REG - Savannah Resources - Financial Results for Year Ended 31 December 2023
15/04/2024 07:00
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RNS Number : 5315K Savannah Resources PLC 15 April 2024
15 April 2024
Savannah Resources Plc
(AIM: SAV, FWB: SAV and SWB: SAV) ('Savannah', or the 'Company')
Financial Results for the Year Ended 31 December 2023
Savannah Resources Plc, the developer of the Barroso Lithium Project (the
'Project') in Portugal, Europe's largest spodumene lithium deposit, is pleased
to announce its audited financial results for the year ended 31 December 2023.
"The team delivered significant progress during 2023, achieving several
important milestones which are allowing Savannah to further advance its
Barroso Lithium Project in 2024." commented Emanuel Proença, CEO. "The award
of a positive environmental impact decision ('DIA') for the Project
demonstrated Savannah's ability to design a project that satisfies the
demanding environmental and social standards which are rightly required of a
21st Century critical raw material project in the European Union. The updated
Scoping Study then demonstrated the highly competitive and attractive
economics of that DIA-compliant design. On these foundations we were able to
raise funds from new and existing investors to accelerate work on the
Project's Definitive Feasibility Study ('DFS'), expand our team at all levels,
and continue with our stakeholder engagement programme and environmental
licencing process. We were also able to initiate a Strategic Partnering
Process as we look to leverage the widespread commercial interest in our
Project for its future financing and development. Much progress has already
been made in 2024 and we expect to continue to make significant advances on
all project-related workstreams during the remainder of the year.
"I am now over 6 months into my role leading Savannah and recognise more and
more each day how beneficial our Project can be for the region we operate in,
for Portugal and Europe in supporting our collective challenge of tackling
climate change. I am proud of the business that Savannah is and am very
excited for our future."
2023 Summary
Corporate
· Emanuel Proença appointed as Chief Executive Officer ('CEO') in
September.
· Dale Ferguson resumed his previous role as Technical Director having
served as Interim CEO since July 2022.
· Bruce Griffin, an experienced mining industry executive and current
Chair of ASX-listed Sheffield Resources, joined the Board as an Independent
Non-Executive Director.
· Mohamed Sulaiman, current Head of Strategy at the Omani conglomerate
business, WJ Towell Group and an experience board director, joined as
Non-Executive Director and the Board representative of Savannah's largest
shareholder, Al Marjan.
· Savannah recorded a loss from continuing operations of £3.5m (2022:
£2.7m). The Company completed a £6.5m (gross) fundraise, providing a
pro-forma cash balance of £11.4m in July. With continued investment in its
asset base and team in Portugal during the remainder of the year, Savannah
ended 2023 with an available cash position of £9.0m.
· Manohar Shenoy, Savannah's much respected Non-Executive Director who
joined the Board in 2016, passed away in September.
Barroso Lithium Project, Portugal
Technical
· After the submission of the Project's revised Environmental Impact
Assessment ('EIA') in March and a second public consultation period, the
Project was awarded a positive DIA with conditions by the Portuguese
Environment Agency in May.
· A new Scoping Study was published in June based on the DIA-compliant
Project design. With average production of 191,000t of spodumene concentrate
over a 14-year life, the Project returned a post-tax NPV of US$953m, IRR of
77% and pay-back period of 1.3 years.
· Following receipt of the DIA, work was accelerated on the Project's
DFS and initiated on the compliance phase ('RECAPE') of the environmental
licencing process.
· A two-phase, 13,500m/230-hole drilling programme was initiated in
October for DFS and RECAPE related data collection, including upgrades to the
Project's existing JORC 2012 Compliant Resources.
Stakeholder Engagement
· Savannah hosted or attended a series of local public meetings
throughout the year to provide accurate information on the revised design of
the Project to stakeholders.
· Following receipt of the DIA and the new CEO's appointment, the
intensity of stakeholder engagement activities in the local area was further
increased through formal and informal meetings, publications and the local
media.
· Community Insights Group 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, which will be an important component
of Savannah's RECAPE submission.
· Savannah maintained regular contact with relevant Portuguese
ministries and government agencies and met with several Portuguese MEPs,
representatives of the UK and the US Government and other embassies in
Portugal.
Commercial
· Following strong commercial interest in the Project for a number of
years, Savannah initiated a Strategic Partnering Process (the 'Process') in
July.
· Savannah appointed Barclays and Barrenjoey as joint financial
advisers to lead on the next phases of the Process.
2024 Year to date Summary
Corporate:
· In response to the Operation Influencer Investigation, which was made
public by the Portuguese Public Prosecutor in November 2023, Savannah
announced the conclusions from an Independent Review and Legal Opinions it had
commissioned. The Independent Review found no evidence which would give rise
to liability in connection with any irregular financial transactions by the
Company.
· The Review 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. The Legal Opinions also confirmed that under no
realistic circumstance would the Project's execution and its expected future
cash flows be at risk from the Investigation's findings.
· Savannah has appointed experienced professionals to the roles of
Community Relations Manager and Communications Manager.
· Savannah hosted an investor event in London, attended the PDAC mining
conference in Toronto, Benchmark Mineral's Giga Europe conference in Stockholm
and Value Investing FM's Grand Event in Madrid.
· The Company received the Overseas Direct Investment Award from the
UK-Portugal Business Alliance in March.
Barroso Lithium Project, Portugal
Technical
· Over 5,500m of drilling has been completed to date in the current
programme with other work for the DFS and RECAPE phase of the environmental
licencing process progressing in parallel.
· Savannah expects to complete the DFS by the end of the year which
will allow the completion of the RECAPE shortly afterwards.
Stakeholder engagement:
· Savannah is maintaining its proactive engagement with all local
stakeholders via meetings, events, publications and the media as it continues
to present the Project and receive feedback.
· Savannah has welcomed a number of guests to Boticas and the Project
in the year to date as it steps up engagement with the Project's wider
stakeholder group.
· Work has continued on the Project's Social Impact Assessment.
Commercial:
· The second phase of the Strategic Partnering Process is underway with
a short-list of potential partners conducting further due diligence on the
Project and Savannah.
· In parallel with the Process, Savannah continues to research and
analyse sources of public funding which may be available to the Company as it
seeks to progress the Project.
Electronic Communications and Notice of AGM
Key excerpts of the Company's Annual Report and Financial Statements to year
end 31 December 2023 are set out below. The full Annual Report and Financial
Statements will be posted to those of our members electing to receive paper
format notifications. The Company is grateful to the remainder of our
shareholders choosing to receive digital notifications as this helps to reduce
the Company's carbon footprint. The report is also available for download from
the Company's website at:
www.savannahresources.com/investors/corporate-documents/
(http://www.savannahresources.com/investors/corporate-documents/)
Information regarding the Company's AGM will be announced in due course.
Regulatory Information
This Announcement contains inside information for the purposes of the UK
version of the market abuse regulation (EU No. 596/2014) as it forms part of
United Kingdom domestic law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR").
Savannah - Enabling Europe's energy transition.
Follow @SavannahRes on X
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For further information please visit www.savannahresources
(https://www.savannahresources.com/) .com or contact:
Savannah Resources PLC Tel: +44 20 7117 2489
Emanuel Proença, CEO
SP Angel Corporate Finance LLP (Nominated Advisor & Joint Broker) Tel: +44 20 3470 0470
David Hignell/ Charlie Bouverat (Corporate Finance)
Grant Barker/Abigail Wayne (Sales & Broking)
SCP Resource Finance (Joint Broker) Tel: +44 204 548 1765
Filipe Martins/Chris Tonkin
Camarco (Financial PR) Tel: +44 20 3757 4980
Gordon Poole/ Emily Hall / Nuthara Bandara
LPM (Portugal Media Relations) Tel: +351 218 508 110
Herminio Santos/ Jorge Coelho/Margarida Pinheiro
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.
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 22(nd) 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 a range of funding packages. Japan's green 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 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 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.
Unfortunately, for lithium sector investors the 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 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.
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
development would increase and intensify their 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 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.
On 30 January 2024, Savannah announced the conclusions from an independent
legal review (the 'Independent Review') and legal opinions (the 'Legal
Opinions') which it commissioned following the announcement of the Operation
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 in relation to the alleged facts
and circumstances contained in Operation Influencer.
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.
Building a team for the future
In addition to the appointment of Emanuel Proença as CEO, the Company also
welcomed 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.
Very sadly, just a 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 fees 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 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.
By achieving our goals, the Barroso Lithium Project can generate a significant
amount of financial and social benefit for all its stakeholders, including our
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
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 interest from investors. Industry 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.
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.
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 Project's development
should not be 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.
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:
Source: Company
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, 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.
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 the Project
through a 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 to push 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.
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
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.
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 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.
Emanuel Proença
Chief Executive Officer
Date: 12 April 2024
The Financial Statements below should be read in conjunction with the Notes
contained within the full Annual Report which is available online at the
Company's website at:
https://www.savannahresources.com/investors/corporate-documents/
(https://www.savannahresources.com/investors/corporate-documents/)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER
2023
2023 2022
£ £
CONTINUING OPERATIONS
Revenue - -
Other Income - -
Administrative Expenses (3,477,405) (3,531,894)
Foreign Exchange (Loss)/Gain (81,116) 814,468
OPERATING LOSS (3,558,521) (2,717,426)
Finance Income 108,286 34,695
Finance Costs (555) (265)
LOSS FROM CONTINUING OPERATIONS BEFORE TAX (3,450,790) (2,682,996)
Tax expense - -
LOSS FROM CONTINUING OPERATIONS AFTER TAX (3,450,790) (2,682,996)
GAIN/(LOSS) ON DISCONTINUED OPERATIONS NET OF TAX (167,304) (176,396)
LOSS AFTER TAX ATTRIBUTABLE (3,618,094)
TO EQUITY OWNERS OF THE PARENT (2,859,392)
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified to profit or loss:
Net change in Fair Value Through Other Comprehensive Income of Equity (5,289)
Investments
(19,598)
Items that will or may be reclassified to profit or loss:
Exchange (Losses)/Gains arising on translation of foreign operations (237,364) 665,656
OTHER COMPREHENSIVE INCOME FOR THE YEAR (242,653) 646,058
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT (3,860,747) (2,213,334)
Loss per share attributable to equity owners of the parent expressed in pence
per share:
Basic and diluted
From Operations (0.20) (0.17)
From Continued Operations (0.20) (0.16)
From Discontinued Operations (0.00) (0.01)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023
2023 2022
£ £
ASSETS
NON-CURRENT ASSETS
Intangible Assets 18,391,089 16,459,599
Right-of-Use Assets 56,378 17,627
Property, Plant and Equipment 1,660,135 1,583,944
Other Receivables 432,003 454,651
Other Non-Current Assets 92,869 77,667
TOTAL NON-CURRENT ASSETS 20,632,474 18,593,488
CURRENT ASSETS
Equity instruments at FVTOCI 6,688 11,977
Trade and Other Receivables 426,065 560,060
Other Current Assets 166 1,036
Cash and Cash Equivalents 9,721,281 7,202,334
TOTAL CURRENT ASSETS 10,154,200 7,775,407
TOTAL ASSETS 30,786,674 26,368,895
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share Capital 18,281,499 16,889,598
Share Premium 46,598,337 41,693,178
Shares to be Issued 43,423 -
Merger Reserve 6,683,000 6,683,000
Foreign Currency Reserve 389,566 626,930
Share Based Payment Reserve 600,709 403,749
FVTOCI Reserve (46,324) (41,035)
Retained Earnings (44,606,003) (40,999,879)
TOTAL EQUITY ATTRIBUTABLE TO 27,944,207
EQUITY HOLDERS OF THE PARENT 25,255,541
LIABILITIES
NON-CURRENT LIABILITIES
Lease Liabilities 39,033 12,263
TOTAL NON-CURRENT LIABILITIES 39,033 12,263
CURRENT LIABILITIES
Lease Liabilities 17,345 5,364
Trade and Other Payables 1,993,060 1,085,778
Other Current Liabilities - 9,949
Tax Provisions 793,028 -
TOTAL CURRENT LIABILITIES 2,803,433 1,101,091
TOTAL LIABILITIES 2,842,466 1,113,354
TOTAL EQUITY AND LIABILITIES 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
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023
2023 2022
£ £
ASSETS
NON-CURRENT ASSETS
Investments in Subsidiaries 333,740 333,740
Other Receivables 34,451,813 31,877,211
Other Non-Current Assets - 6,776
TOTAL NON-CURRENT ASSETS 34,785,553 32,217,727
CURRENT ASSETS
Equity instruments at FVTOCI 6,688 11,977
Trade and Other Receivables 146,252 238,189
Cash and Cash Equivalents 8,226,519 6,241,356
TOTAL CURRENT ASSETS 8,379,459 6,491,522
TOTAL ASSETS 43,165,012 38,709,249
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share Capital 18,281,499 16,889,598
Share Premium 46,598,337 41,693,178
Shares to be Issued 43,423 -
Merger Reserve 6,683,000 6,683,000
Share Based Payment Reserve 600,709 403,749
FVTOCI Reserve (46,324) (41,035)
Retained Earnings (29,540,322) (27,442,644)
TOTAL EQUITY 42,620,322 38,185,846
LIABILITIES
CURRENT LIABILITIES
Trade and Other Payables 544,690 523,403
TOTAL LIABILITIES 544,690 523,403
TOTAL EQUITY AND LIABILITIES 43,165,012 38,709,249
The Company Loss for the financial year was GBP2,109,648 (2022: Profit
GBP1,120,818).
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
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER
2023
Merger Reserve Share Based Payment Reserve FVTOCI Reserve
Foreign Currency Reserve
Share Capital Share Premium Shares to be Issued Retained Earnings Total
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 Description and purpose
Share Capital Amounts subscribed for share capital at nominal value
Share Premium Amounts subscribed for share capital in excess of nominal value less costs of
fundraising
Shares to be Issued Shares for which consideration has been received but which are not issued yet
Merger Reserve Amounts subscribed for share capital in excess of nominal value in respect of
the consideration paid in an acquisition arrangement, when the issuing company
takes its interest in another company from below 90% to 90% or above equity
holding
Foreign Currency Reserve Gains/losses arising on retranslating the net assets of group operations into
Pound Sterling
Share Based Payment Reserve 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
FVTOCI Reserve Cumulative changes in fair value of equity investments classified at fair
value through other comprehensive income (FVTOCI)
Retained Earnings Cumulative net gains and losses recognised in the Consolidated Statement of
Comprehensive Income and other transactions recognised directly in Retained
Earnings
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2023
Share Capital Share Premium Shares to be Issued Merger Reserve Share Based Payment Reserve FVTOCI Reserve Retained Earnings Total
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 Description and purpose
Share Capital Amounts subscribed for share capital at nominal value
Share Premium Amounts subscribed for share capital in excess of nominal value less costs of
fundraising
Shares to be Issued Shares for which consideration has been received but which are not issued yet
Merger Reserve 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
Share Based Payment Reserve 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
FVTOCI Reserve Cumulative changes in fair value of equity investments classified at fair
value through other comprehensive income (FVTOCI)
Retained Earnings Cumulative net gains and losses recognised in the Consolidated Statement of
Comprehensive Income and other transactions recognised directly in Retained
Earnings
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023
2023 2022
£ £
Cash flows used in operating activities
Loss for the year (3,618,094) (2,859,392)
Depreciation and amortisation charges 22,095 23,456
Share based payment charge - Share Options 208,930 242,832
Shares based payment charge - Shares to be issue in lieu of bonus 43,423 -
Finance Income (108,286) (34,695)
Finance Costs 555 265
Reverse impairment other assets (710,467) -
Foreign Exchange Losses/(Gains) 131,325 (858,679)
Cash flow used in operating activities before changes in working capital (4,030,519) (3,486,213)
Decrease/(Increase) in Trade and Other receivables 140,148 (78,217)
Increase/(Decrease) in Trade and Other Payables 982,457 (538,972)
Net cash used in operating activities (2,907,914) (4,103,402)
Cash flow used in investing activities
Purchase of Intangible Exploration Assets (1,456,075) (1,771,821)
Purchase of Tangible Fixed Assets (120,573) (852,127)
Interest received 96,367 28,438
Proceeds from relinquishment of the rights and obligations of discontinued - 89,981
operations
(1,480,281) (2,505,529)
Net cash used in investing activities
Cash flow from financing activities
Proceeds from issues of ordinary shares (net of expenses) 6,297,060 -
Principal paid on Lease Liabilities (9,252) (5,022)
Interest paid on Lease Liabilities (555) (265)
6,287,253 (5,287)
Net cash from/(used in) financing activities
Increase/(Decrease) in Cash and Cash Equivalents 1,899,058 (6,614,218)
Cash and Cash Equivalents at beginning of year 7,202,334 13,002,084
Increase Restricted Cash 701,903 -
Exchange (Losses)/Gains on Cash and Cash Equivalents (82,014) 814,468
Cash and Cash Equivalents at end of year 9,721,281 7,202,334
COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023
2023 2022
£ £
Cash flows used in operating activities
(Loss)/Gain for the year (2,109,648) 1,120,818
Impairment of Investment in Subsidiaries - 17,821
Impairment of Financial Assets (466,912) 102,988
Share based payment reserve charge - Share Options 208,930 242,832
Shares based payment charge - Shares to be issue in lieu of bonus 43,423 -
Dividends Income - (811,572)
Finance Income (108,286) (34,695)
Foreign Exchange Losses/(Gains) 728,241 (2,274,357)
Cash flow used in operating activities before changes (1,704,252) (1,636,165)
in working capital
Decrease in Trade and Other Receivables 39,911 168,209
Increase/(Decrease) in Trade and Other Payables 29,126 (488,024)
Net cash used in operating activities (1,635,215) (1,955,980)
Cash flow used in investing activities
Loans to subsidiaries (3,260,033) (5,204,762)
Proceeds from repayment of loans to subsidiaries 553,702 799,772
Proceeds from dividends from subsidiaries - 811,572
Interest received 96,367 28,438
Net cash used in investing activities (2,609,964) (3,564,980)
Cash flow from financing activities
Proceeds from issues of ordinary shares (net of expenses) 6,297,060 -
Net cash from financing activities 6,297,060 -
Increase/(Decrease) in Cash and Cash Equivalents 2,051,881 (5,520,960)
Cash and Cash Equivalents at beginning of year 6,241,356 11,085,944
Exchange (Losses)/Gains on Cash and Cash Equivalents (66,718) 676,372
8,226,519 6,241,356
Cash and Cash Equivalents at end of year
**ENDS**
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