 December
2015
Exercisable
31 December
2015
Exercise
Price
Expiry Date
-
3,726,667
5,321,776
3,000,000
1,575,000
3,000,000
3,300,000
1,000,000
2,100,000
1,500,000
24,523,443
11,111,112
2,800,000
1,410,449
15,321,561
-
3,726,667
5,321,776
4,500,000
1,575,000
3,000,000
3,300,000
1,000,000
2,100,000
-
23,523,443
11,111,112
2,800,000
1,410,449
15,321,561
100,000
3,726,667
5,321,776
4,500,000
1,575,000
3,000,000
3,300,000
1,000,000
-
-
22,523,443
11,111,112
2,800,000
-
13,911,112
100,000
3,726,667
5,321,776
4,500,000
1,575,000
3,000,000
3,300,000
700,000
-
-
22,223,443
11,111,112
2,800,000
-
13,911,112
10.4p
4.6p
3.0p
3.0p
4.6p
8.8p
5.0p
7.0p
2.8p
7.6p
28/04/16
31/01/18
20 /07/18
21/09/18
30 /09/18
25/02/19
3 /07/17
12/09/17
15/03/20
21/12/20
3.0p
11.0p
5.0p
19 /07/18
17/04/18
30/09/19
All of the options and warrants granted attract a share based payment charge. The grants have been measured
using the Black-Scholes pricing model that takes into account factors such as the option life, share price volatility
and the risk free rate. Volatility was calculated with reference to the Company’s historical share price volatility
up to the grant date to reflect a term approximate to the expected life of the option.
The Directors' interests in the share options and warrants of the Company are as follows:
At 31 December 2016
Quantity at
1 Jan 2016
Quantity
granted
during the
year
Lapsed during
the year
Options /
Warrants at
31 Dec 2016
Exercise
price
Date of
the grant
First date
of exercise
Final date
of exercise
5,321,776
-
- 1,500,000
-
-
5,321,776
1,500,000
3.0p 21/07/13 20/07/14 20/07/18
3.0p 16/03/16 16/03/16 15/03/20
11,111,112
-
- 11,111,112
3.0p 24/09/13 24/09/13 19/07/18
Share Options
Dale J Ferguson
Matthew J King
Warrants
David S Archer
At 31 December 2015
Quantity at
1 Jan 2015
Quantity
granted
during the
year
Lapsed during
the year
Options /
Warrants at
31 Dec 2015
Exercise
price
Date of
the grant
First date
of exercise
Final date
of exercise
Share Options
Dale J Ferguson
5,321,776
Warrants
David S Archer
11,111,112
-
-
-
5,321,776
3.0p
21/07/13 20/07/14
20/07/18
- 11,111,112
3.0p
24/09/13
24/09/13
19/07/18
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
The range of inputs of the options and warrants granted in the financial year were as follows:
Share Options
Stock price
Fair value of option
Exercise Price
Expected volatility
Expected life
Risk free rate
Dividend yield
Investor Warrants
Stock price
Fair value of option
Exercise Price
Expected volatility
Expected life
Risk free rate
Dividend yield
March 2016
2.1p
1.1p
2.8p
78%
4 years
2.5%
-
December 2016
5.7p
3.2p
7.6p
85%
4 years
0.5%
-
September 2016
3.9p
1.7p
5.0p
76%
3 years
2.5%
-
This fair value is the cost that is charged to the Statement of Comprehensive Income and is spread over the
expected vesting period which, for non-market vesting conditions (as noted above), is revised at each period
end. If the issue was a share issue cost, the charge is to the Share Premium account.
Share options granted
During the 2016 financial year 3,600,000 share options were issued to employees and Directors to assist with
the recruitment, reward and retention of key employees. Some of the options vest immediately and some vest
upon the employee meeting service and/or performance conditions. No share options were issued during the
2015 financial year.
Investor warrants issued
During the 2016 financial year 1,410,449 warrants were issued to Beaufort Securities in accordance with the
placement in September 2016. The warrants were issued with an exercise price of 5.0p, equal to 43% of the
price of the placement in September 2016. No investor warrants were issued during the 2015 financial year.
23.
EVENTS SINCE THE REPORTING DATE
On 21 February 2017 the Company agreed a cash Placing (£1.55m) and a cash Subscription (£0.69m) totalling
£2.24m (before expenses) through the issue of 42,699,200 ordinary shares at an issue price of £0.0525 per
share. Additionally the Company received letters of intent for additional £1.01m cash subscriptions from
Directors and their related parties (Al Marjan Ltd) for when the Company is not in a “close period”. In
connection with the Placing the Company has granted 1,480,952 warrants with an exercise price of 7.45p to
Beaufort Securities.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 46
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of Savannah Resources Plc (‘the Company’) will be held at the
Collingwood Room at the Company’s office at 1 Northumberland Avenue, Trafalgar Square, London, WC2N 5BW, on
26 April 2017 at 11:00 a.m. for the purpose of considering and, if thought fit, passing the following resolutions which
will be proposed as ordinary resolutions in the cases of resolutions 1-8 and as a special resolution in the case of
resolution 9.
ORDINARY BUSINESS
1
2
3
4
5
6
7
To receive the report of the Directors and the audited Financial Statements of the Company for the year ended
31 December 2016.
To re-appoint Maqbool Sultan who retires as a Director in accordance with article 23.2(a) of the Articles of
Association at the conclusion of the meeting and, being eligible, offering himself for re-election as a Director of
the Company.
To re-appoint Imad Sultan who retires as a Director in accordance with article 23.2(a) of the Articles of
Association at the conclusion of the meeting and, being eligible, offering himself for re-election as a Director of
the Company.
To re-appoint Manohar Shenoy who retires as an Alternate Director in accordance with article 23.2(a) of the
Articles of Association at the conclusion of the meeting and, being eligible, offering himself for re-election as a
Director of the Company.
To re-appoint Murtadha Sultan who retires as an Alternate Director in accordance with article 23.2(a) of the
Articles of Association at the conclusion of the meeting and, being eligible, offering himself for re-election as a
Director of the Company.
To re-appoint David Archer who retires as a Director in accordance with article 23.2(b) of the Articles of
Association at the conclusion of the meeting and, being eligible, offering himself for re-election as a Director of
the Company.
To re-appoint BDO LLP as auditors of the Company to act until the conclusion of the next Annual General
Meeting and to authorise the Directors to determine the remuneration of the auditors.
ORDINARY RESOLUTION
8
That in substitution for all existing and unexercised authorities, the Directors of the Company be and they are
hereby generally and unconditionally authorised for the purpose of section 551 of the Companies Act 2006 (‘the
Act’) to exercise all or any of the powers of the Company to allot equity securities (within the meaning of Section
560 of the Act) up to a maximum nominal amount of £2,910,000 provided that this authority shall, unless
previously revoked or varied by the Company in general meeting, expire on the earlier of the conclusion of the
next Annual General Meeting of the Company or 15 months after the passing of this Resolution, unless renewed
or extended prior to such time except that the Directors of the Company may before the expiry of such period
make an offer or agreement which would or might require equity securities to be allotted after the expiry of such
period and the Directors of the Company may allot relevant securities in pursuance of such offer or agreement as
if the authority conferred hereby had not expired.
SPECIAL RESOLUTION
9
That in substitution for all existing and unexercised authorities and subject to the passing of the immediately
preceding Resolution, the Directors of the Company be and they are hereby empowered pursuant to section 570
of the Act to allot equity securities (as defined in section 560 of the Act) pursuant to the authority conferred upon
them by the preceding Resolution as if section 561(1) of the Act did not apply to any such allotment provided that
the power conferred by the Resolution, unless previously revoked or varied by special resolution of the Company
in general meeting, shall be limited:
(a)
to the allotment of ordinary shares arising from the exercise of options, warrant options and warrants
outstanding at the date of this resolution;
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 47
NOTICE OF ANNUAL GENERAL MEETING
(b)
(c)
(d)
(e)
to the allotment of equity securities in connection with a rights issue or open offer in favour of ordinary
shareholders where the equity securities respectively attributable to the interest of all such shareholders
are proportionate (as nearly as may be) to the respective numbers of the ordinary shares held by them
subject only to such exclusions or other arrangements as the Directors of the Company may consider
appropriate to deal with fractional entitlements or legal and practical difficulties under the laws of, or the
requirements of any recognised regulatory body in, any territory;
the grant of a right to subscribe for, or to convert any equity securities into Ordinary Shares otherwise
than under sub-paragraph (a) above, up to a maximum aggregate nominal amount of £300,000;
pursuant to the letters of intent received from Al Marjan Ltd in February 2017, to issue Ordinary Shares up
to a maximum aggregate nominal value of £111,901; and
to the allotment (otherwise than pursuant to sub-paragraphs (a), (b), (c) and (d) above) of equity securities
up to an aggregate nominal amount of £1,660,000 (approximately 30% of the Company’s issued share
capital following the issue of ordinary shares pursuant to sub-paragraph (d) above) in respect of any other
issues for cash consideration;
and shall expire on the earlier of the date of the next Annual General Meeting of the Company or 15 months from
the date of the passing of this Resolution save that the Company may before such expiry make an offer or
agreement which would or might require equity securities to be allotted after such expiry and the Directors may
allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not expired.
If you are a registered holder of Ordinary Shares in the Company, whether or not you are able to attend the meeting,
you may use the enclosed form of proxy to appoint one or more persons to attend and vote on a poll on your behalf.
A proxy need not be a member of the Company.
A form of proxy is provided.
This may be sent by facsimile transfer to 01252 719 232 or by mail using the reply paid card to:
The Company Secretary
Savannah Resources Plc
c/o Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey GU9 7DR
In either case, the signed proxy must be received no later than 48 hours (excluding non-business days) before the time
of the meeting, or any adjournment thereof.
Registered Office:
Third Floor
55 Gower Street
London WC1E 6HQ
23 February 2017
Registered in England and Wales Number: 07307107
By order of the Board
Stephen Ronaldson
Company Secretary
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 48
NOTICE OF ANNUAL GENERAL MEETING
Notes to the Notice of Annual General Meeting
Entitlement to Attend and Vote
1.
Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those
members registered on the Company's register of members 48 hours before the time of the Meeting shall be entitled
to attend and vote at the Meeting.
Appointment of Proxies
2.
3.
4.
5.
If you are a member of the Company at the time set out in note 1 above, you are entitled to appoint a proxy to
exercise all or any of your rights to attend, speak and vote at the Meeting and you should have received a proxy form
with this notice of meeting. You can only appoint a proxy using the procedures set out in these notes and the notes
to the proxy form.
A proxy does not need to be a member of the Company but must attend the Meeting to represent you. Details of
how to appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the
notes to the proxy form. If you wish your proxy to speak on your behalf at the Meeting you will need to appoint your
own choice of proxy (not the Chairman) and give your instructions directly to them.
You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different
shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than
one proxy, please contact the registrars of the Company, Share Registrars Limited on 01252 821 390.
A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or
against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her
discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is
put before the Meeting.
Appointment of Proxy Using Hard Copy Proxy Form
6.
The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote.
To appoint a proxy using the proxy form, the form must be:
-
-
-
Completed and signed;
Sent or delivered to Share Registrars Limited at The Courtyard, 17 West Street, Farnham, Surrey GU9 7DR or
by facsimile transmission to 01252 719 232; and
Received by Share Registrars Limited no later than 48 hours (excluding non-business days) prior to the
Meeting.
In the case of a member which is a Company, the proxy form must be executed under its common seal or signed on
its behalf by an officer of the Company or an attorney for the Company.
Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such
power or authority) must be included with the proxy form.
Appointment of Proxy by Joint Members
7.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the
names of the joint holders appear in the Company's register of members in respect of the joint holding (the first-
named being the most senior).
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 49
NOTICE OF ANNUAL GENERAL MEETING
Changing Proxy Instructions
8.
To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note
that the cut-off time for receipt of proxy appointments (see above) also apply in relation to amended instructions;
any amended proxy appointment received after the relevant cut-off time will be disregarded.
Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using
another hard-copy proxy form, please contact Share Registrars Limited on 01252 821 390.
If you submit more than one valid proxy appointment, the appointment received last before the latest time for the
receipt of proxies will take precedence.
Termination of Proxy Appointments
9.
In order to revoke a proxy instruction you will need to inform the Company using one of the following methods:
By sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to Share
Registrars Limited at The Courtyard, 17 West Street, Farnham, Surrey GU9 7DR or by facsimile transmission to 01252
719 232. In the case of a member which is a Company, the revocation notice must be executed under its common
seal or signed on its behalf by an officer of the Company or an attorney for the Company. Any power of attorney or
any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority)
must be included with the revocation notice.
In either case, the revocation notice must be received by Share Registrars Limited no later than 48 hours (excluding
non-business days) prior to the Meeting.
If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject
to the paragraph directly below, your proxy appointment will remain valid.
Appointment of a proxy does not preclude you from attending the Meeting and voting in person. If you have
appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated.
Issued shares and total voting rights
10.
As at 23 February 2017, the Company's issued share capital comprised 450,946,455 ordinary shares of £0.01 each (to
be increased to 493,645,655 ordinary shares following admission of 42,699,200 ordinary shares on 8 March 2017).
Each ordinary share carries the right to one vote at a general meeting of the Company and, therefore, the total
number of voting rights in the Company as at 23 February 2017 is 450,946,455 (to be increased to 493,645,655
ordinary shares following admission of 42,699,200 ordinary shares on 8 March 2017).
Communications with the Company
11.
Except as provided above, members who have general queries about the Meeting should telephone the Company
Secretary, Stephen Ronaldson, on (020) 7580 6075 (no other methods of communication will be accepted). You may
not use any electronic address provided either in this notice of general meeting; or any related documents (including
the chairman's letter and proxy form), to communicate with the Company for any purposes other than those
expressly stated.
CREST
12.
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may
do so for the Annual General Meeting and any adjournment(s) thereof by using the procedures described in the CREST
Manual.
CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a
voting service provider(s) should refer to their CREST sponsor or voting service provider(s), who will be able to take
the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST
message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland
Limited's specifications and must contain the information required for such instructions, as described in the CREST
Manual (available via euroclear.com/CREST).
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 50
NOTICE OF ANNUAL GENERAL MEETING
The message, regardless of whether it relates to the appointment of a proxy or to an amendment to the instruction
given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s
agent (ID: 7RA36) by the latest time(s) for receipt of proxy appointments specified above. For this purpose, the time
of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST
Applications Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner
prescribed by CREST. After this time, any change of Instructions to proxies appointed through CREST should be
communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear
UK & Ireland Limited does not make available special procedures in CREST for any particular messages. Normal system
timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility
of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member
or has appointed a voting service provider(s), to procure that his or her CREST sponsor or voting service provider(s)
take(s)) such action as shall be necessary to ensure that a message is transmitted by means of CREST by any particular
time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are
referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system
and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 51
COMPANY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2016
DIRECTORS:
Matthew James Wyatt King
David Stuart Archer
Dale John Ferguson
Maqbool Ali Sultan
Imad Kamal Abdul Redha Sultan
Manohar Pundalik Shenoy
Murtadha Ahmed Sultan
Chairman
Executive Director
Executive Director
Non-Executive Director
Non-Executive Director
Alternate Director
Alternate Director
SECRETARY:
REGISTERED OFFICE:
S F Ronaldson
55 Gower Street
London
WC1E 6HQ
Third Floor
55 Gower Street
London
WC1E 6HQ
REGISTERED NUMBER:
07307107 (England and Wales)
AUDITORS:
BANKERS:
NOMINATED ADVISOR:
BROKER:
SOLICITORS:
REGISTRARS:
BDO LLP
Chartered Accountants & Statutory Auditors
55 Baker Street
London
W1U 7EU
NatWest Bank Plc
St James' & Piccadilly Branch
PO Box 2DG
208 Piccadilly
London
W1A 2DG
Northland Capital Partners Ltd
60 Gresham Street,
4th Floor,
London
EC2V 7BB
Beaufort Securities Ltd
63 St Mary Axe
London
EC3A 8AA
Ronaldsons LLP
55 Gower Street
London
WC1E 6HQ
Share Registrars
The Courtyard, 17 West Street
Farnham
Surrey, GU9 7DR
WEBSITE:
www.savannahresources.com
SAVANNAH RESOURCES PLC. – ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
Page 52