SAVANNAH RESOURCES PLC
Company No 07307107
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Perivan 261290
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 1
CONTENTS
BUSINESS REVIEW
Chairman’s Statement
Chief Executive’s Report
Corporate Social Responsibility
Strategic Report
Project Overviews
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
Page
2
7
13
16
33
44
46
48
49
56
57
58
59
60
61
62
63
100
IBC
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
1
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 2
CHAIRMAN’S STATEMENT
The world is much changed since Savannah published its
2019 Annual Report. A number of these changes, such
as record sales of electric vehicles, lithium being added
to the European Commission’s critical raw materials list,
and a 30% increase in the price of spodumene, were
extremely favourable for Savannah. However, 2020, and
now 2021 as well, are likely to be remembered for a
single event, the COVID19 global pandemic. The rapid
spread of this virus around the world has significantly
impacted all our
lives with the World Health
Organisation reporting over 160 million cases and nearly
3.4 million fatalities by 18 May 2021. It has been a truly
difficult and challenging period for us all. The Board of
Savannah and I hope that the toll on our shareholders,
project stakeholders and service providers has been as
limited as possible. Savannah introduced measures in
early March 2020 to protect its staff, stakeholders and
the business itself from the direct and indirect threats
posed by the pandemic and has maintained these
measures and adhered to relevant laws and guidance
ever since. In simple terms, while some of our plans have
been disrupted and delayed by the pandemic, the
impact on the Group could have been much worse.
The rapid development of multiple, highly effective,
vaccines and the subsequent initiation of a worldwide
inoculation programme in which over 1.4 billion vaccine
doses have been administered to date represents a huge
achievement by all involved. It will eventually bring an
end to the restrictive conditions we are all experiencing
but worldwide ‘normality’ remains some time away.
Hence Savannah must continue to prioritise the safety
of its staff, contractors and project stakeholders through
mitigation planning and adherence to guidance until
restrictions are lifted. However, we remain determined
to push forward with our plans to drive increased
shareholder value.
COVIDrelated uncertainty will continue to be a risk
factor for the foreseeable future which we must
continue to manage. In the meantime, we are simply
grateful that through the combination of the efforts of
our staff, ongoing shareholder support, and a notable
improvement in lithium prices and sentiment towards
the sector, Savannah looks set to enter the second half
of 2021 in a position of good corporate health. This is
very important as the remainder of the year is going to
be a significant and exciting period for the Group.
Before reviewing the developments made at each
project, I wanted briefly to touch on one major theme
which has emerged during the last 12 months that will
have a direct bearing on our future corporate behaviour
and presents Savannah with an important opportunity.
investors,
institutional
Corporate policies around Environmental, Social and
Governance (“ESG”) matters have been given increasing
industrial
consideration by
consumers and the public for some time. However,
during 2020, the importance of ESG considerations
reached a new level. For example Morningstar report
that inflows into ESG focused funds in Europe in 2020
was €233bn, nearly twice the inflow reported in 2019
with asset managers launching a record 505 new funds
and repurposing a further 250 conventional funds. In the
US, ESG investment vehicles received nearly one quarter
of all inflows into US funds and bonds during the year
(vs. just 1% in 2014). Meanwhile in the manufacturing,
industrial and retail sectors, corporates are placing
significant emphasis on traceability of raw materials and
sourcing from responsible producers.
Hence it now seems more important than ever that
natural resource projects are developed and operated
in a responsible way, prioritising ESG principles. If not,
they risk failing to attract the investment, commercial
partners and social goodwill they need to succeed.
Pleasingly, Savannah is already well positioned to
respond to this trend, particularly given its starting point
as a group set to produce lithium, a raw material vital to
the world’s efforts to reduce greenhouse gas emissions
under exacting national and EU standards.
Strong corporate governance has always been a
particular focus of mine, and I believe Savannah already
ranks highly amongst its direct listed peers on this front.
Furthermore, it has always been Savannah’s policy to
operate its projects to ensure their impact on the
environmental and society are reduced, mitigated
the
against, or wholly eliminated and
socioeconomic benefits associated with a new project
are shared with stakeholders.
that
To consolidate our ESGrelated policies, Savannah has
been working since the start of the year with an
experienced consultant to review all our existing
relevant protocols and add to them where necessary to
create an overarching Corporate Environmental and
Social Management System (“ESMS”). The goal of the
ESMS, based on guidance from relevant international
bodies and industry best practice, is to create a
comprehensive policy framework which shapes our
2
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 3
CHAIRMAN’S STATEMENT
projectspecific ESGrelated policies.
In this way
Savannah will be able to implement a uniform, well
defined approach to these critical issues across its
assets. More information on our recent ESG activities,
including our Corporate
Social Responsibility
programmes, can be found in the Corporate Social
Responsibility section.
Sales of plugin electric vehicles set a new annual record in 2020 despite the impact of COVID19.
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
Source: iStock
Portugal – Lithium
Our original work schedule for 2020, which included the
target of completing the Definitive Feasibility Study
(“DFS”) for the Mina do Barroso Lithium Project in
northeast Portugal, was heavily
impacted by
COVIDrelated restrictions which began to take effect in
Portugal last March. Additionally, key features of the
development plan for the Project await a decision by the
Portuguese authorities on the current Environmental
Impact Assessment and Mine Plan. Nevertheless,
Savannah made good progress on all the major aspects
of the Mina do Barroso Project (“Mina do Barroso”,
“MdB” or the “Project”) during the year.
On a commercial front, we entered discussions with an
increasing number of parties regarding product offtake
agreements and/or projectlevel investment as the year
progressed and sentiment and prices within the lithium
sector improved. In January 2021 we announced a
nonbinding Heads of Agreement (“HoA”) with the
Portuguese energy major, Galp Energia, SGPS, S.A
(“Galp”), in relation to a potential offtake agreement for
up to 100,000tpa of spodumene lithium concentrate and
a potential US$6.4m investment in the Project company
for a 10% shareholding in the enlarged Project entity.
During 2021 the continuing strengthening of lithium
market has resulted in the Company receiving further
interest from groups seeking to strategically undertake
investment in the Project or Savannah with or without
requiring a spodumene offtake. This interest reflects the
increasing appetite for exposure to the lithium value
chain within the wider investment community which has
developed in parallel with the ongoing recovery in
lithium prices. Amid this backdrop the HoA expired on
31 May 2021 and any further discussions with Galp in
relation to a strategic investment and offtake agreement
will continue outside of the exclusive terms of the HoA.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
3
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 4
CHAIRMAN’S STATEMENT
Aided by our stronger financial position, following the
equity placing in April 2021, we are now in a position to
evaluate a wider range of commercial opportunities fully
and move forward
in a way which maximises
shareholder value while also ensuring a solid foundation
for the development of a new lithium industry in
Portugal. This evaluation of options may include
alternative or supplementary offtake contracts, with or
without investment from the offtaker(s) in Savannah or
the project directly. It may also result in strategic
investments in the Company independent of offtake, or
the sale of a portion of the Mina do Barroso Project.
Much more negotiating will need to be done but from a
commercial perspective we believe Savannah is in a
favourable position to secure offtakes for all the Project’s
annual lithium production and, if required, investments
from strategic partners as well.
Any commercial arrangements made on the project
must be underpinned by its comprehensive technical
design, the approval process by the relevant authorities,
and social licencing by stakeholders.
Submission of the Project’s Environmental Impact
Assessment and Mine Plan to the Portuguese
Environmental Agency, Agência Portuguesa do
Ambiente, (“APA”) in June 2020 represented a very
significant effort by Savannah’s technical team and our
consultants and marked the beginning of the key phase
in the amendments to the environmental licencing of
the Project. After initial reviews of the extensive material
submitted, and requests for additional information, APA
declared the EIA ‘to be in conformity’ with its
requirements for the content of the documents on
16 April 2021 with the follow up, public consultation
stage, initiated on 22 April 2021. This stage will continue
through to 16 July 2021 having been extended by APA
from its original closing date of 2 June 2021. As I
expressed in my opening remarks, Savannah is firmly
committed to
its ESG responsibilities, and the
Environmental Impact Assessment (“EIA”) contains
some 238 individual measures to eliminate, mitigate or
minimise the Project’s impact.
In parallel, our commitment to act as a responsible
corporate citizen and to share with local stakeholders
the many direct and indirect benefits that a project like
Mina do Barroso can bring has been demonstrated by
the Benefit Sharing Plan and Good Neighbour Plan we
created to accompany the EIA. We are keen to earn the
respect of the local communities through our efforts to
integrate the Project into everyday life in the area and
by becoming a valued member of local society for the
long term. To achieve this, while also providing Europe
with the critical lithium raw material it needs to reach
its emissions reduction targets, would represent a
significant ‘winwin’.
We have increased the pace of our metallurgical test
work programme in Australia, and our team have
continued with deskbased studies to refine key design
parameters of the Project which will be finalised in the
DFS. Input for the final DFS will also come from the
current EIA process, as APA is required to make some
selections on various site layout options we were asked
to provide in our submissions. In addition to the current
parameters of the DFS, the team has already begun
researching various ESGrelated enhancements to the
Project which it may be possible to introduce over time.
This includes the use of an electric powered mining fleet
and sole use of renewable energy across the Project,
either drawn from the national grid (which already
includes around 60% renewable power) or from specific
renewable sources. This would significantly reduce the
carbon footprint of our lithium and increase its appeal
to carbon conscious end users.
As you will read in the CEO’s statement, the lithium
market has been experiencing a significant recovery
since the second half of 2020 as the transition to
electrified transport gathers ever greater momentum.
Savannah is already one of the leading players in
Europe’s new lithium value chain and should now
leverage its hardearned position to further expand its
lithium supply business in Europe to maintain and grow
its future share of the market. Hence, we plan to
participate actively in the Portuguese Government’s
lithium exploration tender process which is now slated
for 2022, and will use some of the funding from the
recent placing to assess other opportunities across the
Iberian Peninsula.
Mozambique – Mineral Sands
There were three distinct parts to our work in
Mozambique during 2020 but all were underpinned by
the same longterm goal of adding value to the globally
significant Mutamba Minerals Sands Project. Under the
restrictions created by COVID19, our incountry team
worked diligently towards fulfilling the commitments
created by the newly awarded Mining Licences. We also
continued with our ESG activities and government
relations which have given Savannah and Mutamba
good standing in the country. Finally, with ilmenite prices
4
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 5
CHAIRMAN’S STATEMENT
Savannah intends to power Mina do Barroso with northern Portugal’s abundant sources of renewable energy:
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
Source: Getty Images
remaining robust, we initiated a wholesale review of the
the most appropriate
project
development option for Mutamba and how to distil
more of its inherent value for Savannah’s shareholders.
to clarify both
On the ground, the award of the last of the three key
25year Mining Licences in January 2020, committed
Savannah to ensuring compliance with the licence
requirements and gave us the basis on which to restart
the technical analysis on the Project after the long
licence approval process. To this end, prior to
COVIDrelated restrictions impacting on field activities
in the Spring of 2020, our local team and its consultants
successfully demarcated the boundaries of the licences.
Following that, successful competitive tenders were held
to select consultants to work on securing land use and
utilisation agreements (DUATs) with the relevant
landowners, and to complete EIAs on each of the
licences. As a result, work on the DUATs is well
underway, with the EIA work also now initiated.
The wholesale project review we started last October, led
by the highly experienced mineral sands specialist, Bruce
Griffin of Farview Solutions, is continuing in collaboration
with our project partner, Rio Tinto. A portion of the funds
raised recently will be used to maintain the project, finalise
the review work and execute its findings. This should
ensure that Mutamba’s future and its true value can be
clarified for the benefit of our shareholders and the other
stakeholders in the project.
Oman
Following a strategic review of Savannah’s exposure to
the Block 4 and 5 copper projects in Oman, we
concluded the divestment of our shareholdings in these
assets to ASXlisted Force Commodities Ltd (“Force”) last
November. Savannah received 50m new fully paid
ordinary shares in Force (46m net of shares used to
settle transaction costs) and will receive preferential
payment of AUD$3.5m in cash from an existing loan out
of cash flow generated from production on Block 5, and
payment of a 1.0% net smelter royalty on any future
metal sales from Block 4 and/or Block 5. The Board
considered this to be the most attractive option available
at the end of the strategic review period as it gave
Savannah ongoing exposure to these assets in a
favourable copper market, while entirely removing the
Group’s direct commitment of time and resources to
these noncore projects.
Corporate
Savannah’s position as a key market participant in the
European lithium value chain was reaffirmed last May by
its selection to receive support from the Business
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
5
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 6
CHAIRMAN’S STATEMENT
Investment Platform initiative managed by EIT InnoEnergy,
the group appointed by the European Commission to
catalyse the industrialisation of the battery sector in
Europe and manage the European Battery Alliance.
Savannah has played an increasingly active role in the
European Battery Alliance in the past year, presenting at
two of its recent meetings, including representing battery
raw material producers at the second meeting of highlevel
industrial actors attended by EC VicePresident Maroš
Šefčovič in March 2021. Governmentlevel relations have
also been well maintained in Portugal as has our good
relationship with the British Embassy in Lisbon, and the
British High Commission in Mozambique.
In addition to our key corporate objective of implementing
our ESMS during 2021, we also hope to add to our existing
team. As we move towards construction and eventual
production in Portugal it is going to be vital to have the
capacity as well as the experience within our team to deal
with the many complexities involved in these phases. We
look forward to announcing new members of the
executive team in due course.
Financial Overview
I explained in my interim results statement, that the 2020
accounts reflect the dual influences of the cost control
measures put in place by the Board to mitigate against
potential disruptions caused by the COVID19 situation,
and the treatment of the divestment of the Oman assets.
Instigation of the additional cost control measures in
March 2020 helped to reduce Savannah’s annual
operating loss in 2020 by approximately 18% to £2.96m
(2019: £3.60m) with the loss from continuing operations
reduced by an equal percentage to £2.92m (2019:
£3.57m). In contrast the noncash adjustment to our
intangible asset base associated with the Oman
divestment meant that losses on discontinued operations
were £5.40m (2019: £0.23m) which resulted in an overall
loss for the period of £8.33m (2019: £3.80m). Due to
COVID19 related restrictions and our cost control
programme, exploration spending was reduced by 60% to
the
£1.58m
oversubscribed £2.34m placing completed last September,
contributed to the Group’s year end cash position of
£2.0m (2019: £3.48m).
(2019: £3.89m) which, along with
Post year end, the Group’s cash balance was subsequently
significantly increased by the oversubscribed placing
completed in April 2021 which raised a further £10.3m
before expenses. Hence we believe the Company has the
necessary financial reserves to advance Mina do Barroso
towards development, maintain the Mutamba project and
execute the actions from the current review, and
undertake project acquisition and exploration to expand
its lithium portfolio.
Outlook
Despite the ongoing disruptions to our working practices
caused by COVID19, the outlook for Savannah is very
promising. Electric vehicle sales have continued to grow
in the first quarter of 2021, lithium prices have
rebounded, interest in our flagship project and its
spodumene concentrate have increased and the Group
is in a strong financial position. In the remainder of the
year in Portugal, we expect to further advance the
commercial framework around Mina do Barroso, receive
approval for the Project’s EIA, complete the DFS and
expand our lithium project portfolio. In Mozambique we
will undertake the fundamental work required to
maintain the valuable Mining Licences and conclude and
action the findings of the current review.
In 2020 all senior management and remunerated Board
members voluntarily agreed to a temporary 20%
reduction in salaries as part of the costsaving measures
taken in response to the pandemic, as described in more
detail in Note 3 in the financial statements. These
measures have enabled your company to navigate
through a period of exceptional uncertainty. Moreover,
despite these very difficult circumstances management
have achieved some key objectives that have put
Savannah in a favourable and exciting position for its
future development.
My thanks also go to all our shareholders, both old and
new. We understand that Savannah is in a very
competitive global investment marketplace and we are
grateful for your ongoing support and for sharing our
vision and values. It remains our firm goal to grow
Savannah into a valuable business based on responsible
and
sustainable practices which benefit our
shareholders and other stakeholders alike.
Matthew King
Chairman
Date: 1 June 2021
6
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 7
CHIEF EXECUTIVE’S REPORT
As our Chairman has highlighted, while COVID has
dominated the world’s agenda and all our lives during
the past twelve months, Savannah was able to make
meaningful progress with
its project portfolio.
Furthermore, beneath the overbearing presence of the
virus, the economic, political and investment landscape
around Savannah and its flagship project Mina do
Barroso has, I believe, moved in a significant and positive
way. Now, with the addition of the funding provided by
both existing and new shareholders in our April placing,
Savannah can move forward with confidence and fully
grasp the opportunity that now presents itself to us in
Europe’s fastgrowing lithium sector.
As set out in my report in last year’s annual results our
main goals for the year at Mina do Barroso were to
complete and submit the Project’s EIA and associated
reports to the Portuguese authorities, finalise the DFS, and
conclude offtake agreements. We were delighted to
achieve the first of these goals last summer and, after
some follow up information requests from the authorities,
the EIA is now at the public consultation phase of the
approval process. Unfortunately this longer than expected
EIA process and the pandemic moved the completion of
the DFS into 2021, but work completed for the EIA
submissions can be used in the DFS, and we were able to
advance other inputs to the DFS, such as metallurgical test
work. We also achieved the commercial goal of a Heads of
Agreement with a potential offtaker, believed to be the
first announced for a European lithium project. The HoA
expired on 31 May 2021 and discussions in relation to a
strategic investment and offtake agreement will continue
outside of the exclusivity provisions of the HoA. Such
discussions will continue with the favourable backdrop of
the muchimproved commercial environment which has
appeared in the lithium sector since the turn of this year.
As a result, we believe Savannah can achieve significantly
better terms for its shareholders.
On the ground in Mozambique, we focused our efforts
on working towards meeting the requirements of the
25year Mining Licences we were so pleased to be
awarded in late 2019 and early 2020. At a corporate
level, we are determined to clarify the future of
Mutamba for our shareholders and its stakeholders. As
one of the world’s largest undeveloped projects in a
commodity sector where prices have continued to rise
and the outlook is favourable, the lack of recognition of
the project’s strategic and economic value
is a
frustration for all and represents a missed opportunity.
We are working, under expert guidance, and with our
partner Rio Tinto, to bring resolution on this project in a
meaningful timeframe.
While we work to provide a clear path forward for
Mutamba, we did achieve this on our copper projects
in Oman during the year, concluding a divestment
deal which allows Savannah to retain exposure to these
assets without any further commitment. The Board
believe the transaction represented a welcome
outcome for Savannah given the smaller scale nature
of the projects. By removing the commitment of
management’s time and resources to these noncore
projects we have had more capacity to deal with our
higher priority projects, particularly Mina do Barroso,
and I’m sure this will continue to stand us in good stead
as the commitment required grows greater as we move
towards development.
Portugal
Given the socioeconomic impact caused by COVID, it is of
particular note that the prevailing market forecasts I
highlighted to you in my report last year all became reality.
2019 was a transitional year in the auto industry to far
greater Electric Vehicle (“EV”) penetration in 2020 and the
difficult conditions in the lithium supply industry caused
by inventory buildup and low prices were ‘growing pains’.
However, back in the uncertain days of the first half of
2020, it was extremely difficult for anyone to have real
confidence that electric vehicle sales, along with all vehicle
sales, were not going to suffer a yearonyear decline
because of the pandemic. Or that this would not further
increase the inventory of lithium that existed at that point
and further depress prices which had been falling since the
second half of 2018.
The record shows, however, that the exact opposite
happened, albeit with a very heavy weighting on the
second half of the year. Website EVvolumes.com
reports global sales of plugin electric vehicles rose by
43% yearonyear in 2020, passing 3 million units for the
first time, while overall vehicle sales fell by 14%.
Furthermore, the growth in sales was dominated by
Europe (1.4m, +137% yoy), which overtook China
(1.3m, +12%) as the
largest EV market as the
combination of the first year of new EU emissions
legislation and significant government subsidies on EVs
married automakers’ desire to sell EVs with greater
consumer appetite to buy them. As EV sales accelerated
from July onwards, so did demand for battery grade
lithium raw materials. As residual inventory was
consumed, lithium prices began to recover led by the
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
7
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 8
CHIEF EXECUTIVE’S REPORT
domestic lithium carbonate price in China. The price of
this key lithium chemical has subsequently more than
doubled. Other lithium product prices subsequently also
began to recover. The spodumene price for example,
which is of such importance to Savannah, bottomed out
in the 4th quarter of 2020 just below US$400/t and has
since risen by around 80% to be close to US$700/t in
midMay.
We cannot expect lithium prices to continue to rise
indefinitely, but this change in market dynamic and
sentiment has had a very positive impact on the lithium
raw materials
industry. The average share price
performance for a large group of lithium equities over
the last 12 months has been an increase of 437%. Given
their far better market valuations, listed lithium
companies have raised over US$3 bn in equity since the
European Annual Plugin Vehicle Sales & Market Share
Source: EVvolumes.com
Supplydemand outlook for lithium to 2025
8
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
Source: Benchmark Mineral Intelligence
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 9
CHIEF EXECUTIVE’S REPORT
start of 2021. The additional capital raised will go some
way to financing the expansion of existing projects and
construction of new projects required if supply is going
to satisfy future demand. However, back in June 2019,
Galaxy Resources estimated that US$9 bn of investment
was needed to construct the extra production capacity
required, and demand forecasts have only increased
since then. As market commentators such as Benchmark
Minerals highlight, even with all probable and possible
future supply developments, a deficit in the lithium
market is still expected from as early as 2023.
It has taken some time, but it now appears that mid and
downstream participants in the global lithium battery
value chain, as well as legislators, are now cognisant of
the fact that supply of critical battery raw materials is
going to have a major bearing on the success of the
planned emobility transition. Nowhere is this growing
awareness more evident than in Europe. The region has
become the largest and fastest growing market for EVs
and the European Commission expects the region’s
demand for lithium to increase 18x by 2030. It is also
focused on becoming the world’s second largest lithium
battery manufacturing base with the capacity of the
region’s domestic battery manufacturing
industry
forecast to grow more than 10x over the current decade
(reaching 610GW by 2030, source: Bloomberg NEF).
However, at present it has no domestic production of
lithium battery raw materials such as spodumene
concentrate or lithium chemicals. Remembering that all
the world’s major economies are trying to make the
same emobility transition at the same time using the
same lithium battery technology, and that the battery
industry is already dominated by China, it is easy to see
that Europe must do all it can to produce its own battery
raw materials. Hence, we were delighted last September
when lithium was added to the European Commission’s
list of materials critical to its economic stability and
growth. We also welcomed the creation of the European
Raw Materials Alliance, a sister organisation to the
European Battery Alliance, which is dedicated to
supporting the creation of a domestic, sustainable,
critical raw material production industry.
Given the expected growth rates, it is unlikely that
Europe will be able to wholly satisfy its own demand for
battery raw materials from domestic sources. However,
by producing as much of its own raw materials as
possible, Europe will be able to partially reduce the
supply risk faced by its major downstream consumers,
who are so important to the overall European economy.
Domestic production will also supplement
the
Commission’s goals on lowering transportrelated
emissions by reducing the carbon footprint associated
with importing these materials from distant producers.
In addition, domestic end users will be able to take
confidence in the fact that these materials have been
produced in a responsible way by suppliers operating
under stringent EU laws.
Clearly this backdrop is extremely favourable for
Savannah and its development of Mina do Barroso, and
the situation is made even more promising by the
significant increase in interest in ESG considerations
which our Chairman has highlighted in detail in his
statement.
In practical terms, what these changing market dynamics
have meant for Savannah is both a notable increase in
commercial inquiries about our future spodumene
concentrate production, and a marked increase in the
number of groups evaluating the option of building
lithium chemical plants in Europe requiring spodumene
feedstock. Where previously our only option appeared
to be shipping our concentrate to Asia for conversion
into chemicals, operating conversion capacity within
Europe in the 2020s now seems likely. Furthermore, we
are very aware that the Portuguese Government would
like to establish a new lithium industry in the country as
part of its economic diversification and recovery plans
post COVID. In summary, we believe that there is more
than enough demand to ensure that Mina do Barroso’s
concentrate can be fully committed, and that interest in
strategic investment in Savannah from relevant parties
exists if required.
While this economic and commercial framework
continues to drop into place around us, we have
remained very busy in country moving the Project
forward as best as we can under the restrictions created
by COVID. As I say, the submission and subsequent
progression of the EIA through the approval process has
been one of the significant achievements for the Group
in the last 12 months. It has required a very substantial
effort by our team and our consultants for which I am
very grateful.
The current public consultation phase allows our
stakeholders their first real opportunity to see the
extensive planning we have undertaken for the Project
and the ongoing commitments we are making to its
management and to them. Our key intent is to
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
9
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 10
CHIEF EXECUTIVE’S REPORT
responsibly develop Mina do Barroso such that Mina do
Barroso’s impact on everyday life in the nearby villages
and the environment is not only minimised, but that the
Project is used as a catalyst for significant socio
economic growth in the area, which has been suffered
from a falling population for a number of decades due
to the lack of employment opportunities locally.
Last July, Professors Cerejeira and CarballoCruz from the
School of Economics and Management at the prestigious
University of Minho, published a report which
highlighted the very compelling economic, social and
demographic benefits the Mina do Barroso Project could
bring both to the local region, and to the Portuguese
economy as a whole. For example, the Professors
estimated that the jobs created at the Project would
represent a 9% (17% including contract workers)
increase in the number of private sector jobs in the
Boticas Municipality. The study also calculated that the
Municipality would see a 133% increase in its annual tax
revenues once the project was in operation, excluding
any further income it could receive through sharing in
the Government’s 3% royalty on revenues from the
Project. Beyond highlighting the compelling economic
benefits for the local authorities, the Professors also
made recommendations to the national and local
authorities in Portugal, the European Commission, and
ourselves regarding the opportunity presented by the
Project and how these benefits could best be shared
with local stakeholders.
We have taken these ideas on board and combined them
with our own analysis and input from other stakeholders
and produced our Benefit Sharing Plan and Good
Neighbour Plan, which were included as part of our
EIA submission. We believe these two plans, more
details of which can be found in the Corporate
Social Responsibility section, represent an excellent
opportunity for the local communities, local businesses
and local institutions to share in the long term social and
economic opportunity that the Project represents. As
our Chairman has said, we want the Mina do Barroso
Project, Savannah and its current and future staff to
become valued members of the local community.
Looking east across the Grandao orebody:
Source: Company
10
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 11
CHIEF EXECUTIVE’S REPORT
Looking at practical activities on the Project during the
remainder of the year; the public consultation stage of
the EIA approval process is due to finish in midJuly.
Assuming, the remaining parts of the review run as
expected, we hope that APA will be in a position to issue
the ‘Environmental Impact Declaration’ or ‘DIA’ later this
summer. This will not complete the EIA process, but will
be a defining point in the Project’s overall approval.
While that process continues, we will refocus our efforts
on the DFS, including the ongoing metallurgical work in
Australia which returned some very encouraging results
recently around use of Dense Media Separation. Some
inputs from the finalised EIA as well as access to the field
for resource/reserve and geotechnical drilling are
required for completion of the DFS. Assuming these
factors go in our favour, and contractor availability is also
good, we hope to complete the DFS by year end, but as
we highlighted in the April placing this will be subject to
any further COVID or EIA related aspects.
As I have said, we also expect to advance potential
commercial agreements so that we can provide clarity
about our future revenue streams to project finance
providers and other potential providers of construction
finance when we move to that stage in the process next
year. With that stage in mind, it is also the right time to
start adding to our project team at all levels, including
those experienced at managing project construction
processes in Portugal.
We will also initiate studies on enhancing the Project’s
ESG credentials and further reducing
its carbon
footprint. This will include evaluating the use of an
electric mining fleet, and we have already entered
discussions with several new and established equipment
providers. We will also evaluate powering the project
solely with renewable power, potentially from new or
existing locally dedicated renewable sources.
No doubt Mina do Barroso is going to keep us extremely
busy in the remainder of 2021 and beyond, it is our
flagship asset and our best opportunity to become cash
generative. It also has significant exploration upside.
However, it should not be our sole focus in the European
lithium sector. Such is the opportunity now that we
should be looking to increase our exposure to this sector
to generate more shareholder value and a pipeline of
projects which will help to maintain Savannah as a major
player in the European lithium space for a long time to
come. To this end, a portion of the funds we raised
recently are to be dedicated to growing our lithium
business, primarily in the Iberian Peninsula. We are
lithium
the Portuguese Government’s
awaiting
exploration tender and intend to be very active in that
process once it is initiated. We are also looking at other
earlystage opportunities, including across the border
in Spain.
Savannah will evaluate the use of an electric mining fleet at Mina do Barroso:
Source: Behault Mining
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
11
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 12
CHIEF EXECUTIVE’S REPORT
Sample collection taking place on the Mutamba Project, Mozambique:
Source: Company
Mozambique
As the Chairman and I have flagged, there is a strong
desire internally to give the Mutamba Project clear
direction and a new lease of life. As a significant project
it deserves greater
in the mineral sands sector
recognition in the industry and in the capital markets
than it currently receives, and our shareholders and the
project’s stakeholders also need clarity. A portion of the
funds raised recently will be used to maintain our work
on the ground whilst we, our experienced consultant,
and Rio Tinto work together to plot an appropriate
course for Mutamba. No doubt it is a valuable strategic
asset. We will look to complete our current review and
actions its findings in the remainder of the year.
Summary
The global impact of COVID19 has resulted in a year like
no other in recent times. Thanks to the highly dedicated
efforts of its staff in these difficult circumstances,
Savannah finds itself in a promising position as the world
starts its rehabilitation and longterm recovery from the
pandemic. I pass on my thanks and best wishes to all our
shareholders and stakeholders and hope that we can all
enjoy more ‘normal’ times very soon.
David Archer
Chief Executive Officer
Date: 1 June 2021
12
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 13
CORPORATE SOCIAL RESPONSIBILITY
COVID19 curtailed many of our plans for regular contact
in person with our project stakeholders but Savannah
did continue its engagement, provision of information
and support to our stakeholders via alternative channels,
while strictly observing relevant COVID19 related
protocols. We hope that in the remainder of 2021 there
will be more opportunities to engage safely in person
with our stakeholders again, but we believe that our
efforts during 2020 underlined Savannah’s continuing
presence in the communities it works alongside and our
commitment to them.
As highlighted in our Chairman’s statement, Savannah is
currently working on a comprehensive Environmental and
Social Management System. Once this is completed and
we have initiated activities designed to supplement our
projects with features that enhance their sustainability and
environmental performance, we expect to broaden and
extend this CSR section in the 2021 annual report.
Health & Safety
The Health & Safety of our staff, contractors and visitors
remains a top priority for Savannah. The Group is
pleased to report there were no Health & Safety
incidents or loss time injuries reported during 2020
across all our projects and offices (2019: 1 incident).
Portugal
Savannah remains firmly committed to engagement with
all the Project’s stakeholders in Portugal, ranging from
the Government and its agencies, through potential
industry partners and services providers, to local
administrators and local residents.
At the local level, while our Information Centre has been
closed due to COVID19 regulations, Savannah maintained
it active communication with local stakeholders. This was
done through our ongoing newsletter service and via our
project website, and was also extended to include a
comprehensive communications campaign via local radio,
local newspapers, and social media channels. We also
wrote directly to residents and businesses. In all cases,
Savannah was reiterating its commitment to the “Green &
Smart Mining” approach which will ensure Mina do
Barroso is a responsibly managed source of critical lithium
raw material for Europe, operated to minimise its impact
and maximise its economic and social benefits for the
local community and local businesses. During the year, we
were also delighted to be accepted as a member of ‘Mais
Boticas’ – the local business association.
local
Our
level communication campaign was
complemented by a series of articles and supplements
Savannah’s Green & Smart Mining approach was presented for the first time in 2020:
Source: Company
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
13
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 14
CORPORATE SOCIAL RESPONSIBILITY
in some of Portugal’s leading national newspapers,
participation in online industry events and ongoing
regular engagement with the national and municipality
administrations.
We also hosted our own webinar event, “Green and
Smart Mining: An Opportunity Called Lithium” in
December which featured speakers from academia, the
battery
industry, the engineering sector, the UK
Department of International Trade, and the European
Battery Alliance. We also maintained our sponsorship of
FST Lisboa, the team of engineering students from
Instituto Técnico de Lisboa, University of Lisbon, which
competes in international Formula Student competitions
with an electric vehicle and a driverless vehicle of their
own design.
We were also given the opportunity to speak further
about the concept of Green & Smart Mining in May 2021
at a highlevel conference on “Green Mining” organised
by the Portuguese Government as part of
its
EU presidency. To an audience of national and
international government representatives, mining
companies, universities, industry associations and other
stakeholders with relevance for the mineral resources
sector, Savannah outlined
the sustainable and
responsible way in which it intends to operate Mina do
Barroso, including the innovative Benefit Sharing Plan
and Good Neighbourhood Plan it has prepared.
(“BSP”) and Good
The Benefit Sharing Plan
Neighbourhood Plan (“GNP”), which were part of the
overall EIA submission, have been designed after
extensive analysis by the Group and with input from key
local stakeholders to address a number of area specific
social, economic and environmental themes. Via the BSP
and GNP, Savannah is demonstrating its desire to become
a valued member of the local community through the
commitments it is making to operate Mina do Barroso in
a responsible and sustainable way and to share with
stakeholders the many benefits the Project can bring.
Savannah
representatives
At the heart of the BSP proposal is the creation of
a Foundation, governed by a combination of local
stakeholders,
and
independent experts, which will invest in community
focused programmes. The Foundation will receive yearly
endowments of €500,000 per annum from the income
generated at Mina do Barroso throughout the Project’s
operating life. A portion of this annual income will be set
aside by the Foundation for use following the Project’s
closure to ensure the longterm sustainability of the
Foundation’s
community
The
programmes in which the Foundation will invest will be
agreed following community input, but Savannah’s
specific
goals.
Savannah maintained its sponsorship of the Lisbon University student racing team, FST Lisboa.
Source: FST Lisboa
14
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 15
CORPORATE SOCIAL RESPONSIBILITY
initial proposals cover a diverse use of funds including
enhancing elderly care services, education, arts and
leisure, community transport and support for the local
fire service and local food producers.
The GNP builds on many of the same themes as the BSP
and underlines Savannah’s efforts to avoid or minimise
other impacts from the Project on local communities
and local resources, and to sharing its facilities, such as
the onsite medical facilities. It also commits Savannah
to communicating regularly and clearly with the Mina
do Barroso stakeholders about
its activities and
environmental performance on the Project, protecting
and encouraging local fauna and flora, and to donating
Project infrastructure for community use at the end of
the operating phase.
Mozambique
As in Portugal, our CSR programmes in Mozambique were
heavily impacting by COVIDrelated restrictions throughout
the year. On this front, the Group was very pleased to
donate PPE and other materials to the local authorities to
support their efforts to counter the spread of virus.
Despite the challenges, Savannah remains committed to
its various CSR programmes across agriculture, water
and sanitation provision, youth training and health in the
Inhambane province where the Mutamba project is
located. Our 3year partnership on community
programmes with the German Society for International
Collaboration came to a formal conclusion at the end of
2019, but a number of the agricultural support
programmes continued into 2020 and the facilities and
programmes which our combined efforts put in place
across vocational training, agricultural value chain
development, and provision of offgrid power continued
to bring meaningful improvements to the lives of
thousands of residents. We were particularly pleased by
the news that the Mozambiquan authorities are
planning to use the vocational training centre and
programmes we helped to create in Jangamo as a
template for similar projects in other provinces.
The fiveyear “IWAMAMBA” project which Savannah
joined last year with six other national and international
groups including government agencies, NGOs and
private sector entities was also heavily impacted by
COVIDrelated restrictions. However, a short time ago
we were informed that the project will now move ahead
as planned. In the meantime, some progress was made
with developing collaborative models and sharing the
information necessary for the design of further
community programmes in the Mutamba river basin.
The Mozambican authorities are very grateful for the support provided to date and keen to continue the good
collaboration with the Mutamba project.
Source: Company
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
15
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 16
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 2020 Annual Report, which are incorporated by reference
into the Group’s Strategic Report.
Principal Activities, Fair Review of the Business and Future Developments
The following table provides summary reviews of the principal activities of the Group in the year, financial results
and potential future developments. The comments below build on the commentary provided in the Chairman’s
Statement and Chief Executive’s Report:
Asset & location Ownership Activities undertaken
Mina do Barroso
lithium project,
Portugal
100%
• Exploration and Evaluation: The technical team undertook a wide
variety of work during the year despite the impact of COVID19
related restrictions. On site programmes were limited but included
mapping and rock chip sampling as well as a number of studies on
environmental parameters which were required for the EIA
submissions (see below). A bulk sample was also shipped for
conversion into concentrate as part of the ongoing EU sponsored
‘LiRef’ programme. Desktop work included trade off studies and
mining optimization exercises, a trial of a potential optical sorting
process, metallurgical test work examining a broad range of
reagents for mica separation and flotation and potential DMS
optimisation. Mina do Barroso concentrate also performed well in
tests replicating two of the key steps undertaken in the production
of lithium battery chemicals (as announced in July 2020). The team
also spent time identifying future exploration targets in the region.
• Definitive Feasibility Study (“DFS”): The Group and its consultants
continued to revise and refine a number of key inputs to the DFS.
The EIA process is providing key inputs for the DFS which, once
finalized, will include: JORC resource and reserve estimates; final
designs and schedules for (i) site layout, (ii) mining, (iii) processing
and (iv) storage of processed materials and (v) infrastructure;
capital and operating cost estimation; labour studies; commodity
market studies; and a project risk review. We expect the DFS to be
completed by the end of 2021, subject to further delays caused by
COVID19.
• Licencing process: The Group continued to engage with all relevant
local and central government departments, and other stakeholders
in the project licencing processes.
• Environmental Impact Assessment (“EIA”): The Group submitted
the EIA to APA, the Portuguese Environmental regulator, on 1 June
2020 along with an accompanying Mine Plan. To date in its review,
APA has made two requests for revisions to the original submission
and for additional information to be supplied. Savannah made its
first submission of additional material in November 2020 and
made its second submission in March 2021. The conformity of the
content of the EIA was declared by APA on 16 April 2021 and the
16
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 17
STRATEGIC REPORT
Asset & location Ownership Activities undertaken
public consultation period began on 22 April and is scheduled to
run until 16 July 2021. The Board remains confident that the
Environmental Impact Declaration for the Project will be made
later this year.
The EIA evaluates the project’s environmental and social impact
during
implementation, exploitation, deactivation and
its
postdeactivation phases. The outcomes of the assessment are a
set of actions to be undertaken throughout all the operating
phases of the project to minimise its impact.
• Community Engagement: To observe COVIDrelated restrictions &
guidance, the Group adapted its active community engagement
plan during 2020, reducing direct contact with the local
communities in favour of communication through indirect
channels such as newsletters, social media, and via local TV and
radio. The Group believes that with considerate and intelligent
management, the development of the Mina do Barroso project has
the potential to provide multiple longterm benefits for the area.
Further details on our community engagement activities can be
found in the Community Social Responsibility section.
• SocioEconomic Study: The Group commissioned Professors Joao
Cerejeira and Francisco CarballoCruz from the School of
Economics & Management at the University of Minho to examine
the potential socioeconomic impact of developing the Mina do
Barroso Project. The results and conclusions from the study were
released to the market in July 2020, and included the professors’
estimates that the project could contribute €1.2bn to Portugal’s
Gross Output over its life (based on the 2018 Scoping Study
assumptions), support nearly 1,500 direct and indirect jobs per
annum during its operating phase and increase the annual income
of the Boticas Municipality by 133% through taxes and royalty
payments. Overall, the Professors concluded that the Project could
provide a significant economic boost to the local area and
stimulate the development of downstream lithium chemical and
battery facilities in Portugal.
• Partnership with EU’s EIT InnoEnergy: In May 2020 Savannah
announced that it had entered a ‘Added Value Services Agreement’
with EIT InnoEnergy, the EUbacked entity responsible for the
Business Investment Platform of the European Battery Alliance.
Under the Agreement, EIT InnoEnergy tasks include introducing
SAV to potential customers for its lithium products, strategic
investors and project financiers, and technology partners.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
17
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 18
STRATEGIC REPORT
Asset & location Ownership Activities undertaken
• Commercial discussions: During 2020, Savannah continued to
advance its discussions with multiple parties both around
spodumene offtake and investment in the Project itself. This
resulted in the nonbinding Heads of Agreement announcement
with Galp in January 2021 regarding an offtake agreement for up
to 100,000tpa of spodumene concentrate and a US$6.4m
investment in the Project for a 10% stake. The HoA expired on
31 May 2021 and discussions in relation to a strategic investment
and offtake agreement will continue outside of the exclusive terms
of the HoA.
Mutamba Heavy
Mineral Sands,
Mozambique
20% of
consortium with
Rio Tinto
• Licencing Process: In January 2020, the Consortium was pleased
to be awarded the last (9228C) of the three key Mining Licences
(alongside 9229C and 9735C) which cover the resourcebearing
deposits on the project. The Licences are all valid for an initial
25year period with the potential to be extended by a further
25 years if required. The application for the Chilubane concession
(9230C), to the south of the main project area, remains under
consideration by the authorities. The Group’s incountry team is
now working to make sure the ongoing obligations associated with
the licences are met. This includes completing land access studies
and agreements, and EIAs for each of the licences.
• In October 2020, Savannah announced that it had appointed
Farview Solutions, led by mineral sands industry expert Bruce
Griffin as an adviser to the Group on development strategies and
corporate structures to maximise Mutamba’s potential and
valuation. Savannah is working with Farview Solutions to not only
identify the best development strategy for the project from a
technical and economic perspective, but also to potentially create
a commercial and corporate structure around the project which
allows its market value to be properly recognised.
• PreFeasibility Study (“PFS”): The impact of COVID19 related
restrictions has meant that on site programmes were limited.
However, once completed the technical appraisal work currently
being conducted by TZMI and Farview Solutions can be fed into
the project PFS. The work being done by Savannah’s team on the
licence obligations, including the EIAs, will be critical for the
project’s overall approval and eventual development.
• Community Engagement: Observing COVIDrelated restrictions,
the Group continued with its community engagement plans.
Further details of our activities can be found in the Community
Social Responsibility section.
18
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 19
STRATEGIC REPORT
Asset & location Ownership Activities undertaken
Block 4 & 5
Copper projects,
Oman
51% of Al Thuraya
LLC (Block 4);
65% of Al Fairuz
Mining (Block 5)
• Strategic Review: The Group concluded the strategic review of its
options around ongoing involvement with these joint venture
copper projects in Oman and announced in September 2020 that
it intended to divest its shareholdings to ASXlisted, Force
Commodities (“Force”).
• Divestment to Force Commodities: The key terms of the
transaction were:
o
50,000,000 new ordinary shares issued by Force to Savannah
(deemed issue price of 1 cent per Force share)
o
Preferential payment of AUD$3,500,000 of an existing loan
from cash flow from production on Block 5
o
Payment of a 1.0% net smelter royalty on future metal sales
from Block 4 and/or Block 5
The transaction was completed in October 2020 (Note 24).
Fair review of
business
to £8,325,758
Income amounts
• The loss of the Group as set out on the Consolidated Statement of
Comprehensive
(2019:
£3,801,926), of which £2,988,663 (2019: £3,633,672) was related
to Administrative Expenses and £5,401,176 (2019: £227,672) was
related to Discontinued Operations, including an impairment of
Exploration & Evaluation assets amounting to £5,205,622. During
2020 the Group invested £1,565,700 (2019: £3,894,826) on
mineral exploration and evaluation on the licences it owns and
operates, this is capitalised as an intangible asset as set out in
Notes 8 and 24 in the Financial Statements. The Group finished the
year with £2,000,209 in Cash and Cash Equivalents.
• A review of the Group’s prospects is included in the Chairman’s
Statement and the Chief Executive’s Report.
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:
Natural Resource Project Development & Construction Risk
There can be no guarantee that mineral exploration and evaluation programmes will result in the delineation of a
commercially viable project. However, to reduce this risk, the Group is focusing its activity primarily on brownfield
locations, previously delineated resources or established exploration targets. For example, the Mina do Barroso
project in Portugal already has a granted Mining Lease following exploration work done by previous owners, and
the areas covered by the Consortium with Rio Tinto in Mozambique were subject to exploration prior to our
involvement.
When a commercially viable project is delineated, the Group will then be exposed to construction and project
delivery risk factors. These risk factors will include: project financing (see Future Funding Requirements section
below); licence and permitting (see Licence and Title Risk section below); key person (see Attraction and Retention
of Key People section below); and contractor and contract fulfilment/cost overrun. Risk relating to the main project
contractors will be mitigated by comprehensive tendering and due diligence processes being performed to identify
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
19
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 20
STRATEGIC REPORT
competent and financially robust service providers. Contract fulfilment and cost management will be mitigated by
structuring of contracts to include adequate penalty and incentive clauses.
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 adopted a
remuneration policy aimed at rewarding performance, encouraging retention of key staff and aligning their interests
with those of shareholders.
Future Funding Requirements
The Group has an ongoing requirement to fund its exploration and mine development activities and will need to obtain
additional finance to execute its plans. Potential sources of finance include the established debt and equity capital
markets (which themselves may be impacted by macroeconomic, political or environmental trends), offtake or other
industrial partners which could provide prepayment and working capital facilities in exchange for long term supply
contracts, commodity based royalty and stream finance groups which can also provide prepayments in exchange for
exposure to future revenue or production streams, major suppliers, and grants or other facilities from government or
other centralised bodies (e.g. EU which is focusing particularly on the clean energy revolution the Mina do Barroso
project helps to underpin). Finance could also be raised through the sale of a stake in a project, or through the sale of
other assets owned by the Group. 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 focused
on areas of greatest development potential. Overheads and administration costs are carefully managed.
Country Risk
A greater or lesser degree of sovereign and political risk exists in all countries. At the reporting date, the Group
carried out a combination of exploration and mine development work in Portugal and Mozambique. 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 prioritises local incountry employment and
maintains working relationships at all levels with government, administrative bodies, local communities and other
stakeholders. The Board actively monitors relevant political and regulatory developments.
Licence and Title Risk
The granting, maintaining and renewal of the appropriate licence or licence equivalent is essential to the Group’s
exploration, mineral development and mining activities in all the countries in which it operates, and is usually at
the discretion of the relevant government authority. The Group seeks to ensure that its activities are always in
compliance with the relevant licences and associated standards, laws and regulations and will attempt to respond
in a timely manner to any changes in licence regulations. The costs associated with maintaining and renewing
licences and complying with all related licence requirements, together with delays experienced in the issuance of
licences or conversion of exploration licences into mining licences, may have a financial impact on the Group through
additional costs or extensions to work programmes. 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 each of Portugal and Mozambique.
Social Licence Risk
In parallel with obtaining the necessary licences and permits to operate from national and local administrators, natural
resource companies must also operate in a way that is acceptable to local community stakeholders and broader civil
society. Obtaining social acceptance is deemed by the industry to be the one of the most significant risk factors it
faces, and failure to achieve and maintain social acceptance could have a temporary or permanent material adverse
impact on the ability of a business to operate. The Group places great importance on its relationships with its
neighbouring communities and wider stakeholder groups and looks to mitigate ‘social licence’ risk through its proactive,
countryspecific, CSR programmes, and through its wider group policies, including those relating to corporate
governance, conduct, and reporting and communication. See Corporate Social Responsibility section for more details.
20
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 21
STRATEGIC REPORT
Environmental Impact Assessment Approval Risk
As noted in the Licence and Title Risk and Social Licence Risk sections above, the Group understands and takes
proactive steps in order to mitigate or eliminate those risks, and an intersection of these is demonstrated in the
Environmental Impact Assessment (“EIA”) approval process. Specifically, in June 2020 the Group submitted a new
and extensive EIA and Mine Plan to the Portuguese environmental regulator (“APA”), for the Mina do Barroso
project as part of the overall licencing process. APA subsequently declared the EIA to be in conformity with its
requirements for the content of the EIA on 16 April 2021, with the public consultation phase of the process then
began on 22 April 2021 and is due to close on 16 July 2021. Results from the public consultation and APA’s Evaluation
Committee’s review will then form the basis for the Evaluation Committee’s “Final Technical Statement” which will
allow APA to prepare the contents of the Environmental Impact Declaration (“DIA”) and award the Project its DIA,
should this be the decision. Assuming there were no statutory delays, Savannah was expecting to receive the DIA
during August 2021, however the extension to the public consultation is expected to impact this. The Group’s
innovative Benefit Sharing Plan (“BSP”) and Good Neighbourhood Plan (“GNP”) were part of the overall
EIA submission. Both plans have been designed after extensive analysis by the Group and with input from key local
stakeholders to address a number of area specific social, economic and environmental themes. Via the BSP and
GNP, Savannah is demonstrating its desire to become a valued member of the local community through the
commitments it is making to operate Mina do Barroso in a responsible and sustainable way and to share with
stakeholders the many benefits the Project can bring.
Commodity Price Risk
The Group’s primarily commodity focus is lithium and mineral sands and the price movements in these commodities
can be volatile. This volatility can be caused by numerous factors beyond the Group’s control. A sustained period
of significant price volatility has the potential to adversely affect the Group operations. Commodities risk is currently
mitigated by the Group having a diverse portfolio of projects.
Assuming all previously highlighted development and construction related risks have been mitigated and production
is established at one or more of our projects, specific commodity price risk may be more actively managed. This
could be achieved through the use of mechanisms such as longterm sales contracts incorporating minimum pricing
levels or hedging strategies. In the case of the Mina do Barroso project, the spodumene lithium and its coproducts
are not currently exchange traded commodities and this makes entering into offtake agreements as part of the
project financing an attractive option.
Coronavirus Pandemic Risk
On 11 March 2020 the World Health Organisation (“WHO”) declared the worldwide COVID19 outbreak as a
“pandemic”. The subsequent impact of COVID on most countries and economies has been very significant with the
WHO reporting in early February 2021 more than 100 million cases and more than 2 million fatalities had been
confirmed worldwide since the virus first appeared. From late 2020, the rapid approval and distribution of multiple
vaccines is expected to offer long term protection and a basis for social and economic recovery from the impacts
of the virus. However, COVID remains a significant risk, and it is expected to continue to impact all aspects of society
in the short to medium term. The fastchanging nature of the pandemic, combined with governments’ resulting
responses to it, are expected to continue to have an impact on the Group’s day to day operations (e.g. ability to
perform fieldwork) and potentially its’ financial outlook (e.g. in the event of a global depression impacting demand
of commodities), however indications from the European Community and governments is that funds designed to
generate economic recovery will be targeted at projects which are to have a positive impact on climate goals, such
as the Mina do Barroso project. The situation will remain under close review and appropriate actions taken.
Analysis of the Development and Performance of the Business
This information is contained in the Chairman’s Statement, and the Chief Executive’s Report.
Analysis of the Position of the Business
This information is contained in the Chairman’s Statement, and the Chief Executive’s Report.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
21
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 22
STRATEGIC REPORT
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.
Analysis Using Key Financial Performance Indicators and Milestones
KPIs Description Performance
Cash balance (for
exploration,
development and
going concern
purposes)
Cash balance available to
continue with the activity
of the Group.
Subscription and
placing of shares
To continue with its
operating activities as an
active and growing
mineral development
group, the Group has
raised funds from the
market.
Share price
The price reflects the
value of the Group as
determined by the free
trading of its ordinary
shares on public stock
exchanges such as the
AIM.
At the reporting date the Group’s cash balance was £2.0m
(2019: £3.5m). In common with many mineral exploration
companies, the Company raised equity funds for its activities.
Following the receipt of the Placing and Subscription proceeds
the Group had a proforma cash balance of £10.6m at 30 April
2021. The Directors have reviewed the cashflow projection for
the Group and consider that it has sufficient ability to meet its
financial commitments for at least 12 months and that it is
appropriate to prepare the Financial Statements on a going
concern basis.
During 2020 the Company raised gross cash proceeds of
£2.3m (2019: £5.0m) via the issuance of ordinary shares in
relation to an oversubscribed equity fundraise.
Considering the progress being made at the time of the
£2.3m fundraise in respect of commercial negotiations
around the Mina do Barroso project, Management believed
that more significant finance could be secured alongside a
commercial agreement, so recommended to the Board that
only a relatively modest sum was required to provide short
term working capital ahead of a commercial agreement
being concluded.
Having opened the year at 2.25p the share price initially
improved to highs in January and February of 2.85p. As the
rapid spread of COVID around the world sent markets in
freefall, Savannah’s share price fell to an (alltime) low of
0.85p on 17 March. As markets subsequently stabilised and
began to adapt to the conditions created by the pandemic,
Savannah’s share price recovered, passing January’s and
February’s previous highs to reach 3.0p in late May. A
subsequent easing in the price during June, saw the price
range bound between 1.83p and 2.35p until midOctober
when the price moved back to 3.0p. A subsequent return to
a trading range of 2.32.4p ended in early December when
rising lithium prices and improved sentiment towards the
sector lifted the price rapidly to close the year at a high of
4.0p, equating to an overall increase of 78% (2019: 57%) in
the year. A limited amount of funds were raised in
September 2020 at 1.8p (2019: 2.0p) in an oversubscribed
and scaled back fundraise, reflecting the Group’s positive
expectations about subsequent positive progression.
22
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 23
STRATEGIC REPORT
KPIs Description Performance
Investment in
Exploration &
Evaluation Assets
(“E&E Assets”) and
Property, Plant and
Equipment (“PPE”)
As an active and
expanding mine
development group, the
investment in E&E Assets
and PPE Assets show the
volume of activity which is
adding value.
During 2020 the Group continued its investment in
exploration activity, but with field work limited by COVID
restrictions the commitment was reduced yearonyear by
approximately 59% with additions in E&E Assets of only
£1.6m (2019: £3.9m). As in 2019, there was no significant
equipment purchasing required during the year with PPE
investment of just £0.02m (2019: £0.02m).
Analysis Using Other Key Performance Indicators and Milestones
KPIs Description Performance
Project pipeline
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.
Mining Lease
Applications
As a mine development
group the grant of mining
leases as a precursor to
commencement of
production is a significant
milestone.
impacting on global
In recent years there has been (and continues to be) an
increase in the importance of the lithiumion battery
markets,
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
(subsequently relinquished). Following the acquisition of
the Mina do Barroso lithium project in the north of Portugal
in 2017 (100% ownership achieved in 2019), the Group has
the potential to become the first significant lithium
spodumene producer in Europe. As the Group moves Mina
do Barroso towards production it plans to further develop
its lithium business in the Iberian Peninsula and has been
assessing potential lithium exploration targets accordingly.
Portugal:
In June 2020, the Group submitted a new Environmental
Impact Assessment and Mine Plan to APA, the Portuguese
environmental regulator, for the Mina do Barroso project as
part of the overall licencing process for the project. The
conformity of the content of the EIA was declared by APA
on 16 April 2021 and the public consultation period began
on 22 April and is scheduled to run until 16 July 2021.
Mozambique:
In January 2020, the Consortium was pleased to be awarded
the last (9228C) of the three key Mining Licences (alongside
9229C and 9735C) which cover the resourcebearing
deposits on the project. The Licences are all valid for an
initial 25year period with the potential to be extended by
a further 25 years if required. The application for the
Chilubane concession (9230C), to the south of the main
project area, remains under consideration by the
authorities. The Group’s incountry team is now working to
make sure the ongoing obligations associated with the
licences are met.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
23
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 24
STRATEGIC REPORT
KPIs Description Performance
Results in mineral
resources
As a mine development
group the report of
satisfactory mineral
resource results is a key
indicator of the potential
of the Group and its
projects.
Portugal:
There was no update to the 2019 JORC resource estimates
made in 2020. Hence the JORC resource estimates remained
at:
• Lithium: Measured resources of 6.6Mt @ at 1.1% Li2O;
Indicated resources of 8.4Mt @ at 1.0% Li2O; and
Inferred resources of 12.0Mt @ at 1.1% Li2O for a total
of 27.0Mt at 1.06% Li2O containing 285,900t of Li2O. In
addition to the JORC resource estimate, the Exploration
Target1 also remained unchanged from 2019 at
11.019.0Mt at 1.0%1.2% Li2O.
• Coproducts
(Grandao deposit only): Measured
resources of 7.1Mt at 32.6% quartz and 42.8% feldspar,
Indicated resources of 6.3Mt at 34.6% quartz and 42.6%
feldspar; and Inferred resources of 1.0Mt at 30.9%
quartz and 40.3% feldspar for a total resource of 14.4Mt
at 33.4% quartz and 42.6% feldspar contained 4.79Mt
of quartz and 6.11Mt of feldspar.
Mozambique:
There was no update to the 2017 JORC resource estimate
on the Mutamba JV during the year. Hence the JORC
resource estimate remained at:
• Indicated resource of 1.78 billion tonnes @ 3.8% Heavy
Minerals (“HM”); Inferred resources of 2.57 billion
tonnes @ 4.0% HM for a total resource of 4.4 billion
tonnes at 3.9% HM (ilmenite represents 60% of the total
HM contained)
Economic Studies
Satisfactory completion of
economic studies is a key
indicator of the viability of
the Group’s mine
development projects.
Mina do Barroso, Portugal:
Fieldwork was limited during the year due to COVID
restrictions, but work on elements of the Definitive
Feasibility Study (“DFS”) did continue throughout 2020. This
included: trade off studies; mining optimization exercises;
metallurgical test work examining a broad range of reagents
for mica separation and flotation, and potential DMS
optimisation. Work completed for the DFS up to the end of
May 2020 on pit design, mining rates, project layout, and
scheduling was used as a basis for the Mine Plan submitted
to APA along with the EIA.
Mutamba, Mozambique:
In October 2020, Savannah announced that
it had
appointed Farview Solutions as an adviser to the Group in
relation to Mutamba. The first phase of this work has
focused on the potential development strategies for the
1 Cautionary Statement: The potential quantity and grade of the Additional Resource Targets is conceptual in nature, there has been insufficient prospecting work to estimate
a mineral resource and it is uncertain if further prospecting will result in defining a mineral resource.
24
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 25
STRATEGIC REPORT
KPIs Description Performance
project with TZ Minerals International Pty. Ltd. (“TZMI”)
commissioned to produce an updated ‘concept’ study for
the review process. Once completed this concept study can
be fed into the project PFS.
Section 172(1) Statement
The following disclosure describes how the directors have had regard to the matters set out in section 172(1)(a) to
(f) and forms the directors’ statement required under section 414CZA of the Companies Act 2006.
Information is presented below on a number of ‘principal decisions’ which the Board made during the course of
2020. Principal decisions are not defined in legislation, but are considered material by the Board from the
perspective of the company, impacted stakeholder group, or both.
The table below sets out our key stakeholder groups and how we engaged with them during the year:
Stakeholder Group Importance of engagement How did the Board and/or
management engage
Shareholders/Investors
A table of significant shareholders
can be found on the Report of the
Directors section and on the
company’s website.
Key metrics are:
•
•
•
Cash
Investment in Exploration &
Evaluation Assets
Share price
The company has not issued
additional investment instruments
beyond shares and sharerelated
warrants, such as corporate bonds,
and therefore has no other class of
investors.
For Savannah:
•
•
To maintain access to capital in
support of achieving the
Group’s stated business goals
To receive feedback/advice/
assistance on performance
and execution of the Group’s
business plan
For the Shareholder/Investor:
•
•
To be kept informed on the
Group’s performance, changes
to strategy and other
developments
to assist ongoing investment
decision making
Workforce
The average number of monthly
staff employed by the Group
during 2020 was 53 (2019: 64) –
see Note 3 for further details.
The Group’s day to day running
and longterm development relies
on the recruitment, retention and
incentivisation of staff, and
provision of a safe working
environment
The key means of engagement
with shareholders include:
• AGM (held online in 2020)
Investor roadshows (held
•
online in 2020)
•
• Ad hoc meetings in relation to
key news/questions (largely
held online in 2020)
Social media including Twitter
and LinkedIn
Presentations at investor
focused events (largely held
online in 2020)
•
• Attending industryrelated
conferences and events
(largely held online in 2020)
Regular video interviews with
Proactive Investors
•
• Maintenance of a corporate
website and a website for the
Mina do Barroso
The key means of engagement
with staff include:
•
•
Regular internal calls,
meetings (largely held online
in 2020) and visits to project
sites by members of the Board
and executive team (with
COVID regulations observed)
Remuneration framework
including Long Term Incentive
Plan
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
25
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 26
STRATEGIC REPORT
Stakeholder Group Importance of engagement How did the Board and/or
management engage
Full details of the Group’s CSR
activities across its businesses can
be found in the CSR section.
Community
Savannah works alongside
communities at all its project sites
and has active community
programmes underway in each
location. The Group aims to act
with integrity, transparency and
honesty in its dealings with
stakeholders and communities and
wishes for its host communities to
benefit from its projects.
For Savannah:
•
•
•
•
To ensure that Health & Safety
standards and other
regulations relating to
Savannah’s interaction with
the general public and public
services are being met
To ensure it secures and
maintains social acceptance of
its business activities among
the communities it works
alongside through effective
community engagement
programmes
To ensure that indirect
benefits from its operations
are maximised among the
local community
To receive feedback/advice/
assistance on these above
topics
For Communities:
• Opportunity to receive up to
date information on
Savannah’s business activities
and programmes relevant to
communities
To register for and to take part
in relevant community
programmes
To provide feedback on
relevant topics
•
•
26
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 27
STRATEGIC REPORT
Stakeholder Group Importance of engagement How did the Board and/or
management engage
Suppliers
Savannah requires a wide range of
services to maintain its business
activities and uses a wide range of
domestic and overseas suppliers to
meet its needs. When Savannah
moves into the development and
production phases at one or more
of its operations, supplier numbers
are expected to rise significantly
inline with the scale up of the
project concerned.
Customers
As a preproduction business,
Savannah is yet to start generating
revenue from sales of product to
customers. However, the Group
expects to supply products to a
number of industrial customers
over time, beginning with
customers buying its lithium and
coproduct concentrate products
from the Mina do Barroso project.
The Group’s engagement with
current and potential service
suppliers has been widespread
during the year. For example,
considerable time has been spent
working with existing suppliers of
goods and services to the Mina do
Barroso project, and identifying
and evaluating other groups which
may provide key contract services
during the construction and/
or production phases of the
operation. Additionally, the Group
has become a member of the local
chamber of commerce in Portugal.
Management maintained its
efforts to build relationships with
potential customers for its lithium
and coproduct concentrates from
Mina do Barroso as discussed in
the Chairman’s and CEO
statements. This culminated in the
announcement in January 2021 of
a HoA with Galp around a lithium
concentrate offtake and a project
level investment. The HoA expired
on 31 May 2021 and discussions in
relation to a strategic investment
and offtake agreement will
continue outside of the exclusive
terms of the HoA.
Under the consortium agreement
on the Mutamba mineral sands
project. Savannah’s partner,
Rio Tinto has the option to buy
100% of the project’s future
production on commercial terms.
For Savannah:
•
•
To maintain good working
relationships and credit terms
with suppliers to ensure the
timely and costeffective
delivery of services and
supplies
To aid planning for future
supply requirements and to
identify suitable suppliers
For Suppliers:
•
•
To maintain a working
relationship with its customer
and provide product
information
To identify future business
opportunities with an existing
client
For Savannah:
•
•
To identify and build
relationships with future
customers to ensure our
projects become viable
commercial businesses
To access capital for project
development either directly
from customers, or from other
investors which view the
establishment of customer
relationships as a key
derisking factor in an
investment decision
For Customers:
•
•
To build a working relationship
with a wellmanaged, long
term raw material supplier
To secure a longterm
sustainable supply of product
from a responsible producer in
markets where the outlook is
for increasing global
competition for supply, such as
lithium and mineral sands
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
27
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 28
STRATEGIC REPORT
Stakeholder Group Importance of engagement How did the Board and/or
management engage
Lenders
Savannah currently has no
corporate bonds or project finance
loans but expects project finance
to be a key part of the financing
mix for the development of its
projects, such as Mina do Barroso.
Regulators/Government
Depending on the jurisdiction,
multiple departments and
agencies of national, regional
and/or local government can be
involved in the licencing and
monitoring of mining activities.
For Savannah:
•
To identify and build
relationships with future
lenders to ensure sufficient
finance can be secured to
support project development
For Lenders:
•
To secure a lending agreement
with a listed mining company
which expects to be financing
its first mine build during 2022
For Savannah:
•
To build strong and supportive,
working relationships with all
relevant government
departments and to ensure
that the Group receives and
complies with the required
licences and authorities to
operate its projects
For governments:
•
•
To ensure that the Group is
meeting its responsibilities as
per its licences
To understand the needs of
Savannah as an operating
entity with respect to relevant
legislation
Management maintained a
dialogue with potential project
lenders in relation to Mina do
Barroso during the year.
Discussions with these groups is
expected to increase as the
project’s DFS moves towards a
conclusion as that study will be a
key part of a lending bank’s
evaluation of the project.
As outlined in the Chairman’s and
CEO’s statements, Management
has had regular interaction with
the relevant departments and
personnel in the various levels of
government in both countries
where it is has operations. This
included a site visit by the
Portuguese Secretary of State for
Energy and the Environment.
Savannah views the establishment
of active, twoway, relationships
with government stakeholders as
critical in the successful
development of its projects and in
its decisionmaking regarding the
Group’s longterm commitment to
each jurisdiction.
28
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 29
STRATEGIC REPORT
Stakeholder Group Importance of engagement How did the Board and/or
management engage
Environment
Savannah is committed to
minimising the environmental
impact of its operations through
design, monitoring, mitigation and
remediation.
For Savannah:
•
Savannah places great
emphasis on minimising the
environmental impact of its
operations and also realises
the importance placed on
good environmental
management by all project
stakeholders including
governments, communities,
customers, investors and
lenders.
In parallel with all our project
stakeholders, minimising
Savannah’s environmental impact
is one of Management’s highest
priorities, and work undertaken
across all its project sites to date
has been completed in accordance
with the relevant environmental
regulations. Having collected
baseline data and engaged with
relevant groups since 2018,
Savannah submitted the EIA for the
Mina do Barroso project in June
2020 to the Portuguese regulator,
APA. Savannah subsequently
received requests from APA for
additional information, which it
responded to accordingly.
APA subsequently declared
conformity of the EIA on
16 April 2021. The public
consultation phase of the process
then began on 22 April 2021 and is
due to close on 16 July 2021.
Principal decisions
Savannah defines principal decisions as those which are material to the Group and its key stakeholder groups
detailed above.
In making the following principal decisions during the year the Board considered the outcome based on the relevant
stakeholders as well as the need to maintain a reputation for high standards of business conduct and the need to
act fairly between the members of the Group:
Principal decision 1: COVID19 Pandemic Mitigation
With the potential impact on the global population and economy from the COVID19 pandemic rapidly becoming
apparent during late February and early March 2020, the Board took action to mitigate the risk posed by the virus
to the Group’s business, its staff and its stakeholders.
Largely acting ahead of relevant Government guidance and new legislation, had temporarily closed its London
headquarters from Monday 1 March 2020; by the end of March Savannah had temporarily closed all its offices and
arranged for all staff to work remotely; temporarily suspended all field activities; temporarily reduced the staff at
the Mutamba Project camp in Mozambique to essential personnel only; suspended all nonessential travel; and
rearranged meetings to take place via telephone, video conferencing or online where possible. In addition to the
physical actions taken to reduce the risk of infection to the Group’s staff, the Board also acted quickly to introduce
cost saving measures to reduce any financial impact which may result from the pandemic. This included: a
temporary 20% reduction in salaries for the Senior Management team and some other employees; no bonuses
paid to senior executives or employees with respect to the 2019 financial year, a temporary 20% reduction in
Directors’ fees for our two independent nonexecutive directors, reduction in third party services received or fees
paid for them.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
29
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 30
STRATEGIC REPORT
In making the decision the Board considered:
• All stakeholders: By proactively suspending in person contact and following relevant government guidance to
reduce the risk to all stakeholders (with particular consideration of staff, communities and suppliers) of
contracting and transmitting the infection. In initiating a cost saving programme, the Board also considered all
stakeholders as it helped to maintain the Group as a going concern.
•
Shareholders: By introducing cost saving measures, the Board was particularly cognisant of its shareholders by
attempting to preserve capital while maintaining key, valuing adding, work programmes. This, in turn, avoided
the need to raise additional equity, and cause significant equity dilution, at a time when COVIDrelated
uncertainty was dominating global equity capital markets and share prices, including Savannah’s which had
corrected dramatically.
During the period of the year impacted by COVID, Savannah was able to complete a number of key work
programmes including submission of the EIA for Mina do Barroso, completion of the service agreement with EIT
InnoEnergy, and advance commercial discussions. Due to the cost saving measures Savannah was able to wait until
September 2020 to raise a modest amount of equity finance at a time when market sentiment had recovered
substantially, and the placing was oversubscribed as a result.
Principal decision 2: £2.3m equity placing, September 2020
In line with forecasts, as revised following actions taken in response to the COVID19 pandemic, it was agreed that
an increase to the working capital position would be required in 3Q 2020 in order to maintain progress at Savannah’s
two development stage projects in Portugal and Mozambique and to maintain normal operations across the Group.
Given the progress being made at the time with commercial negotiations around Mina do Barroso, Management
believed that more significant finance could be secured alongside a commercial agreement, so recommended to
the Board that only a relatively modest sum was required to provide shortterm working capital ahead of a
commercial agreement being finalised in the coming months.
In consultation with Management and the Group’s capital market advisers, the Board decided that a £2m equity
fundraise should be undertaken to provide the additional, short term, working capital required. This was duly
completed and announced to the market in September with investment from new and existing shareholdings, in
an oversubscribed offering extended to £2.3m to accommodate a portion of the oversubscription.
In making the decision the Board considered:
• All stakeholders: Maintaining the Group as a going concern in the interest of all its stakeholders.
•
•
Shareholders: The impact on existing shareholders of raising additional equity was considered with the Board
weighing up the need to maintain the Group as a going concern against the resulting equity dilution. Equity
market conditions were also factored into the decisionmaking process to strike the optimum balance between
the short term capital requirements of the Group and the price at which funds could be raised, compared to
the uncertainty around quantum and price that might have prevailed later in 2020 given the persistent
uncertainty being caused by COVID, and the additional uncertainty likely around the UK’s final departure from
the EU at the end of the year. The fundraising was also seen as an opportunity to attract new institutional equity
investors into the Group which was considered a benefit to the Group’s longterm financial stability.
Shareholders: The longterm value potential of Mina do Barroso: Mina do Barroso is the Group’s flagship asset
and provides Savannah with its best opportunity to become cash flow positive in the near term. Completing
the appraisal stage of the project and moving it through environmental licencing, financing and construction
phases and into production should accrete significant value for the Group. The fundraise was deemed to be
critical in helping the Group achieve this longterm goal. For the first time, the Company adopted the “advanced
book build” methodology in order to give existing retail investors the opportunity to participate in the fundraise
alongside institutional investors.
30
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 31
STRATEGIC REPORT
•
Employees and Suppliers: The Board also concluded that securing more working capital would help the Group
to retain key staff and suppliers who can help the Group achieve its business objectives.
Principal decision 3: Divestment of the Group’s holdings in copper projects in Oman
The Board took the decision to initiate a Strategic Review of Savannah’s business activities in Oman in the Spring
of 2019. At the time of the decision, the Group had spent almost 3 years awaiting the award of Mining Licences
from the Public Authority of Mining and these projects had become a lower priority for Savannah due to the superior
riskreward profile offered by Mina do Barroso and Mutamba projects.
During the review, the Board and Management considered a number of options for Savannah’s future involvement
with its two joint ventures projects and engaged in discussions with multiple groups around a potential sale of the
assets. One of the groups Savannah engaged with was the recently appointed new management team of ASXlisted
exploration and development company, Force Commodities (“Force”). In consultation with Management and the
Group’s capital market advisers, the Board decided that a divestment to Force via a transaction which would provide
Savannah with a shareholding in Force and exposure to future cash flow from the projects represented the best
option available. The transaction was announced in September 2020 and completed in November 2020.
In making the decision the Board considered:
•
•
•
Shareholders: The Strategic Review was initiated as Savannah had experience long term delays with licence
awards in Oman and the assets had become lower priority to the Group given the superior riskreward profile
of Mina do Barroso and Mutamba projects. The structure of the divestment meant a greater proportion of
internal resources could be committed to advancing the higher priority projects for the benefit of shareholders,
while retaining some riskfree, expenditurefree, long term, exposure to the Oman projects through the
shareholding in Force.
Employees: The Board was mindful that any changes to Savannah’s business in Oman, including any potential
change in ownership or cessation of work, would have a direct impact on the small number of employees in
the country. A condition of the transaction was that all staff in Oman were retained by Force.
Project stakeholders: Over the years in which Savannah has been involved in its two joint venture projects in
Oman, it has built relationships with a wide range of stakeholders ranging from its joint venture partners and
government ministries and agencies, to members of the public living near to the projects. During its negotiations
with Force, Savannah was given reassurances that Force would act with due consideration and responsibility
towards the project stakeholders once it had acquired Savannah’s shareholdings in the project, and
amendments were made to existing joint venture agreements to underpin this.
Principal decision 4: Added Value Services Agreement with EIT InnoEnergy
In May 2020, Savannah announced that it has entered into an ‘Added Value Services Agreement’ with EIT
InnoEnergy, as part of the Business Investment Platform (“BIP”) created in 2019 to accelerate the development of
a European battery industry. EIT InnoEnergy, part of EU body, The European Institute of Innovation & Technology
(“EIT”), is the innovation engine for sustainable energy across Europe and is responsible for the EBA250 initiative,
the industrial development activities of the European Battery Alliance (“EBA”).
To further accelerate transactions in the European battery value chain, EIT InnoEnergy codesigned the BIP with
industrial players and public and private financial institutions from the EBA’s expanding network. The ultimate goal
is to facilitate an additional flow of €70 billion of investment into EU based batteryrelated projects required to
meet peak European demand by 2023. Through the Added Value Services Agreement (the “Agreement”), EIT
InnoEnergy will assist Savannah in securing finance to develop the Mina do Barroso project; work with Savannah
to apply the most innovative and sustainable stateofthe art technologies and processes in the Project; introduce
potential customers for the Project’s lithium; introduce potential strategic Project investors and; provide market
intelligence and wider strategic support. In authorizing this Agreement the board considered the following matters:
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
31
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp01-pp32.qxp 03/06/2021 23:00 Page 32
STRATEGIC REPORT
•
Shareholders: EIT InnoEnergy is able to offer significant assistance to Savannah in its efforts to advance the
Mina do Barroso project by helping the Group establish relationships with potential investors, suppliers and
customers as well as supporting its interactions with other stakeholders including government agencies, the
EU and communities. This is seen as a benefit to shareholders as it reduces the execution risk associated with
the project’s development.
• Other stakeholders: EIT InnoEnergy carried out a comprehensive appraisal of Savannah and the Mina do Barroso
project before offering to work with the Group as part of its management of the BIP. Savannah’s agreement
with EIT InnoEnergy can therefore be seen by interested parties as an endorsement for Savannah, its working
practices, and the Mina do Barroso project from an entity directly linked to the European Union.
Principal decision 5: Appointment of Farview Solutions as Strategic Adviser on the Mutamba Mineral Sands
Project
Mutamba is one of the largest undeveloped mineral sands projects worldwide, and boasts mining major, Rio Tinto,
as joint venture partner and product off taker. However, during the year, the Board became increasingly aware,
that this potential is not fully appreciated by the capital markets. Consequently, Savannah announced in October
2020 that it had appointed Farview Solutions as strategic adviser to the Company in relation to Mutamba. There
are two parts to Farview’s brief; (i) to identify the best development strategy for the project from both a technical
and economic perspective, and (ii) to identify a commercial and corporate structure around the project which allows
its market value to be properly recognized. Savannah hopes to significantly advance this exercise during 2021. In
appointing Farview Solutions, the Board considered the following matters:
•
•
•
Shareholders: Through the input of Farview in developing an appropriate strategy, Savannah hopes to crystallise
more of Mutamba’s value for its shareholders.
Employees: By clarifying the development strategy for Mutamba and advancing the project to production the
Group expects to create a long term employment opportunity in Mozambique for its current and future staff
members.
Project stakeholders: Development of the Mutamba project into a long term mineral sands production operation
could provide significant socioeconomic benefit for the communities living in and around the project in the
Gaza and Inhambane provinces of southern Mozambique, and substantial income for the local and national
administration through taxation and other charges. The project would also provide a long term, responsibly
managed, source of titanium minerals and zircon for international customers.
Approval of the Board
This Strategic Report contains certain forwardlooking statements that are subject to the usual risk factors and
uncertainties associated with mineral development businesses. 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 forwardlooking statements.
On behalf of the Board:
David Archer
Chief Executive Officer
Date: 1 June 2021
32
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp33-pp43.qxp 03/06/2021 23:00 Page 33
PROJECT OVERVIEWS
The Mina do Barroso Lithium project, Portugal
Located less than 2 hours’ drive northeast of the city of Porto, the Mina do Barroso project covers an area of 8.36km2
in the Barroso hills of northeast Portugal and consists of the C100 Mining Lease2 (5.42km2) and an adjacent, three
block, Mining Lease Application area (2.94km2). Through Savannah’s successful exploration programme, Mina do
Barroso has been defined as the most significant source of spodumene lithium in western Europe. In recent years,
spodumene lithium deposits have surpassed brine deposits as the major source of lithium raw material production
globally, and Savannah believes that Mina do Barroso can become an important source of this ‘conventional’ lithium
mineral for Europe’s burgeoning domestic lithium battery industry.
Savannah Resources has operated the project since May 2017 when an initial 75% stake was acquired (with all the
milestones relating to purchase completed by October 2018). Savannah became the sole owner of the project in
June 2019 following the acquisition of the residual 25% stake from the project’s minority shareholders in an allshare
transaction. June 2019 also saw the Group exercise the option it had taken in September 2018 to acquire the
adjacent three block Mining Lease Application area from the Portuguese company Aldeia & Irmão, S.A. (“Aldeia”)
following a period of technical and legal due diligence. This increased the tenement portfolio footprint by over 50%
to its current size.
Mina do Barroso location:
Western Europe’s largest spodumene lithium resource
To date Savannah’s extensive exploration programme, which includes over 31,000m of drilling, has identified
8 deposits bearing spodumene lithium mineralisation on the project. From being a ‘preresource’ project when
acquired, JORC compliant Mineral Resources have now been estimated on five of these deposits (4 on the C100
licence and 1 on Aldeia Block A) which, as of May 2019, totalled 27.0Mt at 1.06% Li2O (containing 285.9kt of Li2O
or 707kt of lithium carbonate equivalent), representing the largest spodumene lithium resource in Western Europe.
Many of the lithium deposits on the project remain open to possible extensions through further exploration and
an Exploration Target3 ranging from 1119Mt at 1.01.2% Li2O has been estimated on three of the orebodies as of
May 2019. The project currently has a combined resource and exploration target of 3848Mt at 1.0 to 1.2% Li2O
hence, Savannah believes significant exploration upside remains.
2 The existing mining lease was granted to the previous project owners in 2006 and is valid for 30 years, but will need amendment or replacement for Savannah’s proposed
mine and concentrator development.
3 Cautionary Statement: The potential quantity and grade of the Additional Resource Targets is conceptual in nature, there has been insufficient prospecting work to estimate
a mineral resource and it is uncertain if further prospecting will result in defining a mineral resource.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
33
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp33-pp43.qxp 03/06/2021 23:00 Page 34
PROJECT OVERVIEWS
Mina do Barroso Lithium JORC Mineral Resource Estimate & Exploration Target4:
JORC Mineral Resource Estimate (May 2019, 0.5% Li2O cutoff)
Deposit
Grandao
Resource
Category
Measured
Indicated
Inferred
Tonnes
(Mt)
6.6
6.4
4.8
Subtotal
17.7
Reservatorio
Measured
Indicated
Inferred
Subtotal
Pinheiro
Measured
NOA
Indicated
Inferred
Subtotal
Measured
Indicated
Inferred
Subtotal
Aldeia
Measured
Indicated
Inferred
Subtotal
All Deposits
Measured
Indicated
Inferred
Grand Total
–
–
3.2
3.2
–
–
2.0
2.0
–
0.4
0.3
0.6
–
1.6
1.8
3.5
6.6
8.4
12.0
27.0
Rounding discrepancies may occur
Source: May 2019 JORC Resource update RNS
Li2O grade (%)
Fe2O3 grade (%)
Li2O
contained (t)
1.1
1.0
1.0
1.04
–
–
1.0
1.0
–
–
1.0
1.0
–
1.2
1.0
1.1
–
1.3
1.3
1.3
1.1
1.0
1.1
1.06
0.7
0.8
0.7
0.7
–
–
1.4
1.4
–
–
0.7
0.7
–
0.8
0.9
0.9
–
0.5
0.4
0.4
0.7
0.7
0.9
0.8
71,600
65,300
48,900
181,800
–
–
32,000
32,000
–
–
20,000
20,000
–
4,200
2,900
7,100
–
21,300
23,700
45,000
71,600
86,700
127,600
285,900
4 Cautionary Statement: The potential quantity and grade of the Additional Resource Targets is conceptual in nature, there has been insufficient prospecting work to estimate
a mineral resource and it is uncertain if further prospecting will result in defining a mineral resource.
34
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp33-pp43.qxp 03/06/2021 23:00 Page 35
PROJECT OVERVIEWS
Exploration Target5 Summary (May 2019)
Deposit
Reservatorio
Grandao
Aldeia
Total
Rounding discrepancies may occur
Source: May 2019 JORC Resource update RNS
Tonnage Range (Mt)
Low
5.0
4.0
2.0
11.0
High
Li2O grade (%)
7.0
8.0
4.0
19.0
1.01.2
1.01.2
1.01.3
1.01.2
Not just a lithium project
In addition to the production of significant volumes of spodumene lithium concentrate, Mina do Barroso also has
the potential to produce larger volumes of feldspar and quartz which is in demand from the large ceramics and
glass industries in Portugal and Spain. Sales of these ‘coproducts’ would have the dual benefits of reducing the
amount of processed material which the project must store onsite and provide additional revenue which could
significantly improve the net production costs of the lithium concentrate.
During 2019 the Group estimated its first coproduct resource on the project, based only on pegmatite material
located inside the proposed Grandao pit (i.e. wholly within the existing lithium mineral resource model). Hence,
this resource is expected to increase further once similar estimates are performed on the NOA, Reservatorio,
Pinheiro and Aldeia deposits. Savannah also completed marketing and test work studies during 2019 to confirm
the coproducts’ suitability for various applications within the ceramic and glass industries.
Mina do Barroso Coproduct JORC Mineral Resource Estimate:
JORC Mineral Resource Estimate (September 2019, no lithium cutoff grade applied)
Resource Tonnes Quartz Feldspar
Deposit Category (Mt) Grade (%) Mt Grade (%) Mt
Grandao Measured 7.1 32.6 2.32 42.8 3.05
Indicated 6.3 34.6 2.17 42.6 2.67
Inferred 1.0 30.9 0.30 40.3 0.39
Subtotal 14.4 33.4 4.79 42.6 6.11
Rounding discrepancies may occur
Source: September 2019 JORC Resource update RNS
5 Cautionary Statement: The potential quantity and grade of the Additional Resource Targets is conceptual in nature, there has been insufficient prospecting work to estimate
a mineral resource and it is uncertain if further prospecting will result in defining a mineral resource.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
35
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp33-pp43.qxp 03/06/2021 23:00 Page 36
PROJECT OVERVIEWS
This independent work, completed on separate quartz and feldspar samples and a mixed bulk tail product,
confirmed that all three materials were suitable for commercial use. Specifically, the test work showed that both
the separate quartz and feldspar products could be used in a variety of applications in both industries such as hotel
ware quality ceramics and container glass while the mixed bulk tail product could be used in ceramic applications,
such as vitrification and bone china. Encouragingly, the marketing study confirmed that prices for all the products
could be potentially higher (in the range of US$40100/t) than had been assumed in the 2018 Scoping Study
summarised below. Furthermore, production of the bulk material would also potentially eliminate approximately
US$15m from the estimated processing plant capex that would otherwise be required to produce separate quartz
and feldspar coproducts.
Positive Scoping Study completed in 2018
Based on the rapid delineation of an initial JORC Resource estimate and Exploration Target during late 2017 and
early 2018, Savannah commissioned a Scoping Study on the project. This was completed in June 2018 and reported
very positive project economics based on a 1.3Mtpa operation producing an average of 175ktpa of spodumene
concentrate and associated coproducts over an 11year life.
Definitive Feasibility Study and Environmental Impact Assessment
As a result of the positive Scoping study, Savannah commissioned a Definitive Feasibility study (DFS) and associated
Environmental Impact Assessment (EIA)6 study on the project in the second half of 2018.
The EIA study, which identifies all the potential environmental and social impacts the expanded project may have,
and details how Savannah would monitor and minimise these, was submitted along with a comprehensive ‘Mine
Plan’ for review and approval by the Portuguese Environmental Authority, APA in June 2020. Approval of the EIA is
a key part of the overall licensing process for the expanded project, and Savannah expects to receive the project’s
‘Environmental Declaration’ from the regulator later in 2021.
Savannah also expects the DFS to be completed this year subject to any further delays related to COVID19, and to
draw upon the latest JORC resource estimate available as a basis for the project’s maiden JORC reserve estimate
and final mine plan. To maximise the reserve tonnage, which can only be drawn from the Measured and Indicated
categories (currently 15Mt) of the JORC resource, a programme of infill drilling is planned (postponed in 2020 due
to COVID) to upgrade sections of the existing 12Mt Inferred resource. As a result of the c.90% increase in overall
resources defined since the 2018 scoping study, the DFS is considering the possibility of increasing the annual
throughput rate to 1.5Mtpa resulting in an average annual output of c.200ktpa lithium concentrate.
6 An EIA on the project was submitted and approved alongside the 2006 Mining Lease award, but a new study is required inline with Savannah’s proposed mine and
concentrator development
36
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp33-pp43.qxp 03/06/2021 23:00 Page 37
PROJECT OVERVIEWS
Mina do Barroso Project 2018 Scoping Study Key Facts:
Operating Parameters and assumptions
Mineable resource (June 2018)
14.4Mt at 1.07% Li2O. All open pit. Life of mine strip ratio
(waste: ore): 5.2: 1, years 14: 1.6:1
Initial life of mine
11 years at 1.3Mtpa throughput rate
Processing route & recovery rate
CrushgrindDense Media Separationflotation (80%
recovery)
Concentrate production & spec
175ktpa (minimum), 6% spodumene
Concentrate production as LCE/Lithium
Hydroxide Equivalent (net of assumed processing
losses in a chemical conversion plant)
~22ktpa; ~25.5ktpa. Sufficient for ~0.5M 60kWh
car battery packs per annum
Coproducts
Initial capex
Feldspar (~276ktpa), quartz (~173ktpa) for use in the
ceramics and other industries
US$109m (Additional contingency of US$24.9m, included in
financial model)
Sustaining capital & closure costs
US$17.2m
LoM C1 Cash Operating cost (US$/t conc)
Financial & economic outcomes
Pricing assumptions (Average life of mine)
US$271/t (US$210/t average in Years 14). Costs include all
mining, processing, transport, shipping/freight, corporate,
admin, marketing & royalty costs and are net of coproduct
credits (included in gross revenue).
Spodumene concentrate: US$685/t; Feldspar US$39/t;
Quartz US$33/t
Gross Revenue (LoM; Avg pa)
US$1,555m; US$140m (includes coproduct revenue)
EBITDA (LoM, Avg pa)
Pretax FCF (LoM; Avg pa)
Net FCF (LoM; Avg pa)
NPV (8% discount rate)
IRR
Payback
US$805m; US$73m
US$651m; US$59m
US$458m; US$41m
Pretax US$356m; Posttax US$241m
Pretax 63.2%; Posttax 48.6%
Pretax 1.7 years; Posttax 2.1 years
Source: June 2018 Scoping Study and subsequent company press releases
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
37
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp33-pp43.qxp 03/06/2021 23:00 Page 38
PROJECT OVERVIEWS
Developing and commercialising the project
A final investment decision on the project’s development will be taken by the company once the DFS has been
completed. Alongside receiving the necessary regulatory approvals and social acceptance of the project, Savannah
also needs to secure the capital required to fund the project’s construction. The Group expects to obtain the capital
it needs from multiple sources including the debt capital markets in the form of a project finance loan, new strategic
partners investing directly in the project, finance linked to offtake agreements for the project’s lithium concentrate,
government and/or EU grants or loans, and from the equity capital markets.
Drilling on the Pinheiro deposit at the Mina do Barroso project:
Source: Company photo
38
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp33-pp43.qxp 03/06/2021 23:00 Page 39
PROJECT OVERVIEWS
Mina do Barroso – a first for Portugal in the new lithium battery industry
Portugal is already established as Europe’s ‘largest’ lithium producer with approximately 1,200t produced in 2019.
However, all of the country’s current lithium production is used in the domestic ceramics and glassware industries,
and not in lithium battery production. Significant lithium mineralisation exists in Portugal, including at Mina do
Barroso, and in 2018 the Portuguese Government announced its ‘lithium strategy’ to support the development of
a new national manufacturing industry to service the growing lithium battery market in Europe.
As part of this strategy, the Portuguese Government has identified a number of areas prospective for lithium
mineralisation which will be made available for exploration via a public tender process. At present a strategic
environmental assessment is underway on these areas which is due to be completed in November 2021. Once that
assessment is completed, it is expected that the Government will initiate the tender process in which Savannah
plans to participate as the most advanced lithium development company in the country.
In parallel with its plans to develop its lithium mining industry the government published new legislation relating
to mineral deposits which sets more demanding standards of environmental sustainability, the sharing of economic
benefits with the populations and gives more powers to the municipalities in regards to mineral project
development. This new Regulatory Decree ensures that the exploration and use of mineral deposits can only be
developed in compliance with the principles of ‘green mining’.
Given its own ‘Green & Smart Mining’ concept designed to maximise the benefits which can flow from mineral
project development, Savannah welcomes this new legislation. The Company is already committed to developing
Mina do Barroso in a sustainable and responsible way that minimises the impact associated with the operation so
that the maximum overall environmental benefit is gained from the lithium once it is incorporated into a battery.
It also means that Savannah is dedicated to ensuring the best outcomes for the project’s stakeholders in terms of
social and economic benefits.
While large scale lithium mining alone would represent a new industry for Portugal, the government has stated
that it wants to develop a domestic lithium industry that goes beyond mining and features downstream stages such
as lithium chemical production. Hence, Mina do Barroso must be seen as part of the first phase in the development
of a much larger national concern. As a result of these objectives, the Mina do Barroso project benefits from
sustained national government support. When lithium production is achieved at Mina do Barroso, Portugal will be
placed at the centre of the new European lithium battery supply chain which the European Commission is so keen
to establish as part of its efforts to combat climate change while maintaining the region’s large automotive industry.
The transport sector is the second largest generator of emissions (CO2 equivalent) in the EU behind energy supply.
Mutamba Mineral Sands Project, Mozambique
Savannah has been active in the Mineral Sands sector (titanium minerals and zircon) in southern Mozambique since
2013 and in October 2016 completed a Consortium Agreement with Rio Tinto which combined Savannah’s Jangamo
Project with Rio Tinto’s adjacent Mutamba Project (which included three deposit areas Jangamo, Dongane and
Ravene), and its Chilubane Deposit, located 180km to the south west of the Mutamba Project. The enlarged
collective Mutamba Project, which is in the Gaza and Inhambane provinces and about 450km northeast of
Mozambique’s capital, Maputo, benefits from good infrastructure, including road, power and access to the nearby
ports of Inhambane and Maxixe approximately 40km away.
Having submitted Mining Licence applications for the project in 2018, the Consortium was pleased to be awarded
the Licences for the three concessions (9228C, 9229C and 9735C) which cover the key resourcebearing deposits
on the project during December 2019 and January 2020. The Licences are all valid for an initial 25year period with
the potential to be extended by a further 25 years if required. The application for the Chilubane concession (9230C),
which is located over 100km to the south of the main project area, remains under consideration by the authorities.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
39
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp33-pp43.qxp 03/06/2021 23:00 Page 40
PROJECT OVERVIEWS
Mining Mining
Concession No. Concession Name Area (km2) Expiry Date Status
9228C Jangamo Rio 118.1 3 Sep 2044 Licence issued
9229C Dongane 161.3 6 May 2044 Licence issued
9735C Jangamo Matilda 119.5 9 Apr 2044 Licence issued
9230C Chilubane 138.0 Under Consideration
Source: Mutamba Licencing RNS, Jan 2020
Partnered with Rio Tinto, but Savannah taking the lead
Savannah is the operator and currently holds a 20% share in the Consortium having completed a Scoping Study on
the project in 2017. The Group may increase its stake in the Consortium up to 51% by funding and completing
PreFeasibility (for an interim 35% stake) and Feasibility studies on the project. Rio Tinto contributes its existing
Mutamba camp, facilities and associated equipment, and the Consortium Agreement includes an offtake agreement
on commercial terms for the sale of 100% of production to Rio Tinto (or an affiliate).
Mutamba’s Mineral Resources: A project of global scale
The global Mineral Resource estimate for the Mutamba project (Jangamo, Dongane and Ravene) currently stands
at 4.4Bt at 3.9% total heavy minerals (“THM”) comprising both Indicated and Inferred category material and
containing ilmenite, rutile and zircon. This includes a highgrade portion of 92Mt at 6.2% THM, which was defined
at Ravene. Significant potential also remains to expand the resource beyond its current boundaries, which will be
the focus of future prospecting activities.
The Mutamba project location:
Source: Mutamba Licencing RNS, Jan 2020
40
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp33-pp43.qxp 03/06/2021 23:00 Page 41
PROJECT OVERVIEWS
Mutamba JORC Mineral Resource Estimate (May 2017):
Ilmenite
Heavy (% in Ilmenite Rutile Zircon
Resource Sand Minerals Heavy (% in (% in (% in
Deposit Category (Mt) (%) Minerals) sand) sand) sand)
Jangamo (1336L) Indicated 1,780 3.8 62 2.4 0.06 0.11
Inferred 200 3.5 63 2.2 0.03 0.11
Jangamo (3617L) Inferred 65 4.2 60 2.5 0.08 0.15
Dongane Inferred 1,400 3.8 61 2.3 0.07 0.10
Ravene Inferred 900 4.1 56 2.3 – 0.10
Total 4,400 3.9 60 2.3 0.05 0.11
Rounding discrepancies may occur
Source: Mutamba Scoping Study RNS, May 2017
Project development concept outlined by 2017 Scoping Study
The Mutamba Project has the potential for the definition of a large orebody able to sustain a significant mining
operation. The mineralisation is amenable to dry mining and dredge mining in parts, with ilmenite being the
dominant heavy mineral present. Savannah’s overall objective, together with Rio Tinto, is to build a commercial
mineral sands presence in Mozambique delivering a stable supply of titanium feedstock to global markets, via Rio
Tinto’s offtake.
Mineral sands industry expert TZMI was commissioned to conduct a scoping study to evaluate an initial low capex,
long life, dry mining operation. Key findings of the study, which was published in May 2017, are given in the following
table.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
41
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp33-pp43.qxp 03/06/2021 23:00 Page 42
PROJECT OVERVIEWS
Mutamba Mineral Sands: Scoping Study key data
Mineable resource
Life of mine (LOM)
Mining rate
Life of mine strip ratio (waste: ore)
Mutamba TZMI Base
Case Prices
Management Case
One +10% Product
Price
Management Case
Two +20% Product
Price
451Mt at 6.0% THM (based on a conceptual mine plan utilising
33% Indicated and 67% Inferred resource)
30 years
15Mtpa
2:451
Average annual production
456,000t of ilmenite and 118,000t of nonmagnetic concentrate
Preproduction capital expenditure
Contingency
US$152m
US$74m
Ilmenite Price (Free on Board, FOB)
Nonmagnetic Concentrate (FOB)
US$185/t
US$250/t
US$204/t
US$275/t
US$222/t
US$300/t
PreTax Free Cashflow (LOM)
US$1,007M
US$1,347M
US$1,686M
PreTax Average Annual Free Cashflow
US$41M
PreTax NPV (10% discount)
US$154M
IRR (pretax)
Payback Period (pretax)
19%
5yrs
Source: Mutamba Scoping Study RNS, May 2017
US$52M
US$245M
23%
4yrs
US$62M
US$335M
27%
3yrs
Recent work & Appointment of Farview Solutions as Strategic Adviser
Following the formal award of the third key Mining Licence in January 2020, Savannah began work to ensure
compliance with the near and longterm requirements of the new licences. Prior to COVIDrelated restrictions
curtailing field activities the project team and its consultants successfully demarcated the boundaries of the new
licences. Focus then switched to meeting the need to complete Environmental Impact Assessments and land use
and utilisation agreements (DUATs) for each concession. Competitive tender processes were held for both these
major pieces of work during 2020. As a result, work on the DUATs is well underway, and the Consortium expects to
appoint a consultant to begin the critical EIA work very soon.
In parallel with the licencefocused work programmes, and following consultation with Rio Tinto, the Group
announced in October 2020 the appointment of Farview Solutions as strategic adviser to the Company in relation to
Mutamba. Building on the Scoping Study, Savannah and Farview are initially focusing on identifying the optimum
technical design for an operation at Mutamba. TZ Minerals International Pty. Ltd. (“TZMI”) have been commissioned
to produce an updated ‘concept’ study for this process, which once completed, can be fed into the project PFS.
Completion of the project design will also give Farview and Savannah the foundation on which to identify an
optimised commercial and corporate structure around the project which allows its value to be better recognized by
the market. Savannah hopes to significantly advance this exercise during 2021.
42
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp33-pp43.qxp 03/06/2021 23:00 Page 43
PROJECT OVERVIEWS
The mineral sands pilot plant at Mutamba
Source: Company photo
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
43
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp44-pp55.qxp 03/06/2021 23:01 Page 44
REPORT OF THE DIRECTORS
The Directors present their report with the Financial
Statements of the Company and the Group for the year
ended 31 December 2020.
Dividends
The Directors do not recommend the payment of a
dividend (2019: £nil).
Events Since the Reporting Date
This information is contained in Note 25 to the Financial
Statements.
Directors
The Directors who have held office during the period
from 1 January 2020 to the date of this report (unless
otherwise stated) are as follows:
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
reappointment at the forthcoming Annual General
Meeting.
David Stuart Archer
Dale John Ferguson
Matthew James Wyatt King
Maqbool Ali Sultan
Imad Kamal Abdul Redha Sultan
James Gerald Leahy
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.
Future Development
This
Statement and the Chief Executive’s Report.
is contained
information
in the Chairman’s
Going Concern
This information is contained in the Strategic Report in
the Key Financial Performance Indicators and Milestones
section.
44
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp44-pp55.qxp 03/06/2021 23:01 Page 45
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 Stuart Archer
Matthew James Wyatt King
Dale John Ferguson
Maqbool Ali Sultan1
Imad Kamal Abdul Redha Sultan1
James Gerald Leahy
Manohar Pundalik Shenoy1
Murtadha Ahmed A Sultan1
No. of shares held at
31 December 2020
No. of shares held at
31 December 2019
39,756,649
2,604,0283
49,581,6042
–
–
1,150,000
5,809,524
–
41,756,649
1,104,028
49,581,6042
–
–
1,150,000
5,809,524
–
1 The Directors indicated are representatives of Al Marjan Ltd which held 268,262,589 shares at the reporting date (2019: 268,262,589 shares).
2 45,993,750 shares (2019: 45,993,750 shares) held indirectly through Slipstream Resources Investments Pty Ltd.
3 Following the subscription of 312,500 shares in the cash subscription approved on 21 April 2021 the number of shares held are 2,916,528.
Details of Directors’ remuneration are disclosed in Note 3.
Details of Directors’ interests in Share Options and Investor Warrants are disclosed in Note 23.
Substantial Shareholding
At the date of this report the Company has been notified or is aware of the following interest in the shares of the
Company of 3% or more of the Company’s total issued Share Capital1:
No. of shares
268,262,589
147,180,000
%
15.88%
8.71%
Name of Shareholder
Al Marjan Ltd (Directors2)
Slipstream Resources Investments Pty Ltd
1 Except those exempts under DTR 5.1.5 regulation.
2 Two Directors are representatives of Al Marjan.
On behalf of the Board:
David Archer
Chief Executive Officer
Date: 1 June 2021
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
45
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp44-pp55.qxp 03/06/2021 23:01 Page 46
CORPORATE GOVERNANCE STATEMENT
The Company strives to ensure that its corporate
governance policies and procedures which are in place
across the Group are of a high standard. The Board
acknowledges the importance of good corporate
governance and in light of the Group’s size and rate of
progression, decided to adopt the provisions of the QCA
Corporate Governance Code in September 2018 (“the
Code”).
The Corporate Governance Statement in relation to the
principles of the QCA Corporate Governance Code is
provided
at
http://www.savannahresources.com/investor
relations/corporategovernance/.
Company
website
the
on
The Code is described as a practical, outcome orientated
approach to corporate governance that is tailored for
small and midsize companies. It is a valuable reference
for growing companies wishing to follow good
governance practice. The Company has adopted the
Code because it allows it to take a flexible yet adequate
approach to corporate governance, ensuring that the
Company places the right people in the right roles and
to ensure that right things are being done to deliver
value for all its stakeholders.
Following the appointment to the Board of James Leahy
as an independent nonexecutive Director in November
2018, the Company’s Chairman relinquished his roles as
Chairman of the Remuneration Committee and Chairman
of the Audit and Risk Committee, and subsequently left
both Committees, thus strengthening the independence
of those Committees from the Board itself.
In February 2021, the Company established a
Nominations Committee, prior to that the Board itself
was responsible for the matters falling under the
responsibility of this Committee, and on an annual basis
had reviewed the need for a Nominations Committee.
The rationale for the creation of the Committee is to
reflect the Company’s growing maturity and its planned
transition from explorer / developer into mine operator.
The Board of Directors
The Board comprises of two executive Directors, four
nonexecutive Directors and two alternate Directors.
Ordinarily, the Board formally meets approximately
every quarter, however owing to the unique challenges
and opportunities presented in 2020 the Board met
more regularly to focus on priority matters. The Board is
responsible for setting and monitoring group strategy,
reviewing budgets and financial performance, ensuring
adequate
funding, examining major portfolio
management matters, 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 continue to review
the effectiveness of the procedures presently in place to
ensure that they are appropriate to the nature and scale
of the operations of the Group.
The Audit and Risk Committee
The Audit Committee’s responsibilities were expanded
to include a risk function in 2018 when it became the
Audit and Risk Committee. In particular, the Committee
is reviewing inter alia items reported under the
Company’s Compliance Policy and facilitates the
management of the Group’s Risk Register, in conjunction
with the Board, senior managers and appropriate
professional advisers.
It comprises one nonexecutive Director and one
alternate Director – James Leahy (who chairs the
Committee), and Manohar Shenoy. The Committee’s key
responsibilities with respect to audit are 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. It also reviews
the Group’s annual and interim Financial Statements
before submission to the Board for approval. The
Committee’s key responsibilities with respect to risk are
providing input to the Board in its assessment of
enterprise risk and the determination of risk appetite as
part of the overall setting of strategy for the Group. It
also assists the Board in its oversight of the Group’s risk
its
management framework
effectiveness.
including monitoring
The Group operates a risk register, with the intention of
allowing risks to be identified, tracked and addressed in
order to mitigate any potential damage to the Group or
its businesses. Reporting on identified risks as per the
Group’s risk register is a standard recurring item at the
Committee’s meetings and periodic updates are
provided to the Committee following the executive
Management team’s reviews.
46
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp44-pp55.qxp 03/06/2021 23:01 Page 47
CORPORATE GOVERNANCE STATEMENT
The necessary controls and procedures, updated by the
Board in 2017 in order to comply with the UK Bribery
Act 2010, continue to be reviewed to ensure compliance
and are scheduled to be updated in June 2021.
The Remuneration Committee
The Remuneration Committee comprises one non
executive Director and one alternate Director – James
Leahy (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 nonexecutive 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
nonexecutive 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.
The Committee is responsible for the Company’s
Corporate Governance Code management. The
Committee is also responsible for ensuring that the
executive Directors and Management are communicating
effectively with the Company’s Nominated Adviser.
for
Furthermore, the Committee
monitoring the Company’s compliance with the AIM
Rules and the Market Abuse Regulations.
is responsible
Nominations Committee
The Nominations Committee, established in February
2021, comprises two nonexecutive Directors – Matthew
King (who chairs the Committee) and Imad Sultan. It is
responsible for reviewing the structure, size, and
composition of the Board of Directors, giving
consideration to succession planning for Directors and
senior executives, and identifying and nominating
candidates for the approval of the Board as required. It
is also responsible for monitoring the performance of
the Board of Directors.
AntiBribery 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 zerotolerance
approach to bribery and corruption and is committed to
acting professionally, fairly and with integrity in all its
business dealings and relationships wherever it operates
and implementing and enforcing effective systems to
counter bribery.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
47
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp44-pp55.qxp 03/06/2021 23:01 Page 48
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
responsibility of
the Directors. The Directors’
responsibility also extends to the ongoing integrity of the
Financial Statements contained therein.
integrity of the Company’s website
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 accounting standards in conformity with
the requirements of the Companies Act 2006. 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 international accounting standards
in conformity with the requirements of the
Companies Act 2006, 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.
48
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp44-pp55.qxp 03/06/2021 23:01 Page 49
REPORT OF THE INDEPENDENT AUDITORS
to the members of Savannah Resources Plc
Opinion on the financial statements
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 2020 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006;
the Parent Company financial statements have been properly prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006 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.
We have audited the financial statements of Savannah Resources Plc (the “Parent Company”) and its subsidiaries (the
“Group”) for the year ended 31 December 2020 which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated and Company Statements of Financial Position, the Consolidated and Company Statements
of Changes in Equity, the Consolidated and Company Statements of Cash Flows and notes to the financial statements,
including a summary of significant accounting policies. The financial reporting framework that has been applied in
their preparation is applicable law and international accounting standards in conformity with the requirements of the
Companies Act 2006 and, as regards the Parent Company financial statements, as applied in accordance with the
provisions 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 believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Independence
We remain 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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment
of the Group and the Parent Company’s ability to continue to adopt the going concern basis of accounting included:
•
Critically assessing the reasonableness of Directors’ forecast expenditure for a period of at least twelve months
from the date of approval of the financial statements by reference to Directors’ planned activity and actual
expenditure in 2020.
• Agreeing the current cash resources and post year end shares placing to supporting documentation.
•
•
Evaluating Directors’ sensitivity analysis and performing our own sensitivity analysis in respect of forecast
expenditure. We assessed the validity of any mitigating actions identified by Directors.
Reviewing and considering the adequacy of the disclosure within the financial statements relating to the
Directors’ assessment of the going concern basis of preparation.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group’s and the Parent Company’s
ability to continue as a going concern for a period of at least twelve months from when the financial statements
are authorised for issue.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
49
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp44-pp55.qxp 03/06/2021 23:01 Page 50
REPORT OF THE INDEPENDENT AUDITORS
to the members of Savannah Resources Plc
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report.
Overview
Coverage1
100% (2019: 100%) of Group profit before tax
100% (2019: 99%) of Group total assets
Key audit matters
2020 2019
Materiality
Carrying value of Exploration and
Evaluation assets ✓ ✓
Going concern ✓ ✓
Group financial statements as a whole
£320,000 (2019: £407,000) based on 1.5% (2019: 1.5%)
of total assets
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. We also
addressed the risk of management override of internal controls, including assessing whether there was evidence
of bias by the Directors that may have represented a risk of material misstatement.
Our Group audit scope focused on the Group’s principal operating locations being the Mina do Barroso lithium
project in Portugal held in Savannah Lithium Lda, and the Mutamba mineral sands project in Mozambique held in
AME East Africa Ltd and Matilda Minerals Lda, which were subject to full scope audits. Together with the Parent
Company, which was also subject to a full scope audit, these represent the significant components of the Group.
The remaining components of the Group were considered nonsignificant 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.
BDO LLP performed the audits of the Parent Company and all components except the Portuguese component,
Savannah Lithium Lda, which was audited by the BDO network member firm in Portugal.
Our involvement with component auditor
For the work performed by component auditor, we determined the level of involvement needed in order to be able
to conclude whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the
Group financial statements as a whole. Our involvement with component auditor included the following:
• Detailed Group reporting instructions were sent to the component auditor, which included the significant areas
to be covered by the audit (including areas that were considered to be key audit matters as detailed below),
and set out the information required to be reported to the Group audit team.
•
•
The Group audit team was actively involved in the direction of the audits performed by the component auditor
for the Group reporting purposes along with the consideration of findings and determination of conclusions
drawn. The Group audit team performed additional procedures in respect of certain of the significant risk areas
that represented Key Audit Matters in addition to the procedures performed by the component auditor.
The Group audit team reviewed the component auditor’s work papers remotely, including review of group
reporting documents, attended clearance meetings virtually for the significant component and engaged with
the component auditor regularly during their fieldwork and completion phases.
1
50
These are areas which have been subject to a full scope audit by the group engagement team
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp44-pp55.qxp 03/06/2021 23:01 Page 51
REPORT OF THE INDEPENDENT AUDITORS
to the members of Savannah Resources Plc
Key audit matters
Key audit matters are those matters that, in our professional judgement, 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) that 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
Carrying value of Exploration and Evaluation Assets (note 1 and 8)
As detailed in note 8 to the financial statements, the Group holds two groups of exploration and evaluation assets:
a lithium project in Portugal and a mineral sands project in Mozambique.
As set out in the accounting policy on Exploration and Evaluation Assets in note 1 to the financial statements, accounting
standards require Management to carry out an assessment at least annually for any indicators of impairment. Reviewing
indicators of impairment often require significant judgements, which are explained in the section on key judgements
relating to Exploration and Evaluation assets in note 1 to the financial statements. Given the subjectivity of the
judgements involved we identified this impairment indicators assessment as a significant risk area and a key audit
matter.
How the Scope of Our Audit Addressed the Key Audit Matter
We reviewed and challenged Management’s assessment of the indicators of impairment, which was prepared in
accordance with the requirements of IFRS 6, Exploration for and Evaluation of Mineral Resources, by performing the
following procedures:
• We agreed their assessment to supporting documentation, including:
o
o
o
Technical data relating to mineral resources
Scoping studies where available
Exploration and mining licence permits
• We read the key licence agreements and confirmed that the Group has contractual rights for exploration in the
licence areas. We assessed and obtained evidence regarding the commitments and obligations associated with
the licences and read correspondence with local authorities to determine compliance with the licences.
• We reviewed Management’s plans and budgets and assessed whether the Group is committed to the development
of the projects and substantive expenditure on further exploration for and evaluation of mineral resources in the
areas is budgeted and planned.
• We reviewed RNS announcements and minutes from the meetings of Directors and considered other potential
impairment indicators, such as the impact of COVID19.
Key Observations:
We found no instances which may suggest that the impairment indicators assessment of Exploration and Evaluation
Assets prepared by Management not to be acceptable and appropriately disclosed.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
51
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp44-pp55.qxp 03/06/2021 23:01 Page 52
REPORT OF THE INDEPENDENT AUDITORS
to the members of Savannah Resources Plc
Our application of 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.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use
a lower materiality level, performance materiality, to determine the extent of testing needed. 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.
Based on our professional judgement, we determined materiality for the financial statements as a whole and
performance materiality as follows:
Group financial statements Parent Company financial statements
2020 2019 2020 2019
£’000 £’000 £’000 £’000
Materiality 320 407 270 300
Basis for determining
materiality
1.5% of total
assets
1.5% of total
assets
Rationale for the
benchmark applied
We consider total assets to be the
most significant determinant of the
Group’s financial performance for
users of the financial statements as
the Group continues to bring its
mining assets through to production.
It is consistent with our approach
adopted in previous years.
1.5% of total
assets capped at
84% of Group
materiality
1.5% of total
assets capped at
74% of Group
materiality
Given the nature of company’s
activities, we considered the total
assets to be the most appropriate
basis. It is consistent with our
approach adopted in previous years.
Performance materiality
240
305
202
225
Basis for determining
performance materiality
75% of Group materiality considering
the nature of activities and historic
value of audit adjustments
75% of Parent Company materiality
considering the nature of activities
and historic value of audit
adjustments
Component materiality
We set materiality for each component of the Group based on a percentage of between 44% and 84% of Group
materiality dependent on the size and our assessment of the risk of material misstatement of that component.
Component materiality ranged from £140,000 to £270,000. In the audit of each component, we further applied
performance materiality levels of 75% of the component materiality to our testing to ensure that the risk of errors
exceeding component materiality was appropriately mitigated.
52
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp44-pp55.qxp 03/06/2021 23:01 Page 53
REPORT OF THE INDEPENDENT AUDITORS
to the members of Savannah Resources Plc
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of
£6,400 (2019: £8,100). We also agreed to report differences below this threshold that, in our view, warranted
reporting on qualitative grounds.
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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are
required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and Directors’ report
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.
In the light of the knowledge and understanding of the Group and 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.
Matters on which we are required to report by exception
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
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.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
53
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp44-pp55.qxp 03/06/2021 23:01 Page 54
REPORT OF THE INDEPENDENT AUDITORS
to the members of Savannah Resources Plc
Responsibilities of Directors
As explained more fully in the Statement of Directors’
Responsibilities, the Directors are responsible for the
preparation of the financial statements and for being
satisfied that they give a true and fair view, 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.
Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities,
including fraud is detailed below:
• Holding discussions with management and the audit
committee to understand the laws and regulations
relevant to the Group and Parent Company. These
included elements of financial reporting framework,
Companies Act 2006,
legislation and
environmental regulations in the UK, Portugal and
Mozambique;
tax
• Holding discussions with management and the audit
committee and considering any known or suspected
laws and
instances of noncompliance with
regulations or fraud identified by them;
•
•
•
Testing the appropriateness of journal entries made
through the year by applying specific criteria, such
as unusual account combinations, to detect possible
irregularities and fraud;
Performing a detailed review of the Group’s year
end adjusting entries and investigating any that
appear unusual as to nature or amount;
For significant and unusual transactions, particularly
those occurring at or near yearend, investigating
the possibility of related parties and the sources of
financial resources supporting the transactions;
• Assessing the judgements made by management
when making key accounting estimates and
judgements, and challenging management on the
appropriateness of these judgements;
•
•
Reviewing minutes from board meetings of those
charges with governance to identify any instances of
noncompliance with laws and regulations;
identified
laws and
Communicating relevant
regulations and potential fraud risks to all
engagement team members and remaining alert to
any indications of fraud or noncompliance with
laws and regulations throughout the audit; and
• Directing the component auditor to ensure an
assessment is performed on the extent of the
components compliance with the relevant local and
regulatory framework.
Our audit procedures were designed to respond to risks
of material misstatement in the financial statements,
recognising that the risk of not detecting a material
misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are
inherent limitations in the audit procedures performed
and the further removed noncompliance with laws and
54
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp44-pp55.qxp 03/06/2021 23:01 Page 55
REPORT OF THE INDEPENDENT AUDITORS
to the members of Savannah Resources Plc
regulations is from the events and transactions reflected
in the financial statements, the less likely we are to
become aware of it.
A further description of our responsibilities is available
on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
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 Parent Company and the Parent Company’s
members as a body, for our audit work, for this report,
or for the opinions we have formed.
Peter Acloque (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
1 June 2021
BDO LLP is a limited liability partnership registered in
England and Wales (with registered number OC305127).
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
55
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp56-pp62.qxp 03/06/2021 23:01 Page 56
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2020
Notes
2020
£
2019*
£
CONTINUING OPERATIONS
Revenue
Other Income
Administrative Expenses
OPERATING LOSS
Finance Income
Finance Costs
LOSS FROM CONTINUING OPERATIONS BEFORE AND AFTER TAX
LOSS ON DISCONTINUED OPERATIONS BEFORE AND AFTER TAX
4
24
LOSS BEFORE AND AFTER TAX ATTRIBUTABLE
TO EQUITY OWNERS OF THE PARENT
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified to profit or loss:
Net change in Fair Value Through Other Comprehensive Income
of Equity Investments
Items that will or may be reclassified to profit or loss:
Exchange Losses arising on translation of foreign operations
OTHER COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR
TOTAL COMPREHENSIVE LOSS 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
From Continued Operations
From Discontinued Operations
–
26,099
(2,988,663)
(2,962,564)
38,747
(765)
(2,924,582)
(5,401,176)
–
35,325
(3,633,672)
(3,598,347)
25,621
(1,528)
(3,574,254)
(227,672)
(8,325,758)
(3,801,926)
320,151
2,496
(163,284)
156,867
(609,228)
(606,732)
(8,168,891)
(4,408,658)
7
7
7
(0.62)
(0.22)
(0.40)
(0.36)
(0.34)
(0.02)
* The disclosures as at 31 December 2019 have been represented so that the operations that are discontinued at the end of the 2020 financial year
are classified as discontinued.
The notes form part of these Financial Statements.
56
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp56-pp62.qxp 03/06/2021 23:01 Page 57
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2020
ASSETS
NONCURRENT ASSETS
Intangible Assets
RightofUse Assets
Other Intangible Assets
Property, Plant and Equipment
Other NonCurrent Assets
Bank Deposits
TOTAL NONCURRENT ASSETS
CURRENT ASSETS
Equity instruments at FVTOCI
Trade and Other Receivables
Other Current Assets
Cash and Cash Equivalents
TOTAL CURRENT ASSETS
TOTAL ASSETS
EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY
Share Capital
Share Premium
Merger Reserve
Foreign Currency Reserve
Warrant Reserve
Share Based Payment Reserve
FVTOCI Reserve
Retained Earnings
Notes
2020
£
2019
£
8
21
9
15
15
11
13
15
14
16
16
23
23
17,246,222
21,709
6,682
973,528
73,530
590,175
21,068,376
37,785
10,804
1,337,229
248,275
742,363
18,911,846
23,444,832
606,245
194,301
13,670
2,000,209
2,814,425
36,762
285,699
19,171
3,484,781
3,826,413
21,726,271
27,271,245
14,309,910
34,474,884
6,683,000
(193,541)
12,157
393,865
276,712
(35,450,713)
12,974,598
33,511,787
6,683,000
(30,257)
975,679
410,121
(43,439)
(28,163,712)
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
20,506,274
26,317,777
LIABILITIES
NONCURRENT LIABILITIES
Lease Liabilities
TOTAL NONCURRENT LIABILITIES
CURRENT LIABILITIES
Lease Liabilities
Trade and Other Payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
21
21
17
1,130
1,130
11,608
1,207,259
1,218,867
1,219,997
12,059
12,059
18,990
922,419
941,409
953,468
21,726,271
27,271,245
The Financial Statements were approved and authorised for issue by the Board of Directors on 1 June 2021 and
were signed on its behalf by:
David Archer
Chief Executive Officer
Company number: 07307107
The notes form part of these Financial Statements.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
57
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp56-pp62.qxp 03/06/2021 23:01 Page 58
COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 December 2020
ASSETS
NONCURRENT ASSETS
Investments in Subsidiaries
Other Intangible Asset
Other Receivables
Other NonCurrent Assets
TOTAL NONCURRENT ASSETS
CURRENT ASSETS
Equity instruments at FVTOCI
Trade and Other Receivables
Cash and Cash Equivalents
TOTAL CURRENT ASSETS
TOTAL ASSETS
EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY
Share Capital
Share Premium
Merger Reserve
Warrant Reserve
Share Based Payment Reserve
FVTOCI Reserve
Retained Earnings
TOTAL EQUITY
LIABILITIES
CURRENT LIABILITIES
Trade and Other Payables
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Notes
2020
£
2019
£
10
13
15
11
13
14
16
16
23
23
17
621,582
5,948
32,995,016
6,776
894,993
5,948
33,265,297
41,068
33,629,322
34,207,306
604,136
47,908
1,237,876
1,889,920
33,935
70,338
3,277,943
3,382,216
35,519,242
37,589,522
14,309,910
34,474,884
6,683,000
12,157
393,865
276,712
(21,455,793)
12,974,598
33,511,787
6,683,000
975,679
410,121
(43,439)
(17,341,234)
34,694,735
37,170,512
824,507
824,507
419,010
419,010
35,519,242
37,589,522
The Company total comprehensive loss for the financial year was £4,833,165 (2019: £4,598,068) (Note 6).
The Financial Statements were approved and authorised for issue by the Board of Directors on 1 June 2021 and
were signed on its behalf by:
David Archer
Chief Executive Officer
Company number: 07307107
The notes form part of these Financial Statements.
58
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp56-pp62.qxp 03/06/2021 23:01 Page 59
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2020
Share
Foreign Based
Share Share Merger Currency Warrant Payment FVTOCI Retained Total
Capital Premium Reserve Reserve Reserve Reserve Reserve Earnings Equity
£ £ £ £ £ £ £ £ £
At 1 January 2019 8,814,518 31,060,554 – 579,126 1,000,221 508,051 (58,737) (16,485,626) 25,418,107
Loss for the year – – – – – – – (3,801,926) (3,801,926)
Other Comprehensive
Income – – – (609,383) – – 15,298 (12,802) (606,887)
Total Comprehensive
Income for the year – – – (609,383) – – 15,298 (3,814,728) (4,408,813)
Issue of share capital
(net of expenses) 2,500,000 2,326,400 – – – – – – 4,826,400
Consideration for
acquisition of
noncontrolling
interest 1,630,000 – 6,683,000 – – – – (8,019,000) 294,000
Consideration for
settlement deferred
consideration 30,080 124,833 – – – – – – 154,913
Share based payment
charges – – – – – 33,170 – – 33,170
Lapse of options – – – – – (131,100) – 131,100 –
Lapse of warrants – – – – (24,542) – – 24,542 –
At 31 December 2019 12,974,598 33,511,787 6,683,000 (30,257) 975,679 410,121 (43,439) (28,163,712) 26,317,777
Loss for the year – – – – – – – (8,325,758) (8,325,758)
Other Comprehensive
Income – – – (163,284) – – 320,151 – 156,867
Total Comprehensive
Income for the year – – – (163,284) – – 320,151 (8,325,758) (8,168,891)
Issue of share capital
(net of expenses)
(Note 16) 1,300,113 920,537 – – – – – – 2,220,650
Shares issued in lieu
(Note 16) 20,199 16,160 – – – – – – 36,359
Share based payment
charges – – – – – 58,979 – – 58,979
Exercise of options
(Note 16,23) 15,000 26,400 – – – (16,650) – 16,650 41,400
Lapse of options – – – – – (58,585) – 58,585 –
Lapse of warrants – – – – (963, 522) – – 963,522 –
At 31 December 2020 14,309,910 34,474,884 6,683,000 (193,541) 12,157 393,865 276,712 (35,450,713) 20,506,274
The following describes the nature and purpose of each reserve within owners’ equity:
Reserve
Share Capital
Share Premium
Merger 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.
Amounts subscribed for share capital in excess of nominal value in respect of the consideration paid in an
acquisition arrangement, when the issuing company takes its interest in another company from below 90% to
90% or above equity holding.
Foreign Currency Reserve
Gains/losses arising on retranslating the net assets of group operations into Pound Sterling.
Warrant Reserve
Share Based Payment Reserve
FVTOCI Reserve
Retained Earnings
Fair value of the warrants issued.
Represents the accumulated balance of share based payment charges recognised in respect of asset acquired
and share options granted by Savannah Resources Plc, less transfers to retained losses in respect of options
exercised, lapsed and forfeited.
Cumulative changes in fair value of equity investments classified at fair value through other comprehensive income (FVTOCI).
Cumulative net gains and losses recognised in the Consolidated Statement of Comprehensive Income and other
transactions recognised directly in Retained Earnings.
The notes form part of these Financial Statements.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
59
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp56-pp62.qxp 03/06/2021 23:01 Page 60
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2020
Share
Based
Share Share Merger Warrant Payment FVTOCI Retained Total
Capital Premium Reserve Reserve Reserve Reserve Earnings Equity
£ £ £ £ £ £ £ £
At 1 January 2019 8,814,518 31,060,554 – 1,000,221 508,051 (58,737) (12,883,510) 28,441,097
Loss for the year – – – – – – (4,600,564) (4,600,564)
Other Comprehensive
Income – – – – – 15,298 (12,802) 2,496
Total Comprehensive
Income for the year – – – – – 15,298 (4,613,366) (4,598,068)
Issue of share capital
(net of expenses) 2,500,000 2,326,400 – – – – – 4,826,400
Consideration for
acquisition of
noncontrolling
interest 1,630,000 – 6,683,000 – – – – 8,313,000
Consideration for
settlement deferred
consideration 30,080 124,833 – – – – – 154,913
Share based payment
charges – – – – 33,170 – – 33,170
Lapse of options – – – – (131,100) – 131,100 –
Lapse of warrants – – – (24,542) – – 24,542 –
At 31 December 2019 12,974,598 33,511,787 6,683,000 975,679 410,121 (43,439) (17,341,234) 37,170,512
Loss for the year – – – – – – (5,153,316) (5,153,316)
Other Comprehensive
Income – – – – – 320,151 – 320,151
Total Comprehensive
Income for the year – – – – – 320,151 (5,153,316) (4,833,165)
Issue of share capital
(net of expenses)
(Note 16) 1,300,113 920,537 – – – – – 2,220,650
Shares issued in lieu
(Note 16) 20,199 16,160 – – – – 36,359
Share based payment
charges – – – – 58,979 – – 58,979
Exercise of options
(Note 16,23) 15,000 26,400 – – (16,650) – 16,650 41,400
Lapse of options – – – – (58,585) – 58,585 –
Lapse of warrants – – – (963,522) – – 963,522 –
At 31 December 2020 14,309,910 34,474,884 6,683,000 12,157 393,865 276,712 (21,455,793) 34,694,735
The following describes the nature and purpose of each reserve within owners’ equity:
Reserve
Share Capital
Share Premium
Merger Reserve
Warrant Reserve
Share Based Payment Reserve
FVTOCI Reserve
Retained Earnings
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.
Amounts subscribed for share capital in excess of nominal value in respect of the consideration paid in an
acquisition arrangement, when the issuing company takes its interest in another company from below 90% to
90% or above equity holding.
Fair value of the warrants issued.
Represents the accumulated balance of share based payment charges recognised in respect of asset acquired
and share options granted by Savannah Resources Plc, less transfers to retained losses in respect of options
exercised, lapsed and forfeited.
Cumulative changes in fair value of equity investments classified at fair value through other comprehensive income (FVTOCI).
Cumulative net gains and losses recognised in the Consolidated Statement of Comprehensive Income and other
transactions recognised directly in Retained Earnings.
The notes form part of these Financial Statements.
60
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp56-pp62.qxp 03/06/2021 23:01 Page 61
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2020
Cash flows used in operating activities
Loss for the year
Depreciation and amortisation charges
Share based payment charge
Shares issued in lieu of payments to suppliers
Finance income
Finance expense
Exchange losses/(gains)
Loss on sale of discontinued operations
Cash flow from operating activities before changes in working capital
Decrease in trade and other receivables
Increase/(Decrease) in trade and other payables
Net cash used in operating activities
Cash flow used in investing activities
Purchase of intangible exploration assets
Purchase of other intangible assets
Purchase of tangible fixed assets
Purchase of investments
Proceeds from sale of investments
Bank deposits for mining licences
Interest received
Proceeds from sale of discontinued operations
Net cash used in investing activities
Cash flow from financing activities
Proceeds from issues of ordinary shares (net of expenses)
Proceeds from exercise of share options
Principal paid on lease liabilities
Interest paid on lease liabilities
Net cash from financing activities
Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at beginning of year
Exchange losses on cash and cash equivalents
Cash and Cash Equivalents at end of year
Notes
9,21
4,23
16
4
24
8,24
9
11
11
24
16
16
21
21
14
14
2020
£
2019
£
(8,325,758)
44,663
58,979
36,359
(38,747)
765
(37,580)
5,373,633
(2,887,686)
176,312
443,541
(3,801,926)
40,872
33,170
–
(25,621)
1,528
196,229
–
(3,555,748)
254,550
(589,705)
(2,267,833)
(3,890,903)
(1,577,532)
–
(2,721)
–
3,272
57,319
38,747
27,543
(4,169,238)
(1,278)
(21,296)
(28,371)
12,112
(742,363)
25,621
–
(1,453,372)
(4,924,813)
2,220,650
41,400
(18,310)
(765)
4,826,400
–
(20,488)
(1,528)
2,242,975
4,804,384
(1,478,230)
3,484,781
(6,342)
(4,011,332)
7,715,435
(219,322)
2,000,209
3,484,781
The notes form part of these Financial Statements.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
61
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp56-pp62.qxp 03/06/2021 23:01 Page 62
COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 December 2020
Cash flows used in operating activities
Loss for the year
Impairment of financial assets
Share based payment reserve charge
Shares issued in lieu of payments to extinguish liabilities
Finance income
Exchange losses/(gains)
Loss on sale of subsidiaries
Cash flow from operating activities before changes in working capital
Decrease in trade and other receivables
Increase/(Decrease) 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
Proceeds from sale of investments
Proceeds from sale of subsidiaries
Interest received
Net cash used in investing activities
Cash flow from financing activities
Proceeds from issues of ordinary shares (net of expenses)
Proceeds from exercise of share options
Net cash from financing activities
Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at beginning of year
Exchange losses on cash and cash equivalents
Cash and Cash Equivalents at end of year
Notes
13
4,23
16
24
10
13
11
11
24
16
16
14
14
2020
£
2019
£
(5,153,316)
(404,684)
58,979
36,359
(4,819)
(1,289,781)
5,438,172
(1,319,090)
258,071
439,527
(4,600,564)
1,035,627
33,170
–
(25,514)
1,718,168
–
(1,839,113)
182,233
(512,038)
(621,492)
(2,168,918)
(36,180)
(3,658,442)
–
–
27,543
4,819
(27,195)
(6,512,623)
(26,326)
12,112
–
25,514
(3,662,260)
(6,528,518)
2,220,650
41,400
2,262,050
(2,021,702)
3,277,943
(18,365)
4,826,400
–
4,826,400
(3,871,036)
7,368,469
(219,490)
1,237,876
3,277,943
The notes form part of these Financial Statements.
62
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
1. ACCOUNTING POLICIES
Basis of Preparation
These Consolidated Financial Statements and the Company Financial Statements have been prepared in
accordance with international accounting standards in conformity with the requirements of the Companies Act
2006. The Consolidated Financial Statements and the Company Financial Statements have been prepared under
the historical cost convention with the exception of FVTOCI investments.
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 has raised equity finance to fund its activities.
Following the receipt from the Placing and Subscription effective 20 April 2021 the Group had a proforma cash
balance of £10.6m at 30 April 2021.
The Directors have reviewed the cashflow projection for the Group to consider if it has sufficient finance in place to
meet its financial commitments for at least 12 months. Taking into account the Group’s committed costs and annual
overheads for the 12 months from the date of this report, the group has £6.3m available for uncommitted expenditure
on the following value adding priorities:
•
•
•
•
expanding the MdB Project team,
conducting further exploration on the MdB Project to increase its resources,
evaluating opportunities to maximise its ESG credentials, and
further developing its lithium business in the Iberian Peninsula.
Further, the Group plans to conduct a Definitive Feasibility Study which will be funded from either, a strategic
partner (as described in the “Portugal – Lithium” section of the Chairman’s Statement), or the partial reallocation
of some of the aforementioned uncommitted expenditure, or investment from EIT’s InnoEnergy’s Business
Investment Platform, or a combination of these, thus potentially reducing investment into other priorities.
In forming their view, the directors have considered the impacts of COVID19 related restrictions and potential
future delays on the work schedule. Whilst the potential future impacts are unknown, the Board has considered
the effect that additional delays in the work schedule could have on the Group’s available cash resources. Having
factored in reasonably plausible scenarios and reasonable mitigating actions (for example, the ability to reduce
its uncommitted future expenditure), the director’s consider sufficient cash balance are maintained under each
scenario and that the Company will be able to meet its obligations as they fall due.
Accordingly, the Directors have concluded that these circumstances form a reasonable expectation that the
Group has adequate resources to continue in operational existence, for the foreseeable future. For these
reasons, the Directors continue to adopt the going concern basis in preparing the Annual Report and Accounts.
Basis of Consolidation
The Group accounts consolidate the accounts of Savannah Resources Plc and its domestic and foreign
subsidiaries, refer to Note 10. The foreign subsidiaries have been consolidated in accordance with IFRS 10
“Consolidated Financial Statements” and IAS 21 "The effects of Foreign Exchange Rates".
Intercompany transactions and balances between group companies are eliminated in full.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
63
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
1. ACCOUNTING POLICIES continued
Equity Investments
Equity investments, excluding subsidiaries, are classified at fair value through other comprehensive income
(FVTOCI). They are carried at fair value with changes in fair value recognised in Other Comprehensive Income
and accumulated in the Fair Value Through Other Comprehensive Income Reserve. Upon disposal any balance
within Fair Value Through Other Comprehensive Income Reserve is reclassified directly to Retained Earnings
and is not reclassified to the Statement of 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
is 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 carried at cost, this being 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.
An impairment is recognised for equity investments where there is a significant and sustained decrease in the
market value of the investment.
Investments in Subsidiaries and Associates
Investments in subsidiaries, associates and jointly controlled entities are accounted for at cost within the
individual accounts of the parent company. These investments are classified as NonCurrent 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.
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 projectbyproject 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.
64
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
1. ACCOUNTING POLICIES continued
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 8.
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 nonoperational 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 cash consideration is contingent and is not recognised as an
asset or liability.
Other Intangible Assets
Once an option to acquire an exploration licence has been obtained by a group holding company, with the
expectation that on execution the exploration licence is to be acquired by a subsidiary, costs are capitalised in
Other Intangible Assets. Costs incurred include appropriate technical and administrative expenses but not
general overheads. On execution of the option by a subsidiary the Other Intangible Assets are reclassified to
Investments in the Group holding company and classified as Exploration and Evaluation Assets by the subsidiary
that acquired the licence.
Property, Plant and Equipment
Tangible noncurrent assets used in exploration and evaluation are classified within Tangible NonCurrent 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 4 – 10 years
Office Equipment 1 – 4 years
Motor Vehicles 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 nonderivative 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.
Under IFRS 9, impairment provisions are recognised based on a forwardlooking expected credit loss model. The
methodology used to determine the amount of the provision is based on whether there has been a significant
increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not
increased significantly since initial recognition of the financial asset, twelve month expected credit losses along
with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime
expected credit losses along with the gross interest income are recognised. For those that are determined to be
credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
65
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
1. ACCOUNTING POLICIES continued
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.
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.
Bank Deposits
Bank Deposits represents deposits that are not expected to be converted into cash within less than a year and
therefore are classified as NonCurrent Assets. Bank Deposits are measured at cost, less any impairment.
Guarantees
Guarantees represents deposits held 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 a year and therefore are classified as Other NonCurrent Assets. Guarantees are measured
at cost, less any impairment.
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 Statement of Comprehensive Income.
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.
Leases
All leases are accounted for by recognising a rightofuse asset and a lease liability except for:
•
•
Leases of low value assets; and
Leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease
term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically
the case) this is not readily determinable, in which case the Group’s incremental borrowing rate on
commencement of the lease is used.
66
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
1. ACCOUNTING POLICIES continued
On initial recognition, the carrying value of the lease liability also includes:
•
•
•
amounts expected to be payable under any residual value guarantee;
the exercise price of any purchase option granted in favour of the Group if it is reasonably certain to assess
that option;
any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis
of termination option being exercised.
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives
received, and increased for:
•
•
•
lease payments made at or before commencement of the lease;
initial direct costs incurred; and
the amount of any provision recognised where the Group is contractually required to dismantle, remove
or restore the leased asset.
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on
the balance outstanding and are reduced for lease payments made. Rightofuse assets are amortised on a
straightline basis over the remaining term of the lease or over the remaining economic life of the asset if,
rarely, this is judged to be shorter than the lease term.
Amounts payable for leases covered by the shortterm exemption are charged to the income statement on a
straightline basis over the term of the relevant lease.
ShareBased 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.
Nonmarket 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
fair value of goods and services received is recognised in either the Statement of Comprehensive Income or
the Statement of Financial Position in accordance with the Group’s relevant accounting policies. Where it is not
possible to reliably value the goods or services received, the fair value is measured by valuing the equity
instruments granted using an option an option pricing model. The probability of nonvesting conditions being
satisfied are included in the fair value recognised at the measurement date.
Where warrants are granted as part of cash subscriptions of new shares in the Company these are designated
as Investor Warrants. The fair value of the Investor Warrants at the date of grant is charged thus decreasing
the value of the Share Premium. Fair value is measured by use of a warrant pricing model.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
67
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
1. ACCOUNTING POLICIES continued
On lapse of the share options and warrants the cumulative fair value registered in the Share Based Payment
Reserve and Warrant Reserve respectively is transferred to Retained Earnings.
Joint Arrangements
The Group is a party to a joint arrangement when there is a contractual arrangement that confers joint control
over the relevant activities of the arrangement to the Group and at least one other party. Joint control is
assessed under the same principles as control over subsidiaries.
The Group classifies its interests in joint arrangements as either: (a) Joint ventures: where the Group has rights
to only the net assets of the joint arrangement; (b) Joint operations: where the Group has both the rights to
assets and obligations for the liabilities of the joint arrangement.
In assessing the classification of interests in joint arrangements, the Group considers: (a) The structure of the
joint arrangement; (b) The legal form of joint arrangements structured through a separate vehicle; (c) The
contractual terms of the joint arrangement agreement; and (d) Any other facts and circumstances (including
any other contractual arrangements).
The Group accounts for its interests in joint operations by recognising its share of assets, liabilities, revenues
and expenses in accordance with its contractually conferred rights and obligations.
NonCurrent Assets Held for Sale
Noncurrent 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 noncontrolling interest in its former subsidiary after the sale.
Noncurrent 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.
Discontinued Operations
The results of operations disposed during the year are included in the Consolidated Statement of
Comprehensive Income up to the date of disposal.
A discontinued operation is a component of the Group's business that represents a separate major line of business
that has been disposed of, has been abandoned or that meets the criteria to be classified as held for sale.
Discontinued operations are presented in the Consolidated Statement of Comprehensive Income as a single
line which comprises the PostTax Profit or Loss of the discontinued operation along with the PostTax Gain or
Loss recognised on the remeasurement to fair value less costs to sell or on disposal of the assets or disposal
groups constituting discontinued operations.
68
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
1. ACCOUNTING POLICIES continued
Contingent Consideration
The Group measures Contingent Consideration at the date of disposal at fair value and recognises the relevant
financial asset. The Group measures the Contingent Consideration at fair value at each reporting date and
changes in fair value are recognised in profit and loss.
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) Useful Economic Life of the Pilot Plant
In determining the useful economic life of the pilot plant in the Mozambique Operations the Management
have made assumptions based on the guidance of third parties experts (Note 9).
The key judgements are set out below:
(a) 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.
(b) 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 8. When the Group has applied for exploration and mining licences and these have not been granted
at the reporting date the Management apply judgement in determining if this should be considered as an
impairment indicator. Management takes into account historic information about the timing of granting
licences by the relevant ministers and governments, and the information provided by the Group's local
teams based on communications with these bodies.
(c) 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 8.
(d)
Impairment of Amounts due from Subsidiaries
When applying the expected credit loss model under IFRS 9 Management apply judgement to evaluate if
there was a significant increase in the credit risk of the loans since initial recognition to determine the
stage of these loans to conclude if need to be calculated the 12months expected credit losses or the
lifetime expected credit losses. To calculate the expected credit losses Management apply judgement to
define several scenarios and their likelihood with the expected cash flows associated to the recovery of
the loans, which are compared with the present value of the loans to calculate the expected credit losses.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
69
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
1. ACCOUNTING POLICIES continued
(e) Classification of Joint Arrangement
In determining the accounting treatment of the agreements signed with other nongroup companies
(Note 12) Management needed to determine if joint control exists and therefore apply IFRS 11 Joint
Arrangements. Also, when applying IFRS 11 it was necessary to evaluate the rights and obligations relating
to the agreements to conclude if it was a Joint Operation or a Joint Venture. During 2020 and 2019
Management concluded that there were no relevant changes affecting the relationship between the Group
and the other parties and therefore there are no changes to the initial accounting treatment of these
agreements.
(f) Fair Value Consideration of Disposed Operations
The Management applied judgement in the calculation of the fair value of the contingent consideration
received on disposal of the Omani Operations (Note 24). The Management defined several scenarios and
their likelihoods with the expected cash flows associated to the recovery of the thirdparty loan and
amounts receivable from the royalty rights.
Accounting Developments During 2020
The accounting policies adopted are consistent with those of the previous financial year. New standards and
amendments to IFRS effective as of 1 January 2020 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 Effective
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 Group is currently assessing the impact of these new accounting standards and amendments and does not
expect a material impact on the Group 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 Portugal, exploration and development
in Mozambique, headquarter and corporate costs, the Company’s third party investments and the discontinued
operation in Oman.
70
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
2. SEGMENTAL REPORTING continued
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 Mozambique and Portugal and the discontinued operation
in Oman 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 effectively at cost and included
in each segment below. Intercompany loans are eliminated to zero and not included in each segment below.
Discontinued
Operation Mozambique
Oman Mineral Portugal HQ and
Copper Sands Lithium corporate Investments Elimination
£ £ £ £ £ £
Total
£
2020
Revenue1 – 57,607 1,110,8302 926,819 – (2,095,256)
–
(765)
Finance Costs – – (765) – – –
38,747
Interest Income – 33,928 – 4,819 – –
Share based payments – – – (58,979) – –
(58,979)
Loss for the year (5,401,176) (396,577) (1,219,127) (1,308,878) – – (8,325,758)
Total Assets – 5,403,090 13,917,231 1,799,705 606,245 – 21,726,271
Total NonCurrent Assets – 5,274,621 13,624,502 12,723 – – 18,911,846
Additions to NonCurrent
1,181,653
Assets – 86,342 1,095,311 – – –
Total Current Assets – 128,469 292,729 1,786,982 606,245 –
2,814,425
Total Liabilities – (65,977) (260,023) (893,997) – – (1,219,997)
Discontinued
Operation Mozambique
Oman Mineral Portugal HQ and
Copper Sands Lithium corporate Investments Elimination
£ £ £ £ £ £
Total
£
2019
Revenue1 – 67,985 1,433,3192 1,011,800 – (2,513,104)
–
(1,528)
Finance Costs – – (1,528) – – –
25,621
Interest Income – 107 – 25,514 – –
Share based payments – – – (33,170) – –
(33,170)
Loss for the year (227,672) (514,312) (1,050,912) (3,033,141) (11,516) 1,035,627 (3,801,926)
(11,516)
Loss on disposal of Investments – – – – (11,516) –
Total Assets 5,507,375 5,957,598 12,261,328 3,508,182 36,762 – 27,271,245
Total NonCurrent Assets 5,409,757 5,859,794 12,128,265 47,016 – – 23,444,832
Additions to NonCurrent
Assets 553,010 1,039,529 3,353,402 (323,137) – –
Total Current Assets 97,618 97,804 133,063 3,461,166 36,762 –
Total Liabilities (115,095) (40,770) (317,634) (479,969) – –
4,622,804
3,826,413
(953,468)
1 Revenues included the intercompany recharges within the Group which are eliminated.
2 This included in the Portugal Lithium segment include £1,110,830 (2019: £ 1,433,319) relate to intercompany recharges within this segment
and therefore eliminated in column Elimination.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
71
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
3. EMPLOYEES AND DIRECTORS
The average monthly number of employees (including Directors that receive remuneration) during the year
was as follows:
Operational
Nonoperational
Staff Costs (excluding Directors)
Salaries
Bonus
Social security and other employee expenses
Pension
Share based payment expense (see Note 23)
1 Bonuses unpaid as at 31 December 2020
Group
Company
2020
No
34
19
53
2020
£
Group
2019
No
42
22
64
2019
£
2020
No
1
6
7
2020
£
1,247,351
187,6221
176,435
48,620
36,159
1,696,187
1,790,408
–
184,706
57,404
25,835
2,058,353
367,571
118,8001
60,655
48,620
36,159
631,805
2019
No
1
7
8
Company
2019
£
550,421
–
65,861
57,404
25,835
699,521
The Group numbers in the above table includes £472,569 (2019: £779,233) which was capitalised as an
intangible asset.
Directors’ Remuneration
Salaries
Bonus
Social security and taxes
Pension
Share based payment expense (see Note 23)
Other
1 Bonuses unpaid as at 31 December 2020
2020
£
478,401
287,8761
71,432
45,725
21,190
–
904,624
2019
£
564,652
–
73,315
30,902
7,335
4,472
680,676
The numbers in the above table include £240,337 (2019: £131,101) of Directors’ Remuneration which was
capitalised as an intangible asset in relation to the provision of specific technical services.
In 2020 a gross loss (before taxes) of £5,400 on the exercise of share options was attributable to the Directors.
The costs related to these exercised share options were charged in the Consolidated Statement of
Comprehensive Income when the options were vested in prior years. No share options were exercised
during 2019.
The Directors’ remuneration is paid by the Company.
The Directors are considered to be the key management of the Group.
72
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
3. EMPLOYEES AND DIRECTORS continued
The remuneration of Directors who held office during the year was as follows:
Directors’ Directors’
emoluments 2020 emoluments 2019
Salary Bonus Pension Non Other Total Salary Bonus Pension Non Other
cash cash
share share
options options
£ £ £ £ £ £ £ £ £ £ £
Executive Directors
Dale Ferguson 125,651 94,1261 – 21,190 – 240,967 149,652 – – 7,335
David Archer 263,500 193,7501 45,725 – – 502,975 310,000 – 30,902 – 4,472
NonExecutive Directors
Matthew King 55,250 – – – – 55,250 65,000 – – – –
James Leahy 34,000 – – – – 34,000 40,000 – – – –
Maqbool Sultan – – – – – – – – – – –
Imad Sultan – – – – – – – – – – –
Manohar Shenoy – – – – – – – – – – –
Murtadha Sultan – – – – – – – – – – –
478,401 287,8761 45,725 21,190 – 833,192 564,652 – 30,902 7,335 4,472
Total
£
156,987
345,374
65,000
40,000
–
–
–
–
607,361
1 Bonuses unpaid as at 31 December 2020
In response to the coronavirus pandemic, all the Directors (who receive remuneration) volunteered to a temporary
salary reduction of 20% effective from March 2020. Salaries were returned to their original levels as and from
31 December 2020. This is the driver of the year over year reduction in the Salary numbers in the above table.
Additionally, the executive Management suggested that bonuses not be considered for the 2019 financial year
and the Board reviewed and confirmed this.
The bonus amount payable to the Chief Executive Officer for 2020 financial year related to performance against
key, previously agreed objectives. These objectives included corporate and strategic initiatives; Mina do Barroso
Project progress; strategic outcomes for Mutamba; capital raising activities; DFS progress for Mina do Barroso;
community relations; engagement with debt and equity providers; senior management team development and
succession; development of a collaborative, goal oriented, ethical company with harmonious working
relationships and personal contribution. Performance against these criteria was assessed by the Remuneration
Committee against a maximum potential bonus of 150% of base salary at year end at 62.5% of £310,000.
The amount payable to the Technical Director for 2020 bonus related to performance against key objectives. These
objectives included progress on the Mina do Barroso EIA and DFS; commercial development support, special projects
and personal commitment. Performance against these criteria was assessed by the Remuneration Committee
against a maximum potential bonus of 100% of base salary at year end at 63.75% of AUD 275,004 (£147,824).
In 2019, the Remuneration Committee undertook a review of remuneration packages and developed a new
remuneration policy aimed at rewarding performance, encouraging retention of key staff and aligning their
interests with those of shareholders. This resulted in a longterm incentive plan (“LTIP”) intended to support
this policy being implemented in March 2019 which is designed to incentivise the Company’s executive
Management Team and other key employees. Along with the implementation of the LTIP, the Remuneration
Committee has worked on refining the overall remuneration policy and has undertaken benchmarking exercises
against external peer groups, sought feedback from institutional shareholders and engaged internationally
recognised consulting firm Alvarez and Marsal. This has resulted in a remuneration policy for the executive
Directors which combines short term incentives (“STI” – cash bonus which is assessed against key business
objectives) and longterm incentives (“LTI” – under the Company’s LTIP). The STI is based upon maximum
potential bonus of 150% / 100% of base salary for the CEO / Technical Director respectively and is assessed
against key business objectives. The LTI element of the remuneration policy is currently being addressed and
will be guided by recommendations from Alvarez and Marsal, with related awards under it expected to be
issued under the Company’s existing LTIP.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
73
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
3. EMPLOYEES AND DIRECTORS continued
The LTIP was established to encourage longterm value creation for Savannah’s shareholders and to align the
interests of the participants with shareholders. Awards under the LTIP take the form of options over the
Company’s ordinary shares of 1 pence each, (the “Options”). The Board believes that the implementation of the
LTIP will incentivise the participants and will also help Savannah to attract and retain talented individuals in the
future as the Company expedites the development of its mining projects. The LTIP allows for up to 7.5% of the
Company’s issued share capital to be allocated to employees. The Remuneration Committee adopted a policy
whereby up to 5% of the Company’s issued share capital should be made available via the LTIP to the executive
Management Team only, with the balance being available to other employees. These percentages are reviewed
annually by the Company’s Remuneration Committee. The LTIP also includes malus and clawback clauses.
The LTIP is a share option scheme of the kind commonly adopted by listed companies and 8,950,000 Options
with an exercise price of 10p were issued in March 2019 (Note 23). The exercise price of 10p represented an
87% premium to the closing share price on the preceding business day. No share options were issued in 2020
under the LTIP. The detail of the LTIP share options granted to the Executive Directors in 2019 is as follows:
Executive Directors
Dale Ferguson
David Archer
Total
No share options under the LTIP were granted to the NonExecutive Directors.
4.
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
– Nonaudit services
Fees payable to associated firms of the auditor for audit of subsidiaries
Fees payable to associated firms of the auditor for nonaudit services
Professional fees
Foreign exchange loss / (gain)
Short term lease payments (Note 21)
Share based payments
Share Options
Quantity
3,000,000
–
3,000,000
2020
£
2019
£
44,663
40,872
59,970
34,968
16,009
8,638
771,712
(37,580)
72,612
58,979
43,500
33,960
25,305
8,068
1,076,638
196,229
196,387
33,170
74
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
5.
INCOME TAX
Analysis of the Tax Charge
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2020 nor for the
year ended 31 December 2019.
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:
2020
£
2019
£
Loss on ordinary activities before tax
(8,325,758)
(3,801,926)
Loss on ordinary activities multiplied by the standard rate
of corporation tax in the UK of 19% (2019: 19%)
Effects of:
Expenses not deductible for tax purposes
Different tax rates applied in overseas jurisdictions
Tax losses carried forward
Total income tax
(1,581,894)
(722,366)
1,401,351
(31,917)
212,460
–
50,059
87,926
584,381
–
Deferred Tax
The Group has carried forward losses amounting to £14,884,544 as at 31 December 2020 (2019: £14,110,5221).
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. Tax losses related to the subsidiaries in Mozambique can be carried
forward for a 5 year period. Tax losses related to the subsidiaries in Portugal can be carried forward for a 14 year
period for losses related to the 20162019 tax years and for a 12 year period for losses related to the 2020
tax year.
1 In the previous year the comparative figure was stated as £10,282,984, and following a review has been corrected.
6.
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 £4,833,165 (2019: £4,598,068).
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
75
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 76
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
7. 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
and Investor Warrant are not considered dilutive because the exercise of these would have the effect of reducing
the loss per share.
Reconciliations are set out below:
2020
£
2019
£
Basic Loss Per Share
Losses attributable to ordinary shareholders:
Total loss for the year
Total loss for the year from continuing operations
Total loss for the year from discontinued operations
Weighted average number of shares
Loss per share – total loss for the year
Loss per share – total loss for the year from continuing operations
Loss per share – total loss for the year from discontinued operations
8.
INTANGIBLE ASSETS
Cost
At 1 January 2019
Additions
Transfer from Other Intangible Assets
Foreign exchange movements
At 31 December 2019
Additions
Transfer to Assets classified as Held for Sale (Note 24)
Disposal assets on liquidation
Foreign exchange movements
At 31 December 2020
Amortisation and impairment
At 1 January 2019
Impairment charged in the year
At 31 December 2019
Reverse on disposal of assets on liquidation
Impairment charged in the year
Transfer to Assets classified as Held for Sale (Note 24)
At 31 December 2020
76
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
(8,325,758)
(2,924,582)
(5,401,176)
(3,801,926)
(3,574,254)
(227,672)
1,343,743,432 1,042,871,447
(0.0036)
(0.0034)
(0.0002)
(0.0062)
(0.0022)
(0.0040)
Exploration and
Evaluation
£
17,553,192
3,894,826
333,353
(572,971)
21,208,400
1,508,794
(5,649,981)
(140,024)
319,033
17,246,222
140,024
–
140,024
(140,024)
5,370,130
(5,370,130)
–
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
8.
INTANGIBLE ASSETS continued
Net Book Value
At 1 January 2019
At 31 December 2019
At 31 December 2020
Exploration and
Evaluation
£
17,413,168
21,068,376
17,246,222
Included in additions is capitalised Plant and Machinery depreciation amounting to £99,189 (Note 9).
In 2018 the Group started the process of divesting its investment in Finkallio Oy, and at 31 December 2018 the
Exploration and Evaluation Assets held by the Company were fully impaired. In 2019 the Group started the
process to liquidate Finkallio Oy, which was completed on 4 May 2020.
In 2018 the Board announced that a strategic review was being conducted in respect of the Oman assets to
identify the best outcome for Savannah and its shareholders. At 30 June 2020 the progress towards an agreement
for sale was substantial with the disposal expected to be completed prior to the end of 2020, and therefore the
assets and liabilities of the Omani operations were classified as Held for Sale on that date (Note 24).
The Exploration and Evaluation Assets referred to in the table above comprise expenditure in relation to
exploration licences in Portugal, Mozambique and the Discontinued Operation in Oman. The Directors consider
that for the purposes of assessing impairment, the above exploration and evaluation expenditure is allocated
to the following licence areas.
Mozambique Minerals Sands
Oman Copper
Portugal Lithium
2020
£
2019
£
3,788,567
–
13,457,655
3,874,935
5,258,775
11,934,666
17,246,222
21,068,376
The Directors have reviewed the carrying value of the CGUs and have not identified any indicators of impairment
for the assets allocated to the licences in Portugal and Mozambique, and therefore there is no impairment
charge in 2020 or 2019 for Portugal and Mozambique. As part of the classification of the Oman assets as Held
for Sale on 30 June 2020 an impairment charge of £5,370,130 was recorded (Note 24). The assets in Finland
were fully impaired in 2018 and this impairment was reversed on liquidation of Finkallio Oy in 2020. Disposals
in 2020 relate to the operations in Oman and Finland. There were no disposals in 2019.
In December 2019 Matilda Minerals Lda was granted with a Mining Concession for the Jangamo deposit – 9735C
for a period of 25 years. In December 2019 and January 2020 respectively Rio Tinto through its subsidiary
Mutamba Mineral Sands, S.A was granted with Mining Concessions for the Dongane/Ravene deposit – 9229C
for a period of 25 years and with a Mining Concession for the Jangamo deposit – 9229C for a period of 25 years.
The only outstanding mining concession application is the one related to Chilubane. The application was
submitted at the same time as the other applications and feedback received from the Ministry indicates that
no objections exists to the application. Some administrative matters need to be attended to in advance of the
award but there is no reason for the Management to believe that these will be in any way insurmountable.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
77
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 78
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
9. PROPERTY, PLANT AND EQUIPMENT
Motor
Vehicles
£
Cost
At 31 December 2018 151,413
Reclassification due to
adoption of IFRS 16 (56,096)
At 1 January 2019 95,317
Additions –
Foreign exchange movements (7,415)
At 31 December 2019 87,902
Additions 1,662
Transfer to Assets classified
as Held for Sale (Note 24) (36,770)
Foreign exchange movements 5,432
At 31 December 2020 58,226
Depreciation
At 31 December 2018 55,215
Reclassification due to
adoption of IFRS 16 (11,778)
At 1 January 2019 43,437
Charge for year 14,224
Foreign exchange movements (3,113)
At 31 December 2019 54,548
Charge for year 14,399
Transfer to Assets classified
as Held for Sale (Note 24) (36,770)
Foreign exchange movements 3,691
At 31 December 2020 35,868
Net Book Value
At 31 December 2018 96,198
At 1 January 2019 51,880
At 1 January 2020 33,354
At 31 December 2020 22,358
Office
Equipment
£
Plant and
Machinery
£
Land
£
Total
£
31,198
1,277,514
56,345
1,516,470
–
31,198
13,413
(1,585)
43,026
1,059
(10,293)
(1,378)
32,414
24,187
–
24,187
11,286
(1,234)
34,239
7,908
(10,293)
(1,575)
30,279
–
1,277,514
7,883
(43,641)
1,241,756
–
–
(249,869)
991,887
–
–
–
–
–
–
99,189
–
–
99,189
–
56,345
–
(3,013)
53,332
–
–
3,005
(56,096)
1,460,374
21,296
(55,654)
1,426,016
2,721
(47,063)
(242,810)
56,337
1,138,864
–
–
–
–
–
–
–
–
–
–
79,402
(11,778)
67,624
25,510
(4,347)
88,787
121,496
(47,063)
2,116
165,336
7,011
7,011
8,787
2,135
1,277,514
1,277,514
1,241,756
892,698
56,345
56,345
53,332
56,337
1,437,068
1,392,750
1,337,229
973,528
Plant and Machinery comprises of the pilot plant located in Mozambique. This was not depreciated during 2019
because it was not fully commissioned and the Group was awaiting for the mining licence where the pilot plant
is located to be granted to have the right to operate the pilot plant. In January 2020 the mining licence where
the pilot plant is located was granted and Management considered this as a trigger event to start depreciating
the pilot plant for a period of 10 years over the useful life of this kind of plant.
78
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
9. 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
Portugal Lithium
2020
£
892,695
80,833
973,528
2019
£
1,246,659
90,570
1,337,229
Management has evaluated the existence of impairment indicators of the Property, Plant and Equipment allocated
to the licence areas together with the impairment review performed for the Exploration and Evaluation Assets,
and it has concluded that there are no indicators of impairment.
10. INVESTMENT IN SUBSIDIARIES
Company
NonCurrent
At 1 January 2019
Additions
Transfer from Other Intangible Assets
At 31 December 2019
Additions
Disposals
At 31 December 2020
Investment in
subsidiaries
£
458,667
102,973
333,353
894,993
3,776,651
(4,050,062)
621,582
In October 2020 the Group disposed Savannah Resources BV (“SRBV”) and its subsidiaries as part of the sale of
the Omani operations (Note 24). Before the disposal the Company increased its investment in SRBV through
the conversion of loans amounting to EUR 4,140,388 (~GBP 3,740,471) into Share Premium. On disposal this
investment was impaired.
In June 2019 the Group acquired the 25% minority interest of Savannah Lithium Lda (“SL”) (formerly Slipstream
Resources Portugal Lda) (Note 20), increasing its interest in the entity to 100%. The Group issued 163,000,000
ordinary shares in the Company (~GBP £8,313,000) as consideration for the additional 25% in SL. SL is a
Portuguese entity which is the holder of a series of highly prospective lithium projects with nearterm
production potential in the north of Portugal.
In November 2018 the Group incorporated a new subsidiary Savannah Advisory Services Ltd, to deal with the
Group’s service contracts. The Company is a whollyowned subsidiary of Savannah Resources Plc (”SAV”).
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
79
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 80
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
10. INVESTMENT IN SUBSIDIARIES continued
In October 2016 SAV, 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 in May 2017, AME’s interest in the Mutamba Consortium increased to 20%. AME can earn
into up to 51% in the Project by achieving prescribed milestones. Based on the terms of the CA, both AME and
Rio Tinto have joint control, and therefore this is a joint arrangement under IFRS. Further information about
the CA is included in Note 12.
In 2018 the Group started the process of divesting its investment in Finkallio Oy, and at 31 December 2018 the
Exploration and Evaluation Assets held on the Company were fully impaired. In 2019 the Group started the
process to liquidate Finkallio Oy, which was completed in 2020.
The Company had the following subsidiary undertakings, either directly or indirectly, at 31 December 2020,
which have been included in the Consolidated Financial Statements:
Subsidiary Registered office Nature of business Class of % Holding
share
Savannah Advisory
Services Limited1 United Kingdom5 Holding Company Ordinary 100%
AME East Africa Limited1 United Kingdom5 Holding Company Ordinary 100%
Matilda Minerals Limitada3 Mozambique6 Mining & exploration Ordinary 100%
Panda Recursos Limitada2 Mozambique7 Mining & exploration Ordinary 99.99%
African Mining & Exploration Limited1 United Kingdom5 Dormant Ordinary 100%
Savannah Resources Portugal B.V1 Netherlands8 Holding Company Ordinary 100%
AME Portugal Pty Ltd2 Australia9 Holding Company Ordinary 100%
Slipstream PORT Pty Ltd2 Australia9 Holding Company Ordinary 100%
Savannah Lithium Unipessoal Limitada2,4 Portugal10 Mining & exploration Ordinary 100%
Savannah Resources Lithium B.V1 Netherlands8 Holding Company Ordinary 100%
Savana Matinal – Mining,
Unipessoal Limitada2 Portugal10 Mining & exploration Ordinary 100%
1 Directly held by Savannah Resources Plc
2 Indirectly held by Savannah Resources Plc
3 99.99% Indirectly held by AME East Africa Limited and 0.01% Directly held by Savannah Resources Plc.
4 Formerly Slipstream Resources Portugal Limitada
5 Salisbury House, London Wall, London, EC2M 5PS, United Kingdom
6 Damiao de Gois, no 438, Sommerschield, Maputo, Mozambique
7 Rua 1301, Num 97, Sommerschield, Maputo, Mozambique
8 Herikerbergweg 88,1101 CM, Amsterdam, The Netherlands
9 Level 20, 16 Carrington Street, Sydney, NSW 2000, Australia
10 Rua Jose Eigenmann, No 90, parish of Nogueira, municipality of Braga, Portugal, 4715199
80
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
10. INVESTMENT IN SUBSIDIARIES continued
The Company disposed during 2020 the following entities:
Subsidiary Registered office Nature of business Class of % Holding
share
Savannah Resources B.V.1 The Netherlands Holding Company Ordinary 100%
Gentor Resources Limited1 British Virgin Is. Holding Company Ordinary 100%
Sohar Mining L.L.C1 Oman Dormant Ordinary 70%
Finkallio Oy2 Finland Mining & exploration Ordinary 100%
Joint Operations
Al Fairuz Mining L.L.C.1 Oman Mining & exploration Ordinary 65%
Al Thuraya Mining L.L.C.1 Oman Mining & exploration Ordinary 51%
1 Disposed as part of the sale of the Omani operations (Note 24)
2 Liquidated in May 2020
11. EQUITY INSTRUMENTS AT FVTOCI
Group
At 1 January 2019
Additions at cost
Disposals
Change in market value of investment
At 31 December 2019
Additions at cost
Disposals
Change in market value of investment
At 31 December 2020
Company
At 1 January 2019
Additions at cost
Disposals
Change in market value of investment
At 31 December 2019
Additions at cost
Change in market value of investment
At 31 December 2020
Shares in
Investments at
FVTOCI
£
18,007
28,371
(12,112)
2,496
36,762
252,604
(3,272)
320,151
606,245
Shares in
Investments at
FVTOCI
£
17,225
26,326
(12,112)
2,496
33,935
250,050
320,151
604,136
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
81
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 82
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
11. EQUITY INSTRUMENTS AT FVTOCI continued
Equity Investments are designated as Fair Value Through Other Comprehensive Income (FVTOCI).
In 2020 the Company received 46 million shares (net of costs) in Force Commodities Limited, a listed company
on the Australian Stock Exchange (AXS), as part of the consideration for the disposal of the Omani operations
in October 2020 (Note 24). The fair value of these shares is the quoted value at the reporting date, being the
fair value hierarchy level 1.
In 2019 the Company acquired 25 million shares in a listed company. The fair value of these shares is the quoted
value at the reporting date, being the fair value hierarchy level 1.
In January 2018 as part of the agreement with its partners in Al Fairuz Mining Company LLC the Company issued
1,000,000 ordinary shares in the Company and received 312,500 shares in a listed company. In 2019 the
Company disposed these 312,500 shares in the listed company, with a loss on disposal of £11,516. At
31 December 2019 and 2020 the Company does not hold any other shares in this company.
The fair value of the rest of shares held by the Company is the quoted value at the reporting date. The fair value
hierarchy in 2020 and 2019 for these shares is level 1 as the valuation is based wholly on quoted prices.
12. JOINT ARRANGEMENTS
Unincorporated consortium Mutamba Project
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 (PreFeasibility 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 11 Joint Arrangements.
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 £2,888,555 (2019: £2,658,984) in Exploration and Evaluation Assets
and £1,133,567 (2019: £1,133,567) in Property, Plant and Equipment, relating to the combined project.
82
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
12. JOINT ARRANGEMENTS continued
Shareholders’ agreement for Al Fairuz Mining L.L.C.
In October 2020 Savannah disposed Savannah Resources BV and its subsidiaries and ceased to be party of the
shareholders’ agreement for Al Fairuz Mining LLC.
Earnin agreement for Al Thuraya Mining L.L.C.
In October 2020 Savannah disposed Savannah Resources BV and its subsidiaries and ceased to be party of the
Earnin agreement for Al Thuraya Mining LLC.
13. TRADE AND OTHER RECEIVABLES
NonCurrent:
Amounts due from Subsidiaries
Total NonCurrent Trade and Other Receivables
Current:
VAT Recoverable
Other Receivables
Total Current Trade and Other Receivables
Group
2019
£
Company
2020
£
2019
£
–
–
32,995,016
33,265,297
32,995,016
33,265,297
2020
£
–
–
98,852
95,449
194,301
165,120
120,579
285,699
–
47,908
47,908
–
70,338
70,338
The carrying value of trade and other receivables classified at amortised cost approximates fair value.
The Group and the Company applies the expected credit loss model to measure expected credit losses for
amounts due from subsidiaries and amounts due from third parties. The Group and the Company considered
the probability of a default. The loans to subsidiaries are interest free and are repayable on demand.
The Company expects that the carrying value of the intercompany loans receivable may not be fully recoverable
as the subsidiaries may not generate sufficient future profits to settle the amounts owing and accordingly, these
amounts have been partially impaired. Repayment of the intercompany loans is subject to the Directors’
assessment of the Group’s requirements and availability of appropriate liquid resources. Among other things,
the Company’s expected credit loss model includes consideration of various risks affecting the success of
underlying projects of its subsidiaries. When determining the expected credit losses Management has taken into
account that the intercompany loans are related to projects that are in the exploration stage. Management has
concluded that the success of the projects is the most important factor that will drive credit losses. This will be
affected by the results in mineral resources, the commodity prices, the capability of the Parent company to
obtain funds to develop the projects and the success in obtaining or renewing exploration and mining licences.
Several scenarios and their likelihood have been considered to calculate the expected cash flows for the loans
associated to each project and the expected credit losses as at the reporting date. In the current period the
Company estimates that a reverse in expected credit loss calculated of £0.4m (2019: loss of £1m) arises on the
receivables from the subsidiaries, decreasing the £2.9m expected credit loss relating to prior periods.
The Group has a receivable from Gentor Resources Limited, which is part of the Force Group. As detailed in
note 24, this represents contingent consideration and has been valued at £nil.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
83
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp63-pp84.qxp 03/06/2021 23:01 Page 84
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
13. TRADE AND OTHER RECEIVABLES continued
Movements in the impairment allowance for the year ended 31 December 2020 is as follows:
Company
At 1 January 2019
Charged during the year
At 1 January 2020
Reversed during the year
Reversal of loan writtenoff on disposal of discontinued operations
Reversed on liquidation of subsidiary
At 31 December 2020
Impairment
from Subsidiaries
£
1,882,244
1,035,627
2,917,871
(404,684)
(1,749,148)
(168,884)
595,155
The reversal of loan writtenoff on disposal of discontinued operations is related to the impairment registered
in prior years on the Omani project intercompany loans.
The breakdown of the Amounts due from Subsidiaries as at 31 December 2020 is as follows:
Company
Amounts due from Subsidiaries:
Outstanding amount
Impairment
14. CASH AND CASH EQUIVALENTS
2020
£
2019
£
33,590,171
(595,155)
36,183,168
(2,917,871)
32,995,016
33,265,297
Group
Company
2020
£
2019
£
2020
£
2019
£
Cash at Bank and in Hand
2,000,209
3,484,781
1,237,876
3,277,943
84
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
15. OTHER CURRENT AND NONCURRENT ASSETS
NonCurrent:
Guarantees
Bank Deposits
Other
Total Other NonCurrent Assets
Current:
Other
Total Other Current Assets
Group
Company
2020
£
65,592
590,175
7,938
663,705
13,670
13,670
2019
£
205,052
742,363
43,223
990,638
19,171
19,171
2020
£
–
–
6,776
6,776
–
–
2019
£
–
–
41,068
41,068
–
–
The NonCurrent Assets Guarantees are deposits required by the local mining / environmental authorities in
relation to exploration / mining licences and applications thereof.
NonCurrent Assets – Bank Deposits for £590,175 (2019: £742,363) is a bank deposit with maturity lower than
3 months as of the signing date but with the obligation to be renewed on the termination date and therefore
has been classified as NonCurrent Assets. This cash is associated to the bank guarantee necessary for the grant
of mining licences in Mozambique and is restricted cash until the end of the bank guarantee in 2023 (Note 22).
16. SHARE CAPITAL
Allotted, issued and fully paid
At beginning of year
Issued during year:
Share placements
Exercise of share options
In lieu of cash for professional services
In lieu of cash for acquisition
of minority interest
Settlement of deferred
consideration Oman
2020
2019
£0.01
ordinary
shares
number
1,297,459,820
£
12,974,598
£0.01
ordinary
shares
number
881,451,795
130,011,2701
1,500,0002
2,019,9453
1,300,113
15,000
20,199
250,000,0001
–
–
£
8,814,518
2,500,000
–
–
–
–
–
–
163,000,000
1,630,000
3,008,025
30,080
At end of year
1,430,991,035
14,309,910 1,297,459,820
12,974,598
1 In respect of the Share placements in 2020 the net proceeds were £2,220,650 (2019: £4,826,400) of which £920,537 (2019: £2,326,400) has
been recorded in Share Premium. The gross proceeds were £2,340,203 (2019: £5,000,000).
2 Refer to Note 23 for details of exercise of share options. £26,400 has been recorded in Share Premium.
3 In respect of shares issued in lieu of cash for payment of professional fees. £16,160 has been recorded in Share Premium.
The par value of the Company’s shares is £0.01.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
85
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 86
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
17. TRADE AND OTHER PAYABLES
Current:
Trade Payables
Other Payables
Accruals
Amounts owing to Subsidiaries
2020
£
357,247
136,935
713,077
–
Total Current Trade and Other Payables
1,207,259
Group
Company
2019
£
436,459
96,493
389,467
–
922,419
2020
£
178,901
110,841
534,765
–
824,507
2019
£
199,815
60,205
124,690
34,300
419,010
In 2020 accruals represent mainly bonuses to be paid to employees and professional fees in the Group for
which invoices have not been received at the reporting date. In 2019 accruals represent mainly professional
fees in the Group for which invoices have not been received at the reporting date
Part of Trade and other payables amounts relate to work performed in the projects which balances 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:
•
•
•
•
•
•
•
Intercompany Loan Receivables
Trade and Other Receivables
Cash and Cash Equivalents
Trade and Other Payables
Loans and Borrowings
Leases Liabilities
Investments
• Other NonCurrent Assets – Guarantees
Trade and other payables fall due for payment within 3 months from the reporting date.
86
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
18. FINANCIAL INSTRUMENTS continued
Liquidity Risk
At the reporting date the Group’s cash balance was £2m (2019: £3.5m). This, in conjunction with the raising of
future cash through different options, which the Directors believe can be secured, will allow the Group to
continue working on its development / exploration activities and to meet its financial commitments for at least
12 months. In common with many nonrevenue generating companies, the Company routinely raises 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.
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 during 2019 whose
functional currency is OMR which is pegged to the USD at a rate of 1 OMR to 2.6 USD and in Portugal whose
functional currency is Euro.
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.
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 £60,414
(2019: increase in other comprehensive income and net assets of £3,393). 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 Group and the Company are exposed to credit risk on its receivables from its subsidiaries and third parties.
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. The thirdparty receivable is due
when its related mining project generate positive cash flow, the project is the exploration phase and the Group
has calculated the expected credit loss from these receivables (Note 13).
The Group is exposed to credit risk in cash and cash equivalents and deposits with banks and financial
institutions. Only reputable banks and financial institutions which are rated by recognised rating agencies are
accepted by the Company in the UK. The Group policy is to maintain the majority cash and cash equivalents
within the Company in the UK and funds are remitted to other group entities on a monthly basis to settle
liabilities as they fall due, to avoid credit risk associated to foreign jurisdictions banks. The Group policy is also
to operate at least with two banks in each country when possible.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
87
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 88
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
18. FINANCIAL INSTRUMENTS continued
Financial instruments by category (Group)
Financial Assets
Fair Value
Through Other
Amortised Comprehensive
Cost Income Total
£ £ £
As at 31 December 2020
Investments – 606,245 606,245
Other NonCurrent Assets 73,530 – 73,530
Cash Deposits 590,175 – 590,175
Other Current Assets 13,670 – 13,670
Cash and Cash Equivalents 2,000,209 – 2,000,209
Total Financial Assets 2,677,584 606,245 3,283,829
As at 31 December 2019
Investments – 36,762 36,762
Other NonCurrent Assets 248,275 – 248,275
Cash Deposits 742,363 – 742,363
Other Current Assets 19,171 – 19,171
Cash and Cash Equivalents 3,484,781 – 3,484,781
Total Financial Assets 4,494,590 36,762 4,531,352
See review of the fair value hierarchy of fair value through other comprehensive income assets in Note 11.
Financial Liabilities
Financial
Liabilities at
Amortised Cost Total
£ £
As at 31 December 2020
Trade and Other Payables 1,207,259 1,207,259
Lease Liabilities 12,738 12,738
Total Financial Liabilities 1,219,997 1,219,997
As at 31 December 2019
Trade and Other Payables 922,417 922,417
Lease Liabilities 31,049 31,049
Total Financial Liabilities 953,466 953,466
88
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
18. FINANCIAL INSTRUMENTS continued
The Group’s net exposure to foreign exchange at the reporting date was as follows:
Functional Currency of Entity
GBP MZN EUR Total GBP MZN EUR Total
2020 2020 2020 2020 2019 2019 2019 2019
£ £ £ £ £ £ £ £
Foreign currency
financial assets
USD 99,575 26,865 22,184 148,624 481,830 31,466 14,440 527,736
EUR 423,988 – – 423,988 1,702,214 – – 1,702,214
AUD 874,112 – 5,523 879,635 585,224 – 5,202 590,426
OMR 8,558 – – 8,558 – – – –
GBP – – 821 821 – – 668 668
Total 1,406,233 26,865 28,528 1,461,626 2,769,268 31,466 20,310 2,821,044
Functional Currency of Entity
GBP Total GBP Total
2020 2020 2019 2019
£ £ £ £
Foreign currency
financial liabilities
USD 29,699 29,699 58,144 58,144
AUD 173,072 173,072 114,124 114,124
EUR 16,429 16,429 34,118 34,118
OMR 6,900 6,900 10,270 10,270
Total 226,100 226,100 216,656 216,656
The effect of a 10% strengthening of the USD against GBP at the reporting date on the USD denominated Cash
and Cash Equivalents carried at that date would, all other variables held constant, have resulted in a decrease
in pretax loss for the year and increase of net assets of GBP £16,300 (2019: £58,637). A 10% weakening in the
exchange rate would, on the same basis, have increased pretax loss and decreased net assets by GBP £13,336
(2019: £47,976).
The effect of a 10% strengthening of the EUR against GBP at the reporting date on the EUR denominated Cash
and Cash Equivalents carried at that date would, all other variables held constant, have resulted in a decrease
in pretax loss for the year and increase of net assets of GBP £46,511 (2019: £189,135). A 10% weakening in
the exchange rate would, on the same basis, have increased pretax loss and decreased net assets by GBP
£38,054 (2019: £154,747).
The effect of a 10% strengthening of the AUD against GBP at the reporting date on the AUD denominated Cash
and Cash Equivalents carried at that date would, all other variables held constant, have resulted in a decrease
in pretax loss for the year and increase of net assets of GBP £30,611 (2019: £65,603). A 10% weakening in the
exchange rate would, on the same basis, have increased pretax loss and decreased net assets by GBP £25,045
(2019: £53,675).
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
89
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 90
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
18. FINANCIAL INSTRUMENTS continued
Financial instruments by category (Company)
Financial Assets
Fair Value
Through Other
Amortised Comprehensive
Cost Income Total
£ £ £
As at 31 December 2020
Other Receivables 32,995,016 – 32,995,016
Other NonCurrent Assets 6,776 – 6,776
Investments – 604,136 604,136
Trade and Other Receivables 47,908 – 47,908
Cash and Cash Equivalents 1,237,876 – 1,237,876
Total Financial Assets 34,287,576 604,136 34,891,712
As at 31 December 2019
Other Receivables 33,265,297 – 33,265,297
Other NonCurrent Assets 41,068 – 41,068
Investments – 33,935 33,935
Trade and Other Receivables 70,338 – 70,338
Cash and Cash Equivalents 3,277,943 – 3,277,943
Total Financial Assets 36,654,646 33,935 36,688,581
See review of the fair value hierarchy of fair value through other comprehensive income assets in Note 11.
Financial liabilities
Financial
Liabilities at
Amortised Cost Total
£ £
As at 31 December 2020
Trade and Other Payables 824,507 824,507
Total Financial Liabilities 824,507 824,507
As at 31 December 2019
Trade and Other Payables 419,010 419,010
Total Financial Liabilities 419,010 419,010
90
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
18. FINANCIAL INSTRUMENTS continued
The Company’s net exposure to foreign exchange risk at the reporting date was as follows:
Functional Currency of Entity
GBP Total GBP Total
2020 2020 2019 2019
£ £ £ £
Foreign currency financial assets
USD 3,939,068 3,939,068 6,732,424 6,732,424
EUR 23,324,327 23,324,327 22,432,437 22,432,437
AUD 808,618 808,618 585,224 585,224
OMR 8,558 8,558 16,738 16,738
Total 28,080,571 28,080,571 29,766,823 29,766,823
Functional Currency of Entity
GBP Total GBP Total
2020 2020 2019 2019
£ £ £ £
Foreign currency financial liabilities
USD – – 39,432 39,432
AUD 104,001 104,001 18,061 18,061
EUR 2,155 2,155 30,516 30,516
OMR 6,900 6,900 10,270 10,270
Total 113,056 113,056 98,279 98,279
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 maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may issue new shares or seek other financial
structures such as debt (project finance), royalties, streaming, mezzanine finance, or combinations thereof.
19. GROUP CONTINGENT LIABILITIES
Details of contingent liabilities where the probability of future payments is not considered remote are set out
below, as well as details of contingent liabilities, which although considered remote, the Directors consider
should be disclosed. The Directors are of the opinion that provisions are not required in respect of these matters,
as at the reporting date it is not probable that a future sacrifice of economic benefits will be required and the
amount is not capable of reliable measurement.
Consideration payable in relation to the acquisition of the Aldeia Mining Lease Application for lithium,
feldspar and quartz (Portugal lithium project)
In June 2019 the Company exercised its option to acquire a Mining Lease Application for lithium, feldspar and
quartz from private Portuguese company, Aldeia & Irmão, S.A.. The total purchase price for the acquisition is
EUR €3,250,000 (~ GBP £2,920,000), which will only become due once the Mining Lease Application has been
granted and the Mining Rights transferred to an entity within the Group, at which point the agreed payment
schedule will consist of an initial EUR €55,000 (~ GBP £49,000) payment with the balance due in 71 equal
monthly instalments. Upon delivery of the request for transfer of the Mining Rights to an entity within the
Group, the Group shall provide with a bank guarantee of EUR €3,195,000 (~ GBP £2,870,000) that will be
reduced in accordance with the 71 monthly instalments. As at 31 December 2020 the mining lease has not
been granted.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
91
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 92
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
20. RELATED PARTY DISCLOSURES
Details of Directors’ remuneration are disclosed in Note 3. During the year £204,735 (2019: £131,693) was
payable to Blue Bone Consulting Pty Ltd (a company controlled by Dale Ferguson) for consultancy fees of which
£103,170 (including bonus) (2019: £10,727) remained unpaid. The amounts payable to Blue Bone Consulting
Pty Ltd have been included in the Directors’ remuneration in Note 3.
Dale Ferguson is also a Director and minority shareholder of Slipstream Resources Investments Pty Ltd (one of
the Vendors of Savannah Lithium Lda). As such, he was excluded from any of the Group’s commercial
negotiations with the Vendors and was precluded from voting on board matters related to the acquisition of
the 25% in Savannah Lithium Lda. Dale Ferguson indirectly received 33,618,750 ordinary shares in Savannah
Resources plc as consideration for the Transaction in 2019.
21. LEASES
RightofUse Assets
Vehicles
£
Cost
At 1 January 2019 56,096
Additions 8,829
At 31 December 2019 64,925
Additions –
Foreign exchange movements 3,658
At 31 December 2020 68,583
Depreciation
At 1 January 2019 11,778
Charge for year 15,362
At 31 December 2019 27,140
Charge for year 18,008
Foreign exchange movements 1,726
At 31 December 2020 46,874
Net Book Value
At 1 January 2019 44,318
At 31 December 2019 37,785
At 31 December 2020 21,709
Lease Liabilities
Vehicles
£
At 1 January 2019 42,708
Additions 8,829
Lease payments (18,204)
Foreign exchange movements (2,284)
At 31 December 2019 31,049
Additions –
Lease payments (19,843)
Foreign exchange movements 1,532
At 31 December 2020 12,738
92
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 93
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
21. LEASES continued
Current Liabilities
NonCurrent Liabilities
Total lease liabilities
2020
£
11,608
1,130
12,738
2019
£
18,990
12,059
31,049
The rightofuse assets and related lease liabilities are for the lease of motor vehicles. Total 2020 cash flow
outflow amount is £19,075 (2019: £19,732).
Other Leases
The Group has registered £72,612 (2019: £192,219) in the Statement of Comprehensive Income related to
shortterm leases. Shortterm leases meet the requirements to not be accounted for by recognising a rightof
use asset and a lease liability, having a duration of 12 months or less and without reasonable certainty about
their renewal.
At 31 December 2020 the Other Lease commitments for the next 12 months is £13,024 (2019: £90,449).
These leases are for business premises in Mozambique, Portugal and the UK.
22. GROUP COMMITMENTS
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.
As a condition of being granted with mining licence 9735C in Mozambique the Group, through Matilda Minerals
Lda, signed a bank guarantee of MZN 60,143,680 (~GBP £590,175) to be assigned to the Ministério Dos Recursos
Minerais e Energia (Ministry of Natural Resources and Energy). The guarantee is valid until the 28 November
2023 and Matilda Minerals Lda is obligated to maintain funds for the same amount as the guarantee in a bank
account. These funds can be transferred to bank deposits, and currently are held in a 3 months bank deposit
(Note 15).
23. SHARE OPTIONS AND INVESTOR WARRANTS
Share Options and Investor 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.
2020 2019
Weighted Weighted
average Weighted average Weighted
remaining
exercise remaining exercise
Number price life Number price
life
Share Options
Opening Balance 24,750,000 8.0p 2.21 18,800,000 7.2p
Granted – – – 8,950,000 10.0p
Lapsed (3,100,000) 7.4p – (3,000,000) 8.8p
Exercised (1,500,000) 2.8p – – –
1.78
4.20
–
–
Closing Balance 20,150,000 8.5p 1.41 24,750,000 8.0p
2.21
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
93
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 94
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
23. SHARE OPTIONS AND INVESTOR WARRANTS continued
2020 2019
Weighted Weighted
average Weighted average Weighted
remaining
exercise remaining exercise
Number price life Number price
life
Investor Warrants
Opening Balance 48,713,979 6.1p 0.74 50,124,428 6.1p
Granted – – – – –
Lapsed (48,370,547) 6.0p – (1,410,449) 5.0p
Exercised – – – – –
1.71
–
–
–
Closing Balance 343,432 11.3p 0.62 48,713,979 6.1p
0.74
Share schemes outstanding as at 31 December 2020 are as follows:
Outstanding Exercisable Outstanding Exercisable
31 December 31 December 31 December 31 December Exercise
2020 2020 2019 2019 Price
Share Options
March 2016 – – 2,100,000 2,100,000 2.8p
December 2016 – – 1,500,000 1,500,000 7.6p
March 2017 10,700,000 10,700,000 10,700,000 10,700,000 7.6p
August 2017 500,000 500,000 500,000 500,000 6.2p
January 2018 1,000,000 1,000,000 1,000,000 500,000 8.0p
March 2019 7,950,000 – 8,950,000 – 10.0p
Expiry
Date
16/03/20
21/12/20
28/02/21
17/08/21
25/01/22
11/03/24
20,150,000 12,200,000 24,750,000 15,300,000
Investor Warrants
March 2017 – – 1,480,952 1,480,952 7.4p
July 2017 – – 11,165,477 11,165,477 6.0p
October 2017 – – 35,724,118 35,724,118 6.0p
August 2018 343,432 343,432 343,432 343,432 11.3p
07/03/20
14/07/20
25/10/20
13/08/21
343,432 343,432 48,713,979 48,713,979
All of the Share Options granted attract a share based payment charge.
The fair value of the Share Options and Investor Warrants at the date of grant have been measured using the
BlackScholes 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.
94
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
23. SHARE OPTIONS AND INVESTOR WARRANTS continued
The Directors' interests in the Share Options and Investor Warrants of the Company are as follows:
At 31 December 2020
Options/
Warrants at
1 Jan 2020
Quantity
granted
during
the year
Exercised
during
the year
Options/
Lapsed Warrants
during
the year
at 31 Dec Exercise
price
2020
Date of
the grant
First
date of
exercise
Final
date of
exercise
Share Options
Matthew King
Dale Ferguson
David Archer
Dale Ferguson
Investor Warrants
David Archer
Al Marjan Ltd1
Manohar
Shenoy2
1,500,000
2,000,000
7,000,000
3,000,000
2,857,143
4,952,381
1,904,762
– (1,500,000)
–
–
–
–
–
–
–
–
–
–
–
2,000,0003
7,000,0003
3,000,000
2.76p 16/03/16 16/03/16 15/03/20
01/03/17 01/03/17 28/02/21
7.59p
01/03/17 01/03/17 28/02/21
7.59p
11/03/19 11/03/22 11/03/24
10.0p
–
–
–
– (2,857,143)
– (4,952,381)
– (1,904,762)
–
–
–
6.0p
6.0p
14/07/17 14/07/17 14/07/20
14/07/17 14/07/17 14/07/20
6.0p
14/07/17 14/07/17 14/07/20
1 Two Directors are representatives of Al Marjan Ltd
2 Alternate Director
3 Share options were not exercised and these lapsed on 28 February 2021
At 31 December 2019
Options/
Warrants at
1 Jan 2019
Quantity
granted
during
the year
Exercised
during
the year
Share Options
Matthew King
Dale Ferguson
David Archer
Dale Ferguson
1,500,000
2,000,000
7,000,000
–
–
–
–
3,000,000
Investor Warrants
David Archer
Al Marjan Ltd1
Manohar
Shenoy2
2,857,143
4,952,381
1,904,762
–
–
–
–
–
–
–
–
–
–
Options/
Warrants
at 31 Dec
2019
1,500,000
2,000,000
7,000,000
3,000,000
2,857,143
4,952,381
Exercise
price
Date of
the grant
First
date of
exercise
Final
date of
exercise
2.76p
7.59p
7.59p
10.0p
16/03/16
01/03/17
01/03/17
11/03/19
16/03/16
01/03/17
01/03/17
11/03/22
15/03/20
28/02/21
28/02/21
11/03/24
6.0p
6.0p
14/07/17
14/07/17
14/07/17
14/07/17
14/07/20
14/07/20
1,904,762
6.0p
14/07/17
14/07/17
14/07/20
1 Two Directors are representatives of Al Marjan Ltd
2 Alternate Director
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
95
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 96
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
23. SHARE OPTIONS AND INVESTOR WARRANTS continued
The range of inputs of the Share Options granted during 2020 and 2019 were as follows:
Share Options March 2019
Stock price 5.3p
Fair value of option 1.6p
Exercise Price 10.0p
Expected volatility 55%
Expected life 5 years
Risk free rate 0.6%
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 nonmarket vesting conditions (as noted above), is revised at each period
end. If the Investor Warrants issued relate to a share issue expense, the charge is to the Share Premium account.
Share Options granted
During the 2019 financial year 8,950,000 Share Options were issued to employees to assist with the recruitment,
reward and retention of key employees. These Share Options vest upon the employee meeting service and/or
performance conditions. No Share Options were issued in 2020. The detail of the LTIP share options granted to
the Directors is disclosed in Note 3.
Investor Warrants issued
No Investor Warrants were issued in 2020 or 2019.
24. ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS
Assets and liabilities classified as held for sale:
i) General description
In the Financial Statements for the year ended 31 December 2018 the Board announced that it was undertaking
a strategic review in respect of the Oman assets to identify the best outcome for Savannah and its shareholders.
During 2019 and 2020 this strategic review continued. During Q2 2020 discussions with Force Commodities Ltd
(“Force”) commenced. Substantial progress towards an agreement for sale was made before 30 June 2020, and
the disposal was expected to be completed prior to the end of 2020, therefore, the assets and liabilities of the
Omani operations were classified as held for sale in the Consolidated Statement of Financial Position and related
items presented in the Statement of Comprehensive Income as Discontinued Operations at 30 June 2020.
On 1 September 2020 a Share Sale and Purchase Agreement was signed between the Company and Force (the
‘Transaction’). The Transaction highlights were as follows:
•
Consideration and other payments (subject to Settlement of the Transaction):
o 50,000,000 new ordinary shares to be issued by Force (deemed issue price of 1 cent per Force share)
(equivalent to AUD 500,000 (~GBP 280,000))
o Preferential payment of AUD$3,500,000 (~GBP 1,950,000) in cash of an existing loan to the Company
from cash flow generated from production on Block 5
o Payment of a 1% net smelter royalty on metal sales (the 1% is pertaining to Force’s proportional
ownership of each project)
•
Settlement of the Transaction (“Settlement”) is subject to certain conditions being achieved or waived,
and notably includes Force undertaking the steps necessary to be readmitted to trading on the ASX and
obtaining certain consents in Oman.
96
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 97
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
24. ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS continued
•
At Settlement the Company will transfer 100% ownership of Savannah Resources B.V. which in turn holds
the Group’s interest in the Projects (being 65% in Block 5 via its shareholding in Al Fairuz Mining LLC and
51% (earning up to 65%) in Block 4 via its shareholding in Al Thuraya Mining LLC).
On 30 October 2020 the conditions for settlement of the transaction were achieved, the transaction was
completed, and the Company accounted for the disposal of the Omani operations.
ii) Assets and Liabilities Held for Sale
The assets and liabilities relating to the Omani operations were classified as Held for Sale in the Consolidated
Statement of Financial Position on 30 June 2020.
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. Management concluded that the fair value of the consideration
and other payments (detailed above) less costs to sell was lower than the carrying amount and therefore an
impairment loss of £5,370,130 was recognised on the date of the transfer. Following the classification as Assets
held for sale the movement of the Intangibles Assets was as follows:
Intangible
Assets
£
Cost
At 31 December 2019 –
Transfer from Exploration and Evaluation Assets 5,649,981
Additions 56,906
Disposal of Discontinued Operations (5,473,432)
Foreign exchange movements (233,455)
At 31 December 2020 –
Amortisation and impairment
At 31 December 2019 –
Transfer from Exploration and Evaluation Assets 5,370,130
Impairment charged/(reversed) in the year (164,508)
Disposal of Discontinued Operations (5,205,622)
At 31 December 2020 –
Net Book Value
At 31 December 2019 –
At 31 December 2020 –
It was appropriate for the rest of assets and liabilities to be measured at carrying value and therefore no changes
were necessary in their valuation at 30 June 2020.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
97
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 98
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
24. ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS continued
Discontinued Operations:
In October 2020 the Group completed the disposal of its Omani operations. The Group received as consideration
on settlement of the transaction 50,000,000 new ordinary shares in the capital of Force with a deemed issue
price of 1 Australian cent per Force share, of which 4,000,000 shares were used to settle some transaction
costs, and AUD$50,000 (~GBP27,543) during the exclusivity due diligence period. The fair value of the
consideration was calculated based in the quoted value at the shares when Force was readmitted to trade on
the ASX, being the fair value hierarchy level 1. Additionally, the Group received as contingent consideration: a)
the preferential payment of AUD$3,500,000 (~GBP 1,950,000) in cash of an existing loan to the Company from
cash flow generated from production on Block 5. The Management has calculated the fair value of this loan at
the date of settlement of the transaction and has been assigned a nil value. b) the right to a 1% net smelter
royalty on metal sales (the 1% is pertaining to Force’s proportional ownership of each project). The Management
has calculated the fair value of the royalty at the date of settlement of the transaction and has been assigned
a nil value.
The posttax loss from selling Discontinued Operations was determined as follows:
£
Cash consideration received 27,543
Other consideration received 271,794
Total consideration received 299,337
Cash disposed of –
Net cash inflow on disposal of Discontinued Operation 27,543
Net Assets disposed
Intangible Assets (418,300)
Other NonCurrent Assets (1,940)
Trade and Other Receivables (1,900,587)
Trade and Other Payables 1,939,215
Total Net Assets disposed (381,612)
PreTax Loss on disposal of Discontinued Operation (82,275)
Related Tax –
PostTax Loss on disposal of Discontinued Operation (82,275)
The detail of the result of discontinued operations is as follows:
Expenses other than finance costs
Impairment of Exploration and Evaluation Assets
Loss from selling Discontinued Operations after tax
Loss on Discontinued Operations for the year
Earnings per share from discontinued operations
Basic and diluted loss per share
98
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
2020
£
2019
£
(113,279)
(5,205,622)
(82,275)
(5,401,176)
(227,672)
–
–
(227,672)
(0.40)
(0.02)
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 99
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
24. ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS continued
The statement of cash flows includes the following amounts relating to discontinued operations:
Operating activities
Investing activities
Financing activities
Net cash from discontinued operations
25. EVENTS SINCE THE REPORTING DATE
2020
£
2019
£
(133,263)
(144,929)
239,068
(39,124)
(255,230)
(326,757)
497,052
(84,935)
On 12 January 2021 a Heads of Agreement was announced with the major diversified Portuguese energy group,
Galp Energia, SGPS, S.A, regarding a proposed strategic investment and alliance in the lithium field around the
Mina do Barroso Lithium Project in northern Portugal. 2021’s strong lithium market has resulted in the Company
receiving increasing interest from groups seeking to strategically undertake investment in the Project or
Savannah with or without requiring a spodumene offtake. The interest reflects the increasing appetite for
exposure to the lithium value chain within the wider investment community. Amid this backdrop the HoA
expired on 31 May 2021 and discussions in relation to a strategic investment and offtake agreement will
continue outside of the exclusive terms of the HoA.
On 16 April 2021 the Portuguese environmental regulator, Agência Portuguesa do Ambiente (“APA”), declared
the Mina do Barroso Lithium Project Environmental Impact Assessment (“EIA”) to be in conformity with its
requirements for the content of the EIA. The EIA will now progress to the next stages of the approval process,
being a public consultation and a detailed review by APA’s Evaluation Committee, which take place
simultaneously.
On 21 April 2021 the Company approved a cash placement and subscriptions amounting to £10.3m (before
expenses) through the issue of 257,968,785 ordinary shares at an issue price of 4 pence per share.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
99
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 100
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 Company’s registered office, Salisbury House, London Wall, London, EC2M 5PS, on 30 June 2021 at 10.00 am
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 15 and as special resolutions in the case of resolution 6.
ORDINARY BUSINESS
1
To receive the report of the Directors and the audited Financial Statements of the Company for the year ended
31 December 2020.
2
3
4
To reappoint 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 reelection as a Director
of the Company.
To reappoint James Leahy 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 reelection as a Director
of the Company.
To reappoint 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
5
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 £6,770,000 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
6
That in substitution for all existing and unexercised authorities and subject to the passing of Resolution 5 above,
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)
(b)
to the allotment of ordinary shares arising from the exercise of options, warrant options and warrants
outstanding at the date of this resolution;
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;
100 SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 101
NOTICE OF ANNUAL GENERAL MEETING
(c)
(d)
the grant of a right to subscribe for, or to convert any equity securities into Ordinary Shares otherwise than
under subparagraph (a) above, up to a maximum aggregate nominal amount of £1,190,000; and
to the allotment (otherwise than pursuant to subparagraphs (a), (b) and (c) above) of equity securities up
to an aggregate nominal amount of £5,070,000 (approximately 30% of the Company’s issued share capital)
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 emailed to voting@shareregistrars.uk.com or sent by mail 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 nonbusiness days) before the
time of the meeting, or any adjournment thereof.
Registered Office:
By order of the Board
Salisbury House
Christopher Michael McGarty
London Wall
Company Secretary
London
EC2M 5PS
1 June 2021
Registered in England and Wales Number: 07307107
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020 101
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 102
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 (excluding nonbusiness days) 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 emailed to voting@shareregistrars.uk.com; and
Received by Share Registrars Limited no later than 48 hours (excluding nonbusiness 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 firstnamed being the most senior).
102 SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 103
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 cutoff time for receipt of proxy appointments (see above) also apply in relation to amended
instructions; any amended proxy appointment received after the relevant cutoff time will be disregarded.
Where you have appointed a proxy using the hardcopy proxy form and would like to change the instructions
using another hardcopy 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. 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 nonbusiness 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 1 June 2021, the Company's issued share capital comprised 1,688,959,820 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 1 June 2021 is 1,688,959,820.
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.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020 103
w
e
i
v
e
R
s
s
e
n
i
s
u
B
e
c
n
a
n
r
e
v
o
G
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
n
o
ti
a
m
r
o
f
n
I
M
G
A
261290 Savannah pp85-pp104.qxp 03/06/2021 23:01 Page 104
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.
104 SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2020
COMPANY INFORMATION
for the year ended 31 December 2020
Matthew James Wyatt King
David Stuart Archer
Dale John Ferguson
Maqbool Ali Sultan
Imad Kamal Abdul Redha Sultan
James Gerald Leahy
Manohar Pundalik Shenoy
Murtadha Ahmed Sultan
Chairman
Executive Director
Executive Director
NonExecutive Director
NonExecutive Director
NonExecutive Director
Alternate Director
Alternate Director
Christopher Michael McGarty
c/o Salisbury House
London Wall
London EC2M 5PS
Dominic Traynor
Salisbury House
London Wall
London EC2M 5PS
Salisbury House
London Wall
London EC2M 5PS
DIRECTORS:
SECRETARIES:
REGISTERED OFFICE:
REGISTERED NUMBER:
07307107 (England and Wales)
AUDITORS:
BANKERS:
NOMINATED ADVISOR:
JOINT BROKERS:
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
SP Angel Corporate Finance LLP
Prince Frederick House
3539 Maddox Street
London W1S 2PP
finnCap Ltd
One Bartholomew Close
London EC1A 7BL
WH Ireland Limited
24 Martin Lane
London EC4R 0DR
Druces LLP
Salisbury House
London Wall
London EC2M 5PS
Share Registrars
The Courtyard, 17 West Street
Farnham
Surrey GU9 7DR
WEBSITE:
www.savannahresources.com