REG - Zinnwald Lithium PLC - Half-year Report
15/09/2022 07:00
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RNS Number : 5138Z Zinnwald Lithium PLC 15 September 2022
Zinnwald Lithium plc / EPIC: ZNWD.L / Market: AIM / Sector: Mining
15 September 2022
Zinnwald Lithium plc
("Zinnwald Lithium" or the "Company")
Interim Results
Zinnwald Lithium plc, the German focused lithium development company, is
pleased to announce its Interim Results for the period ended 30 June 2022.
Zinnwald Lithium's CEO, Anton du Plessis, will be providing a live investor
presentation at 10:00am BST today relating to the Company's plans to advance
its integrated Zinnwald Lithium Project in Germany. Investors and potential
investors can sign up to join the meeting at:
https://www.investormeetcompany.com/zinnwald-lithium-plc/register-investor
(https://www.investormeetcompany.com/zinnwald-lithium-plc/register-investor) .
OVERVIEW
· Revised development path for the Project to increase its scale and
pivot it to battery-grade lithium hydroxide to better align with the
requirements of European off-takers
· Considerable work undertaken during the period ahead of the PEA,
which was published post period end on 7 September
· PEA highlighted robust economics: pre-tax NPV8 of US$1,605m, IRR of
39.0%, $192m average annual EBITDA and a payback of 3.3 years
· Annual production capacity of 12,000t LiOH in the PEA compares to
annual production of 5,000t lithium fluoride under the previous technical
concept
· Significant progress made in designing a project that generates low
or "zero" waste and where energy efficiency and minimisation of CO2 emissions
is core
· Post period end, commenced drilling campaigns at the Zinnwald
deposit, which will assist with detailed mine planning, and at the Falkenhain
exploration license, which could represent important upside for the Project
· Ongoing strong lithium market in 2022 driven by EV and battery
storage demand
· Well-funded into 2023 with cash of €5.4m as at the date of this
report
· Extremely active schedule ahead to crystallise the value of the
Project as it works towards delivering a BFS by the end of 2023
CHAIRMAN'S STATEMENT
The half year to the end of June has been extremely busy for Zinnwald
Lithium. As is typical for development stage projects such as our integrated
lithium hydroxide project ('the Project') in Germany, some of the work
undertaken is not always immediately visible to investors as large pieces need
to be completed and put in context before publication. The Preliminary
Economic Assessment ('PEA') that we published post period end on 7 September
is an example of this and is the culmination of a tremendous amount of
underlying work by both the management team and external consultants.
As we have previously stated, we had identified the need to revise the
development path for the Project by focusing on increasing its scale in terms
of annual output, as well as pivoting it to focus on battery-grade lithium
hydroxide as a primary product to better align with the requirements of
European off-takers and overall developments in the battery market. The
results of the PEA support this approach as highlighted by the robust
economics showing a headline pre-tax NPV8 of US$1,605m, IRR of 39.0%, $192m
average annual EBITDA and a payback of just 3.3 years. Furthermore, annual
production capacity of 12,000t LiOH in the PEA compares to annual production
of 5,000t lithium fluoride under the previous technical concept. In addition,
significant progress has been made in designing a project that generates low
or "zero" waste and where energy efficiency and minimisation of CO2 emissions
is core.
Underlying the PEA was detailed work on the flow sheet to produce a battery
grade lithium hydroxide product. Producing battery grade lithium products from
zinnwaldite does differ from the process for producing these products from
spodumenes, which represent the bulk of current hard rock sources of lithium.
However, all aspects of the flow sheet incorporate tried and tested
technologies applied in many other areas of mining. In addition, relative to
the "typical" spodumene process, the flow sheet is less energy intensive and
has a higher overall recovery than typical spodumene-based processes. The
development of the flow sheet has been based on extensive work, including
pilot scale test work.
Alongside the PEA, the Company continues to progress on multiple fronts. Not
only have we commenced an in-fill drilling campaign at the Zinnwald deposit,
which will assist with detailed mine planning but we also started an
exploration drilling programme at our Falkenhain exploration license, which is
located just 5km from the core Zinnwald deposit. A detailed review of
historic drill data from this area indicated the clear potential for
significant lithium resource at this location which, if it can be proven,
could represent important upside for the Project.
In terms of the lithium market in 2022 thus far, pricing has continued to be
extremely strong with spot prices for LiOH reaching levels in excess of
US$70,000 / ton and contract prices reported by current producers such as SQM
and Elkem of between US$35,000 and US$40,000 / ton. Many commentators point to
an expectation for a continued supply deficit, which is supportive for
pricing. EV demand remains robust and growing strongly despite broader
economic headwinds. The PEA assumed a long-term price of US$22,500/t for
LiOH, which we believe to be very defensible given the wider pricing backdrop
in the sector.
It is also worth mentioning the importance of delivering sustainable lithium
to the market. Currently, Europe imports all of the lithium needed for its
rapidly growing battery industry, but to achieve its NetZero targets, it must
develop its own resources. Our focus is on developing responsible mining and
processing operations which help deliver these NetZero targets.
Our Project enjoys a number of key advantages that support this strategy: it
is located close to its end markets meaning reduced transport emissions; it
has access to existing infrastructure; it will bring industrial activity and
jobs back to a region long steeped in mining history; it aims to utilise
sustainable technologies and processes including the use of electric mining
equipment; and it has the potential to produce a meaningful volume of a
valuable commodity that supports the green energy transition at a competitive
cost over a long period of time.
In terms of financial markets, share prices of junior mining companies have
been under considerable pressure in the year thus far as investors have
grappled with risks of an economic downturn exacerbated by the conflict in
Ukraine and the resulting energy crisis. However, we are confident that the
inherent strengths of our Project as enumerated in the PEA will ultimately be
reflected in our market value as we continue to deliver against our plan.
Financials
The Company continues to maintain its extremely disciplined approach to
expenditure and cash management and as such is well funded into 2023, with
cash of €5.4m as at the date of this report.
Outlook
As we reflect on where we are now post the publication of the PEA, we are
extremely proud of having moved Zinnwald from a company with 50% of a 5,000
tonne niche lithium product project, to full ownership of a 12,000 tonne
lithium hydroxide one with what we hope is the scope to expand still further.
Looking ahead, we have an extremely active work schedule. We are already
working on a Bankable Feasibility Study, which we intend to deliver by the end
of 2023, and will continue to evaluate processing and manufacturing options to
ensure the Project achieves economic and environmental excellence; our aim is
to become one of the more sustainable and investable lithium projects
worldwide.
In the short term we continue to make progress on our drill programmes as well
as having an active schedule of mineral and chemical processing test work to
further refine these aspects of the Project. Permitting is also another key
work stream and progress on this is key to meeting the timelines that we have
laid out.
We look forward to updating the market on progress on all of these fronts.
Jeremy Martin
Non-Executive Chairman
STRATEGIC REPORT
Highlights
6 Months to 30 June 2022
· Testwork confirmed viability to produce at least 10,000 tonnes
annually of Lithium Hydroxide
· Testwork confirmed viability to produce economically significant
by-products
· Hyper-spectral scanning tested to produce accurate quantitative
information on ore types and ore grades
· Commenced discussions with owners of local infrastructure
· Engaged SRK Consulting (UK) Ltd to provide competent person support
· Joined the EU funded Horizon Europe "Exploration Information Systems"
project
· Strengthened the operational team in Germany
Post period end to 14 September 2022
· Completion of PEA on revised Project plan showing robust economic
results.
· Lithological ore-sorting proven to be viable in pilot tests carried
out by Tomra
· Commencement of in-fill drilling campaign at Zinnwald license
· Commencement of exploration drilling campaign at Falkenhain
· Entered into Option Agreement to acquire more land in vicinity of
Altenberg
Operational Review
The first half of 2022 saw Zinnwald Lithium Plc (the "Company") and its wholly
owned subsidiary, Deutsche Lithium GmbH ("DL" and together the "Group")
continue with the revised development strategy for its Zinnwald Lithium
Project (the "Project"). The Group's management team took the decision
following the completion of the acquisition of the remaining 50% of DL in June
2021 to reposition the Project to better reflect the significant and rapid
developments in the Global and European Lithium markets.
The original scope of the Project, as defined in its 2019 NI 43-101
feasibility study ("2019 FS"), was based on a smaller scale, niche end-product
(Lithium Fluoride) project designed to be internally financed and integrated
to the original owners' operational strategy. The Project's revised
strategy is now to focus on a larger scale operation that produces
battery-grade Lithium Hydroxide Monohydrate ("LiOH") products; to optimise the
Project from a cost perspective, and also 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 will now be located near to the
deposit itself.
To progress this revised strategy, the Group has completed a number of steps
in the further definition, design and study work required. Some of these
items were completed during the period of this report and others after
period-end, all of which culminated in the publication on 7th September 2022
of the "Preliminary Economic Assessment ("PEA") for the revised Zinnwald
Lithium Project.
Six months to 30 June 2022
Hydrometallurgy - Production of battery-grade LiOH and co-products
In March 2022, the Company announced the successful completion of pilot scale
testwork that demonstrated the technical and economic viability of producing
high purity (>99.9% purity) lithium hydroxide from Zinnwaldite concentrate
is technically and economically viable. The test work also confirmed the
potential to produce economically significant amounts of commercially saleable
co-products, such as high-purity potassium sulphate ("SOP") and precipitated
calcium carbonate ("PCC").
In these tests, almost 50kg of battery grade LiOH was produced out of several
tons of Zinnwaldite concentrate. The test work was conducted in Germany by a
leading industry specialist, K-UTEC AG Salt Technologies ('K-UTEC') and
verified by a third-party laboratory through chemical and physical analysis.
The lithium recovery from the Zinnwaldite concentrate to the LiOH was proven
to be above 80% and comparable to lithium processes from other types of
lithium resources. Non-saleable side streams were proven to contain very low
amounts of soluble, possibly environmentally problematic elements.
The Company further commissioned K-UTEC to conduct an initial, scoping level
study on upgrading the SOP and PCC by-products of the process. This new study
will evaluate the commercial feasibility of the production of these high
purity by-products. These by-product credits already have a meaningful impact
on the operational cost economics of the Project, but could be even further
improved as, for instance, the price of high purity SOP has historically been
up to double that of fertilizer grade product.
Mining and Geometallurgy
TheiaX GmbH, a local German company, reported initial hyperspectral core
scanning tests on both existing drill core from previous drilling campaigns,
and crushed ore samples from the previous pilot tests. The hyperspectral
scanning produced clear quantitative information on Zinnwaldite (Li-mineral),
Muscovite, Clay minerals and Topaz from both the drill core and the crushed
product. In comparison to standard one metre assay intervals, the
hyperspectral imaging produced information on five cm intervals and detected
lower grade inclusions from the core giving a very clear indication that
online hyperspectral imaging could be used for value-based bulk or particle
sorting of crushed ore.
In a separate campaign, Metso: Outotec / Tomra tested the amenability of
Zinnwaldite ore for particle sorting. All Zinnwaldite lithologies, ore and
waste, were tested. Different lithologies could easily be distinguished and
hence particle sorting was found to be suitable for Zinnwald ore.
If successful, this could also lead to an increase in total Mineral Resources.
The current Mineral Resource excludes Ore Type 1 lenses thinner than two
meters due to processing cost per tonne waste rock mined. With better
understanding of the small-scale grade variation and application of sorting
process, it may be possible to lower the Li cut-off grade of Ore Type 1. In
addition, a considerable amount of lithium at the Project is contained in the
"Greisenized Granite" rock, which could potentially be included in Mineral
Resources. This material can be understood as an alteration halo surrounding
the Ore Type 1 and is estimated at 214 Mt at a Li grade of 1700 ppm. It is
currently not included in the Project's Mineral Resources of 40.4 million
tonnes (35.5 million tonnes measured and indicated plus 4.9 million tonnes
inferred), as set out in the PEA.
Pyrometallurgy
Calcination (roasting of pre-treated Zinnwaldite concentrate) testwork was
carried out by IBU-tec Advanced Materials AG. The calcination testwork focused
on pre-treatment of the concentrate with different additives, agglomeration
and roasting of the agglomerate. The test targeted the possibility of
utilising cheaper additives and a higher leach rate of lithium and potassium
from calcine. The tests for calcine leaching of the calcined material were
carried out by K-UTEC.
The tests indicated that Flue Gas Desulfurization ('FGD') Gypsum is suitable
for the purpose. FGD Gypsum is readily available and inexpensive and would
represent a cost saving versus using primary gypsum. The tests also showed an
increased lithium recovery rate of 90% (previously 87%) and an increased
potassium recovery rate of 70% (previously 50%) from Zinnwaldite ore compared
with what was demonstrated in the 2019 FS.
Access to Legacy Mining Infrastructure
In March 2022, the Company was granted access to portions of the existing
mining infrastructure in the vicinity of the Project for inspection purposes.
This infrastructure includes a 4km drainage tunnel, and disused ventilation
and access shafts, which potentially could be used as part of its
operations. The infrastructure was found to be in excellent condition and
easily accessible. The Company continues to develop its plans for the possible
utilisation of this infrastructure to beneficially impact the Project and is
also in discussion with the owners of the assets for access and usage.
ESG Matters
In line with its progressive ESG policy, the Company is committed to
delivering benefits to the local community. The Company has held several
meetings with different stakeholders regarding its plans for the future.
Members of the management team have met with local and provincial authorities
to keep them updated regarding progress and plans for the Project.
As part of the public engagement effort, an encouraging consultation and
information meeting was held in the village of Zinnwald in March 2022 to
explain the drill programme and plans to develop the Project. In order to
assist in keeping the public and the authorities informed about the Project, a
local project office has now been established for the duration of the drilling
campaign.
Occupational Health and Safety ('OHS')
As the team expands and new physical work stages advance, the OHS aspects have
been reconsidered. The Company targets zero incidents through training,
selection of work methods and continuous auditing.
Horizon Europe
In May 2022, the Company joined the "Exploration Information Systems" project,
part of the EU funded Horizon Europe Research and Innovation scheme. The
research project focuses on developing new exploration techniques that are
based on large datasets, artificial intelligence and deep learning methods to
identify new sources of raw materials. Precise techniques that can take
several factors into consideration to determine prospectivity of deposits, aim
to lead to more effective exploration decision making and consequently reduced
project development costs. The Company believes that such projects are
crucial in securing the necessary materials for future generations and is
proud to contribute to this effort by providing a case study site in Germany.
Management and Staffing in Germany
Dr Armin Mueller stepped down from his role as Managing Director of DL to
pursue other opportunities. He was succeeded by Dr Torsten Bachmann. Dr
Bachmann is Dipl.-Ing. of Environmental Technology and has a PhD in Chemistry.
He has over 15 years' experience in science and industry in the area of
photovoltaics and inorganic chemistry and long-term experience in the
management of national research projects. He was team leader in the "Lithium
Zinnwald Project" from 2011 to 2015 and since 2017 has been responsible for
"Chemical Processing" aspects of the Project.
In addition, the Company has further strengthened the team in Germany, adding
skills in several key disciplines including geology, mining, and logistics.
Post Balance Sheet events to September 2022
In-fill drilling at Zinnwald Lithium Deposit
In August 2022, the Company received its final permits and started an in-fill
drilling programme at the core Zinnwald Lithium license. The purpose of the
in-fill drilling programme is to study the mining scale variability of the ore
with the view of applying larger scale mining methods. The ultimate aim is to
accommodate greater mining capacity for expanded Li-product output.
Zinnwald Lithium has engaged SRK Consulting (UK) Ltd to provide competent
person support for the drill campaign and geometallurgy. The drilling is
being conducted by GEOPS Bolkan Drilling Services Ltd. The Company has also
leased and taken occupancy of new warehouse space in Freiberg that will be
used for core storage and core logging and processing of new drill core when
the drill programme commences. The facility is being outfitted with the latest
safe and environmentally friendly equipment.
Exploration drilling at Falkenhain Licence Area
In September 2022, the Company received its final permits and started an
exploration drilling programme at its Falkenhain Lithium license. This
exploration licence is located 7km north from the core Zinnwald License. The
licence area was historically extensively explored for occurrences of tin and
tungsten with drilling undertaken most recently from 1963 to 1990. The Company
has performed a detailed review of the historic data including assaying
samples of the surviving core from these campaigns. The outcome from this work
has identified the potential for a lithium resource. The Company has therefore
designed an exploration drill campaign of ten diamond drill holes to test the
historic drill data and better determine the resource potential of the
licence.
Option on Land in Altenberg
In August 2022, the Company announced that it had entered into an option
agreement with Projektgesellschaft Altenberg mbH, an entity owned by the town
of Altenberg in Germany, that gives the Company the right to acquire
approximately 14,000 square metres of industrial land in the Europark
industrial area near to Altenberg. The option agreement is valid until
August 2025. The land subject to the option agreement is adjacent to land
already owned by the Company and combined would bring the Company's total land
holding in this area to approximately 30,000 square metres. This industrial
land has the potential to be used for access and other operational aspects of
the Zinnwald Lithium Project.
Ore-sorting pilot test by Tomra
After successful preliminary test work, pilot ore-sorting tests were carried
out by Tomra in Hamburg, Germany. The pilot confirmed that >10 mm crushed
material particles can be effectively sorted with off-the-self ore-sorters.
The objective of these testwork campaigns is to reduce ore processing costs by
removing waste and low-grade material from the Mineral Processing circuit
before the expensive grinding, drying and magnetic separation stages, as well
as minimising the quantity of fine material produced as by-product.
Preliminary Economic Assessment
On 7th September 2022, the Company published its NI 43-101 standard
Preliminary Economic Study ('The Technical Report' or 'PEA') on the revised
Zinnwald Lithium Project. The full report is published on the Company's
website at
https://www.zinnwaldlithium.com/investors/reports-and-presentations/. The
economic analysis included in this Technical Report demonstrates the robust
economics and financial viability of the Project.
As shown below, the PEA demonstrates the financial viability of the Project at
an initial minimum design production rate of approximately 12,011 t/a LiOH
(battery grade 99.5 %). The Project is currently estimated to have a payback
period of 3.3 years. Cash flows are based on 100 % equity funding. The
economic analysis indicates a pre-tax NPV, discounted at 8 %, of approximately
US$ 1,605m and an Internal Rate of Return (IRR) of approximately 39%. Post-tax
NPV is approximately US$1,012m and IRR 29.3%.
PEA Key Indicators Unit Value
Pre-tax NPV (at 8 % discount) US$ m 1,605
Pre-tax IRR % 39.0%
Post-tax NPV (at 8 % discount) US$ m 1,012
Post-tax IRR % 29.3%
Simple Payback (years) Years 3.3
Initial Construction Capital Cost US$ m 336.5
Average LOM Unit Operating Costs (pre by-product credits) US$ per tonne LiOH 10,872
Average LOM Unit Operating Costs (post by-product credits) US$ per tonne LiOH 6,200
Average LOM Revenue US$ m 320.7
Average Annual EBITDA with by-products US$ m 192.0
Annual Average LiOH Production Tonnes per annum 12,011
LiOH Price assumed in model US$ per tonne $22,500
Annual Average SOP Production Tonnes per annum 56,887
Blended SOP Price assumed in model € per tonne 875
The Project described in this Technical Report includes an underground mine
with a nominal output of approximately 880,000 t/a ore at estimated 3,004 ppm
Li and 75,000 t/a barren rock. Ore haulage is via a 7km partly existing
network of underground drives and adits from the "Zinnerz Altenberg" tin mine
which closed in 1991. Processing including mechanical separation, lithium
activation, and lithium fabrication will be carried out at an industrial
facility near the village Bärenstein, in close proximity to the existing
underground mine access and an existing site for tailings deposition with
significant remaining capacity.
The nominal output capacity of the project is targeted at c. 12,000 t/a LiOH
with c. 56,900 t/a of SOP, which is used as a fertilizer, as a by-product.
Another by-product that is contemplated is PCC, a key filling material in the
paper manufacturing process. The estimated mine life covers >35 years of
production. The optimisation of mining methods has been a key consideration to
realise increased total mined tonnage from the Zinnwald mine. This includes
utilising more efficient techniques such as sub-level stoping and Avoca
wherever possible and in preference to the less efficient room and pillar
method.
Lithium Market in 2022
Building on an extremely strong performance in 2021, the lithium market in
2022 has continued to perform strongly with very high levels of spot prices
positively impacting contract pricing. There is a growing consensus around
the worsening Supply / Demand imbalance, which is generally accepted economic
pre-cursor to increased prices. In terms of what that means for long term
lithium hydroxide prices, back in Q3 2021 Benchmark forecast a price of
$12,110 long term, but this is before the step change in balance in the
market. In March 2022, Roskill forecast an inflation adjusted long term
price of $23,609 per tonne through to 2036 with a nominal rate of $33,200 by
2036.
The global lithium market is expanding rapidly due to an increase in the use
of lithium-ion batteries for electric vehicle and energy storage applications.
In recent years, the compound annual growth rate of lithium for battery
applications was over 22% and is projected by Roskill to be more than 20% per
year to 2028. This expansion is being driven by global policies to support
decarbonisation towards carbon neutrality via electrification, which is
underpinned by Carbon Emission Legislation (COP26, EU Green Recovery, Paris
Accord); Government regulation and subsidies; and Automakers commitment to
EVs. Global electric car sales totalled 4.2 million units in 2021, more than
double the level in 2020 and up ~ 200% versus 2019 with no slowdown
anticipated in 2022.
Benchmark Minerals highlighted that there are 282 Gigafactories at various
stages of production/ construction, up from only 3 in 2015 (by May 2022, this
number had gone over 300). If all these plants did come online in the
planned 10-year timeframe, it would equate to 5,777 GWh of battery capacity,
equivalent to 109 million EVs. But more relevantly it would require 5m
tonnes of Lithium each year, as compared with 480,000 tonnes produced in
2021. They noted that the lack of supply is not due to any geological
constraints but to a simple lack of capital investment to build future mines
and estimated $42bn needs to be spent by 2030 to meet demand for lithium.
In April 2022, the Belgium-based research university KU Leuven published a
report "Metals for Clean Energy" on behalf of Europe's metal industry group,
Eurometaux, and endorsed by the EU. This report explored in detail the
supply, demand and sustainability factors at play around critical raw
materials, especially in Europe. It noted that Europe's 2030 energy
transition goals would require 100-300kt of lithium rising to around 600-800kt
by 2050, equivalent to 3,500% of Europe's low consumption levels today. In
terms of direct European supply, Eurometaux comments that "Several projects
are subject to local community opposition (most visibly in Portugal, Spain,
and Serbia). Others are dependent on untested technologies to be viable or
have less certain economics. However, the EU has made it a strategic priority
to improve its self-sufficiency for lithium."
Ireland
The Company has retained its sole license at Abbeytown and has met all
expenditure requirements to maintain the license through to June 2023. The
license is being kept on care and maintenance, whilst the Company is seeking
either a partner or purchaser for the assets. No expenditure was made on the
license during the period.
Share Price performance in 2022
The Board shares the frustration of shareholders at the weakness of the
Company's share price in 2022. The wider equity markets, especially for
smaller companies, have been under sustained pressure in 2022 due to wider
macro-economic factors. Zinnwald has had two specific equity events that
occurred at the end of December 2021 (the distribution of 91m Zinnwald shares
owned by Bacanora Lithium Plc on completion of its takeover by Ganfeng Lithium
Ltd; and the expiration of the lock-in on the majority of the 50m Zinnwald
shares originally issued to creditors of the SolarWorld AG estate) which
resulted in there being a number of material shareholders that were unlikely
to be natural holders of the Company's stock. The Board understands that a
significant number of these shareholders have sold all or the majority of
their holdings over the course of 2022. The Board is grateful for the new
and existing shareholders that have absorbed this volume of stock.
Outlook
The Company has already commenced an infill drilling programme at the core
Zinnwald license with the objective of better defining the Resources and
Reserves that lie within the ore body, as well as determine the detailed early
years' mining plan. This will likely lead to revised Resource and Reserves
Estimate being included in the new Bankable Feasibility Study ("BFS") planned
for the re-scoped Project as defined in this PEA Study. The Company has also
commenced an exploration drilling campaign at its nearby Falkenhain license to
determine the potential for expansion of both the project's resources and the
production level. The Company's goal is to be able to publish this updated BFS
by the end of 2023, subject to appropriate financing.
The Company will continue to develop the technologies planned for its
processes. Individual processing methods and stages are well established in
mining and other industries. As the recognition of Zinnwaldite as a source for
battery metals is more recent, the application of methods such as
high-intensity magnetic separation has not previously been used in
beneficiation of this specific type of lithium ore but is utilised and well
established in the beneficiation of other ore types. Evaporators and
crystallizers are common processing methods in the production of fertiliser
salts. The Company has also completed the initial phases of bulk and particle
sorting techniques designed to increase the type of resource available to the
Project. The Company will also continue to refine its plans for reducing its
overall CO2 footprint and operating costs, such as via the use of electric
mining equipment.
The Company has already commenced its EIA and other permit application
process, including baseline studies and other reports. This will be the
highest priority area over the coming quarters.
The Company will continue to liaise with individual, State and Federal owners
of local infrastructure regarding access rights and/or acquisition. The
Company will also advance negotiations for service contracts for electric
power and natural gas with local power companies as well as supply contracts
for required reagents and materials.
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 most
of the exploration expenditure, including that of its subsidiary Deutsche
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 or disposes of its
historic exploration project in Ireland.
During the period, the Group made a loss before taxation of €1.4m compared
with a loss of €0.9m for the period ended 30 June 2021. Whilst the overall
amounts are relatively similar, the underlying expenditure areas are
materially different. In the six months to 30 June 2022, administrative
expenses increased to €0.9m compared with €0.4m in the previous period.
This is due in part to the Company consolidating the costs of Deutsche Lithium
in the current period, which it did not do in the comparator as it was still a
Joint Venture. The Group has also increased its overall staffing levels to
reflect the sole ownership of the Project and the increased workstreams to
advance the Project. There was also a share-based payment expense of €0.6m
in the current period, arising from the issuance of new Options and RSUs in
January 2022. In the previous period to 30 June 2021, there was a project
impairment charge of €1.55m for Abbeytown together with the revaluation gain
of €1.03m on the original investment in Deutsche Lithium, such costs being
one off in that period.
The Total Net Assets of the Group increased to €21.7m at 30 June 2022 from
€16.8m at 30 June 2020, due to increased capital investment in the
Intangible Assets of the Project, as part of the work on the PEA together with
increased cash balances following the fund raise in December 2021.
The closing cash balance for the Group at the period end was €6.1m which is
greater than the €2.9m at the end of the same period in the prior year, due
primarily to the funds raised in December 2021, offset by ongoing development
and operational expenditure. As at the date of this report, the Group's cash
balance is €5.4m.
On behalf of the board
Cherif Rifaat,
CFO and Director
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2022
30 June 2022 30 June 2021
Unaudited Unaudited
Notes € €
Continuing operations
Cost of sales - (13,797)
Ireland and Sweden exploration projects impairment - (1,549,875)
Administrative expenses (858,953) (357,579)
Other operating income 2,187 -
Share based payments charge 17 (591,099) -
Operating Loss 5 (1,447,865) (1,921,251)
Revaluation gain on original joint venture holding 6 - 1,038,252
Share of loss of joint venture 7 - (52,911)
Finance income 8 18 422
Loss before taxation (1,447,847) (935,488)
Tax on loss - -
Loss for the financial period (1,447,847) (935,488)
Other Comprehensive Income - -
Total comprehensive loss for the period (1,447,847) (935,488)
Earnings per share from continuing operations attributable to the owners of 9
the parent company
Basic (cents per share) (0.49) (0.44)
Diluted (cents per share) (0.48) (0.44)
Total loss and comprehensive loss for the year is attributable to the owners
of the parent company.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
30 June 2022 30 June 2021 31 December 2021
Unaudited Unaudited Audited
Notes € € €
Non-current assets
Intangible Assets 10 16,852,308 8,303,034 16,165,085
Goodwill 11 - 5,531,474
Property, plant and equipment 12 188,062 46,974 48,621
17,040,370 13,881,482 16,213,706
Current assets
Trade and other receivables 13 194,918 122,137 121,845
Cash and cash equivalents 14 6,020,170 2,908,955 8,291,991
6,215,088 3,031,092 8,413,836
Total Assets 23,255,458 16,912,574 24,627,542
Current liabilities
Current tax liabilities - - 23,802
Trade and other payables 15 123,324 143,974 614,858
123,324 143,974 638,660
Net current assets 6,091,764 2,887,118 7,715,176
Total liabilities 123,324 143,974 638,660
Total assets less current liabilities 23,132,134 16,768,600 23,988,882
Deferred tax liability (1,382,868) - (1,382,868)
Net Assets 21,749,266 16,768,600 22,606,014
Equity
Share capital 16 3,316,249 2,867,979 3,316,249
Share premium 20,289,487 14,112,654 20,289,487
Other reserves 1,413,880 818,654 822,781
Retained earnings (3,270,350) (1,030,687) (1,822,503)
Total equity 21,749,266 16,768,600 22,606,014
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2022
Share Capital Share premium account Other reserves Retained earnings Total
€ € € € €
Balance at 1 January 2022 3,316,249 20,289,487 822,781 (1,822,503) 22,606,014
Six months ended 30 June 2022
Loss and total other comprehensive income for the period - - - (1,447,847) (1,447,847)
Total comprehensive income for the period - - - (1,447,847) (1,447,847)
Credit to equity for equity settled - - 591,099 - 591,099
Total transactions with owners directly in equity - - 591,099 - 591,099
Balance at 30 June 2022 3,316,249 20,289,487 1,413,880 (3,270,350) 21,749,266
Share Capital Share premium account Other reserves Retained earnings Total
€ € € € €
Balance at 1 January 2021 2,278,155 7,362,699 814,281 (95,199) 10,360,476
Six months ended 30 June 2021
Loss and total other comprehensive income for the period - - - (935,488) (935,488)
Total comprehensive income for the period - - - (935,488) (935,488)
Issue of share capital 589,824 6,749,955 - - 7,339,779
Credit to equity for equity settled share-based payments - - 3,833 - 3,833
Total transactions with owners recognised directly in equity 589,824 6,749,955 3,833 - 7,343,612
Balance at 30 June 2021 2,867,979 14,112,654 818,654 (1,030,687) 16,768,600
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2022
30-Jun-22 30-Jun-21
Unaudited Unaudited
Notes
Cash flows from operating activities
Cash used in operations 18 (1,427,833) (390,310)
Net cash outflow from operating activities (1,427,833) (390,310)
Cash flows from investing activities
Investment in Deutsche Lithium as Joint Venture - (735,800)
Purchase of remaining 50% of Deutsche Lithium - (1,500,000)
Cash acquired on purchase of Deutsche Lithium - 486,213
Exploration expenditure in Germany (687,664) -
Exploration expenditure in Ireland and Sweden - (3,764)
Purchase of property, plant and equipment (180,603) -
Proceeds from sale of tangible assets 26,471
Interest received 18 422
Net cash used in investing activities (841,778) (1,752,929)
Cash flows from financing activities
Proceeds from the issue of shares - 58,717
Net cash generated from financing activities - 58,717
Net (decrease)/increase in cash and cash equivalents (2,269,611) (2,084,522)
Cash and cash equivalents at beginning of period 8,291,991 4,846,528
Effect of foreign exchange rates (2,210) 146,949
Cash and cash equivalents at end of period 14 6,020,170 2,908,955
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2022
1. Accounting Policies
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 30 June 2022.
Name of undertaking Registered office Nature of business Class of shares held Direct holding Indirect holding
Deutsche Lithium Holdings Ltd United Kingdom Exploration Ordinary 100.0% -
Deutsche Lithium GmbH Germany Exploration Ordinary - 100.0%
Erris Zinc Limited Ireland Exploration Ordinary 100.0% -
The registered office address of Deutsche Lithium Holdings Ltd (formerly Erris
Resources (Exploration) Ltd) is 29-31 Castle Street, High Wycombe, Bucks, HP13
6RU.
The registered office address of Deutsche Lithium GmbH is at Am
Junger-Loewe-Schacht 10, 09599, Freiberg, Germany
The registered office address of Erris Zinc Ltd is The Bungalow, Newport Road,
Castlebar, Co. Mayo. F23YF24.
1.1 Basis of preparation
These unaudited interim condensed consolidated financial statements have been
prepared under the historical cost convention and in accordance with the AIM
Rules for Companies. As permitted, the Company has chosen not to adopt IAS 34
"Interim Financial Statements" in preparing this interim financial
information. The unaudited interim condensed financial statements should be
read in conjunction with the annual report and financial statements for the
year ended 31 December 2021, which 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 unaudited interim condensed consolidated financial statements do not
constitute statutory financial statements within the meaning of the Companies
Act 2006. They have been prepared on a going concern basis in accordance with
the recognition and measurement criteria of UK adopted international
accounting standards. Statutory financial statements for the year ended 31
December 2021 were approved by the Board of Directors on 22 February 2022 and
delivered to the Registrar of Companies. The report of the auditor on those
financial statements was unqualified.
The same accounting policies, presentation and methods of computation are
followed in these unaudited interim condensed financial statements as were
applied in the preparation of the audited financial statements for the year
ended 31 December 2021.
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 Deutsche Lithium,
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 30 June 2022 was
€1.16189.
1.2 Basis of consolidation
The consolidated financial statements incorporate those of Zinnwald Lithium
Plc and all of its subsidiaries, as listed above (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 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.
1.3 Going concern
At the time of approving the financial statements, the directors have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. The Company had a cash
balance of €6.0m at the period end and keeps a tight control over all
expenditure. Thus, the going concern basis of accounting in preparing the
Financial Statements continues to be adopted.
1.4 Intangible assets
Capitalised Exploration and Evaluation costs
Capitalised Exploration and Evaluation Costs consist of direct costs, licence
payments and fixed salary/consultant costs, capitalised in accordance with
IFRS 6 "Exploration for and Evaluation of Mineral Resources". The Group
recognises expenditure in Exploration and Evaluation assets when it determines
that those assets will be successful in finding specific mineral assets.
Exploration and Evaluation assets are initially measured at cost.
Exploration and Evaluation Costs are assessed for impairment 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.
1.5 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 Nil
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.
1.6 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.
1.7 Joint Arrangements
Up to 24 June 2021, the Group's core activities in relation to the Zinnwald
Lithium project were conducted through joint arrangements in which two or more
parties have joint control. A joint arrangement is classified as either a
joint operation or a joint venture, depending on the rights and obligations of
the parties to the arrangement.
Joint operations arise when the Group has a direct ownership interest in
jointly controlled assets and obligations for liabilities. The Group does not
currently hold this type of arrangement.
Joint ventures arise when the Group has rights to the net assets of the
arrangement. For these arrangements, the Group uses equity accounting and
recognises initial and subsequent investments at cost, adjusting for the
Group's share of the joint venture's income or loss, dividends received and
other comprehensive income thereafter. When the Group's share of losses in a
joint venture equals or exceeds its interest in a joint venture it does not
recognise further losses. The transactions between the Group and the joint
venture are assessed for recognition in accordance with IFRS. The Group
recognised a share of the Joint Venture's profit or loss up until 24 June
2021.
No gain on acquisition, comprising the excess of the Group's share of the net
fair value of the investee's identifiable assets and liabilities over the cost
of investment, has been recognised in profit or loss. The net fair value of
the identifiable assets and liabilities have been adjusted to equal cost.
Joint ventures are tested for impairment whenever objective evidence indicates
that the carrying amount of the investment may not be recoverable under the
equity method of accounting. The impairment amount is measured as the
difference between the carrying amount of the investment and the higher of its
fair value less costs of disposal and its value in use. Impairment losses are
reversed in subsequent periods if the amount of the loss decreases and the
decrease can be related objectively to an event occurring after the impairment
was recognised.
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.
Joint venture investment
The Group applied IFRS 11 to all joint arrangements and classified them as
either joint operations or joint ventures, depending on the contractual rights
and obligations of each investor. The Group held 50% of the voting rights of
its joint arrangement with SolarWorld AG. The Group determined itself to have
joint control over this arrangement as under the contractual agreements,
unanimous consent is required from all parties to the agreements for certain
key strategic, operating, investing and financing policies. The Group's joint
arrangement was structured through a limited liability entity, Deutsche
Lithium GmbH, and provided the Group and SolarWorld AG (parties to the joint
venture agreement) with rights to the net assets of Deutsche Lithium under the
arrangements. Therefore, this arrangement was classified as a joint venture up
to 24 June 2021 when the Company acquired the remaining 50% of Deutsche
Lithium and thereafter consolidated its full results
The investment was assessed at each reporting period date for impairment. An
impairment is recognised if there is objective evidence that events after the
recognition of the investment have had an impact on the estimated future cash
flows which can be reliably estimated. In addition, the assessment as to
whether economically recoverable reserves exist is itself an estimation
process. Under IFRS 3, on acquisition of the additional stake in the joint
venture, the Company remeasured the fair value of its original investment in
the joint venture and recognised a gain in the period to 30 June 2021.
Impairment of Capitalised Exploration Costs
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 joint venture partners. 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 from joint venture partners is unlikely, a
decision will be made to discontinue exploration.
The Company's sole focus is now on the Zinnwald Lithium Project and the
majority of capitalised exploration and development expenses are held at
Deutsche Lithium level. Management have reviewed the carrying value of these
intangible assets at period end and do not believe that any impairment is
required. Management believe that this is supported by the robust potential
economic value of the Project, as identified by the recently published PEA.
In Ireland, the Group has retained the core license at Abbeytown (PL 3735),
which remains valid until June 2023. The Board concluded that a full
impairment of the carrying value of this license be incurred in 2021 and
accordingly the Ireland assets are held on the balance sheet at a Nil value.
3 Segmental reporting
The Group operates principally in the UK and Germany with a largely dormant
subsidiary in Ireland. Activities in the UK include the Head Office
corporate and administrative costs whilst the activities in Germany relate to
the work done by Deutsche Lithium on the Group's primary asset of the Zinnwald
Lithium Project. The reports used by the Board and Management are based on
these geographical segments. As noted earlier, the results of Germany were
reported as an Investment in Joint Venture for the period to 24 June 2021, and
from thereon are reported on a fully consolidated basis.
Non-core Assets Germany UK Total
2022 2022 2022 2022
€ € € €
Cost of sales and administrative (3,172) (225,941) (1,218,729) (1,447,842)
Project impairment - - - -
Gain/loss on foreign exchange - - (2,210) (2,210)
Other operating income - 2,187 18 2,205
Share of loss from joint venture - - - -
Profit/(loss) from operations per reportable segment (3,172) (223,754) (629,840) (1,447,847)
Reportable segment assets 11,972 16,897,083 6,346,403 23,255,458
Reportable segment liabilities - 71,237 52,087 123,324
Non-core Assets Germany UK Total
2021 2021 2021 2021
€ € € €
Cost of sales and administrative (5,331) - (514,642) (519,973)
Project impairment (1,549,875) - - (1,549,875)
Gain/loss on foreign exchange 11 - 148,586 148,597
Other operating income - - 1,038,674 1,038,674
Share of loss from joint venture - (52,911) - (52,911)
Profit/(loss) from operations per reportable segment (1,555,195) (52,911) 672,618 (935,488)
Reportable segment assets 19,032 14,395,408 2,498,134 16,912,574
Reportable segment liabilities - 41,122 102,852 143,974
Non-Core Assets includes Ireland and Scandinavia. Ireland is the only one
with material balances within this category and makes up a majority of the
balances. The Scandinavia assets were fully disposed of in 2021.
4 Impairments
Impairment tests have been carried out where appropriate and the following
impairment losses have been recognised in profit or loss:
2022 2021
Notes € €
In respect of
Intangible assets in Ireland and Sweden 10 - 1,549,875
Recognised in
Administrative expenses - 1,549,875
The impairment losses in respect of financial assets are recognised in other
gains and losses in the income statement.
5 Operating loss
Group
2022 2021
€ €
Operating loss for the year is stated after charging / (crediting)
Exchange (gains)/losses (2,210) 148,597
Depreciation of owned property, plant and equipment 18,980 488
Amortisation of intangible assets 442 -
Ireland and Sweden exploration projects impairment - 1,549,875
Share-based payment expense 591,099 3,833
Operating lease charges 64,836 11,891
Exploration costs expensed 210,328 5,331
6 Other gains and losses
2022 2021
€ €
Gain on re-measurement of initial 50% interest in Deutsche Lithium - 1,038,252
7 Share of results in Joint Venture
Group
2022 2021
€ €
Share of loss in joint venture - (52,911)
8 Finance income
Group
2022 2021
€ €
Interest income
Interest on bank deposits 18 422
9 Earnings per share
2022 2021
€ €
Weighted average number of ordinary shares for basic earnings per share 293,395,464 213,439,290
Effect of dilutive potential ordinary shares
- Weighted average number of outstanding share options 5,900,000 2,700,000
Weighted average number of ordinary shares for diluted earnings per share 299,295,464 216,139,290
Earnings
Continuing operations (1,447,847) (935,488)
Loss for the period for continuing operations
Earnings for basic and diluted earnings per share distributable to equity (1,447,847) (935,488)
shareholders of the company
Earnings per share for continuing operations
Basic and diluted earnings per share
Basic earnings per share (0.49) (0.44)
Diluted earnings per share (0.48) (0.44)
There is no difference between the basic and diluted earnings per share for
the period ended 30 June 2022 or 2021 as the effect of the exercise of options
would be anti-dilutive.
10 Intangible Assets
Group Germany Ireland Total
€ € €
Cost
At 1 January 2022 16,165,914 2,059,272 18,225,186
Additions - group funded 687,665 - 687,665
At 30 June 2022 16,853,579 2,059,272 18,912,851
Amortisation and impairment
At 1 January 2022 829 2,059,272 2,060,101
Amortisation charged for the period 442 - 442
At 30 June 2022 1,271 2,059,272 2,060,543
Carrying amount
At 30 June 2022 16,852,308 - 16,852,308
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 now fully impaired Ireland
Zinc Project.
11 Business Combination
Remeasurement of fair value of initial holding in Deutsche Lithium
Under IFRS 3, on acquisition of the controlling stake, the Company remeasured
the fair value of its original investment in Deutsche Lithium. In terms of
calculating that revaluation and any resulting gain or loss, the Directors
noted that both transactions were conducted on an arms-length basis with
unconnected third-parties. The Directors considered that there was a
significant control premium in acquiring the second 50% of Deutsche Lithium
and used an estimate of 30% in its calculations of the revaluation of the fair
value of the initial shareholding.
€ €
Value of second acquisition 8,781,062 Control premium (30%) of Net Value 2,388,525
Less: Cash in company (486,213) Fair Value of original investment 5,573,224
Less: Free Carry eliminated (333,100) Cash 486,213
Release of obligation 333,100
Net Value of second acquisition 7,961,749 Value of second Acquisition 8,781,062
Carrying Value at 24 June 2021 4,534,972
Gain recognised on revaluation 1,038,252
On consolidation as at 24 June 2021, a calculation was required under normal
acquisition rules to calculate the goodwill arising at the date of acquisition
but taking into consideration the 50% already owned at that date. The
previously held 50% investment in Deutsche Lithium at Fair Value is
derecognised and replaced with the assets and liabilities of Deutsche Lithium,
so that going forward it is consolidated in full as normal as a subsidiary
undertaking. The Directors have concluded that there should be no
adjustment to the carrying value of Deutsche Lithium's Net Assets. The
Directors undertook a detailed review of Deutsche Lithium's balance sheet at
the time of the Company's acquisition of the remaining 50% of Deutsche Lithium
it did not own and concluded that no adjustments were required. Since that
date, Deutsche Lithium has continued with the same accounting policies, which
are in accordance with those of the Company.
Fair Value of consideration given to acquire the controlling interest €
Cash payment of €1.5m 1,500,000
Issuance of 49,999,996 new ordinary shares 7,281,062
Total consideration 8,781,062
Fair value of 50% investment in Deutsche Lithium as at 24 June 2021 5,573,224
14,354,286
Fair value of net assets acquired in Deutsche Lithium as at 24 June 2021 (8,822,812)
Goodwill - re-allocated to Deutsche Lithium intangible exploration assets at 5,531,474
31 December 2021
12 Property plant and equipment
Leasehold, land and buildings Fixtures, fittings and equipment Motor vehicles Total
€ € € €
Cost
At 1 January 2022 9,817 24,642 32,427 66,886
Additions - group funded - 147,158 33,446 180,604
Disposals - - (22,183) (22,183)
Exchange adjustments - - - -
At 30 June 2022 9,817 171,800 43,690 225,307
Depreciation and impairment
At 1 January 2022 - 13,143 5,122 18,265
Depreciation charged for the year - 12,025 6,955 18,960
Exchange adjustments - - - -
At 30 June 2022 - 25,168 12,077 37,245
Carrying amount
At 30 June 2022 9,817 146,632 31,613 188,062
13 Trade and other receivables
30 June 31 December 2021
2022
Amounts falling due within one year: € €
Other receivables 120,610 83,982
Prepayments and accrued income 74,308 37,863
At period end 194,918 121,845
14 Cash and cash equivalents
30 June 31 December 2021
2022
€ €
Cash and cash equivalents 6,020,170 8,291,991
At period end 6,020,170 8,291,991
15 Trade and other payables
30 June 31 December 2021
2022
Amounts falling due within one year: € €
Trade payables 68,562 313,391
Other taxation and social security - 23,802
Other payables 7,893 13,509
Accruals and deferred income 48,869 287,958
At period end 123,324 638,660
16 Share Capital
30 June 2022 31 December 2021
Ordinary share capital € €
Issued and fully paid
293,395,464 ordinary shares of 1p each 3,316,249 3,316,249
3,316,249 3,316,249
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.
17 Share based payment transactions
Group
2022 2021
€ €
Expenses recognised in the year
Options issued under the Share Option Plan (2017) 490,705 3,833
RSUs issued under RSU Scheme (2020) 100,394 -
591,099 3,833
Share Option Plan (2017)
A total of 4,000,000 Options were granted to employees, consultants and
Directors of the Group on 15 January 2022 at a price of 18.10p. All awards
vested 1/3 on award, 1/3 after 12 months and 1/3 after 24 months. They are
expensed over the vesting period.
RSU Scheme (2020)
The first awards of RSUs under the new scheme were made on 15 January 2022
relating to the initial performance period from 1 October 2020 to 31 December
2021. A total of 1,909,531 RSUs were issued and have been expensed based on
the share price at the date of issue being 18.10p and expensed over the
vesting period.
18 Cash (used in)/generated from group operations
2022 2021
€ €
Loss for the year after tax (1,447,847) (935,488)
Adjustments for:
Investment income (18) (422)
Impairment of intangible assets in Ireland and Sweden - 1,549,875
Depreciation and amortisation of property, plant and equipment 19,422 488
Profit on disposal of fixed assets (4,288) -
Gain on remeasurement of initial interest in Joint Venture - (1,038,252)
Share of loss of Joint Venture - 52,911
Equity-settled share-based payment expense 591,099 3,833
Exchange gains / (losses) 2,210 (146,949)
Movements in working capital:
Decrease/(increase) in trade and other receivables (73,075) 79,674
Increase in trade and other payables (515,336) 44,020
Cash used in operations (1,427,833) (390,310)
19 Approval of interim condensed consolidated financial statements
These interim condensed financial statements were approved by the Board of
Directors on 14 September 2022.
*ENDS*
For further information visit www.zinnwaldlithium.com or contact:
Anton du Plessis Zinnwald Lithium plc info@zinnwaldlithium.com (mailto:info@zinnwaldlithium.com)
David Hart Allenby Capital Limited +44 (0) 20 3328 5656
Freddie Wooding Nominated Adviser
Michael Seabrook Oberon Capital Ltd +44 (0) 20 3179 5300
Adam Pollock Broker
Isabel de Salis St Brides Partners Ltd zinnwald (mailto:zinnwald@stbridespartners.co.uk) @stbridespartners.co.uk
(mailto:zinnwald@stbridespartners.co.uk)
Catherine Leftley Financial PR
Notes
Zinnwald Lithium plc (EPIC: ZNWD.L) is an AIM quoted, German focused lithium
development company focussed on becoming an important supplier to Europe's
fast-growing battery sector. The Company owns 100% of the Zinnwald Lithium
Project in Germany, a development project with attractive economics and
approved mining licence. The Project is located in the heart of Europe's
chemical and automotive industries and has the potential to be one of Europe's
most advanced battery grade lithium projects.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
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. END IR BIGDCRXBDGDSRecent news on Zinnwald Lithium
See all newsREG - Zinnwald Lithium PLC - Director/PDMR Shareholding
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