REG - Zinnwald Lithium PLC - Interim Results
24/08/2023 07:00
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RNS Number : 2711K Zinnwald Lithium PLC 24 August 2023
Zinnwald Lithium plc / EPIC: ZNWD.L / Market: AIM / Sector: Mining
24 August 2023
Zinnwald Lithium plc
("Zinnwald Lithium" or the "Company")
Interim Results
Zinnwald Lithium plc, the European focused lithium company, developing the
Zinnwald Lithium Project in Germany, is pleased announce its Interim Results
for the period ended 30 June 2023.
HIGHLIGHTS
Six months to 30 June 2023
· Fundraise of £18.75m completed in March 2023 cornerstoned by AMG
Critical Minerals N.V.
· 44 drill holes completed over 14,000 metres in the period
· Intersections into the Albite Granites yielding consistent and
extensive mineralised intervals
· Representative bulk sample sent to Metso and UVR-FIA for pilot
scale testwork
· Completion of sale of Erris Zinc Ltd to Ocean Partners
Post period end to 23 August 2023
· Further 17 drill holes completed over 5,800 metres bringing the
total to 25,300 metres over 77 holes
· Granting of the Bärenstein exploration license
Chairman's Statement
As a key transition metal required to deliver on net zero commitments, it is
widely recognised that lithium production needs to increase significantly and
that supply chains must be brought closer to their end markets. This is
particularly relevant in the EU, which has already both relaxed State Aid
rules for energy transition materials and proposed the new Critical Raw
Materials Act ("CRMA"), which includes targets for domestic capacities for
extraction and processing of at least 10% and 40% respectively. New UK/EU
Rules of Origin are also being phased in from 2024 that will see tariffs of up
to 10% being applied to manufacturers that fail to demonstrate that 50-60% of
battery materials originate from the EU.
Against this background, Zinnwald Lithium's integrated lithium hydroxide
("LiOH") project (the "Project"), located central to Germany's automotive and
chemical industries, is positioned to be a key supplier of lithium to the
European battery industry.
As the macro environment moves in Zinnwald's favour, it is imperative that at
a micro-level we fully capitalise on the opportunities opening up for us and
position ourselves to do so. Accordingly, in March this year we secured
£18.75 million via a fundraise at a 26% premium to the closing share price on
the date of the fundraise announcement and welcomed global critical materials
company AMG Critical Materials N.V ("AMG") as a cornerstone investor. Shortly
thereafter we welcomed AMG Lithium GmbH's Chief Executive Officer, Dr. Stefan
Scherer, to Zinnwald's Board.
With funds in place, we have been able to accelerate our efforts to advance
the Project towards completing a bankable feasibility study ("BFS") by early
in the first half of 2024. Since completing the fundraise, we have
significantly increased our drilling activity, utilising up to six drill rigs
and completing 45 drill holes totalling 14,800 metres since the beginning of
April to the date of this report. The total number of metres drilled since
the beginning of the in-fill drill campaign now stands at 25,300m over 77
holes.
The aim of the drilling programme is to increase drillhole and data density in
parts of the deposit to further optimise the geological model to support BFS
level mine planning, metallurgical and geotechnical engineering workstreams.
In addition, it will generate further geological and geometallurgical data to
support potential inclusion of the mineralised Albite Granite ("Greisenised
Granite" or "Type 2") lithology to upgrade the existing Mineral Resource
Estimate ("MRE") as the lithium demand and price have radically increased
since the last MRE was conducted. The Albite Granite contains disseminated
zinnwaldite mineralisation that can be laterally and vertically extensive,
reaching up to 80m (vertical) thickness in places.
Thus far, intersections in Albite Granite lithology continue to yield
consistent and extensive mineralised intervals supporting the Company's
strategy of planning for high productivity mining methods and higher lithium
output. We anticipate completing the drill campaign at the core Zinnwald
license area within the coming weeks, and, once all assays are received and
reviewed, publishing the new MRE in Q4 2023.
Alongside the drill campaign, we are undertaking extensive testwork with
regard to the process flow sheet. A representative bulk sample of "new ore
feed" has been sent for confirmatory metallurgical testwork and piloting to
Metso in Finland. A pilot test trial will be conducted in late summer / early
autumn 2023 to affirm insights from bench scale testing and provide further
input for the upcoming engineering processes.
While the priority for the Company remains advancing the core Zinnwald
Project, it does control an extensive license area adjacent to the core
Zinnwald Mining License. Work done on the Falkenhain license areas continues
to confirm the prospectivity of this area which could support further scale
and upside for the Project going forward. In addition, during July the
Company was granted the Bärenstein exploration license area, which lies
adjacent to and directly to the north-east of the Company's Altenberg-DL
licence and almost completely encloses the Falkenhain license. Following
further exploration work on these license areas, there is the potential to
increase the resource base and lifetime of the planned mine and mineral
processing facilities related to the Project. Furthermore, the Company
continues to investigate the broader Bärenstein area as a location for future
mining and processing operations. To hold the mineral rights for these areas
has therefore been a priority to maintain planning flexibility as well as
legal certainty.
In terms of the lithium market, news headlines in the half of 2023 saw much
commentary around the significant decline in the spot market price for lithium
products into China from peaks of circa $80,000 per tonne at the end of 2022
to a low of just over $30,000 per tonne in April 2023 with a recovery to circa
$40,000 in August. It should be emphasised that the spot market in general
is a small portion of the overall global market, and this specific index is
often more volatile in relation to what is happening elsewhere. Indeed, in
August 2023, SQM (the world's largest supplier of battery grade lithium
products) reported its H1 2023 results that showed an average price of circa
$41,000 per tonne. SQM specifically noted that they see a "positive dynamic
in lithium market supported by strong EV sales volumes in different markets
and expect the global lithium demand growth to reach at least 20% this
year." Other major producers, such as Albermarle and Livent, have forecast
improving prices for the second half of 2023 as destocking comes to an end and
the structural undersupply issues continue.
It is important to note that Zinnwald used a long-term price of $22,500 per
tonne in its Preliminary Economic Assessment ("PEA"), which the Company
continues to believe is a sensible, conservative long-term price for the
Project.
In terms of financial markets, share prices of junior mining companies have
been under considerable pressure in recent months, as investors have grappled
with risks of significant inflationary pressures, and an economic downturn
exacerbated by the continuing conflict in Ukraine and the resulting energy
crisis. As such, we are fortunate to have put the Company on a sound
financial footing with the fundraise in March, and to be able to move forward
rapidly with the next phase of the Project development. We are confident
that the inherent strengths of our Project 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 through completion
of the BFS and into the follow-on detailed engineering work in 2024, with cash
of €18.9m as at the date of this report.
Outlook
Looking ahead, we have an extremely active work schedule. The Company's
near-term priorities are the completion of the in-fill and hydrogeological
drill campaigns at the Zinnwald Project, detailed mine planning and testwork
programmes related to mineral and chemical processing.
The PEA demonstrated a robust project with very attractive economics and the
team is working hard to advance this to the next stages of an updated MRE in
2023 and on to the BFS in early 2024. The additional work completed supports
the potential to increase the scale of the Project and is being explored
further as part of the next phase.
We look forward to updating the market on progress on all of these fronts as
we continue our various work programmes.
Jeremy Martin
Non-Executive Chairman
Operational Review
The first half of 2023 saw Zinnwald Lithium Plc (the "Company") and its wholly
owned subsidiary, Zinnwald Lithium GmbH ("ZL GmbH" and together the "Group")
accelerate its development strategy for its integrated Zinnwald Lithium
Project (the "Project"). During the six months to 30 June, the Company's
priorities were the in-fill drill campaigns at the Zinnwald Project as well as
detailed mine planning and testwork programmes related to mineral and chemical
processing.
Six months to 30 June 2023
Fund Raise
On 29 March 2023, the Company completed a £18.75m fundraise at a 26% premium
to its share price at close on 22 March 2023. This raise was cornerstoned by
AMG, existing significant shareholders, and new German institutional
investors. These funds have enabled the Company to accelerate its various
workstreams and will finance it beyond completion of the BFS. As part of the
investment from AMG, the Company has welcomed Dr Stefan Scherer to the Board.
The fundraise included an offering via PrimaryBid, which reflects the
Company's ongoing commitment to enabling its retail shareholders to
participate. The Board appreciates that this process can inherently only be
done at very short notice and with a small window of opportunity to act and
will continue to explore any alternate avenues that might enable a wider
participation.
Infill and Resource Delineation Drill Programme
The successful fundraise completed at the end of March 2023 enabled the
Company to significantly accelerate its resource delineation drilling
activities. During the six months to 30 June, it completed 14,100m of diamond
core drilling across 44 drill holes. This brought the total metres drilled to
19,500 metres across 60 drill holes at the Zinnwald Mining license during this
drill campaign. Since the end of the reporting period, an additional 5,800
metres across 17 holes of drilling have been completed.
The objectives of the programme are to:
· Increase drillhole and data density in parts of the deposit to
further optimise the geological model to support BFS level mine planning,
metallurgical and geotechnical engineering workstreams;
· Generate additional geological and geometallurgical data to
support inclusion of the mineralised Albite Granite (Type 2) lithology in
order to upgrade the existing Mineral Resource Estimate ("MRE");
· Improve resolution of the extents of the Type 1 (high grade
Greisen mineralisation); and
· Improve confidence in available existing historical drillhole
data.
Following completion of the drilling programme, anticipated during Q3 2023,
the results will be used to update the geological and mineralisation models
with the objective of producing an updated MRE later in 2023. SRK Consulting
(UK) ("SRK") has been commissioned to complete the MRE.
The Albite Granite (previously called the "Greisenised Granite" or "Type 2")
is recognised as a mineralised alteration halo surrounding the higher-grade
Greisen type mineralisation ("Type 1"). Here the Albite Granite contains
disseminated zinnwaldite mineralisation that can be laterally and vertically
extensive, reaching up to 80m (vertical) thickness in places. In the 2019
NI43-101 Technical report, the potential in-situ mineral inventory of Albite
Granite was estimated at 214 Mt at a Li grade of 0.37 % Li2O (1,700 ppm Li).
One of the objectives of the ongoing drilling programme is to better delineate
and quantify this style of mineralisation for possible inclusion in the
updated MRE.
The Company anticipates that the inclusion of Albite Granite mineralisation
will increase the Zinnwald Lithium Project's Mineral Resource base. This will
also serve to better align the Project's metrics with other known zinnwaldite
deposits as well as strengthen the Company's operational and production
capacity. Here, the inclusion of the Albite granite will also allow
consideration of higher productivity mining methods, such as AVOCA or Sublevel
Stoping that will drive productivity and simplify operational planning.
Key insights from results of the current drill programme are (see relevant
graphics included at the end of this release):
· The Greisens, which host the strongest levels of Li
mineralisation, trend along a North West-South East axis across the granite
cupola (see overview map and sections in appendix).
· There are further opportunities for expansion to the west, south
towards the national boundary, and in particular to the South East where
high-grade mineralisation remains open.
· Intersections in Albite Granite lithology continue to yield
consistent and extensive mineralised intervals including up to 92.3 m with
average grade of 0.48 % Li2O in (ZGLi-045), supporting the Company's strategy
of planning for high productivity mining methods.
· Shorter drill spacing in the deposit will be used to provide the
Company with a sufficient information basis to support detailed mine planning,
geotechnical and hydrogeological work in the upcoming phase.
· The Company has a robust working model for the deposit,
demonstrated by new logging and assay results from the ongoing drilling
programme, which are consistent with the geometries of the mineralisation and
expected grades.
Significant drill intersections and assay results from the current drilling
campaign include:
· ZGLi 045/2023:
o 158 m (156.0 m - 314.0 m) at average grade 0.56 % Li2O (383.7 ppm Sn)
§ Within this lies a high-grade interval of 65.7 m (156.0 m - 221.7 m) with
an average Li grade 0.68 % Li2O (517.9 ppm Sn)
· ZGLi 036/2022 in the north of the deposit:
o 81.7 m (158.7 m - 240.4 m) at average grade 0.46 % Li2O (76.9 ppm Sn)
· ZGLi 031/2022 in the central part of the deposit:
o High-grade interval of 12.9 m (79.9 m - 92.8 m) with an average Li grade
0.70 % Li2O (963.9 ppm Sn)
o 81.1 m (129.9 m - 211.0 m) at average grade 0.55 % Li2O (205.4 ppm Sn)
· ZGLi 042/2023:
o High-grade interval of 24.6 m (85.4 m to 110.0 m) with an average Li grade
0.78 % Li2O (1,463.7 ppm Sn)
o 66.4 m (188.5 m to 254.9 m) at average grade 0.42 % Li2O (246.8 ppm Sn)
The results of the infill drilling campaign continue to validate and support
the geological model in line with the Company's expectations.
Other critical work areas that the Company is focusing on including the
hydrogeological testing and modelling, which represents an essential piece of
work for both technical planning as well as EIA permitting requirements. It is
planned to conduct further geotechnical and hydrogeological drill holes later
in the year. The Company is supported by a group of consultants in this
effort, including SRK, Geologische Landesuntersuchung Freiberg GmbH ("GLU"),
Fugro, and CSA Global.
To fully understand the impact of a new mineral resource, which would
potentially comprise new ore feed characteristics, sampling from larger
diameter drill core has been completed across the deposit, supported by SRK,
with the aim to produce a representative bulk sample for confirmatory
metallurgical testing. This sample was taken in Q1 of this year and is
currently being used for test work by Metso in Finland (see Metallurgical
Process Development section below).
Mine Planning Activities
The drill programme has enabled further optimisation of the geological model
and understanding of zinnwaldite/grade distribution throughout the deposit,
and this enabled the Company and SRK to update and revise the mine design. It
is envisaged that the revised mine design will incorporate the strategy of
higher productivity mining methods, as well as operating the mine using a
fully electrified trackless equipment fleet. This current work focuses 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.
Metallurgical Process Development / Testwork
Working with several partners including Metso (formerly Metso:Outotec) and UVR
FIA, the Company is focused on confirming and optimising the existing mineral
processing flowsheet. Metso has been supplied with a representative two-ton
bulk sample of drill core to undertake confirmatory bench and pilot scale
mineral processing testwork. The primary goal of this work is to confirm
previous testwork results on a feed material that now also includes the
lithium bearing Albite Granite lithology and therefore may differ from the
process as described in the PEA. The bench scale results will also deliver
additional engineering parameters that will feed into downstream engineering
processes.
Mineral processing tests at UVR FIA GmbH in Freiberg earlier this year
investigated the efficacy of magnetic separation methods specifically on the
Albite Granite lithology, which have yielded further encouraging results and
will be taken into account in on-going bench-scale testing at Metso. The
target is now to optimise method parameters further in the application of
magnetic separation as well as potential down-stream froth flotation stages in
a scavenger circuit arrangement.
Ultimately, a pilot test trial will be conducted in late summer / early autumn
2023 to affirm insights from bench scale testing and provide further input for
the upcoming engineering processes. Mineral concentrate from this pilot test
will be used to validate existing process assumptions and engineering for
pyro- and hydro-metallurgical processing at Metso's test centres in the USA
and Finland.
Exploration Licenses - Falkenhain, Altenberg, Sadisdorf
In the time since the last operational update, the Company has been focussing
its efforts on the development the core Zinnwald Project. However, additional
work has been undertaken over the Company's other exploration licenses
including:
· Completion of drill hole LiSH-001 at Falkenhain on the
Schenkenshöhe with results announced to the market on the 30th January 2023
and key highlight intercept including:
o 80 m (114m - 194m) with average 0.62 % Li2O; 492 ppm Sn and 271 ppm W
§ Including 51 m (140.0m - 191.0m) at average 0.73 % Li2O; 519ppm Sn and 361
ppm W
o 10m (334.0m - 344.0m) with average 0.69 % Li2O; > 1,924 ppm Sn and 83
ppm W
· Re-assay of available historic core from Falkenhain has been
carried out to guide further exploration works. This effort yielded highly
promising results at the historic hole "SnFhiDi-045", drilled on the
"Schenkenshöhe" part of the Falkenhain license by the GDR state in 1973
whilst exploring for tin resources in the area. The core material for this
hole is available to the Company and has been re-logged, re-sampled and
re-assayed. Whilst the Company recognises the indicative character of results
originating from a historic drill hole, it considers these as very valuable in
directing further exploration efforts at the Falkenhain license.
The assay results from the c. 600 m deep hole include the following drill
intercepts:
o 174.5-187.0 m (12.5 m) average 0.53 % Li2O (824.3 ppm Sn)
o 216.5-346.6 m (119.1 m) average 0.98% Li2O (484.3 ppm Sn)
· Planning of further exploration and drilling stages at
Falkenhain, Altenberg and Sadisdorf licenses will be undertaken in the
upcoming phase of project development.
Infrastructure
In collaboration with the owner of the historic Zinnerz Altenberg mine, the
LMBV, the Company has undertaken the digitisation of historic mine plans of
the Zinnerz mine in Altenberg. The digital plans now cover more than three
production and mine infrastructure levels of the historic mine that operated
at commercial scale in Altenberg as "VEB Zinnerz Altenberg" for 40 years, but
with mining activities dating back to medieval times. These digital plans are
vital in the process of developing detailed construction plans and mine
designs that will also include utilisation of the existing historic mine
infrastructure in Altenberg. This will result in significantly reduced
disruption to local residents by hauling the ore underground on the 500m RL
elevation towards the processing site, northeast of Altenberg (including via
the "De-Watering Tunnel" as mentioned in previous announcements).
Further updates with regards to Infrastructure and Tailings Management
Planning:
· On-going evaluation for tailings management are supported by
Knight Piesold (UK), which specialise in tailings management &
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.
· DSF tailings are becoming industry standard for new projects and
present multiple advantages including:
o Increased capacity compared with volume / storage capacity of conventional
wet tailings facilities;
o Limited long-term risk of dam failure and liquefaction as designed to be
self-supporting;
o No or limited requirement for embankment or retention structures;
o Re-naturation / rehabilitation can be completed in step with stack
construction; and
o Option to re-claim materials from stack, presenting opportunities for
materials re-utilisation in the future, in line with UN Sustainable
Development Goals.
Sustainability / ESG Matters
Zinnwald continues to comply with the QCA corporate governance code and its
guidance on sustainability matters. The Company views sustainability as a
guiding principle of its development strategy and is dedicated to delivering
on the commitments to its shareholders, future investors, clients, employees,
local communities, and other stakeholders with this in mind. It believes
that transparency and ethical behaviour are central to any successful group
and undertakes all development with respect to the environment and
neighbouring communities.
Environmental
Zinnwald is committed to applying the highest standards for environmental
protection, not only in its future operations, but more immediately in its
current on-going exploration phases of the Project. In conjunction with its
environmental surveyors and consultants, the team is focused on defining its
future environmental management strategies and delivery of its Environmental
Impact Assessment ("EIA"). The Company has already commenced its monitoring
and baseline studies at its preferred site locations through GLU and
Umweltberatung Schulz since September 2022 and this will cover a minimum
12-month (all four seasons) timeframe.
The Company formally submitted its Scoping Document to the Mining Authority on
the 21st of April, which started the formal permitting process for the
construction and operation in Germany. The Mining Authority is expected to
arrange a Scoping Meeting with Stakeholder Authorities later in summer, which
will serve as a platform to clarify the Project and get first feedback from
Stakeholder Authorities on all aspects of the planned Project, which can be
considered and taken forward in subsequent formal application stages.
As previously announced, the Company is pursuing a Mandatory Framework
Operating Permit ("MFOP") to cover all operations. It has been agreed that the
Saxony Mining Authority will be the determining body for the overall
permitting pathway for the processes permitted under the Mining Act. This also
provides clarity for participating stakeholder authorities and legal certainty
for the Project in the future.
The Projects' permitting is supported by GLU, which has extensive experience
of mine and resource project permitting in the region. The Company intends to
maintain international best practice in the permitting by keeping a
transparent approach to project development and stakeholder engagement.
Social
With the Project gaining momentum, the Company has increased its staff numbers
to support the accelerated exploration activities as well as on-going
feasibility study development work. The Company is also working to expand
its long-term operational owners' team in Germany. In total, the Project
team now consists of eight geologists that are working at the Project site, as
well as the Freiberg core-logging and sample preparation facilities. In total,
the Project team includes 23 professionals working across disciplines in both
Freiberg and London office locations.
Engagement with the local community of Zinnwald has always been a high
priority to the Company, especially given the increased number of drill rigs
in the town and its surroundings. In May, the Company held a well-attended
information event at the Zinnwald town hall that outlined the on-going
drill-campaign as well as future development plans. This enabled local
residents and stakeholders to raise concerns and pose questions directly to
the local project team as well as the UK executive team. The event included
a visit to one of the nearby drill rigs and an explanation of the steps taken
to keep noise to a minimum, as well as how the Company remediates all drill
holes and keeps its environmental impact as low as practicable.
Governance
The Company is working on its formal engagement process with its main
stakeholders and will be sending out detailed questionnaires to enable the
completion of a formal Materiality Risk Assessment. This will enable the
Company to better tailor its operational policies, activities and reporting to
the risks identified.
The Board has decided to formally rebrand the entire Group under the "Zinnwald
Lithium" banner and completed this name change process in Germany in July.
This reflects the close ties that the Group and the Project has to the local
town and community and indeed to the very name of the mineral (Zinnwaldite) we
will be processing. The Group will retain the trademark to "Deutsche
Lithium" and will use it as the branding for the ultimate end product. As
part of this rebranding, the Group will be relaunching its website later in
the year to better support the Group's three core audiences - investors, local
stakeholders, and the ultimate end users.
Ireland
In order to focus its efforts on the Zinnwald Project, in March 2023, Zinnwald
signed a Heads of Terms Agreement with Ocean Partners UK Ltd for it to acquire
Erris Zinc Ltd, the Company's subsidiary that owns the Abbeytown Zinc License
in Ireland ('Abbeytown'). On 24 June 2023, the Irish GeoSciences Department
approved the transaction and the sale was completed. Zinnwald shall receive a
1% Net Smelter Royalty and a €200,000 cash payment due six months after
commencement of commercial production from Abbeytown.
Post Balance Sheet events to 23 August 2023
In-fill drilling at Zinnwald Lithium Deposit close to completion
As at 23 August 2023, the Company has almost completed its in-fill drilling
programme at the Zinnwald License and has drilled a further 17 holes over
5,800 metres since the end of June bringing the total campaign to 25,200
metres over 77 holes. The Company expects to complete the final in-fill
drill holes over the coming weeks Core logging, sampling and assaying is
expected to be completed in the weeks following completion of drilling,
subject to laboratory availability. The results will be incorporated in a
revised MRE which is expected to be published in Q4 2023.
Granting of additional Barenstein exploration license
On 6 July 2023, the Company announced that it had been granted an additional
exploration licence (the 'Bärenstein Licence') covering approximately 4,933.9
hectares ('ha') in the Erzgebirge region of Saxony, Germany. The Bärenstein
Licence has the potential to provide additional resource upside to the
Company's Project and results in continuous licence coverage from the Zinnwald
Mining Licence to the Falkenhain Exploration licence, thus complementing the
Company's strategy to potentially develop future operations in this area.
The new license area shown in the map below closes the gap between Falkenhain
and Altenberg Exploration licences and adds a substantial land area to the
mineral exploration titles of the Company in the region that now stands at
combined 9,959.6 ha. The greenfield Bärenstein Licence holds significant
mineral potential and was historically mined for tin and silver between the
15th and 19th centuries. The Bärenstein Licence area includes land that is
being evaluated for the future mining and processing operations of the
Project.
Lithium Market in 2023
Headlines in the first few months of 2023 saw much commentary around the
significant decline in the spot market price for lithium products into China
from peaks of circa $80,000 per tonne at the end of 2022 to a low of just over
$30,000 per tonne in April 2023 with a recovery to circa $40,000 in August.
It should be emphasised that the spot market in general is a small portion of
the overall global market and this specific index is often more volatile in
relation to what is happening elsewhere. Indeed, in August 2023, SQM (the
world's largest supplier of battery grade lithium products) reported its H1
2023 results that showed an average price of circa $41,000 per tonne. SQM
specifically noted that they see a "positive dynamic in lithium market
supported by strong EV sales volumes in different markets and expect the
global lithium demand growth to reach at least 20% this year. " Other major
producers, such as Albermarle and Livent, have forecast improving prices for
the second half of 2023 as destocking comes to an end and the structural
undersupply issues continue.
It is important to note that Zinnwald used a long-term price of $22,500 per
tonne in its PEA, which the Company continues to believe is a sensible,
conservative long-term price for the Project.
In terms of the wider regulatory context for the battery materials market, the
impact of the US Inflation Reduction Act ("IRA") continues to reverberate and
influence global structures. In March 2023, the EU announced the planned
details behind its Critical Raw Materials Act ("CRMA"). These include that
lithium is defined as both a "Critical and Strategic" raw material. It
proposes benchmarks of 10% of the EU's annual consumption for extraction and
40% for processing - both relevant to Zinnwald. The CRMA plans to simplify
permitting procedures for projects in the EU, as well as identifying selected
strategic projects to benefit from EU financial support. It should be noted
that the CRMA is still to pass through the European Parliament and the EU
Council, and these key strategic projects have not yet been identified. The
Board believes that the Zinnwald Project should be one of these projects.
One slightly less well publicised event that potentially has a greater and
more immediate relevance to Zinnwald is the relaxation of the European State
Aid rules. On 9 March 2023, the European Commission adopted the Temporary
Crisis and Transition State aid Framework
(https://competition-policy.ec.europa.eu/state-aid/ukraine_en) ("TCTF") aimed
at boosting and retaining clean tech investments in Europe. The TCTF allows
Member States to provide undertakings with significant State aid support in
order to develop and boost businesses that will drive the EU's energy
transition. These rules apply from the end of 2025 with a further three
years from receipt of the aid to deliver the projects.
Shareholder Evolution
The Company has undertaken a formal review of its underlying beneficial
shareholder base that shows an ever-increasing ownership by German and EU
investors. Based on the latest share register, the Company now shows UK
holders at 46%, large German institutional and corporate investors at 31%,
other German and EU investors at 13% and Rest of the World at 10%.
Outlook
The Company's near-term priorities are the completion of the in-fill and
hydrogeological drill campaigns at the Zinnwald Project, detailed mine
planning and test work programmes related to mineral and chemical processing.
The satisfactory completion of these items, which are being done in
conjunction with external parties, will impact the timing of the BFS. While
the objective remains to complete this as soon as possible, the permitting of
certain of these activities as well as the limited availability of necessary
testing facilities and staffing carries the risk that the timing will move
beyond the end of this year. However, the team remains confident that
completion of the BFS by early in the first half of 2024 is highly achievable
and is working to ensure that the overall timetable of the Project is not
unduly impacted.
The PEA demonstrated a robust Project with very attractive economics and the
team is working hard to advance this to the next stage. The additional work
supports the potential to increase the scale of the Project and is being
explored further as part of the next phase.
The Company has now almost completed the infill drilling programme at the core
Zinnwald license that commenced in July 2022. This has been an extensive
programme which, upon completion, will see a total of more than 26,700 metres
drilled across 83 drill holes. The objective of the drill programmes is to
better define the Resources and Reserves that lie within the ore body, as well
as determine the detailed early years' mining plan.
In addition, 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. The Company is working with Metso, a global
leader in process engineering, to develop and refine the mineral and chemical
processing solution for the Project. A representative bulk ore sample was
delivered to Metso in February, and this is being used to thoroughly test the
processing steps for 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. The detailed scoping
meeting with permitting authorities will be held in late August 2023.
The Company continues 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 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 or disposes of its
historic exploration project in Ireland.
During the period, the Group made a loss before taxation of €1.3m compared
with a loss of €1.4m for the period ended 30 June 2022. Whilst the overall
amounts are relatively similar, the underlying expenditure areas are
different. In the six months to 30 June 2023, administrative expenses
increased to €1.2m compared with €0.9m in the previous period. This is
due to the Group has also increased its overall staffing levels to reflect the
increased workstreams to advance the Project. There was also a share-based
payment expense of €0.3m in the current period compared with €0.6m for the
period ended 30 June 2022, arising from the issuance of new Options and RSUs
in March 2023.
The Total Net Assets of the Group increased to €40.9m at 30 June 2023 from
€21.7m at 30 June 2022, due to increased capital investment in the
Intangible Assets of the Project together with increased cash balances
following the fund raise in March 2023. The Company's management team itself
secured the majority of the funds raised in March 2023 and consequently only
paid €0.2m of commission on the raise, equating to 0.9% of the total funds
raised.
The closing cash balance for the Group at the period end was €19.7m which is
greater than the €6.1m at the end of the same period in the prior year, due
primarily to the funds raised in March 2023, offset by ongoing development and
operational expenditure. As at the date of this report, the Group's cash
balance is €18.9m.
On behalf of the board
Cherif Rifaat,
CFO and Director
ZINNWALD LITHIUM PLC
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2023
30 June 2023 30 June 2022
Unaudited Unaudited
Notes € €
Continuing operations
Administrative expenses (1,178,600) (858,953)
Other operating income 68,957 2,187
Share based payments charge 13 (255,111) (591,099)
Operating Loss 4 (1,364,754) (1,447,865)
Finance income 5 32,792 18
Loss before taxation (1,331,962) (1,447,847)
Tax on loss - -
Loss for the financial period (1,331,962) (1,447,847)
Other Comprehensive Income -
Total comprehensive loss for the period (1,331,962) (1,447,847)
Earnings per share from continuing operations attributable to the owners of 6
the parent company
Basic (cents per share) (0.34) (0.49)
Total loss and comprehensive loss for the year is attributable to the owners
of the parent company.
ZINNWALD LITHIUM PLC
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
30 June 2023 30 June 2022 31 December 2022
Unaudited Unaudited Audited
Notes € € €
Non-current assets
Intangible Assets 7 22,654,530 16,852,308 18,966,165
Property, plant and equipment 8 353,077 188,062 327,528
Right of Use Assets 9 116,280 - 185,285
23,123,887 17,040,370 19,478,978
Current assets
Trade and other receivables 10 507,920 194,918 309,795
Cash and cash equivalents 11 19,689,789 6,020,170 3,164,585
20,197,709 6,215,088 3,474,380
Total Assets 43,321,596 23,255,458 22,953,358
Current liabilities
Trade and other payables 12 (934,725) (123,324) (583,660)
Lease Liabilities < 1 year 9 (118,455) - (140,149)
(1,053,180) (123,324) (723,809)
Net current assets 19,144,529 6,091,764 2,750,570
Non-current Liabilities
Deferred tax liability (1,382,868) (1,382,868) (1,382,868)
Lease Liabilities > 1 year 9 - - (47,795)
(1,382,868) (1,382,868) (1,430,663)
Total liabilities (2,436,048) (1,506,192) (2,154,472)
Net Assets 40,885,548 21,749,266 20,798,886
Equity
Share capital 14 5,365,379 3,316,249 3,316,249
Share premium 39,403,810 20,289,487 20,289,487
Other reserves 1,623,039 1,413,880 1,367,868
Retained earnings (5,506,680) (3,270,350) (4,174,718)
Total equity 40,885,548 21,749,266 20,798,886
ZINNWALD LITHIUM PLC
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Share Capital Share premium account Other reserves Retained earnings Total
€ € € € €
Balance at 1 January 2023 3,316,249 20,289,487 1,367,868 (4,174,718) 20,798,886
Six months ended 30 June 2023
Loss and total other comprehensive income for the period (1,331,962) (1,331,962)
Currency translation difference - - 60 - 60
Total comprehensive income for the period - - 60 (1,331,962) (1,331,902)
Issue of share capital 2,049,130 19,282,326 - - 21,331,456
Share issue costs (168,003) - - (168,003)
Credit to equity for equity settled share-based payments 255,111 - 255,111
Total transactions with owners directly in equity 2,049,130 19,114,323 255,111 - 21,418,564
Balance at 30 June 2023 5,365,379 39,403,810 1,623,039 (5,506,680) 40,885,548
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 share-based payments - - 591,099 - 591,099
Total transactions with owners recognised 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
ZINNWALD LITHIUM PLC
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
30 June 2023 30 June 2022
Unaudited Unaudited
Notes
Cash flows from operating activities
Cash used in operations 15 (859,168) (1,430,043)
Net cash outflow from operating activities (859,168) (1,430,043)
Cash flows from investing activities
Exploration expenditure (3,689,166) (687,664)
Purchase of property, plant and equipment (50,707) (180,603)
Proceeds from sale of tangible assets - 26,471
Interest received 32,792 18
Net cash used in investing activities (3,707,081) (841,778)
Cash flows from financing activities
Proceeds from the issue of shares 21,163,453 -
Lease payments (72,000) -
Net cash generated from financing activities 21,091,453 -
Net (decrease)/increase in cash and cash equivalents 16,525,204 (2,271,821)
Cash and cash equivalents at beginning of period 3,164,585 8,291,991
Cash and cash equivalents at end of period 11 19,689,789 6,020,170
ZINNWALD LITHIUM PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
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 2023.
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 Rental Leasing Ordinary - 100.0%
The registered office address of Zinnwald Lithium Holdings Ltd (formerly
Deutsche Lithium Holdings Ltd) is 29-31 Castle Street, High Wycombe, Bucks,
HP13 6RU.
The registered office address of both Zinnwald Lithium GmbH and Zinnwald
Lithium Services GmbH is at Am Junger-Loewe-Schacht 10, 09599, Freiberg,
Germany. In July 2023, the Group completed the process of renaming both
companies under the "Zinnwald Lithium" banner to better reflect the Group's
ties to the local community.
On 14 June 2023, the Company completed the sale of its previously wholly owned
subsidiary, Erris Zinc Ltd, whose registered office address is The Bungalow,
Newport Road, Castlebar, Co. Mayo. F23YF24. Accordingly, the results of this
company are only consolidated in the accounts of the Group up to the date of
disposal.
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 2022, 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 2022 were approved by the Board of Directors on 22 March 2023 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 2022.
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 2023 was
€1.163027.
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 €19.7m 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 No depreciation 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.
1.6 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 Right of Use Assets and Lease Liabilities
On 1 January 2019, the Group adopted IFRS 16, which supersedes IAS 17 and sets
out principles for the recognition, measurement, presentation and disclosure
of leases for both parties to a contract. 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.
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.
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
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 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 PEA published in September
2022 and further supported by the material investment in the Group made by AMG
in March 2023.
In Ireland, the Group fully impaired the carrying value of its license at
Abbeytown (PL 3735) in 2021 and accordingly the Ireland assets were held on
the balance sheet at a Nil value. In June 2023, the Group completed the sale
of this asset and has only consolidated results up to the date of disposal.
3 Segmental reporting
The Group now operates solely in the UK and Germany having disposed of its
Ireland operations in June 2023. 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.
Non-core Assets Germany UK Total
2023 2023 2023 2023
€ € € €
Cost of sales and administrative (8,839) (446,466) (811,663) (1,266,968)
Gain/loss on foreign exchange - - 88,368 88,368
Other operating income - 68,957 - 68,957
Finance income - - 32,792 32,792
Share based payment charge - - (255,111) (255,111)
Profit/(loss) from operations per reportable segment (8,839) (377,509) (945,614) (1,331,962)
Reportable segment assets - 22,667,315 20,654,281 43,321,596
Reportable segment liabilities - 2,415,318 20,730 2,436,048
Non-core Assets Germany UK Total
2022 2022 2022 2022
€ € € €
Cost of sales and administrative (3,172) (225,941) (627,630) (856,743)
Gain/loss on foreign exchange - - (2,210) (2,210)
Other operating income - 2,187 - 2,187
Finance income - - 18 18
Share based payment charge - - (591,099) (591,099)
Profit/(loss) from operations per reportable segment (3,172) (223,754) (1,220,921) (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 comprises the former Ireland assets, which were disposed of in
June 2023.
4 Operating loss
Group
2023 2022
€ €
Operating loss for the year is stated after charging / (crediting)
Exchange (gains)/losses 88,368 (2,210)
Depreciation of Right of Use Assets 69,005 -
Depreciation of owned property, plant and equipment 25,219 18,980
Amortisation of intangible assets 800 442
Share-based payment expense 255,111 591,099
Operating lease charges 23,712 64,836
Exploration costs expensed 351,197 210,328
5 Finance income
Group
2023 2022
€ €
Interest income
Interest on bank deposits 32,792 18
6 Earnings per share
2022 2021
€ €
Weighted average number of ordinary shares for basic earnings per share 385,948,016 293,395,464
Effect of dilutive potential ordinary shares
- Weighted average number of outstanding share options 5,553,591 5,900,000
Weighted average number of ordinary shares for diluted earnings per share 391,501,607 299,295,464
Earnings
Continuing operations
Loss for the period for continuing operations (1,331,962) (1,447,847)
Earnings for basic and diluted earnings per share distributable to equity (1,331,962) (1,447,847)
shareholders of the company
Earnings per share for continuing operations
Basic and diluted earnings per share
Basic earnings per share (0.34) (0.49)
There is no difference between the basic and diluted earnings per share for
the period ended 30 June 2023 or 2022 as the effect of the exercise of options
would be anti-dilutive.
7 Intangible Assets
Group Germany Ireland Total
€ € €
Cost
At 1 January 2023 18,967,989 2,059,272 21,027,261
Additions - group funded 3,689,166 - 3,689,166
Disposals (2,059,272) (2,059,272)
At 30 June 2023 22,657,155 - 22,657,155
Amortisation and impairment
At 1 January 2023 1,824 2,059,272 2,061,096
Amortisation charged for the period 800 - 800
Disposals - (2,059,272) (2,059,272)
At 30 June 2023 2,624 - 2,624
Carrying amount
At 30 June 2023 22,654,530 - 22,654,530
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, which was sold in June 2023.
8 Property plant and equipment
Leasehold, land and buildings Fixtures, fittings and equipment Motor vehicles Total
€ € € €
Cost
At 1 January 2023 40,990 277,195 66,593 384,778
Additions - group funded - 50,707 - 50,707
Disposals - - -
Exchange adjustments - 160 - 160
At 30 June 2023 40,990 328,062 66,593 435,645
Depreciation and impairment
At 1 January 2023 - 39,636 17,614 57,250
Depreciation charged for the year - 18,576 6,643 25,219
Exchange adjustments - 99 - 99
At 30 June 2023 - 58,311 24,257 82,568
Carrying amount
At 30 June 2023 40,990 269,751 42,336 353,077
9 Right of Use Assets and Lease Liabilities
In May 2022, Deutsche Lithium GmbH entered into a commercial lease agreement
for and office and core shed property in Freiberg, Germany. The duration of
the lease is for 2 years. 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. Movements in the period are shown as follows:
€
Right of use asset
Initial Recognition on 1 January 2023 185,285
Depreciation charged in the period (69,005)
Balance as at 30 June 2023 116,280
Lease Liability
Initial Recognition on 1 January 2023 187,944
Interest charged for the period 2,511
Lease payments in the period (72,000)
Balance as at 30 June 2023 118,455
- Recognised in Short Term Payables 118,455
- Recognised in Payables >1 year -
10 Trade and other receivables
30 June 31 December 2022
2023
Amounts falling due within one year: € €
Other receivables 430,318 248,692
Prepayments and accrued income 77,602 61,103
At period end 507,920 309,795
11 Cash and cash equivalents
30 June 31 December 2022
2023
€ €
Cash and cash equivalents 19,689,789 3,164,585
At period end 19,689,789 3,164,585
12 Trade and other payables
30 June 31 December 2022
2023
Amounts falling due within one year: € €
Trade payables 827,454 321,277
Other taxation and social security - 34,974
Other payables 25,737 13,082
Accruals and deferred income 81,534 214,327
At period end 934,725 583,660
13 Share based payment transactions
Group
2023 2022
€ €
Expenses recognised in the year
Options issued under the Share Option Plan (2017) 103,061 490,705
RSUs issued under RSU Scheme (2020) 152,050 100,394
255,111 591,099
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. A further
total of 2,450,000 Options were granted to employees, consultants and
Directors of the Group on 23 March 2023 at a price of 10.41p. All awards
vest 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.
The second awards of RSUs under the new scheme were made on 23 March 2023
relating to the initial performance period from 1 January 2022 to 31 December
2022. A total of 3,406,780 RSUs were issued and have been expensed based on
the share price at the date of issue being 10.41p and expensed over the
vesting period.
14 Share Capital
30 June 2023 31 December 2022
Ordinary share capital € €
Issued and fully paid
473,524,624 ordinary shares of 1p each (2022 : 293,395,464) 5,365,379 3,316,249
5,365,379 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.
Reconciliation of movements during the period:
Ordinary Number Ordinary
Value
€ €
Ordinary shares of 1p each
At 1 January 2023 293,395,464 3,316,249
Issue of fully paid shares (cash subscription) 180,129,160 2,049,130
At 30 June 2023 473,524,624 5,365,379
15 Cash (used in)/generated from group operations
2023 2022
€ €
Loss for the period after tax (1,331,962) (1,447,847)
Adjustments for:
Investment income (32,792) (18)
Lease interest 2,511 -
Gain on disposal of fixed assets - (4,288)
Depreciation of Right of Use Assets 69,005 -
Depreciation of property, plant and equipment 25,219 19,422
Amortisation of Intangible Assets 800 -
Equity-settled share-based payment expense 255,111 591,099
Movements in working capital:
(Increase) / decrease in trade and other receivables (198,125) (73,075)
Increase / (decrease) in trade and other payables 351,065 (515,336)
Cash used in operations (859,168) (1,430,043)
16 Approval of interim condensed consolidated financial statements
These interim condensed financial statements were approved by the Board of
Directors on 23 August 2023.
The technical information relating to geology, the drill results summary,
mining and processing in this announcement has been extracted from the
Company's Operational & Corporate Update which was published on 14 June
2023 and was reviewed on behalf of Zinnwald Lithium by Martin Pittuck CEng,
FGS, MIMMM of SRK Consulting. Mr Pittuck is a Corporate Consultant of SRK
Consulting Ltd. Mr Pittuck has sufficient experience relevant to the style of
mineralisation and type of deposit under consideration, and to the activity
which he is undertaking to qualify as a Competent Person in accordance with
the guidance note for Mining, Oil & Gas Companies issued by the London
Stock Exchange in respect of AIM Companies, which outlines standards of
disclosure for mineral projects. Mr Pittuck consents to the inclusion in this
announcement of the matters based on his information in the form and context
in which it appears.
*ENDS*
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)
Notes
AIM quoted Zinnwald Lithium plc (EPIC: ZNWD.L) is focused on becoming an
important supplier of lithium hydroxide to Europe's fast-growing battery
sector. The Company owns 100% of the Zinnwald Lithium Project in Germany,
which has an approved mining licence, is located in the heart of Europe's
chemical and automotive industries and has the potential to be one of Europe's
more advanced battery grade lithium projects.
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