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SAVANNAH RESOURCES PLC
Company No 07307107
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Perivan.com
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CONTENTS
BUSINESS REVIEW
Company at a glance
Chairman’s Statement
Chief Executive’s Report
ESG Report
Strategic Report
Barroso Lithium Project Overview
GOVERNANCE
Report of the Directors
Remuneration Report
Corporate Governance Statement
Statement of Directors’ Responsibilities
FINANCIAL STATEMENTS
Report of the Independent Auditors
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
GLOSSARY
COMPANY INFORMATION
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COMPANY AT A GLANCE
Company overview and evolution
Savannah Resources is a natural resource development
company listed on the Alternative Investment Market
(AIM) of the London Stock Exchange. The Company is
committed to developing and maintaining a culture of
integrity, social responsibility, environmental awareness
and protection, and good governance in the conduct of
its business.
Since being established in 2010, the Company has
owned, progressed and divested several projects in
differing commodities and geographies but its sole focus
is now the Barroso Lithium Project in Portugal (the
‘Project’, the ‘BLP’). This Project, with first production
targeted for 2026, has the potential to become a
significant component of Europe’s new lithium battery
value chain.
This new value chain is being championed by the European
Commission as an integral part of the bloc’s energy
transition strategy as it looks to become less dependent
on external sources of raw materials and technology and
create an economy with net‐zero production of
greenhouse gas emissions as part of its efforts to tackle
climate change. Through the EU’s 2023 Critical Raw
Materials Act, legislators have set a target of at least 10%
of Europe’s demand for critical raw materials, such as
lithium, to be sourced from domestic supply from 2030.
The Barroso Lithium Project can safely and responsible
produce enough lithium raw material for approximately
0.5 million vehicle battery packs per year (3.1m plug‐in
electric vehicles were sold in Europe in 2023).
in 2006 and
The Project was originally granted a 30‐year Mining
lithium, feldspar and quartz
Lease
mineralisation had already been
identified when
Savannah initially acquired a 75% stake in 2017.
However, no comprehensive exploration and drilling
programme had been undertaken. Since that time
Savannah has completed over 35,000m of drilling as part
of an extensive evaluation programme on the Project,
which has also included two Scoping Studies (2018 and
2023). The Company also moved to 100% ownership of
the Project in 2019. Through Savannah’s evaluation
work, and with the addition of an adjacent 3‐block
Mining Lease application area to the Project, the Barroso
Lithium Project now contains the largest spodumene
lithium resource in Europe with a current JORC 2012
compliant Resource of 28Mt at 1.05% Li2O (equivalent
to 725,521t of lithium carbonate).
The fact that Savannah’s project bears spodumene
mineralisation is important as this lithium‐bearing
mineral is responsible for making Australia the single
largest producer of lithium raw material in the world.
Hence, safe and responsible mining and processing of
spodumene, are well‐established industrial practices.
Savannah has applied this industry knowledge to its own
development plans for the Barroso Lithium Project so
that its impact on the natural environmental and local
communities is minimised and all relevant Portuguese
and European regulations are met or exceeded.
After an exhaustive three‐year process, which included
two extended periods of public consultation, the Project
was awarded a positive environmental
impact
declaration with conditions by the Portuguese
environmental regulator in May 2023. The approved
design for the Project features numerous measures to
minimise its impact. Examples of these include, an
innovative water system combining onsite collection
with significant recycling which allows the Project to be
self‐sustaining for its water needs, the comprehensive
rehabilitation of all impacted land and water courses,
and a new road which will keep project‐related traffic
out of local villages and towns.
Importantly, the June 2023 Scoping Study which was
based on this approved design showed the Project’s
economic capacity to absorb the additional costs
associated with this minimal impact approach. Based on
production of just under 200,000t of spodumene
concentrate per year, the Project would generate an
average annual EBITDA of USD205m and net free cash
flow of USD124m. Overall, a post‐tax Net Present Value
(‘NPV’) of USD953m was generated alongside an Internal
Rate of Return (‘IRR’) of 77% and a payback period of
just 1.3 years.
Savannah is currently completing a Definitive Feasibility
Study (‘DFS’) on the Project as well as completing the
compliance phase of the environmental licencing
process. It expects to have the DFS completed by the end
of 2024 followed shortly after by the completion of the
compliance phase of the environmental licencing
process. Savannah also expects to have completed the
Strategic Partnering Process it is running to identify
partners to assist with the financing and development
of the Project later this year. Based on its current
timetable, Savannah expects to begin construction in
2025 and be commissioning the Project in 2026.
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COMPANY AT A GLANCE
Alongside the significant returns the Project could
generate for Savannah’s shareholders, it would also
generate over USD900m in taxes and royalties to be shared
between the local authority and Portuguese Government.
This is one of a number of socio‐economic benefits that
Savannah’s Project can generate for its stakeholders in the
future, but the Company has been actively engaged with
local stakeholders since it first became involved with the
Project in 2017. This has included supporting local
organisations, working with
local businesses and
employing local people. Once in production, the Project’s
socio‐economic impact will be significantly scaled up with
350 direct jobs generated, key infrastructure such as a new
road to be shared with the local population, and far greater
financial resources committed to supporting community
initiatives and education.
Savannah at a Glance
•
Experienced: Nearly 15 years as a listed mineral
exploration & development company
•
•
•
Focused: Pure play lithium development company
European: set to become a key domestic raw
material supplier to Europe’s new lithium battery
value chain
Regionally significant: 100% owner of the Barroso
Lithium Project, Europe’s
largest spodumene
resource with significant exploration upside already
identified on the Mining Lease
• Advanced: 30‐year Mining Lease awarded in 2006,
key environmental licencing approval received in
2023 after thorough process
Sunset over the Barroso Lithium Project:
•
•
•
•
•
•
Low‐risk: Conventional production techniques based
on long‐established Australian lithium industry; In
Portugal, an EU member state, and operating under
UK law and London Stock Exchange compliance &
controls
Economically
attractive: Annual production
sufficient for approximately 500,000 EV battery
packs/year; Additional production (up to 400kt/y) of
a feldspar‐quartz product for Iberia’s ceramics &
glass industries; Post‐tax Net Present Value of
USD953m, IRR of 77% and payback of 1.3 years,
hundreds of jobs created and hundreds of millions
of Euros generated in taxes and royalties for Portugal
Relevant: Fulfils the 2023 European Critical Raw
Materials Act targets for domestic production of the
lithium raw material
Environmentally & socially responsible: Project
designed to minimise impact on the natural
local communities, while
environment and
generating and sharing significant social and
economic benefits with stakeholders
Progressing: Targeting production before end 2026,
in time to respond to peak market demand growth
& anticipated shortage
Capable: Full‐fledged team with 6 international
Non‐Executive Directors
(‘NEDs’) on Board,
3 C‐levels covering key work areas, engineering team
in Australia, financial team in the UK, on‐the‐ground
team of seasoned Portuguese professionals
Further information is available on the Company’s
website at www.savannahresources.com.
Source: Company
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
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CHAIRMAN’S STATEMENT
Keeping the big picture in sight
After a challenging end to 2023 for the Company, which
came on top of a challenging year for the whole lithium
sector, I am very pleased to have this opportunity to
reiterate to shareholders the significant progress that
the Company made in the period, and to outline the
Company’s ambition for 2024 and beyond.
transformation plans aim to raise up to JPY 20 trillion
(approximately EUR140 billion)
through “green
transition” bonds and China’s announced investment in
clean technologies exceeds USD280bn.
Overall, I think these statistics leave little room but to
conclude that the energy transition is very much alive.
The market backdrop for our business remains very
positive. The energy transition is taking place at a rapid
pace and we are now in a period of intense political and
commercial competition as countries and companies
look to secure market share within this new
industrial sector.
For example, the International Energy Agency reports
that in 2023, global renewable energy capacity increased
by nearly 50% to 510GW, of which approximately 75%
was solar PV. This was the 22nd consecutive year of
growth and the fastest growth rate in the past two
decades. The statistics for sales of electric vehicles (EVs)
also remain robust. EV‐volumes.com report 14.2m
plug‐in vehicles were sold globally last year, representing
approximately 16% all new vehicles sold. This included
just over 3m in Europe, where the EV market share of
new sales is over 20%. Global sales of that quantum
represent a 33%
increase over 2022. Though
year‐on‐year sales growth has slowed (+55% during
2022) I don’t believe 2023’s growth rate could ever be
regarded as representing a market in difficulty. Indeed,
it appears that the EV market has remained remarkably
buoyant given the macroeconomic and political stresses
that have been placed on the global economy during the
year by rising interest rates, the ongoing war in Ukraine
and, more recently, the conflict in Gaza and the resulting
instability in the Middle East.
Furthermore, we should not forget the highly supportive
policies and associated financial packages put in place
by many major governments to execute the transition,
address the worst impacts of climate change, and to
prepare their economies for a carbon‐neutral future. For
example, the United States’ 2022 Inflation Reduction Act
includes nearly USD400bn in federal funding for clean
energy with the goal of substantially lowering the
nation’s carbon emissions by 2030. The European
Commission’s 2023 Green Deal Industrial Plan, designed
to enhance the competitiveness of Europe’s net‐zero
industry and accelerate the transition to climate
neutrality, could offer over EUR600bn in investment over
Japan's green
funding packages.
a
range of
The economic and geopolitical turmoil of 2023 is not the
only factor which caused the falls in the price of lithium
during the year. Another factor, which has become
apparent only with hindsight, is the nature of the buying
out of China which took place during 2021 and 2022.
While this helped fulfil demand and
lifted the
spodumene price by approximately 2,000% in tight
market conditions, it was also being partially used to
create an inventory of products right along the battery
value chain. During 2023, this inventory of products was
worked down meaning demand for
lithium raw
materials was reduced, just at a time when a number of
lithium mining projects increased production or came
online for the first time. The result was excess raw
material in the market and an 80%+ fall in lithium prices
during the year. This downward trend continued into
2024, eventually triggering a supply side response with
several operations,
including the world’s biggest
spodumene mine, Greenbushes in Australia, reducing
production. Fortunately, the downward price trend
appears to have abated with a modest improvement in
prices seen since late February 2024 as inventory levels
along the battery value chain run low and China
becomes active again after its New Year holiday.
An 80% fall in prices is clearly material but it is still worth
remembering that the USD1150/t price for spodumene
we have today is more than three times those seen in
late 2020 and nearly 68% higher than the average price
used in our 2018 Scoping Study.
As one would expect, market analysts have lowered their
short to medium price forecast for lithium products
following this correction. However, what is important to
note for Savannah given our proposed commissioning
target in 2026, is that long term pricing and the
expectation of a shortfall in supply against ongoing
demand growth remains in place. While our Project
remains economically viable at price levels much below
those seen currently, the long‐term lithium market
dynamics remain very supportive for Savannah, with
long‐term price expectations well above today’s level.
Furthermore, this comes on top of the strategic target
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CHAIRMAN’S STATEMENT
Europe has set itself of meeting at least 10% of domestic
demand from local supply by 2030 as outlined in last
year’s Critical Raw Material Act. This further supports
our Project’s development. The real challenge, as has
always been the case, is not the lithium market dynamic
but to secure all the building blocks – finance, partners,
licences, etc. that we need to get to production.
for
investors
lithium sector
the
Unfortunately,
unpredictability and volatility in this small volume
commodity market (lithium global demand was
approximately 900kt LCE in 2023 vs. Iron ore at 2.2Bt+
pa) will be with us going forward. Nonetheless, the
fundamentals are supportive and I am confident we
remain on a path towards substantial value creation.
Savannah’s key successes in 2023
Turning to Savannah specifically, the Company made
great progress during 2023, the very significant value of
which, I believe will be fully appreciated again in a more
upbeat lithium market than we have today. Our key
achievements during the year are summarised below.
The DIA underpins everything
The re‐submission of the Project’s Environmental Impact
Assessment (‘EIA’) and subsequent positive decision
(‘DIA’) by the Portuguese Environment Agency (‘APA’) as
the culmination of the ‘Article 16’ process we had
entered in July 2022, was the dominant theme for the
first five months of the year. My thanks again go to our
technical team, led by Dale Ferguson, and all our expert
consultants who worked so hard to produce such an
innovative design and operating plan for the Project
which was able to satisfy the very exacting demands of
APA, members of its evaluation committee and other
stakeholders. To be the first lithium project in Portugal
to receive a positive DIA decision from the regulator was
a great achievement for Savannah, and provided the
foundation and impetus which allowed us to move
forward with many other key aspects of the Project since
last Spring.
The Scoping Study proved the new business case
With the DIA in hand, last June and July were an
extremely busy and productive period for the Company.
June’s Scoping Study, the first economic study on the
Project in five years, included all the elements of the DIA
compliant design and demonstrated that the new
Project can have very attractive economics (Post‐tax NPV
USD953m or 41p/share) even with approximately
USD150m of combined capex and opex dedicated to
further reducing the environmental and social impact of
the Project.
Additional capital allowed us to advance with confidence
Buoyed by the DIA and the new Scoping Study, Savannah
was then keen to accelerate the Definitive Feasibility
Study and the compliance phase (‘RECAPE’) of the
environmental licencing process. To do this additional
finance was required, and a successful GBP6.5m (gross)
fundraise was completed
in challenging market
conditions in early July at 4.67p/share, par with the
market price. As part of the fundraise we were pleased
to receive the support of a number of existing
shareholders, including our two largest, Al Marjan and
Slipstream Resources, and members of the Board and
Management. We also welcomed new sector specialist
institutional investors and new private shareholders as
we built a treasury of over GBP11m. This allowed us to
undertake work on the DFS and the RECAPE, with
confidence and to take on new members of staff in key
positions as we build towards production.
Appointment of new Chief Executive Officer (‘CEO’)
In September, we were delighted to welcome Emanuel
Proença as our new CEO, with Dale Ferguson resuming
his previous role as Technical Director. Emanuel joins
Savannah from Prio Group, which is the largest producer
and supplier of biofuels in Portugal and where, as CEO
of ‘Prio Supply’, he grew EBITDA by 20 times in 6 years.
Hence, he has developed skills in managing a rapidly
growing business, which are highly transferable to
Savannah, as are his existing relations with industry
regulators, commercial partners in the energy sector,
and service providers as well as his knowledge of
Portuguese Government processes. He also has a strong
record of maintaining a constructive rapport with local
communities and other stakeholders. Equally important,
as Savannah's first Portuguese CEO, Emanuel’s
appointment underlines Savannah’s commitment to
Portugal and the Project, and brings a fresh focus and
immediacy to our efforts as we look to develop
Savannah’s brand as an important, responsible and
successful business in Portugal. Emanuel will be
appointed to the Board in April 2024.
Partnerships can make us stronger
Shareholders will be aware that commercial interest in
the Project and its spodumene lithium offtake has been
strong for a number of years and increased significantly
following the DIA approval and publication of a new
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CHAIRMAN’S STATEMENT
Scoping Study in 2023. To quantify the commercial
interest received, the Company initiated an orderly
Strategic Partnering Process (‘SPP’ or the ‘Process’) in
July, in which interested parties were invited to submit
proposals outlining how they could assist Savannah with
financing the Project's development as part of a
long‐term commercial relationship with the Company.
Due to the high number of positive responses received
from a wide range of groups, in November we appointed
Barclays Bank Plc and Barrenjoey Advisory Pty Limited
(‘Barclays and Barrenjoey’) as joint financial advisers to
lead on the Process. Following completion of the first
phase of the exercise, the Process is now focused on
engaging with a shortlist of potential partners both
willing and able to assist with the Project's future
development and financing, and which also bring
complementary skills or additional opportunities to
Savannah.
Savannah’s key challenges during the year
Despite the many achievements listed above, we have
had to contend with persistent negative media coverage
of the Project, principally instigated by a small group of
individuals from the local area. This was compounded
by the announcement of the so‐called ‘Operation
Influencer’ investigation by the Portuguese Public
Prosecutor in November 2023.
Stakeholder engagement
With the DIA received and the appointment of our new
Portuguese CEO, we have further increased the intensity
of our stakeholder engagement activities. The EIA
captured the significant changes being proposed to the
Project and additional explanation has been provided to
local stakeholders at all levels via formal and informal
meetings. We are dedicated to being ‘present’ locally,
explaining the Project to people, hearing their views and
building relationships. Pleasingly this does seem to be
starting to have a positive
impact. This can be
demonstrated by the increasingly strong relationships we
have with some local people and businesses, our
increasing number of local employees, the regular
inquiries we receive at our Information Centre in Boticas
about work opportunities and services that Savannah
might need. We also have some local people who are
willing to speak to the media about the merits of the
Project. Our consultants, Community Insights Group
(‘CIG’), have also conducted around 400 interviews with
local residents to gauge their views on the Project and feed
this data into the ongoing Social Impact Assessment study.
increase and
Regrettably, it is difficult for shareholders monitoring the
Project through the media to appreciate this. We have
always recognised that not everyone views the
development of the Barroso Lithium Project positively.
With the award of the DIA significantly increasing the
likelihood of the Project’s future development, it was
always to be expected that those against the
intensify their
development would
opposition. They appreciate the significant advancement
which the positive decision by the country’s regulator
represents for the Project. The additional legal cases that
have been brought in relation to the Project, which
Savannah believes are without foundation, coupled with
the increased stream of negative media coverage in the
second half of the year are a cause for ongoing
frustration. However, we will continue to communicate
the positive benefits of our project for the local
community, Portugal and indeed Europe as a whole, and
our efforts to minimise any and all negative impacts it
may have. Our project can represent the foundation of
a new industry for Portugal, and provide a new,
long‐term economic anchor for the Boticas municipality
via millions of euros in taxes and royalties (thereby
providing sustained financial support for community‐led
initiatives), whilst also creating hundreds of direct and
indirect jobs.
Operation Influencer
The initiation of Operation Influencer by the Portuguese
Public Prosecutor in November has had a significant
impact on the Company’s brand but it has not stopped
us working for a minute. However, we took proactive
steps, announced in January 2024 and reiterated below,
to clarify the Company’s position and re‐establish
confidence.
On 7 November 2023 the Portuguese Public Prosecutor’s
Office announced publicly the existence of ‘Operation
Influencer’ (the ‘Investigation’), an inquiry into possible
corruption, undue influence, malfeasance and other
wrongdoings in relation to the Sines 4.0 data centre
project and H2Sines hydrogen project, both in the
southern port city of Sines, the Romano lithium mine in
Montalegre, and the Barroso mine (the Barroso Lithium
Project) in Boticas. Savannah cooperated fully with the
authorities on that day when some of our premises were
visited, but none of our staff were arrested (5 arrests
were made in total) or named as ‘arguido’ under formal
investigation. Since then, the Company has been free to
continue with all its business activities unencumbered.
On 21 December 2023, the PPO announced that the
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CHAIRMAN’S STATEMENT
Investigation was being split into three separate
investigations (by industry), with one now covering the
two lithium projects. Savannah can confirm that it has
no relationship with the other lithium project involved.
of
the Operation
On 30 January 2024, Savannah announced the
conclusions from an independent legal review (the
‘Independent Review’) and legal opinions (the ‘Legal
it commissioned following the
Opinions’) which
announcement
Influencer
investigation. In summary, the Independent Review
found no evidence which would give rise to liability of
the Company in connection with any irregular financial
transactions by the Company. It also found no evidence
of improper offers, improper payments, or other forms
of wrongdoing by the Company regarding the suspicions
set out in the Investigation associated with: past
relations with a potential partner, discussions on the
by‐pass road, royalties, or in relation to interactions with
national entities in the EIA process under Article 16. No
material legal risk was identified related to the alleged
facts and circumstances outlined in the Investigation.
Separate Legal Opinions also confirmed that, based on
the findings of the Independent Review, but also on the
functioning of the Portuguese permitting process, past
legal experience, and constitutional protections, under
no realistic circumstance would the Project's execution
and its expected future cash flows be at risk from the
Investigation's findings.
Hence, the conclusions of the Independent Review and
the Legal Opinions demonstrated Savannah's solid legal
position
facts and
circumstances contained in Operation Influencer.
in relation to the alleged
Based on past similar cases, the timeline for next steps
is uncertain and likely to be long, and a formal clearing
or accusation is not expected in the near term.
the Company also welcomed
Building a team for the future
In addition to the appointment of Emanuel Proença as
CEO,
two new
Non‐Executive Directors. Bruce Griffin joined as an
Independent Non‐Executive Director, while Mohamed
Sulaiman joined as Non‐Executive Director, replacing the
retiring Imad Sultan (Non‐Executive Director since
July 2016) as the Board representative of Savannah's
largest shareholder, Al Marjan.
Bruce Griffin brings over 20 years of mining sector
experience to Savannah's Board and is currently
Executive Chair of ASX‐listed Sheffield Resources, which
has recently built and commissioned its 10Mtpa
Thunderbird minerals sands project
in Australia.
Mohamed Sulaiman is Head of Strategy at the Omani
conglomerate business, WJ Towell Group, and previously
led Strategy and Performance at OQ, the Omani energy
company. He has significant experience on the boards of
both public and private companies, and in the energy
sector. The pair have been a great addition to our board
and I look forward to their continuing contribution.
just a
Very sadly,
few days after these new
appointments, we were sorry to learn of the passing of
our friend and much‐respected Non‐Executive Director,
Manohar Shenoy. Manohar, who was Chairman of the
Board’s Audit and Risk Committee first joined Savannah’s
Board in 2016 as an alternate Director for one of the
nominees of Al Marjan and became a Non‐Executive
Director in his own right in April 2022. During his lengthy
time with Savannah, Manohar made many valuable
contributions and his insightful input and friendly
demeanour is greatly missed.
Finally, and on a happier note, we have also been
pleased to add to our technical, communication and
community liaison teams over recent months. It has
been particularly pleasing for me that a number of these
recruits have come from the local area.
Financial Overview
With the receipt of the positive DIA decision and the
publication of the Scoping Study, in order to confidently
progress the DFS the Company completed a GBP6.5m
gross fundraise providing a pro‐forma cash balance of
GBP11.4m in July. With continued investment in its asset
base in Portugal during the remainder of the year
(GBP2.3m in total; 2022: GBP2.6m), combined with the
expansion of its team and the launch of its Strategic
Partnering Process to evaluate the options for the
financing of the Project’s development, the Group
ended the year with an available cash position of
GBP9.0m. Hence, our opening cash position for 2024
allows us to progress the DFS and RECAPE.
In terms of the broader financial performance, Savannah
recorded a loss from continuing operations of GBP3.5m
(2022: GBP2.7m). Administration
for 2023
amounting to GBP3.5m were in line with 2022 cost of
GBP3.5m. However, H2 2023 Administration fees were
GBP0.7m (50%) higher than the cost in H1 2023. This
resulted from the increase in activities after the receipt
fees
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CHAIRMAN’S STATEMENT
for all
By achieving our goals, the Barroso Lithium Project can
generate a significant amount of financial and social
benefit
including our
its stakeholders,
shareholders, and provide society with one of the critical
raw materials it needs to combat climate change and
develop a net‐zero carbon economy suitable for
the future.
To make this happen much more work is required from
our team and all our service providers and I thank them
for their significant efforts made to date and their efforts
yet to come. Our success also relies on the continued
support of our shareholders whom I also thank for their
commitment to sharing Savannah’s goal of becoming a
major player in Europe’s new lithium battery chain.
Matthew King
Chairman
Date: 12 April 2024
of the positive DIA decision, and from investments in
both the appointment of a CEO and clarifying the
Company’s position and re‐establishing confidence by
demonstrating a solid legal position in relation to the
alleged facts and circumstances contained in Operation
Influencer.
Outlook
The many strands of this important project are beginning
to come together. As we stand today, the completion of
the DFS and the environmental licencing processes are
in sight, and we already have the Mining Lease we need.
Strategic partnerships and associated financings are also
achievable in the near‐term and we have options
available to us to secure the land we need to develop
the Project. There are many individual Portuguese who
would like to participate in the lithium battery value
chain which is developing in their country, including our
Project. This has allowed us to grow our team with highly
skilled individuals and build relationships with many
other businesses, trade bodies and potential investors.
Furthermore, all this is now being done against a
supportive European political backdrop, which is calling
for meaningful domestic production of critical raw
materials by 2030. Hence, I believe we can move forward
with confidence acknowledging that, while the lithium
market will remain volatile and that many challenges lie
ahead, the long‐term situation will be in our favour.
8
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CHIEF EXECUTIVE’S REPORT
I was delighted to join the Savannah team in September
to play my part in the development of the Barroso
Lithium Project. I see the Project as a unique opportunity
for Portugal to become a very significant player in a new,
future facing, industry.
As key decision makers in Portugal have often pointed
out, the country must not hesitate to take advantage of
the unique opportunity presented by its hardrock
reserves of lithium, which are the largest in Europe.
These reserves grant Portugal the chance to take a
leading role in the region’s energy transition. I firmly
believe that by responsibly developing this new industry,
including the lithium resources at the Barroso Lithium
Project, we can bring meaningful benefits to the
Portuguese national economy, its local economies and
to individual stakeholders in projects, such as local
people and company shareholders, such as Savannah’s.
The success or failure of our society to deliver the energy
transition and a net‐zero global economy will have a
direct impact on all our lives in the coming decades.
Hence, I’m very keen to do what I can to combat the
worsening effects of climate change and I am humbled
by the opportunity to do it through a project of
unmatched size and opportunity, alongside a great team
of professionals.
As this is the first of what I hope will be many CEO
reports I will write for Savannah, I thought I would take
this opportunity to layout my observations since joining
the Company seven months ago, and highlight the areas
that I will be focusing on to take our Project forward.
Observations:
1. The quality of our project gives us an excellent
opportunity: The natural parameters of the Project
including its scale, location, and conventional
spodumene lithium mineralisation, make it a very
significant lithium asset. These parameters also
make it an ideal development project for a company
like Savannah. It has also shown its economic
robustness by being able to bear the additional costs
associated with the very comprehensive design
elements required to minimise its environmental
and social impact, and gain the final approval from
the regulator – making this a project that responds
to the most stringent European standards.
Furthermore, as we have shown throughout our
time working on the Project, there is huge mineral
potential on the Mining Lease beyond the current
limits of the orebodies defined to date.
2. We have a great team: Savannah is fortunate to
have highly capable and very dedicated staff, who
work together extremely well, often under testing
circumstances. As my appointment and the other
appointments we have made recently show, there is
a commitment to not only grow the team but to take
on and empower Portuguese nationals, reflecting
the importance of the Portuguese project to the
Company. Equally, we understand that to achieve all
our goals, including best practice at the Project, we
must utilise skills and knowledge which we can’t find
in Portugal today, and our staff demographics will
always reflect that.
3. The Project is ‘achievable’: Given the highly
strategic nature of the asset, people are often
surprised that the capex, including nearly 20%
contingency is only approximately USD280m. In
reality, a project processing 1.5Mtpa is not large by
industry standards. While that is still a significant
sum, it is very modest when compared to the capital
expenditure required to build lithium chemical
plants (refineries) or integrated projects which
feature both a mine and a chemical plant, or even
alternative mining projects in lithium or other
commodities. Furthermore, it should be a sum
which Savannah can secure. Despite the significant
fall in the lithium price during 2023, this sector still
has strong potential for corporate transactions and
sustained
Industry
from
participants understand the value of future, long
term, supply from low‐risk projects in stable
jurisdictions. The Barroso Lithium Project offers
these features, and Savannah should feel confident
that financing solutions will be found and that more
of the Project’s value will be recognised in our share
price in the future.
investors.
interest
Through our Strategic Partnership Process we expect
to generate value for our shareholders by identifying
industry groups which appreciate the strategic
advantages of assisting Savannah with the Project’s
financing. We are also investigating the latest
opportunities for public funding which may be
available following the additional focus placed on
the domestic production of ‘Critical’ and ‘Strategic’
raw materials by the recent approval of the new
Critical Raw Materials Act by the European
Parliament.
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CHIEF EXECUTIVE’S REPORT
4. We have a strong mandate for development: The
award of the DIA by the environmental regulator
was a huge step forward for the Project. While there
is much work still ahead in the remainder of the year
to complete the current RECAPE, or compliance,
phase of the environmental licencing process, the
DIA’s positive impact on the probability of the
be
Project’s
underestimated. In combination with the existing
30‐year Mining Lease, as well as the positive stance
of the major political parties in Portugal towards
development of a domestic lithium industry, we
have a good foundation from which to move
forward with confidence.
development
should
not
5. Misunderstandings regarding the Company’s
brand: The combination of the Project’s extended
development timeline, confusion over the licencing
process in Portugal, spurious legal actions brought
in relation to the Project, persistent negative press
coverage often instigated by anti‐mine campaigners,
and the Operation Influencer investigation, have all
contributed to severely impact Savannah’s brand.
This has created challenges in many aspects of our
business which in turn slow our rate of progress and
undermines the real value of our asset. This
perception doesn’t match the reality of a project
that is in so many aspects good for everyone. I am,
as is everyone in the team, proud to support and
defend
the merits of Savannah’s project.
Transmitting that pride to the public will certainly
help turn the tide.
Drilling during the first phase of the 2023/24 programme:
My current focus and future actions
1. On project development: I agree with the clear
message I have received from shareholders and
advisers that ‘delivery’ of the Project and all the
various milestones along the way is our best
opportunity to distil greater value in our share price.
I trust shareholders will appreciate from our
announcements over the last few months, we are
progressing the Project as quickly as we can to a
Final Investment Decision. I am working closely with
our technical team, under the leadership of Dale
Ferguson, to ensure they have all they need to
maintain progress. If we can remain on track with
our activity and funding plans we should complete
the Definitive Feasibility Study by the end of the year
and the RECAPE phase of the environmental
licencing process shortly afterwards. While the
technical team goes about its work, I and others in
the team are focusing on securing the external
inputs we need to complete the DFS and secure the
environmental licence. This includes regular liaison
with government departments and agencies,
reviewing our financing options, and securing the
land access required.
On land access, I support a strategy, defended many
times by Savannah
in the past, focused on
prioritizing the purchase of land, or the striking of
access agreements on the land we need for the
Project with the relevant private landowners or
Baldios groups which manage the land on behalf of
the community. Generous offers have been made,
Source: Company
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CHIEF EXECUTIVE’S REPORT
and agreements have now been reached for 100
parcels of land. We will continue to pursue this
strategy when possible, but at the same time start
to use the rights granted under the Portuguese legal
system to secure the land we need in a timely
manner when amicable agreements are not possible
or are taking too long.
2. On team building: While I identified above that
Savannah had an excellent team, it is also a relatively
small team and as we move forward and grow, we
must take on more staff and add key skills to the
group. You will have read in the Chairman’s report
about the additional Non‐Executive Directors who
joined at the same time, but since summer 2023 we
have doubled Savannah’s operational team in
Portugal. The majority of new staff have joined the
technical team to assist with the drilling programme
and field work we started in October to provide
important data for the DFS and RECAPE. Pleasingly,
ten members of staff are inhabitants of the local
area. In addition, as the Chairman highlighted, we
have also recruited high quality individuals to take
up roles including Community Relations Manager,
Communications Manager, and Communications
Assistant. Our ‘owner’s team’ has also expanded
with more consultants engaged in relation to the
DFS and RECAPE. I believe our recent recruitment
activities tells shareholders much about the areas I
believe we need to focus on to ensure the Project
moves forward efficiently.
Looking ahead, we will continue to add to the team
as appropriate and always while being mindful of
our cash resources. Furthermore, I have been
delighted by the steady flow of inquiries we have
had at our information centre and through the
website regarding future employment. There really
is growing interest in working for Savannah.
3. On achieving the achievable project: To make this
project a reality we must take it to a point where we
can raise the capital required to build it. To get there,
we must first complete the licencing process,
confirm definitively the economic case for the
Project, secure the land we need, build our own
team and a suite of capable service providers, and
identify partners and/or customers who share our
vision and see the strategic value in this asset and
its products. Pleasingly, all these workstreams are in
hand including the Strategic Partnering Process, and
I will work to ensure they are all completed. As we
reported recently, our Strategic Partnering Process
has now reached the second stage and we are
engaging with a shortlist of counterparties. The
team and I will continue to engage with these
groups, and with the assistance of our advisers,
hope to be able to structure a transaction which
underpins the Project’s development. At the same
time, we will continue to assess various sources of
public funding which are potentially available to the
Project, to make sure Savannah has multiple
financing options available to it.
through a
the Project
4. On using our mandate for development: I think the
Barroso Lithium Project represents an extremely
valuable and important opportunity for Portugal.
Furthermore, we have been given formal approval
for
lengthy and
comprehensive licencing process which featured
two extended periods of public consultation in 2021
and 2023, which we welcomed. Encouragingly, there
are many, including the new government and the
other major political parties,
academics,
industrialists, and members of the public, who agree
with me and want to see the Project responsibly
developed and operated to establish Portugal in the
lithium battery value chain. Building on the approval
we have been given, we want to garner more of this
type of external support to give us a more secure
platform on which
forward with
development. Efforts on this front are already
underway, but looking ahead we will be reaching out
to a wider circle of politicians, including at the
European Commission, networking into related
industries and academia through shared contacts
and events, and presenting Savannah to Portuguese
investors where we believe significant latent interest
in our Company exists. Wherever good support is
found, we will be actively encouraging those parties
to speak freely about the benefits they see in
our Project.
to push
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
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CHIEF EXECUTIVE’S REPORT
5. Changing the perception of Savannah and the
Project: For me, this is the biggest challenge that we
face. Looking from the outside, as I did myself a few
short months ago, it is easy to believe that the whole
of the local community, indeed most of Portugal,
appears to be against the development of this
Project, others like it, and new infrastructure in
general. I now know from experience, that this is not
the real situation. Furthermore, it is hard to
understand why this would be case, on the basis of
facts, given how much good can be delivered by this
project in terms of job creation, value to the region,
opportunity for the country and contribution to the
environmental needs of Europe and the rest of the
world. However, today it appears that perceptions
are almost as important as facts, and that instigating
fear is easier for some than providing facts, as
Savannah chooses to do.
Savannah’s CEO, Emanuel Proença and Technical Director, Dale Ferguson receiving the Overseas Direct Investment
Award from HM Ambassador, Lisa Bandari at the UK‐Portugal Business Alliance Awards ceremony, March 2024:
Source: Company
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CHIEF EXECUTIVE’S REPORT
We completely understand those with genuine
concerns about the Project’s impact on the local
environment and local communities, and we want
to spend time engaging with them. I have already
begun to do this and have spoken with many
individuals and groups in my short time at Savannah.
Encouragingly, I am finding by listening to these
people’s concerns and then explaining the accurate
facts of the Project – how it will be developed, the
scale of its various parts and the true size of the land
area which will be impacted (and rehabilitated), the
steps we are taking to minimise noise, dust,
transport, the jobs it can create, etc, and reminding
them that they live in an area which has numerous
active quarries already, that they become more
accepting of the concept. I, and all the Savannah
team, are committed to this incremental process of
winning hearts and minds through open dialogue.
But this is just one front on which we must win the
perception battle.
The active campaign to stop the development of this
Project has been building for a number of years, led
by a small group of very committed individuals. They
are thorough and efficient in their use of the media,
social media, and the legal system to execute their
campaign. We believe misinformation and
emotional arguments abound. Few questions are
ever raised by journalists about their underlying
motives, or their alternative solutions to delivering
the energy transition we all need, and the industrial
development which must support it, to tackle
climate change. No doubt they are as much affected
by this problem as the rest of us.
campaign. Quite rightly, in the past two years efforts
were more focused on the creation of a project
which satisfies the appointed government agency
and its associated parties, which accurately consider
the environmental and social impact of a project
against the socio‐economic benefits it can bring to
the country as a whole. However, now we have
created a project which meets the Portuguese
Government’s rigorous requirements, and are
subsequently legitimately progressing the Project,
the team and I will be focusing on getting Savannah’s
side of the story prioritised in the mainstream
media. It is our intention to have much greater
control of the narrative which surrounds our Project.
As part of this we will target the accurate reporting
of relevant facts and, where appropriate, take firm
action against those spreading misinformation and
making unsubstantiated claims against us.
To sum up, we have some very clear next steps:
complete the DFS and the environmental licencing
process; identify our strategic partners; secure finance;
leverage the mandate we have been given to consolidate
our position; gain greater acceptance among local
stakeholders; and rebuild our brand in Portugal and
internationally. It’s a lot of work, but it can be achieved
and I’m eager to tackle the challenge. My appreciation
goes to our shareholders and stakeholders for their
ongoing support, I look forward to meeting many more
of you in the months ahead. And my thanks to the
Savannah team for welcoming me onboard and
responding to the challenge so determinedly.
As a listed company, with a strong governance code,
Savannah must follow protocols and has not had the
resources to effectively and persistently tackle this
Emanuel Proença
Chief Executive Officer
Date: 12 April 2024
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ESG REPORT
Savannah withstood some significant challenges across
the ESG spectrum during 2023, but the team were able
to respond to these challenges effectively, demonstrating
both the Board’s and executive team’s capabilities, and
the operation of the Company’s robust systems and
controls to manage these critical issues under pressure.
As the Company matures in parallel with the progression
of the Barroso Lithium Project towards eventual
operation and cash flow generation, the depth and
breadth of our ESG commitments and protocols will also
increase. This is already beginning to express itself in a
number of ways including increased staffing in areas such
as environmental management, community relations and
communications and developing additional ESG‐related
policies and compliance with relevant international policy
standards.
We remain determined to demonstrate that a natural
resource company, like Savannah, can fit with the
conservative perception of an ESG compliant company.
We believe we can achieve this through the role we will
play in the energy transition and the highly responsible
and transparent way we conduct our business and deliver
on our goals which include dedicated environmental
stewardship, and sustained stakeholder engagement and
benefit sharing.
Savannah hosting a social event for visitors and members of the local community at its core store, March 2024:
Source: Company
Environmental
The Company’s initial ESG challenge in the year related
to the environment and was technical in nature. By
making sure that we re‐submitted a revised EIA to the
Portuguese authorities on time which satisfactorily
addressed and reflected the substantial feedback
received during the Article 16 process, Savannah
demonstrated its willingness to reduce further the
environmental and social impact of the Project. This
commitment was rewarded by the positive DIA decision
on the submission.
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ESG REPORT
Key features of the revised project design include:
• Rehabilitation: One of the key advantages of the
Barroso Lithium Project is that mining will take place
in a sequential fashion which will allow for continual
remediation and rehabilitation of the areas
impacted from early in the Project’s life. Focus will
be placed on reharmonising the Project area with
the local landscape, replanting with native species
of plants and trees to encourage local fauna, and
protecting and re‐establishing local water courses.
Our objective at the end of the Project is to leave the
land rehabilitated, safe, valued and with new
opportunities for different uses by the
local
population. Savannah commits to ensuring future
sustainable use, whether for tourism, agriculture, or
other purposes.
• Water: Savannah appreciates the critical importance
of both water availability and water quality to the
population and natural environment in the Barroso
region. Hence, the Project has been designed so that
its water usage does not impact other local users or
the natural environment. The Project is expected to
be self‐sufficient for its water needs with the water
required collected on the site, primarily from within
or below the mine workings. The single largest
consumer of water on the Project will be the
processing plant, and 85% of the water used in the
plant will be recycled and used again.
In addition to not depriving other local users or the
local environment of water, the Project does not
pose a threat to local water quality, thanks to its
benign production processes and innovative water
treatment and storage process.
• Waste Storage: Another critical feature is the
innovative ‘dry stacking’ technique that will be used
for the storage of tailings from the processing plant.
This highly stable structure will completely avoid the
need for a traditional ‘wet tailings dam’ onsite.
Furthermore,
environmental
protection the waste storage facility will be built on
a waterproof lining. As with other areas of the
additional
for
Project, the waste storage facility will also be
progressively rehabilitated and revegetated over the
Project life.
• Monitoring & reporting: To provide peace of mind
to local residents, we are also planning to offer
real‐time data on the Project’s environmental
performance to the public (air quality, water quality,
noise, ground vibrations). This will be done by
making the relevant data, which we will collect from
a series of sensors located across the Project area
and local surroundings, available via an app and our
website. In addition, local communities will be
protected from disturbance from project‐related
traffic thanks to a road plan which avoids villages
and towns and allows trucks safe and efficient
access onto the national highway network.
• Decarbonisation: As part of its commitment to the
decarbonisation of Europe, in 2021 Savannah
announced its intention to target net zero scope 1
and 2 greenhouse gas emissions over the life of the
Project. This would mean, over the life of the
Project, significantly reducing any emissions it
generates and removing or offsetting any residual
emissions that remain. The Company is also seeking
to significantly minimise scope 3 emissions by
exploring a number of innovative technology
options. Work on this decarbonisation strategy has
been underway since March 2022. The Project is
significantly aided in its decarbonisation goal by the
70%+ renewable energy mix which already exists in
Portugal’s power grid. The commercialisation of zero
or ultra‐low emission surface mining equipment
over the medium term is also likely to contribute
significantly to our plans.
The following table summarises the key steps that
Savannah has taken and intends to take to minimise its
impact on the natural and urban environment
neighbouring the Barroso Lithium Project. Where
relevant, Savannah’s mitigation proposals meet or
exceed the obligations and targets set in the Project’s
DIA from the environmental regulator.
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ESG REPORT
Summary of Environmental protection measures and commitments made at the Barroso Lithium Project:
Previous & Recent activities/
Consideration commitments Future activities/commitments
Air quality
management
Baseline monitoring of local air
quality completed
•
• Annual monitoring of local air
quality, during exploitation works
on the NOA pit
• Constant monitoring of local air quality
during operating phase and real‐time
reporting of data to stakeholders
• Dust suppression through regular dowsing
of site roads from water trucks and use of
‘fog cannons’ at plant delivery point
• Future air quality to benefit from targeted
reductions to Scope 1 & 2 emissions to net
zero and additional reductions to Scope 3
emissions
• Comprehensive action plan prepared to
deal with any air pollution incidents
Biodiversity
•
Baseline monitoring of local flora
and
fauna completed plus 2
seasonal flora and fauna surveys
completed for RECAPE phase of
environmental licencing process
•
Survey of local land use completed
• Annual monitoring for the Iberian
• Rehabilitation
and
revegetation
of
impacted areas on the Project beginning
during operating phase using native species
of plants
• Ongoing monitoring of key land and aquatic
fauna in the area, including the Iberian Wolf
Carbon abatement
•
•
Wolf completed
3rd party Scope 1‐3 emissions
assessment completed in 2019.
Scope 1 & 2 emissions inventory
estimate revised and restated in
2022 (see below)
Commitment to move towards net
zero Scope 1&2 emissions during
operating phase and
target
additional Scope 3 reductions
announced in 2021
• Decarbonisation strategy initiated
in March 2022 with study led by
the Portuguese environmental
consultant, ECOPROGRESSO. First
phase
study
concluded
(announced in Feb 2023):
of
• Decarbonisation studies to be continued.
Next steps to include:
o More detailed analysis of the options
available for 100% renewable energy
provision as part of the Definitive
Feasibility Study on the Project. A
number of viable options are available
to secure 100% renewable energy
supply to the Project including regional
solar and wind generation, on market
purchase, via direct Power Purchase
Agreements, or a combination of these
Studies with a number of mining
equipment OEMs to determine a site‐
specific solution for a transition to a
battery operated mining fleet and
associated charging infrastructure
o
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ESG REPORT
Previous & Recent activities/
Consideration commitments Future activities/commitments
•
Execution of study findings to deliver on the
defined emissions targets through final
project design, ongoing optimisation during
production
o
o
that battery
Confirmation
electric mining
powered
equipment will provide the
most effective and flexible
means to reduce Scope 1
emissions at the Project to
zero. Scope 1 emissions
represent 68% of the Scope 1
and 2 total
the potential
The estimate of Scope 2
baseline
emissions was
reduced by 54% from the
original 2019 forecast, based
for a
on
reduction in the estimated
power requirement of the
Project's plant and a 41%
reduction in the emissions
associated with Portugal's grid
power between 2019 and
2021
•
a Memorandum
Signed
of
Understanding (‘MoU') with ABB,
the global technology leader as the
first of
the decarbonisation
‘specialist’ appointments. Under
the MoU, ABB will:
o
Apply its industrial automation
and electrification expertise to
develop and co‐ordinate an
extensive suite of production
control and process solutions
for the Project
o Work with ECOPROGRESSO
and its partners to provide
engineering support for the
Barroso
Project
Lithium
Definitive Feasibility Study
Land rehabilitation
• Ongoing rehabilitation of areas
impacted by previous exploration
activities (drill pads and access
routes)
•
•
• Annual monitoring ongoing of the
small exploitation works on the
NOA deposit
Continue with rehabilitation of previous
exploration sites
and
Progressive
comprehensive
rehabilitation during and after operating
phase using native species to revegetate
impacted areas
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ESG REPORT
Previous & Recent activities/
Consideration commitments Future activities/commitments
Execute project design and plans at the
relevant time with commitment to operate
at or below the night time legal noise limits
during both day and night (with the
exception of blasting)
Constant monitoring of noise levels during
operating phase and real‐time reporting of
data to stakeholders and the environmental
regulator
• Noise levels may be further reduced by the
introduction of zero‐emission mining fleet
and other equipment
•
•
•
•
•
•
•
Execute access road plan, avoiding project
traffic passing through local villages and
towns
Evaluate use of low/zero emission road
trucks as part of decarbonisation strategy
Refine and finalise project design through
licencing and DFS
the environmental
processes
Execute final Project design
Refine and finalise the project design
through the environmental licencing and
DFS processes
Execute final project design
Comprehensive action plan prepared to
deal with any potential pollution incidents
Noise & light
abatement
•
Baseline noise studies completed
•
• Annual monitoring ongoing of the
small exploitation works on the
NOA deposit
•
•
Processing plant location selected
to reduce light and noise impact on
local communities
•
Time limited, regulated blasting
schedule included in project plan
Transport
management
• No mining activities at night
•
•
Inclusion of new access roads in the
project design to mitigate impact
on local communities and minimise
use of local roads
the
Truck movements during
operating phase restricted
to
weekdays only and set times during
the day
Visual impact
abatement
• Visual impact proactively considered
in project design (e.g., processing
plant location, road layout)
Waste
management
• Waste to be minimised through sale
of feldspar‐quartz product
•
Processing plant waste (tailings) to
be dried and stacked to avoid risks
in
associated with wet storage
traditional tailings dam
• Waste rock stored in temporary
storage facilities to be used to fill
closed pits as part of rehabilitation
programme
•
Beginning in the operating phase,
permanent waste storage areas to
existing
be
topography
progressively
re‐vegetated
contoured
into
and
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ESG REPORT
Previous & Recent activities/
Consideration commitments Future activities/commitments
Water
management
Vibrations
management
Refine and finalise project design through
licencing and DFS
the environmental
processes
Execute final project design
both
quality
Constant monitoring of local water quantity
and
and
downstream of the Project area during and
post operating phase and real‐time
reporting of data to stakeholder
upstream
Comprehensive action plan prepared to
deal with any potential pollution incidents
•
•
•
•
•
•
•
•
Continued baseline monitoring of
including
local water courses,
surface and underground chemical
analysis
3rd party estimate of annual water
requirement for operating phase
completed
Project to be self‐sufficient for water
through on‐site water
usage
harvesting, and storage, wastewater
recycling and recovery of water from
concentrate and waste products
Lithium recovery process based on
use of REACH registered chemicals
with low environmental toxicity;
will operate at near neutral pH
• Hydrogeological study, including
drilling, initiated as part of the
RECAPE
the
phase
environmental licencing process
of
• Water quantity monitoring on the
Covas river both upstream and
downstream of the Project area
• Monitoring of vibration, during
blasting works at the NOA pit
• Vibration levels to be well below legal limits
during operating phase
•
•
Constant monitoring of vibrations during
operating phase and real‐time reporting of
data to stakeholders
Comprehensive action plan prepared in
case the vibrations results exceed what was
expected
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ESG REPORT
Social
Local Community engagement
Once the EIA had been resubmitted in March 2023, more
social engagement, greater provision of accurate
information, and Savannah’s capacity to receive and
respond quickly and accurately to feedback from
stakeholders were crucial. Savannah has been delighted
to welcome a number of local people onto its team
during the year, including to our communications team,
as we look to further anchor the Company in local
society, by making a positive impact on the local
economy and workforce in the area.
Following the revised EIA submission, Savannah spent
time meeting with local people to explain the proposed
changes to the Project and to hear their views. We also
welcomed the extended public consultation period which
was run by APA during March and April. After the positive
decision had been made, further meetings with key
stakeholders, including the Baldios land management
groups and Mayor of Boticas, addressed topics such as
future land access and other issues relevant to how
Savannah will progress the Project. Whether it is in more
formal meetings, or ad hoc meetings with members of
the public, the Company’s focus has remained on
building relationships, receiving feedback and providing
accurate, consistent information on the Project and
acting in a responsible and transparent way.
Alongside Savannah’s own engagement with local
stakeholders, Community Insights Group, the highly
experienced social performance consultancy, continued
its Social Impact Assessment (‘SIA’) work following
submission of the findings of the first phase of this
assessment as a 'Social Issues Scoping Report' to APA as
part of Savannah's revised EIA. The SIA is an important
part of Savannah’s RECAPE work, and CIG has conducted
approximately 400 interviews with local people to gather
their views on the Project as well as their expectations
and preferences for benefit sharing from the Project.
The Savannah team meeting with members of the Dornelas village community, February 2024:
Source: Company
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ESG REPORT
Government & other stakeholder engagement
In the normal course of
its business, Savannah
maintained regular contact with relevant Portuguese
ministries and government agencies during the year as
well as meeting with several Portuguese MEPs,
representatives of the UK and the US Government and
other embassies in Portugal.
In the final quarter of the year, Savannah’s governance
was placed under extreme scrutiny by Operation
Influencer. This inquiry, launched by the Portuguese
Public Prosecutor, is investigating possible corruption,
undue influence, malfeasance and other wrongdoings in
relation to a number of projects including Savannah’s
Barroso Lithium Project. The Company immediately
responded with a public statement reiterating that
Savannah has and always will conduct its business in a
fully lawful and transparent manner. Savannah went on
to commission an Independent Review and external Legal
Opinions, the key findings of which were announced to
the market in January 2024 (see Chairman’s Statement
for further details).
The Independent Review found no evidence which would
give rise to liability of the Company in connection with
any irregular financial transactions by the Company. It
also found no evidence of improper offers or payments,
or other forms of wrongdoing by the Company in regard
to the questions raised
Influencer
associated with past relations with a potential partner,
discussions of the by‐pass road, royalties, or in relation
to interactions with national entities in the EIA process
under Article 16. No material legal risk was identified
related to the allegations outlined in the Investigation.
in Operation
The Legal Opinions confirmed that, based on the findings
of the Independent Review, but also on the functioning
of the Portuguese permitting process, past
legal
experience, and constitutional protections, under no
realistic circumstance would the Project's execution and
its expected future cash flows be at risk.
Hence, Savannah believes that the conclusions of the
Independent Review and the Legal Opinions demonstrate
the Company’s solid legal position in relation to the
allegations contained in Operation Influencer.
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ESG REPORT
Summary of social and government interaction and commitments made in relation to the Barroso Lithium Project:
Previous & Recent activities/
Consideration commitments Future activities
Social
Impact
the
Completion of
Assessment as part of the RECAPE process
and to support finalisation of Stakeholder
Engagement Plan to complement future
phases of the Project
Refine and finalise the Benefit Sharing and
Good Neighbour Plans
Continue with land acquisition programme
Community
engagement
• Additional
Information
centre
•
opened in Boticas town (2 in total)
•
•
•
•
•
Impact
Initial phase of Social
by
completed
Assessment
Insights
Group,
Community
incorporating
interviews with
community members and resulting
in a 'Social Issues Scoping Report'
which accompanied Savannah’s
revised EIA submission to APA
•
•
of
around
Completion
400
interviews with local residents for
the next phase of the Social Impact
Assessment
Communication also maintained
with local communities through a
range of meetings , drop‐ins and
activities at the Information Centres,
and publications of community
newspapers
and
December 2023)
(September
acquisition
Land
continued
programme
Produced a comprehensive series of
Information sheets for stakeholders
highlighting the key design points
and
socio‐economic programs
within the revised EIA
Community
support
•
Sponsorship of local cultural and
sporting events & teams
• Donations
to
service (forest fire mitigation)
local firefighting
•
•
Repairs made to local housing stock
Incorporation of a foundation as part
of the Benefit Share Plan which will
focused
invest
programmes
community
in
•
•
Continue with current financial and
resource support for local events, teams
and groups; continue with support for local
residents in need
Refine and finalise the Benefit Sharing and
Good Neighbour Plans
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ESG REPORT
Previous & Recent activities/
Consideration commitments Future activities
Government
engagement
held
have
•
Commission/European
Engagement/Meetings
included:
European
Parliament:
•
EC Executive Vice President, Maroš
Šefčovič
• MEP Carlos Zorrinho (Pt)
• MEP Cláudia Monteiro de Aguiar (Pt)
• MEP Paulo Rangel (Pt)
• DG Grow Head of Unit, Peter
Handley
Continue and increase engagement with
key national government ministers &
departments, and local administrators
• Maintain
contact with British, US,
Australian and other relevant Embassies in
Portugal
• Maintain
European
contact with
Commission & relevant EU bodies (see
Membership section in Governance box
below)
Portugal:
•
for
Minister
Portuguese Minister of Economy
and Maritime Affairs
Portuguese Minister of Environment
and Energy Transition
Portuguese
Infrastructure
Portuguese Secretary of State for
Energy
Environmental regulator (APA)
Institute for Nature Conservation
and Forests
The Northern Portugal Regional
Coordination and Development
Commission (CCDR‐N)
The Directorate‐General for Energy
and Geology (DGEG)
•
•
•
•
•
•
•
• Mayor of Boticas
• Mayors of Dornelas parish, Covas do
Barroso parish, Ribeira de Pena
Portuguese Ambassador to UK
•
Australia:
• Australian Ambassador to Portugal
(visit to Boticas Information Centre)
British Ambassador to Portugal
UK:
•
USA:
• US trade delegations at US Embassy,
Portugal
• Office of Foreign Investment and
National Security, U.S. Department
of Energy
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ESG REPORT
Previous & Recent activities/
Consideration commitments Future activities
Health & Safety
Local business
engagement
•
•
•
•
• Maintain priority focus on Health & Safety
and associated staff training
Continued
to prioritise high
standards of Health & Safety and
updated the related policies
Zero Health & Safety incidents or
loss time injuries reported in 2023
(2022: 0)
Became member of Mais Boticas
(local Chamber of Commerce)
• Maintain and increase engagement with
local suppliers of goods and services
Preference given to local suppliers of
goods & services
• Maintain and increase engagement with
suppliers of goods and services across
Portugal
Other stakeholder
engagement
• Attendance at relevant government
and trade events in Portugal and
elsewhere in Europe
• Maintain presence at relevant government
and industry events in Portugal, UK and
across Europe
• Active engagement with national
and international press and media
resulting in significant coverage of
Savannah and the Barroso Lithium
in Portugal and across
Project
Europe
•
(April‐July
Public consultation phases of EIA
2021,
completed
March‐April 2023) including public
‘in‐person’ meetings arranged by
environmental regulator (2021)
• Met with the Food and Agriculture
Organisation of the United Nations
Staff
•
24 members of staff as at February
2024 with 70:30 male:female
demographic with 14%
from
minority ethnic groups; currently
42% of project staff are from the
local community
Other activities
•
Sponsorship of FST Lisboa, the
Lisbon University student electric
vehicle racing team
•
Public relations campaigns across multiple
media channels in Portugal and beyond to
highlight importance of domestic battery
raw material supply
in Europe and
Savannah’s responsible approach to its own
lithium operation
• Add to the existing team across the range
of disciplines required to develop the
Project
•
•
•
to
expected
Project
generate
approximately 350 direct jobs during the
operating phase, and around 2,000 indirect
and induced jobs
Continue to seek opportunities to recruit
from the local population and within
Portugal
Evaluate other sponsorship and support
opportunities with relevant groups
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ESG REPORT
Governance
Consideration Recent activities Future activities
Board Composition
• Annual evaluation of the Board’s
• Appointment
performance implemented
five1
new
of
Non‐Executive directors during 2022
and 2023 including Bruce Griffin and
Mohamed Sulaiman
in 2023.
Retirement from the Board of Imad
Kamal Abdul Redha Sultan
• Appointment of Directors to meet needs
identified by the Nomination Committee
• Ongoing annual board performance review
•
Bruce Griffin adds to the Board’s
mining sector knowledge with over
20 years’ experience
in mining
finance and also holds a number of
executive and NED positions in the
industry
• Mohammed Sulaiman acts as the
Board’s representative of Savannah’s
largest shareholder, the Al Marjan
group, and has over 20 years of
experience in Strategy, investment
management and board level roles
Environmental &
Social Management
System
ESG Reporting
•
•
Finalised Corporate ESMS, aligned
with internationally recognised ESG
standards
Completion of ESG questionnaires
for institutional investors
• Adopt relevant international specific ESG
standard and commence reporting to
relevant standard
1 Manohar Pundalik Shenoy was appointed on 7 April 2022 and passed away in September 2023
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268158 Savannah pp01-pp27.qxp 22/04/2024 09:30 Page 26
ESG REPORT
Consideration Recent activities Future activities
Lithium Industry:
• Maintain
Membership of
industry Trade
bodies &
Associations
current memberships and
evaluate membership of additional
initiatives which would support our efforts
to follow industry best practices and
complement other ESG and corporate goals
•
•
International Lithium Association
British Standards Institute Technical
Committee on Lithium Industry
Standardisation (UK is a participant
International
the
member of
Standards Organisation’s Technical
Committee on Lithium Industry
Standardisation)
European Union Associated initiatives:
•
•
•
•
Business
managed by EIT InnoEnergy
Investment
Platform
European Battery Alliance
EIT RawMaterials
European Raw Materials Alliance
European Mining Industry:
•
European Association of Mining,
Metal Ores & Industrial Minerals
('Euromines’)
Portuguese initiatives:
• Association for the Battery Cluster
(founding member)
• Mineral Resources Cluster
•
Business Council for Sustainable
Development
• Mais
Boticas
Commerce in Boticas area)
(Chamber
of
Forest Association of Trás‐os‐Montes
Forestry Association
COTEC Portugal
Portuguese Chamber of Commerce
•
•
•
UK:
•
London Stock Exchange
• Quoted Company Alliance
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ESG REPORT
Consideration Recent activities Future activities
Policies and
Procedures
• Annual
training/
online
acknowledgement of Company’s
Code of Conduct and Anti‐Bribery
Code (Directors / Employees /
Company Consultants)
•
•
•
•
•
•
Risk Management
Implementation of Social Media
Policy
Implementation of Travel and
Expenses Policy
Translation of key policies
Portuguese
into
Introduction of policies to reflect the
Group’s growing maturity and transition to
building and operating a mine
policies
Introduce
the
requirements of potential customers or
financiers
reflect
to
Refinement of Group’s insurance
coverage in conjunction with leading
global brokers, Marsh
•
Review and update of Group’s Financial
Reporting Procedure
• Ongoing enhancement of
IT security
protocols
• Annual Board Risk workshop
• Ongoing review of Risk Register
• Nomad’s attendance at Board
Meeting to keep the Directors
governance
abreast
developments
of
•
Enhancement of
protocols
IT
security
• Annual Risk Workshops and regular
Risk Register
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268158 Savannah pp28-pp47.qxp 22/04/2024 09:35 Page 28
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 2023 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
The Barroso
Lithium project,
Portugal
100%
• Exploration and Evaluation: Following the positive DIA decision
received at the end of May (see Environmental Licencing Process
section below), fieldwork was significantly increased in the second
half of the year. In September, Savannah announced the
appointment of a number of key contractors to undertake and
manage various DFS‐related work packages, including drilling.
A two‐phase approximately 13,500m/230 hole drilling programme
was commenced in October. In February 2024, Savannah
announced the completion of the resource‐related drilling (3,189m
across 42 holes) in the first phase of the programme and is
the outstanding geotechnical and
currently completing
metallurgical‐related drilling of phase 1. Details for the larger,
phase 2, programme will be finalised once all phase 1 results have
been received and reviewed.
• To meet an ongoing condition of the existing mining lease, a small
amount of mining was also undertaken during the year from the
existing workings at the NOA deposit.
• Environmental Licencing Process: For Savannah to achieve its goal
of becoming a responsible lithium raw material producer it must
secure a new Environmental Licence for its Barroso Lithium Project.
The major step in this licencing process is the approval by APA,
Portugal’s environmental regulator, of an Environmental Impact
Assessment for the Project. An EIA evaluates a project’s
environmental and social impact during its construction, operation,
closure and post‐closure phases. The outcome of the EIA is a project
design and a set of actions to be undertaken which minimises the
environment and social impact of the project throughout all its
active phases and over the long term, post closure.
Having agreed with APA in July 2022 that the EIA evaluation process
for the Project, which began in 2020, should continue under Article
16 of Decree‐Law No. 151‐B/2013, amended and republished by
the Decree‐law 152‐B/2017 of 11 December ('Article 16'), which
regulates Environmental Impact Assessments in Portugal. Under
Article 16, Savannah submitted its substantially revised EIA in March
2023, triggering the maximum of 50 business days allowed under
the legislation for APA to review the resubmission and give its DIA
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STRATEGIC REPORT
Asset & location Ownership Activities undertaken
decision. A second public consultation period was also held on the
Project during March and April 2023, following which APA gave a
positive DIA, with conditions, at the end of May.
Receipt of the DIA confirms the regulator’s approval of the
proposed project subject to any conditions it attaches to the
permission being met in the final design and subsequent operation
of the project. The DIA award is the major approval in a multi‐stage
environmental licencing process and the Project has now moved
into the subsequent Environmental Compliance Report of the
Execution Project (‘RECAPE’) stage after which approval of the
Project's detailed final designs are received ('DCAPE') and the
Project’s final environmental title can be awarded.
Work on the RECAPE phase of the process began following the DIA
decision with the appointment of key contractors. Since then field
and desk studies have been underway on a range of fronts including,
hydrogeology, seasonal studies of flora and fauna, archaeology, and
social impact. Savannah expects to have completed the work
required for the RECAPE phase shortly after completing the DFS.
• Other Licencing processes: Once the RECAPE submission has been
approved and the resulting DCAPE declaration has been made, and
the environmental licence received, Savannah will then be able to
apply for the remainder of the licences required for the Project’s
development and operation. These licences cover permissions for
construction and use of services on site such as power and water.
Permits will also be required for the proposed new road sections
which are included in the revised project design to further limit
traffic impact on local communities.
During the period Savannah remained engaged with key
stakeholders in these licencing processes including the government
agencies, APA and DGEG, ministers and Secretaries of State. The
Company also initiated the process to licence a new 60KV
connection and deviation of the existing electricity grid power line
which crosses part of the Lease area.
• Definitive Feasibility Study: The DFS is a comprehensive technical
and economic study of the proposed Project and will include
among other elements; an updated JORC compliant Resource for
the Project as well as its maiden JORC compliant Reserve estimate;
final designs for site layout and associated infrastructure;
schedules for mining, processing, storage of processed materials;
commodity market studies; and capital and operating cost
estimations and a cashflow model.
Following the positive DIA decision, work on the DFS was
accelerated over the summer of 2023 with the appointment of key
contractors in Q3 2023. In October the Company announced the
start of a two‐phase, approximately 13,500m/226 hole drilling
programme to gather data for resource, geotechnical and
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STRATEGIC REPORT
Asset & location Ownership Activities undertaken
metallurgical studies as part of the DFS. The first phase of resource‐
related drilling was completed in February 2024 with new resource
estimates expected to be made from early Q2 2024 onwards on a
deposit‐by‐deposit basis. Geotechnical and metallurgical drilling
from the first phase of the programme is expected to be completed
in April, and the plans for the larger, second phase, of the
programme will be finalised once all drill results are received from
the first phase. Away from the field, work continued on the
Project’s final design and further metallurgical test work. Savannah
expects to complete the DFS by the end of 2024.
• Decarbonisation Study: In March 2022 Savannah announced the
initiation of a Decarbonisation Strategy to support its goal of
producing a net carbon zero lithium product from the Project. By
setting this goal Savannah is helping to minimise the carbon
footprint associated with the European lithium battery value chain,
thus maximising the environment benefit these batteries can bring.
ECOPROGRESSO, a subsidiary of the Portuguese engineering and
environmental consultancy, Quadrante Group, was commissioned
to lead on the multiple phased study. Phase 1, which was focused
on updating the estimate of the Project's emissions of greenhouse
gases ('GHG') based on international guidelines, and defining
targets for overall GHG reduction was completed during 2022 and
the results announced in January 2023. The study confirmed that:
o
o
o
Battery Electric Mining Equipment will provide the most
effective and flexible means to reduce Scope 1 emissions at
the Project to zero. Scope 1 emissions represent 68% of the
Scope 1 and 2 total
The estimate of Scope 2 baseline emissions was reduced by
54% from the original 2019 forecast, based on the potential
for a reduction in the estimated power requirement of the
Project's plant and a 41% reduction in the emissions associated
with Portugal's grid power
A number of viable options are available to secure 100%
renewable energy supply to the Project including regional solar
and wind generation, on market purchase, via direct Power
Purchase Agreements, or a combination of these. Use of 100%
renewable energy would reduce the Project's Scope 2
emissions to zero
Next steps in the study are to include:
o More detailed analysis of the options available for 100%
renewable energy provision as part of the Definitive Feasibility
Study on the Project; and
o
Studies with a number of mining equipment OEMs to
determine a site‐specific solution for a transition to battery
operated mining fleet and associated charging infrastructure
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Asset & location Ownership Activities undertaken
• Government Engagement: In its normal course of business,
Savannah staff engaged regularly with stakeholders among
government and government‐related entities at the national and
local level during the year. In the first quarter, much of this
engagement occurred under the guidelines of the ongoing Article
16 process, and then following the positive DIA decision at the end
of May, the focus of engagement moved on to progressing the
Project according to APA’s approval and the associated conditions.
During September, time was spent introducing the Company’s new
CEO, Emanuel Proença, to key government stakeholders to ensure
continuity of the Company’s relationships with these stakeholders.
In the immediate aftermath of the launch of Operation Influencer
in November, there was a natural pause in engagement, but regular
communication was subsequently re‐established with all key central
government, local government and government agencies and
Savannah continues to build these relationships as it strives to take
the Project through development and into production.
• Community Engagement: Savannah’s engagement with its local
community stakeholders evolved on a number of fronts during the
year. As in previous years, Savannah continued with its support of
local groups and events and its preferential use of local suppliers
for goods and services. The Company also recruited more staff
from the local population to assist with its fieldwork programme.
Community Insights Group also spent an extended period engaging
with local stakeholders, conducting approximately 400 interviews
as part of the next phase of its Social Impact Assessment .
• Strategic Partnering Process/Commercial discussions: The
commercial interest in the Project and its spodumene lithium
offtake has been strong for a number of years and increased
significantly following the ‘DIA’ approval and publication of a new
Scoping Study earlier this year. To quantify the commercial interest
received in the Project, the Company initiated an orderly Strategic
Partnering Process in July 2023, in which interested parties were
invited to submit proposals outlining how they could assist
Savannah with financing the Project’s development as part of a
long‐term commercial relationship with the Company. Due to the
high number of positive responses received from a wide range of
groups, in November 2023 we appointed Barclays and Barrenjoey
as joint financial advisers to lead on the Process. Following
completion of the first phase of the exercise, the Process is now
focused on engaging with a shortlist of potential strategic partners
which are potentially willing to assist with the Project’s future
development and financing, and which also bring complementary
skills or additional opportunities to Savannah.
Fair review of
business
• A review of the Group’s performance during the period and
prospects is included in the Chairman’s Statement and the Chief
Executive’s Report.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
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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:
Environmental Permitting Risk
As noted in the Licence and Title Risk and Social Licence Risk sections below, the Group understands and takes
proactive steps in order to mitigate or eliminate those risks, and a combination of these is demonstrated in the
environmental licencing evaluation process, the failure to do so could result in the Project’s approval being delayed
or withheld. On 30 May 2023 APA, the Portuguese environmental regulator, issued a positive Environmental Impact
Statement (the DIA), on the Project. Achieving the DIA award is the most challenging part of the overall environmental
licencing process. This means that the regulator has agreed to the design of the Project and that the Group and APA
have mutually agreed a set of accompanying conditions for the Project’s construction and operation. For the
remaining ‘RECAPE’ phase (the Environmental Compliance Report of the Execution Project), the Group is required
to produce a final design which complies with the DIA and its associated conditions, for APA’s approval.
On 7 November 2023, the Portuguese Public Prosecutor’s Office announced publicly the existence of ‘Operation
Influencer’, an investigation into possible active and passive corruption, undue influence, malfeasance and other
wrongdoings in relation to a variety of “green” projects, and this included the award of Savannah’s DIA. Savannah
cooperated fully with the authorities that day when some of its premises were visited and none of its staff were
arrested or named as ‘arguido’ (Pre‐Defendants). Since then, the Company has been free to continue with all its
business activities unencumbered. Following the announcement of Operation Influencer, the Company commissioned
a full independent legal review which included due diligence by independent experts of relevant accounts, facts and
documents in the Group’s possession. While the Investigation may draw on evidence not available to the Independent
Review, and although further steps are to be expected, this Independent Review concluded, based on the evidence
examined, that there was no improper use of the Group’s money or evidence of wrongdoing by the Group. The
related legal opinions also concluded that the Group’s ability to deliver the Project and generate future cash flows
from it would most likely not be affected by the Investigation’s findings. As it awaits new steps in the Investigation,
the Group continues to progress its Project unencumbered while remaining ready to cooperate fully with the
Portuguese authorities should the Company be required to do so. Based on past similar cases, the timeline for next
steps is uncertain and likely to be long, and a formal clearing or accusation is not expected in the near term.
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 focused its activity primarily on brownfield
locations, previously delineated resources or established exploration targets. Notably, the Barroso Lithium Project
in Portugal already had a granted Mining Lease following exploration work conducted by previous owners when
Savannah acquired the Project.
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); contractor and contract fulfilment/cost overrun; inflation increasing the BLP’s CAPEX.
Risks relating to the main project contractors will be mitigated by comprehensive tendering and due diligence
processes being performed to identify competent and financially robust service providers. Contract fulfilment and
cost management will be mitigated by structuring 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, supported by the
Remuneration Committee and professional advisers, has adopted a remuneration framework aimed at rewarding
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performance, encouraging retention of key staff, and aligning their interests with those of shareholders, including
via its (Share Options’ based) Long‐Term Incentive Plan.
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. The Company is running a Strategic Partnering Process in conjunction with Barclays
and Barrenjoey, which could provide a funding solution for the BLP’s development. Other potential sources of finance
include the established debt and equity capital markets (which themselves may be impacted by global and regional
shocks, or macro‐economic, 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 up‐front payments 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 which the BLP helps to underpin). Finance could also be
raised through the sale of a stake in the Project. 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 that 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. Being a member of the EU,
Portugal operates within the framework of the EU. Country risk is further mitigated by ensuring the Group maintains
working relationships at all levels with government, administrative bodies, local communities, and other
stakeholders. The Board actively monitors relevant political and regulatory developments and the appointment of
CEO, Emanuel Proença, in September 2023, an experienced senior Portuguese business leader, has further
strengthened the Company’s network within Portugal.
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, 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 licencing 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 mining licence relating to the BLP has been the subject of legal due diligence in order to establish
validity of legal title. It is in good standing and regular communication is maintained with the relevant government
authority (Direção‐Geral de Energia e Geologia (DGEG)). Such actions mitigate the risks posed by challenges from
anti‐mine groups in respect of licence and title risk, as do the actions taken in respect of Social Licence Risk.
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 one of the most significant risk factors it faces,
and failure to achieve and maintain broad 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,
community engagement programmes, and through its wider group policies, including those relating to environmental
standards, corporate governance, code of conduct, reporting and communication, securing land access rights, and
continued work on a formal Social Impact Assessment which began in 2022. See ESG Report for more details.
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‘Lawfare’ is a common tool used by parties seeking to disrupt project developments, and the following legal cases
are ongoing:
•
•
•
Parish of Covas do Barroso as plaintiff in the Mirandela Fiscal and Administrative Court in Portugal against the
Ministry of Environment and Climate Action as defendant, and the Company’s wholly owned subsidiary,
Savannah Lithium Unipessoal Lda., has been joined as the counter‐interested party. The lawsuit seeks to nullify
certain administrative actions by the defendant in June 2016 including the addition of lithium to and the
expansion in the area of the C‐100 Mining Lease. The C‐100 Mining Lease which contains the Barroso Lithium
Project is fully granted, has a term of 30 years to 2036 and remains in good standing. The lawsuit neither impacts
the Barroso Lithium Project's activities nor the current environmental impact assessment process which is
moving to a conclusion. The advice from the Company's lawyers was and remains that the lawsuit is without
foundation.
Parish of Covas do Barroso as plaintiff in the Mirandela Fiscal and Administrative Court in Portugal against the
Portuguese Environmental Agency (APA) and the Ministry of Environment and Climate Action as defendants,
and the Company’s wholly owned subsidiary, Savannah Lithium Unipessoal Lda., has been joined as the
counter‐interested party. The lawsuit seeks to nullify the positive Environmental Impact Statement (DIA) and
supporting documents for the Company's revised design and optimisation for the Barroso Lithium Project,
issued in May 2023 by APA. In response to the Public Ministry's opinion, APA has published a statement on its
website which included confirmation that the "procedure was carried out in accordance with the legal terms
of the respective legal regime". The DIA remains in force and allows the Company to proceed with all the actions
authorised by its content, and the Lawsuit does not impact the Barroso Lithium Project's activities. The advice
from the Company's lawyers is that the Lawsuit is without foundation.
Covas do Barroso Baldios as plaintiff in the District Court of Vila Real against the Company’s wholly owned
subsidiary, Savannah Lithium Unipessoal Lda. and several other private landowners. The lawsuit seeks to
challenge the registration of certain areas and limits of 6 parcels of land at the BLP which the Company acquired
from private landowners, claiming that the landowners have registered some of their property boundaries
incorrectly and that the land in question is actually Baldios land (community owned and managed land). As the
Company has acquired some of those properties, the Baldios Commission has included the Company in those
claims, requesting that the acquisition of such properties should be declared null and void. The Company’s due
diligence included registration of properties’ boundaries at BUPI ‐ Balcão Único do Prédio (public entity required
for land properties geo reference) and the Company has purchased exactly what is registered with the Land
Registry Office. For context, out of a total area of 593 hectares within the Project's mining concession, the areas
that are being disputed by the Baldios Commission occupy approximately 7 hectares, or circa 1.4% of the total
area of the Project. The Company’s lawyers advise that if the Covas do Barroso Baldios is successful in proving
there were any discrepancies in the land borders, it is expected that these will be adjusted and the land returned
to the Covas do Barroso Baldios. A generous offer has been made to the Covas do Barroso Baldios for a land
access agreement (and was included in the Article 16 EIA submission), however, if it is not possible to secure
the remainder of the land required by mutual agreement the Company has the right and empowerment to use
the Portuguese legal system to secure the land.
The Group’s innovative Benefit Sharing Plan (‘BSP’) and Good Neighbour Plan (‘GNP’) were part of the overall EIA
submission. Both plans will be finalised 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 the BLP in a responsible and sustainable way and to share with stakeholders
the many benefits the Project can bring. A Community Relations Manager was appointed in January 2024 to provide
additional expertise and capacity.
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Commodity Price Risk
The Group’s commodity focus is lithium and the price movement in this commodity 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’s operations.
Assuming all previously highlighted development and construction related risks have been mitigated and production
is established at the BLP, specific commodity price risk can be more actively managed. This could be achieved in
the case of the BLP, where spodumene lithium and its by‐products are not currently exchange traded commodities,
by entering into off‐take agreements as part of the Project’s financing.
Global and Regional External Shocks
Operating in an increasingly globally mobile economy and population, the Group may be affected by global or
regional shocks such as pandemics, energy crisis, inflation, or military conflicts. Global or regional shocks potentially
impact the worldwide economy and the Group’s financial outlook (e.g., in the event of a global depression impacting
demand for commodities, albeit, lithium’s unique place in the energy transition provides a basis for its demand
growth to remain strong), thus the Group maintains a minimum cash balance to mitigate any such adverse impacts.
Furthermore, the global response to recent external shocks has led national governments, the EU, and global
industrial business to focus on energy security and regionalisation of supply chains, thus increasing the importance
to Europe of the BLP.
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.
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.
At the reporting date the Group’s available cash balance was
GBP9.0m (2022: GBP7.2m). The major sources of cash funding
during the year was the 2022 year‐end balance and the
GBP6.5m gross total raised at 4.67p/share in July through the
non‐pre‐emptive Placing, Subscriptions, and offering via the
PrimaryBid platform.
The Directors believe that the Group’s Barroso Lithium Project
is attractive and are confident that funding will continue to be
secured and that it is appropriate to prepare the Financial
Statements on a going concern basis. The Company currently
has a number of options in respect of future financing and is
currently running a Strategic Partnering Process which is
expected to result in significant financing being made available
by the selected partner(s) for the development of Savannah’s
project. The Company is also evaluating various sources of
public funding, which may be available from the Portuguese
Government and/or European Union.
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KPIs Description Performance
Subscription and
placing of shares
To
its
continue with
operating activities as an
active and growing mineral
development group, the
Group has raised funds
from the market
Following the rise in the share price in the wake of the
positive DIA decision from APA in May and the release of
the new Scoping Study on the Project in June, Savannah
took the opportunity to raise equity finance in July. A gross
total of GBP6.5m was raised at a price of 4.67p/share
through a combination of a non‐pre‐emptive Placing
(GBP2.4m), Subscription (GBP3.7m), and offering via the
online PrimaryBid platform (GBP0.4m).
Share price
Investment in
Exploration &
Evaluation Assets
(‘E&E Assets’) and
Property, Plant and
Equipment (‘PPE’)
the
Group
The price reflects the value
as
of
determined by the free
trading of
its ordinary
shares on public stock
exchanges such as the
Alternative
Investment
Market of the London
Stock Exchange
From an opening price of 2.3p, the share price made steady
upwards progress and broke through the 3p level in early
March as Savannah moved towards the submission of the
revised EIA on the Project. Having hovered around that level
for some weeks, during which the EIA was submitted to APA,
the price briefly broke through 4p in late April and then stayed
just below that level until the positive DIA decision was
announced on 31 May. At that point the price quickly moved
back over 4p and went on to hit the year’s high of 4.95p on
6 June. The price remained in a high 4p range while we
released the new Scoping Study and allowed the Company to
raise GBP6.5m gross at 4.67p in early July, in line with the
then share price. Overall the price remained above
4p through to 8 August but with the spodumene price
remaining under pressure, it had already fallen by over 50%
in the first seven months of the year, Savannah’s share price
began to perform more in line with the underlying
commodity price. Prior to the announcement on 7 November,
the day on which we became aware of the launch of
Operation Influencer by the Portuguese Public Prosecutor,
the share price had eased to 3.3p. Over the subsequent four
days, following the negative market reaction to the news, the
price fell to the year’s low of 1.95p. The price did return above
the 2p level as the immediate impact of the news faded and
the market began to acknowledge that Savannah was able to
continue with its work unencumbered. However the stock
traded in a tight range for the remainder of the year, closing
at 2.1p, representing a 9% fall over the year (vs. 2022: ‐47%).
While this performance was disappointing given the
significant progress made by the Company between March
and July, the performance should be viewed relative to the
performance of the spodumene price itself, which ended the
year over 80% lower.
investment
As an active and expanding
mine development group,
in E&E
the
Assets and PPE Assets can
show the volume of activity
which is adding value
During 2023 the Company continued its investment in
exploration activity, but with meaningful field work limited
to the second half of the year the increase in E&E Assets
was only 29% higher year‐on‐year at GBP2.2m (2022:
GBP1.7m). During the period there was no significant
Property, Plant and Equipment acquisitions.
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Analysis Using Other Key Performance Indicators and Milestones
KPIs Description Performance
Project pipeline
Mining Lease
Applications
As an active mineral
group,
development
Management is up to date
in the
on the changes
market and
looking for
to
new opportunities
increase the potential of
the Company
In recent years there has been (and continues to be) an
increase in the importance of the lithium‐ion battery market,
impacting on global lithium demand with projections
showing significant increases in demand. In 2016 the Group
started its investment in lithium projects with the acquisition
of exploration licences in Finland (subsequently relinquished).
Following the acquisition of the Barroso lithium Project in the
north of Portugal in 2017 (100% ownership achieved in 2019),
the Group has the potential to become a significant
spodumene lithium producer in Europe. While the near‐term
focus of the Company is on the development of the Barroso
Lithium Project following the positive DIA decision in May
2023, one of Savannah’s longer‐term goals is to further
develop its lithium business in the Iberian Peninsula. To this
end, it actively assesses potential lithium exploration targets
in the area, and expects to participate in the long‐awaited
lithium exploration tender process in Portugal when it is
launched by the Government.
As a mineral development
company, the grant of
a
leases
mining
to
precursor
commencement
of
production is a significant
milestone
as
Portugal:
A 30‐year Mining Lease (the C‐100 Lease) was granted on
the Project in 2006. The licence can be extended for a
further 20 years from 2036. To be allowed to execute its plan
of developing a spodumene mine and concentrator
operation on the Lease, Savannah is required to obtain a
new Environmental Licence for the Project and associated
licences covering areas such as construction and use of
services on site (power, water, etc).
In June 2020, the Group submitted a new Environmental
Impact Assessment and Mine Plan to APA, the Portuguese
environmental regulator, for the Barroso Lithium Project as
part of the overall licencing process for the Project. That
submission was made public in April 2021 and underwent
a public consultation between April and July of that year. In
July 2022, the Regulator recommended that the review
process enter an additional phase of evaluation under
Article 16 of the relevant EIA legislation during which
Savannah could meet with the Regulator’s Evaluation
Committee, receive feedback on its original design and be
given 180 working days to revise and resubmit its EIA.
Savannah agreed to this proposal and resubmitted its EIA
on 16 March 2023. As required under the legislation, the
regulator announced its decision on the resubmitted EIA
within 50 working days of it being submitted. That decision
was positive, with the Project EIA being approved by APA
(DIA awarded) with conditions attached that must be met
in the Project’s final design and operating practices, which
Savannah agreed to.
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KPIs Description Performance
Mineral resources
As a mineral development
company the reporting of
satisfactory
mineral
resource estimates is a key
indicator of the potential
of the Group and
its
projects
Portugal:
An update was made in June 2023 to the previous JORC
resource estimate for the Barroso Lithium Project (May 2019).
As at June 2023 the JORC resource estimates is now:
• Lithium: Measured Resources of 6.6Mt @ at 1.1% Li2O;
Indicated Resources of 11.8Mt @ at 1.0% Li2O; and
Inferred Resources of 9.6Mt @ at 1.1% Li2O for a total
of 28.0Mt at 1.05% Li2O containing 293,400t of Li2O. The
additional Exploration Target2 remained unchanged
from 2019 at 11.0‐19.0Mt at 1.0%‐1.2% Li2O
• The by‐products (Grandao deposit only) JORC resource
remained unchanged from 2019: 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 Mineral Resource of 14.4Mt
at 33.4% quartz and 42.6% feldspar contained 4.79Mt
of quartz and 6.11Mt of feldspar
Economic Studies
Satisfactory completion of
economic studies is a key
indicator of the viability of
the
mine
Group’s
development projects
The Barroso Lithium Project, Portugal:
During the year, the Company produced a new Scoping
Study on the Project, which returned a post‐tax NPV (8%
discount rate) of USD953m, an IRR of 77% and a post‐tax
payback period of 1.3years.
Following the positive DIA decision from the environmental
regulator, Savannah restarted DFS‐related fieldwork in the
second half of 2023, including a two‐phase approximately
13,500m/230 hole drilling programme, the first phase of
which is expected to be completed in April 2024. Savannah
expects to complete the DFS by the end of 2024.
2 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.
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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.
The table below sets out our key stakeholder groups and how we engaged with them during the year:
How did the Board and/or
Stakeholder Group Importance of engagement management engage
trade
bodies &
Industry
associations
A list of the relevant industry trade
bodies and associations of which
is pleased to be a
Savannah
in the
member can be found
Governance table
in the ESG
section and on the Company’s
website
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
issued
The Company has not
additional investment instruments
beyond shares and share‐related
warrants, such as corporate bonds,
and therefore has no other class of
investors
For Savannah:
•
and
Trade association can offer
industry specific networking,
training
education,
technical advice, and support in
interactions with governments,
government
departments,
agencies, regulators, the media,
and other stakeholders
For trade associations:
•
Savannah
Interacting with
offers a
trade association
another source of
industry
expertise; an opportunity to
extend its network and reach,
and an additional source of
income and sponsorship
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 Company’s
business plan
For the Shareholder/Investor:
•
•
To be kept informed on the
Company’s
performance,
changes to strategy and other
developments
To assist ongoing investment
decision making
During the year members of the
Savannah team regularly attended
interacted with
meetings, and
relevant trade associations.
The key means of engagement with
shareholders include:
• AGM (held in person)
•
Investor roadshows
• Meetings in relation to key
news/questions (largely held
online)
•
including X
Social media
(formerly called Twitter) and
LinkedIn
• Attending
industry‐related
conferences and events
• Video interviews and corporate
videos via the newly designed
corporate website in English
and Portuguese
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
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STRATEGIC REPORT
How did the Board and/or
Stakeholder Group Importance of engagement management engage
The key means of engagement with
staff include:
•
•
Regular internal calls, meetings
and visits to Project sites by
members of the Board and
Executive Team
Remuneration
framework
including Long Term Incentive
Plan (Share options) and Short
Terms Incentive Plan (Annual
Bonus)
the Group’s
Full details of
community‐related activities across
its businesses can be found in the
ESG Report.
Workforce
The average number of monthly
staff employed by the Company
during 2023 was 19 (2022: 17) see
Note 3 for further details
The Company’s day to day running
and long‐term development relies
on the recruitment, retention and
incentivisation of
and
provision of a
safe working
environment.
staff,
Community
Savannah will be often working
alongside communities at
its
project sites. For example, it works
alongside a number of small
communities at the Barroso Lithium
Project. The Company aims to act
with integrity, transparency and
its dealings with
honesty
communities and wishes for its host
communities to benefit from its
projects
in
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
its
To ensure that indirect benefits
are
from
operations
maximised among the
local
community
To receive feedback/ advice/
assistance on the above topics
For Communities:
•
To receive relevant information
about site‐specific Health &
Safety matters and other
guidance relating to Savannah’s
interaction with the general
public
• Opportunity to receive up to
date information on Savannah’s
and
business
programmes
to
communities
activities
relevant
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STRATEGIC REPORT
How did the Board and/or
Stakeholder Group Importance of engagement management engage
•
•
•
To register for and to take part in
relevant community programmes
To provide feedback on relevant
topics
To learn about job opportunities
at a Savannah Project or to
receive training/coaching
For Savannah:
•
•
To maintain good working
relationships and credit terms
with suppliers to ensure the
timely and cost‐effective 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 help with planning
for
changing levels of demand from
a client
To
future business
opportunities with an existing
client
identify
For Savannah:
•
•
build
To
and
identify
relationships with
future
customers to ensure our projects
become
commercial
businesses
viable
To access capital for project
development either directly from
from other
customers, or
investors which
the
customer
establishment of
relationships as a key de‐risking
factor in an investment decision
view
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 phase at an operation,
supplier numbers are expected to
rise significantly in‐line with the scale
up of the project concerned
Customers
As a pre‐production business,
Savannah is yet to start generating
revenue from sales of product to
customers. However, the Company
expects to supply products to a
number of industrial customers over
time, beginning with customers
buying its lithium and by‐product
concentrate products
from the
Barroso Lithium Project
Savannah’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 Barroso
Lithium Project, and identifying and
evaluating other groups which may
provide key contract services during
the construction and/or production
operation.
phases
Additionally, the Company
is a
member of the local chamber of
commerce in Portugal and where
possible the use of local service
providers will be prioritised.
the
of
Management maintained its efforts
to build relationships with multiple
potential customers for its lithium
and by‐product concentrates from
the Barroso Lithium Project as
discussed
the Chairman’s
in
Statement and CEO’s Report.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
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STRATEGIC REPORT
How did the Board and/or
Stakeholder Group Importance of engagement management engage
For Customers:
•
•
To build a working relationship
with a well‐managed, long term
raw material supplier
To secure a long‐term supply of
product from a responsible
producer in markets where the
outlook is for increasing global
competition for supply, such as
lithium
For Savannah:
•
and
identify
build
To
relationships with future lenders
to ensure sufficient finance can
be secured to support project
development
Lenders
Savannah currently has no corporate
bonds or project finance loans but
may seek to secure project finance as
part of the financing mix for the
development of its projects, such as
the Barroso Lithium Project
For Lenders:
•
To secure a future
lending
agreement with a responsible
raw material producer operating
in the battery metals sector
the
Regulators/Government
Depending on
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:
•
departments
To build strong and supportive,
working relationships with all
of
relevant
government and to ensure that
the Company receives and
complies with the required
licences and authorities
to
operate its projects
For governments:
•
•
To ensure that the Company is
meeting its responsibilities as per
its licences
To understand the needs of
Savannah as an operating entity
with
relevant
legislation
respect
to
42
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
Management maintained a dialogue
with potential project lenders in
relation to the Barroso Lithium
Project during the year. Discussions
with these groups are expected to
become more detailed once the DFS
is completed as that study will be a
key part of a
lending bank’s
evaluation of the Project.
The Company’s ESMS incorporates
elements from the International
Finance Corporation’s Performance
Standards on Environmental and
Social Sustainability, the World Bank
Group’s Environmental Health &
Safety, Mining
and General
Guidelines.
the
As outlined
in the Chairman’s
Statement and CEO’s Report,
Management has had
regular
relevant
interaction with
departments and personnel in the
various levels of government in the
country where it had operations
during the period. Savannah views
the establishment of active, two‐way,
relationships with
government
stakeholders as critical to the
successful development of
its
projects and in its decision‐making
regarding the Company’s long‐term
commitment to any jurisdiction.
268158 Savannah pp28-pp47.qxp 22/04/2024 09:35 Page 43
STRATEGIC REPORT
How did the Board and/or
Stakeholder Group Importance of engagement management engage
Environment
Savannah is committed to minimising
the environmental impact of its
operations
design,
monitoring,
and
remediation
through
mitigation
For Savannah:
•
Savannah places great emphasis
on minimising the environmental
impact of its operations and also
realises the importance placed
environmental
on
management by all project
including
stakeholders
communities,
governments,
customers, investors and lenders
good
priority
In parallel with all our project
for
a
stakeholders,
Savannah’s Management
to
is
minimise
Company’s
the
environmental impact, and work
undertaken across all its project sites
to date has been completed in
accordance with
relevant
environmental regulations.
the
Having collected baseline data and
engaged with relevant groups since
2018,
in June 2020, Savannah
submitted a new Environmental
Impact Assessment and Mine Plan to
APA, the Portuguese environmental
regulator, for the Barroso Lithium
Project as part of the overall licencing
process for the Project.
That submission was made public in
April 2021 and underwent a public
consultation between April and July
of that year. Before giving its final
decision on the EIA, the regulator
recommended in July 2022 that the
review process enter an additional
phase of evaluation under Article 16
of the relevant EIA legislation during
which Savannah could meet with the
regulator’s Evaluation Committee,
receive feedback on its original
design, and be given 180 working
days to revise and resubmit its EIA.
Savannah agreed to this proposal
and resubmitted its EIA on 16 March
2023. The regulator conducted a
second period of public consultation
during March and April of 2023, and
issued a positive
subsequently
impact statement
environmental
(DIA) on the Project with conditions,
which Savannah accepted,
in
May 2023.
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STRATEGIC REPORT
Principal decisions
The Company defines principal decisions as those which are material to the Group and its key stakeholder groups
detailed above.
Information is presented below on a number of ‘principal decisions’ which the Board made during the course of
2023. 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. 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: Barroso Lithium Project Redesign and DIA Acceptance
In March 2023, the Company’s subsidiary, which operates the BLP, submitted a significantly revised design for the Project
under the Article 16 of Decree‐Law No. 151‐B/2013 (‘Article 16’) process, which regulates Environmental Impact
Assessments in Portugal, and subsequently agreed to the terms which APA proposed as part of the DIA grant.
Assisted by its team of local and international engineering and environmental consultancies, the Company worked
collaboratively with APA and the other authorities represented on the Evaluation Committee established under the EIA
process, to ensure the updated submission addressed all concerns raised and recommendations made.
The Company supported APA’s request to extend the public consultation period by a further 15 days, recognising that
the significant amount of documentation we submitted to APA in our comprehensive optimisation of the Project may
take time for interested parties to review. As expected, and in line with international practice, the DIA was issued with
a set of conditions, measures and compensations which, following review, the Company agreed to.
In making the decision the Board considered:
• All stakeholders: Having an approved Project that has addressed all concerns raised and recommendations
made is in the interest of all its stakeholders.
•
•
Shareholders / Investors, Workforce, Customers, and Lenders: The changes made to the BLP design and
subsequent DIA grant mean that the Company can move the Project towards production, and the staff have
the confidence of the high quality and solid credentials of the Project they are working on.
Community, Regulators / Government, and Environment: Significant changes were made to the BLP design in
the Article 16 submissions, which resulted from working collaboratively with APA and the other authorities
represented on the Evaluation Committee established under the EIA process, to ensure the updated submission
addressed all concerns raised and recommendations made. The conditions issued with the DIA grant provide
further assurance that the Project will be developed and operated in a socially and environmentally responsible
way, and that socio‐economic benefits will be shared with stakeholders.
Principal Decision 2: Scoping Study Publication
Following the DIA grant, the Company was able to finalise a new Scoping Study, which was published in June. It was
the first economic study on the Project in five years, it included all the elements of the DIA compliant design, and
it demonstrated that the new Project can have very attractive economics (post‐tax NPV USD953m or 41p/share).
In making the decision the Board considered:
•
•
Shareholders / Investors, Workforce, Customers, Lenders: The publication of the Scoping Study allowed the
investment community to quantify the value of the BLP and its very attractive financial metrics provided further
confidence to staff and potential customers that the Project is viable to take into production.
Community, Regulators / Government, and Environment: The Scoping Study demonstrated the significant
investments ( approximately USD150m of combined CAPEX and OPEX) that the Company is dedicating to
reducing the environmental and social impact of the Project.
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STRATEGIC REPORT
Principal Decision 3: Fundraise
Buoyed by the DIA and the new Scoping Study, the Company was then keen to accelerate key workstreams relating
to the Definitive Feasibility Study and the compliance phase (RECAPE) of the environmental licencing process. To
do this additional finance was required, and a successful GBP6.5m gross fundraise was completed in challenging
market conditions in early July at 4.67p/share, par with the market price. The fundraise included existing
shareholders (including the two largest, Al Marjan and Slipstream Resources), members of the Board, Management,
new sector specialist institutional investors, and new and existing retail investors who participated via the Primary
Bid retail offer. This resulted in a treasury of over GBP11m which allowed the Company to initiate with confidence
work on the DFS, the RECAPE, and to take on new members of staff in key positions as the Company builds towards
production.
In making the decision the Board considered:
• All stakeholders: Maintaining the Group as a going concern in the interest of all its stakeholders.
•
Shareholders / Investors: 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 and to be well‐place to take
advantage of the strong market conditions and opportunities in the lithium sector, against the resulting equity
dilution. The fundraising was also seen as an opportunity to attract new sector specific institutional equity
investors into the Group which was considered a benefit to the Group’s long‐term financial stability. The funds
raised provided a greater position of strength from which to develop the Company’s BLP amid the backdrop of
strong lithium pricing. The Primary Bid retail offer provided the opportunity for existing retail shareholders to
participate in the fundraise.
• Workforce 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 4: Appointment of CEO and Non‐Executive Directors
Following the DIA grant, Scoping Study Publication and the fundraise in the summer, the Company appointed
Emanuel Proença as the Company’s first Portuguese CEO (effective September) to take the Company into the next
stage of development. Emanuel joined from Prio Group, which is the largest producer and supplier of biofuels in
Portugal and where, as CEO of ‘Prio Supply’, he grew EBITDA by 20 times in 6 years.
The Company also appointed two new Non‐Executive Directors at the same time as Emanuel Proença’s
appointment. Bruce Griffin joined as an Independent Non‐Executive Director, while Mohamed Sulaiman joined as
Non‐Executive Director, replacing the retiring Imad Sultan (Non‐Executive Director since July 2016) as the Board
representative of the Company’s largest shareholder, Al Marjan.
In making the decision the Board considered:
•
Shareholders / Investors, Customers, Lenders, and Environment: Emanuel Proença has a strong track record of
success, including growing EBITDA by 20 times in 6 years at his previous company. He has a good knowledge of
Portuguese Government processes, and good relations with industry regulators, commercial partners in the
energy sector, and service providers. Bruce Griffin brings over 20 years of mining sector experience to the
Company’s Board and is currently Executive Chair of ASX‐listed Sheffield Resources, which has recently built
and commissioned its 10Mtpa Thunderbird minerals sands project in Australia. Mohamed Sulaiman is Head of
Strategy at the Omani conglomerate business, Towell Group, and previously led Strategy and Performance at
OQ, the Omani energy company and he has significant experience on the boards of both public and private
companies, and in the energy sector.
• Workforce: Emanuel Proença has developed skills in managing a rapidly growing business, which are highly
transferable to the Company.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
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STRATEGIC REPORT
•
Community and Regulators / Government: Emanuel Proença has a strong record of maintaining a constructive
rapport with local communities and other stakeholders. As the Company's first Portuguese CEO, Emanuel’s
appointment underlines the Company’s commitment to Portugal and the Project and brings a fresh focus and
immediacy to our efforts as the Company looks to develop its brand as an important, responsible and successful
business in Portugal.
Principal Decision 5: Appointment of Investment Bank
Commercial interest in the Project and its spodumene lithium offtake has been strong for a number of years and
increased significantly following the DIA approval and publication of a new Scoping Study in 2023. To quantify the
commercial interest received, the Company initiated an orderly Strategic Partnering Process in July, in which
interested parties were invited to submit proposals outlining how they could assist the Company with financing
the Project's development as part of a long‐term commercial relationship with the Company. Due to the high
number of positive responses received from a wide range of groups, in November the Company appointed Barclays
and Barrenjoey as joint financial advisers to lead on the Process.
In making the decision the Board considered:
•
Shareholders / Investors, Customers, and Lenders: Additional expertise and capacity to help deliver the best
partnering outcome for the Company. Barclays has country, industry and M&A specialists located across the
world, including natural resources teams which have advised on a large number of significant transactions
across the mining sector. Barrenjoey is a leading Australian financial services firm and has advised and been
lead manager on significant transactions in the lithium space.
Principal Decision 6: Appointment of Legal Advisers / Independent Investigation (Operation Influencer)
On 7 November 2023, the Portuguese Public Prosecutor’s Office announced publicly the existence of ‘Operation
Influencer’, an investigation into possible active and passive corruption, undue influence, malfeasance and other
wrongdoings in relation to a variety of “green” projects, and this included the award of the Company DIA. This has
had a significant impact on the Company’s brand, but it has not stopped the team working for a minute. However,
the Company took proactive steps, to clarify the Company’s position and re‐establish confidence. This included:
commissioning CMS Portugal (Rui Pena, Arnaut e Associados, RL), part of the internationally renowned law group
CMS, to conduct an independent review of the Company’s activities in relation to Operation Influencer; and
commissioning additional legal opinions from a renowned Portuguese legal expert in constitutional and penal law,
and also from the specialist Portuguese law firm, Gama Glória.
As a result, on 30 January 2024, the Company announced that the conclusions of the Independent Review and the
Legal Opinions demonstrated the Company’s solid legal position in relation to the alleged facts and circumstances
contained in Operation Influencer (see Chairman’s Statement for more details).
In making the decision the Board considered:
•
Shareholders / Investors, Workforce, Community, Suppliers, Customers, Lenders, Regulators / Government:
Whilst such exercises consume cash resources and Management time, taking proactive steps, to clarify the
Company’s position and re‐establish confidence was essential for the Company’s stakeholders (including
potential long‐term partners).
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STRATEGIC REPORT
Approval of the Board
This Strategic Report contains certain forward‐looking statements that are subject to the usual risk factors and
uncertainties associated with 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 forward‐looking statements.
On behalf of the Board:
Matthew King
Chairman
Date: 12 April 2024
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BARROSO LITHIUM PROJECT OVERVIEW
Overview and History of the Project
Located less than 2 hours’ drive northeast of the city of Porto, the Barroso Lithium project covers an area of 8.36km2 in
the Barroso hills of northeast Portugal and consists of the 30‐year C‐100 Mining Lease (5.42km2), which was awarded
to a previous owner in 2006 and can be extended by 20 years, and an adjacent, three block, Mining Lease Application
area (2.94km2). Through Savannah’s successful exploration programme, the Barroso Lithium Project (the ‘Project’) has
been defined as the most significant source of spodumene lithium in 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 the Barroso Lithium Project 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 all‐share
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.
Plan of the Barroso Lithium Project showing the location of drilling to date and the major orebodies:
Source: Company
Current Resources and Exploration Upside
To date Savannah’s extensive exploration programme, which includes over 35,000m of drilling, has identified 8 deposits
bearing spodumene lithium mineralisation on the project. From being a ‘pre‐resource’ project when acquired, JORC
compliant Mineral Resources have now been estimated on five of these deposits (4 on the C‐100 licence and 1 on
Aldeia Block A) which, as of June 2023, totalled 28.0Mt at 1.05% Li2O (containing 293.4kt of Li2O or 725.5kt of lithium
carbonate equivalent), representing the most significant spodumene lithium resource in Western Europe.
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BARROSO LITHIUM PROJECT OVERVIEW
Many of the lithium deposits on the project remain open to possible extensions through further exploration and
an additional Exploration Target3 ranging from 11‐19Mt at 1.0‐1.2% Li2O has been estimated on three of the deposits
as of June 2023. The project currently has a combined resource and exploration target3 of 39‐49Mt at 1.0 to 1.2%
Li2O hence, Savannah believes significant exploration upside remains with the potential to substantially extend the
Project’s operational life.
The Barroso Lithium Project’s Lithium JORC Mineral Resource Estimate & Exploration Target3:
JORC Mineral Resource Estimate (June 2023, 0.5% Li2O cut‐off)
Deposit
Grandao
Resource Tonnes Li2O
Category (Mt) Li2O grade (%) Fe2O3 grade (%) contained (t)
Measured 6.6 1.1 0.7 71,600
Indicated 6.4 1.0 0.8 65,300
Inferred 4.8 1.0 0.7 48,900
Sub‐total 17.7 1.04 0.7 181,800
Reservatorio
Measured – – – –
Indicated 3.5 0.95 0.8 33,000
Inferred 0.7 0.9 0.9 6,500
Sub‐total 2.0 0.9 0.7 39,500
Pinheiro
Measured – – – –
Indicated – – – –
Inferred 2.0 1.0 0.7 20,000
Sub‐total 2.0 1.0 0.7 20,000
NOA
Measured – – – –
Indicated 0.4 1.2 0.8 4,200
Inferred 0.3 1.0 0.9 2,900
Sub‐total 0.6 1.1 0.9 7,100
Aldeia
Measured – – – –
Indicated 1.6 1.3 0.5 21,300
Inferred 1.8 1.3 0.4 23,700
Sub‐total 3.5 1.3 0.4 45,000
All Deposits
Measured 6.6 1.1 0.7 71,600
Indicated 11.8 1.0 0.7 119,800
Inferred 9.6 1.1 0.9 102,000
Grand Total 28 1.05 0.8 293,400
Rounding discrepancies may occur
Source: June 2023 JORC Resource update RNS
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.
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Exploration Target4 Summary (June 2023)
Deposit
Reservatorio
Grandao
Aldeia
Total
Rounding discrepancies may occur
Source: June 2023 JORC Resource update RNS
Tonnage Range (Mt)
Low
5.0
4.0
High
7.0
8.0
Li2O grade (%)
1.0‐1.2
1.0‐1.2
2.0
4.0
1.0‐1.3
11.0
19.0
1.0‐1.2
Not just a lithium project
In addition to the production of significant volumes of spodumene lithium concentrate, the Barroso Lithium Project
also has the potential to produce significant volumes of feldspar and quartz which is in demand from the large
ceramics and glass industries in Portugal and Spain. Sales of these ‘by‐products’ would have the dual benefits of
reducing the amount of processed material which the Project must store on‐site and provide additional revenue
which could significantly improve the net production costs of the lithium concentrate.
During 2019 the Group estimated its first by‐product 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 by‐products’ suitability for various applications within the ceramic and glass industries.
The Barroso Lithium Project’s By‐product JORC Mineral Resource Estimate:
JORC Mineral Resource Estimate (September 2019, no lithium cut‐off 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
Sub‐total 14.4 33.4 4.79 42.6 6.11
Rounding discrepancies may occur
Source: September 2019 JORC Resource update RNS
Development of the Project
With the largest spodumene resource in Europe and the encouraging results in the initial Scoping study completed
on the Project in 2018 (see section Economic Studies on the Project for further details), Savannah took the decision
to progress the Project towards a Final Investment Decision point. While the Project has an existing Mining Lease,
Savannah’s plan to produce spodumene concentrate and mine on a larger scale than had been envisaged when
the Mining Lease was awarded in 2006, meant it was necessary for the Project to receive a new Environmental
Licence and have a new Mine Plan approved by the Portuguese authorities. Savannah must also justify its potential
capital investment in the Project with a robust business case. Hence, the Company has been working to secure a
new Environmental Licence for the Project and complete a Definitive Feasibility Study.
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.
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BARROSO LITHIUM PROJECT OVERVIEW
Environmental Licencing
For the Environmental Licencing process, Savannah first submitted its Environmental Impact Assessment and Mine
Plan to APA, the Portuguese environmental regulator, in June 2020. An EIA study identifies all the potential
environmental and social impacts a Project may have and details how the project’s proponents would monitor and
minimise these impacts throughout all phases of the project’s life, including after its closure.
Following submission, Savannah’s EIA was made public in April 2021 and underwent a public consultation between
April and July of that year. APA then continued with its review and consideration of feedback from the public
consultation until July 2022 when it recommended that the review process enter an additional phase of evaluation
under Article 16 of the relevant EIA legislation. In contrast to the initial period of the EIA review, Under Article 16 the
applicant can meet with the regulator’s Evaluation Committee and receive feedback on its original design. Article 16
also has a closely defined schedule with the applicant given 180 working days to revise and resubmit its EIA based
on the feedback received. Savannah agreed to this proposal, and after a series of productive meetings with members
of APA’s Evaluation Committee and a period spent significantly revising the Project’s design and its operational plan,
resubmitted its EIA and associated Mine Plan in March 2023. Under the legislation, the regulator then had 50 working
days, until 31 May 2023 to review and publish its ‘Environmental Impact Statement’ (DIA) decision on the revised
EIA. During this period a second public consultation period was also held (March ‐ April 2023).
Savannah was delighted to receive a positive conditional DIA decision at the end of May 2023. Receipt of the DIA
confirms the regulator’s approval of the proposed project subject to any conditions it imposes in the permission
being met (as is standard international practice) in the final design and subsequent operation of the Project. The DIA
award is the major approval in a multi‐stage environmental licencing process and the project has now moved into
the subsequent Environmental Compliance Report of the Execution Project (RECAPE) stage after which approval of
the Project's detailed final designs are received (DCAPE) and the Project’s final environmental title can be awarded.
Key elements of the Barroso Lithium Project during the operating phase as proposed in the 2023 revised EIA:
Source: Company
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Work on the RECAPE phase of the process began over the summer of 2023 with the appointment of key contractors.
Since then work has been underway on a range of fronts including, hydrogeology, seasonal studies of flora and
fauna, archaeology, and social impact. Savannah expects to complete the work required for the RECAPE phase
shortly after completion of the DFS, which it expects to complete by the end of 2024.
Once the DCAPE declaration has been made and the environmental licence received, Savannah will then be able
to apply for the remainder of the licences required for the Project’s development and operation. These licences
cover permissions for construction and use of services on site such as power and water. In July 2023, Savannah
initiated the process to licence a new 60KV connection and deviation of the existing grid power line which crosses
part of the Lease area.
Key features of the DIA approved Project design and operational plan:
Parameter Details
Footprint • Expanded C‐100 Mining Lease: 593 hectares (5.93km2)
• Area which will be sequentially impacted and rehabilitated on the expanded
C‐100 Mining Lease: 271 hectares; less than half of the Lease’s total area
• Agricultural land impacted o the C‐100: 14 hectares (2.4%) of the Lease area or
0.21% of the total 1,127km2 area which was categorised as Globally Important
Agricultural Heritage System (GIAHS) by the Food and Agriculture Organisation
in 2018 (Mining Lease awarded in 2006)
Operating times • Drilling 7am‐8pm Mon‐Fri; Blasting up to 3 times/week weekdays only
12 noon‐3pm; Mining & on‐site trucking 7am‐11pm 7/7; Processing plant 24hr 7/7
External road transport • Road transport 7am‐8pm Mon‐Fri
• External access to the Project is via a new 11.6km road which connects to the
R311 and a new 17km Boticas bypass road to connect to A24; No project traffic
will pass through local villages and towns
Mining areas • Minimum distance to nearest house from edge of final mine area (Grandao) 560m
• Mining areas to be backfilled with inert waste rock, landscaped and re‐vegetated
using native species beginning in the second year of operation
Processing Plant • Engineered into hillside to be located below sight lines from local villages and
to reduce noise pollution
• Includes a water recycling and treatment system with all water treated and 85%
recycled for reuse
• Housed in an insulated building to further reduce noise
Tailings Storage Facility (TSF) • Tailings (waste from processing plant) is inert
• Tailings will be stored separately from mining waste rock at a safe distance from
the Covas River
• TSF will be a highly stable ‘dry stack’ structure. The Project will not use a
traditional ‘wet’ tailings dam
• For additional environmental protection, the TSF will be built on a waterproof lining
• The TSF will be revegetated progressively during the Project’s life
Water Sourcing • No water extraction from the Covas River
• Water sourced on‐site from the mining areas and other surface sources and
recycled
• Any water courses interrupted by mining will be restored once mining finishes
• Water flowing towards the Project will be diverted to reach the Covas River
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BARROSO LITHIUM PROJECT OVERVIEW
Parameter Details
Water Storage • Water collected on the Project will be stored in small, purpose‐built storage
facilities
• Water storage facilities also act as sediment control structures to help with
maintaining water quality
Waste Rock Storage & Reuse • Waste rock (rock which is not ore) stored in temporary or permanent structures
• Waste areas located to reduce impact & avoid water courses
• Permanent waste rock formations will be contoured into the existing landscape
and revegetated
Ecology • Not drawing water from the Covas River helps preserve the local aquatic
ecosystem, including the river mussel
• Removal of road bridges also reduces impact on aquatic ecosystem
• Impact on oak groves and meadows further reduced in latest project layout
• No mining at night avoids impact on nocturnal widelife, including the Iberian
Wolf
• Re‐vegetation to utilise native species and other suitable plants with good
pollination characteristics
Noise & Vibrations • Commitment to not exceeding a limit of 38 decibels at nearest house, less than
noise of refrigerator, during day and night time operation, except when blasting
• Blasting will last 5‐10 seconds and measure up to 55 decibels at nearest house
(loudest ‘Project noise’ but less than a washing machine)
• Ground vibration from blasting to be 60% below legal limit as measured at
nearest house
Air Quality • Dust identified as the most significant impact with no other notable airborne
emissions
• Dust to be suppressed by: treating unpaved roads with water; fog cannons used
when haul trucks dump their loads at the processing plant.
• Electric mining equipment and trucks to be used when available to remove
vehicle CO2 emissions
Environmental Reporting • Multiple environmental indicators (air quality, noise levels, ground vibrations,
and water levels and water quality) will be monitored, in real time, through a
series of sensors distributed across the Project and surrounding area.
• The data collected will be publicly reported 24 hours a day, 365 days a year.
• Everyone will have access to information through a smartphone app; Savannah’s
website; Information Centres and Public places in the local area.
Social benefits • 300+ direct jobs created
• Preferential trade with local businesses & producers
• Community foundation to receive cash donations from the Project to be used
for community initiatives
• Environmental, historical, cultural and agricultural heritage projects supported;
Social and educational support; Sharing of health & transport assets
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BARROSO LITHIUM PROJECT OVERVIEW
Resource drilling during the 2023/24 programme:
Source: Company
Economic Studies on the Project
2018 & 2023 Scoping Studies
Savannah completed its first Scoping Study on the Project in 2018, based on a ‘mineable resource’ of 14.4Mt,
throughput of 1.3Mtpa and average annual production of 175ktpa of 6% spodumene concentrate over a life of
mine of 11 years. This study returned a post‐tax NPV of USD241m and IRR of 48.6% based on an average spodumene
concentrate price of USD685/t.
In June 2023, Savannah produced a new Scoping Study based on the Project based on a mineable resource of
20.5Mt and the design which had received the DIA from APA the month before. The key operating and economic
parameters of that design are outlined in the table below, which compared to the 2018 Study saw average annual
tonnage of concentrate production rise by 9% to approximately 190ktpa.
The Barroso Lithium Project 2023 Scoping Study Key Facts:
Operating Parameters and assumptions
Mineable resource
Initial life of mine
Average Stripping ratio (waste: ore)
Average annual processing rate
20.5Mt at 1.05% Li2O. All open pit.
14 years
5.9:1
1.5Mtpa
Processing route & recovery rate
Crush‐grind‐Dense Media Separation‐flotation;73% recovery
Average annual concentrate production &
specification
191ktpa, at minimum 5.5% Li2O
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BARROSO LITHIUM PROJECT OVERVIEW
Operating Parameters and assumptions
Concentrate production as Lithium carbonate
equivalent (‘LCE’)/Lithium Hydroxide
Equivalent (‘LHE’)
Average annual by‐product output
~26ktpa LCE; ~29.5ktpa LHE. Sufficient for ~0.5M 60kWh
car battery packs per annum
400ktpa of a bulk feldspar/quartz for use in the ceramics and
other industries
Employment
~350 staff during the operating phase
Initial capex (ex. contingency/inc. contingency)
USD235.9m/USD280.3m
(Additional 19% contingency of USD44.4m, included in
financial model)
Sustaining capital & closure costs
USD49.3m & USD102m (total USD151.3m)
C1 Cash Operating cost (USD/t conc)
Includes all mining, processing, transport, G&A and
community costs less feldspar‐quartz ceramic
by‐products credits (‐USD132/t concentrate);
excludes royalties
USD292/t
All in sustaining costs (USD/t conc)
Includes all mining, processing, transport, G&A
and community costs, royalties, sustaining capex
and closure & rehabilitation costs less net of
ceramic by‐products credits (‐USD132/t concentrate)
USD409/t
Financial & economic outcomes
Average price assumptions
Spodumene
Feldspar/quartz by‐product: USD53.5/t
concentrate
(5.5%
Li2O): USD1,464/t;
Gross Revenue (Total; Avg pa)
USD4,151m; USD304m (includes by‐product revenue)
EBITDA (Total, Avg pa)
USD2,793m; USD205m
Royalties (Total)
Taxes (Total)
USD153m
USD771m
Net Free Cashflow (Total; Avg pa)
USD1,694m; USD124m
Post‐tax NPV (8% discount rate)
Post‐tax IRR
Post‐tax Payback
Source: June 2023 Scoping Study
USD953m
77.3%
1.3 years
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Proposed layout of the Project’s processing facilities:
Source: Company
Definitive Feasibility Study
The DFS is a comprehensive technical and economic study of the proposed Project and will include among other
elements; an updated JORC Resource for the Project as well as its maiden JORC Reserve estimate; final designs for
site layout and associated infrastructure; schedules for mining, processing, storage of processed materials;
commodity market studies; and capital and operating cost estimations, and a cashflow model.
Savannah has been working towards the DFS since the first Scoping Study was completed in 2018. The extended
environmental licencing process (2020‐23) subsequently impacted the timing of some elements of the Study, but
work on the DFS restarted over the summer of 2023 beginning with the appointment of key contractors. Drilling
then restarted in October, after a four‐year break, for resource, geotechnical and metallurgical data. The first phase
of resource‐related drilling was completed in February 2024. New resource estimates are expected to be made
from early Q2 2024 onwards on a deposit‐by‐deposit basis and Savannah expects to complete the DFS by the end
of 2024.
Whilst further test work is planned, the process flowsheet for the concentrator plant was finalised in Q1 2022.
Based on industry standard equipment and processing techniques and an environmentally friendly reagent regime,
which complies with all relevant regulations and allows both mica and spodumene flotation to operate at near
neutral pH, the plant will be capable of producing a high quality, spodumene concentrate grading ≥5.5% Li2O with
low levels of impurities.
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BARROSO LITHIUM PROJECT OVERVIEW
Simplified Process Flowsheet Block Flow Diagram:
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Source: Company
Decarbonisation Study
In March 2022 Savannah announced the initiation of a Decarbonisation Strategy to support its goal of producing a
net carbon zero lithium product from the Project. By setting this goal Savannah is helping to minimise the carbon
footprint associated with the European lithium battery value chain, thus maximising the environmental benefit
these batteries can bring. ECOPROGRESSO, a subsidiary of the Portuguese engineering and environmental
consultancy, Quadrante Group, was commissioned to lead on the multiple phased study. Phase 1, which was focused
on updating the estimate of the Project's greenhouse gases emissions based on international guidelines, and
defining targets for overall emissions reduction was completed during 2022 and the results announced in February
2023. Key findings of the first phase study included; confirmation that battery electric mining equipment provides
the most effective and flexible means to reduce Scope 1 emissions, which account for 68% of the combined Scope
1 & 2 total and; the Scope 2 emissions estimate being reduced by 54% from the 2019 estimate based on a lower
power consumption at the Project’s processing plant and a 41% reduction in the emissions associated with grid
power due to the increase in contribution from renewable sources in the intervening period. The recommendations
for ongoing studies to further reduce the Project’s CO2 footprint include assessing the options for securing a 100%
renewable energy supply for the Project, and working with mining equipment OEMs to determine a site‐specific
solution for a transition to a battery operated mining fleet and associated charging infrastructure.
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Development timetable
Based on the current schedule for the DFS and the licencing process Savannah expects to make a Final Investment
Decision on the Project in early 2025.
Assuming the necessary finance can be sourced in a timely manner once a Final Investment Decision has been
made, construction could begin in 2025 and completed in 2026 with first production at the Project later that year.
If this schedule can be met, Savannah will be well placed to supply spodumene concentrate into the new merchant
lithium chemicals plants being proposed in Europe, including two in Portugal, which are also targeting first
production around this time.
Savannah’s Exploration Manager, John Pereira, showing drillcore to a visiting university group, February 2024:
Source: Company
The Barroso Lithium Project – a first for Portugal in the new lithium battery industry
Portugal is already established as Europe’s ‘largest’ lithium producer with approximately 600t produced in 2022 (source:
USGS). 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 the
Barroso Lithium Project, 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 earmarked six areas which are prospective for lithium
mineralisation that will be made available for exploration via a public tender process in due course. This follows
the publication of strategic environmental assessments on an initial nine areas and a public consultation round
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BARROSO LITHIUM PROJECT OVERVIEW
which was completed in December 2021. As the most advanced lithium development company in the country,
Savannah plans to participate in the tender process when it is initiated.
In parallel with its plans to develop its lithium mining industry the government published new legislation relating
to mineral deposits in 2021, Decree‐Law 30/2021 from 7 May, which sets more demanding standards of
environmental sustainability, the sharing of economic benefits with the populations and gives more powers to
municipality‐level administrators in regard to mineral project development.
Given its own focus on low impact project design and maximising the benefits which can flow from mineral project
development to stakeholders, Savannah welcomes this new legislation. The Company is already committed to
developing the Barroso Lithium Project in a responsible way and by applying the best international practices that
minimise 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, demographic and economic benefits.
While larger 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, the Barroso Lithium Project must be seen as part of the first phase in the
development of a much larger national concern as demonstrated by the large lithium chemical production plant
proposals announced by two partnerships in December 2021. As a result of these objectives, the Barroso Lithium
Project has received strong support at national government level. When lithium production is achieved at the
Barroso Lithium Project, Portugal would 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, and the transition to mass adoption of zero or low emission vehicles
is a key part of the European Commission’s target of achieving a net zero carbon economy by 2050.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
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REPORT OF THE DIRECTORS
Going Concern
This information is contained in the Strategic Report in
the Key Financial Performance Indicators and Milestones
section and in Note 1.
Streamlined Energy & Carbon Reporting (‘SECR’)
The Group does not meet the SECR requirements and
therefore is not required to perform this reporting.
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
they ought to have taken as a Director in order to make
themselves aware of any relevant audit information and
to establish that the Group's auditors are aware of that
information.
Auditors
The auditors, BDO LLP, will be proposed
for
re‐appointment at the forthcoming Annual General
Meeting.
The Directors present their report with the Financial
Statements of the Company and the Group for the year
ended 31 December 2023.
Dividends
The Directors do not recommend the payment of a
dividend (2022: GBPnil).
Events Since the Reporting Date
This information is contained in Note 23 to the Financial
Statements.
Directors
The Directors who have held office during the period
from 1 January 2023 to the date of this report (unless
otherwise stated) are as follows:
Dale John Ferguson
Bruce Griffin (appointed on 12 September 2023)
Mary Jo Jacobi
Matthew James Wyatt King
James Gerald Leahy
Manohar Pundalik Shenoy (passed away in September
2023)
Diogo da Silveira
Mohamed Sulaiman
Imad Kamal Abdul Redha Sultan (retired from the Board
on 12 September 2023)
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 17 to the Financial
Statements.
Future Development
This
Statement and the Chief Executive’s Report.
is contained
information
in the Chairman’s
Key Stakeholder Groups and Principal Decisions
Details of how the Directors have had regard to the need
to foster Savannah’s business relationships with
suppliers and others, and the principal decisions taken
by the Company during the year, can be found in the
Strategic report in Section 172 (1) Statement.
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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:
Dale John Ferguson
Bruce Griffin
Mary Jo Jacobi
Matthew James Wyatt King
James Gerald Leahy
Diogo da Silveira
Mohamed Sulaiman2
No. of shares held at
31 December 2023
No. of shares held at
31 December 2022
51,037,6251
1,110,572
578,900
3,564,394
1,682,955
1,070,663
–
50,649,5101
–
–
2,916,528
1,365,889
–
–
1 46,335,639 shares (2022: 46,161,656 shares) held indirectly through Slipstream Resources International Pty Ltd
2 The Director indicated is a representative of Al Marjan Ltd which held 275,762,589 shares at the reporting date (2022: 268,262,589 shares)
Details of Directors’ remuneration are disclosed in the Remuneration Report.
Details of Directors' interests in Share Options are disclosed in the Remuneration Report.
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
275,762,589
148,274,045
91,600,000
%
15.08%
8.11%
5.01%
Name of Shareholder
Al Marjan Ltd (Director2)
Slipstream Resources International Pty Ltd
Mário Nuno dos Santos Ferreira
1 Except those exempts under DTR 5.1.5 regulation
2 One Director is representative of Al Marjan
On behalf of the Board:
Matthew King
Chairman
Date: 12 April 2024
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REMUNERATION REPORT
The Remuneration Committee is comprised of James Leahy (Chairman), Bruce Griffin and Diogo da Silveira. Manohar
Shenoy also served as a member of the Committee and on his passing, Bruce Griffin joined the Committee in
September 2023.
The main purpose of the Remuneration Committee is to:
•
•
be independent Non‐Executive Directors in determining and reviewing the remuneration of executives on behalf
of the ‘Board’; and
ensure that remuneration policies and packages attract, retain and motivate quality Directors and Senior
Management whilst not exceeding market rates.
Procedures for developing policy and fixing remuneration
The Remuneration Committee fixes executive remuneration and ensures that no Director is involved in deciding
his or her own remuneration. The Remuneration Committee is authorised to obtain outside professional advice
and expertise. The Remuneration Committee is authorised by the Board to investigate any matter within its Terms
of Reference, and it is authorised to seek information that it requires from employees and professional advisers.
Details of the remuneration policy
The fees to be paid to the Executive Directors and Senior Management are set by the Remuneration Committee.
Non‐Executive Directors fees are determined by the Board as a whole, based on a review of the current practices
in other companies and recommendations by the Executive Director, CEO and CFO.
Directors’ service agreements
Service agreements for Directors and Senior Management are terminable by either party on notice periods up to
a maximum of 6 months.
Directors’ remuneration
The following remuneration information comprises Directors’ fees and ‘benefits in kind’ that were paid to the
Directors and the CEO during the year:
Directors’ Directors’
emoluments 2023 emoluments 2022
Salary Bonus Non‐ Other Total Salary Bonus Non‐
cash Benefits cash
Shares/ Shares/
Share Share
Options Options
£ £ £ £ £ £ £ £
Executive Director and CEO
Dale Ferguson 298,190 66,9861 37,338 – 402,514 241,142 16,2741 41,413
Emanuel Proença 99,6082 –3 74,4813 641 174,730 – – –
Non‐Executive Directors
Matthew King 65,000 – – – 65,000 65,000 – –
Bruce Griffin4 12,111 – – – 12,111 – – –
Mary Jo Jacobi 40,000 – – – 40,000 29,282 – –
James Leahy 40,000 – – – 40,000 40,000 – –
Manohar Shenoy5 40,000 – – – 40,000 – – –
Diogo da Silveira 50,000 – – – 50,000 6,941 – –
Mohamed Sulaiman4 – – – – – – – –
Imad Sultan6 – – – – – – – –
644,909 66,986 111,819 641 824,355 382,365 16,274 41,413
Total
£
298,829
–
65,000
–
29,282
40,000
–
6,941
–
–
440,052
1 2023 Bonus unpaid as at 31 December 2023. 2022 Bonus unpaid as at 31 December 2022
2 Includes GBP39,799 related to employment related accruals under Portuguese labour law (e.g. holiday accrual)
3 Bonus to be settled by the issue of 2,011,880 new ordinary shares of 1 pence each over the Company’s Share Capital, of which GBP43,423.08 has
been recognised in 2023 under Non‐cash Shares/Share options, and GBP31,016.48 will be recognised in 2024. These shares were unissued as at
31 December 2023 and will be issued during 2024
4 Appointment as Directors on 12 September 2023
5 Passed away in September 2023
6 Termination of appointment as Director on 12 September 2023
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REMUNERATION REPORT
The Board recognises that Directors’ remuneration is a legitimate concern of the Company’s shareholders and it is
committed to following the current best business practices. The Company operates within a competitive
environment and its performance depends on the individual contributions of the Directors.
The Board’s policy is to provide executive remuneration packages designed to attract, motivate and retain directors of
the calibre necessary to advance the Company’s position and to reward the Directors (and Senior Management) for
enhancing shareholder value and return. The Company aims to provide sufficient levels of remuneration to do this, but
to avoid paying more than necessary; the remuneration will also reflect the Directors’ duties and responsibilities.
Dale Ferguson stepped down as the Interim CEO in September 2023 and the Board approved the appointment of
Emanuel Proença as CEO. Whilst acting as Interim CEO (and Technical Director), the Company applied a temporary
adjustment to Dale Ferguson’s monthly fees in consideration of the expanded role (an additional payment of
AUD24,360.83 (2022: AUD23,766.66) per month). Emanuel Proença joined the Company as the CEO in a Non‐Board
capacity and he will be appointed to the Board in April 2024. The Company sought advice from Korn Ferry (which
led the competitive executive search process) for the remuneration benchmarking and implementation thereof in
line with the Company’s framework.
This includes a signing‐on bonus of EUR100,000, payable in 5,000,000 Share Options over the Company’s ordinary
shares of 1 pence each and a bonus for 2023 of EUR86,667 payable in 2,011,880 new ordinary shares of 1 pence
each over the Company’s Share Capital. Both the Share Options and the Shares will be issued during 2024.
In the calendar year, the Board appointed two Non‐Executive Directors, with Bruce Griffin and Mohamed Sulaiman
joining the Company in September 2023. Mr Sulaiman represents the Company’s largest shareholder, Al Marjan
Ltd., and is not paid for the role.
Dale Ferguson was awarded a 2.5% pay rise in 2023 to partially reflect the inflationary environment.
Remuneration Policy and Long‐Term Incentive Plan
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 long‐term 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 established an overall
remuneration policy which included benchmarking exercises, feedback from institutional shareholders and engaging
internationally recognised consulting firm Alvarez and Marsal. This 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 long‐term incentives (‘LTI’ – under the Company’s LTIP). The STI is based upon maximum potential bonus of
100% of base salary for the CEO / Technical Director and is assessed against key business objectives.
The LTIP was established to encourage long‐term 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 and did not change between 2022 and 2023. The LTIP also includes malus
and clawback clauses.
The LTIP is a Share Option scheme of the kind commonly adopted by listed companies. The Remuneration
Committee took advice and recommendations from leading remuneration consultancy, Alvarez and Marsal.
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REMUNERATION REPORT
During 2023 the Company agreed to issue 15,000,000 share options to the CEO, Emanuel Proença, under the LTIP.
These share options have not been issued as at 31 December 2023 and should be issued in 2024. No Share Options
were issued in 2022 under the LTIP.
During 2023 the Company agreed to issue 5,000,000 share options (equivalent to EUR 100,00) to the CEO, Emanuel
Proença, as part of the agreed signing Bonus on his appointment. These share options have not been issued as at
31 December 2023 and should be issued in 2024 under the same conditions than the LTIP share options.
The Directors' interests in the Share Options of the Company are as follows:
Quantity
granted Exercised
during
the year
during
the year
–
–
–
–
–
–
Options at
1 Jan 2023
3,000,000
3,625,000
3,625,000
Dale Ferguson1,3
Dale Ferguson2
Dale Ferguson2
1 Granted under the 2019 LTIP
2 Granted under the 2021 LTIP
3 Share Options were not exercised and expired on 11 March 2024
Lapsed Options at
during
the year
31 Dec Exercise
price
2023
Date of
the grant
First
date of
exercise
Final
date of
exercise
–
–
–
3,000,000
3,625,000
3,625,000
10.0p
4.7p
6.2p
11/03/19 11/03/22 11/03/24
30/06/21 30/06/24 30/06/29
30/06/21 30/06/24 30/06/29
In addition, to the share options included in the above table, the Company is committed to issue a total of 20,000,000 Share Options
to the CEO, Emanuel Proença, as part of the agreement signed in September 2023. These Share Options are expected to be issued
during 2024.The details of these is as follows:
•
•
10,000,000 share options with exercise price 4.74p, start date 18 September 2023, vesting date 18 September 2026 and expiry
date 18 September 2031.
10,000,000 share options with exercise price 6.32p, start date 18 September 2023, vesting date 18 September 2026 and expiry
date 18 September 2031.
A share based payment charge has been recognised during the year for these share options to be issued.
Quantity
granted
during
the year
Exercised
during
the year
Lapsed Options at
during
the year
2022
31 Dec Exercise
price
–
–
–
–
–
–
–
–
–
3,000,000
3,625,000
3,625,000
10.0p
4.7p
6.2p
Date of
the grant
11/03/19
30/06/21
30/06/21
First
date of
exercise
Final
date of
exercise
11/03/22 11/03/24
30/06/24 30/06/29
30/06/24 30/06/29
Dale Ferguson1
Dale Ferguson2
Dale Ferguson2
Options at
1 Jan 2022
3,000,000
3,625,000
3,625,000
1 Granted under the 2019 LTIP
2 Granted under the 2021 LTIP
No Share Options were granted to the Non‐Executive Directors.
The QCA updated its Corporate Governance Code and recommended that companies start to apply its new (2023)
code in respect of accounting periods commencing on or after 1 April 2024. In respect of Principle 9 (Establish a
remuneration policy which is supportive of long‐term value creation and the Company’s purpose, strategy and
culture), the Company has started to review how the Company’s Remuneration Policy is aligned with the Company’s
purpose, strategy and culture to motivate Management and promote long‐term growth in shareholder value.
On behalf of the Board:
James Leahy
Chairman of the Remuneration Committee
12 April 2024
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CORPORATE GOVERNANCE STATEMENT
Savannah strives to ensure the 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 Quoted Companies
Alliance (‘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
www.savannahresources.com/investors/corporate‐
governance.
Company
website
the
on
The QCA has launched an updated 2023 Code. The
Company has begun a review of the key changes to
consider in good time any enhancements to the
Company’s
Governance
arrangements and any necessary updates to the
Company’s procedures and disclosures which will be
reported in the Annual Report and Financial Statements
for the year ending 31 December 2025.
Corporate
existing
The Code is described as a practical, outcome orientated
approach to Corporate Governance that is tailored for
small and mid‐size 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.
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 one Executive Director, and six
Non‐Executive Directors. Ordinarily, the Board formally
meets approximately every quarter, and convenes for
business updates in between those formal meetings.
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.
Various board changes occurred in September 2023:
Imad Kamal Redha Sultan retired from the Board as a
Non‐Executive Director and was replaced by Mohamed
Sulaiman as the Board representative of Savannah's
largest shareholder, Al Marjan. Mr Sulaiman has
significant experience on the boards of both public and
private companies, particularly in the energy sector.
Bruce Griffin joined the Board as a Non‐Executive
Director bringing over 20 years of mining sector
experience to Savannah's Board. This followed the
appointment in 2022 of Mary Jo Jacobi and Diogo da
Silveira as independent Non‐Executive Directors. Mary
Jo Jacobi is a leader of the ESG movement and oversees
the Company's ESG program, and has a wealth of
relevant industry and government experience. Diogo da
Silveira is a highly experienced business leader with
extensive experience in Portugal and Europe, and has
strengthened the Company’s network within Portugal.
In September 2023, the Company announced the sad
passing of Manohar Shenoy, Non‐Executive Director.
Manohar joined Savannah’s Board in 2016 as an
alternate Director as one of the nominees of Al Marjan,
Savannah’s
largest shareholder. He became a
Non‐Executive Director in his own right in April 2022 and
was Chairman of the Board’s Audit and Risk Committee
and served on the Remuneration Committee.
Matthew King (Chairman), and Non‐Executive Directors
Bruce Griffin, Mary Jo Jacobi, James Leahy and Diogo da
Silveira are all deemed to be independent by the
Company, in compliance with the QCA 2018 Code
(Principle 5), Board’s recommendation of having more
than 50% of the Board being Independent Directors.
These
independent Non‐Executive Directors hold
8,007,484 shares which represent 0.44% of the
Company’s issued Share Capital.
Emanuel Proença joined the Company as the CEO in a
Non‐Board capacity on the 18 September 2023 and he
will be appointed to the Board in April 2024.
An annual board evaluation program is run by an
external facilitator collating feedback from Directors on
the Board performance and Directors’ performance via
self‐assessment questionnaires. The results are reviewed
by the Company Chair and Nomination Committee, and
action plans prepared accordingly.
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CORPORATE GOVERNANCE STATEMENT
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 and Risk Committee comprises of three
Non‐Executive Directors – Mohamed Sulaiman (who chairs
the Committee), Mary Jo Jacobi and Diogo da Silveira.
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.
including monitoring
The Committee’s key responsibilities with respect to risk
are supporting 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
its oversight of the Group’s risk
the Board
in
management framework
its
effectiveness. 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. The Committee facilitates
the management of the Risk Register, in conjunction
with the Board, senior managers and appropriate
professional advisers. The Committee also reviews any
items reported under the Company’s Code of Conduct
and whistleblowing procedure.
A risk workshop is run annually by an external facilitator
with the purpose of challenging discussions with the
Board on the Company’s risks and drive actions to
enhance the Company’s approach to risk management
(managed in the Risk Register report).
In 2023 Internal Audit reviews were completed for UK
and Portugal operating entities, and the results of the
tests demonstrated that controls were adequate to the
nature and scale of the operations of the entities, and
no material instances of noncompliance were noted.
The Remuneration Committee
The Remuneration Committee comprises of three
Non‐Executive Directors – James Leahy (who chairs the
Committee), Bruce Griffin, and Diogo da Silveira. It is
responsible for reviewing the performance of the
Executive Directors and Senior Management and for
setting the scale and structure of their remuneration,
paying due regard to the interests of shareholders as a
whole and the performance of the Group. The
remuneration of the Chairman and any Non‐Executive
Director is determined by the Board as a whole, based
on a review of the current practices in other companies
and recommendations by the Executive Director, CEO
and CFO.
In 2023, the Remuneration Committee, supported by
Korn Ferry (which led the competitive executive search
process), led the review for the remuneration package
setting for Emanuel Proença for the permanent CEO role
including benefits benchmarking.
The AIM Rules Compliance Committee
The AIM Rules Compliance Committee comprises one
Non‐Executive and one Executive Director – Matthew
King (who chairs the Committee) and Dale Ferguson, the
Technical Director (Interim CEO up to 18 September
2023). It is responsible for ensuring that resources and
procedures are in place to ensure the Company is at all
times in compliance with the AIM Rules for Companies
and the Market Abuse Regulations. 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.
The Nominations Committee
The Nominations Committee, established in February
2021, comprises three Non‐Executive Directors –
Matthew King (who chairs the Committee), Mary Jo
Jacobi and Mohamed Sulaiman. 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.
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CORPORATE GOVERNANCE STATEMENT
The Nomination Committee played an instrumental role
in the changes to the Board Composition in 2023, which
saw the Board strengthened by the addition of Bruce
Griffin who has over 20 years of mining sector
experience and Mohamed Sulaiman who has significant
experience on the boards of both public and private
companies, and in the energy sector.
Anti‐Bribery and Corruption
It is the Group's policy to conduct business in an honest
way, and without the use of corrupt practices or acts of
bribery to obtain an unfair advantage in line with the UK
Bribery Act 2010. The Group takes a zero‐tolerance
approach to bribery and corruption and is committed to
acting professionally, fairly and with integrity in all its
business dealings and relationships wherever it operates
and implementing and enforcing effective systems to
counter bribery.
The necessary controls and procedures required in order
to comply with the UK Bribery Act 2010 were updated
by the Board in 2021 and will continue to be monitored
for appropriateness and effectiveness.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
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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 (www.savannahresources.com) in
accordance with legislation in the United Kingdom
governing the preparation and dissemination of
Financial Statements, which may vary from legislation in
other jurisdictions. The maintenance and integrity of the
Company’s website is the responsibility of the Directors.
The Directors’ responsibility also extends to the ongoing
integrity of the Financial Statements contained therein.
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 are required to prepare the Group and
Company Financial Statements in accordance with UK
adopted international accounting standards. 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.
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;
•
•
in
state whether they have been prepared
accordance with UK adopted
international
accounting standards, subject to any material
departures disclosed and explained in the Financial
Statements; and
prepare the Financial Statements on the going
concern basis unless it is inappropriate to presume
that the Company will continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Company and enable them to ensure that the
Financial Statements comply with the requirements of
the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection
of fraud and other irregularities.
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REPORT OF THE INDEPENDENT AUDITORS
to the members of Savannah Resources Plc
Opinion 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 2023 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with UK adopted international
accounting standards;
the Parent Company financial statements have been properly prepared in accordance with UK adopted international
accounting standards 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 2023 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 UK adopted international accounting standards 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.
Material uncertainty related to going concern
We draw attention to Note 1 to the financial statements which indicates that the Group and Parent Company require
additional funding for which there are currently no binding agreements in place and therefore there is no guarantee
that additional funding will be received. As stated in Note 1, these events or conditions, along with the other matters
set out in Note 1 indicate that a material uncertainty exists that may cast significant doubt on the Group and Parent
Company’s ability to continue as a going concern. The financial statements do not include any adjustments that
would result if the Group and Parent Company were unable to continue as a going concern Our opinion is not
modified in respect of this matter.
For the reasons set out above and based on our risk assessment, going concern was determined to be a key audit matter.
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 and in
response to the key audit matter included:
• 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’ budgeted activity and actual expenditure in
2023;
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
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REPORT OF THE INDEPENDENT AUDITORS
to the members of Savannah Resources Plc
•
•
•
•
Checking the mathematical accuracy of the forecast and agreeing the current cash resources to supporting
documentation;
Considering the mitigating actions available to management such as deferring uncommitted capital expenditure
on the Barroso Lithium Project and confirming whether these are reasonable and within management’s control;
Inspected correspondence with Barclays Bank Plc indicating the process of seeking funding is in progress; and
Reviewing the adequacy and consistency of the disclosures within the financial statements in respect of going
concern with the Directors assessment including the key judgements made by the Directors.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report.
Overview
Coverage
97% (2022: 94%) of Group profit before tax
100% (2022: 100%) of Group total assets
Key audit matters
2023 2022
Materiality
Carrying value of the Exploration
and Evaluation assets ✓ ✓
Going concern ✓ ✓
Group financial statements as a whole
£461,000 (2023:£390,000) based on 1.5% (2022: 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 location being the Barroso Lithium Project in
Portugal held in Savannah Lithium Unipessoal Lda, and the Parent Company, both of which were subject to full
scope audits. These represent the significant components of the Group.
The remaining components of the Group were considered non‐significant and the financial information of these
components were principally subject to analytical review procedures by the Group engagement team, together
with additional detailed testing over UK components subject to a statutory audit where applicable.
The Group engagement team performed the audit of the Parent Company and the Portuguese component,
Savannah Lithium Unipessoal Lda, was audited by a BDO network member firm in Portugal.
Our involvement with component auditors
For the work performed by component auditors, 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 auditors included the following:
• Detailed Group reporting instructions were sent to the component auditor, which included an assessment of
the areas determined to be higher audit risk (including areas that were key audit matters), and set out the
information required to be reported to the Group audit team.
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REPORT OF THE INDEPENDENT AUDITORS
to the members of Savannah Resources Plc
•
•
•
The Group audit team was actively involved in the direction of the audit performed by the component auditor for
the Group reporting purposes, review of their working papers, consideration of findings and determination of
conclusions drawn.
The Group audit team reviewed the component auditor’s work papers remotely, including review of group
reporting documents and engaged with the component auditor regularly during their planning, fieldwork and
completion phases.
The Group audit team performed procedures in respect of the significant risk areas that represented Key Audit
Matters in addition to the procedures performed by the component auditor.
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.
These matters were 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 these matters.
Key audit matter
Carrying value of the Exploration and Evaluation Assets (notes 1 and 8)
The Group holds one exploration and evaluation asset being the Barroso Lithium Project in Portugal. Accounting
standards require Management to carry out an assessment at least annually for any indicators of impairment. This
requires significant management judgement, which is explained in the section on key judgements relating to the
Carrying value of Exploration and Evaluation Assets in note 1 to the financial statements. Therefore we considered this
to be a key audit matter
How the scope of our audit addressed the key audit matter
We reviewed and assessed whether Management’s assessment was performed in accordance with the requirements
of IFRS 6. We challenged Management’s assessment of the indicators of impairment of the Barroso Lithium Project in
Portugal, by performing the following procedures:
• We agreed management’s assessment to third party supporting documentation where applicable, including:
o
o
Scoping studies,
Exploration and mining licence permits,
• We reviewed the Group’s Mina do Barroso mining licence which expires in 2036 and has a 20 years’ extension
available. We checked compliance with licence terms through inspecting supporting documents.
• We reviewed Management’s plans and budgets to establish whether the Group is committed to the development
of the project and that substantive expenditure on further exploration and evaluation of mineral resources in the
area is budgeted and planned. We checked consistency of these with the Going concern forecasts.
• We considered whether the asset would be commercially viable with reference to the revised scoping study and
the future lithium prices as per Consensus Economics forecasts.
• We reviewed RNS announcements, minutes from the meetings of Directors and news articles to check whether
there were any other potential impairment indicators.
Key observations:
We consider the judgements made in the impairment indicators assessment of Exploration and Evaluation Assets
prepared by Management to be reasonable.
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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
2023 2022 2023 2022
£’000 £’000 £’000 £’000
Materiality 461 390 346 310
Basis for determining
materiality
Rationale for the
benchmark applied
1.5% of total assets
We considered 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.
75% of Group
Materiality
79% of Group
Materiality
Capped at a percentage of Group
materiality taking into account our
assessment of component
aggregation risk.
Performance materiality 346 293 260 233
Basis for determining 75% of Materiality
performance materiality
Rationale for the
percentage applied for
performance materiality
The level of performance materiality was set after considering a number of factors
including the expected value of known and likely misstatements and Management’s
attitude towards proposed misstatements based on past experience
Component materiality
Materiality for the Parent Company is set out above. Materiality for the second significant component, Savannah
Lithium Unipessoal Lda, was based on a percentage of 75% (2022: 69%) of Group materiality and amounted to
GBP346,000 (2022: GBP270,000). We further applied performance materiality levels of 75% (2022: 75%) of the
component materiality to our testing to ensure that the risk of errors exceeding component materiality was
appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of
GBP9,200 (2022: GBP7,800). We also agreed to report differences below this threshold that, in our view, warranted
reporting on qualitative grounds.
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REPORT OF THE INDEPENDENT AUDITORS
to the members of Savannah Resources Plc
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.
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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.
including
fraud, are
Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities,
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:
Non‐compliance with laws and regulations
The Group is also subject to laws and regulations where
the consequence of non‐compliance could have a
material effect on the amount or disclosures in the
financial statements,
the
imposition of fines or litigations.
for example
through
Based on:
• Our understanding of the Group and the industry in
which it operates;
• Discussion with management and the Audit
Committee; and
• Obtaining and understanding of the Group’s policies
and procedures regarding compliance with laws and
regulations
we considered the significant laws and regulations to be
Companies Act 2006, tax legislation, health and safety
legislation and the Bribery Act 2010.
Our procedures in respect of the above included:
•
•
•
•
Review of minutes of meeting of those charged with
governance for any instances of non‐compliance
with laws and regulations;
Review of correspondence with regulatory and tax
authorities for any instances of non‐compliance with
laws and regulations;
Review of financial statement disclosures and
agreeing to supporting documentation;
Review of legal expenditure accounts to understand
the nature of expenditure incurred; and
• Directing the component auditor’s work to ensure
an assessment is performed on the extent of the
component’s compliance with the relevant local and
regulatory framework.
Fraud
We assessed the susceptibility of the financial
statements to material misstatement, including fraud.
Our risk assessment procedures included:
•
Enquiry with management and those charged with
governance regarding any known or suspected
instances of fraud;
• Obtaining an understanding of the Group’s policies
and procedures relating to:
o
o
Detecting and responding to the risks of fraud;
and
Internal controls established to mitigate risks
related to fraud.
•
Review of minutes of Board and Audit Committee
meetings to identify any known or suspected
instances of fraud;
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REPORT OF THE INDEPENDENT AUDITORS
to the members of Savannah Resources Plc
• Discussion amongst the engagement team as to how
and where fraud might occur in the financial
statements;
•
•
Involvement of forensic specialists during the
engagement team fraud discussions;
Performing analytical procedures to identify any
unusual or unexpected relationships that may
indicate risks of material misstatement due to fraud;
and the further removed non‐compliance with laws and
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.
Based on our risk assessment, we considered the areas
most susceptible to fraud to be management override
of controls through inappropriate journal entries and
bias in areas of judgement due to level of subjectivity
involved with them.
Our procedures in respect of the above included:
•
•
•
Testing a sample of journal entries throughout the
year, which met a defined risk criteria, by agreeing
to supporting documentation;
Involvement of forensic specialists to review the
report issued by the legal experts regarding the
independent
review performed on Project
Influencer;
Reviewing the Group’s year end adjusting entries,
consolidation entries and investigating any that
appear unusual as to nature or amount by agreeing
to supporting documentation; and
• Assessing
significant
by
management for bias (refer to Carrying value of the
Exploration and Evaluation Assets key audit matter).
estimates made
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, UK
Date: 12 April 2024
BDO LLP is a limited liability partnership registered in
England and Wales (with registered number OC305127).
We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement
team members including component engagement teams
who were all deemed to have appropriate competence
and capabilities and remained alert to any indications of
fraud or non‐compliance with laws and regulations
throughout the audit. For component engagement
teams, we also reviewed the result of their work
performed in this regard.
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
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
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268158 Savannah pp76-pp82.qxp_268158 Savannah AR 22/04/2024 09:45 Page 76
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2023
CONTINUING OPERATIONS
Revenue
Other Income
Administrative Expenses
Foreign Exchange (Loss)/Gain
OPERATING LOSS
Finance Income
Finance Costs
LOSS FROM CONTINUING OPERATIONS BEFORE TAX
Tax expense
LOSS FROM CONTINUING OPERATIONS AFTER TAX
GAIN/(LOSS) ON DISCONTINUED OPERATIONS NET OF TAX
LOSS 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)/Gains arising on translation of foreign operations
OTHER COMPREHENSIVE INCOME 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
Notes
2023
£
2022
£
–
–
(3,477,405)
(81,116)
(3,558,521)
108,286
(555)
(3,450,790)
–
(3,450,790)
(167,304)
–
–
(3,531,894)
814,468
(2,717,426)
34,695
(265)
(2,682,996)
–
(2,682,996)
(176,396)
(3,618,094)
(2,859,392)
4
22
(5,289)
(19,598)
(237,364)
(242,653)
665,656
646,058
(3,860,747)
(2,213,334)
7
7
7
(0.20)
(0.20)
(0.00)
(0.17)
(0.16)
(0.01)
The Notes form part of these Financial Statements
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268158 Savannah pp76-pp82.qxp_268158 Savannah AR 22/04/2024 09:45 Page 77
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2023
ASSETS
NON‐CURRENT ASSETS
Intangible Assets
Right‐of‐Use Assets
Property, Plant and Equipment
Other Receivables
Other Non‐Current Assets
TOTAL NON‐CURRENT 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
Shares to be Issued
Merger Reserve
Foreign Currency Reserve
Share Based Payment Reserve
FVTOCI Reserve
Retained Earnings
Notes
2023
£
2022
£
8
20
9
12
14
11
12
13
15
21
18,391,089
56,378
1,660,135
432,003
92,869
16,459,599
17,627
1,583,944
454,651
77,667
20,632,474
18,593,488
6,688
426,065
166
9,721,281
10,154,200
11,977
560,060
1,036
7,202,334
7,775,407
30,786,674
26,368,895
18,281,499
46,598,337
43,423
6,683,000
389,566
600,709
(46,324)
(44,606,003)
16,889,598
41,693,178
–
6,683,000
626,930
403,749
(41,035)
(40,999,879)
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
27,944,207
25,255,541
LIABILITIES
NON‐CURRENT LIABILITIES
Lease Liabilities
TOTAL NON‐CURRENT LIABILITIES
CURRENT LIABILITIES
Lease Liabilities
Trade and Other Payables
Other Current Liabilities
Tax Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
20
20
16
18
39,033
39,033
12,263
12,263
17,345
1,993,060
–
793,028
2,803,433
2,842,466
5,364
1,085,778
9,949
–
1,101,091
1,113,354
30,786,673
26,368,895
The Financial Statements were approved and authorised for issue by the Board of Directors on 12 April 2024 and
were signed on its behalf by:
Matthew King
Chairman
Company number: 07307107
The Notes form part of these Financial Statements
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
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268158 Savannah pp76-pp82.qxp_268158 Savannah AR 22/04/2024 09:45 Page 78
COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 December 2023
ASSETS
NON‐CURRENT ASSETS
Investments in Subsidiaries
Other Receivables
Other Non‐Current Assets
TOTAL NON‐CURRENT 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
Shares to be Issued
Merger 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
2023
£
2022
£
10
12
14
11
12
13
15
21
16
333,740
34,451,813
–
333,740
31,877,211
6,776
34,785,553
32,217,727
6,688
146,252
8,226,519
8,379,459
11,977
238,189
6,241,356
6,491,522
43,165,012
38,709,249
18,281,499
46,598,337
43,423
6,683,000
600,709
(46,324)
(29,540,322)
16,889,598
41,693,178
–
6,683,000
403,749
(41,035)
(27,442,644)
42,620,322
38,185,846
544,690
544,690
523,403
523,403
43,165,012
38,709,249
The Company Loss for the financial year was GBP2,109,648 (2022: Profit GBP1,120,818) (Note 6).
The Financial Statements were approved and authorised for issue by the Board of Directors on 12 April 2024 and
were signed on its behalf by:
Matthew King
Chairman
Company number: 07307107
The Notes form part of these Financial Statements
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2023
Share
Foreign Based
Share Share Shares to Merger Currency Payment FVTOCI Retained Total
Capital Premium be Issued Reserve Reserve Reserve Reserve Earnings Equity
£ £ £ £ £ £ £ £ £
At 1 January 2022 16,889,598 41,693,178 – 6,683,000 (38,726) 305,095 (21,437) (38,284,665) 27,226,043
Loss for the year – – – – – – – (2,859,392) (2,859,392)
Other Comprehensive
Income – – – – 665,656 – (19,598) – 646,058
Total Comprehensive
Income for the year – – – – 665,656 – (19,598) (2,859,392) (2,213,334)
Share based
payment charges – – – – – 242,832 – – 242,832
Lapse of options – – – – – (144,178) – 144,178 –
At 31 December 2022 16,889,598 41,693,178 – 6,683,000 626,930 403,749 (41,035) (40,999,879) 25,255,541
Loss for the year – – – – – – – (3,618,094) (3,618,094)
Other Comprehensive
Income – – – – (237,364) – (5,289) – (242,653)
Total Comprehensive
Income for the year – – – – (237,364) – (5,289) (3,618,094) (3,860,747)
Issue of Share Capital
(net of expenses) 1,391,901 4,905,159 – – – – – – 6,297,060
Share based
payment charges – – 43,423 – – 208,930 – – 252,353
Lapse of options – – – – – (11,970) – 11,970 –
At 31 December 2023 18,281,499 46,598,337 43,423 6,683,000 389,566 600,709 (46,324) (44,606,003) 27,944,207
The following describes the nature and purpose of each reserve within owners' equity:
Reserve
Share Capital
Share Premium
Shares to be Issued
Merger Reserve
Foreign Currency 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
Shares for which consideration has been received but which are not issued yet
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
Gains/losses arising on retranslating the net assets of group operations into Pound Sterling
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
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268158 Savannah pp76-pp82.qxp_268158 Savannah AR 22/04/2024 09:45 Page 80
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2023
Share
Based
Share Share Shares to Merger Payment FVTOCI Retained Total
Capital Premium be Issued Reserve Reserve Reserve Earnings Equity
£ £ £ £ £ £ £ £
At 1 January 2022 16,889,598 41,693,178 – 6,683,000 305,095 (21,437) (28,707,640) 36,841,794
Profit for the year – – – – – – 1,120,818 1,120,818
Other Comprehensive
Income – – – – – (19,598) – (19,598)
Total Comprehensive
Income for the year – – – – – (19,598) 1,120,818 1,101,220
Share based
payment charges – – – – 242,832 – – 242,832
Lapse of options – – – – (144,178) – 144,178 –
At 31 December 2022 16,889,598 41,693,178 – 6,683,000 403,749 (41,035) (27,442,644) 38,185,846
Profit for the year – – – – – – (2,109,648) (2,109,648)
Other Comprehensive
Income – – – – – (5,289) – (5,289)
Total Comprehensive
Loss for the year – – – – – (5,289) (2,109,648) (2,114,937)
Issue of Share Capital
(net of expenses) 1,391,901 4,905,159 – – – – – 6,297,060
Share based
payment charges – – 43,423 – 208,930 – – 252,353
Lapse of options – – – – (11,970) – 11,970 –
At 31 December 2023 18,281,499 46,598,337 43,423 6,683,000 600,709 (46,324) (29,540,322) 42,620,322
The following describes the nature and purpose of each reserve within owners' equity:
Reserve
Share Capital
Share Premium
Shares to be Issued
Merger 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
Shares for which consideration has been received but which are not issued yet
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
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
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CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2023
Cash flows used in operating activities
Loss for the year
Depreciation and amortisation charges
Share based payment charge – Share Options
Shares based payment charge – Shares to be issue in lieu of bonus
Finance Income
Finance Costs
Reverse impairment other assets
Foreign Exchange Losses/(Gains)
Cash flow used in operating activities before changes
in working capital
Decrease/(Increase) 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 Tangible Fixed Assets
Interest received
Proceeds from relinquishment of the rights and
obligations of discontinued operations
Net cash used in investing activities
Cash flow from financing activities
Proceeds from issues of ordinary shares (net of expenses)
Principal paid on Lease Liabilities
Interest paid on Lease Liabilities
Net cash from/(used in) financing activities
Increase/(Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at beginning of year
Increase Restricted Cash
Exchange (Losses)/Gains on Cash and Cash Equivalents
Cash and Cash Equivalents at end of year
Notes
9, 20
4, 21
15
4
8
9
22
15
20
20
13
13
13
2023
£
2022
£
(3,618,094)
22,095
208,930
43,423
(108,286)
555
(710,467)
131,325
(2,859,392)
23,456
242,832
–
(34,695)
265
–
(858,679)
(4,030,519)
140,148
982,457
(3,486,213)
(78,217)
(538,972)
(2,907,914)
(4,103,402)
(1,456,075)
(120,573)
96,367
(1,771,821)
(852,127)
28,438
–
89,981
(1,480,281)
(2,505,529)
6,297,060
(9,252)
(555)
6,287,253
1,899,058
7,202,334
701,903
(82,014)
–
(5,022)
(265)
(5,287)
(6,614,218)
13,002,084
–
814,468
9,721,281
7,202,334
The Notes form part of these Financial Statements
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
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COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 December 2023
Cash flows used in operating activities
(Loss)/Gain for the year
Impairment of Investment in Subsidiaries
Impairment of Financial Assets
Share based payment reserve charge – Share Options
Shares based payment charge – Shares to be issue in lieu of bonus
Dividends Income
Finance Income
Foreign Exchange Losses/(Gains)
Cash flow used in 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
Loans to subsidiaries
Proceeds from repayment of loans to subsidiaries
Proceeds from dividends from subsidiaries
Interest received
Net cash used in investing activities
Cash flow from financing activities
Proceeds from issues of ordinary shares (net of expenses)
Net cash from financing activities
Increase/(Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at beginning of year
Exchange (Losses)/Gains on Cash and Cash Equivalents
Cash and Cash Equivalents at end of year
Notes
10
4, 21
15
4
4
4
15
13
13
2023
£
2022
£
(2,109,648)
–
(466,912)
208,930
43,423
–
(108,286)
728,241
(1,704,252)
39,911
29,126
1,120,818
17,821
102,988
242,832
–
(811,572)
(34,695)
(2,274,357)
(1,636,165)
168,209
(488,024)
(1,635,215)
(1,955,980)
(3,260,033)
553,702
–
96,367
(5,204,762)
799,772
811,572
28,438
(2,609,964)
(3,564,980)
6,297,060
6,297,060
2,051,881
6,241,356
(66,718)
–
–
(5,520,960)
11,085,944
676,372
8,226,519
6,241,356
The Notes form part of these Financial Statements
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
1. ACCOUNTING POLICIES
Basis of Preparation
These Consolidated Financial Statements and the Company Financial Statements have been prepared in
accordance with UK adopted international accounting standards. 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 Group and Company have, in the past raised equity
to fund their exploration activities and to date has not earned any revenues from their exploration projects.
The Directors have prepared a cash flow forecast for the period to September 2025. This indicates that additional
funding will be required in the second half of 2024 in order to fund the work on the DFS and RECAPE. The Group
and Company are currently running a Strategic Partner Process (the ‘SPP’) with Barclays and Barrenjoey as the
financial advisors leading the process. The Directors believe that following the grant of the DIA, the Group’s
Barroso Lithium Project will be attractive to investors and this is reflected by the participation of third parties
in the SPP. Therefore, the Directors are confident that funding for the DFS and RECAPE would be obtained
through options which may include equity, strategic partnership or offtake.
While the Group and Company have been successful in raising equity finance in the past, and while the Directors
are confident of raising additional funding when required, their ability to do this is not completely within their
control and the lack of a binding agreement means there can be no certainty that the additional funding
required by the Group and the Company will be secured within the necessary timescale. These conditions
indicate the existence of a material uncertainty which may cast significant doubt about the Group and the
Company’s ability to continue as a Going Concern and therefore they may be unable to realise their assets and
discharge their liabilities in the normal course of business.
The Directors consider that the funding will be forthcoming and therefore the Going Concern basis of
preparation is deemed appropriate. The Financial Statements do not include any adjustments that would result
if the Group and Company were unable to continue as a Going Concern.
Basis of Consolidation
Where the company has control over an investee, it is classified as a subsidiary. The Company controls an investee
if all three of the following elements are present: power over the investee, exposure to variable returns from
the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed
whenever facts and circumstances indicate that there may be a change in any of these elements of control.
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’.
The consolidated Financial Statements present the results of the Company and its subsidiaries (‘the Group’)
as if they formed a single entity. Intercompany transactions and balances between group companies are
therefore eliminated in full.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023 83
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
1. ACCOUNTING POLICIES continued
Investments in Subsidiaries and Associates
Investments in subsidiaries, associates and jointly controlled entities are accounted for at cost within the
individual accounts of the parent company. These investments are classified as Non‐Current Assets on the
Statement of Financial Position of the parent company.
Foreign Currencies
Transactions in foreign currencies are initially recorded in the functional currency by applying spot exchange rate
ruling at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated
at the functional currency rate of exchange ruling at the reporting date. Exchange differences arising on the
retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or loss.
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 / mining licence or an option to acquire an exploration / mining licence has been obtained,
all costs associated with mineral property development and investments are capitalised on a project‐by‐project
basis pending determination of the feasibility of the project. Costs incurred include appropriate technical and
administrative expenses, but not general overheads. 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.
Exploration and Evaluation Assets 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. When facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may
exceed its recoverable amount the asset is assessed for impairment.
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, and subsequently
amortised over the estimated life of the commercial ore reserves on a unit of production basis.
Acquisitions of Mineral Exploration Licences
Acquisitions of Mineral Exploration Licences through acquisition of non‐operational corporate structures that
do not represent a business, and therefore do not meet the definition of a business combination, are accounted
for as the acquisition of an asset. Related future cash consideration is contingent and is not recognised as an
asset or liability.
Property, Plant and Equipment
Tangible Non‐Current Assets used in exploration and evaluation and land are classified within Tangible
Non‐Current Assets as Property, Plant and Equipment and are initially recognised at cost. 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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
1. ACCOUNTING POLICIES continued
Depreciation is provided on all items of Property, Plant and Equipment, except land, 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
These assets arise principally from the provision of goods and services to customers (e.g., trade receivables),
but also incorporate other types of Financial Assets where the objective is to hold these assets in order to
collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. 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 forward‐looking 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.
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.
Financial Liabilities
Other Liabilities
Other Liabilities consist of trade and other payables, which are initially recognised at fair value and subsequently
carried at amortised cost, using the effective interest method.
Financial Liabilities are derecognised when they are extinguished, that is when the obligation is discharged,
cancelled or has expired. When a Financial Liability is derecognised, the cumulative gain or loss in equity (if any)
is transferred to the Consolidated Statement of Comprehensive Income.
There is no significant difference between the carrying value and fair value of Other Liabilities.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023 85
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
1. ACCOUNTING POLICIES continued
Share‐Based Payments
Where equity settled share options are awarded to Directors and employees, the fair value of the options at
the date of grant is charged to the Consolidated Statement of Comprehensive Income over the vesting period.
Non‐market vesting conditions are taken into account by adjusting the number of equity instruments expected
to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is
based on the number of options that eventually vest. Market vesting conditions are factored into the fair value
of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of
whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to
achieve a market vesting condition.
Where the terms and conditions of options are modified before they vest, the change in the fair value of the
options, measured immediately before and after the modification, is also charged to the Consolidated Statement
of Comprehensive Income over the remaining vesting period.
Where equity instruments are granted to persons other than employees for goods and services received, the
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 pricing model. The probability of non‐vesting conditions being satisfied
are included in the fair value recognised at the measurement date.
On lapse of the share options the cumulative fair value registered in the Share Based Payment Reserve is
transferred to Retained Earnings.
Non‐Current Assets Held for Sale and Discontinued Operations
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 Post‐Tax Profit or Loss of the discontinued operation along with the Post‐Tax Gain or
Loss recognised on the re‐measurement to fair value less costs to sell or on disposal of the assets or disposal
groups constituting discontinued operations.
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 judgements and estimates
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 judgements and estimates are based on
Management's best knowledge of the amounts, event or actions, actual results ultimately may differ.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
1. ACCOUNTING POLICIES continued
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) 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 in 2020. Management defined several scenarios and their
likelihoods with the expected cash flows associated to the recovery of the third‐party loan and amounts
receivable from the royalty rights. This evaluation is reviewed at each reporting period.
The key estimates are set out below:
(a)
Impairment of Amounts due from Subsidiaries
When applying the expected credit loss model under IFRS 9 Management apply estimates to evaluate if
there was a change in the credit risk of the loans since initial recognition. To calculate the expected credit
losses Management apply estimation to determine the probability of different scenarios occurring to
determine 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.
(b) Tax Provision
The Group is subject to taxes in several jurisdictions for which significant estimation is required in
determining the provision for taxes. During the course of business, there are transactions and calculations
for which the ultimate tax determination is uncertain. As a result, the Group recognises tax
provisions/liabilities based on estimates of whether additional taxes and interest could be due. These tax
provisions/liabilities are recognised when the Company believes that its tax return positions are supportable
but it is possible that a taxation authority would not accept its filing position. In these cases, the Company
applies estimations to determine the probability‐weighted outcome of different scenarios to determine
the value of the tax provision to be recognised (see Note 18).
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
1. ACCOUNTING POLICIES continued
Accounting Developments During 2023
The accounting policies adopted are consistent with those of the previous financial year. New standards and
amendments to IFRS effective as of 1 January 2023 have been reviewed by the Group and other than the
application of the amendments to IAS 1 to disclose only material accounting policy information in Note 1, 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, and headquarter, corporate and
other costs.
Based on the Group’s current stage of development there are no external revenues associated to the segments
detailed below. For exploration and development in Portugal the segment is calculated by the summation of
the balances in the legal entities which are readily identifiable to each of the segmental activities. Recharges
between segments are at cost (although tax related transfer pricing markup is required) and included in each
segment below. Intercompany loans are eliminated to zero and not included in each segment below.
HQ,
Portugal corporate
Lithium and other Elimination
£ £ £
2023
Revenue1 1,550,4052 858,089 (2,408,494)
Finance Costs (555) – –
Interest Income – 108,286 –
Share based payments – 252,353 –
Gain/(Loss) for the year (2,072,003) (1,546,091) –
Total Assets 20,709,860 10,076,814 –
Total Non‐Current Assets 20,200,471 432,003 –
Additions to Non‐Current Assets 2,332,568 – –
Total Current Assets 509,389 9,644,811 –
Total Liabilities (1,039,684) (1,802,782) –
Total
£
–
(555)
108,286
252,353
(3,618,094)
30,786,674
20,632,474
2,332,568
10,154,200
(2,842,466)
1 Revenues included the intercompany recharges within the Group which are eliminated.
2 Included in the Portugal Lithium segment is £1,908,637 (2021: £1,654,567) relating to intercompany recharges within this segment and therefore
eliminated in Elimination column.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
2. SEGMENTAL REPORTING continued
HQ,
Portugal corporate
Lithium and other3 Elimination
£ £ £
2022
Revenue1 1,908,6372 971,582 (2,880,219)
Finance Costs (265) – –
Interest Income – 34,695 –
Share based payments – 242,832 –
Gain/(Loss) for the year (1,661,876) (1,197,516) –
Total Assets 18,575,420 7,793,475 –
Total Non‐Current Assets 18,130,222 463,266 –
Additions to Non‐Current Assets 2,667,514 454,651 –
Total Current Assets 445,198 7,330,209 –
Total Liabilities (326,564) (786,790) –
1 Revenues included the intercompany recharges within the Group which are eliminated
Total
£
–
(265)
34,695
242,832
(2,859,392)
26,368,895
18,593,488
3,122,165
7,775,407
(1,113,354)
2 Included in the Portugal Lithium segment is GBP1,550,405 (2022: GBP1,908,637) relating to intercompany recharges within this segment and
therefore eliminated in Elimination column
3 Following the divestment of its Oman and Mozambique portfolios, the Company’s is effectively a single project company and it is appropriate
to adjust its segmental reporting accordingly. Therefore the 2022 segment note disclosures have been re‐stated accordingly, combining the
following categories ‘Discontinued Operation Mozambique Mineral Sands’ and ‘HQ and corporate’ into ‘HQ, corporate, and other’
3. EMPLOYEES AND DIRECTORS
The average monthly number of employees (including Directors that receive remuneration) during the year
was as follows:
Operational
Non‐operational
Staff Costs (excluding Directors1)
Salaries
Bonus
Social security and other employee expenses
Pension
Share based payment expense (Note 21)
Group
Company
2023
No
6
13
19
2023
£
Group
2022
No
4
12
16
2022
£
1,144,993
137,0882
159,772
62,908
107,847
1,612,608
990,123
80,6632
136,784
54,372
124,804
1,386,746
2023
No
1
6
7
2023
£
541,184
87,8972
77,436
62,908
107,847
877,272
2022
No
1
6
7
Company
2022
£
494,875
49,3052
69,235
54,372
124,804
792,591
1 This excludes costs related to Directors and to the Company’s CEO, who will be appointed as a Director in April 2024
2 2023 bonuses unpaid as at 31 December 2023. 2022 bonuses unpaid as at 31 December 2022
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023 89
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a
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v
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e
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t
a
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a
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
3. EMPLOYEES AND DIRECTORS continued
The Group numbers in the above table includes GBP319,261 (2022: GBP165,311) which was capitalised as an
exploration and evaluation asset.
Directors’ Remuneration1, 2
Salaries
Bonus
Social security and taxes
Other benefits
Share based payment expense
2023
£
644,909
66,9863
33,599
641
111,818
857,953
2022
£
556,633
16,2743
38,717
16,525
94,629
722,778
1 This includes costs related to Directors and to the Company’s CEO, who will be appointed as a Director in April 2024
2 This includes the remuneration received by David Archer in 2022, who stepped down as Director (and employee) on 6 July 2022
3 2023 bonuses unpaid as at 31 December 2023. 2022 bonuses unpaid as at 31 December 2022
The numbers in the above table include GBP131,713 (2022:GBP144,462) of Directors’ Remuneration which was
capitalised as an Intangible Asset in relation to the provision of specific technical services.
The Directors’ remuneration is paid by the Company, except the CEO’s remuneration which is paid by Savannah
Lithium Unipessoal Limitada. Details of the Director’s remunerations are disclosed in the Remuneration Report.
The Directors and the CEO are considered to be the key Management of the Group.
No share options were exercised during the financial year ended 31 December 2023 or 31 December 2022.
The highest paid director received remuneration of GBP365,176 (see Remuneration Report and Note 19) and
non‐cash payments of GBP37,338. This is including the temporary adjustment to Dale Ferguson’s fees of
GBP123,657 in consideration for his expanded role as Interim CEO combined with his Technical Director role.
This temporary adjustment was ceased in October 2023 after the appointment of Emanuel Proença as CEO.
4. LOSS BEFORE INCOME TAX
The Group loss before income tax is stated after charging:
Depreciation and amortisation
Auditors’ remuneration:
– Group audit fees
– Subsidiaries audit fees
– Non‐audit services – tax services
– Non‐audit services – other
Fees payable to associated firms of the auditor for audit of subsidiaries
Fees payable to associated firms of the auditor for non‐audit services of
subsidiaries – tax services
Fees payable to associated firms of the auditor for non‐audit services of
subsidiaries – research services
Professional fees
Foreign Exchange (Gain)/Loss
Short term lease payments (Note 20)
Share based payments (Note 21, 15)
90
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
2023
£
2022
£
22,095
23,456
78,750
5,250
14,205
–
16,954
14,755
76,115
4,000
26,314
15,643
16,312
8,409
–
1,075,781
81,116
32,534
252,353
5,455
1,085,326
(814,468)
76,505
242,832
268158 Savannah pp83-pp97.qxp 22/04/2024 09:48 Page 91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
4. LOSS BEFORE INCOME TAX continued
The Company profit/(loss) before income tax is stated after charging:
Auditors' remuneration:
– Statutory audit of the Group Financial Statements
– Non‐audit services – tax services
– Non‐audit services – other
Foreign Exchange (Gain)/Loss
Short term lease payments
Share based payments
(Reversal)/charge of intercompany impairment
Dividends from subsidiaries
2023
£
2022
£
78,750
14,205
–
728,241
23,796
252,353
(466,912)
–
76,115
26,314
15,643
(2,274,357)
59,000
242,832
16,125
(811,572)
5.
INCOME TAX
Analysis of the Tax Charge
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2023 or
31 December 2022.
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:
2023
£
2022
£
Loss on ordinary activities before tax
(3,618,094)
(2,859,392)
Loss on ordinary activities multiplied by the standard rate
of corporation tax in the UK of 23.5%1 (2022: 19%)
Effects of:
Expenses/(income) not deductible for tax purposes
Different tax rates applied in overseas jurisdictions
Tax losses carried forward
Corporation tax related to prior year
Total Income Tax
(850,252)
(543,284)
(15,601)
(21,212)
887,065
–
–
164,020
(39,277)
392,824
25,717
–
1 From 1 April 2023 UK corporation tax rate is 25% for companies with taxable profits over GBP250,000. For this analysis has been used an average
rate of 23.5%
Deferred Tax
The Group has carried forward losses amounting to GBP18,416,762 as at 31 December 2023 (2022:
GBP15,520,1402). 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.
2 In the previous year the comparative figure was stated as GBP14,559,035 and following submission of definitive tax computations for the year
ended 31 December 2022 has been updated
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023 91
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i
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e
c
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a
n
r
e
v
o
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s
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n
e
m
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t
a
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l
a
i
c
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a
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F
i
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
5.
INCOME TAX continued
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 2017‐2019 tax
years and for a 12 year period for losses related to the 2020‐2023 tax years. There is no expiry date for tax losses
carried forward in the UK. The aging of the tax losses carried forward in Portugal and Mozambique is as follows:
Valid until
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2032
2033
2034
2035
No expiry date
Total
2023
£
2022
£
317,312
240,236
1,572,619
91,465
36,984
–
22,272
138,065
460,244
928,811
1,095,910
1,524,558
1,660,604
1,498,961
8,828,721
333,945
252,905
1,655,049
–
–
–
22,733
140,923
469,772
948,040
1,118,598
1,556,120
1,666,189
–
6,321,159
18,416,762
14,485,433
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 Loss for the financial year was
GBP2,109,648 (2022: Profit GBP1,120,818).
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
are not considered dilutive because the exercise of these would have the effect of reducing the loss per share.
Reconciliations are set out below:
2023
£
2022
£
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
92
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
(3,618,094)
(3,450,790)
(167,304)
(2,859,392)
(2,682,996)
(176,396)
1,751,881,365 1,688,959,820
(0.00169)
(0.00159)
(0.00010)
(0.00207)
(0.00197)
(0.00010)
268158 Savannah pp83-pp97.qxp 22/04/2024 09:48 Page 93
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
8.
INTANGIBLE ASSETS
Cost
At 1 January 2022
Additions
Foreign exchange movements
At 31 December 2022
Additions
Foreign exchange movements
At 31 December 2023
Amortisation and impairment
At 1 January 2022
At 31 December 2022
At 31 December 2023
Net Book Value
At 1 January 2022
At 31 December 2022
At 31 December 2023
Exploration and
Evaluation
£
14,137,817
1,731,323
590,459
16,459,599
2,162,197
(230,707)
18,391,089
–
–
–
14,137,817
16,459,599
18,391,089
The Exploration and Evaluation Assets referred to in the table above comprise expenditure in relation to
exploration licences in Portugal. The Directors consider that for the purposes of assessing impairment, the
above exploration and evaluation expenditure is allocated to the Portugal Lithium licences area, representing
the Group’s Cash Generating Units (‘CGUs’).
The Directors have reviewed the carrying value of the CGU and have not identified any indicators of impairment
for the assets allocated to the licences in Portugal, and therefore there is no impairment charge in 2023 or 2022
for Portugal operations.
Amongst other matters, the impairment review has taken into account the “lawfare” that the Group faces from
certain sections of the local population, which seek to call into question the validity of the Barroso Lithium
Project (‘ BLP’) (C‐100) mining licence parameters and the BLP’s DIA grant, by making claims against the relevant
competent authorities within the Portuguese government (see Social Licence Risk in the Strategic Report for
further details). Both of which are considered to be without foundation by the Company lawyers. The
impairment review has also taken into account that the Company will require additional funds to fully develop
the BLP into an operating mine, and it remains confident that the BLP’s strategic location within EU’s carbon
borders, the excellent investment metrics reported in the 2023 Scoping Study, and the long‐term lithium pricing
outlook, will result in the BLP mine development being funded (see Chairman’s Statement and CEO Report for
information on the partnering process and other sources of finance).
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023 93
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c
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a
n
r
e
v
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a
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
9. PROPERTY, PLANT AND EQUIPMENT
Cost
At 1 January 2022
Additions
Foreign exchange movements
At 31 December 2022
Additions
Foreign exchange movements
At 31 December 2023
Depreciation
At 1 January 2022
Charge for year
Foreign exchange movements
At 31 December 2022
Charge for year
Foreign exchange movements
At 31 December 2023
Net Book Value
At 1 January 2022
At 31 December 2022
At 31 December 2023
Motor
Vehicles
£
Office
Equipment
£
54,401
–
2,954
57,355
–
(1,163)
56,192
46,333
8,192
2,830
57,355
–
(1,163)
56,192
8,068
–
–
37,748
9,095
2,365
49,208
15,600
(3,683)
61,125
18,460
5,444
1,176
25,080
12,897
(3,211)
34,766
19,288
24,128
26,359
Land
£
Total
£
649,180
843,032
67,604
1,559,816
104,973
(31,013)
741,329
852,127
72,923
1,666,379
120,573
(35,859)
1,633,776
1,751,093
–
–
–
–
–
–
–
64,793
13,636
4,006
82,435
12,897
(4,374)
90,958
649,180
1,559,816
1,633,776
676,536
1,583,944
1,660,135
The additions in land reflect the land acquisition program that Savannah has in place in Portugal to acquire the
land required for the future development of the Barroso Lithium project.
The above Property, Plant and Equipment is allocated to the Portugal Lithium operations, representing the
Group’s CGUs.
Management has evaluated the existence of impairment indicators of the Property, Plant and Equipment
allocated to the licences area together with the impairment review performed for the Exploration and Evaluation
Assets, and it has concluded that there are no indicators of impairment, and therefore there is no impairment
charge in 2023 or 2022 for Portugal operations.
10. INVESTMENT IN SUBSIDIARIES
Company
Non‐Current
At 1 January 2022
Additions
Impairment charge
At 31 December 2022
Additions
Impairment charge
At 31 December 2023
94
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
Investment in
subsidiaries
£
333,831
17,730
(17,821)
333,740
–
–
333,740
268158 Savannah pp83-pp97.qxp 22/04/2024 09:48 Page 95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
10. INVESTMENT IN SUBSIDIARIES continued
During 2022 the Company impaired its investment in Savannah Lithium BV after the commencement of the
liquidation process of this entity, which was completed in 2023.
The Company had the following subsidiary undertakings, either directly or indirectly, at 31 December 2023, 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 Limitada2,10 Mozambique7 Mining & exploration Ordinary 99.99%
African Mining & Exploration Limited1 United Kingdom5 Dormant Ordinary 100%
Savannah Resources Portugal B.V.1 Netherlands8 Holding Company Ordinary 100%
Savannah Lithium Unipessoal Limitada2,4 Portugal9 Mining & exploration Ordinary 100%
Savana Matinal – Mining,
Unipessoal Limitada2 Portugal9 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, and formerly Savannah Lithium 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 Rua 5 de Outubro, nº 26, Boticas, Portugal, 5460‐304
10 Liquidation process started in 2023 and expected to be completed in 2024
11. EQUITY INSTRUMENTS AT FVTOCI
Group and Company
At 1 January 2022
Change in market value of investment
At 31 December 2022
Change in market value of investment
At 31 December 2023
Shares in
Equity
Investments at
FVTOCI
£
31,575
(19,598)
11,977
(5,289)
6,688
Equity Investments are designated as Fair Value Through Other Comprehensive Income (FVTOCI).
The fair value of the shares held by the Company is the quoted value at the reporting date. The fair value
hierarchy in 2023 and 2022 for these shares is Level 1 as the valuation is based wholly on quoted prices.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023 95
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a
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
12. TRADE AND OTHER RECEIVABLES
Non‐Current:
Other Receivables
Amounts due from Subsidiaries
Total Non‐Current Trade and Other Receivables
Current:
VAT Recoverable
Other Receivables
Total Current Trade and Other Receivables
2023
£
432,003
–
432,003
253,790
172,275
426,065
Group
Company
2022
£
2023
£
2022
£
454,651
–
454,651
–
34,451,813
–
31,877,211
34,451,813
31,877,211
155,205
404,855
560,060
108,422
37,830
146,252
6,707
231,482
238,189
The carrying value of Trade and Other Receivables classified at amortised cost approximates fair value.
The amount registered in Non‐current Other receivable is related to the Deed of Termination entered into with
Rio Tinto in December 2021.
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 reversal amounting to GBP0.5m (2022: loss GBP0.02m) is required in the
expected credit loss calculated in prior years on the receivables from the subsidiaries, decreasing the expected
credit loss balance to GBP4.4m.
The Group has a receivable of AUD 3,500,000 (~GBP1,870,000) from Gentor Resources Limited, a subsidiary of
Critical Resources, which represents contingent consideration from the disposal of the Oman operations in
2020, this becomes payable from future production from Block 5 and / or an event of default. In accordance
with IFRS guidance the fair value has been valued at GBPnil as at 31 December 2023 and 31 December 2022,
but this does not imply that value will not be realised in future.
The expected credit loss on other third parties’ receivables is immaterial as at 31 December 2023 and 2022.
96
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
268158 Savannah pp83-pp97.qxp 22/04/2024 09:48 Page 97
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
12. TRADE AND OTHER RECEIVABLES continued
Movements in the impairment allowance for the year ended 31 December 2023 are as follows:
Company
At 1 January 2022
Impairment charge
Foreign exchange movements
At 31 December 2022
Impairment charge reversal
Foreign exchange movements
At 31 December 2023
Impairment
from Subsidiaries
£
4,581,141
16,125
467,550
5,064,816
(466,912)
(222,433)
4,375,471
The amounts due from Matilda Minerals are fully impaired as at 31 December 2023 and 31 December 2022,
amounting to GBP4,256,677 (2022: GBP4,479,109) given cessation of exploration activities in Mozambique in 2021.
The breakdown of the Amounts due from Subsidiaries as at 31 December 2023 is as follows:
Company
Amounts due from Subsidiaries:
Outstanding amount
Impairment
13. CASH AND CASH EQUIVALENTS
2023
£
2022
£
38,827,287
(4,375,474)
36,942,027
(5,064,816)
34,451,813
31,877,211
Group
2023
£
2022
£
Company
2023
£
2022
£
Cash at Bank and in Hand
Restricted Cash
Total Cash and Cash Equivalents
9,019,375
701,906
9,721,281
7,202,334
–
7,202,334
8,226,519
–
8,226,519
6,241,356
–
6,241,356
The balance of Cash and Cash Equivalents approximates fair value.
The Group’s cash balance in Mozambique is restricted for use in Mozambique until the Group and the Mozambican
Tax Authority resolve the potential tax treatment or otherwise of the Deed of Termination from 2021 (see Note 18).
14. OTHER NON‐CURRENT ASSETS
Non‐Current:
Guarantees
Other
Total Other Non‐Current Assets
Group
Company
2023
£
63,301
29,568
92,869
2022
£
64,611
13,056
77,667
2023
£
–
–
–
2022
£
–
6,776
6,776
The carrying value of Other Non‐Current Assets classified at amortised cost approximates fair value.
The Non‐Current Assets ‐ Guarantees are deposits required by the local mining / environmental authorities in
relation to exploration / mining licences and applications thereof.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023 97
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
15. SHARE CAPITAL
Allotted, issued and fully paid
At beginning of year
Issued during the year:
Share placements
At end of year
£0.01
ordinary
shares
number
1,688,959,820
139,190,0841
1,828,149,904
2023
2022
£0.01
ordinary
shares
number
16,889,598 1,688,959,820
£
£
16,889,598
1,391,901
–
–
18,281,499 1,688,959,820
16,889,598
1 In respect of the Share placements in 2023 the net proceeds were GBP6,297,060 (2022: GBPnil) of which GBP4,905,159 (2022: GBPnil) has been
recorded in Share Premium. The gross proceeds were GBP6,500,177 (2022: GBPnil) and the costs of the Share placements GBP203,117 (2022: GBPnil)
The par value of the Company’s shares is £0.01.
As at 31 December 2023 the Company has 2,011,880 new ordinary shares of 1 pence each over the Company
Share Capital to be Issued to the CEO in 2024 in lieu of payment of the 2023 bonus agreed as part of his
appointment in September 2023. This is considered a share based payment and a charge of GBP43,423.08 has
been recognised in 2023 and GBP31,016.48 will be recognised in 2024. These shares will be issued in 2024.
16. TRADE AND OTHER PAYABLES
Current:
Trade Payables
Other Payables
Accruals
Amounts due to Subsidiaries
Total Current Trade and Other Payables
Group
2023
£
2022
£
820,487
121,879
1,050,694
–
1,993,060
618,805
56,745
410,228
–
1,085,778
Company
2023
£
200,261
31,168
313,261
–
544,690
2022
£
329,005
28,651
156,961
8,786
523,403
The carrying value of Trade and Other Payables classified at amortised cost approximates fair value.
In 2023 Accruals represent mainly costs related to the drilling and DFS work, and legal fees for work related to
the Operation Influencer in Portugal, for which invoices have not been received at the reporting date. In 2022
Accruals represent mainly professional fees in the Group for which invoices had not been received at the
reporting date.
A significant part of the Trade Payables amounts relates to work performed in the BLP whose balances are
capitalised and therefore included in Investing cash flows instead of Operating cash flows.
17. 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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
17. FINANCIAL INSTRUMENTS continued
Principal Financial Instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
•
•
•
•
Intercompany Loan Receivables
Non‐Current Other Receivables
Current Trade and Other Receivables
Cash and Cash Equivalents
• Other Non‐Current Assets – Guarantees
•
Trade and Other Payables
Trade and other payables fall due for payment within 3 months from the reporting date.
Liquidity Risk
At the reporting date the Group’s not restricted cash balance was GBP9.0m (2022: GBP7.2m). 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 non‐revenue 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 mainly arises because the Group
has overseas operations located 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, 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.
In addition, the Group is exposed through the cash held in foreign currencies. To mitigate this risk the Group’s
policy is to review the cash flow forecast identifying the currencies that will be required to settle liabilities in
future and hold the cash balances in the required currencies. From time to time when there is insufficient
precision about the currencies that will be required for future expenditure the Group spreads its cash balances
across globally recognised reserve currencies to mitigate against adverse changes in exchanges rates, and the
Company monitors this regularly.
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 third‐party receivables are due
within 30 days of issuing the invoices; in the case of the contingent consideration from the disposal of the Oman
operations this is due when its related mining project generate positive cash flow, the project is in the
exploration phase. The Group has calculated the expected credit loss from these receivables (Note 12).
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
99
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
17. FINANCIAL INSTRUMENTS continued
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 practicable.
Financial instruments by category (Group)
Financial Assets
Amortised
Cost Total
£ £
As at 31 December 2023
Non‐Current Other Receivables 432,003 432,003
Other Non‐Current Assets 92,869 92,869
Current Trade and Other Receivables 46,654 46,654
Other Current Assets 166 166
Cash and Cash Equivalents 9,721,281 9,721,281
Total Financial Assets 10,292,973 10,292,973
As at 31 December 2022
Non‐Current Other Receivables 454,651 454,651
Other Non‐Current Assets 77,667 77,667
Trade and Other Receivables 191,143 191,143
Other Current Assets 1,036 1,036
Cash and Cash Equivalents 7,202,334 7,202,334
Total Financial Assets 7,926,831 7,926,831
See review of the fair value hierarchy of fair value through other comprehensive income assets in Note 11.
Financial Liabilities
Amortised Cost Total
£ £
As at 31 December 2023
Trade and Other Payables 1,947,413 1,947,413
Total Financial Liabilities 1,947,413 1,947,413
As at 31 December 2022
Trade and Other Payables 1,085,778 1,085,778
Total Financial Liabilities 1,085,778 1,085,778
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
17. 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
2023 2023 2023 2023 2022 2022 2022 2022
£ £ £ £ £ £ £ £
Foreign currency Financial Assets
USD 573,081 1,097 322 574,500 847,872 6,089 354 854,315
EUR 5,561,385 – – 5,561,385 4,132,466 – – 4,132,466
AUD 462,077 – 4,151 466,228 581,376 – 4,388 585,764
OMR – – – – 8,558 – – 8,558
Total 6,596,543 1,097 4,473 6,602,113 5,570,272 6,089 4,742 5,581,103
Functional Currency of Entity
GBP EUR Total GBP Total
2023 2023 2023 2022 2022
£ £ £ £ £
Foreign currency Financial Liabilities
USD 5,597 – 5,597 132,841 132,841
AUD 359,428 – 359,428 68,061 68,061
EUR 99,654 – 99,654 104,010 104,010
OMR 10,244 – 10,244 6,900 6,900
GBP – 121 121 – –
Total 474,923 121 475,044 311,812 311,812
The effect of changes in foreign currencies exchange rates against GBP at the reporting date on the foreign
currency denominated Cash and Cash Equivalents carried at that date would, all other variables held constant,
have resulted in the following:
USD EUR AUD
As at 31 December 2023 £ £ £
Movement exchange rates
against GBP +10% ‐10% +10% ‐10% +10%
Pre‐tax loss for the year (63,833) 52,227 (617,932) 505,580 (50,293)
Net assets 63,833 (52,227) 617,932 (505,580) 50,293
‐10%
41,149
(41,149)
USD EUR AUD
As at 31 December 2022 £ £ £
Movement exchange rates
against GBP +10% ‐10% +10% ‐10% +10%
Pre‐tax loss for the year (44,407) 36,333 (459,163) 375,679 (63,754)
Net assets 44,407 (36,333) 459,163 (375,679) 63,754
‐10%
52,162
(52,162)
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023 101
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
17. FINANCIAL INSTRUMENTS continued
Financial instruments by category (Company)
Financial Assets
Amortised Cost Total
£ £
As at 31 December 2023
Other Receivables 34,451,813 34,451,813
Trade and Other Receivables 11,919 11,919
Cash and Cash Equivalents 8,226,519 8,226,519
Total Financial Assets 42,690,251 42,690,251
As at 31 December 2022
Other Receivables 31,877,211 31,877,211
Other Non‐Current Assets 6,776 6,776
Trade and Other Receivables 27,215 27,215
Cash and Cash Equivalents 6,241,356 6,241,356
Total Financial Assets 38,152,558 38,152,558
See review of the fair value hierarchy of fair value through other comprehensive income assets in Note 11.
Financial Liabilities
Amortised Cost Total
£ £
As at 31 December 2023
Trade and Other Payables 544,690 544,690
Total Financial Liabilities 544,690 544,690
As at 31 December 2022
Trade and Other Payables 523,403 523,403
Total Financial Liabilities 523,403 523,403
The Company’s net exposure to foreign exchange risk at the reporting date was as follows:
Functional Currency of Entity
GBP GBP
2023 2022
£ £
Foreign currency Financial Assets
USD 529,322 215,473
EUR 39,452,132 35,369,797
AUD 442,063 509,978
OMR – 8,558
Total 40,423517 36,103,806
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
17. FINANCIAL INSTRUMENTS continued
Functional Currency of Entity
GBP Total GBP Total
2023 2023 2022 2022
£ £ £ £
Foreign currency Financial Liabilities
USD – – 8,174 8,174
AUD 12,926 12,926 43,178 43,178
EUR 8,529 8,529 15,696 15,696
OMR 10,244 10,244 6,900 6,900
Total 31,699 31,699 73,948 73,948
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 grants, debt (project finance), royalties, streaming, mezzanine finance, or combinations thereof.
18. GROUP CONTINGENT LIABILITIES AND PROVISIONS
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,
because 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
EUR3,250,000 (~GBP2,820,000), 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 EUR55,000 (~GBP48,000) 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 EUR3,195,000 (~GBP2,770,000) that will be reduced in accordance
with the 71 monthly instalments. As at 31 December 2023 the mining lease has not been granted.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023 103
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
18. GROUP CONTINGENT LIABILITIES AND PROVISIONS continued
Provisions:
In October 2016 the Group and Rio Tinto entered into a Consortium Agreement to develop their respective
projects in Mozambique through an unincorporated consortium. On 1 December 2021 Savannah signed a Deed
of Termination relating to the Consortium Agreement. Under the Deed of Termination, compensation of
USD9.5m (GBP7.0m) was agreed to be paid by Rio Tinto to the Group. In 2023 the Company was indirectly
notified that the Mozambican Tax Authority (‘MTA’) considers the transaction in scope for capital gains tax and
that a tax amount of MZN134,261,677 (~GBP1,650,000) should be paid. Savannah has not received any formal
notification from the MTA and it does not agree with the MTA’s position in relation to this matter. However, the
fact that the Group and the MTA have different opinions in this matter represents the existence of an uncertainty
in the tax treatment relating to the Deed of Termination and therefore the Group is required to apply IFRIC 23.
The Company has applied estimations to determine the probability of different scenarios occurring and has
made a provision of GBP793,028 (2022: nil) based on the sum of the probability‐ weighted outcomes, but that
does not indicate the Group will be liable to pay this amount. Although the Company is seeking a resolution of
the matter with the MTA the timing thereof is not certain, in the event that any tax is paid it could be settled
from restricted cash (see note 13) or non‐current other receivables (see Note 12).
19. RELATED PARTY DISCLOSURES
Details of Directors’ remuneration are disclosed in the Remuneration Report and in Note 3.
During the year GBP346,352 (2022: GBP237,903) was payable to Blue Bone Consulting Pty Ltd (a company
controlled by Dale Ferguson) for consultancy fees of which GBP78,361 (including bonus) (2022: GBP41,554
(including bonus)) remained unpaid. The amounts payable to Blue Bone Consulting Pty Ltd have been included
in the Directors’ remuneration in the Remuneration Report and in Note 3.
During the year the Directors and the CEO acquired the following shares in the market or as part of the July
2023 fundraise:
Al Marjan Ltd1
Diogo da Silveira
Bruce Griffin
Matthew King
Mary Jo Jacobi
Emanuel Proença3
Dale Ferguson2
James Leahy
Total
Number of Consideration
£
shares
7,500,000
1,070,663
1,110,572
647,866
578,900
725,000
388,115
317,066
12,338,182
350,250
50,000
27,136
26,513
24,705
19,792
18,125
10,099
526,620
1 One Director is representative of Al Marjan.
2 173,983 shares for a consideration of GBP8,125 acquired indirectly through his investment in Slipstream Resources International Pty, Ltd
3 To be appointed as a Director in April 2024
Detail of the total number of shares held by the Directors is included in the Directors Report.
During 2022 Dale Ferguson acquired in the market 900,000 shares for a consideration of GBP18,900, and
167,906 shares indirectly through his investment in Slipstream Resources International Pty, Ltd for a
consideration of GBP5,096. During 2022 James Leahy acquired in the market 215,889 shares for a consideration
of GBP5,018.
104 SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
20. LEASES
Right‐of‐Use Assets
Vehicles
£
Cost
At 1 January 2022 64,857
Additions 21,322
Foreign exchange movements 4,341
At 31 December 2022 90,520
Additions 48,075
Foreign exchange movements (1,550)
At 31 December 2023 137,045
Depreciation
At 1 January 2022 59,467
Charge for year 9,820
Foreign exchange movements 3,606
At 31 December 2022 72,893
Charge for year 9,198
Foreign exchange movements (1,424)
At 31 December 2023 80,667
Net Book Value
At 1 January 2022 5,390
At 31 December 2022 17,627
At 31 December 2023 56,378
Lease Liabilities
Vehicles
£
At 1 January 2022 1,132
Additions 20,663
Lease payments (4,837)
Foreign exchange movements 669
At 31 December 2022 17,627
Additions 48,361
Lease payments (9,252)
Foreign exchange movements (358)
At 31 December 2023 56,378
Current Liabilities
Non‐Current Liabilities
Total Lease Liabilities
2023
£
17,345
39,033
56,378
2022
£
5,364
12,263
17,627
The Right‐of‐Use Assets and related Lease Liabilities are for the lease of motor vehicles. Total 2023 cash flow
outflow amount is GBP9,807 (2022: GBP5,287).
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023 105
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
20. LEASES continued
Other Leases
The Group has registered GBP32,534 (2022: GBP76,505) in the Statement of Comprehensive Income related
to short‐term leases. Short‐term leases meet the requirements to not be accounted for by recognising a
Right‐of‐Use Asset and a Lease Liability, having a duration of 12 months or less and without reasonable certainty
about their renewal.
At 31 December 2023 the Other Lease commitments for the next 12 months is GBP14,290 (2022: GBP33,969).
These leases are for business premises in Portugal.
21. SHARE OPTIONS
Share Options to subscribe for Ordinary Shares in the Company are granted to certain employees, Directors,
and Consultants. 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.
2023 2022
Weighted Weighted
average Weighted average Weighted
remaining
exercise remaining exercise
life
Number price life Number price
Share Options
Opening Balance 44,074,380 6.3p 5.44 67,600,000 6.0p
Granted – – – – –
Lapsed (1,110,000) 5.5p – (23,525,620) 5.6p
6.71
–
–
Closing Balance 42,964,380 6.3p 5.42 44,074,380 6.3p
5.44
Share schemes outstanding as at 31 December 2023 are as follows:
Outstanding Exercisable Outstanding Exercisable
31 December 31 December 31 December 31 December Exercise
2023 2023 2022 2022 Price
Share Options
March 20191 7,950,000 7,950,000 7,950,000 7,950,000 10.0p
June 2021 750,000 750,000 750,000 750,000 4.7p
June 2021 750,000 750,000 750,000 750,000 6.2p
June 2021 13,332,190 – 13,887,190 – 4.7p
June 2021 13,332,190 – 13,887,190 – 6.2p
October 2021 250,000 250,000 250,000 250,000 4.7p
October 2021 250,000 250,000 250,000 250,000 6.3p
October 2021 3,175,000 – 3,175,000 – 4.7p
October 2021 3,175,000 – 3,175,000 – 6.3p
42,964,380 9,950,000 44,074,380 9,950,000
Expiry
Date
11/03/24
30/06/26
30/06/26
30/06/29
30/06/29
01/10/26
01/10/26
01/10/29
01/10/29
1 Share Options were not exercised and expired on 11 March 2024
All of the Share Options granted attract a share based payment charge.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
21. SHARE OPTIONS continued
The Company is committed to issue a total of 20,000,000 share options to the CEO, Emanuel Proença, as part
of the agreement signed in September 2023. These share options are expected to be issued during 2024. The
details of these is as follows:
•
•
10,000,000 share options with exercise price 4.74p, vesting date 18 September 2026 and expiry date
18 September 2031.
10,000,000 share options with exercise price 6.32p, vesting date 18 September 2026 and expiry date
18 September 2031.
A share based payment charge has been recognised during the year for these share options to be issued.
The fair value of the Share Options at the date of grant have been measured using the Black‐Scholes pricing
model that takes into account factors such as the option life, share price volatility and the risk‐free rate. Volatility
was calculated with reference to the Company’s historical share price volatility up to the grant date to reflect
a term approximate to the expected life of the option.
The range of inputs of the Share Options committed to be issued in 2023 that will be granted during 2024 were
as follows:
September
Share Options 2023
Stock price 3.6p
Fair value of option 1.8p
Exercise Price 4.7p
Expected volatility 56%
Expected life 5.5 years
Risk free rate 0.05%
September
2023
3.6p
1.5p
6.3p
56%
5.5 years
0.05%
This fair value is the cost that is charged to the Statement of Comprehensive Income and is spread over the
expected vesting period which, for non‐market vesting conditions (as noted above), is revised at each period
end.
Share Options granted
During the 2023 financial year 20,000,000 Share Options were committed to be 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 granted during 2022 to employees.
The detail of the LTIP Share Options granted to the Directors and CEO is disclosed in the Remuneration Report.
22. DISCONTINUED OPERATIONS
In October 2016 Savannah, AME and Rio Tinto entered into a Consortium Agreement (‘CA’), whereby both
Savannah Group and Rio Tinto combined their respective projects in Mozambique to form an unincorporated
consortium. On the 1 December 2021 Savannah signed a Deed of Termination relating to the CA.
SAVANNAH RESOURCES Plc – ANNUAL REPORT AND FINANCIAL STATEMENTS 2023 107
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
22. DISCONTINUED OPERATIONS continued
The residual costs related to the Mozambique activities during the year are registered as discontinued
operations in the Consolidated Statement of Comprehensive Income. The detail of the result of discontinued
operations is as follows:
Expenses other than finance costs
(Loss) / Profit on discontinued operations for the year
Earnings per share from discontinued operations
Basic and diluted loss per share
2023
£
2022
£
(167,304)
(167,304)
(176,396)
(176,396)
(0.00010)
(0.00010)
The statement of cash flows includes the following amounts relating to discontinued operations:
Net cash used in operating activities
Net cash from investing activities
Net cash from financing activities
Net cash used in discontinued operations
2023
£
2022
£
(123,229)
–
47,054
(76,175)
(274,769)
91,807
112,265
(70,697)
Savannah is in the process of exiting its residual interest in Mozambique which includes Mining Concession
9735C and finalising administrative work related to the termination of the Consortium Agreement as required
by the Mozambique laws. The costs incurred during 2023 and 2022 are related to these activities.
The legal transfer of Matilda’s employees and some supplier contracts to Rio Tinto was completed in April 2022,
and a gross payment was received amounting to USD115,329 (~GBP91,807), which was part of the Termination
Compensation amounting to USD9.5m.
23. EVENTS SINCE THE REPORTING DATE
There were no events after the reporting date to report.
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GLOSSARY
Title Abbreviation Definition
Agência Portuguesa do Ambiente APA The Portuguese Environment Agency.
Aldeia & Irmão S.A. Aldeia Private Portuguese company.
Impact Assessments.
Article 16 The Portuguese law which regulates Environmental
Article 16 of Decree‐Law No.
151‐B/2013, amended and
republished by the Decree‐law
152‐B/2017 of 11 December
Barclays Bank PLC, acting
through its Investment Bank
('Barclays') and Barrenjoey
Advisory Pty Limited
Benefit Sharing Plan BSP The Benefit Sharing Plan is one of two plans Savannah
is developing to ensure that the economic and social
benefits of the Barroso Lithium Project are shared in a
transparent manner with stakeholders.
Joint advisers appointed to lead on the Strategic
Barclays
and
Barrenjoey
Partnering Process.
The Barroso Lithium Project BLP, the ‘Project’ Savannah’s wholly owned lithium project in northern
Portugal.
Balcão Único do Prédio BUPI The public entity at owners of rustic and mixed
buildings, which allows them to map, understand and
value the Portuguese territory.
Comissão de Coordenação e
Desenvolvimento Regional do
Norte
CCDR‐N Northern Regional Coordination and Development
Commission – A public institution that works towards
the integrated and sustainable development of the
North Region of Portugal, contributing to the country’s
competitiveness and cohesion.
Community Insights Group CIG A social impact management consultancy that helps its
clients in their efforts to respect people's rights and
make a difference in their communities.
COTEC Portugal COTEC The main Portuguese business association for the
promotion of business innovation and technological
cooperation.
Decisão sobre a Conformidade
Ambiental do Projeto de
Execução
DCAPE Declaration on the Environmental Compliance of the
Execution Project – The decision issued by APA
following completion of the RECAPE (see below) phase
of the environmental licence process for a project.
Declaração de Impacte Ambiental DIA An Environmental Impact Statement ‐ The opinion
given by APA on a project’s Environmental Impact
Assessment.
Definitive Feasibility Study DFS A comprehensive technical and economic study of the
proposed Project and will include among other
elements.
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GLOSSARY
Title Abbreviation Definition
Direção‐Geral de Energia e
Geologia
DGEG A service of the state's direct central administration
whose mission
is to contribute to the design,
promotion and evaluation of policies relating to energy
and geological resources, with a view to sustainable
development and guaranteeing security of supply.
Electric Vehicle EV A vehicle that can be powered by an electric motor that
draws electricity from a battery and is capable of being
charged from an external source.
Environmental Impact Assessment EIA An EIA evaluates a project’s environmental and social
impact during its construction, operation, closure and
post‐closure phases. The outcome of the EIA is a
project design and a set of actions to be undertaken
which minimises the environment and social impact of
the project throughout all its active phases and over
the long term, post closure.
Good Neighbour Plan GNP The Good Neighbour Plan is one of two plans Savannah
is developing to ensure that the economic and social
benefits of the Barroso Lithium Project are shared in a
transparent manner with stakeholders.
Greenhouse gases GHG Gases in the earth’s atmosphere such as carbon dioxide
and methane which trap heat and contribute to global
warming.
Independent Review Independent The Company commissioned CMS Portugal (Rui Pena,
Review Arnaut e Associados, RL), part of the internationally
renowned law group CMS, to conduct an independent
review of the Company’s activities between 1 January
2017 and 31 October 2023 in relation to Operation
Influencer.
Internal Rate of Return IRR IRR is a that makes the Net Present Value of all cash
flows equal to zero in a discounted cash flow analysis.
Legal Opinions Legal Opinions Legal opinions provided by a renowned Portuguese
legal expert in constitutional and penal law, and also
from the specialist Portuguese law firm, Gama Glória.
Lithium Carbonate Equivalent LCE The traditional lithium industry measure used when
comparing masses of differing lithium materials.
Lithium hydroxide Equivalent LHE Alternative lithium industry comparator for masses of
differing lithium materials.
Mais Boticas Mais Boticas Boticas Business Association.
Memorandum of Understanding MoU A non‐binding agreement that states each party's
intentions to take action, conduct a business
transaction, or form a new partnership.
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GLOSSARY
Title Abbreviation Definition
Net present value NPV A financial metric that seeks to capture the total value
Operation Influencer
of an investment opportunity.
Operation
Influencer, the
Investigation
An
investigation run by the Portuguese Public
Prosecutor into possible active and passive corruption,
undue influence, malfeasance and other wrongdoings
in relation to a variety of “green” projects including
Savannah’s Barroso Lithium Project.
Quoted Companies Alliance QCA A UK independent membership organisation that
champions the interests of small to mid‐size quoted
companies.
Relatório de Conformidade
Ambiental do Projeto de
Execução
RECAPE The Environmental Compliance Report of the Execution
Project ‐ Following award of a DIA, the proposer is
required to develop the execution project
in
compliance with the provisions of the DIA and produce
this report as part of the environmental licencing
process.
Social Impact Assessment SIA A process of research, planning and management of
social change or consequences (positive and negative,
intended and unintended) arising from policies, plans,
developments and projects.
Strategic Partnering Process SPP, the Process The Process Savannah is undertaking advised by
Barclays & Barrenjoey to identify potential strategic
partners both willing and able to assist with the
Project's future development and financing, and which
also bring complementary skills or additional
opportunities to Savannah.
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COMPANY INFORMATION
DIRECTORS:
SECRETARIES:
Matthew King
Dale Ferguson
Bruce Griffin
Mary Jo Jacobi
James Leahy
Diogo da Silveira
Mohamed Sulaiman
Chairman
Executive Director
Non‐Executive Director
Non‐Executive Director
Non‐Executive Director
Non‐Executive Director
Non‐Executive Director
Christopher Michael McGarty
c/o Salisbury House
London Wall
London EC2M 5PS
Dominic Traynor
Salisbury House
London Wall
London EC2M 5PS
REGISTERED OFFICE:
Salisbury House
London Wall
London EC2M 5PS
REGISTERED NUMBER:
07307107 (England and Wales)
AUDITORS:
BANKERS:
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
Barclays Bank plc
1 Churchill Place
London E14 5HP
INVESTMENT BANK ADVISERS:
Barclays Bank plc
1 Churchill Place
London E14 5HP
Barrenjoey Advisory Pty LTD
Quay Quarter Tower
level 9, 50 Bridge Street
Sydney NSW 2000
NOMINATED ADVISER:
SP Angel Corporate Finance LLP
Prince Frederick House
35‐39 Maddox Street
London W1S 2PP
JOINT BROKERS:
SOLICITORS:
REGISTRARS:
SP Angel Corporate Finance LLP
Prince Frederick House
35‐39 Maddox Street
London W1S 2PP
SCP Resource Finance LP
Unit 211 Harbour Yard
Chelsea Harbour
London SW10 0XD
Druces LLP
Salisbury House
London Wall
London EC2M 5PS
Share Registrars Limited
3 The Millennium Centre, Crosby Way
Farnham
Surrey GU9 7XX
WEBSITE:
www.savannahresources.com
268158 Savannah cover 6mm Spine.qxp 22/04/2024 09:21 Page 1
SAVANNAH RESOURCES PLC
Company No 07307107
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Perivan.com
268158