REG - Zinnwald Lithium PLC - Final Results
10/03/2025 07:00
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RNS Number : 9052Z Zinnwald Lithium PLC 10 March 2025
Zinnwald Lithium plc / EPIC: ZNWD.L / Market: AIM / Sector: Mining
10 March 2025
Zinnwald Lithium plc ('Zinnwald Lithium' or the 'Company')
Final Results
Positioned as a strategic asset in Europe's critical mineral supply chain
Zinnwald Lithium plc, the European focused lithium company developing the
integrated Zinnwald Lithium Project (the 'Project') in Germany, is pleased to
announce its final audited results for the year ended 31 December 2024.
The Company's Annual Report and Financial Statements for the year ended 31
December 2024 will be posted to shareholders today and will be available on
the Company's website www.zinnwaldlithium.com.
HIGHLIGHTS
12 Months to 31 December 2024
· Announced two updates to the Mineral Resource Estimate ('MRE') -
confirmed the Project's position as the second-largest hard rock lithium
project in the EU and increasing ore tons in the Measured category.
· Explored potential to expand the Project in phases, starting with
Phase 1 producing 16,000-18,000 tpa of battery-grade Lithium Hydroxide
("LiOH"), a 50% increase from the 2022 estimate of 12,000 tpa.
· Agreed to develop a Pre-Feasibility Study ('PFS') to assess the
potential for a Phase 2 expansion and undertake various technical trade-off
studies.
· Advanced processing tests with Metso, which continue to generate
encouraging results that potentially offer significant advantages in overall
recovery, efficiency and environmental impact reduction.
· Applied for the Project to be designated as 'strategic' under the
European Critical Raw Materials Act ('CRMA').
· ERM contracted to provide the Environmental and Social Impact
Assessment ('ESIA') Scoping Study.
· Received strong expressions of support from Federal and State
Governments in Germany with invitation to formally apply for federal grant
funding strongly backed by the State of Saxony.
· New CDU-SPD coalition agreement in Saxony highlights the raw material
industry as critical to the region's economy, prioritising the simplification
and acceleration of mining project approvals, with the Zinnwald Lithium
Project being the only project formally referenced.
· Held productive meetings with German Chancellor Olaf Scholz during
his visits to the SOBA.
· Strengthened the team to support increased activity.
· Organised events and engaged in regular dialogue with local
communities.
· Engaged InvestorHub to streamline communication with shareholders.
Post period end to 7 March 2025
· The PFS remains on track to be published in Q1 2025.
· Detailed mine plan finalised to deliver increased production
scenarios, following the publication of an updated MRE in June 2024.
· Metso process engineering and design work in final stages following
completion of mineral processing basic engineering and the key calcination,
and hydrometallurgical testwork programmes.
· Site layout design and infrastructure completed indicating sufficient
supply of key utilities.
· The geotechnical drill programme has been completed as part of
detailed planning for constructing an exploration adit to access the Zinnwald
orebody.
· Advancing environmental licencing and permitting, with updates to the
spatial planning process submitted to Landesdirektion Sachsen.
· LOI signed with solar development company Solar-Bau to explore the
option for long term clean power offtake.
For further information visit www.zinnwaldlithium.com
(http://www.zinnwaldlithium.com/) or contact:
Anton du Plessis Zinnwald Lithium plc info@zinnwaldlithium.com (mailto:info@zinnwaldlithium.com)
Cherif Rifaat
David Hart Allenby Capital +44 (0) 20 3328 5656
Dan Dearden-Williams Nominated Adviser
Michael Seabrook Oberon Capital Ltd +44 (0) 20 3179 5300
Adam Pollock Joint Broker
Richard Greenfield Tamesis Partner LLP +44 (0) 20 3882 2868
Charles Bendon Joint Broker
Isabel de Salis St Brides Partners zinnwald@stbridespartners.co.uk (mailto:zinnwald@stbridespartners.co.uk)
Paul Dulieu Financial PR
CHAIRMAN'S STATEMENT
Zinnwald Lithium continues to make significant progress in advancing its
integrated lithium hydroxide ('LiOH') project in Germany (the 'Project'), the
second-largest hard-rock lithium project in the EU. A key milestone achieved
during the year was the publication of an updated Mineral Resource Estimate
('MRE') in June 2024, reaffirming the scale and quality of our deposit and
reinforcing the Project's potential within Europe's critical mineral supply
chain.
Securing a stable supply of lithium and other critical minerals is essential
for Europe's economic resilience and energy transition. As demand surges with
the expansion of renewable energy, electric vehicles ('EVs'), and advanced
manufacturing, Europe's reliance on imported critical raw materials leaves it
exposed to supply chain vulnerabilities. Developing domestic projects such as
ours will not only reduce dependency on imports but also strengthen industrial
competitiveness and support sustainability targets.
The importance of our Project to Germany and the region was highlighted by its
specific mention in the coalition agreement reached between the CDU and SDP in
Saxony in December 2024 as part of the region's strategic focus on the raw
materials sector. We were also delighted to be invited to attend two
meetings in August and December 2024 with German Federal Chancellor Olaf
Scholz to discuss raw material security and the Project's potential.
The updated MRE and increased potential scale, longevity, expansion potential
and integrated nature of the Project are key elements that underpin its
strategic value. This is particularly relevant when looking at the
volatility of lithium pricing demonstrated in recent years, which underlines
the importance of a project's ability to sustain long term operations that can
withstand multiple market cycles. A long life is also important in justifying
the significant investment required for a fully integrated operation.
As part of our risk mitigation strategy, we are taking a prudent approach to
developing the Project through a phased development approach. In Phase 1, we
aim to achieve an annual production of 16-18ktpa of LiOH, up 50% from the 2022
estimate of 12ktpa, with the flexibility to scale up in response to future
market demand. Our forthcoming Pre-Feasibility Study ('PFS'), set for
publication later this month, will provide further insights into this
strategy.
Alongside this, we are advancing the permitting process for Phase 1 of the
Project. This includes undertaking environmental base line studies, close
engagement with regulatory authorities, and finalising our spatial planning
submissions. Additionally, we are progressing with our Environmental and
Social Impact Assessment ('ESIA') to ensure compliance with both national and
international standards of best practice.
Minimising our environmental footprint remains a top priority as we look to
become a sustainable LiOH producer. In line with this, post-period end, we
signed a Letter of Intent with Solar-Bau to explore long-term renewable power
solutions for the Project. Furthermore, we are conducting extensive
hydrogeological and biodiversity studies to ensure responsible resource
management.
Delivering a project of this scale requires strong and reliable partners. We
continue to collaborate with industry leaders such as Metso, which has played
a key role in our process engineering and metallurgical testwork. Our
partnerships extend to other world-leading environmental and engineering
specialists, ensuring that we develop a project that meets the highest
standards of sustainability and operational efficiency.
At Zinnwald Lithium, we deeply value our relationship with the local
community, recognising that their support is essential to the success of the
Project. We are committed to delivering positive impacts through job creation,
economic growth, and sustainable development. To promote open dialogue and
transparency, we have established a comprehensive stakeholder engagement and
communication programme. This includes regular town hall events and meetings
at our new local office in Saxony. These events, hosted by our German Managing
Director, Marko Uhlig, a native of the region, offer local stakeholders the
chance to engage directly with our team, ask questions, and stay informed
about the Project's progress. By fostering ongoing interaction, we remain
responsive to local needs and concerns, building a strong foundation of trust
and collaboration as we work towards a sustainable future.
Although the lithium market has encountered short-term weakness, recent
industry forecasts indicate a more balanced supply/demand dynamic in the
coming years. Fastmarkets' 2025 Lithium Market Outlook, for instance,
forecasts a potential supply deficit by 2026, which could drive restocking and
price recovery earlier than previously expected. Such a shift would occur at
an opportune time for Zinnwald Lithium as it advances towards the development
stage.
Despite the challenges facing the lithium sector, Zinnwald Lithium remains
well-positioned to develop one of Europe's most advanced battery-grade lithium
projects. With the PFS expected very soon, permitting progressing, and
government support reinforcing the Project's strategic importance, we are
firmly on track to becoming a key supplier to Europe's growing battery sector.
In closing, I would like to thank our shareholders and stakeholders for their
ongoing support and look forward to providing regular updates as we continue
to focus on bringing this exciting project to fruition.
Jeremy Martin
Non-Executive Chairman
7 March 2025
THE ZINNWALD LITHIUM PROJECT
The Zinnwald Lithium Project is located in east Germany, some 35 km from
Dresden and adjacent to the border with the Czech Republic. The Project
concept is for a fully integrated underground mine and associated, on site,
mineral and chemical processing to produce a battery grade lithium hydroxide.
The Company's business model is predicated around utilising its inherent
advantages to enable it to become a sustainable project serving the European
lithium market. Europe does not currently have a domestic source of lithium
supply and there are relatively few projects within the EU. The Project has
applied for "strategic project" status under the EU's Critical Raw Materials
Act.
Geology and License Areas
The Project is in a granite hosted Sn/W/Li belt that has been mined
historically for tin, tungsten and lithium at different times over the past
400 years. Lithium is contained in lithium-bearing mica, which is called
"zinnwaldite" takings its name from the nearby village. Several lithium
focused projects in Europe are focused on the exploitation of zinnwaldite ore.
The Project comprises five license areas:
The Zinnwald Mining License
The Zinnwald Mining License covers the core project area where a resource has
been defined. The license covers 256.5 ha and is valid to 31 December 2047.
In June 2024, the Project published an updated MRE that showed a total
Measured category of 36.3Mt @ 2,500ppm Li (91kt contained lithium metal), a
total Indicated category of 157.2Mt @ 2,150ppm Li (337kt contained lithium
metal) and a total Inferred category of 33.3Mt @ 2,140ppm Li (71kt contained
lithium metal). This establishes the Project as the second largest hard rock
lithium project by both resource size and contained lithium in the EU and the
third largest in Europe.
Falkenhain, Altenberg, Sadisdorf and Bärenstein exploration licence areas
· Falkenhain - the licence covers an area of 2,957,000 m² and in 2022
the licence was extended for a further three years to 31 December 2025.
· Altenberg - the licence covers an area of 42,252,700 m² and in
October 2023 the term of the licence was extended to February 2027.
· Sadisdorf - the licence covers an area of 2,250,300 m² and is valid
to 30 June 2026. Historical exploration work at the Sadisdorf licence by
previous licence holders resulted in a December 2017 historic JORC compliant
inferred mineral resource of 25 Mt with an average grade of 0.45% Li2O.
· Bärenstein - this licence covers an area of 4,934 hectares and was
awarded in July 2023 valid to June 2028. This licence closes the gap between
the Falkenhain and Altenberg licences.
Project Plans and Timeline
The Group's strategy is to focus on advancing a scalable fully integrated
operation that produces battery-grade lithium products; to optimise the
Project from a cost perspective; and to minimise the potential impact on the
environment and local communities. All aspects of the Project from mining
through to production of the end product are planned to be located near to the
deposit itself in an area with developed infrastructure, energy sources,
services, facilities, and access roads and rail. Power and water are provided
by existing regional supply networks. It is also located close to the heart of
the German automotive and chemical industries.
The Project completed its PEA in September 2022 based on the revised plan to
produce lithium hydroxide. It expects to complete its Pre-Feasibility Study
in Q1 2025. The Project published an updated Mineral Resource Estimate in
February 2024 and further updated this in June 2024 reflecting greater
confidence in the resource, underpinned by the Project's 84 hole, 27,000m
in-fill drill programme conducted in 2023. The Mineral Processing Plant basic
engineering has already been completed to Definitive Feasibility Study (AACE
Class 3) level. The Project is then targeting completion of the full Project
DFS in 2026.
Permitting and Environmental Studies
Following engagement and various meetings with the authorities, the Project
will follow an integrated permitting procedure. A Spatial Planning Procedure
is underway in parallel to the overarching permit, the General Operating Plan
("GOP"). As part of the GOP process, the Project will complete an
Environmental Impact Assessment ("EIA"). The Mining Authority of the Federal
State of Saxony ("SOBA") will be the single overarching permitting authority
for the GOP. The GOP requires a number of supporting documents including the
EIA and other related documentation (e.g. Natura 2000 Impact Assessments,
Landscape Management Plan and various environmental technical reports). The
Project has commenced its work to produce an Environmental and Social Impact
Assessment ("ESIA") that will meet both the requirements for permitting under
German Federal law as well as being completed to a level suitable for the
purposes of seeking finance from International Financing Institutions ("IFIs")
who are signatories to the Equator Principles 4 (and related
standards).
STRATEGIC REPORT
Extracts from the Company's Strategic Report are set out below.
Strategic Review
Company Overview - Background and ownership structure
Zinnwald Lithium Plc ("ZLP" or the "Group") is the ultimate owner of the
Project. It is a UK public limited company ("plc") and has been quoted on the
AIM market of the London Stock Exchange since December 2017. ZLP is the
Project promoter and fund-raising vehicle and provides funding required by the
operational subsidiaries in Germany. ZLP owns 100% of Zinnwald Lithium
Holdings Ltd ("ZLH"), which is a UK company, that acts as the holding company
for the Project.
ZLH owns 100% of Zinnwald Lithium GmbH ("ZLG"). ZLG is the main operational
company in the Group that is developing the Project. It owns the various
mining and exploration licenses in Germany. ZLG will apply for the General
Operating Plan permit that will govern the Project as a whole, as well as the
subsidiary Main Operating and Special Operating Permits.
ZLP acquired its initial 50% stake in ZLG in October 2020 by way of reverse
takeover from the previous owner, Bacanora Lithium Plc ('Bacanora'). In June
2021, ZLP consolidated its ownership by acquiring the remaining 50% of ZLG
from the bankrupt estate of SolarWorld AG.
Company Strategy and Business Plan
The Zinnwald Lithium Project, as set out above, is the Company's core
development asset and the sole focus. This strategy continues to be
underpinned by a technically led team with extensive experience in bringing
projects from the feasibility stage through to mine production, as well as the
capital markets experience to source the funding required for these types of
mining projects. The Company will focus on further de-risking the Project as
it is advanced towards a financing decision. The overall strategy can be
split into the following key work areas across the operational, financing and
commercialisation parts.
Operational Strategy
The Company will continue to work on scalable production scenarios through
resource expansion (both at the core licence area and satellite exploration
licences), and optimised mine planning, including the application of bulk
mining techniques and infrastructure and site planning. As part of this, the
Project has finalised its preferred processing site selection and will work
with relevant landowners and leaseholders to secure the required land.
The Project will continue to further refine the processing route (flowsheet)
that supports the primary production of battery grade lithium products
including improvements in recoveries, reduced waste generation and the
production of valuable by-products. This work will include minimising the
carbon footprint through project wide optimisation (transport, material flow,
energy consumption, site location).
The Project will continue to work with its globally recognised consultants and
engineers to firstly complete a PFS by Q1 2025. Thereafter, the Project will
complete its DFS that will include plant engineering work done to AACE Class 3
specifications. As the Project then moves towards final permitting, it will
commence the detailed Front-end Engineering ("FEED") work in done to AACE
Class 2 and Class 1 that will underpin construction subject to permitting
approvals.
Concurrent with this work, the Project is permitting an Exploration Tunnel
that, amongst other wider objectives, will enable the extraction of
large-scale representative samples direct from the ore body itself. These
bulk samples will provide the feedstock for a continuous pilot plant test to
produce large scale (>100kg) battery grade end product samples that can be
supplied to potential offtake partners. A continuous pilot scale test is also
necessary in order to obtain suitable process guarantees form technology
providers which will be critical for debt financing.
The Project will also continue to advance the permitting process that
commenced in 2023 that will involve the securing of a General Operating Permit
under German mining laws. At the same time, the Project will advance its
ESIA work to secure the social license to operate via extensive public
participation. The Company recognises the importance of the general public
and NGOs in the permitting processes and has committed to proactively engage
with all the stakeholders in its projects.
Commercialisation Strategy
As the Project is conceived as an integrated operation from mining to
producing a battery-grade lithium product, its commercial strategy will be
focussed on securing a commercial offtake partner for that product rather than
producing a basic concentrate. In terms of offtake partners, the lithium
industry is unusual in the commodity sector in terms of how offtake
arrangements are structured. This is primarily due to the lack of homogeneity
in high purity lithium products (different levels of contaminants etc) and the
requirement to qualify products with specific customers. The result is that
any offtake arrangements entered into too far ahead of final production are
necessarily somewhat contingent and therefore do not provide material support
for traditional project debt financing.
As such, while the Company has held several discussions with potential
off-takers in Europe, the strategy has been to keep the off-take "free" for as
long as possible such that the value of this strategic aspect of the Project
can be maximised. However, the intention is clearly for the material
ultimately produced to be supplied to the battery industry in the EU. The
demand for this exists in the EU and will also increase significantly in the
coming years with the "ramp-up of e-mobility". Our goal is to find an
offtake partner that will commit to either a meaningful advance payment on the
offtake and/or a meaningful investment in the Company which it must maintain
through to production. Zinnwald Lithium has had several discussions with
potential offtake partners on these terms and continues to be involved in
discussions about the progress of the Project.
The Project will also, as part of future phases of work, conduct continuous
steady-stage pilot plant test runs to demonstrate the production process and
the product quality. ZLG believes that this will significantly de-risk the
Project by giving both finance providers and potential off-takers comfort that
the production of qualifying material is feasible.
Financing Strategy and Business Plan
Zinnwald's Board will continue to run the Group with an efficient overhead
cost base in order to focus resources on advancing the Project. The main
challenge faced by the Company is securing sufficient funding to execute the
development programme for the Project. The Company maintains a tight control
on its budgets and reviews spend against budget on a monthly basis. The
Directors' extensive experience of mining projects helps to ensure that funds
are spent in the most effective way possible both on a cost basis and in
relation to targeting the most effective areas to move the Project through to
production and revenue generation.
The Company's quoted status has enabled the Group to target a wide pool of
investors, as demonstrated by the issuance of new equity, for cash and assets,
several times over the last three years. In the last four years, since the
Company first became involved in the Project, the Company issued shares to the
value of circa €11m to acquire the Project and has raised a further €34m
in cash from investors to finance the Project's development.
The Company will continue to work to secure short term finance to fund near
term expenditures necessary to advance the Project to a construction ready
state (preparation of a DFS, advancing permitting, construction of initial
infrastructure, the FEED Engineering work, and orders for long lead items).
This financing activity will involve existing investors as well as the
identification of and negotiation with further long-term cornerstone
investors. The Company will also identify and negotiate with potential project
financing partners that could include banks and national and transnational
development organisations. The Project has also already engaged with German
Federal and State bodies with regard to securing grant funding to further
de-risk the financing of the Project.
Operational Review
2024 saw Zinnwald Lithium accelerate its development strategy for the Project.
During the year, the Company's priorities were completion of its MRE, a
refinement of its strategy to focus on the PFS and its associated detailed
mine planning, flowsheet development and infrastructure planning, and ongoing
work towards permitting.
MINERAL RESOURCE ESTIMATE ("MRE")
On 21 February 2024, the Company published its updated independent MRE that
showed a substantial increase in its Mineral Resource at the Project with a
243% increase in contained lithium in the Measured and Indicated categories
versus the 2018 MRE. This establishes the Project as the second largest hard
rock lithium project by both resource size and contained lithium in the EU and
clearly highlights its scale and strategic importance.
The MRE incorporated 26,911 metres of new diamond core drilling across 84
drill holes and a reinterpreted and updated geological model since the
previous MRE, which was released in September 2018. In addition to the
high-grade greisen mineralisation, focus of the recent 2022/2023 drilling was
the lithium mineralisation hosted by the broader zone of altered albite
granite, which includes internal lenses of higher-grade greisen. The
highlights of this initial MRE showed a 445% increase over the previous MRE
issued in May 2018, with a total Measured and Indicated resource of 193.5Mt
that represents 429,000 tonnes of contained Lithium metal and an Inferred
resource of a further 33.3Mt that represents 71,000 tonnes of contained
Lithium metal.
On 6 June 2024, the Company announced a further update to the MRE following a
geometallurgical testwork programme recommended by Snowden Optiro on 35
variability drill core samples derived from the 2022 / 2023 drilling
campaign. It was undertaken to provide a higher level of confidence in the
Mineral Resource within the mineralised albite granite, which surrounds the
lenses of higher-grade greisen mineralisation. The result was to add an
additional 25.0Mt @ 2,090ppm Li (52kt contained lithium metal), in the
Measured category representing an increase of 221% in tonnes and 133% in
contained metal in the Measured category compared with the February 2024 MRE.
The Project now has sufficient material in Measured category alone to support
over 20 years of production. This is a major milestone as it further
de-risks the resource and adds a higher level of confidence in the detailed
mine plan, which is key to future financing plans.
Overall, the total Measured category increased to 36.3Mt @ 2,500ppm Li (91kt
contained lithium metal) while the total Indicated category is now 157.2Mt @
2,150ppm Li (337kt contained lithium metal), as a result of the increase in
the Measured category. The total Measured and Indicated category remains
unchanged at 193.5Mt @ 2,220ppm Li (428kt contained lithium metal). The
Inferred category remained unchanged at 33.3Mt @ 2,140ppm Li (71kt contained
lithium metal).
The MRE (detailed below) was prepared in accordance with National Instrument
43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities
Administrators ("NI 43-101") by independent consulting firm Snowden Optiro Ltd
("Datamine International") of Bristol, United Kingdom.
Table 0.1 Mineral Resource Statement for Zinnwald Lithium
Project, effective 5th June 2024.
Classification Domain Tonnes Mean Grade Contained Metal
(Mt) Li (ppm) Li2O (%) Li (kt) LCE (kt)
Measured External Greisen (1) 11.3 3,420 0.736 39 206
Mineralised Zone (2) 25.0 2,090 0.449 52 277
Internal Greisen 1.5 3,240 0.697 5 27
Mineralised Granite 23.5 2,020 0.434 47 250
Subtotal (1) and (2) 36.3 2,500 0.538 91 483
Indicated External Greisen (1) 2.1 3,510 0.756 7 40
Mineralised Zone (2) 155.1 2,130 0.459 331 1,762
Internal Greisen 13.2 3,330 0.717 44 234
Mineralised Granite 141.9 2,019 0.435 287 1,528
Subtotal (1) and (2) 157.2 2,150 0.463 338 1,802
Measured + Indicated Subtotal 193.5 2,220 0.478 429 2,285
Inferred External Greisen (1) 0.8 3,510 0.756 3 15
Mineralised Zone (2) 32.5 2,110 0.454 68 364
Internal Greisen 0.6 2,880 0.620 2 9
Mineralised Granite 31.9 2,090 0.450 67 355
Subtotal (1) and (2) 33.3 2,140 0.461 71 379
This updated MRE cemented the Project's position as the second largest
resource in the EU and the third largest in Europe as a whole. The chart
below puts the Project in context of the other European hard rock lithium
projects.
PRE-FEASIBILITY STUDY STRATEGY
Mine Planning Activities
During 2024, following completion of the updated MRE, the Company commenced
detailed mine planning with Snowden Optiro and completed this work stream in
early 2025, which will feed into the PFS. Large scale sub-level stoping with
subsequent backfill has previously been determined to be the optimal mining
method, which offers higher capacity, lower operating expenditure and easier
backfill process than the Room and Pillar-method assumed in earlier studies.
Notably, with 36.3Mt in measured resources and the large dimensions of both
the High Grade External Greisen ('HGG') and Albite Granite ('AG') domains now
confirmed, significantly larger annual mining volumes can be supported, which
will positively impact production of end product.
The updated mine plan incorporates the strategy of higher productivity mining
methods and focussed on the understanding of key drivers of costs and
efficiency across the entire production operation, taking all technical
aspects of the Project into consideration. Detailed understanding of
geotechnical aspects at Zinnwald as well as downstream process efficiencies
and cost assumptions are crucial to adequately determine future metrics
defining the Cut-off-Grade ('COG') and optimal production capacity scenarios.
Having completed detailed mine planning, the work is now focused on
preparation of the Reserve Statement. The potential of the ore body to support
larger scale mining in the future has also been evaluated and incorporated
into the PFS.
PROCESS DEVELOPMENT / TESTWORK / ENGINEERING
Based on representative samples generated from its exploration programme,
including both high grade greisen and albite granite ore types found in the
deposit, the Company has continued its mineral processing, calcination and
hydrometallurgical testwork programmes. These have been undertaken by Metso, a
frontrunner in sustainable technologies, end-to-end solutions and services for
the aggregates, minerals processing and metals refining industries globally.
Mineral Processing
Following completion of the pilot scale mineral processing testwork in
December 2023 at the GTK pilot facilities in Finland by GTK and Metso, which
confirmed the earlier bench scale test work, basic engineering for a
feasibility study was initiated later that month. In H1 2024, Metso
completed its mineral processing flowsheet design and equipment selection.
This section of the process is a simple mainstream, proven design with a
single crushing stage followed by two production lines consisting of grinding
and rougher-scavenger wet magnetic separating and dewatering. The Basic
Engineering for the mineral processing circuit was completed in early 2025 to
a level of accuracy consistent with a definitive feasibility standard.
Pyro- and Hydrometallurgy
Pilot scale calcination testwork was undertaken at IBU-tec under Metso's
supervision during June 2024. A further c. 1 tonne sample was sent to
Metso's facility in York, Pennsylvania, USA for a further testwork programme
focused, inter alia, on equipment sizing. This testwork was successful and
equipment selection has been confirmed. Basic engineering for the
pyrometallurgical stage is well advanced.
Calcined material is being used for hydrometallurgical testing at large
bench-scale at Metso's facility in Pori, Finland. The remaining testwork is
primarily focused on refining the treatment of effluent streams and the
production of saleable by-products. All of this testwork will help to define
the base line hydrometallurgical process and the mass balance, as well as the
resultant basic engineering work.
The Company and Metso believe that the alkaline processing route has the
potential to offer significant advantages in terms of overall recovery,
efficiency and reduced impact on the environment. While the use of this
process for zinnwaldite ore is a new application of the process, it has been
successfully demonstrated at continuous pilot scale using spodumene feedstock
at other operations such as the Keliber lithium project in Finland, which is
under construction.
A representative sample of zinnwaldite concentrate was also tested by K-Utec
using the previously developed sulphation roast process during 2024. This
confirmed that the large scale tests previously performed by K-Utec based on
HGG concentrate are applicable to the material derived from a combination of
both HGG and AG. As such, the sulphation roast process route that
underpinned the PEA published in 2022 remains a viable processing route for
the larger scale operation.
Hydrogeology
Water management and hydrogeology is a critical component of both mine design
and the permitting process. In 2024, the Company completed its hydrogeological
drill programme that comprised eight groundwater ('GW') monitoring wells.
These included six deep wells extending to reach the mineralised Albite
Granite, and two shallow drill wells intended to penetrate the Rhyolite rock
of the hanging wall. A main operating plan for hydrogeological monitoring
in the Zinnwald area was approved by SOBA in November 2024 and is valid until
November 2028. This plan outlines a comprehensive framework for evaluating
water resources in the area. It includes the establishment and operation of
monitoring stations for surface water, groundwater, and mine water, ensuring
data collection on water levels, flow, and quality. In 2025, the Project
started the conversion of these GW wells to long term ground water monitoring
wells to collate the required data on an ongoing basis.
In cooperation with Geomet s.r.o., which is the owner of the Cinovec Project
in the Czech Republic, Zinnwald has contracted ERM, the largest global pure
play sustainability consultancy, to develop a cross-border hydrogeological
model. The model will be used to evaluate the potential impact of mining
operations on the hydrogeology.
Exploration adit
A geotechnical drill programme was completed in 2024 as part of detailed
planning for the construction of an exploration adit to access the Zinnwald
ore body. The exploration adit will provide the opportunity to extract a
large-scale bulk sample to be used for piloting, as well as providing further
detailed information on the ore body.
OTHER OPERATIONAL MATTERS
Infrastructure
In 2024, the Company has continued its work on defining the optimal solutions
for the required infrastructure based on the potential for higher production
levels supported by the results of the drilling campaign and the metallurgical
testwork carried out. The Company is using Fichtner GmbH, a major German
consulting group with experience concerning materials handling, road, and rail
infrastructure as well as all civil works. The Group will, using trade-off
studies, evaluate the most suitable, economical and environmentally friendly
options for all surface facilities.
The Company has also continued with its evaluations for tailings management,
supported by Knight Piesold (UK), which specialises in tailings management and
engineering. The Company is strongly committed to progress planning for a Dry
Stack Facility ('DSF'), for which multiple design and site options are being
evaluated.
Solar power opportunity
In 2025, the Company has signed a letter of intent ('LOI') with P+S
Projektentwicklung Solar-Bau GmbH ('Solar-Bau') to explore the purchase of
solar-generated power. Solar-Bau, a solar development company, plans to
establish several solar power generation facilities near the Project. This
partnership could therefore minimise environmental impact by using solar
energy close to its source, thereby reducing energy transfer losses and
infrastructure costs, while providing Zinnwald Lithium with a clean energy
source to lower the CO2 content of its final product.
Exploration Licenses
Whilst the Company's primary focus is on the development of its core Zinnwald
Licence, it continues to advance targets on its surrounding 100% owned
prospective exploration licence areas, including Falkenhain, Altenberg,
Bärenstein and Sadisdorf. Work on these licences has mainly involved
relogging and sampling historical data and core. Furthermore, the Company
applied for and received an extension of its Altenberg exploration licence,
which is now valid until 20 February 2027.
In addition, the team is evaluating an extensive historic geological database
derived from historical drilling campaigns such as those undertaken by the
former Wismut SAG, which has recently been made available to the public.
Notably, there is data for over 900 drill holes of various depths within the
areas of interest to the Company that has the potential to provide valuable
geological and geotechnical information relevant to its licenses and site
location options.
Staffing in Germany
The Group has further strengthened the team in Germany in 2024. The local
Project team now comprises 14 full time staff of which four are female. The
Company also employs six full time consultants with expertise across all the
areas of the Project's flowsheet and development plan. In total, the Group
has twenty-six full-time professionals (including employees, full time
consultants and directors) working across disciplines in both the Dresden and
London office locations. In addition to the professionals working directly for
the Company, more than 30 professionals work for the Project in partner
organisations.
ESG and Sustainability
Progress in relation to Permitting, Environmental, Social and Governmental
engagement are covered in detail in the report of the Sustainability Committee
below.
EUROPEAN UNION AND GERMANY DEVELOPMENTS
Critical Raw Materials Act ("CRMA")
On 23 May 2024, the EU's CRMA passed into law, with its primary emphasis being
for material EU production by 2030 with goals for domestic European capacities
to be able to extract 10%, process 40% and recycle 25% of its annual
consumption of strategic raw materials. In August 2024, Zinnwald Lithium
applied for strategic project designation under the Extraction and Processing
categories. The European Commission has confirmed the application has passed
the initial evaluation stage and anticipates informing applicants of the final
outcome in March 2025, following the high number of applications (170 in
total, of which 121 were from within the EU). Zinnwald believes the Project
holds significant potential for recognition as a Strategic Project, given its
significant contribution to LiOH production in the EU, its resource scale,
feasibility, sustainability credentials and broader EU benefits
Temporary Crisis and Transition Framework ('TCTF')
In September 2023, the German Federal Ministry for Economic Affairs and
Climate Action ('BMWK') announced a new programme for public grant funding
under the TCTF, a temporary funding instrument of the EU to promote the
production of climate-neutral, strategically important technologies. This
specific TCTF programme is to support the "Resilience and Sustainability of
the Battery Cell Manufacturing Ecosystem" in Germany.
Zinnwald Lithium submitted an application and, as part of Phase 1 of the
application process, underwent a series of detailed reviews with by BMWK's
programme management agency, VDI/VDE Innovation + Technology GmbH ('VDI/VDE').
On 27 June 2024, Zinnwald Lithium received an invitation from VDI/VDE to
formally apply for the envisaged funding (Phase 2 of the application process)
and this review is ongoing. While the invitation does not guarantee funding,
it acknowledges the Project's strong potential. Updates will be provided as
more information becomes available.
If the application is ultimately successful, any funding would be provided 70%
by the Federal State Government and 30% by the State of Saxony. On 4 June
2024, the Saxony Government announced its commitment to provide its portion of
any funding, subject in part to receipt of formal approval by the Parliament
of the State of Saxony, which was duly received on 21 June 2024.
Saxony Government
On 16 December 2024, the Christlich Demokratische Union Deutschlands ('CDU'),
which won the highest individual share of the state elections in September
2024, approved a coalition agreement with the Sozialdemokratische Partei
Deutschlands ('SPD') to form a minority coalition government. Zinnwald Lithium
was delighted that this agreement specifically refers to the importance of the
raw material industry to Saxony and establishes as a key goal the ability to
simplify and speed up the planning and approval of mining projects. The
agreement specifically refers to the Zinnwald Lithium Project in this context
and is the only project formally referenced.
Visits by Chancellor Scholz
In August and December 2024, Germany's Federal Chancellor, Olaf Scholz,
visited the Saxon Mining Authority ('SOBA') in Freiberg to discuss the future
raw material security in Germany with the Saxon Minister of Economics, Martin
Dulig. Representatives of Zinnwald Lithium GmbH also attended the meetings at
which the potential role of Zinnwald Lithium's Project near Altenberg was
discussed.
Chancellor Scholz was enthusiastic about the possibility of mining lithium in
Saxony in an environmentally friendly way. He said "We are a country that
processes modern raw materials. Germany imports many raw materials from
other countries in the world, but some are also available in this country -
including lithium. In Saxony, lithium is to be mined on a large scale in an
environmentally friendly way in the future. "This creates jobs, prosperity and
is therefore a priority", the Chancellor wrote on X after the meeting.
Lithium Market in 2024
General Lithium Market in 2024
In 2024, the lithium market was marked by volatility and transformation, with
oversupply and weak demand being the dominant themes. The main trends that
shaped the market included:
· Price Decline: According to Benchmark Mineral Intelligence, Lithium
carbonate prices dropped by about 29% in 2024 and lithium hydroxide by around
27%. This decline was attributed to a global surplus of around 4.8% of demand,
down from 9.5% in 2023.
· Supply Glut: The global supply of lithium increased substantially due
to expanded production capacity. Overall lithium production has risen from
0.7m tonnes of LCE in 2022 to almost 1.2m tonnes in 2024.This oversupply,
combined with softer demand, particularly from the electric vehicle (EV)
sector early in the year, further pressured prices. A feature of 2024 saw
the reduction in planned production or even mothballing of a number of
projects from major suppliers, such as Kathleen Valley, Bald Hill, Mt Cattlin
and Greenbushes,
· Mergers and Acquisitions (M&A): The lithium sector saw
significant M&A activity. Notable deals included the merger between Livent
and Allkem to form Arcadium Lithium, and Rio Tinto's acquisition of Arcadium
for $6.7 billion. Additionally, Pilbara Minerals acquired Latin Resources, and
Sayona Mining merged with Piedmont Lithium1.
· Electric Vehicle Market Dynamics: While EV sales were initially weak
in North America, they picked up momentum later in the year, especially in
China, where record sales were reported. Overall EV sales exceeded 17m in
2024, an increase of 25% from 2023. However, global EV demand was not strong
enough to offset the supply surplus.
· Battery Energy Storage Systems (BESS) growth: One of the brighter
areas of growth with more than 200 GWh of new installed capacity, with Europe
increasing by 110% alone. This is being driven by the dramatic decline in
battery costs (down 40% from 2023) and an increase in storage duration.
Lithium-ion batteries remain the dominant option accounting for 87% of total
storage, up from 83% in 2023. Rho Motion expects these growth trends to
continue into 2025 and beyond.
· Geopolitical Factors: Geopolitical tensions, including trade disputes
and tariffs on Chinese EVs; threats by China to restrict export of processing
technology; uncertainty in the US around future support for the EV industry
and potential tariffs; increased resource nationalism in key supplier
countries such as Chile. These all added complexity and volatility to the
market landscape.
Lithium Pricing
Definitive and accurate lithium pricing is inherently problematic, due to the
opaque nature of what is, in global mining terms, a relatively new and small
market by value. Lithium pricing is not quoted on any major exchange. There is
no terminal market, although the London Metal Exchange is working to launch a
futures contract. There is a spot market visible in China, but this is a small
part of the overall lithium market. As there is no industry wide benchmark for
pricing, the bulk of the market is sold based on negotiation between buyer and
seller on long term contracts with prices fixed on an annual or quarterly
revised basis. This is not wholly surprising, as battery grade lithium is a
speciality chemical that requires acceptance testing by manufacturers who
value the consistency of quality of end product and its impurities and
guarantee on supply.
2024 has continued to see ongoing weakness in the price of lithium from the
highs of $80,000 per tonne in 2022 to between $10,000-12,000 per tonne in the
second half of 2024. The lithium market has grown very rapidly from being a
relatively small niche market from a global perspective. Partly as a
consequence of this, the pricing of lithium has historically been quite
volatile if looked at over a purely short-term basis. The price tends to
overshoot in the short term on both the high and low side.
In terms of longer-term forecasts, the prospects for lithium pricing remain
encouraging. Benchmark forecasts deficits substantially higher than the
current surpluses. In 2034, the lithium market is expected to be in deficit by
572,000 tonnes, around seven times larger than the current surplus.
Benchmark takes the view that "lithium will be the bottleneck for the growth
of the battery industry more than any other part of the supply chain. Though
more than one million tonnes of mined lithium is expected to be produced in
2024, mined supply will need to reach 2.7 million tonnes to meet demand in
2030, the majority of which is driven by the electric vehicle (EV) market."
In terms of the pricing forecasts published by integrated lithium projects
currently in development (i.e.: excludes concentrate producers). The table
below shows the assumed pricing for those projects that have published studies
since the beginning of 2023, when lithium prices started to retrace from the
abnormal highs in 2022.
Shareholder Evolution in 2024
During 2024, the Company's underlying shareholder base shows an
ever-increasing ownership by German and EU investors. Based on the latest
share register, the Company now shows UK holders at 43.5% (2023: 46%), large
German institutional and corporate investors unchanged from 2023 at 31%, other
German and EU investors increased to 15.5% (2023: 13%) and Rest of the World
unchanged from 2023 at 10%.
Outlook
The Company's strategy is centred on developing a project that is not only
significant in scale but also economically attractive and founded on a robust
technical and sustainable framework. Current and ongoing workstreams are
pivotal to this strategy, with significant progress already achieved and
several key milestones on the horizon. These include ongoing metallurgical
testwork, continuous advancement of hydrogeological drilling campaigns, and
detailed mining planning. Concurrently, the team is engaged in permitting and
commercial activities.
The Project's updated MRE that has shown the potential size and scale of the
Project has re-positioned it in terms of its relevance to the German and EU
Battery Chain. The Company's near-term priorities are to progress and complete
the PFS Study for publication in Q1 2025. The Company will also continue to
advance the work required to successfully permit the Project, including the
Spatial Planning submission and the start of its formal ESIA Scoping Study.
Alongside this, advancing the Project from a technical and permitting aspect,
the Company will continue to advance its long term financing strategy
including discussions with potential financing partners.
Financial Review
Notwithstanding that the Company is a UK Plc admitted to trading on AIM, the
Company presents its accounts in its functional currency of Euros, since the
majority of its expenditure, including that of its subsidiary Zinnwald
Lithium, is denominated in this currency.
The Group is still at an exploration and development stage and not yet
producing minerals, which would generate commercial income. The Group is not
expected to report overall profits until it is able to profitably
commercialise its Zinnwald Lithium project in Germany.
During the year, the Group made an operating loss of €3.1m compared with a
loss of €2.9m in 2023. In 2024, administrative expenses maintained a
consistent level of €2.5m compared with €2.6m in 2023. It includes the
costs related to being a public listed company, including the costs of
non-executive directors, brokers, nominated adviser and other advisers. There
was also a share-based payment expense of €0.7m in 2024, compared with
€0.5m in 2023, arising from the issuance of new Options and RSUs and the
first issuance of PSUs.
During the year, the Group made an overall loss before taxation of €2.8m
compared with a loss of €2.6m for the year ended 31 December 2023. This
included interest income of €0.4m on the Group's cash balances.
The Total Net Assets of the Group decreased to €37.7m as at 31 December 2024
from €39.8m at 31 December 2023 due mainly to the operating loss noted
above. The Group spent €6.5m on direct development work on the Project
focussed on completion of the Mineral Resource Estimate and the extensive
testwork and flowsheet development, engineering, permitting and general work
required for the forthcoming PFS. This increased the Group's Intangible asset
balance to €34.2m at year end from €27.7m at the end of 2023 and cash
balances decreased to €5.2m from €14.3m at the end of 2023.
The closing cash balance for the Group at the period end was €5.2m. As at
today's date, the Group's cash balance is €3.9m.
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
31 December 2024 31 December 2023
Notes € €
Continuing operations
Administrative expenses (2,526,650) (2,560,466)
Other operating income 7 110,605 183,143
Share based payments charge 23 (688,877) (528,626)
Operating Loss (3,104,922) (2,905,949)
Finance income 9 380,607 282,229
Loss before taxation (2,724,315) (2,623,720)
Tax 10 (11,274) (18,785)
Loss for the financial year 27 (2,735,589) (2,642,505)
Other Comprehensive Income 65 38
Total comprehensive loss for the year (2,735,524) (2,642,467)
Earnings per share from continuing operations attributable to the owners of 11
the parent company
Basic (cents per share) 11 (0.56) (0.61)
Total loss and comprehensive loss for the year is attributable to the owners
of the parent company.
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
31 December 2024 31 December 2023
Notes € €
Non-current assets
Intangible Assets 12 34,202,236 27,652,152
Property, plant and equipment 13 430,752 386,788
Right of Use Assets 14 279,566 -
34,912,554 28,038,940
Current assets
Trade and other receivables 18 371,142 357,463
Right of Use Assets < 1 year 14 - 46,131
Cash and cash equivalents 5,216,085 14,306,191
5,587,227 14,709,785
Total Assets 40,499,781 42,748,725
Current liabilities
Trade and other payables 19 (1,106,584) (1,469,564)
Lease Liabilities 14 (118,652) (47,795)
(1,225,236) (1,517,359)
Net current assets 4,361,991 13,192,426
Non-current Liabilities
Deferred tax liability 20 (1,382,868) (1,382,868)
Lease Liabilities > 1 Year 14 (164,687) -
(1,547,555) (1,382,868)
Total Liabilities (2,772,791) (2,900,227)
Net Assets 37,726,990 39,848,498
Equity
Share capital 24 5,377,253 5,365,379
Share premium 25 39,476,355 39,403,810
Other reserves 26 2,303,850 1,896,531
Retained losses 27 (9,430,468) (6,817,222)
Total equity 37,726,990 39,848,498
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
Notes Share Capital Share premium account Other reserves Retained earnings Total
€ € € € €
Balance at 1 January 2023 3,316,248 20,289,487 1,367,867 (4,174,717) 20,798,885
Year ended 31 December 2023
Loss for the year - - - (2,642,505) (2,642,505)
Other comprehensive income:
Currency translation differences - - 38 - 38
Total comprehensive loss for the year - - 38 (2,642,505) (2,642,467)
Issue of share capital 2,049,131 19,282,326 - - 21,331,457
Share issue costs - (168,003) - - (168,003)
Credit to equity for equity settled share-based payments 23 - - 528,626 - 528,626
Total transactions with owners recognised directly in equity 2,049,131 19,114,323 528,626 - 21,692,080
Balance at 31 December 2023 and 1 January 2024 5,365,379 39,403,810 1,896,531 (6,817,222) 39,848,498
Year ended 31 December 2024
Loss for the year - - - (2,735,589) (2,735,589)
Other comprehensive income
Currency translation differences - - 65 - 65
Total comprehensive income for the year - - 65 (2,735,589) (2,735,524)
Issue of share capital 24 11,874 72,545 - - 84,419
Share issue costs - - - - -
Credit to equity for equity settled share-based payments 23 - - 407,254 122,343 529,597
Total transactions with owners recognised directly in equity 11,874 72,545 407,254 122,343 614,016
Balance at 31 December 2024 5,377,253 39,476,355 2,303,850 (9,430,468) 37,726,990
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Year ended 31 December 2024 Year ended 31 December 2023
Notes € € € €
Cash flows from operating activities
Cash used in operations 32 (2,583,318) (1,359,464)
Net cash outflow from operating activities (2,583,318) (1,359,464)
Cash flows from investing activities
Exploration expenditure in Germany 12 (6,552,094) (8,687,649)
Purchase of property, plant and equipment 13 (128,320) (112,964)
Interest received 380,607 282,229
Net cash used in investing activities (6,299,807) (8,518,384)
Cash flows from financing activities
Proceeds from the issue of shares - 21,331,457
Share issue costs - (168,003)
Costs related to vested RSUs (74,861)
Lease payments (132,120) (144,000)
Net cash generated (used in) / from financing activities (206,981) 21,019,454
Net decrease) / increase in cash and cash equivalents (9,090,106) 11,141,606
Cash and cash equivalents at beginning of year 14,306,191 3,164,585
Cash and cash equivalents at end of year 5,216,085 14,306,191
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
1. Accounting Policies
1.1 Company Information
Zinnwald Lithium Plc (the "Company") is a public limited company which is
listed on the AIM Market of the London Stock Exchange domiciled and
incorporated in England and Wales. The registered office address is 29-31
Castle Street, High Wycombe, Buckinghamshire, United Kingdom, HP13 6RU.
The group consists of Zinnwald Lithium Plc and its wholly owned subsidiaries
as follows as at 31 December 2024:
Name of undertaking Registered office Nature of business Class of shares held Direct holding Indirect holding
Zinnwald Lithium Holdings Ltd United Kingdom Exploration Ordinary 100.0% -
Zinnwald Lithium GmbH Germany Exploration Ordinary - 100.0%
Zinnwald Lithium Services GmbH Germany Leasing Ordinary - 100.0%
On 1 December 2017, Zinnwald Lithium Plc acquired the entire issued share
capital of Zinnwald Lithium Holdings Ltd ("ZLH", formerly known as Erris
Resources (Exploration) Ltd) by way of a share for share exchange, ahead of
the Company's listing on the AIM Market of the London Stock Exchange. Its
registered office address is 29-31 Castle Street, High Wycombe, Bucks, HP13
6RU.
On 29 October 2020, Zinnwald Lithium Plc acquired 50% of the issued share
capital of Zinnwald Lithium GmbH ("ZLG", formerly known as Deutsche Lithium
GmbH). On 24 June 2021, the Company acquired the remaining 50% of the issued
share capital of ZLG. ZLG is a company registered in Germany. On 21 June
2024, the Company changed its registration from Chemnitz (HRB 23391) to
Dresden (HRB 45396) and its statutory seat from Freiberg to Altenberg. Its
business office is at Antonstrasse 3a, 01097, Dresden, Germany.
On 22 February 2023, ZLH incorporated a new company, Zinnwald Lithium Services
GmbH ("ZLS") for the purpose of holding all rental and similar operational
leases for the Group's operations in Germany. ZLS is a company registered in
Germany. On 21 June 2024, the Company changed its registration from Chemnitz
(HRB 35711) to Dresden (HRB 45386) and its statutory seat from Freiberg to
Altenberg. Its business office is at Antonstrasse 3a, 01097, Dresden, Germany
1.2 Basis of preparation
These financial statements have been prepared in accordance with UK-adopted
International Accounting Standards and IFRIC interpretations and with those
parts of the Companies Act 2006 applicable to companies reporting under IFRS
(except as otherwise stated).
The financial statements are prepared in euros, which is the functional
currency of the company and the group's presentation currency, since the
majority of its expenditure, including funding provided to ZLG and ZLS, is
denominated in this currency. Monetary amounts in these financial statements
are rounded to the nearest €.
The € to GBP exchange rate used for translation as at 31 December 2024 was
€1.209256.
The consolidated financial statements have been prepared under the historical
cost convention, unless stated otherwise within the accounting policies. The
principal accounting policies adopted are set out below.
1.3 Basis of consolidation
The consolidated financial statements incorporate those of Zinnwald Lithium
Plc and all of its subsidiaries (i.e., entities that the group controls when
the group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity).
All financial statements are made up to 31 December 2024. Where necessary,
adjustments are made to the financial statements of subsidiaries to bring the
accounting policies used into line with those used by other members of the
group.
All intra-group transactions, balances and unrealised gains on transactions
between group companies are eliminated on consolidation. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of
the asset transferred.
Subsidiaries are fully consolidated from the date on which control is
transferred to the group. They are deconsolidated from the date on which
control ceases.
1.4 Going concern
At the time of approving the financial statements, the directors have a
reasonable expectation that the group and company have adequate resources to
continue in operational existence for the foreseeable future. The Group had a
cash balance of €5.2m at the year-end (€3.9m at date of this report) and
keeps a tight control over all expenditure. The group is fully financed
through to at least the completion of its PFS in 2025 and thereafter into
2026. The Board maintains an ongoing strategy to enable the curtailing of a
number of areas of expenditure to enable it to meet its minimum fixed costs
for the next 12 months, even without raising further funds, whilst still
maintaining all licenses in good standing. Thus, the going concern basis of
accounting in preparing the Financial Statements continues to be adopted.
1.5 Intangible assets
Capitalised Exploration and Evaluation costs
Exploration and evaluation assets are capitalised as Intangible Assets and
represent the costs incurred on the exploration and evaluation of potential
mineral resources. They include direct costs (such as permitting costs,
drilling, assays and flowsheet testwork done by consulting engineers), licence
payments and fixed salary/consultant costs, capitalised in accordance with
IFRS 6 "Exploration for and Evaluation of Mineral Resources". Exploration
and Evaluation assets are initially measured at historic cost. Exploration
and Evaluation Costs are assessed for indicators of impairment in accordance
with IFRS 6 when facts and circumstances suggest that the carrying amount of
an asset may exceed its recoverable amount. Any impairment is recognised
directly in profit or loss.
1.6 Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently
measured at cost, net of depreciation and any impairment losses. Depreciation
is recognised so as to write off the cost or valuation of assets less their
residual values over their useful lives on the following bases:
Leasehold land and buildings No deprecation is charged on these balances
Plant and equipment 25% on cost
Fixtures and fittings 25% on cost
Computers 25% on
cost
Motor
vehicles
16.7% on cost for new vehicles, 33.3% on cost for second-hand vehicles
Low-value assets (Germany) 100% on cost on acquisition for items valued at
less than €800
The gain or loss arising on the disposal of an asset is determined as the
difference between the sale proceeds and the carrying value of the asset and
is recognised in the income statement.
1.7 Non-current investments
In the parent company financial statements, investments in subsidiaries are
initially measured at cost and subsequently measured at cost less any
accumulated impairment losses.
1.8 Impairment of non-current assets
At each reporting period end date, the group reviews the carrying amounts of
its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where it is not
possible to estimate the recoverable amount of an individual asset, the group
estimates the recoverable amount of the cash-generating unit to which the
asset belongs.
Intangible assets not yet ready to use and not yet subject to amortisation are
reviewed for impairment whenever events or circumstances indicate that the
carrying value may not be recoverable.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
1.9 Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held at call with
banks with a maturity date of less than 30 days.
1.10 Right of Use Assets and Lease Liabilities
All leases are accounted for by recognising a right-of-use assets due to a
lease liability except for:
· Lease of low value assets; and
· Leases with duration of 12 months or less
The group reviews its contracts and agreements on an annual basis for the
impact of IFRS 16. The group has such short duration leases and lease payments
are charged to the income statement with the exception of the Group's lease
for the Freiberg office and core shed, which expired in April 2024 and have
been replaced by new office leases in Dresden and Core Shed in Altenberg that
both started on 1 May 2024.
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is
typically the case) this is not readily determinable, in which case the
group's incremental borrowing rate on commencement of the lease is used.
Variable lease payments are only included in the measurement of the lease
liability if they depend on an index or rate. In such cases, the initial
measurement of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments are
expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also
includes:
· amounts expected to be payable under any residual value guarantee;
· the exercise price of any purchase option granted in favour of the
group if it is reasonably certain to assess that option;
· any penalties payable for terminating the lease, if the term of the
lease has been estimated on the basis of termination option being exercised.
Right of use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received, and increased for:
· lease payments made at or before commencement of the lease;
· initial direct costs incurred; and
· the amount of any provision recognised where the group is
contractually required to dismantle, remove or restore the leased asset
Subsequent to initial measurement lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made. Right-of-use assets are amortised on a straight-line
basis over the remaining term of the lease or over the remaining economic life
of the asset if, rarely, this is judged to be shorter than the lease term.
1.11 Financial assets
Financial assets are recognised in the group's and company's statement of
financial position when the group and company become party to the contractual
provisions of the instrument.
Financial assets are classified into specified categories at initial
recognition and subsequently measured at amortised cost, fair value through
other comprehensive income, or fair value through profit or loss. The
classification of financial assets at initial recognition that are debt
instruments depends on the financial assets cash flow characteristics and the
business model for managing them.
Financial assets are initially measured at fair value plus transaction
costs. In order for a financial asset to be classified and measured at
amortised cost, it needs to give rise to cash flows that are "solely payments
of principal and interest SPPI" on the principal amount outstanding.
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the
effective interest rate method and are subject to impairment. The group's
and company's financial assets at amortised cost comprise trade and other
receivables and cash and cash equivalents.
Interest is recognised by applying the effective interest rate, except for
short-term receivables when the recognition of interest would be immaterial.
The effective interest method is a method of calculating the amortised cost of
a debt instrument and of allocating the interest income over the relevant
period. The effective interest rate is the rate that exactly discounts
estimated future cash receipts through the expected life of the debt
instrument to the net carrying amount on initial recognition.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting
end date.
Financial assets are impaired where there is objective evidence that, as a
result of one or more events that occurred after the initial recognition of
the financial asset, the estimated future cash flows of the investment have
been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership to another entity.
Financial liabilities
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at
fair value, net of transaction costs. They are subsequently measured at
amortised cost using the effective interest method, with interest expense
recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of
a financial liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts
estimated future cash payments through the expected life of the financial
liability to the net carrying amount on initial recognition.
Derecognition of financial liabilities
Financial liabilities are derecognised when the group's contractual
obligations expire or are discharged or cancelled.
1.12 Equity instruments
Equity instruments issued by the group are recorded at the proceeds received,
net of direct issue costs.
1.13 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an
expense, unless those costs are required to be recognised as part of the cost
of non-current assets.
The cost of any unused holiday entitlement is recognised in the period in
which the employee's services are received.
Termination benefits are recognised immediately as an expense when the group
and company is demonstrably committed to terminate the employment of an
employee or to provide termination benefits.
1.14 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an
expense as they fall due.
1.15 Equity
Share capital
Ordinary shares are classified as equity.
Share premium
Share premium represents the excess of the issue price over the par value on
shares issued. Incremental costs directly attributable to the issue of new
ordinary shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Merger reserve
A merger reserve was created in 2017 on purchase of the entire share capital
of Zinnwald Lithium Holdings Ltd (formerly Erris Resources (Exploration) Ltd)
which was completed by way of a share for share exchange and which has been
treated as a group reconstruction and accounted for using the reverse merger
accounting method.
Share-based payment reserve
The share-based payment reserve is used to recognise the fair value of
equity-settled share-based payment transactions.
1.16 Share-based payments
Equity-settled share-based payments with employees and others providing
services are measured at the fair value of the equity instruments at the grant
date. Fair value is measured by use of an appropriate pricing model.
Equity-settled share-based payment transactions with other parties are
measured at the fair value of the goods and services, except where the fair
value cannot be estimated reliably, in which case they are valued at the fair
value of the equity instrument granted.
The fair value determined at the grant date is expensed on a straight-line
basis over the vesting period, based on the estimate of shares that will
eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the
time they were granted are subsequently modified, the fair value of the
share-based payment under the original terms and conditions and under the
modified terms and conditions are both determined at the date of the
modification. Any excess of the modified fair value over the original fair
value is recognised over the remaining vesting period in addition to the grant
date fair value of the original share-based payment. The share-based payment
expense is not adjusted if the modified fair value is less than the original
fair value.
Cancellations or settlements (including those resulting from employee
redundancies) are treated as an acceleration of vesting and the amount that
would have been recognised over the remaining vesting period is recognised
immediately.
1.17 Foreign exchange
Foreign currency transactions are translated into the functional currency
using the rates of exchange prevailing at the dates of the transactions. At
each reporting end date, monetary assets and liabilities that are denominated
in foreign currencies are retranslated at the rates prevailing on the
reporting end date. Gains and losses arising on translation are included in
administrative expenses in the income statement for the period.
The financial statements are presented in the functional currency of Euros
since the majority of exploration expenditure is denominated in this currency.
1.18 Exceptional items
Items are disclosed separately in the financial statements where it is
necessary to do so to provide further understanding of the financial
performance of the group. They are items that are material, either because
of their size or nature, or that are non-recurring.
1.19 Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the Chief Executive Officer, who is considered to be the
group's chief operating decision-maker ('CODM').
1.20 New standards, amendments and interpretations not yet adopted
There were no new standards or amendments to standards adopted by the group
and company during the year which had a material impact on the financial
statements.
At the date of approval of these financial statements, the following standards
and amendments were in issue but not yet effective, and have not been early
adopted:
· Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rate:
Lack of Exchangeability (Effective date 1 January 2025)
· IFRS 18 Presentation and Disclosure in Financial Statements
(Effective date TBC)*
· Amendments to IFRS 9 Financial instruments and IFRS 7 Financial
Instruments: Disclosures: Classification and Measurement of Financial
Instruments (Effective date TBC)*
· Annual Improvements to IFRS standard - Volume 11 (Effective date 1
January 2026)
*subject to UK endorsement
There are no other IFRSs or IFRIC interpretations that are not yet effective
that would be expected to have a material impact on the group or company.
2. Judgements and key sources of estimation uncertainty
In the application of the accounting policies, the directors are required to
make judgements, estimates and assumptions about the carrying amount of assets
and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised where the revision affects only that period, or in the
period of the revision and future periods where the revision affects both
current and future periods.
Critical judgements
The following judgements and estimates have had the most significant effect on
amounts recognised in the financial statements.
Share-based payments
Estimating fair value for share based payment transactions requires
determination of the most appropriate valuation model, which depends on the
terms and conditions of the grant. This estimate also requires determination
of the most appropriate inputs to the valuation model including the expected
life of the share option or appreciation right, volatility and dividend yield
and making assumptions about them. For the measurement of the fair value of
equity settled transactions with employees at the grant date, the group and
company use the Black Scholes model.
Impairment of Capitalised Exploration Costs
Group capitalised exploration costs had a carrying value as at 31 December
2024 of €34,202,236 (2023: €27,652,152), which solely relate to the
Zinnwald Lithium Project, Management tests annually whether capitalised
exploration costs have a carrying value in accordance with the accounting
policy stated in note 1.6. Each exploration project is subject to a review
either by a consultant or an appropriately experienced Director to determine
if the exploration results returned to date warrant further exploration
expenditure and have the potential to result in an economic discovery. This
review takes into consideration long-term metal prices, anticipated resource
volumes and grades, permitting and infrastructure as well as the likelihood of
on-going funding from equity investors or other sources of long term funding.
In the event that a project does not represent an economic exploration target
and results indicate that there is no additional upside, or that future
funding is unlikely, a decision will be made to discontinue exploration.
In Germany, ZLGs core mining license at Zinnwald is valid to 31 December 2047,
which underpins the PEA published in September 2022 and the forthcoming PFS.
In February 2024, and further updated in June 2024, the group published an
updated Mineral Resource Estimate that showed a materially increased resource
that underpins both the size of the Project and its long mine life. It shows
that the Project is the second largest hard-rock lithium project in the EU and
the third largest in Europe as a whole. ZLG has additional exploration
licenses at Falkenhain valid to 31 December 2025, at Altenberg to 15 February
2027, at Sadisdorf to 30 June 2026 and at Bärenstein, newly granted in 2023
and valid to 30 June 2028. The 2022 PEA showed a material increase in size
and output of the Project and underpinned a pre-tax NPV of $1.6 billion and a
post-tax NPV of $1.0 billion and post-tax IRR of 29%. Accordingly, the Board
has concluded that no impairment charge is required for these assets.
Recoverability of investments in and loans to subsidiaries
The Directors review the carrying value of investments in and loans made to
subsidiaries for any indications of impairment of potential
non-recoverability. Since all investments and loans ultimately relate solely
to funding for the Project in Germany and, as noted above, the Directors do
not believe that any impairments is required for that asset, accordingly the
Directors do not believe there is any impairment to investment or loan value.
3. Financial Risk and Capital Risk Management
The Group's and Company's activities expose it to a variety of financial
risks: market risk (primarily currency risks), credit risk and liquidity
risk. The overall risk management programme focusses on currency and working
capital management.
Foreign Exchange Risk
The Company operates internationally and is exposed to foreign exchange risk
arising from one main currency exposure, namely GBP for its Head Office costs
and the value of its shares for fund-raising and Euros for a material part of
its operating expenditure. The Group's Treasury risk management policy is
currently to hold most of its cash reserves in Euros, as the majority of its
current and planned expenditure will be on the Project in Germany.
Credit and Interest Rate Risk
The group and company have no borrowings and a low level of trade creditors
and have minimal credit or interest rate risk exposure. The Group's cash and
cash equivalents is held at major financial institutions.
Working Capital and Liquidity Risk
Cashflow and working capital forecasting is performed in the operating
entities of the group and consolidated at a group level basis for monthly
reporting to the Board. The Directors monitor these reports and rolling
forecasts to ensure the group has sufficient cash to meet its operational
needs. The Board has a policy of maintaining at least a GBP 0.5m cash reserve
headroom. The group has no material fixed cost overheads other than its costs
of being listed on the AIM market and its leases in Dresden and Altenberg.
None of its employee contracts have notice periods of longer than six months
and its development expenditure is inherently discretionary.
4. Segmental reporting
The Group operates in the UK and Germany. Activities in the UK include the
Head Office corporate and administrative costs whilst the activities in
Germany relate to ongoing development work at the group's wholly owned
Zinnwald Lithium Project. The reports used by the Board and Management are
based on these geographical segments. Non-core Assets related to the
historic Abbeytown Zinc Project, which was sold in April 2023.
Non-core Assets Germany UK Total
2024 2024 2024 2024
€ € € €
Administrative expenses - (1,013,403) (1,675,736) (2,689,139)
Share based payment charge - - (688,877) (688,877)
Gain/loss on foreign exchange - - 170,006 170,006
Other operating income - 110,605 - 110,605
Finance income - 1,950 378,657 380,607
Interest paid - (7,517) - (7,517)
Tax - (11,274) - (11,274)
Loss from operations per reportable segment - (919,639) (1,815,950) (2,735,589)
Reportable segment assets - 34,476,535 6,082,411 40,558,946
Reportable segment liabilities - 2,429,932 402,024 2,831,956
Non-core Assets Germany UK Total
2023 2023 2023 2023
€ € € €
Administrative expenses (8,837) (872,958) (1,717,060) (2,598,855)
Share based payment charge - - (528,626) (528,626)
Gain/loss on foreign exchange - - 42,240 42,240
Other operating income - 183,143 - 183,143
Finance income - - 282,229 282,229
Interest paid - (3,851) - (3,851)
Tax - (18,785) - (18,785)
Loss from operations per reportable segment (8,837) (712,451) (1,921,217) (2,642,505)
Reportable segment assets - 27,046,520 15,702,205 42,748,725
Reportable segment liabilities - 2,436,646 463,581 2,900,227
5. Operating loss
2024 2023
€ €
Operating loss for the year is stated after charging / (crediting)
Exchange gains (170,008) (42,240)
Loss on disposal of subsidiary - 3,672
Amortisation of intangible assets 2,010 1,662
Depreciation of property, plant and equipment 84,421 53,741
Depreciation of Right of Use Assets 126,711 139,154
Share-based payment expense 688,877 528.626
Operating lease charges 36,641 41,105
Exploration costs expensed 824,709 687,224
6. Auditor's remuneration
Fees payables to the company's auditor 2024 2023
€ €
For audit services
Annual Audit of group, parent company and subsidiary undertakings 45,914 41,979
Review of interim group financial statements 3,557 3,274
49,471 45,254
For other services
Taxation compliance services 7,759 5,354
7. Other operating income
2024 2023
€ €
Other operating income 110,605 183,143
Other operating income primarily comprised rental and utilities income from
sub-lessors at the Group's former offices in Freiberg.
8. Employees
The average monthly number of persons (including directors) employed by the
group and company during the year was:
Group Company
2024 2023 2024 2023
Number Number Number Number
Directors 6 6 6 6
Employees 14 20 - 1
20 26 6 7
Their aggregate remuneration comprised Group Company
2024 2023 2024 2023
€ € € €
Wages and salaries 1,823,149 1,621,204 875,722 819,393
Social security costs 235,368 200,980 137,050 101,657
Pension costs 113,329 139,841 63,370 64,571
2,191,846 1,962,025 1,076,142 985,621
Aggregate remuneration expenses of the group include €913,998 (2023:
€942,695) of costs capitalised and included within non-current assets of the
group.
Aggregate remuneration expenses of the company include €Nil (2023:
€63,543) of costs capitalised and included within non-current assets of the
group.
Directors' remuneration is disclosed in report of Remuneration Committee.
9. Finance income
Group
2024 2023
€ €
Interest income
Interest on bank deposits 380,607 282,229
10. Taxation
Group
Income Tax Expense 2024 2023
€ €
UK Corporation tax expense - current year - -
Overseas current tax expense - current year 2,383 18,785
Overseas real estate tax expense - current year 8,891 -
Total current tax expense 11,274 18,785
€ €
Loss before taxation (2,735,588) (2,642,505)
Expected tax credit based on the standard rate of corporation tax in the UK of (519,762) (502,076)
19.00% (2023: 19.00%)
Disallowable expenses 132,436 119,407
Non-taxable gains - -
Unutilised tax losses carried forward 388,786 394,237
Difference in overseas tax rate 922 7,216
Overseas real estate tax expense 8,891 -
Taxation charge for the year 11,274 18,785
Losses available to carry forward amount to €9,578,000 (2023:
€7,539,000). No deferred tax asset has been recognised on these losses, as
the probability and timing of available future taxable profits is not
something that can currently be estimated.
Foreign tax liabilities are calculated at the prevailing tax rates applicable
in the overseas tax jurisdictions, being Germany.
11. Earnings per share
2024 2023
€ €
Weighted average number of ordinary shares for basic earnings per share 474,497,857 430,096,224
Effect of dilutive potential ordinary shares
- Weighted average number of outstanding share options 22,706,856 6,106,301
Weighted average number of ordinary shares for diluted earnings per share 497,204,713 436,202,525
Earnings
Continuing operations (2,724,315) (2,642,505)
Loss for the period for continuing operations
Earnings for basic and diluted earnings per share distributable to equity (2,724,315) (2,642,505)
shareholders of the company
Earnings per share for continuing operations
Basic and diluted earnings per share
Basic earnings per share - cents (0.56) (0.61)
There is no difference between the basic and diluted earnings per share for
the period ended 31 December 2024 or 2023 as the effect of the exercise of
options would be anti-dilutive.
12. Intangible Assets
Group Germany Ireland Total
€ € €
Cost
At 1 January 2023 18,967,989 2,059,272 21,027,261
Additions - group funded 8,687,649 - 8,687,649
Disposals - (2,059,272) (2,059,272)
At 31 December 2023 27,655,638 - 27,655,638
Additions - group funded 6,552,094 - 6,552,094
At 31 December 2024 34,207,732 - 34,207,732
Amortisation and impairment
At 1 January 2023 1,824 2,059,272 2,061,096
Amortisation charged for the year 1,662 - 1,662
Disposals (2,059,272) (2,059,272)
At 31 December 2023 3,486 - 3,486
Amortisation charged for the year 2,010 - 2,010
At 31 December 2023 5,496 - 5,496
Carrying amount
At 31 December 2024 34,202,236 - 34,202,236
At 31 December 2023 27,652,152 - 27,652,152
Intangible assets comprise capitalised exploration and evaluation costs
(direct costs, licence fees and fixed salary / consultant costs) of the
Zinnwald Lithium project in Germany, as well as the fully impaired Ireland
Zinc Project that was sold in April 2023.
The Company has had no directly owned intangible assets since 2020.
13. Property plant and equipment
Group Leasehold, land and buildings Fixtures, fittings and equipment Motor vehicles Total
Cost € € € €
At 1 January 2023 40,990 277,196 66,593 384,779
Additions - group funded 30,000 82,964 - 112,964
Exchange adjustments - 103 - 103
At 31 December 2023 70,990 360,263 66,593 497,846
Additions - group funded 30,000 98,320 - 128,320
Exchange adjustments - 331 - 331
At 31 December 2024 100,990 458,914 66,593 626,497
Depreciation and impairment
At 1 January 2023 - 39,638 17,614 57,252
Depreciation charged for the year - 40,555 13,286 53,741
Exchange adjustments - 65 - 65
At 31 December 2023 - 80,158 30,900 111,058
Depreciation charged for the year - 71,135 13,286 84,421
Exchange adjustments - 266 - 266
At 31 December 2024 - 151,559 44,186 195,745
Carrying amount
At 31 December 2024 100,990 307,355 22,407 430,752
At 31 December 2023 70,990 280,105 35,693 386,788
Company Computers
Cost €
At 1 January 2023 5,082
Additions - group funded 1,654
Exchange adjustments 103
At 31 December 2023 6,839
Additions - group funded -
Exchange adjustments 331
At 31 December 2024 7,170
Depreciation and impairment
At 1 January 2023 2,515
Depreciation charged for the year 1,566
Exchange adjustments 65
At 31 December 2023 4,146
Depreciation charged for the year 1,463
Exchange adjustments 266
At 31 December 2024 5,875
Carrying amount at 31 December 2024 1,295
Carrying amount at 31 December 2023 2,693
14. Right of Use Assets and Lease Liabilities
In May 2022, Zinnwald Lithium GmbH entered into a commercial lease agreement
and office and core shed property in Freiberg, Germany. The duration of the
lease is for 2 years and expired in April 2024. The instalments for the
lease are €12,000 per month, fixed for the duration of the lease. The
right of use asset and lease liability was recognised on 1 May 2022 on
inception of the lease.
In May 2024, Zinnwald Lithium Services GmbH entered into two new commercial
lease agreements for an office in Dresden and a Core Shed in Altenberg. The
duration of both leases is for 3 years with no break clauses and expire in
April 2027. The Dresden lease can be renewed for two further 3-year periods in
2027 and 2030 The Altenberg lease can be renewed for a further 3-year period
in 2027 and a further 4-year period in 2030. The monthly combined leases
instalments are €10,515 per month, fixed for the duration of the leases.
The right of use asset and lease liability for each new leases were recognised
on 1 May 2024on inception of the leases. Movements in the year are shown as
follows:
Group Leases expired in the year New Leases in the year Total
€ € €
Right of Use Asset
At 1 January 2023 185,285 - 185,285
Depreciation (139,154) - (139,154)
At 31 December 2023 46,131 - 46,131
Initial recognition in the year - 360,146 360,146
Depreciation (46,131) (80,580) (126,711)
At 31 December 2024 - 279,566 279,566
Lease Liability
At 1 January 2023 187,944 - 187,944
Interest charged in the year 3,851 - 3,851
Lease payments in the year (144,000) - (144,000)
At 31 December 2023 47,795 - 47,795
Initial recognition in the year - 360,146 360,146
Interest charged in the year 205 7,313 7,518
Lease payments in the year (48,000) (84,120) (132,120)
At 31 December 2024 - 283,339 283,339
- Recognised in short-term payables - 118,652 118,652
- Recognised in payables > 1 year - 164,887 164,887
15. Investments
Company 2024 2023
€ €
Investments in subsidiaries 14,523,374 14,523,374
Investments in subsidiaries are recorded at cost, which is the fair value of
the consideration paid.
Movement in non-current investments
Shares in group undertakings
Cost
At 1 January 2023 14,523,375
Disposals (1)
At 31 December 2023 and 31 December 2024 14,523,374
Carrying amount
At 31 December 2023 and 31 December 2024 14,523,374
The disposal in 2023 relates to the sale of the €1 share capital of Erris
Zinc Ltd to Ocean Capital Partners in June 2023.
16. Trade and other receivables - credit risk
Fair value of trade and other receivables
The directors consider that the carrying amount of trade and other receivables
is equal to their fair value.
17. Financial Instruments
Group Company
2024 2023 2024 2023
€ € € €
Financial instruments at amortised cost
Trade and other receivables 235,783 221,114 26,781,242 15,052,474
Cash and bank balances 5,216,085 14,306,191 2,964,450 13,724,866
5,451,868 14,527,305 29,745,692 28,777,340
Financial liabilities at amortised cost
Trade and other payables 1,106,584 1,469,564 129,058 236,118
1,106,584 1,469,564 129,058 236,188
18. Trade and other receivables
Group Company
2024 2023 2024 2023
Amounts falling due greater than one year: € € € €
Amounts owed by group undertakings - - 26,642,540 -
Amounts falling due within one year:
Amounts owed by group undertakings - - - 15,031,909
Trade receivables 439 4,418 - -
Other receivables 235,344 216,696 23,576 20,566
Prepayments and accrued income 135,359 136,349 55,961 122,622
371,142 357,463 79,537 15,175,098
Other receivables primarily comprise VAT recoverable, which were received
following the year end. The Company has reclassified its intercompany loan
receivable to greater than one year from 2024 onwards.
The carrying amounts of the Group and Company's trade and other receivables
are denominated in the following currencies:
Group Company
2024 2023 2024 2023
Euros 203,495 210,328 7,371 575,045
British Pounds 167,647 147,135 26,714,706 14,600,052
371,142 357,463 26,722,077 15,175,097
19. Trade and other payables
Group Company
2024 2023 2024 2023
Amounts falling due within one year: € € € €
Trade payables 343,391 234,817 18,430 94,945
Other taxation and social security 61,465 54,082 40,231 35,022
Other payables 61,234 30,892 - 275
Accruals and deferred income 640,494 1,149,773 70,397 105,876
1,106,584 1,469,564 129,058 236,118
All Trade payables have been settled since the year end.
The carrying amounts of the Group and Company's current liabilities are
denominated in the following currencies:
Group Company
2024 2023 2024 2023
Euros 808,725 1,144,295 - 64
British Pounds 297,859 325,268 129,058 236,055
1,106,584 1,469,563 129,058 236,118
20. Deferred taxation
The following are the major deferred tax liabilities and assets recognised by
the group and company, and movements thereon:
Group Liabilities Liabilities
2024 2023
€ €
Zinnwald Lithium intangible assets - fair value adjustment 1,382,868 1,382,868
The deferred tax liability set out above relates to a 25% provision made on
the fair value uplift of the company's acquisition of control of Zinnwald
Lithium GmbH.
21. Retirement benefit schemes
Defined contribution scheme 2024 2023
€ €
Charge to profit or loss in respect of defined contribution schemes 63,370 64,571
A defined contribution pension scheme is operated for all qualifying
employees. The assets of the scheme are held separately from those of the
group in an independently administered fund.
22. Share based Incentives
The Directors believe that the success of the Group will depend to a
significant degree on the performance of the Group's senior management team.
The Directors also recognise the importance of ensuring that the management
team are well motivated and identify closely with the success of the Group.
The Company adopted an initial Share Option Plan in December 2017 and will
continue to issue options to key employees, consultants and Non-Executive
Directors. In October 2020, the Company's shareholders approved additional
short-term and long-term incentive schemes for Executive Management, the key
terms of which are detailed in the Remuneration Committee report.
Share Option Plan (2017)
Movements in the number of share options, under the Share Option Plan (2017),
outstanding and their related weighted average exercise prices are as follows:
Year ended 31 December 2024 Year ended 31 December 2023
Average exercise price (£/share) Number of Options Average exercise price (£/share) Number of Options
At beginning of year £0.1487 6,650,000 £0.1748 4,200,000
Granted during the year £0.0675 4,350,000 £0.1041 2,450,000
Lapsed during the year £0.0675 (133,332) - -
Exercised during the year - - - -
At end of year £0.1172 10,866,668 £0.1487 6,650,000
Exercisable at the year end 7,283,335 3,683,333
Weighted average remaining exercise period, years 3.06 3.44
Option classification
Issue Date No of Options Exercise Price Expiry Date
29 October 2020 200,000 £0.0500 28 October 2025
15 January 2022 4,000,000 £0.1810 15 January 2027
23 March 2023 2,450,000 £0.1041 23 March 2028
15 January 2024 4,216,668 £0.0675 15 January 2029
10,866,668 £0.1172
RSU Scheme (2020)
Movements in the number of RSUs, under the RSU Plan (2020), outstanding and
their related weighted average exercise prices are as follows
Year ended 31 December 2024 Year ended 31 December 2023
Average exercise price (£/share) RSUs Average exercise price (£/share) RSUs
Beginning of Period n/a 5,316,310 n/a 1,909,531
Granted n/a 4,228,475 n/a 3,406,779
Lapsed n/a - n/a -
Exercised £0.0711 (1,909,531) - -
At end of period n/a 7,635,254 n/a 5,316,310
Weighted average remaining exercise period, years 0.68 0.80
RSU Classification
Issue Date No of RSUs Vesting date
23 March 2023 3,409,779 23 March 2025
15 January 2024 4,228,475 15 January 2026
7,635,254
PSU Scheme (2020)
Movements in the number of PSUs, under the PSU Plan (2020), outstanding and
their related weighted average exercise prices are as follows
Year ended 31 December 2024 Year ended 31 December 2023
Average exercise price (£/share) PSUs Average exercise price (£/share) PSUs
Beginning of Period n/a - n/a -
Granted n/a 4,500,000 n/a -
Lapsed n/a - n/a -
Exercised - - - -
At end of period n/a 4,500,000 n/a -
Weighted average remaining exercise period, years 1.04 -
PSU Classification
Issue Date No of PSUs Vesting date
15 January 2024 4,500,000 15 January 2026
4,500,000
23. Share based payment transactions
Group Company
2024 2023 2024 2023
€ € € €
Expenses recognised in the year
Options issued under the Share Option Plan (2017) 201,811 174,633 201,811 174,633
RSUs issued under the RSU Scheme (2020) 381,834 353,993 381,834 353,993
PSUs issued under the PSU Scheme (2020) 105,232 - 105,232 -
688,877 528,626 688,877 528,626
Awards made under the various share incentive schemes will be expensed over
the relevant vesting periods for each scheme. Options and PSUs have been
expensed based on a Black Scholes calculation using an option life of 5 years
and a risk-free interest rate of 3.9%. The Company has used a volatility
rate of 65.6% looking back 3 years from the date of grant to account for the
material distorting event of the Company's readmission to AIM in October 2020
following its reverse takeover acquisition of the Zinnwald Project. The
Company will use a 4 year look-back for the grants made in January 2025 and
thereafter a 5 year look back for all future grants going forward.
24. Share Capital
Group and Company
2024 2023
Ordinary share capital € €
Issued and fully paid
474,536,675 ordinary shares of 1p each 5,377,253 5,365,379
5,377,253 5,365,379
The Group's share capital is issued in GBP £ but is converted into the
functional currency of the Group (Euros) at the date of issue of the shares.
Reconciliation of movements during the year: Ordinary Number Ordinary
Value
€ €
Ordinary shares of 1p each
At 1 January 2023 473,524,624 5,365,379
Issue of fully paid shares (vesting of RSUs) 1,012,051 11,874
At 31 December 2023 474,536,675 5,377,253
25. Share Premium account
Group Company
2024 2023 2024 2023
€ € € €
At beginning of year 39,403,810 20,289,487 39,403,810 20,289,487
Issue of new shares - 19,282,326 - 19,282,326
Exercise of share options / RSUs 72,545 - 72,545 -
Share issue expenses - (168,003) - (168,003)
39,476,355 39,403,810 39,476,355 39,403,810
26. Other reserves
Merger reserve Share based payment reserve Translation reserve Total
Group € € € €
At 1 January 2023 688,731 679,074 62 1,367,867
Additions - 528,626 38 528,664
At 31 December 2023 688,731 1,207,700 100 1,896,531
Share Option charge for the year - 688,877 - 688,877
Release of RSU provisions - (159,280) - (159,280)
Lapsed share incentives - (122,343) - (122,343)
Other additions - - 65 65
At 31 December 2024 688,731 1,614,954 165 2,303,850
Share based payment reserve Translation reserve Total
Company € € €
At 1 January 2023 679,074 62 679,136
Additions 528,626 38 528,664
At 31 December 2023 1,207,700 100 1,207,800
Share Option charge for the year 688,877 - 688,877
Release of provisions (159,280) - (159,280)
Lapsed share incentives (122,343) - (122,343)
Other additions - 65 65
At 31 December 2024 1,614,954 165 1,615,119
27. Retained earnings
Group Company
2024 2023 2024 2023
€ € € €
At the beginning of the year (6,817,222) (4,174,717) (2,787,077) (1,917,521)
Loss for the year (2,735,589) (2,642,505) 278,145 (869,556)
Lapsed share incentives 122,343 - 122,343 -
At the end of the year (9,430,468) (6,817,222) (2,386,589) (2,787,077)
28. Financial commitments, guarantees and contingent liabilities
Bacanora Royalty Agreement
The company and Bacanora entered into on completion of the Acquisition a
royalty agreement which provides that the Company agrees to pay Bacanora a
royalty of 2 per cent. of the net profit received by the company pursuant to
its 50 per cent. shareholding in Zinnwald Lithium GmbH ("ZLG") and earned in
relation to the sale of lithium products or minerals by ZLG's projects on the
Zinnwald and Falkenhain licence areas. The royalty fee shall be paid in Euros
and paid by ZLG half yearly. The agreement is for an initial term of 40 years
and shall automatically extend for additional 20 year terms until mining and
processing operations cease at ZLG's projects at the Zinnwald and Falkenhain
licence areas. The company has undertaken to Bacanora to abide by certain
obligations in relation to ZLG's projects at the Zinnwald and Falkenhain
licence areas such as complying with applicable laws and ensure that these
projects are operated in accordance with the underlying licences and
concessions granted to Zinnwald Lithium. The company shall have the right,
but not the obligation, to extinguish at any time its right to pay a royalty
fee to Bacanora prior to the expiry of the term by paying a one-off payment of
€2,000,000.
Whilst the Directors acknowledge this contingent liability, at this stage, it
is not considered that the outcome can be considered probable or reasonably
estimable and hence no provision has been made in the financial statements.
The Directors note that the Royalty is only applicable to 50% of ZLG's
production and does not apply to the additional 50% of ZLG acquired by the
Company in June 2021. The Directors also note that the Royalty obligation
remains due to Bacanora, which now a wholly owned subsidiary of Ganfeng
Lithium Limited.
Osisko Royalty Agreements
As part of the sale of Erris Zinc Ltd to Ocean Capital Partners on 13 June
2023, the historic royalty due by the group to Osisko Gold Royalties was
novated to Erris Zinc ahead of completion. Accordingly, this historic
contingent liability has now been removed from the group. The Osisko royalty
did not apply to the Zinnwald Lithium project.
29. Agreements with Ocean Capital Partners
Under the terms of the sale of Erris Zinc Limited to Ocean Capital Partners on
13 June 2023, the Company was granted a 1% Net Smelter Royalty and a
€200,000 cash payment due six months after the start of commercial
production. As agreed in the Sale and Purchase Agreement, the company also
has the right to buy Erris Zinc Ltd back for €1 if the additional
exploration spend of €100,000 over 2024 to 2025 is not made by March 2025.
This deadline has been extended by mutual agreement to August 2025, and it has
been confirmed that the licenses remain in good standing. Whilst the Directors
acknowledge these contingent assets, at this stage, it is not considered that
the outcome can be considered certain to be recognised and receivable and
hence no asset has been recognised in the financial statements.
30. Events after the reporting date
On 31 January 2025, the Company made a grant of a total of 2,624,814 RSUs and
3,600,000 Options under the Company's Long-Term Incentive Plans relating to
performance in 2024, and a total of 694,081 PSUs relating to performance
from 1 January 2022 to 31 December 2024. The RSUs and PSUs were issued to
Executive Management under the relevant schemes approved by shareholders in
October 2020. The Options were primarily issued to Employees and Consultants
under the terms of the Option Scheme approved by shareholders in 2017.
31. Related party transactions
In 2024, the Company engaged Jeremy Martin in a consultancy agreement to
provide specific technical support specific technical support to the
operational team with the development of the resource and processing parts of
the Project's flowsheet, in light of his professional qualifications and
experience (further detail is included in the report of the Remuneration
Committee). No consultancy fees or expenses were incurred with Related
Parties in 2023.
32. Cash (used in)/generated from group operations
2024 2023
€ €
Loss for the year after tax (2,735,589) (2,642,505)
Adjustments for:
Investment income (380,607) (282,229)
Lease interest 7,518 3,851
Depreciation of property, plant and equipment 84,421 53,741
Depreciation of Right of Use Assets 126,711 139,154
Amortisation of intangible assets 2,010 1,662
Loss on disposal of subsidiary - 3,672
Equity-settled share-based payment expense 688,877 528,626
Movements in working capital:
(Increase) in trade and other receivables (72,843) (52,089)
(Decrease) / increase in trade and other payables (303,816) 886,653
Cash used in operations (2,583,318) (1,359,464)
33. Cash (used in)/generated from operations - company
2024 2023
€ €
Profit / (Loss) for the year after tax 278,145 (869,556)
Adjustments for:
Investment income (378,657) (282,229)
Group loan interest (1,742,846) (708,861)
Depreciation and impairment of property, plant and equipment 1,463 1,566
Loss on disposal of subsidiary - 1
Equity-settled share-based payment expense 688,877 528,626
Movements in working capital:
Decrease / (Increase) in trade and other receivables 4,484 (97,029)
(Decrease) / increase in trade and other payables (47,895) 125,364
Cash used in operations (1,196,429) (1,302,118)
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