Saratoga Investment Corp 7.50% Annual Report 2017

FY2017 Annual Report · Saratoga Investment Corp 7.50%
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SAVANNAH RESOURCES PLC
Company No 07307107

ANNUAL REPORT AND FINANCIAL STATEMENTS 

FOR THE YEAR ENDED 31 DECEMBER 2017

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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SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

1

CHAIRMAN’S STATEMENT

Technological  change  is  driving  new  growth  and
innovation.  Work 
to  ﬁnd  more  eﬃcient  and
environmentally friendly forms of power has led to the
increased importance of the lithium-ion battery; which
is  at  the  core  of  a  new  wave  of  development  in  the
automobile and energy storage markets. As the name
would suggest, lithium is critical to this development but
other commodities, such as copper, are experiencing a
similar  increase  in  demand  as,  for  example,  battery
electric vehicles (‘BEVs’) require three to four times as
much copper as traditional internal combustion engine
(‘ICE’) vehicles. 

With  near-term  copper  and 
lithium  production
potential, Savannah is a diverse energy metals group
that is well placed to capitalise on these trends. This is
supplemented with our world class heavy mineral sands
project in Mozambique, which is being evaluated as part
of a Consortium Agreement with the mining major Rio
Tinto  at  a  time  of  increasing  prices  for  titanium
feedstocks.  This  pipeline  of  projects  ﬁrmly  positions
Savannah for growth, both in the near and in the mid to
longer-term  at  a  time  of  rising  global  growth.  The
is  currently
International  Monetary  Fund  (‘IMF’) 
forecasting  global  economic  growth  of  3.9%  in  2018,
with the recent US tax policy changes likely to increase
output by the USA and its trading partners.

Near-Term Production: Lithium in Portugal
The  Board  believes  Savannah  has  the  potential  to
become the ﬁrst signiﬁcant lithium producer in Europe
thanks  to  its  Mina  do  Barroso  Project,  located  in
northern Portugal. With a mining lease in place (valid
until  2036,  with  a  20-year  extension  available),
established infrastructure, and preliminary metallurgical
test work indicating that a high-grade (over 6% Li₂O),
clean, low iron lithium concentrate can be produced,
Mina do Barroso oﬀers signiﬁcant and very attractive
near-term production potential. Savannah acquired a
75% interest in the project in May 2017, alongside nine
exploration licence applications (pending approval) for
areas prospective for lithium, which collectively cover an
area of 1,018km2. With lithium being one of the most
sought-after  commodities,  and  demand  expected  to
rapidly rise in line with the electric vehicle revolution,
we are delighted to have had the opportunity to acquire
this signiﬁcant project portfolio.

Based on results received to date, we believe that Mina
do Barroso is the closest European analogue to the very
successful  Australian  hard-rock,  open  cut  mine
developments,  which  produce  highly  sought-after
lithium  spodumene  concentrates  for  international
markets.  Our  focus,  therefore,  is  on  expediting  the
development  of  the  project  in  order  to  provide  a
European source of battery-grade lithium concentrates
to supply the growing production volumes of EVs both
in  Europe  and  internationally.  Interestingly,  despite
Europe being an early adopter of EV and battery storage
solutions,  with  European  manufacturers  consuming
approximately  24%  of  global  battery  grade  lithium
production,  no  European  country  currently  produces
battery  grade  lithium  carbonate  equivalent  (‘LCE’)
products.

At  the  end  of  2017,  we  deﬁned  a  maiden  Mineral
Resource at our Reservatorio deposit with an initial JORC
compliant Inferred Mineral Resource of 3.2Mt at 1.0%
Li₂O containing 32,000t of Li₂O. This initial ﬁgure was for
one of at least eight pegmatite deposits on the Mina do
Barroso  Mining  Lease  and  one  of  three  deposits
currently being drilled. As a result of this ongoing drill
programme,  in  February  2018  we  achieved  a  ~200%
increase  in  the  project’s  Inferred  Mineral  Resource
Estimate to 9.1Mt at 1.03% Li₂O containing 94,100t of
Li₂O  using  a  0.5%  Li₂O  cut-oﬀ  grade.  This  increased
resource includes 5.5Mt at 1.04 Li₂O for 56,500t, which
was deﬁned at Grandao and 0.5Mt at 1.23% Li₂O for
5,600t, deﬁned at NOA. Alongside the known resource,
an Exploration Target* of 8-12Mt at 1.0% to 1.2% Li₂O
was  generated  for  Grandao  and  Reservatorio,  which
gives  the  project  a  total  target  (including  Mineral
Resources)  of  17-21Mt  at  1.0-1.2%  Li₂O  showing  the
signiﬁcant further upside available.

Further drilling is now underway targeting both down
dip and strike extensions of the current resource in order
to convert this exploration target into an established
resource and further prove up the commercial potential
of Mina do Barroso. The initial results from this drill work
have  been  positive,  with  new  high-grade  lithium
mineralisation discovered to the west and southwest of
the main Grandao Deposit, creating a new target area
to be known as “Grandao Extended”, highlighting the
signiﬁcant further development potential that exists.

*Cautionary Statement: The potential quantity and grade of the Exploration Targets is conceptual in nature, there has been insuﬃcient exploration
work to estimate a mineral resource and it is uncertain if further exploration will result in deﬁning a mineral resource.

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SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

CHAIRMAN’S STATEMENT

In  support  of  commercialisation,  it  is  signiﬁcant  that
much of the mineralisation occurs near surface, which
suggests the potential for a low stripping ratio and low
cost open-cut mine development. Metallurgical analysis
conﬁrms a lithium content of around 1.7% Li₂O with low
impurities  of  less  than  0.5%  Fe₂O3 and  test  work
continues  to  conﬁrm  well  proven,  conventional
metallurgical  processes  will  produce  a  highly  sought
after  high-grade  spodumene  concentrate.  Indeed,
preliminary results suggest that by using a process route
combining both gravity separation and ﬂotation, a total
recovery of at least 80% at a concentrate grade of over
6%  Li₂O  is  likely  to  be  achieved.  Further  test  work  is
underway which aims to build on the results obtained
to date and Mr Noel O’Brien, a metallurgist and lithium
processing expert with over 35 years’ experience, has
been  appointed  as  a  technical  consultant  to  lead
these eﬀorts.

Our focus now is to complete a Scoping Study around a
potential mine development. Hatch, the internationally
recognised  engineering  group,  was  appointed 
in
February 2018 to conduct the Scoping Study and will
investigate a potential mining and concentration plant
development based on the Grandao, Reservatorio and
NOA spodumene deposits. Results of the Scoping Study
are expected to be available towards the end of Q2 2018
and will feed into feasibility studies. Alongside this, work
has  begun  to  modify  the  licencing  conditions  of  the
Mining Plan we currently have in place, to enable the
extraction of additional tonnages and to build a plant
speciﬁc to lithium processing.

We are looking to secure oﬀtake contracts with existing
spodumene lithium converters. This will likely involve
the provision of equity and, potentially, debt ﬁnancing.
To  this  end,  we  have  recently  appointed  Mr.  Martin
Steinbild to lead the Group’s discussions with the major
players in the international lithium value chain including
converters,  producers  of  cathodes,  battery  cells  and
battery packs, and car manufacturers. Martin has over
25 years’ experience working for majors in the industry
such  as  Rockwood  Lithium  GmbH  (acquired  by
Albemarle  Corp.,  the  leading  lithium  producer  in  the
world).

We believe the Group should be in a position to make a
decision  for  the  development  of  Mina  do  Barroso  in

early  2019.  To  be  able  to  advance  a  project  from
acquisition to making a development decision within
two years will undoubtedly be a signiﬁcant achievement
and it is something we are conﬁdent we can achieve. The
demand  of  lithium  for  electric  vehicle  batteries  is
growing  remarkably,  and  we  believe  our  strategic
location  and  near-term  production  will  make  our
product highly sought after. 

Near-term Production: Copper in Oman
2018 is set to be a signiﬁcant year in Oman as we plan
to  commence  copper  production,  with  open  pit
production  at  Maqail  South  and  an  underground
development at Mahab 4. The objective is high-grade,
low cost copper production and we intend to achieve
this  by  establishing  a  central  processing  plant  and
tailings storage facility (‘TSF’), which could support the
development  of  not  only  these  two  mines  but  other
high-grade deposits in the region.

We are seeing strong market demand for copper thanks
to its use in electric vehicles (‘EV’), which is expected to
result in a nine-fold increase in copper demand from
185,000 tonnes in 2017 to 1.74 million tonnes in 2027
(according  to  a  report  by  consultancy  IDTechEx,
commissioned by the International Copper Association
in June 2017). Increasing demand for copper and the
slow  supply  response  from  the  mining  industry  has
meant that we have seen strong interest from a number
of potential copper oﬀtake partners combined with a
ﬁnancing element.

Taking  a  closer  look  at  the  mines  being  developed
initially, Mahab 4 and Maqail South are both located in
Block  5  with  a  JORC  complaint  Mineral  Resource
Estimate of 1.51Mt at 2.1% copper and 0.16Mt at 3.8%
copper respectively. It is our intention that run-of-mine
crushed ore will be trucked to the shared processing
plant,  which  will  produce  a  copper  concentrate  for
shipment to export markets. Tailings produced will then
be stored within a central TSF. Our plan is that both the
processing plant and TSF will be established within the
adjacent Block 4 licence. The Ministry of Environment
and Climate Aﬀairs (‘MECA’) has approved in principle
the concept for our TSF plans subject to studies and test
work  being  presented,  and  having  successfully
completed  hydrogeological  baseline  assessments  in
October 2017 we are now working on completing the

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

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CHAIRMAN’S STATEMENT

Environmental Impact Assessment (‘EIA’) into the design
of  the  proposed  TSF  and  copper  concentrator  /
processing plant.

Alongside  this,  solid  progress  continues  to  be  made
towards the grant of the two mining licences. Regulatory
approvals  have  been  received  for  all  eight  of  the
required  Government  permitting  approvals  for  the
Maqail South Mining Licence application, and seven for
Mahab 4, with only the Ministry of Housing remaining.
Positive discussions are continuing with the Ministry of
Housing in respect of this, which is a pre-requisite to the
Public  Authority  of  Mining  being  able  to  assess  the
Group’s Mining Licence applications. With a clear route
to production, upcoming licencing approval and a strong
copper backdrop, we continue to advance towards our
target of commencing mining in 2018. We look forward
to keeping shareholders updated on progress.

in

Sands 

Production:  Mineral 

Longer-Term 
Mozambique 
Savannah, under a Consortium Agreement with global
major  Rio  Tinto,  is  advancing  the  Mutamba  Heavy
Mineral  Sands  Project  in  Mozambique.  This  is  a
signiﬁcant asset which we believe, due to its size and
grade quality, has world class mining potential.

Mutamba has a current Indicated and Inferred Mineral
Resource  of  4.4  billion  tonnes  at  3.9%  Total  Heavy
Minerals (‘THM’), which currently covers three of four
target  areas,  being  Jangamo,  Dongane,  Ravene  and
Chilubane. Signiﬁcant expansion potential exists at all
three  of  the  targets  for  which  we  currently  have  a
resource,  and  we  have  not  yet  even  begun  to  test
Chilubane.

Production  at  Mutamba  is  targeted  to  commence  in
2020, with average annual production of 456,000t of
roasted 
ilmenite  and  118,000t  of  non-magnetic
concentrate (rutile and zircon). Based on this production
proﬁle, a scoping study completed in May 2017 showed
that  over  an  initial  30-year  life  of  mine,  revenues  of
US$4.23 billion and a pre-tax NPV₁₀ of US$335 million
are achievable. Furthermore, Rio Tinto (or an aﬃliate)
has  agreed  to  enter  into  an  oﬀtake  agreement  to
purchase  100%  of  heavy  mineral  production  on
commercial  terms.  These  key  attributes  credential

Mutamba as one of the most exciting signiﬁcant new
projects poised for production in the early 2020s.

In support of commencing production, in January 2018
three applications covering a total area of 417.32km²
over  the  Jangamo,  Dongane,  Ravene  and  Chilubane
deposits  were  submitted  to  the  Ministry  of  Mineral
Resources and Energy in Mozambique for mining leases.
Mining  Leases  are  generally  awarded  for  a  term  of
25 years and can be renewed at the end of their terms.
The Ministry has six months from the date of submission
to respond to the applications. A Pre-Feasibility Study
(‘PFS’), into the potential development of the project
began  in  August  2017.  This  PFS  is  targeted  for
completion in early 2019 and will be a major milestone
for our Group as it will further deﬁne the commercial
potential of Mutamba whilst also resulting in Savannah
earning a 35% interest in the Mutamba Consortium.

With  multiple  value  accretive  milestones  due  in  the
coming year, signiﬁcant global growth driving demand
for  titanium  feedstocks,  and  one  of  the 
largest
undeveloped mineral sands deposits in the world, we
look forward to continuing to highlight the signiﬁcant
potential of Mutamba.

Corporate Update
During  2017  the  Company’s  largest  shareholder  Al
Marjan Ltd (‘Al Marjan’) continued to invest signiﬁcantly
in the Company (£2.73m (2016: £2.43m)). As part of the
cash subscription in March 2018 the Company received
a  letter  of  intent  from  Al  Marjan  to  invest  a  further
£0.57m when the Company is not in a “close period”,
resulting  in  Al  Marjan  holding  over  28%  of  the
Company’s issued share capital. Thus, underpinning Al
Marjan’s intention to remain a supportive investor going
forward. Al Marjan’s representatives (Mr. Maqbool Ali
Sultan the former Minister of Commerce and Industry in
Oman, Mr. Imad Kamal Abdul Redha Sultan holding the
roles of Non-Executive Directors of the Company, with
Mr. Manohar Pundalik Shenoy and Mr. Murtadha Ahmed
Sultan  their  respective  alternates)  do  not  receive
remuneration for the material contributions that they
make to the Group, which beneﬁts from their proven
operating experience both in Oman and internationally.

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SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

CHAIRMAN’S STATEMENT

Financial Overview
As  is  to  be  expected  with  an  active  and  expanding
resource development group, the Group is reporting a
loss for the year of £2.84m (2016: £1.76m). The loss for
the year has been impacted by the lithium project in
Portugal acquired in the year and the increase of the
activity in the project in Mozambique. The signiﬁcant
driver  was  staﬀ  costs  amounting  to  £1.63m  (2016:
£1.02m), however £0.42m (2016: £0.05m) of this related
to  non-cash  costs,  and  the  ratio  of  this  compared  to
investment in ﬁxed assets dropped from 70% in 2016 to
25% in 2017. Professional fees amounting to £0.62m
(2016:  £0.34m)  included  £0.13m  in  relation  to  the
acquisition  of  the  Portuguese  lithium  project.  Other
Comprehensive Income for the year amount to £0.20m
loss (2016: £0.48m gain) was primarily due to the net
eﬀect  of  the  foreign  exchange  gain  from  the
retranslation of the ﬁnancial statements of subsidiaries
with  functional  currencies  not  denominated  in  the
presentation currency, GBP, and the foreign exchange
loss  due  to  the  revaluation  of  loans  to  subsidiaries,
which have seen the translated value decrease due to
the recovery of GBP against major currencies in 2017
compared with the devaluation suﬀered by the GBP in
2016 following the UK’s referendum on membership of
the EU. Net assets have increased to £13.14m (2016:
£6.07m)  predominantly  due  to  the  increase  in  the
exploration activity during the year and the acquisition
of the lithium project in Portugal in May 2017, reﬂected
with additions in Exploration and Evaluation assets of
£5.04m, and £1.14m additions in Property, plant and
equipment (primarily relating to the erection of a pilot
plant in Mozambique) as at 31 December 2017, and the
increase in Cash and Cash Equivalents by £1.29m as a
result of well supported capital raisings during the year.

The parent Company’s total comprehensive loss for the
ﬁnancial  year  as  set  out  on  Note  7  was  £1,886,723
(2016: £291,231). The increase in the loss for the year
compared  with  2016  is  primarily  due  to  the  foreign
exchange  raised  on  the  revaluation  of 
loans  to
subsidiaries being a loss of £0.21m in 2017 and a gain of
£0.86m  in  2016  due  to  the  recovery  of  GBP  against
major currencies in 2017 compared with the devaluation
suﬀered by the GBP in 2016. Other factors impacting the
increase in losses are non-cash issues of employee share
options with an eﬀect in the Company results of £0.32m

(2016:  £0.03m),  and  professional  fees  amounting  to
£0.48m (2016: £0.25m).

In March, July and October 2017 the Company raised a
total  of  £8.47m  cash  (before  expenses)  through  the
placing  of  161,423,950  new  ordinary  shares  at  a
signiﬁcantly increased subscription price of 5.25p per
ordinary share (2016: 2.46p per ordinary share). As part
of these subscriptions the Company issued 61,762,707
shares at a price of 5.25p to Al Marjan, David Archer,
Matthew King and Manohar Pundalik Shenoy, resulting
in Al Marjan holding a 29.39% interest of the Company’s
issued share capital at the reporting date.

As of 31 December 2017, the Group had a cash position
of £2.46m. On 31 March 2018 the Company approved a
cash subscription of £1.52m cash (before expenses). The
Group  will  have  a  pro-forma  cash  balance  of
approximately  £1.83m  following  the  receipt  of  the
subscription proceeds. This is expected to be increased
by a further £0.58m cash from a Directors’ related party
(Al Marjan Ltd) and from a number of employees when
the Company is not in a “close period”, with letters of
intent received to this eﬀect.

Social Responsibility
As a resource development group, we are committed to
advancing the assets we own and also to supporting the
continued growth and development of the communities
we  work  with  whilst  maintaining  high  social  and
environmental  standards.  Transparency 
is  key  to
ensuring  positive  relations  with  the  communities  in
which we work and in line with this, during late 2017,
we were delighted to launch a new community section
on our website to provide further information on what
we  are  doing  in  each  of  the  countries  in  which  we
operate. Alongside supporting a number of community
projects  and  oﬀering  employment  opportunities,  we
have  developed  a  very  active  programme  of
engagement  with  the  communities  close  to  our
operations in Oman, Mozambique and Portugal, and we
look  forward  to  maintaining  honest,  timely  and
transparent communication with all our stakeholders. In
Mozambique,  our  community  projects  comprise  of
technical  training,  support  to  private  agriculture  and
community  development  and  clean  water  provision
amongst other initiatives.

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CHAIRMAN’S STATEMENT

Outlook
2018 is set to be another signiﬁcant year in Savannah’s
development. With resource upgrades and economic
studies due at our lithium project in Portugal, copper
mining  due  to  commence  in  Oman,  and  economic
studies set to further evaluate the commercial value of
our  mineral  sands  project 
in  Mozambique,  the
remainder  of  the  year  will  be  highly  active  with
milestone news ﬂow. This is a very exciting time to be
developing lithium and copper projects due to the strong
pricing dynamics currently being experienced as a result
of the unprecedented rise of the lithium-ion battery and
the  associated  electric  vehicle  /  energy  storage
industries. As a diverse energy metals group, we look
forward  to  supporting  this  growth  and  building
meaningful value for our shareholders.

Finally, I would like to thank our Board, management,
and operational teams for their consistent hard work
during the period. They, together with the continued
support of our shareholders, for which I also give thanks,
have  enabled  us  to  advance  to  this  exciting  point  of
growth. We have already announced the appointment
of  Martin  Steinbild  as  Director,  Lithium  Business
Development and anticipate making further additions to
our team to match the needs of our growing group in
the coming year. Alongside this we have implemented a
long-term  incentive  scheme  in  order  to  further  align
management  incentives  with  shareholder  interests.  I
very much look forward to the year to come.

Matthew King
Chairman

Date: 12 April 2018 

6

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

CHIEF EXECUTIVE’S REPORT

Savannah  is  developing  a  portfolio  of  energy  metals
projects  with  near-term  milestone/value  drivers  and
near and mid to longer-term mineral production. Our
three core projects comprise lithium located in Portugal,
copper  located  in  Oman  and  heavy  mineral  sands
located in Mozambique.

Portugal
In  May  of  2017  we  acquired  a  75%  interest  in  the
advanced Mina do Barroso lithium Project, located in
Portugal (the “Project”), which has a mining lease and
which the Board believe has the potential to be the ﬁrst
signiﬁcant lithium producing project in Europe.

Previous work on the mining lease acquired with the
Project has focused on the production of materials for
the  ceramics  industry  and  not  lithium.  Nevertheless,
Savannah  gained  access  to  a  database  that  included
reconnaissance geological mapping, trenching, drilling
and preliminary metallurgical test work. 

We are very encouraged by the potential of the Project,
with key highlights being:

•

•

The  lithium  mineral  is  spodumene,  the  most
desirable of the hard-rock lithium minerals;

Broad  zones  of  moderate-grade  to  high-grade
mineralisation;

• Near surface open-cut potential;

•

•

Excellent preliminary metallurgical results;

Conventional mineral processing;

• Granted,  30  Year  mining  lease  with  18  years

remaining; and

•

Excellent  nearby  infrastructure  including  power,
expressways and Portugal’s second largest export
port.

By  way  of  a  summary  of  our  activity,  mapping  was
undertaken across three primary target areas, Grandao,
Reservatorio and NOA, and in July 2017 an initial Reverse
Circulation (‘RC’) drill programme commenced with a
total of 135 holes for 10,986m completed. Throughout
H2 2017 we announced encouraging moderate-grade
and high-grade lithium results from the drill programme.
We believe that the most recent intercepts reported in

December 2017 and February 2018 represent some of
the best lithium spodumene intersections ever reported
for a European deposit.

Since commencing drilling at Reservatorio we have more
precisely deﬁned the extent of the deposit with assay
results  conﬁrming  that  the  lithium  mineralisation
extends to over 400m strike length, with good down dip
extensions of at least 100m. Drill results from December
2017  included  32m  at  1.05%  Li₂O  from  78m  in
17RESRC17  and  15m  at  1.19%  Li₂O  from  79m  in
17RESRC16. Following this, we were delighted to report
a maiden JORC complaint Mineral Resource Estimate for
the  Reservatorio  deposit  of  3.2Mt  at  1.0%  Li₂O
containing 32,000t of Li₂O, before our year-end target.
Mineral  Resource  Estimate  updates  are  likely  for
Reservatorio  during  2018  as  the  drill  programme
continues.

At Grandao, a mineralised zone of over 100m has been
intersected and results from recent drilling has recorded
the broadest and most signiﬁcant data for the Project to
date.  Key  results  include  109m  at  1.04%  Li₂O  from
surface  (uncut),  including  52m  at  1.32%  Li₂O  in
17GRARC17; 59m at 1.13% Li₂O from 5m in 17GRARC31;
33m at 1.22% Li₂O from 40m in 17GRARC41; and, 71m
at 1.06% Li₂O from 88m, including 57m at 1.2% Li₂O in
17GRARC19.  This  drill  work  led  to  the  deﬁnition  of  a
maiden JORC complaint Mineral Resource Estimate for
Grandao in February 2018 of 5.5Mt at 1.04% Li₂O for
56,500t.  This  Mineral  Resource  Estimate  signiﬁcantly
builds the aggregate Mineral Resource Estimate for the
Mina do Barroso Project and importantly further upside
remains  as  the  estimate  is  based  on  only  the  ﬁrst
40 holes drilled of the 61 drilled to date. Furthermore,
new high priority targets, known as Romainho, Campo
de Futebol and Piegro Negro, have been identiﬁed to the
northeast of Grandao and these will be drill tested as
part of our ongoing work programme. As a result, an
initial  Exploration  Target*  for  the  Grandao  and
Reservatorio deposits of 8-12Mt at 1.0% to 1.2% Li₂O has
been deﬁned.

Post period end, in March 2018, drilling to target the
Exploration Target* zones led to the discovery of a new
zone  of  high-grade  lithium  mineralisation,  which  has
been named “Grandao Extended”. This is located to the
west and southwest of the main Grandao Deposit and

*Cautionary Statement: The potential quantity and grade of the Exploration Targets is conceptual in nature, there has been insuﬃcient exploration
work to estimate a mineral resource and it is uncertain if further exploration will result in deﬁning a mineral resource.

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to date a zone of a zone of pegmatite approximately
300m  long  and  200m  wide  has  been  identiﬁed,
conﬁrming the excellent upside potential available. Drill
results include 90m at 0.96% Li₂O from surface including
31m at 1.06% Li₂O from surface and 34m at 1.37% Li₂O
from 50m in 18GRARC65, 31m at 1.42% Li₂O from 47m
in  18GRARC63,  and  11m  at  1.71%  Li₂O  from  45m  in
the
18GRARC46, 
mineralisation  at  the  project.  Drill  testing  of  Piegro
Negro,  Campo  de  Futebol  and  Romainho  has  also
returned encouraging ﬁrst pass results including, 15m at
0.4% Li₂O from surface in 18PGNRC01 at Piegro Negro,
13m at 0.5% Li₂O from 2m in 18CAMRC02 at Campo de
Futebol,  and  6m  at  0.85%  Li₂O  from  surface  in
18ROMRC05 at Romainho.

the  quality  of 

reaﬃrming 

At the NOA deposit, drilling has conﬁrmed the presence
of  lithium  mineralisation  over  a  200m  strike  length
together with good down dip extensions of at least 50m
and pegmatite widths up to 15m. Results received to
date from the second round of drilling include, 13m at
1.19% Li₂O from 7m in 17NOARC03; 11m at 1.23% Li₂O
from 46m in 17NOARC04; 15m at 0.83% Li₂O from 5m
in 17NOARC06, including 9m at 1.27% Li₂O; and, 14m at
0.73%  Li₂O  from  19m,  including  7m  at  1.26%  Li₂O  in
17NOARC10.  These  results  enabled  us  to  deﬁne  a
maiden JORC complaint Mineral Resource Estimate for
the  deposit  of  0.5Mt  at  1.23  Li₂O  for  5,600t.  This,
together with the Mineral Resource Estimate and the
Exploration Target* for Reservatorio and Grandao gives
a  total  project  resource  target  of  17-21Mt  at  1.0-
1.2% Li₂O.

low 

Results from preliminary metallurgical test work in June
2017  conﬁrmed  that  a  high-grade, 
impurity
spodumene concentrate can be produced from Mina do
Barroso using conventional, well understood processing
techniques and should be very attractive material for
manufacturers of battery grade lithium. Phase two of the
metallurgical test work programme was completed in
early March 2018, with samples taken from Grandao,
Reservatorio and NOA tested. Analysis of these samples
conﬁrmed  the  presence  of  high-grade  spodumene
mineralisation with a lithium content of around 1.7%
Li₂O  and  low  impurities  of  less  than  0.5%  Fe2O3.
Furthermore,  test  work  continues  to  conﬁrm  well
proven, conventional metallurgical processes, using a
process route combining both gravity separation and

ﬂotation,  will  produce  a  high-grade  spodumene
concentrate  with  total  recovery  of  at  least  80%  at  a
concentrate grade of over 6% Li₂O likely to be achieved.
Further improvements are expected as part of Phase 3
of the test work programme currently underway, with
diamond  drilling  being  undertaken  at  Grandao  and
Reservatorio to collect additional samples for the Phase
3 test programme. Six (480m drilled) out of the eight
planned diamond holes have been completed to date,
with results expected in Q3 2018.

Results of the metallurgical test work will feed into the
Scoping Study currently being undertaken by Hatch, an
internationally recognised engineering group, who were
appointed  in  February  2018.  The  test  work  will
investigate a potential mining and concentration plant
development based on the Grandao, Reservatorio and
NOA spodumene deposits, with results of the Scoping
Study expected to be available towards the end of Q2
2018.

Mina do Barroso is a very exciting project. Within less
than a year of acquiring the project we have delineated
a 9.1Mt Mineral Resource Estimate from three of at least
eight pegmatite deposits, all of which we believe oﬀer
signiﬁcant  further  upside.  We  are  now  focused  on
building  the  aggregate  Mineral  Resource  Estimate,
ﬁnalising the Scoping Study underway and ultimately
advancing the project so that a development decision
can be made by early 2019.

Oman
In  Oman,  Savannah  has  a  highly  prospective  copper
asset portfolio spanning 1,006km² covering two blocks,
4 and 5. Savannah holds a 51% interest in Block 4 (with
the right to earn up to 65%) and holds 65% in Block 5,
which contains a deﬁned Mineral Resource Estimate of
1.7Mt at 2.1% copper. Copper production is targeted to
commence this year from the Maqail South (open-pit)
and Mahab 4 (underground) deposits, so 2017 saw us
set the building blocks in place in order to reach this
major milestone.

In  February  2017  we  received  the  preliminary
metallurgical results for the Mahab 4 deposit in Block 5,
which revealed the commercial appeal of the deposit.
Chalcopyrite was identiﬁed as the sole copper bearing
mineral, allowing a simple, quick and relatively low-cost

*Cautionary Statement: The potential quantity and grade of the Exploration Targets is conceptual in nature, there has been insuﬃcient exploration
work to estimate a mineral resource and it is uncertain if further exploration will result in deﬁning a mineral resource.

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CHIEF EXECUTIVE’S REPORT

ﬂotation process to concentrate the copper. This test
data also indicated that due to the relatively soft ore, the
deposit should enjoy favorable processing costs due to
it  requiring  relatively  low  primary  milling  power.
Additional metallurgical test work and the development
of a detailed mine design and production plan for the
two mines is currently being undertaken.

In terms of recoveries, initial rougher ﬂotation test work
indicated  potential  recoveries  of  around  95%  at
moderate grind sizes, whilst rougher cleaner ﬂotation at
38microns indicated that a saleable copper concentrate
of over 23% can be achieved with recoveries over 90%
with  additional  gold  and  silver  credits.  There  is  also
potential to produce a zinc product; drilling at the Dog’s
Bone area, which is part of the Aarja target at Block 4,
identiﬁed a high-grade zinc zone with an intersection of
6.1m  at  6.8%  zinc,  1.4g/t  gold  and  84g/t  silver  from
72.9m in 16B4DD005, however further work is required
to  conﬁrm  that  this  is  possible  without  aﬀecting  the
copper grades and recoveries.

The Scoping Study for the initial mine developments for
Mahab 4 and Maqail South has been largely completed.
The study is based on two run-of-mine ore streams being
treated  at  a  common,  centrally 
located  copper
concentration plant with an associated tailings storage
facility (‘TSF’). With this in mind, during the period we
successfully  completed  a  hydrogeological  baseline
assessment  for  the  proposed  TSF,  which  already  has
approval in principle from the Ministry of Environment
and  Climate  Aﬀairs  subject  to  studies  and  test  work
being presented. An Environmental Impact Assessment
is  underway  to  assess  the  design  and  eﬃcacy  of  the
proposed  TSF  and  copper  concentrator  /  processing
plant, with results expected in Q2 2018.

In terms of licencing, we have made signiﬁcant progress
during the period and were delighted to be issued the
environmental  operating  permits  for  both  mine
developments 
in  November  2017.  All  regulatory
applications  for  copper  mine  development  at  both
Mahab 4 and Maqail South have now been submitted
and whilst the Mining Lease approval has taken longer
than  anticipated,  we  expect  to  receive  it  in  time  to
commence mining in 2018. To date, approvals have been
received  for  all  eight  of  the  required  Government
permitting  approvals  for  the  Maqail  South  Mining

Licence application, and seven for Mahab 4, with only
the Ministry of Housing remaining. Positive discussions
are continuing with the Ministry of Housing in respect
of this which is a pre-requisite to the Public Authority of
Mining being able to assess the Group’s Mining Licence
applications.

Mozambique
The Mutamba Mineral Sands Deposit in Mozambique is
a world class mineral sands occurrence and during 2017
we were focused on evaluating the economics of the
project and signiﬁcantly de-risking the project through
further technical studies. As a result of the Consortium
Agreement entered into at the end of 2016, we have
combined Savannah’s Jangamo Project with Rio Tinto’s
adjacent Mutamba Project, which includes three deposit
areas  –  Jangamo,  Dongane  and  Ravene  –  and  the
Chilubane  Deposit,  which  is  located  180km  to  the
southwest  of  Mutamba.  In  evaluating  Mutamba,
Savannah can earn up to a 51% in the project and Rio
Tinto (or an aﬃliate) has agreed to enter into an oﬀtake
agreement  for  the  purchase  of  100%  of  the  heavy
mineral production on commercial terms.

Following  the  completion  of  a  107  holes  (2,914m)
drilling  programme  on  the  Ravene  deposit  (to  the
northeast of and on the same system of sand dunes that
host the heavy minerals at Dongane) in February 2017
we conﬁrmed the existence of two mineralised zones of
heavy  mineral  concentrations  of  >5%  THM,  with  the
main zone having a length of 3.5km and widths of up to
1.5km. Previous drilling by Rio Tinto highlighted speciﬁc
zones of signiﬁcant heavy minerals with values up to
14.7%  total  heavy  minerals  (‘THM’)  carried  out  on  a
1,000m  x  500m  grid.  The  aim  of  the  2017  drilling  at
Ravene  was  to  inﬁll  the  original  grid  on  a  500m  line
spacing to provide drilling information at a concentration
of 500m x 500m and to feed the results into a maiden
Mineral  Resource  Estimate  and  subsequently  a
Scoping Study.

In March 2017 we delivered a JORC complaint Inferred
Mineral Resource Estimate of 900Mt at 4.1% THM for
Ravene, which includes a higher-grade portion of 92Mt
at  6.2%  THM  and  signiﬁcant  expansion  potential.  By
adding Ravene to the already deﬁned resources within
our  heavy  mineral  sands  portfolio  we  increased  the
global  Mineral  Resource  Estimate  for  the  Mutamba

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project (combined Jangamo, Dongane and Ravene) to
4.4Bt  at  3.9%  THM,  comprising  both  indicated  and
inferred category material. This new resource estimate
represents  a  26%  increase  in  the  overall  Mineral
Resource Estimate and importantly an 8% increase in
THM grade compared to the overall resource estimate.
This also compares favorably with other major African
heavy mineral sands projects.

With our new global Mineral Resource Estimate in place
we successfully completed the Mutamba Scoping Study
in May 2017, which concluded that there is a potential
for a ﬁnancially robust, long life (30 years) mineral sands
project that is anticipated to provide positive life of mine
(‘LOM’) ﬁnancial returns (US$4.23 billion LOM revenue)
with  relatively  modest  capital  requirements  (pre-
production capital expenditure of US$152 million plus
US$74  million  of  contingency,  EPCM  (Engineering,
Procurement, Construction Management) and spares)
with opportunities already identiﬁed which may reduce
this capex ﬁgure. Based on a resource estimate of 451Mt
at 6.0% THM (based on a conceptual mine plan utilising
33%  indicated  resource  estimate  and  67%  inferred
resource  estimate),  we  are  targeting  ﬁrst  production
from Mutamba in the early 2020s with average annual
production of 456,000t of ilmenite and 118,000t of non-
magnetic concentrate.

As a result of delivering the Scoping Study, Savannah has
increased  its  interest  in  the  Mutamba  Consortium  to
20%, and we look forward to this interest increasing to
35% on completion of the Pre-Feasibility Study (‘PFS’),
which began in the latter half of 2017 and is targeted for
delivery  in  early  2019  by  mineral  sands  expert  TZMI.
Stage one of the Mutamba PFS is well advanced and will
include a gap analysis, options review, project planning
and budget ﬁnalisation for stage two of the PFS.

With  regards  to  licences,  in  January  2018  three
applications  for  mining  leases  were  submitted  to  the
Ministry  of  Mineral  Resources  and  Energy 
in
Mozambique.  These  applications  cover  the  Jangamo,
Dongane, Ravene and Chilubane deposits across a total
area of 417.32km². The Ministry has six months from the
date of submission to respond to the applications and
Mining Leases are generally awarded for a term of 25
years and can be renewed at the end of their terms.

With  targeted  production  only  a  few  years  away  we
commenced construction of a 20 tonne per hour pilot
plant for bulk metallurgical test work in August 2017 and
were delighted to complete the plant’s construction on
schedule in December 2017. The plant will be used to
produce concentrates as part of the PFS for Mutamba
and was oﬃcially opened by the Governor of Inhambane
in  the  presence  of  national,  provincial  and  district
oﬃcials and members of the local community.

Finland
Savannah, through its Finnish subsidiary Finkallio Oy,
holds a 100% interest in two lithium assets and during
2017  we  have  sought  expressions  of  interest  from  a
number  of  groups  with  an  energy  metals  focus
interested in acquiring these.

Summary
2017  was  an  incredibly  busy  year  for  Savannah
operationally.  We  have  successfully  de-risked  and
developed our core portfolio of projects to the point of
a  Mineral  Resource  Estimate  delineation  in  Portugal,
near-term production in Oman, and the Pre-Feasibility
stage  in  Mozambique.  I  would  like  to  take  this
opportunity to thank our hard working teams in each of
the  countries  of  operation.  In  particular,  our  team  in
Portugal has successfully delivered a maiden Resource
Estimate  in  a  very  short  time-frame,  which  is  a  very
pleasing achievement and sets the pace at which we
hope to continue to advance.

I look forward to the year ahead with great optimism as
we continue to unlock the value of our energy metals
portfolio  and  transition  Savannah  into  a  mineral
production group.

David S Archer
Chief Executive Oﬃcer

Date: 12 April 2018

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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 Group, 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  2017  Annual  Report,  which  are  incorporated  by
reference into the Group’s Strategic Report.

Principal Activities 
The  principal  activity  of  the  Group  in  the  year  under
review was: licencing applications for its copper projects
in Oman; resource expansion, scoping study completion,
pilot  plant  construction,  commencement  of  a  pre-
lease  application
feasibility  study  and  mining 
preparation for the combined project with Rio Tinto for
heavy mineral sands in Mozambique; and the acquisition
of  a  highly  prospective  lithium  project  in  Portugal
(including an existing granted mining lease) followed by
initial resource delineation. Going forwards the Group’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 25 amounts to
£2,842,285  (2016:  £1,759,250),  of  which  £2,835,684
(2016: £1,669,203) was related to administrative costs,
£nil  (2016:  £128,505)  was  due  to  loss  on  disposal  of
assets and £nil (2016: loss £42,871) was due to realised
gain on disposal of investments. During 2017 the Group
invested  £1,919,514  in  the  acquisition  of  the  lithium
asset in Portugal and £3,120,755 (2016: £1,464,373) 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.
Additionally, the Group invested £1,143,636 (2016: £nil)
on property, plant and equipment relate mainly to the
construction of a pilot plant in Mozambique.

A  review  of  the  Group’s  prospects  is  included  in  the
Chairman’s  Statement  on  pages 2 to 6 and  the  Chief
Executive’s Report on pages 7 to 10.

information 

Future Development
This 
in  the  Chairman’s
is  contained 
Statement  on  pages 2 to 6 and  the  Chief  Executive’s
Report on pages 7 to 10.

Principal Risks and Uncertainties
The Board has identiﬁed various risk factors which taken
individually or together may have a materially adverse
eﬀect on the Group’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 Group 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  areas
covered  by  the  Consortium  with  Rio  Tinto 
in
Mozambique being supported by substantial historical
exploration  databases  and  with  the  Mina  do  Barroso
project in Portugal already with a granted mining lease
following exploration work done by previous owners. As
the Group progresses its projects to mine development
it is necessary to go through licencing processes with
government departments and secure rights for related
infrastructure. The Group engages qualiﬁed consultants
and in-house expertise to manage this.

Attraction and Retention of Key People
The success of the Group 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 Group. The Board has put in place
a  remuneration  policy  which  includes  a  new  share
option  scheme  in  order  to  motivate  and  retain  key
personnel and has introduced a long-term incentive plan
for certain members of senior management.

Future Funding Requirements
The  Group  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  in  ensuring
expenditure is focussed on areas of greatest exploration
potential.  Overheads  and  administration  costs  are
carefully managed. Also the Oman copper development

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Analysis of the Development and Performance of the
Business 
This 
in  the  Chairman’s
is  contained 
Statement on pages 2 to 6, and the Chief Executive’s
Report on pages 7 to 10.

information 

information 

Analysis of the Position of the Business
This 
in  the  Chairman’s
is  contained 
Statement on pages 2 to 6, and the Chief Executive’s
Report on pages 7 to 10.

Key Financial Performance Indicators and Milestones
Our key performance indicators (‘KPIs’) help the Board
and executive management assess performance against
our strategic priorities and business plans.

has attracted interest and negotiating with many oﬀ-
takers who are willing to provide ﬁnance towards mine
development  in  exchange  for  securing  the  oﬀ-take
rights. Furthermore, the Group has appointed a Director,
(non-Board
Lithium 
appointment) with a view to entering into a strategic
partnership with a signiﬁcant player in the lithium value
chain – following a model that has been successfully
demonstrated by Australia’s hard rock spodumene mine
developers / operators.

Development 

Business 

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
Group’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  Mozambique,  Oman  and
Portugal.

Country Risk
At  the  reporting  date,  the  Group  carried  out  a
combination  of  geological  and  mine  development
planning  work  in  Oman,  Mozambique,  Portugal  and
Finland. Each of these countries presents a very diﬀerent
risk proﬁle. However, this also means the Group beneﬁts
from  a  diversiﬁcation  of  country  risk.  Country  risk  is
further  mitigated  by  ensuring  the  Group  maintains
active geological programmes, that it prioritises local in-
country  employment  and  that  it  maintains  good
levels  with  government,
relationships  at  all 
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 Group’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
maintains a diverse portfolio of projects.

12

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

STRATEGIC REPORT

Analysis Using Key Financial Performance Indicators and Milestones

KPIs

Description

Performance

Cash balance (for exploration,
development 
going
concern purposes)

and 

Cash  balance  available  to
continue  with  the  activity  of
the Group.

At the reporting date the Group’s cash balance was
£2.45m (2016: £1.17m). Following the receipt of the
Subscription proceeds in March/April 2018, which are
contractually committed to be paid to the Company,
the  Group  will  have  a  pro-forma  cash  balance  of
£1.83m and letters of intent for a further £0.58m cash
subscriptions. This provides the Group suﬃcient cash
to continue working on its development / exploration
activities and, in conjunction with the raising of future
cash,  which  the  Directors  believe  will  be  secured,
allows the Group to meet its ﬁnancial commitments
for at least 12 months.

Subscription  and  placing  of
shares

As  an  active  and  expanding
mining development group, to
continue  with  its  exploration
activities it is required to raise
funds from the market.

During 2017 the Company raised gross proceeds of
£8.47m (2016: £4.04m) cash via issuance of ordinary
shares.  In  March/April  2018  the  Company  raised  a
further £1.52m post year end through the issue of
27.64m shares and have letters of intent for a further
£0.58m cash subscriptions. 

Share Price

Share price reﬂects the value
added by the Company’s Board
and management teams.

An increase in share price during 2017 of 26.3% (2016:
228%) was achieved, with the price at the reporting
date 6.63p (2016: 5.25p) per ordinary share. Funds
were raised at an average price of 5.25p in 2017 (2016:
2.46p) per ordinary share, representing an increase
of 113%.

Investment  on  Exploration  &
Evaluation assets (‘E&E assets’)
and  Property,  Plant  and
Equipment (‘PPE’)

As  an  active  an  expanding
mining  development  group,
the investment on E&E assets
and  PPE  assets  show  the
volume  of  activity  which  is
adding value.

During 2017 the Group increased its investment in
exploration activity with additions in E&E assets of
£5.04m (2016: £1.46m). Also, there was an increase
in  the  investment  in  PPE  with  additions  of  £1.14m
(2016: £0.02m), primarily relating the erection of a
pilot  plant  in  Mozambique  which  will  be  used  to
support the PFS.

Analysis Using Key Financial Performance Indicators and Milestones

KPIs

Project pipeline

Description

Performance

As an active mine development
group,  management  is  up  to
date  on  the  changes  in  the
market  and  looking  for  new
opportunities  to  increase  the
potential of the Group. 

In recent years there has been (and continues to be)
an  increase  in  the  importance  of  the  lithium-ion
battery markets, impacting on global lithium demand
with  projections  showing  signiﬁcant  increases  in
demand. In 2016 the Group started its investment in
lithium projects with the acquisition of exploration
licences in Finland. In 2017 following the acquisition
of a highly prospective lithium project in the north of
Portugal, Savannah has the potential to become the
ﬁrst  signiﬁcant 
in  Europe.
Expressions  of  interest  for  the  acquisition  of  the
project in Finland are being sought.

lithium  producer 

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

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STRATEGIC REPORT

KPIs

Description

Performance

Mining Lease Application

As  a  mining  development
group  the  grant  of  mining
to
leases  as  a  precursor 
commencement of production
is a signiﬁcant milestone. 

Results in mineral resources

As  a  mining  development
group the report of satisfactory
mineral  resource  results  is  a
key indicator of the potential of
the Group and its projects.

Economic Studies

Satisfactory  completion  of
economic  studies 
is  a  key
indicator of the viability of the
Group  mining  development
projects. 

for 

licencing  applications 

During 2017 the Group have made signiﬁcant progress
in 
copper  mine
developments  at  both  Mahab  4  and  Maqail  South.
These applications have progressed well and now all
8 “no objections” / approvals from the Ministries in
Oman have been received for Maqail South and 7 out
of  the  8  for  Mahab  4.  Following  receipt  of  the
outstanding approval the Public Authority of Mining
will be responsible for the ﬁnal approval of the mining
licences.
During  2017  a  Lithium  Project  in  Portugal  was
acquired which included the Mina do Barroso project
with a mining lease in place (valid until 2036, with a
20-year extension available).

Portugal: Preliminary metallurgical test work indicates
that  a  high-grade  (over  6%  Li₂O),  clean,  low  iron
lithium concentrate can be produced. Following the
drill  results  obtained  in  2017  a  maiden  Mineral
Resource for Reservatorio deposit of 3.2Mt at 1.0%
Li₂O was reported.
Oman – Block 5: Mahab 4 and Maqail South are both
located in Block 5 with Mineral Resources of 1.51Mt
at  2.1%  copper  and  0.16Mt  at  3.8%  copper
respectively.  In  February  2017  the  preliminary
metallurgical results were received for the Mahab 4
deposit, which highlighted the commercial appeal of
the deposit and a signiﬁcant amount of interest has
been  received  in  acquiring  an  oﬀtake  agreement,
linked  to  the  provision  of  contributions  to  mine
development ﬁnancing, from metal trading groups.
Mozambique: In March 2017 we delivered an Inferred
Mineral  Resource  of  900Mt  at  4.1%  THM  for  the
Ravene deposit, taking the total reported since the
Group’s participation in the project to 4.4Bt at 3.9%.

In  May  2017  the  Scoping  Study  for  the  Mutamba
project 
in  Mozambique  was  completed,  which
concludes that there is potential for a ﬁnancially robust,
long  life  mineral  sands  mining  operation  that  is
anticipated to provide excellent life of mine ﬁnancial
returns with relatively modest capital requirements and
the Group increased its interest in the project to 20%.
In Oman-Block5, the economic scoping study for the
initial mine developments for Mahab 4 and Maqail
South has been largely completed.

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SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

STRATEGIC REPORT

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: 12 April 2018 

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REPORT OF THE DIRECTORS

Marjan (including letters of intent), in Q1, Q3 and Q4
2017 and Q1 2018 respectively support this view. The
Directors  are  therefore  conﬁdent  that  funding  will
continue  to  be  secured  and  that  it  is  appropriate  to
prepare the Financial Statements on a going concern
basis.  However,  although  the  Company  has  been
successful in the past in raising equity ﬁnance, the lack
of formal agreements means there can be no certainty
that the additional funding required by the Group and
the Company in the next twelve months will be secured
within  the  necessary  timescale.  These  conditions
indicate the existence of a material uncertainty which
may  cast  signiﬁcant  doubt  about  the  Group  and  the
Company’s  ability  to  continue  as  a  going  concern,
however  as  aforementioned  and  evidenced  by
announcements the Company has routinely been able
to raise funds to progress its highly prospective portfolio.
The Financial Statements do not include the adjustments
that would result if the Group and the Company was
unable to continue as a going concern.

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.

The  Directors  present  their  report  with  the  Financial
Statements of the Company and the Group for the year
ended 31 December 2017. 

Dividends
The  Directors  do  not  recommend  the  payment  of  a
dividend (2016: £nil).

Events Since the Reporting Date
This information is contained in Note 24 to the Financial
Statements. 

Directors
The Directors who have held oﬃce during the period
from 1 January 2017 to the date of this report (unless
otherwise stated) are as follows: 

David S Archer 
Dale J Ferguson 
Matthew J King 
Maqbool Ali Sultan 
Imad Kamal Abdul Redha Sultan
Manohar Pundalik Shenoy1
Murtadha Ahmed Sultan1

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.

information 

Future Development
This 
in  the  Chairman’s
is  contained 
Statement  on  pages 2 to 6 and  the  Chief  Executive’s
Report on pages 7 to 10.

Going Concern
In common with many mineral exploration companies,
the  Company  raises  equity  funds  for  its  activities  in
discrete  share  placements.  The  Directors  believe  the
Group’s project portfolio is attractive and the cash sums
of  £3.3m,  £1.3m,  £3.9m  and  £2.1m  raised  for  new
equity,  including  £3.3m  from  28.2%  shareholder  Al

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SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

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 Sultan1
Imad Kamal Abdul Redha Sultan1
Manohar Pundalik Shenoy1
Murtadha Ahmed A Sultan1

No. of shares held at
31 December 2017

No. of shares held at
31 December 2016

31,792,519
1,104,028
4,391,0782
–
–
3,809,524
–

25,931,251
913,552
266,078
–
–
–
–

1 The Directors indicated are representatives of Al Marjan Ltd which held 186,878,750 shares at the reporting date (2016: 134,830,329 shares).

2 4,125,000 shares held indirectly through Slipstream Resources Investments Pty Ltd.

Details of Directors’ remuneration are disclosed in Note 3.

Details of Directors’ interests in the share options and warrants are disclosed in Note 23.

On behalf of the Board:

D S Archer
Chief Executive Oﬃcer

Date: 12 April 2018

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CORPORATE GOVERNANCE STATEMENT

The  Company,  being  presently  listed  on  AIM,  is  not
required to comply with the standards of a recognised
code  under  AIM  Rule  26  until  28  September  2018.
However, the Company has given consideration to the
provisions  set  out  in  Section  1  of  the  UK  Corporate
Governance Code (“the Code”), issued in April 2016 and
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 and will
keep this under review pending implementation of the
revised AIM Rule 26 (March 2018). 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
comprises  one
The  Remuneration  Committee 
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 will ensure
the  timely  implementation  of  the  new  AIM  Rules
regarding 
the
28 September  2018  deadline.  The  Committee  is  also
responsible for ensuring that the executive Directors are
communicating  eﬀectively  with 
the  Company’s
Nominated Adviser.

Corporate  Governance 

before 

Anti-Bribery and Corruption
It is the Group’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  Group  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.

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SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

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 
is  the
integrity  of  the  Company’s  website 
responsibility  of 
the  Directors.  The  Directors’
responsibility also extends to the ongoing integrity of the
Financial Statements contained therein.

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. 

In preparing these Financial Statements, the Directors
are required to:

•

select suitable accounting policies and then apply
them consistently;

• 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.

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REPORT OF THE INDEPENDENT AUDITORS

to the members of Savannah Resources Plc

Opinion
We have audited the ﬁnancial statements of Savannah Resources Plc (the ‘parent company’) and its subsidiaries
(the ‘group’) for the year ended 31 December 2017 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 ﬂow and notes to the ﬁnancial statements,
including a summary of signiﬁcant accounting policies. 

The ﬁnancial reporting framework that has been applied in the preparation of the ﬁnancial statements is applicable
law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the
parent company ﬁnancial statements, as applied in accordance with the provisions of the Companies Act 2006.

In our opinion:

•

•

•

the ﬁnancial statements give a true and fair view of the state of the group’s and of the parent company’s aﬀairs
as at 31 December 2017 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.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the ﬁnancial statements section of our report. We are independent of the group and the parent company in
accordance with the ethical requirements that are relevant to our audit of the ﬁnancial statements in the UK,
including  the  FRC’s  Ethical  Standard  as  applied  to  listed  entities,  and  we  have  fulﬁlled  our  other  ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
suﬃcient and appropriate to provide a basis for our opinion.

Material uncertainty in relation to going concern
We draw attention to note 1 in the ﬁnancial statements concerning the group and parent company’s ability to
continue as a going concern. Our opinion is not modiﬁed in respect of this matter. The matters explained in the
note indicate that the group and parent company will require additional funding within the next twelve months.
There are currently no formal agreements in place for raising additional equity ﬁnance and there is no certainty
that the funding required by the Group will be secured within the necessary timescale. These conditions, along
with the other matters as set out in note 1, indicate that a material uncertainty exists that may cast signiﬁcant
doubt on the group and parent company’s ability to continue as a going concern. 

Given the conditions and uncertainties noted above we considered going concern to be a Key Audit Matter. We
critically challenged the directors’ forecasts to assess the group and parent company’s ability to meet their ﬁnancial
obligations as they fall due for a period of at least 12 months from the date of approval of the ﬁnancial statements
and assessed and corroborated the key underlying assumptions, including:

• Assessing  the  reasonableness  of  forecast  expenditure  by  reference  to  actual  expenditures  in  2017  and

Management’s planned activity.

• Veriﬁcation of the March and April fundraising to supporting documentation.

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SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

REPORT OF THE INDEPENDENT AUDITORS

to the members of Savannah Resources Plc

• Discussion with Management whether there are any other matters that may adversely impact upon their

assessment of going concern.

We also reviewed the disclosures in the ﬁnancial statements.

Use of our report
This report is made solely to the parent 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 parent 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 parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Key audit matters
In addition to the matter described in the material uncertainty related to going concern section, key audit matters
are  those  matters  that,  in  our  professional  judgment,  were  of  most  signiﬁcance  in  our  audit  of  the  ﬁnancial
statements of the current period and include the most signiﬁcant assessed risks of material misstatement (whether
or not due to fraud) we identiﬁed, including those which had the greatest eﬀect on: the overall audit strategy, the
allocation of resources in the audit; and directing the eﬀorts of the engagement team. This matter was addressed
in the context of our audit of the ﬁnancial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on this matter.

KEY AUDIT MATTER

Impairment of Exploration and Evaluation assets
As detailed in note 9, at the year end the group held three groups of exploration and evaluation assets: mineral
sands in Mozambique, copper projects in Oman and lithium projects in Portugal.

Each of the above assets are separate ‘cash generating units’ (CGUs) and should be assessed individually for
indicators of impairment.

Under IFRS 6 Management are required to carry out an assessment at least annually for any indicators of
impairment. 

Reviewing  indicators  of  impairment  often  require  signiﬁcant  estimates  and  judgements  and  therefore  we
identiﬁed this as a key audit matter.

OUR RESPONSE

With respect to each CGU, we reviewed Management’s consideration of whether there were any indicators of
impairment as outlined in IFRS 6. The indicators in IFRS 6 include but are not limited to:

• The period for which the entity has the right to explore in the speciﬁc area has expired during the period or

will expire in the near future, and was not expected to be renewed.

• Substantive expenditure on further exploration for and evaluation of mineral resources in the speciﬁc area is

neither budgeted nor planned.

• Exploration for and evaluation of mineral resources in the speciﬁc area have not led to the discovery of
commercially viable quantities of mineral resources and the entity has decided to discontinue such activities
in the speciﬁc area.

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REPORT OF THE INDEPENDENT AUDITORS

to the members of Savannah Resources Plc

• Suﬃcient data exists to indicate that, although a development in the speciﬁc area is likely to proceed, the
carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful
development or by sale.

We considered Management’s assessment of the indicators of impairment (as stated above), we conﬁrmed there
is an ongoing plan to develop the licence areas. We reviewed the licence agreements and we noted the licences
are valid and there is an ongoing exploration/development programme in 2018. In the case the licenses have
expired during the period we reviewed the application for renewal of the licences and in case the licenses will
expire in the near future, we conﬁrmed the expectation and plans for renewal. 

We concur with management’s view that there were not any indicators of impairment.

Our application of materiality

Group materiality 

£250,000 (2016: £100,000)

Basis for determining materiality 

1.75% of total assets 

Group performance materiality

Basis for performance materiality

£187,500 (2016: £75,000)

75% of group materiality

Parent company materiality

£225,000 (2016: £90,000)

Basis for determining materiality

1.75% of total assets, capped at 90% of group materiality 

Parent company performance materiality

£168,750 (2016: £67,500)

Basis for performance materiality

75% of parent company materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the eﬀect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could
inﬂuence the economic decisions of reasonable users that are taken on the basis of the ﬁnancial statements.
Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take
account of the nature of identiﬁed misstatements, and the particular circumstances of their occurrence, when
evaluating their eﬀect on the ﬁnancial statements as a whole. 

Our determination of materiality has remained unchanged with a signiﬁcant increase in the total assets in the year
impacting materiality. We consider total assets to be the most signiﬁcant determinant of the group’s ﬁnancial
performance used by members as the group continues to bring its mining assets through to production.

Whilst materiality for the ﬁnancial statements as a whole was £250,000, each signiﬁcant component of the group
was audited to a lower level of materiality ranging from £45,000 to £142,500. Performance materiality has been
set at 75% of materiality, which is used to determine the ﬁnancial statement areas that are included within the
scope of our audit and the extent of sample sizes during the audit.

We agreed with the Audit Committee that we would report to the Committee all individual audit diﬀerences
identiﬁed during the course of our audit in excess of £12,000 (2016: £5,000). We also agreed to report diﬀerences
below these thresholds that, in our view warranted reporting on qualitative grounds.

An overview of the scope of our audit
Our group audit was scoped by obtaining an understanding of the group and its environment, including the group’s
system of internal control, and assessing the risks of material misstatement in the ﬁnancial statements at the group
level. 

22

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

REPORT OF THE INDEPENDENT AUDITORS

to the members of Savannah Resources Plc

Our group audit scope focused on the group’s principal operating locations being:

•

•

•

the Block 4 and Block 5 copper projects in Oman held in Al Thuraya LLC and Al Fairuz Mining Co LLC, respectively, 

the Mutamba mineral sands project in Mozambique held in AME East Africa Ltd and Matilda Minerals Lda, and 

the Mina do Barroso lithium project in Portugal held in Slipstream Resources Portugal Lda, 

which all were subject to a full scope audit. Together with the parent company and its group consolidation, which
was also subject to a full scope audit, these represent the signiﬁcant components of the group.

These locations which were subject to full scope audit procedures represent the principal business units and account
for 99% of the group’s total assets.

The remaining components of the group was considered non-signiﬁcant and these components were principally
subject to analytical review procedures, together with additional substantive testing over the risk areas detailed
above where applicable to that component. 

The audits of each of the components were principally performed in the United Kingdom. All of the audits were
conducted by BDO LLP.

Other information
The directors are responsible for the other information. The other information comprises the information included
in the annual report, other than the ﬁnancial statements and our auditor’s report thereon. Our opinion on the
ﬁnancial statements does not cover the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the ﬁnancial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the ﬁnancial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the ﬁnancial statements or a material misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.

Opinions 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 report and the directors’ report for the ﬁnancial year for which the
ﬁnancial statements are prepared is consistent with the ﬁnancial statements; and

the  strategic  report  and  the  directors’  report  have  been  prepared  in  accordance  with  applicable  legal
requirements.

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained
in 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 in relation to which 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

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REPORT OF THE INDEPENDENT AUDITORS

to the members of Savannah Resources Plc

•

•

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.

Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation
of the ﬁnancial statements and for being satisﬁed that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation of ﬁnancial statements that are free from material
misstatement, whether due to fraud or error.

In  preparing  the  ﬁnancial  statements,  the  directors  are  responsible  for  assessing  the  group’s  and  the  parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent
company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the ﬁnancial statements
Our objectives are to obtain reasonable assurance about whether the ﬁnancial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these ﬁnancial
statements.

A further description of our responsibilities for the audit of the ﬁnancial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.

Stuart Barnsdall (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
55 Baker Street
London
W1U 7EU
United Kingdom

12 April 2018

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

24

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2017

CONTINUING OPERATIONS
Revenue
Administrative expenses
Gain on disposal of investments
Loss on disposal of assets

OPERATING LOSS
Finance income
Finance costs

LOSS BEFORE AND AFTER TAX 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 on disposal of investments
Exchange (losses)/gains arising on translation of foreign operations

OTHER COMPREHENSIVE INCOME FOR THE YEAR

TOTAL COMPREHENSIVE INCOME FOR THE YEAR
ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT

Loss per share attributable to equity owners of the parent 
expressed in pence per share:
Basic and diluted
From Operations

Notes

11
4

2017
£

2016
£

–
(2,835,684)
–
–

(2,835,684)
948
(7,549)

–
(1,669,203)
42,871
(128,505)

(1,754,837)
–
(4,413)

5

(2,842,285)

(1,759,250)

11
11

45,644
–
(197,120)

(151,476)

44,840
(42,871)
476,018

477,987

(2,993,761)

(1,281,263)

8

(0.53)

(0.46)

The notes form part of these Financial Statements.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 December 2017

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
Other current assets
Cash and cash equivalents

Assets classiﬁed as held for sale
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
NON-CURRENT LIABILITIES
Loans and borrowings

TOTAL NON-CURRENT LIABILITIES

CURRENT LIABILITIES
Loans and borrowings
Trade and other payables

Liabilities classiﬁed as held for sale
TOTAL CURRENT LIABILITIES

TOTAL LIABILITIES

TOTAL EQUITY AND LIABILITIES

Notes

2017
£

2016
£

9
10
13
15

11
13

14

19

16

23
23

22

22
17

19

9,809,994
1,196,084
239,300
220,213

11,465,591

170,203
155,959
20,011
2,455,968

2,802,141
138,543
2,940,684

14,406,275

5,066,750
16,170
33,171
–

5,116,091

124,472
126,557
–
1,172,347

1,423,376
–
1,423,376

6,539,467

6,358,504
18,105,108
194,878
1,405,958
691,194
(13,612,758)

4,509,465
11,226,706
391,998
386,794
455,309
(10,900,327)

13,142,884

6,069,945

22,847

22,847

10,276
1,228,757

1,239,033
1,511
1,240,544

1,263,391

–

–

–
469,522

469,522
–
469,522

469,522

14,406,275

6,539,467

The Financial Statements were approved by the Board of Directors on 12 April 2018 and were signed on its behalf by:

D S Archer
Chief Executive Oﬃcer
Company number: 07307107

The notes form part of these Financial Statements.

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SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

COMPANY STATEMENT OF FINANCIAL POSITION

as at 31 December 2017

ASSETS
NON-CURRENT 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
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

2017
£

2016
£

11
13
15

11
13
14

16

17

342,883
13,699,270
19,035

14,061,188

170,116
44,841
2,125,504

2,340,461

16,401,649

291,031
6,685,753
–

6,976,784

124,472
43,007
1,029,765

1,197,244

8,174,028

6,358,504
18,105,108
1,405,958
691,194
(10,502,403)

4,509,465
11,226,706
386,794
455,309
(8,699,890)

16,058,361

7,878,384

343,288

343,288

295,644

295,644

16,401,649

8,174,028

The Company total comprehensive loss for the ﬁnancial year was 1,886,723 (2016: £291,231) (Note 7).

The Financial Statements were approved by the Board of Directors on 12 April 2018 and were signed on its behalf by:

D S Archer
Chief Executive Oﬃcer
Company number: 07307107

The notes form part of these Financial Statements.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2017

Share
capital
£

Share
premium
£

Foreign
currency
reserve
£

Warrant
reserve
£

Share 
based 
payment
reserve
£

Retained
earnings
£

Total
equity
£

2,858,658
–

9,156,284
–

(84,020)
–

362,252
–

473,178
–

(9,187,216) 3,579,136
(1,759,250) (1,759,250)

–

–

–

–

476,018

476,018

1,650,807

2,094,964

–

–

–

–

–

–

–

1,969

477,987

(1,757,281) (1,281,263)

– 3,745,771

–
–
–
–
4,509,465
–

–
–
–
(24,542)
11,226,706
–

–
–
–
–
391,998
–

–
–
–
24,542
386,794
–

–
36,600
7,570
–

26,301
(36,600)
(7,570)
–

26,301
–
–
–
455,309 (10,900,327) 6,069,945
(2,842,285) (2,842,285)

–

–

–

–

–

(197,120)

(197,120)

1,849,039

7,897,566

–

–

–

–

–

–

–

45,644

(151,476)

(2,796,641) (2,993,761)

– 9,746,605

–
–
–
6,358,504

–
–
(1,019,164)
18,105,108

–
–
–
194,878

–
–
1,019,164
1,405,958

320,095
(84,210)
–

320,095
–
–
691,194 (13,612,758) 13,142,884

–
84,210
–

At January 2016
Loss for the year
Other comprehensive
income
Total comprehensive 
income for the year
Issue of share capital 
(net of expenses)
Share based payment 
charges
Exercise of options
Lapse of options
Issue of warrants
At 31 December 2016
Loss for the year
Other comprehensive 
income
Total comprehensive 
income for the year
Issue of share capital 
(net of expenses)
Share based payment 
charges
Lapse of options
Issue of warrants
At 31 December 2017

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.

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SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

COMPANY STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2017

Share
capital
£

Share
premium
£

2,858,658
–
–

9,156,284
–
–

Warrant
reserve
£

362,252
–
–

Share
based
payment
reserve
£

Retained
earnings
£

Total
equity
£

473,178
–
–

(8,452,829) 4,397,543
(859,042)
567,811

(859,042)
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
–
–

– 3,745,771
26,301
–
–
36,600
–
7,570
–
–
(8,699,890) 7,878,384
(1,932,367) (1,932,367)
45,644

45,644

–

–

–

–

(1,886,723) (1,886,723)

1,849,039
–
–
–
6,358,504

7,897,566
–
–
(1,019,164)
18,105,108

–
–
–
1,019,164
1,405,958

–
320,095
(84,210)
–

– 9,746,605
320,095
–
–
84,210
–
–
691,194 (10,502,403) 16,058,361

At 1 January 2016
Loss for the year
Other comprehensive income
Total comprehensive income 
for the year
Issue of share capital 
(net of expenses)
Share based payment charges
Exercise of options
Lapse of options
Issue of warrants
At 31 December 2016
Loss for the year
Other comprehensive income
Total comprehensive income 
for the year
Issue of share capital 
(net of expenses)
Share based payment charges
Lapse of options
Issue of warrants
At 31 December 2017

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

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.

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CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31 December 2017

Cash ﬂows used in operating activities
Loss for the year
Depreciation and amortisation charges
Gain 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 in trade and other receivables
Increase in trade and other payables

Net cash used in operating activities

Cash ﬂow used in investing activities
Purchase of intangible exploration assets
Purchase of tangible ﬁxed assets
Purchase of investments
Proceeds from sale of investments
Payments for guarantees for mining activity
Interest received

Net cash used in investing activities

Cash ﬂow from ﬁnancing activities
Interest paid
Proceeds from issues of ordinary shares (net of expenses)

Net cash from ﬁnancing activities

Increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange (losses)/gains on cash and cash equivalents

Cash and cash equivalents at end of year

Notes

2017
£

2016
£

10
11
3, 23
3, 16

5
4

11
11

(2,842,285)
14,895
–
320,095
98,630
(948)
7,549
75,156
–

(1,759,250)
9,536
(42,871)
26,301
20,992

4,413
96,036
128,505

(2,326,908)
(71,288)
39,620

(1,516,338)
(53,476)
46,089

(2,358,576)

(1,523,725)

(3,276,715)
(1,069,056)
(87)
–
(199,755)
948

(1,557,087)
–
(24,363)
94,653
–
–

(4,544,665)

(1,486,797)

(7,549)
8,257,418

(4,413)
3,724,778

8,249,869

3,720,365

1,346,628
1,172,347
(63,007)

709,843
359,296
103,208

2,455,968

1,172,347

The notes form part of these Financial Statements.

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SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

COMPANY STATEMENT OF CASH FLOWS

for the year ended 31 December 2017

Cash ﬂows used in operating activities
Loss for the year
Impairment of investments
Gain on disposal of investments
Share based payment reserve charge
Shares issued in lieu of payments to extinguish liabilities
Finance income
Finance expense
Exchange losses/(gains)

Cash ﬂow from operating activities before changes in working capital
Increase in trade and other receivables
Increase in trade and other payables

Net cash used in operating activities

Cash ﬂow used in investing activities
Investment in subsidiaries
Loans to subsidiaries
Purchase of investments
Purchase of intangible exploration assets
Proceeds from sale of investments
Interest received

Net cash used in investing activities

Cash ﬂow from ﬁnancing activities
Interest paid
Proceeds from issues of ordinary shares

Net cash from ﬁnancing activities

Increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange (losses)/gains on cash and cash equivalents

Cash and cash equivalents at end of year

Notes

11
11
3, 23
3, 16

11

11

11

2017
£

2016
£

(1,932,367)
–
–
320,095
98,630
(948)
4,348
75,156

(1,435,086)
(21,078)
44,228

(1,411,936)

(51,643)
(5,631,693)
–
–
–
948

(859,042)
76,147
(42,871)
26,301
20,992
–
4,377
(89,175)

(863,271)
(1,037)
28,159

(836,149)

(672,355)
(1,610,058)
(24,363)
(61,900)
94,653
–

(5,682,388)

(2,274,023)

(4,348)
8,257,418

(4,377)
3,724,778

8,253,070

3,720,401

1,158,746
1,029,765
(63,007)

610,229
316,328
103,208

2,125,504

1,029,765

The notes form part of these Financial Statements.

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES
Basis of Preparation
These  Consolidated  Financial  Statements  and  the  Company  Financial  Statements  have  been  prepared  in
accordance with International Financial Reporting Standards, International Accounting Standards (collectively
“IFRSs”)  as  adopted  by  the  EU  and  IFRIC  and  with  those  parts  of  the  Companies  Act  2006  applicable  to
companies reporting under IFRS. The Consolidated Financial Statements and the Company Financial Statements
have been prepared under the historical cost convention.

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
In common with many mineral exploration companies, the Company raises equity funds for its activities in
discrete share placements. The Directors believe that the Group’s project portfolio is attractive and the cash
sums of £3.3m, £1.3m, £3.9m and £2.1m raised for new equity, including £3.3m from 28.2% shareholder Al
Marjan (including letters of intent), in Q1, Q3 and Q4 2017 and Q1 2018 respectively support this view. The
Directors are therefore conﬁdent that funding will continue to be secured and that it is appropriate to prepare
the Financial Statements on a going concern basis. However, although the Company has been successful in the
past in raising equity ﬁnance, the lack of formal agreements means there can be no certainty that the additional
funding required by the Group and the Company in the next twelve months will be secured within the necessary
timescale. These conditions indicate the existence of a material uncertainty which may cast signiﬁcant doubt
about the Group and the Company’s ability to continue as a going concern, however as aforementioned and
evidenced  by  announcements  the  Company  has  routinely  been  able  to  raise  funds  to  progress  its  highly
prospective portfolio. The Financial Statements do not include the adjustments that would result if the Group
and the Company was unable to continue as a going concern.

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.  When  there  are  no  active  market  and  a  reliable  measure  of  the  fair  value  of  the
investments is not available these are carry at cost, being this the fair value carrying amount on the date of the
reclassiﬁcation. 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.

32

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES continued

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.

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  in  the  Consolidated  Financial  Statements  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 Group, the related costs
will be written oﬀ.

Unevaluated  mineral  properties  are  assessed  annually  at  reporting  date  for  indicators  of  impairment  in
accordance with IFRS 6. 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 Licences through acquisition of non-operational corporate structures that
do 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.

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES continued
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
1 – 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.

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.

Guarantees
Guarantees represents deposits held at banks as security required by the local mining/environmental authorities
in relation to exploration/mining licences and applications thereof. They are not expected to be converted into
cash within less than year and therefore are classiﬁed as other non-current assets. Guarantees are measured
at cost, less any impairment.

34

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES continued

Financial Liabilities
Other liabilities
Other liabilities consist of loan and borrowings and 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 temporary 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.

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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES continued

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.

Non-current assets held for sale
Non-current assets and disposal groups are classiﬁed as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use. This condition is regarded as met
only when the asset (or disposal group) is available for immediate sale in its present condition subject only to
terms that are usual and customary for sales of such asset (or disposal group) and its sale is highly probable.

Management  must  be  committed  to  the  sale,  which  should  be  expected  to  qualify  for  recognition  as  a
completed sale within one year from the date of classiﬁcation.

When the Group is committed to a sale plan involving loss of control of a subsidiary, all the assets and liabilities
of that subsidiary are classiﬁed as held for sale when the criteria described above are met, regardless of whether
the Group will retain a non-controlling interest in its former subsidiary after the sale.

After the disposal takes place, the Group accounts for any retained interest in the associate or joint venture in
accordance with IAS 39 unless the retained interest continues to be an associate or a joint venture, in which
case the Group uses the equity method.

Non-current assets (and disposal groups) classiﬁed as held for sale are measured at the lower of their carrying
amount and fair value less costs to sell.

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. 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 23.

(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.

36

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES continued

The key judgements are set out below:

(a) 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.

(b)

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.

(c) Classiﬁcation of Joint Arrangement

In determining the accounting treatment of the agreement signed between the Group and Rio Tinto in
2016 (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 2017
The accounting policies adopted are consistent with those of the previous ﬁnancial year. New standards and
amendments to IFRS eﬀective as of 1 January 2017 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
There are a number of standards and interpretations which have been issued by the International Accounting
Standards Board that are eﬀective in future accounting periods that the Group has decided not to adopt early.
The most signiﬁcant of these, and the eﬀect that these will have on the Financial Statements of the Group or
Company are:

•

•

•

IFRS 15 Revenue from Contracts with Customers (mandatorily eﬀective for periods beginning on or after
1 January 2018): This will not impact in the Group Financial Statements as it does not have revenue and
the eﬀect in the Company Financial Statements will not be material as these are not signiﬁcant.

IFRS 16 Leases (mandatorily eﬀective for periods beginning on or after 1 January 2019): This will not have
a material impact in the Group and Company Financial Statements as they do not have signiﬁcant leases
in place.

IFRS 9 Financial Instruments (mandatorily eﬀective for periods beginning on or after 1 January 2018): This
will not have a material impact in the Group Financial Statements as the main ﬁnancial instruments are
Cash and cash equivalents and Trade payables. The main ﬁnancial instruments in the Company Financial
Statements are Cash and cash equivalents and Amounts due from subsidiaries. The standard includes a
single  approach  for  the  classiﬁcation  and  measurement  of  ﬁnancial  assets,  based  on  cash  ﬂow
characteristics and the business model used for the management of the ﬁnancial instruments, and based
on this the Amounts due from subsidiaries will be classiﬁed at amortised cost. The Company is quantifying
the eﬀect that will have the new expected credit loss model for impairment of ﬁnancial assets.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 and development in Portugal, 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, Portugal 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.

Portugal
Lithium

Finland
Lithium
(Note 19)

HQ and
corporate

Invest-
ments Elimination

Mozam-
bique
Mineral
Sands

£

–

–

Oman
Copper

£

–

–

(2,035)

(1,166)

–

–

2017

Revenue

Interest income

Finance costs

Share based 

payments

£

–

–

–

–

£

–

–

–

–

£

639,108

948

(4,348)

320,095

£

–

–

–

–

£

(639,108)

–

–

–

–

–

–

–

–

–

Total

£

–

948

(7,549)

320,095

(2,842,285)

14,406,275

11,465,591

6,596,109

2,940,684

(1,263,391)

(Loss) for the year

(308,616)

(631,731)

(171,056)

(8,164)

(1,722,718)

Total assets

4,365,898

4,640,081

2,902,257

138,543

2,189,293

170,203

Total non-current 

assets

Additions to 

non-current 

assets

Total current 

assets

4,224,672

4,387,977

2,833,907

951,312

2,801,960

2,823,802

–

–

19,035

19,035

–

–

141,226

252,104

68,350

138,543

2,170,258

170,203

Total liabilities

(112,807)

(398,825)

(411,302)

(1,511)

(338,946)

–

38

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SEGMENTAL REPORTING continued

Oman
Copper
£

Mozambique
Mineral
Sands
£

Finland
Lithium
£

HQand
corporate
£

Investments
£

Elimination
£

Total
£

2016
Revenue
Financecosts
Gainondisposal
ofinvestments
Lossondisposal
ofassets
Sharebased
payments
(Loss)/Gainfor
theyear
Totalassets
Totalnon-current
assets
Additionsto
non-currentassets
Totalcurrentassets
Totalliabilities

442,984
(4,377)

–
–

(442,984)
–

–
–

–

(128,505)

20,992

–
(36)

–

–

–

–
–

–

–

–

–

–

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
108,956
(135,754)

204,241
107,495
(34,553)

118,805
9,682
(12,304)

–
1,072,771
(286,911)

–
124,472
–

–
(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)

–

–

–

–
–

–

–
–
–

3. EMPLOYEES AND DIRECTORS

Theaveragemonthlynumberofemployeesduringtheyearwasasfollows:

Operational
Non-operational

Staﬀ Costs (excluding Directors)

Salaries
Bonus
Socialsecurityandotheremployeeexpenses
Pension
Sharebasedpaymentexpense(seeNote23)

Group

Company

2017
No

43
15

58

2017
£

Group

2016
No

12
12

24

2016
£

1,266,934
150,467
66,262
13,187
85,195

1,582,045

946,731
66,243
38,187
–
9,651

1,060,812

2017
No

1
4

5

2017
£

332,833
142,208
29,145
13,187
85,195

602,568

2016
No

1
3

4

Company

2016
£

338,218
29,051
13,225
–
9,651

390,145

SAVANNAH RESOURCES Plc – ANNUALREPORTANDFINANCIALSTATEMENTS2017

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. EMPLOYEES AND DIRECTORS continued

The  Group  numbers  in  the  above  table  includes  £654,947  (2016:  £486,101)  which  was  capitalised  as  an
intangible asset. The Group numbers for employees show an increase from 24 to 58 and this is primarily driven
by the activities in Mozambique where employment costs are relatively low.

The Group bonus in 2017 includes £98,630 (2016: £20,992) paid in Company shares.

Directors’  Remuneration

Salaries
Bonus
Social security
Pension
Share based payment expense (see Note 23)

2017
£

428,066
76,927
56,039
16,750
234,900

812,682

2016
£

336,892
118,318
45,326
–
16,650

517,186

The numbers in the above table include £116,658 (2016: £74,663) 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.

The remuneration of Directors who held oﬃce during the year was as follows:

Directors’ 
emoluments 2017

Salary

Bonus

£

£

Non- Pension
cash
share 
options
£

£

Total

Salary

Directors’ 
emoluments 2016
Bonus

Non-
cash
share
options
£

Total

£

£

£

£

Executive Directors
Dale J Ferguson
David S Archer
Non-Executive Directors
Matthew J King
Maqbool Ali Sultan
Imad Kamal Abdul Redha Sultan
Manohar Pundalik Shenoy
Murtadha Ahmed A Sultan

148,066 28,9271
52,200
240,000 48,0001 182,700

– 229,193 106,892 23,3182
16,750 487,450 190,000 95,0002

– 130,210
– 285,000

40,000
–
–
–
–

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

40,000
–
–
–
–

40,000
–
–
–
–

–
–
–
–
–

16,650
–
–
–
–

56,650
–
–
–
–

428,066

76,927 234,900

16,750 756,643 336,892 118,318

16,650 471,860

1 Bonuses unpaid as at 31 December 2017

2 Bonuses unpaid as at 31 December 2016

40

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. EMPLOYEES AND DIRECTORS continued

Supported by KPMG, the Remuneration Committee undertook a benchmarking survey of the remuneration
packages of the Group’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 2017; successful capital raisings; acquisition of a near-term production lithium
project in Portugal; increasing the participating interest in the world class Mutamba Heavy Mineral Sands Project
in Mozambique; signiﬁcantly progressing its Oman copper development through the licencing process; the
development of a highly professional management team with superior technical, commercial and corporate
abilities; and maintaining a cohesive, collaborative and collegiate corporate culture. The increase in Directors’
salaries resulted from the benchmarking exercise undertaken in conjunction with KPMG.

4. LOSS ON DISPOSAL

Consideration
Net assets disposed

2016
£

–
(128,505)

(128,505)

There was no disposal of subsidiaries in 2017.

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 did not receive consideration from the existing shareholders, all
existing loans payables by Al Zuhra Mining LLC to the Group in relation to this were cancelled and the rights of
the 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
128,5051

1 The net assets in the table above did not include the loans payable to group companies. These loans were
cancelled and registered a loss in the Group companies that was eliminated in the Consolidated Group
Accounts.

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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

2017
£

14,895

44,000
30,960
14,700
8,056
–
90,759
119,082
320,095
98,630

2016
£

9,536

35,000
15,100
7,252
2,997
9,549
96,036
46,620
26,301
20,992

6.

INCOME TAX
Analysis of the Tax Charge
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2017 nor for the
year ended 31 December 2016.

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:

2017
£

2016
£

Loss on ordinary activities before tax

(2,842,285)

(1,759,250)

Loss on ordinary activities multiplied by the standard rate
of corporation tax in the UK of 20% (2016 – 20%)
Eﬀects of:
Expenses not deductible for tax purposes
Diﬀerent tax rates applied in overseas jurisdictions
Tax losses carried forward

Total income tax

(568,457)

(351,850)

133,229
101,268
333,960

–

88,390
45,058
218,402

–

Deferred Tax
The Group has carried forward losses amounting to £6,959,311 as at 31 December 2017 (2016: £4,783,169).
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. 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 £1,886,723 (2016: £291,231).

42

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8. 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

9.

INTANGIBLE ASSETS

Cost
At 1 January 2016
Additions
Disposals of assets (Note 4)
Transfers from Other non-current assets
Exchange diﬀerences

At 1 January 2017
Additions
Transfer to Assets classiﬁed as Held for Sale (Note 19)
Exchange diﬀerences

At 31 December 2017

Amortisation and impairment
At 1 January 2016
At 1 January 2017

At 31 December 2017

Net Book Value
At 1 January 2016

At 31 December 2016

At 31 December 2017

2017
£

2016
£

(2,842,285)
538,585,436
0.0053

(1,759,250)
385,212,275
0.0046

Exploration and
evaluation
£

3,155,242
1,464,373
(127,535)
225,668
349,002

5,066,750
5,040,296
(118,804)
(178,248)

9,809,994

–
–

–

3,155,242

5,066,750

9,809,994

Refer to Note 11 and Note 20 for detail of additions with consideration satisﬁed by the issue of shares.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

9.

INTANGIBLE ASSETS continued
The exploration and evaluation assets referred to in the table above comprise expenditure in relation to
exploration licences in Oman, Mozambique and Portugal. 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
Portugal Lithium

2017
£

2016
£

3,047,021
4,087,859
2,675,114

9,809,994

1,404,964
3,542,982
–

4,947,946

The  Directors  have  reviewed  the  carrying  value  of  the  CGUs  and  have  not  identiﬁed  any  indicators  of
impairment. Therefore there is no impairment charge in 2017 or 2016. In 2016 a loss of £127,535 was registered
due to the disposal of Al Zuhra Minerals LLC (Note 4). There were no disposals in 2017.

In Mozambique the Jangamo exploration licence 3617L held by the Company’s subsidiary, Matilda Minerals Lda,
expired in December 2017 and is going through a routine approval process and is expected to be renewed in the
coming months. The “Rights to work over areas” relating to licences number 562L, 566L, and 1336L, held by Rio
Tinto, cover the Jangamo, Dongane, Ravene and Chilubane deposits. These “Rights to work over areas” expired
in January 2018, prior to which an application for three mining concessions over the same areas were submitted.
The Ministry of Mineral Resources and Energy in Mozambique has six months to respond to the applications.

10. PROPERTY, PLANT AND EQUIPMENT

Motor
vehicles
£

Oﬃce
equipment
£

Plant and
machinery
£

Cost
At 1 January 2016
Additions
Exchange diﬀerences

At 1 January 2017
Additions
Exchange diﬀerences

At 31 December 2017

Depreciation
At 1 January 2016
Charge for year
Exchange diﬀerences

At 1 January 2017
Charge for year
Exchange diﬀerences

At 31 December 2017

Net Book Value
At 1 January 2016

At 31 December 2016

At 31 December 2017

30,474
–
6,133

36,607
41,197
(2,441)

75,363

10,013
9,152
1,999

21,164
12,539
(2,059)

31,644

20,461

15,443

43,719

10,398
–
1,003

11,401
12,760
(249)

23,912

8,967
384
1,323

10,674
2,356
(743)

12,287

1,431

727

–
–
–

–
1,044,021
50,444

1,094,465

–
–
–

–
–
–

–

–

–

44

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

Land
£

–
–
–

–
45,656
619

46,275

–
–
–

–
–
–

–

–

–

Total
£

40,872
–
7,136

48,008
1,143,634
48,373

1,240,015

18,980
9,536
3,322

31,838
14,895
(2,802)

43,931

21,892

16,170

11,625

1,094,465

46,275

1,196,084

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

10. PROPERTY, PLANT AND EQUIPMENT continued

The above property, plant and equipment is allocated to the following licence areas, representing the Group’s
Cash Generating Units (“CGUs”):

Mozambique Minerals Sands
Oman Copper
Portugal Lithium

2017
£

1,102,890
5,776
87,418

1,196,084

2016
£

727
15,443
–

16,170

The carrying value of the property, plant and equipment assets is not impaired and therefore an impairment
charge has not been included in 2017 or 2016.

11. INVESTMENTS

Group

At 1 January 2016
Additions at cost
Disposals
Change in market value of investment

At 31 December 2016

Additions at cost
Change in market value of investment

At 31 December 2017

Shares in
investments
£

149,922
24,363
(94,653)
44,840

124,472

87
45,644

170,203

In  2016  the  Company  disposed  of  35million  shares  in  Cradle  Arc  Plc  (formerly  Alecto  Minerals  Plc)  and
recognised a realised gain on disposal of £1,266 which was transferred from Other Comprehensive Income.
There was no disposal of shares in 2017. On 21 December 2016 Cradle’s shares were suspended from trading
on AIM pending the publication of an admission document. At 31 December 2017 there was not an active
market for these shares, and management concluded that a reliable measure of the fair value of the shares
was not available. Therefore it becomes appropriate to carry the investment in Cradle Arc Plc at deemed cost
being the fair value carrying amount as at 31 December 2017. The fair value hierarchy used in 2016 was level
2 as the valuation was based in other observable inputs. In January 2018 Cradle Arc Plc was admitted to trading
on AIM.

In 2016 the Company disposed of 5.2million shares in a listed company and recognised a realised gain on
disposal of £41,605 which was transferred from Other Comprehensive Income. There was not disposal of shares
in 2017. The fair value of the shares is the quoted value at the reporting date. The fair value hierarchy in 2017
and 2016 is level 1 as the valuation is based wholly on quoted prices.

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

45

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11. INVESTMENTS continued

Company

Non-Current
At 1 January 2016
Additions
Disposal to group company

At 31 December 2016
Additions

At 31 December 2017

Current
At 1 January 2016
Additions
Disposals
Change in market value of investment

At 31 December 2016
Change in market value of investment

At 31 December 2017

Shares in
subsidiaries
£

875,733
908,027
(1,492,729)

291,031
51,852

342,883

Shares in 
investments
£

149,922
24,363
(94,653)
44,840

124,472
45,644

170,116

At 31 December 2016 the Company classiﬁed expenses relate to exploration and evaluation services amounting
to £290,750 as Intangible assets. The Company’s subsidiaries hold the rights to the exploration licences and
therefore  during  2017  a  reclassiﬁcation  within,  Non-current  assets,  of  the  2016  balances  has  been  done
reclassifying the amount registered in Intangible assets to Investments in subsidiaries.

During May 2017, the Group incorporated two new subsidiary entities: Savannah Resources Portugal B.V.
(‘SRPBV’), being a wholly-owned subsidiary of Savannah Resources Plc (‘SAV’), and AME Portugal Pty Ltd
(‘AMEPPty’), being a wholly-owned subsidiary of SRPBV. In May 2017, the Company entered into an agreement
to acquire 100% of Slipstream PORT Pty Ltd (‘SPPty’), thereby acquiring an eﬀective 75% interest in Slipstream
Resources Portugal Lda (‘SRP’) (formerly Slipstream Resources Portugal Unipessoal Lda). SRP is a Portuguese
entity which is the holder of a series of highly prospective lithium projects with near-term production potential
in the north of Portugal.

In consideration for acquiring 100% of the issued share capital of SPPty, the Group paid AUD$ 1,000,000 (~GBP
£591,000) in cash and issued 20,000,000 (equivalent to GBP £1,300,000) ordinary shares in the Company. In
addition, the purchase of SPPty dictates future milestone payments as disclosed in Note 20. The transaction
has  been  accounted  for  as  an  acquisition  of  an  asset  due  to  it  not  meeting  the  deﬁnition  of  a  business
combination and has been recognised in Intangible assets (Note 9).

In August 2017, the Group acquired a further 20% of the issued share capital of Matilda Minerals Lda, increasing
its interest in the entity to 100%. The Group paid an aggregate consideration of AUD$ 100,000 (~GBP £60,000),
satisﬁed by the issue of 1,194,074 ordinary shares in the Company.

In September 2017 a new 100% subsidiary company, Savannah Resource Lithium B.V. was set up with an initial
investment of €100 (~£92) in the ordinary share capital.

46

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11. INVESTMENTS continued

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 owned 10% of the combined Mutamba Project and Rio Tinto owned the remaining 90%.
After delivery of Scoping Study, AME’s interest in the Mutamba Consortium has increased to 20%. AME can
earn into up to 51% in the Project by achieving prescribed milestones. In 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.

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 licences for lithium exploration projects in Finland.

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 £1,482,580) within two years of entering the earn-in agreement and a
further USD $2,600,000 (~GBP £1,927,354) cash within four years to receive a further 14% shareholding in Al
Thuraya. These funds will be used for geological development activities. During the 2017 ﬁnancial year the
Group made capital contributions of USD $595,096 (GBP £441,055) (2016: USD $984,454), being the total
contribution as at 31 December 2017 of USD $3,070,486 (GBP £2,276,120) (2016: US $2,475,390). In September
2016 the Group earned the 51% interest in Al Thuraya after achieving the capital contribution of USD $2,000,000
as per the Earn-in agreement.

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 was
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 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 £741,290) upon a formal ﬁnal investment decision
for the development of the Block 5 Licence; (b) USD $1,000,000 (~GBP £741,290) 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 £741,290) 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 20).

The Company had the following subsidiary undertakings, either directly or indirectly, at 31 December 2017,
which have been included in the Consolidated Financial Statements.

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11. INVESTMENTS continued

Subsidiary

Registered oﬃce

Nature of business

Class of 
share

% Holding

Holding Company
Mining & exploration
Mining & exploration

Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary

United Kingdom8
Mozambique9
Mozambique10
The Netherlands11 Holding Company
British Virgin Is.12
Holding Company
Oman13
Mining & exploration
Oman13
Dormant
Oman14
Mining & exploration
Finland15
Mining & exploration
Dormant

AME East Africa Limited4
Matilda Minerals Limitada7
Panda Recursos Limitada5
Savannah Resources B.V.4
Gentor Resources Limited5
Al Fairuz Mining L.L.C.5
Sohar Mining L.L.C5,6
Al Thuraya Mining L.L.C.5
Finkallio Oy5
African Mining & Exploration  United Kingdom8
Limited4
Savannah Resources 
Portugal B.V4
AME Portugal Pty Ltd5
Slipstream PORT Pty Ltd5
Slipstream Resources 
Portugal Limitada5
Savannah Resources Lithium  Netherlands11
B.V4
1 In 2016 the Group achieved the capital contribution to earn a right to 51%, the formalities to complete the

100%
100%2
99.99%
100%
100%
65%3
70%3
51%1,3
100%
100%

Holding Company
Holding Company
Mining & exploration

Australia16
Australia16
Portugal17

Ordinary
Ordinary
Ordinary

100%
100%
75%3

Holding Company

Holding Company

Netherlands11

Ordinary

Ordinary

100%

100%

registration were completed in 2017

2 In 2017 the Group acquired a further 20% of the issued share capital of Matilda Minerals Lda, increasing its

interest in the entity to 100%

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

4 Directly held by Savannah Resources Plc

5 Indirectly held by Savannah Resources Plc

6 Formerly Gentor Resources L.L.C

7 99.99% Indirectly held by AME East Africa Limited and 0.01% Directly held by Savannah Resources Plc

8 55 Gower Street, London WC1E 6HQ, United Kingdom

9 Damiao de Gois, no 438, Sommerschield, Maputo, Mozambique

10 Rua 1301, Num 97, Sommerschield, Maputo, Mozambique

11 Strawinskylaan 3127, 8e verdieping, 1077ZX Amsterdam, The Netherlands

12 Trident Chambers, P.O. Box 146, Road Town, Tortola, VG1110, Virgin Islands, British

13 P.O.Box 1053, P.C.130, Azaiba, Muscat, Sultanate of Oman

14 P.O.Box 54, P.C.100, Muscat, Sultanate of Oman

15 c/o Bokf.byrå Mattans Ab, Storalånggatan 57 A 1, 65100 VASA, Finland

16 Level 20, 16 Carrington Street, Sydney, NSW 2000, Australia

17 Rua Jose Eigenmann, No 90, parish of Nogueira, municipality of Braga, Portugal, 4715-199

48

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 the Group completing the Phase 1 work programme (Scoping Study) it will have a 20% participating

interest in the Project;

(b) Upon the Group completing Phase 2 of the work programme (Pre-Feasibility study) it will have a 35%

participating interest in the Project;

(c) Upon  the  Group  completing  Phase  3  of  the  work  programme  (Feasibility  study)  it  will  have  a  51%

participating interest in the Project.

In May 2017 the Group completed the Phase 1 milestone with the delivery of the Scoping Study, increasing its
interest in the combined Mutamba Project to 20%.

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 in 2016 the Group has capitalised £1,853,458 (2016: £309,820) relating to the combined
project.

13. TRADE AND OTHER RECEIVABLES

Non-Current
Other receivables – VAT
Amounts due from subsidiaries

Total non-current receivables

Current
VAT recoverable
Other receivables

Total current receivables

Group

Company

2017
£

2016
£

2017
£

2016
£

239,300
–

239,300

51,069
104,890

155,959

33,171
–

33,171

–
13,699,270

13,699,270

–
6,685,753

6,685,753

24,364
102,193

126,557

9,207
35,634

44,841

22,311
20,696

43,007

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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

14. CASH AND CASH EQUIVALENTS

Group

Company

2017
£

2016
£

2017
£

2016
£

Cash at bank and in hand

2,455,968

1,172,347

2,125,504

1,029,765

15. OTHER NON-CURRENT ASSETS

Guarantees
Other

Total other non-current assets

Group

Company

2017
£

199,755
20,458

220,213

2016
£

–
–

–

2017
£

–
19,035

19,035

2016
£

–
–

–

The  guarantees  are  deposits  required  by  the  local  mining/environmental  authorities  in  relation  to
exploration/mining licences and applications thereof.

16. SHARE CAPITAL

Allotted, issued and fully paid

At beginning of year
Issued during year:
Share placements 1
Bonus paid in shares 2
Exercise of share options 3
In lieu of cash for acquisition of assets 4

At end of year

2017

2016

£0.01
ordinary
shares
number

£0.01 
ordinary
shares
number

£

£

450,946,455

4,509,465

285,865,770

2,858,658

161,423,950
1,688,870
–
21,791,111

1,614,239
16,889
–
217,911

162,581,043
999,642
1,500,000
–

635,850,386

6,358,504

450,946,455

1,625,811
9,996
15,000
–

4,509,465

1 In respect of the Share placements in 2017 the gross proceeds were £8,257,418 of which £6,643,178 has been

recorded in share premium.

2 Refer to Note 3 for details of bonus paid in shares. £81,741 has been recorded in share premium for these

transactions.

3 Refer to Note 23 for details of share options exercised.

4 Refer to Note 11 and Note 20 for details of shares issued in lieu of cash for acquisition of assets and payment

of deferred consideration. £1,172,647 has been recorded in share premium for these transactions.

The par value of the Company’s shares is £0.01.

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SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17. TRADE AND OTHER PAYABLES

Current
Trade payables
Other payables
Accruals
Amounts owing to subsidiaries

Total current payables

Group

2017
£

2016
£

Company

2017
£

2016
£

481,436
45,054
702,267
–

1,228,757

155,077
44,414
270,031
–

469,522

149,155
28,052
161,740
4,341

343,288

41,827
38,844
206,238
8,735

295,644

Accruals represent mainly work done in 2017 in the projects in Mozambique (construction of the Pilot Plants
and community projects) and Portugal (drilling programme) and professional fees along the Group for which
invoices has not been received at the reporting date. Trade and other payables amounts relate mainly to
balances that are capitalised and therefore these are included in investing not operating cash ﬂows.

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

loans and borrowings

investments

other non-current assets – guarantees

Trade and other payables fall due for payment within 3 months from the reporting date.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

18. FINANCIAL INSTRUMENTS continued

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, including a regular review of rolling 18-month cash ﬂow
projections on a regular basis, as well as information regarding cash balances being provided to the Board. 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 Portugal and 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.

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 £17,011
(2016: increase in other comprehensive income and net assets of £11,713). 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.

52

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

18. FINANCIAL INSTRUMENTS continued

Financial instruments by category (Group)

Financial assets

As at 31 December 2017
Investments
Other non-current assets
Cash and cash equivalents

Total ﬁnancial assets

As at 31 December 2016
Investments
Cash and cash equivalents

Total ﬁnancial assets

Loans and
receivables
£

Available
for sale at
fair value
£

Available for
sale at cost
£

–
220,213
2,455,968

2,676,181

–
1,172,347

1,172,347

125,062
–
–

125,062

124,472
–

124,472

45,141
–
–

45,141

–
–

–

Total
£

170,203
220,213
2,455,968

2,846,384

124,472
1,172,347

1,296,819

See review of the fair value hierarchy of available for sale assets measured at fair value in Note 11.

Financial liabilities

As at 31 December 2017
Trade and other payables
Loans and borrowings

Total ﬁnancial liabilities

At 31 December 2016
Trade and other payables

Total ﬁnancial liabilities

Financial
liabilities at 
amortised cost
£

Total
£

1,228,757
33,123

1,261,880

1,228,757
33,123

1,261,880

469,522

469,522

469,522

469,522

The Group’s net exposure to foreign exchange risk at the reporting date was as follows:

Functional Currency of Entity

GBP
2017
£

MZN
2017
£

Total
2017
£

GBP
2016
£

Foreign currency ﬁnancial assets
USD
EUR
AUD

Total

271,964
359,004
37

181,138
–
–

453,102
359,004
37

524,348
30,461
37

631,005

181,138

812,143

554,846

MZN
2016
£

49,612
–
–

49,612

Total
2016
£

573,960
30,461
37

604,458

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

18. FINANCIAL INSTRUMENTS continued

Functional Currency of Entity

GBP
2017
£

MZN
2017
£

OMR
2017
£

Total
2017
£

GBP
2016
£

MZN
2016
£

OMR
2016
£

Total
2016
£

Foreign 
currency 
ﬁnancial 
liabilities
USD
AUD
EUR
OMR

Total

35,842
107,706
1,128
1,541

245,137
–
–
–

146,217

245,137

–
24,697
–
–

24,697

280,979
132,403
1,128
1,541

416,051

7,258
47,626
–
–

54,884

3,568
–
–
–

3,568

45,950
48,603
–
–

94,553

56,776
96,229
–
–

153,005

Assets and liabilities in the entities with functional currency Euro are denominated in Euro and therefore are
not exposure to foreign exchange risk.

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 £41,191 (2016: £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 £50,345
(2016: £63,773).

The eﬀect of a 10% strengthening of the EUR against GBP at the reporting date on the EUR 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 £36,194. A 10% weakening in the exchange rate
would, on the same basis, have decreased pre-tax loss and increased net assets by GBP £44,237.

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.

19. NON-CURRENT ASSETS AS HELD FOR SALE AND DISCONTINUED OPERATIONS

Having acquired nearer term value opportunities in Portugal which became the Group’s primary lithium focus
in Europe in mid-2017 the Board decided to seek expressions of interest from parties interested in acquiring
its lithium project in Finland and initiated a programme to locate a buyer for the its subsidiary Finkallio Oy.
Although nothing has been agreed to date, numerous parties have engaged in discussions on this and it is
expected that the sale will be completed before the end of 2018 and the associated assets and liabilities have
been consequently presented as held for sale in the 2017 ﬁnancial statements.

Intangible assets classiﬁed as held for sale during the reporting period were measured at the lower of their
carrying amount and fair value less costs to sell. The management has concluded that the carrying amount is
lower than the fair value less costs to sell and therefore no changes has been done in the value of the intangibles.

54

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. NON-CURRENT ASSETS AS HELD FOR SALE AND DISCONTINUED OPERATIONS continued

The detail of assets and liabilities presented as held for sale at 31 December 2017 is as follows:

Non-current assets held for sale
Intangible assets
Current assets held for sale
Receivables
Cash and cash equivalents

Total assets held for sale

Current liabilities held for sale
Trade and other payables

Total liabilities held for sale

2017
£

137,128

187
1,228

138,543

(1,511)

(1,511)

The pre-tax loss and post-tax loss relating to discontinued operations is £8,164 (2016: £5,844).

20. GROUP CONTINGENT LIABILITIES

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

Deferred consideration payable in relation to the acquisition of 80% shareholding in Matilda Minerals Lda
(Mozambique mineral sands project)
In August 2017, a deed of variation was executed between the parties that entered into the agreement for the
acquisition of 80% shareholding in Matilda Minerals Lda in September 2013. In accordance with the deed of
variation,  the  deferred  consideration  agreed  in  the  September  2013  agreement  was  substituted  by  ﬁxed
consideration of AUD$ 50,000 (~GBP £29,500). In August 2017, such ﬁxed consideration was satisﬁed by the
issue of 597,037 ordinary shares in the Company and the deferred consideration was extinguished.

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 £593,000) 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 Resources Plc shares)

(a) a milestone payment of USD $1,000,000 (~GBP £741,000) upon a formal ﬁnal investment decision for

the development of the Block 5 Licence;

(b) a milestone payment of USD $1,000,000 (~GBP £741,000) 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 £741,000) within six months of the payment of the

Deferred Consideration in (b).

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

20. GROUP CONTINGENT LIABILITIES continued

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.

Deferred consideration payable in relation to the acquisition of Slipstream PORT Pty Ltd (Portugal lithium
project)
On 24 May 2017 the Group acquired a series of highly prospective lithium projects with near-term production
potential in the north of Portugal. The Group paid an initial consideration of AUD$ 1,000,000 (~GBP £579,000)
in cash and issued 20,000,000 ordinary shares in the Company. Additional milestone payments, to be satisﬁed
by cash and the issue of ordinary shares in SAV, are payable as follows: (a) AUD$ 1,500,000 (~GBP £868,000)
cash and a further 20,000,000 ordinary shares of the Company upon the announcement by the Company of a
JORC-compliant  Indicated  Mineral  Resource  Estimate  of  7.5  million  tonnes  at  no  less  than  1%  Li2O;  (b)
AUD$1,500,000 (~GBP £868,000) cash and an additional 20,000,000 ordinary shares of the Company upon the
announcement by the Company of a further JORC-compliant Indicated Mineral Resource Estimate of a minimum
of 7.5m tonnes at no less than 1% Li2O.

In February 2018 the Company announced the completion of a revised JORC 2012 – Compliant Inferred Mineral
Resource Estimate of 9.1Mt at 1.03% Li2O and milestone (a) was triggered (Note 24).

21. RELATED PARTY DISCLOSURES

Details of Directors’ remuneration are disclosed in Note 3. During the year £159,224 (2016: £116,051) was
payable to Blue Bone Consulting Pty Ltd (a company controlled by Dale Ferguson) for consultancy fees and
bonus of which £33,924 (2016: £31,795) remained unpaid. The amounts payable to Blue Bone Consulting Pty
Ltd have been included in the Directors’ remuneration in Note 3.

These transactions were entered into on an arms-length basis.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

22. GROUP COMMITMENTS

Finance lease

Finance Lease Commitments
No later than 1 year
Later than 1 year and no later than 5 years
Later than 5 years

Total ﬁnance lease commitments

Current liabilities
Non-current liabilities

Minimum
lease
payments
£

11,234
24,088
–

Interest
£

958
1,241
–

Present
value
£

10,276
22,847
–

33,123

10,276
22,847

The ﬁnance lease is for the lease of a motor vehicle in Portugal. The Group has the right to purchase the vehicle
outright at the end of the lease term by paying a nominal amount. The Group intention is to exercise this option
and the value of the lease has been classiﬁed in Property, Plant and Equipment (Note 10).

Operating lease

Operating Lease Commitments
No later than 1 year
Later than 1 year and no later than 5 years
Later than 5 years

Total operating lease commitments

2017
£

111,249
351
–

111,600

2016
£

89,044
–
–

89,044

The operating lease commitments are for business premises in Oman, Mozambique, Portugal 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 (~£1,834,636) and therefore achieved the right to a 51% shareholding. During
2017 ﬁnancial year the Group made contributions of USD $595,096 (~GBP £441,055). A further USD $1,529,514
(~GBP £1,133,599) cash contribution within one year is required if the Company wishes to guarantee a further
14% shareholding in Al Thuraya to achieve a 65% interest.

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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

23. 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.

2017

Weighted 

2016

Weighted

average Weighted
exercise remaining
life

price

Number

average Weighted
exercise remaining
life

price

4.8p
7.5p
5.5p
–

5.7p

4.6p
6.0p

5.7p

– 22,523,443
3.20 3,600,000

(100,000)2
–
– (1,500,000)3

1.77 24,523,443

1.61 13,911,112
2.73 1,410,449

2.24 15,321,561

4.8p
4.8p
10.4p
3.0p

4.8p

4.6p
5.0p

4.6p

–
3.53
–
–

1.70

–
2.75

1.61

Number

24,523,443
11,700,000
(4,300,000)1

–

31,923,443

15,321,561
51,240,548

66,562,109

Share Options
At beginning of year
Granted
Lapsed
Exercised

At end of year

Investor Warrants
At beginning of year
Granted

At end of year

1 Share Options expired on 3 July 2017 and 23 September 2017

2 Share Options expired on 26 April 2016

3 Share Options exercised on 28 November 2016

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SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

23. SHARE OPTIONS AND WARRANTS continued

Share schemes outstanding at 31 December 2017 are as follows:

Exercisable
Exercisable Outstanding
Outstanding
31 December 31 December 31 December 31 December 
2016

2016

2017

2017

Share Options
February 2013
July 2013
September 2013
September 2013
February 2014
July 2014
September 2014
March 2016
December 2016
March 2017
July 2017
August 2017

Investor Warrants
September 2013
April 2014
September 2016
March 2017
July 2017
October 2017

3,726,667
5,321,776
3,000,000
1,575,000
3,000,000
–
–
2,100,000
1,500,000

3,726,667
5,321,776
3,000,000
1,575,000
3,000,000
–
–
2,100,000
750,000
10,700,000 10,700,000
–
–

500,000
500,000

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
–
–
–

3,726,667
5,321,776
3,000,000
1,575,000
3,000,000
3,300,000
1,000,000
2,100,000
–
–
–
–

31,923,443 30,173,443 24,523,443 23,023,443

2,800,000
1,410,449
1,480,952

11,111,112 11,111,112 11,111,112 11,111,112
2,800,000
1,410,449
–
–
–

2,800,000
1,410,449
1,480,952
12,542,977 12,542,977
37,216,619 37,216,619

2,800,000
1,410,449
–
–
–

Exercise 
Price

Expiry Date

4.6p
3.0p
3.0p
4.6p
8.8p
5.0p
7.0p
2.8p
7.6p
7.6p
6.7p
6.2p

28/02/18
21/07/18
19/07/18
30/09/18
25/02/19
03/07/17
12/09/17
16/03/20
21/12/20
28/02/21
06/07/21
17/08/21

3.0p
11.0p
5.0p
7.4p
6.0p
6.0p

19/07/18
17/04/18
30/09/19
07/03/20
14/07/20
25/10/20

66,562,109 66,562,109 15,321,561 15,321,561

All of the options granted attract a share based payment charge.

The fair value of the options and warrants at the date of grant 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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

23. SHARE OPTIONS AND WARRANTS continued

The Directors’  interests in the share options and warrants of the Company are as follows:

At 31 December 2017

Quantity at
1 Jan 2017

Quantity
granted

Options/
during the Lapsed during Warrants at
the year 31 Dec 2017

year

Exercise
price

Date of
the grant

First date

Final date
of exercise of exercise

Share Options
Dale Ferguson
Dale Ferguson
Matthew King
David Archer

5,321,776
–
1,500,000
–

–
2,000,000
–
7,000,000

Warrants
David S Archer 11,111,112
–
David S Archer

–
2,857,143

At 31 December 2016

–
–
–
–

–
–

5,321,776
2,000,000
1,500,000
7,000,000

3.0p
7.59p
3.0p
7.59p

21/07/13
01/03/17
16/03/16
01/03/17

20/07/14
01/03/17
16/03/16
01/03/17

20/07/18
28/02/21
15/03/20
28/02/21

11,111,112
2,857,143

3.0p
6.0p

24/09/13
14/07/17

24/09/13
14/07/17

19/07/18
14/07/20

Quantity
granted

Options/
during the Lapsed during Warrants at
the year 31 Dec 2016

year

Quantity at
1 Jan 2016

Exercise
price

Date of
the grant

First date

Final date
of exercise of exercise

Share Options
Dale J Ferguson 5,321,776
–
Matthew J King

–
1,500,000

–
–

5,321,776
1,500,000

3.0p
3.0p

21/07/13
16/03/16

20/07/14
16/03/16

20/07/18
15/03/20

Warrants
David S Archer 11,111,112

–

–

11,111,112

3.0p

24/09/13

24/09/13

19/07/18

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

March 2017

July 2017

August 2017

5.7p
2.6p
7.6p
70%
4 years
0.6%

4.9p
2.1p
6.7p
70%
4 years
0.5%

4.6p
2.1p
6.2p
70%
4 years
0.4%

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

23. SHARE OPTIONS AND WARRANTS continued

Investor Warrants

Stock price
Fair value of option
Exercise Price
Expected volatility
Expected life
Risk free rate

March 2017

July 2017 October 2017

5.1p
2.2p
7.4p
75%
3 years
0.4%

4.9p
1.8p
6.0p
66%
3 years
0.5%

5.4p
2.0p
6.0p
61%
3 years
0.5%

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 2017 ﬁnancial year 11,700,000 (2016: 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.

Investor warrants issued
During the 2017 ﬁnancial year 51,240,548 warrants were issued in relation to placements and subscriptions in
2017. The warrants vested immediately on issue.

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. The warrants vested immediately on issue.

24. EVENTS SINCE THE REPORTING DATE

In January 2018 the Company granted options over 1,000,000 ordinary shares in the Company to the new
Director, Lithium Business Development.

In January 2018 the Company issued 1,000,000 new Ordinary Shares to its joint venture partner in Al Fairuz
Mining Company LLC in order to satisfy the terms of the shareholders’ agreement relating to the Company’s
acquisition of Gentor Resources Limited as announced on 14 April 2014.

In February 2018 the Company issued 233,336 new ordinary shares in respect of 2013 Share Options at an
exercise price of 4.62 pence per share following an exercise of share options.

In February 2018 the Company announced the completion of a revised JORC 2012 – Compliant Inferred Mineral
Resource Estimate of 9.1Mt at 1.03% Li2O. This triggered the ﬁrst deferred consideration (Milestone (a)) to be
paid under the acquisition agreement of Slipstream PORT Pty Ltd (Note 20) and the Company has paid AUD$
1,500,000 (~GBP £842,028) in cash and has issued 20,000,000 ordinary shares in the Company in March 2018.

In March 2018 the Company issued 1,400,000 and 1,500,000 new ordinary shares in respect of 2013 Share
Options at an exercise price of 4.62 and 3.00 pence per share respectively following the exercise of share options.

On 31 March 2018 the Company approved a cash Subscription of £1.52m (before expenses) through the issue
of 27,636,361 ordinary shares at an issue price of 5.50 pence per share. Additionally, the Company received
letters of intent for additional £0.58m cash subscriptions from a Directors’ related party (Al Marjan Ltd) and
from a number of employees for when the Company is not in a “close period”.

On 12 April 2018 the Company implemented a long-term incentive plan (“LTIP”) designed to incentivise key senior
personnel (the “April 2018 LTIP”). Awards under the LTIP comprise of both cash and equity; and the maximum
value of equity in the Company that may be issued in connection with the April 2018 LTIP awards is £342,715.

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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 Great Room, London Executive Oﬃces, 25 Southampton Buildings, WC2A 1AL, on 10 May 2018 at 10:00 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 1-4 and as a special resolution in the case of resolution 5.

ORDINARY BUSINESS
1

To receive the report of the Directors and the audited Financial Statements of the Company for the year ended
31 December 2017.

2

3

To re-appoint Dale Ferguson 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
4

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 £3,730,000 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
5

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;

(b) 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;

(c) 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; and

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NOTICE OF ANNUAL GENERAL MEETING

(d) to the allotment (otherwise than pursuant to sub-paragraphs (a), (b) and (c) above) of equity securities up
to an aggregate nominal amount of £2,100,000 (approximately 30% of the Company’s issued share capital
following the anticipated issue of shares in respect of the letters of intent, to subscribe to shares when the
Company  is  not  in  a  “close  period”  received  in  March  2018)  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: 

By order of the Board

Christopher Michael McGarty
Company Secretary

Salisbury House
London Wall
London
EC2M 5PS

12 April 2018

Registered in England and Wales Number: 07307107

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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.

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.

3.  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.

4. 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.

5. 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).

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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 12 April 2018, the Company’s issued share capital comprised 687,620,083 ordinary shares of £0.01 each.
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 12 April 2018 is 687,620,083.

Communications with the Company
11. Except  as  provided  above,  members  who  have  general  queries  about  the  Meeting  should  telephone  the
Company Secretary, Christopher Michael McGarty, on 0207 117 2489 (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.

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NOTICE OF ANNUAL GENERAL MEETING

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). 

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.

66

SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2017

COMPANY INFORMATION

DIRECTORS:

SECRETARIES:

REGISTERED OFFICE:

Matthew James Wyatt King
David Stuart Archer
Dale John Ferguson
Maqbool Ali Sultan
Imad Kamal Abdul Redha Sultan
Manohar Pundalik Shenoy
Murtadha Ahmed Sultan

Dominic Traynor
Salisbury House
London Wall
London EC2M 5PS

Salisbury House
London Wall
London EC2M 5PS

Chairman
Executive Director
Executive Director
Non-Executive Director
Non-Executive Director
Alternate Director
Alternate Director

C M McGarty
c/o Salisbury House
London Wall
London EC2M 5PS

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
40 Gracechurch Street
2nd Floor
London EC3V 0BT

ﬁnnCap Ltd
60 New Broad Street
London EC2M 1JJ

Druces LLP
Salisbury House
London Wall
London EC2M 5PS
(Ronaldsons merger with Druces LLP took eﬀect on 03.04.18)

Share Registrars
The Courtyard, 17 West Street
Farnham
Surrey GU9 7DR

WEBSITE:

www.savannahresources.com

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