REG - Zinnwald Lithium PLC - Interim Results
20/09/2024 07:00
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RNS Number : 9502E Zinnwald Lithium PLC 20 September 2024
Zinnwald Lithium plc / EPIC: ZNWD.L / Market: AIM / Sector: Mining
20 September 2024
Zinnwald Lithium plc ("Zinnwald Lithium" or the "Company")
Interim Results
Zinnwald Lithium Plc (AIM:ZNWD), the German focused lithium development
company, is pleased announce its Interim Results for the period ended 30 June
2024.
HIGHLIGHTS
Six months to 30 June 2024
· Announced two updates to the Mineral Resource Estimate ('MRE') -
confirmed the Project's position as the second-largest hard rock lithium
project in the EU and strengthened the Measured category.
· Advanced processing tests with Metso, which continue to generate
encouraging results that potentially offer significant advantages in overall
recovery, efficiency and environmental impact reduction.
· Explored potential to expand project in phases, starting with Phase 1
producing 16,000-18,000 tpa of battery-grade Lithium Hydroxide (LiOH), a 50%
increase from the 2022 estimate of 12,000 tpa.
· Received strong expressions of support from Federal and State
Governments in Germany with invitation to formally apply for federal grant
funding strongly backed by the State of Saxony.
· Strengthened the team to support increased activity.
· Organised events and engaged in regular dialogue with the local
communities.
· Engaged InvestorHub to streamline communication with shareholders.
Post period end to 17 September 2024
· Agreed to develop a Pre-Feasibility Study ('PFS') to assess the
potential for a Phase 2 expansion and undertake various technical trade-off
studies.
· Progressed workstreams, with several achieving Feasibility Study
accuracy and others nearing completion at PFS level.
· Applied for the Project to be designated as 'strategic' under the
European Critical Raw Materials Act ('CRMA'), with a decision expected in
December.
· Held a productive meeting with German Chancellor Olaf Scholz during
his visit to the Saxon Mining Authority.
Investor hub presentation
Anton Du Plessis, CEO, will provide a pre-recorded webinar relating to these
results, which will be available for viewing via the Company's investor hub.
Investors will be notified via email of the presentation if they have signed
up to the Zinnwald Investor Hub in advance, which can be done here:
https://investors.zinnwaldlithium.com/auth/signup
(https://investors.zinnwaldlithium.com/auth/signup) . Investors are invited to
submit questions in advance at:
https://investors.zinnwaldlithium.com/link/XyOVVP
(https://investors.zinnwaldlithium.com/link/XyOVVP) .
For further information visit 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.
CHAIRMAN'S STATEMENT
We continue to advance our integrated lithium hydroxide ('LiOH') project in
Germany (the 'Project'), which is positioned to supply Europe with a
sustainable source of lithium at a competitive cost that reduces its
dependency on imports and further develop the EU's battery chain
infrastructure.
During the period, we announced two updates to our independent Mineral
Resource Estimate ('MRE'). The first, published in February, confirmed the
Project's position as the second-largest hard rock lithium project in the EU,
while the second, published in June, increased the Measured category.
Accordingly, the increased size of the resource creates the potential to
develop a significantly larger project, which could be developed in phases,
starting with Phase 1 production of 16,000-18,000 tonnes per annum ('tpa') of
battery-grade (99.5%) LiOH, with the potential of a Phase 2 to add additional
production capacity. Phase 1 would represent a circa 50% increase over the
production of approximately 12,000 tpa projected in the 2022 Preliminary
Economic Assessment and would be sufficient to power 500,000 electric vehicles
per annum.
We also strengthened the team to support increased activity and continued with
testwork programmes focused primarily on the Metso Alkaline Leach process.
Results from these tests continue to generate encouraging results supporting
further development of this processing route. The alkaline leach route
potentially offers significant advantages in overall recovery, energy
efficiency and environmental impact reduction.
We had originally planned to incorporate and publish our findings into a
Definitive Feasibility Study ('DFS') at the end of this year. However, given
the increased scale of the Project and the potential benefits offered by the
Metso process, post period end in July we decided to take an interim step and
produce a Pre-Feasibility Study ('PFS'), which we expect to complete in Q1
2025. This enables us to evaluate the potential for Phase 2 and ensure that
its impact on the environment and local communities is minimised and technical
testwork and trade-offs fully examined.
The additional PFS step is not anticipated to delay the overall project
timeline. In fact, several workstreams have already reached Feasibility
Study level accuracy and others are either in progress or nearing completion
including metallurgical testing, mine planning, permitting, and commercial
activities.
In terms of market dynamics, the lithium sector continues to navigate complex
trading conditions as a result of geopolitical tensions, regulatory changes
and shifting demand patterns. Despite these hurdles, Europe's future demand
for lithium is projected to exceed supply as the EU strives to secure its own
lithium resources, reduce its reliance on external sources and achieve its
climate objectives.
The European Critical Raw Materials Act ('CRMA') was enacted in May and
represents a crucial move towards enhancing the bloc's strategic autonomy and
economic resilience. In light of this, in August we submitted an application
to have our project designated as 'strategic' under the CRMA as we believe it
meets the necessary criteria. Achieving this status would offer several
benefits including expedited permitting and increased regulatory support,
which would be instrumental in advancing the Project and integrating it into
the EU's critical raw materials value chain. The EU is expected to announce
its decision in December.
Encouragingly, in June we received a strong expression of support from the
Government of the State of Saxony for the Project in relation to our
application for a grant under the German Government's Temporary Crisis and
Transition Framework ('TCTF') scheme for its domestic Battery Chain. Although
the amount and certainty of grant funding for the Project remain unknown until
the Federal Government makes a formal decision on recommended projects during
2024 and final funding decisions at the end of the year, this support
underscores the emphasis on developing domestic supplies of critical raw
minerals in Germany and the EU.
We were also delighted to meet German Chancellor Olaf Scholz during his visit
to the Saxon Mining Authority earlier this month to discuss the future raw
material security. The Chancellor was supportive saying: "We need all of
Europe ready to take on projects like this. It's not just a challenge for us;
there are critical raw materials across Europe that we can mine and urgently
need."
Local support is essential for the long-term success and sustainability of our
Project. With this in mind, our team in Germany is actively engaging in
regular dialogue with the local communities to foster a shared sense of
purpose that promotes mutual prosperity. By supporting our project, we are
hopeful that they see the value in ensuring the responsible extraction of
resources, economic growth, and job creation while contributing to global
climate goals.
Equally important are our shareholders, which is why we have engaged
InvestorHub. This platform allows us to streamline our communication,
providing shareholders with timely updates, insights, and essential
information about the Project as well as helping us to better address
shareholder queries.
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 PFS and into the ongoing work in 2024, with cash of €8.1m as at
the date of this report.
Outlook
The remainder of the year promises to be busy as we look to develop a
low-risk, scalable project that delivers enduring value to our shareholders,
stakeholders, and the communities in which we operate. The updated MRE
supports this vision and underscores the potential for increased production of
LiOH through a phased development approach.
We look forward to keeping our shareholders informed with regular updates as
we progress the Project towards its construction phase.
Jeremy Martin
Non-executive Chairman
OPERATIONAL REVIEW
The first half of 2024 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 completion of its MRE, detailed mine planning and testwork
related to mineral and chemical processing.
Six months to 30 June 2024
GEOLOGY AND MINING
Mineral Resource Estimate
On 21 February 2024, the Company published its updated independent MRE that
showed a substantial increase in its Mineral Resource at the Project with a
243% increase in contained lithium in the Measured and Indicated categories
versus the 2018 MRE. This establishes the Project as the second largest hard
rock lithium project by both resource size and contained lithium in the EU and
clearly highlights its scale and strategic importance.
The MRE incorporated 26,911 metres of new diamond core drilling across 84
drill holes and a reinterpreted and updated geological model since the
previous MRE, which was released in September 2018. In addition to the
high-grade greisen mineralisation, focus of the recent 2022/2023 drilling was
the lithium mineralisation hosted by the broader zone of altered albite
granite, which includes internal lenses of higher-grade greisen. The
highlights of this initial MRE showed a 445% increase over the previous MRE
issued in May 2018, with a total Measured and Indicated resource of 193.5Mt
that represents 429,000 tonnes of contained Lithium metal and an Inferred
resource of a further 33.3Mt that represents 71,000 tonnes of contained
Lithium metal.
On 6 June 2024, the Company announced a further update to the MRE following a
geometallurgical testwork programme recommended by Snowden Optiro on 35
variability drill core samples derived from the 2022 / 2023 drilling
campaign. It was undertaken to provide a higher level of confidence in the
Mineral Resource within the mineralised albite granite, which surrounds the
lenses of higher-grade greisen mineralisation. The result was to add an
additional 25.0Mt @ 2,090ppm Li (52kt contained lithium metal), in the
Measured category representing an increase of 221% in tonnes and 133% in
contained metal in the Measured category compared with the February 2024 MRE.
The Project now has sufficient material in Measured category alone to support
over 20 years of production. This is a major milestone as it further de-risks
the resource and adds a higher level of confidence in the detailed mine plan,
which is key to future financing plans.
Overall, the total Measured category increased to 36.3Mt @ 2,500ppm Li (91kt
contained lithium metal) while the total Indicated category is now 157.2Mt @
2,150ppm Li (337kt contained lithium metal), as a result of the increase in
the Measured category. The total Measured and Indicated category remains
unchanged at 193.5Mt @ 2,220ppm Li (428kt contained lithium metal). The
Inferred category remained unchanged at 33.3Mt @ 2,140ppm Li (71kt contained
lithium metal).
The MRE (detailed below) was prepared in accordance with National Instrument
43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities
Administrators ("NI 43-101") by independent consulting firm Snowden Optiro Ltd
("Datamine International") of Bristol, United Kingdom.
Table .1 Mineral Resource Statement for Zinnwald Lithium Project, effective
5th June 2024.
Classification Domain Tonnes Mean Grade Contained Metal
(Mt) Li (ppm) Li2O (%) Li (kt) LCE (kt)
Measured External Greisen (1) 11.3 3,420 0.736 39 206
Mineralised Zone (2) 25 2,090 0.449 52 277
Internal Greisen 1.5 3,240 0.697 5 27
Mineralised Granite 23.5 2,020 0.434 47 250
Subtotal (1) and (2) 36.3 2,500 0.538 91 483
Indicated External Greisen (1) 2.1 3,510 0.756 7 40
Mineralised Zone (2) 155.1 2,130 0.459 331 1,762
Internal Greisen 13.2 3,330 0.717 44 234
Mineralised Granite 141.9 2,019 0.435 287 1,528
Subtotal (1) and (2) 157.2 2,150 0.463 338 1,802
Measured + Indicated Subtotal 193.5 2,220 0.478 429 2,285
Inferred External Greisen (1) 0.8 3,510 0.756 3 15
Mineralised Zone (2) 32.5 2,110 0.454 68 364
Internal Greisen 0.6 2,880 0.62 2 9
Mineralised Granite 31.9 2,090 0.45 67 355
Subtotal (1) and (2) 33.3 2,140 0.461 71 379
This updated MRE cemented the Project's position as the second largest
resource in the EU and the third largest in Europe as a whole. The chart
below puts the Project in context of the other European hard rock lithium
projects.
Mine Planning Activities
With the completion of the updated MRE, the Company has commenced detailed
mine planning with Snowden Optiro. Large scale sub-level stoping with
subsequent backfill has previously been determined to be the optimal mining
method, which offers higher capacity, lower operating expenditure and easier
backfill process than the Room and Pillar-method assumed in earlier studies.
Notably, with 36.3Mt in measured resources and the large dimensions of both
the High-Grade External Greisen ('HGG') and Albite Granite ('AG') domains now
confirmed, significantly larger annual mining volumes can be supported, which
will positively impact production of end product.
It is envisaged that the revised mine design will incorporate the strategy of
higher productivity mining methods. In addition, operating the mine using a
fully electrified trackless equipment fleet will be evaluated. 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.
PROCESS DEVELOPMENT / TESTWORK / ENGINEERING
The Company has continued its mineral processing, calcination and
hydrometallurgical testwork programme run by Metso, a leader in sustainable
technologies, end-to-end solutions and services for the aggregates, minerals
processing and metals refining industries globally.
Mineral Processing
Following completion of the pilot scale mineral processing testwork in
December 2023 at the GTK pilot facilities in Finland by GTK and Metso, which
confirmed the earlier bench scale test work, basic engineering for a
feasibility study was initiated later that month. In H1 2024, Metso
completed its mineral processing flowsheet design and equipment selection.
This section of the process is a simple mainstream, proven design with a
single crushing stage followed by two production lines consisting of grinding
and rougher-scavenger wet magnetic separating and dewatering. Basic
engineering for this stage is expected to be completed by the end of September
2024.
Pyro- and Hydrometallurgy
Pilot scale calcination testwork was undertaken at IBU-tec under Metso's
supervision during June 2024. A further large-scale c. 1 tonne sample has
been sent to Metso's facility in York, Pennsylvania, USA for a further
testwork programme focused, inter alia, on equipment sizing. The calcination
tests undertaken at IBU-Tec have provided calcined material, which will be
tested at large bench-scale at Metso's facility in Pori, Finland, which will
help to define the base line hydrometallurgical process and the mass balance.
The ongoing pyro- and hydrometallurgy testwork is all designed with the goal
of further proving the suitability of Zinnwaldite for Metso's proprietary
alkaline leach process. The earlier findings for initial testwork included:
· No additives needed in calcination;
· Significantly less waste material produced;
· Temperature clearly below 1000°C; and
· Li recovery to solution above 95%.
The Company and Metso believe that the alkaline processing route has the
potential to offer significant advantages in terms of overall recovery,
efficiency and reduced impact on the environment. While the use of this
process for zinnwaldite ore is a new application of the process, it has been
successfully demonstrated at continuous pilot scale using spodumene feedstock
at other operations such as the Keliber lithium project in Finland, which is
under construction.
A representative sample of zinnwaldite concentrate was also tested by K-Utec
during Q2 2024. This confirmed that the large-scale tests previously performed
by K-Utec based on HGG concentrate are applicable to the material derived from
a combination of both HGG and AG. As such, the sulphation roast process
route that underpinned the PEA published in 2022 remains a viable processing
route for the larger scale operation. Work to assess this relative to the
alkaline leach route will continue to ensure that the route eventually
selected is the most optimal in terms of delivery, efficiency, cost and
environmental impact.
Hydrogeology
In February 2024, the Company completed its hydrogeological drill programme
that comprised eight groundwater ('GW') monitoring wells and was started in
September 2023. These included six deep wells extending to reach the
mineralised Albite Granite, and two shallow drill wells intended to penetrate
the Rhyolite rock of the hanging wall. All of these wells will be converted
to long term ground water monitoring wells to collate data on an ongoing
basis.
The results of this programme will support the production of a hydrogeological
underground and surface model. This model will include information received
from Geomet in regard to data on the Czech side of the border to support the
development of a combined cross-border hydrogeological model. This represents
an essential piece of work for both technical and planning as well as
environmental impact assessment ('EIA') permitting requirements.
The Company is supported by a group of consultants in this effort, including
Geologische Landesuntersuchung Freiberg GmbH ('GLU'), Fugro and ERM.
Infrastructure
In 2024, the Company has continued its work on defining the optimal solutions
for the required infrastructure based on the potential for higher production
levels supported by the results of the drilling campaign and the metallurgical
testwork carried out. The Company is using Fichtner GmbH, a major German
consulting group with experience concerning materials handling, road, and rail
infrastructure as well as all civil works. The Group will, using trade-off
studies, evaluate the most suitable, economical and environmentally friendly
options for all surface facilities.
The Company has also continued with its evaluations for tailings management,
supported by Knight Piesold (UK), which specialises in tailings management and
engineering. The Company is strongly committed to progress planning for a Dry
Stack Facility ('DSF'), for which multiple design and site options are being
evaluated.
Exploration Licenses
Whilst the Company's primary focus is on the development of its core Zinnwald
License, it continues to advance targets on its other 100% owned prospective
exploration license areas that surround it including Falkenhain, Altenberg,
Bärenstein and Sadisdorf. The primary focus of the geology team in the
first half of 2024 was on preparing the updated MRE for Zinnwald, but work has
also been carried out to relog and sample historic data and core related to
the exploration licenses.
In addition, the team is evaluating an extensive historic geological database
derived from historical drilling campaigns such as those undertaken by the
former Wismut SAG, which has recently been made available to the public.
Notably, there is data for over 900 drill holes of various depths within the
areas of interest to the Company that has the potential to provide valuable
geological and geotechnical information relevant to its licenses and site
location options.
EUROPEAN UNION MARKET & FUNDING OPPORTUNITIES
Critical Raw Materials Act ("CRMA")
On 23 May 2024, the EU's CRMA passed into law, which includes two key pillars
that are most relevant to the Project. Firstly, it codifies the EU's
benchmark goals for domestic European capacities to be able to extract 10%,
process 40% and recycle 25% of its annual consumption of strategic raw
materials by 2030. Secondly, it states that "selected strategic projects
will benefit from support for access to finance and shorter permitting
timeframes (27 months for extraction permits and 15 months for processing and
recycling permits)."
The EU Commission issued an invitation for applications by promotors of
critical materials projects to be formally designated as a "strategic project"
under the specific categories of Extraction, Processing, Recycling or
Substitution. The invitation specified a deadline for the first round of
applications to be submitted by 22 August 2024.
The Company formally applied for the designation by this deadline under both
the Extraction and Processing categories. It believes that there is a
strong case that the Project will meet the key criteria for recognition as a
Strategic Project, namely, its ability to deliver a meaningful contribution of
LiOH to the EU based on the scale of its resource as the second largest
hard-rock deposit in the EU; the feasibility of its flowsheet; its
sustainability credentials; and its wider benefits to the EU.
Temporary Crisis and Transition Framework ('TCTF')
In September 2023, the German Federal Ministry for Economic Affairs and
Climate Action ('BMWK') announced a new programme for public grant funding
under the TCTF, a temporary funding instrument of the EU to promote the
production of climate-neutral, strategically important technologies. This
specific TCTF programme is to support the "Resilience and Sustainability of
the Battery Cell Manufacturing Ecosystem" in Germany.
Zinnwald Lithium submitted an application and, as part of Phase 1 of the
application process, underwent a series of detailed reviews with by BMWK's
programme management agency, VDI/VDE Innovation + Technology GmbH ('VDI/VDE').
On 27 June 2024, Zinnwald Lithium received an invitation from VDI/VDE to
formally apply for the envisaged funding (Phase 2 of the application
process). This invitation does not guarantee that funding will be secured
but is a recognition of the strong potential of the Project.
If the application is ultimately successful, any funding would be provided 70%
by the Federal State Government and 30% by the State of Saxony. On 4 June
2024, the Saxony Government announced its commitment to provide its portion of
any funding, subject in part to receipt of formal approval by the Parliament
of the State of Saxony, which was duly received on 21 June 2024.
Zinnwald Lithium has mandated IKB Deutsche Industriebank AG to support the
application within Phase 1 and 2 of the process.
SUSTAINABILITY 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. The Company
believes that transparency and ethical behaviour are central to any successful
group and undertakes all development with respect to the environment and
neighbouring communities.
Permitting and 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 EIA Study.
The Company has ongoing engagement with all relevant authorities and other
stakeholders, including the Saxony Mining Authority ('SOBA'), the
Landesdirektion Sachsen (State Directorate responsible for spatial planning)
and local municipal, district, state and federal authorities.
The Company previously held a Scoping Meeting in 2023 with all relevant
authorities and in January 2024, received the Scoping Meeting Report from
SOBA, detailing stakeholder feedback on the Project. The Company has also been
undertaking an "Early Spatial Planning Procedure" to gather feedback on its
plans from the relevant authorities. Consequently, an alternative potential
processing site location was identified alongside the A17 Highway, the main
highway connecting Dresden with Prague. This site is large enough to
accommodate an operation that can support the scale of mineral resource that
has been confirmed with the updated MRE.
Social
With the Project gaining momentum, the Company has continued to build out its
long-term operational owners' team in Germany. Engagement with the local
community of Zinnwald remains a priority for the Company. Accordingly, the
Company's local MD, Marko Uhlig, holds regular meetings with local and
regional representatives to foster collaboration and dialogue on
community-related matters. In May 2024, as part of its continued commitment
to the local community, the Company took out a long-term lease on a new
property in the City of Altenberg that now houses the Project's extensive core
shed and also presentation areas for engagement with the local community. On
1 June 2024, the Company held a well-attended open day for the community at
which several hundred people attended as well as representatives from local
government and SOBA. The Company will continue to hold town hall events in the
coming months to provide further details on the development of the Project,
its benefits, and its aim to mitigate impact on the environment and community.
Post Balance Sheet events to 16 September 2024
Feasibility study strategy
The significant increase in resource size coupled with the identification in
2024 of a potential processing site next to the A17 Highway has created the
opportunity for the Company to consider a significantly larger scale
project. This will increase the relevance of the Project to the European
battery materials markets and improve its prospects of being classified as a
strategic project under the CRMA.
In order to properly assess the Project's design and scope, it has been
decided to undertake an interim step of producing a PFS to allow a detailed
analysis of the trade-off and options associated with the increased scope of
the Project and the new site options. The PFS is expected to be completed in
Q1 2025 with several parts already reaching Feasibility Study accuracy.
Alongside this, the Company continues to progress the spatial planning and
permitting process associated with the Project and, as such, does not
anticipate that taking the additional step of producing a PFS will delay the
overall project timeline.
As with its previous work on the MRE, the Company will continue to use
internationally credible consultants to assist the Project through this phase
and onwards to the Feasibility Study as this will lend the credibility
required by permitting authorities and ultimately finance partners. For the
PFS, the Company is working with Metso for mineral processing and pyro and
hydromet engineering, Snowden Optiro for mine planning, Knight Piesold for
design of the tailings storage facility, K-Utec for backfill design, DMT for
mining electrical and communications, ERM for hydrogeology, Fichtner for
infrastructure and Dr Sauer & Partners for tunnel development.
Environmental and Social Impact Assessment ('ESIA') Scoping Study
Following engagement and various meetings with the authorities, the Project
will follow an integrated permitting procedure. A Spatial Planning Procedure
(under the Saxony State Directorate - Landesdirektion Sachsen - LDS) is
underway to feed into the overarching permit the General Operating Plan (GOP -
Rahmenbetriebsplan). The Mining Authority of the Federal State of Saxony
(Sächsisches Oberbergamt - SOBA) will be the single overarching permitting
authority for the GOP. The GOP requires a whole suite of documents including
the EIA and other related documentation (e.g. Natura 2000 Impact Assessments,
Landscape Management Plan, various environmental technical reports etc.).
The Project has been screened under the Mining EIA legal framework and Project
Standards. It has been determined that an EIA is mandatory for the Project.
In August 2024, the Group issued a Request for Quotation ('RfQ') to five
leading internationally respected consultancy groups for the production of an
ESIA Scoping Study. The Company expects to select the successful bidder for
this Study in October 2024 with work to start immediately. This Scoping Study
stage will include the provision of ESIA related inputs to the Stakeholder
Engagement Plan ('SEP')', the Land Acquisition & Resettlement Framework
('LARF') and the Environmental and Social sections of the PFS. The Company
will then invite the successful bidder during the later part of the ESIA
scoping stage to submit a full technical and commercial proposal for the full
ESIA stage. This will include commercial proposal for related assessments such
as Appropriate Assessment under Birds & Habitats Directive (if deemed
required during scoping) and a full suite of Environmental and Social
Management Plan ('ESMP') documents.
The ESIA Scoping Report and then full ESIA will also be used for the purposes
of seeking finance from International Financing Institutions ('IFIs') who are
signatories to the Equator Principles 4 ('EP4'). EP4 is a risk management
framework adopted by IFIs for determining, assessing and managing
environmental and social risks of investments, as well as the requirements of
the IFC Performance Standards and the broadly aligned EBRD Performance
Requirements. In addition, the WBG EHS Guidelines for Mining and General
Guidelines are relevant to meeting international lender standards. The Group
will also evaluate the applicability of the Initiative for Responsible Mining
Assurance ('IRMA') certification. The Group also aligns itself to the UN
Sustainable Development Goals ('SDGs'), which are a collection of 17
interlinked global goals supported by 5448 actions. The Group will undertake a
process to identify its initial and future contributions to the UN SDGs on a
local and global scale.
Visit by Chancellor Scholz
On 30 August 2024, Germany's Federal Chancellor, Olaf Scholz, visited the
Saxon Mining Authority ('SOBA') in Freiberg to discuss the future raw material
security in Germany with the Saxon Minister of Economics, Martin Dulig.
Representatives of Zinnwald Lithium GmbH also attended the meeting at which
the potential role of Zinnwald Lithium's Project near Altenberg was discussed.
During his visit, Chancellor Scholz was enthusiastic about the possibility of
mining lithium in Saxony in an environmentally friendly way. He said "We are
a country that processes modern raw materials. Germany imports many raw
materials from other countries in the world, but some are also available in
this country - including lithium. In Saxony, lithium is to be mined on a large
scale in an environmentally friendly way in the future. "This creates jobs,
prosperity and is therefore a priority", the chancellor wrote on X after the
meeting. During his visit to the Oberbergamt, the Chancellor learned about the
Project, in which Zinnwald Lithium GmbH near Altenberg wants to implement one
of the largest lithium mining projects in Europe - by around 2030. The
Company's goal is to mine roughly the amount of lithium needed for about
500,000 car batteries per year. The Federal Government and the Free State of
Saxony support the Project.
Lithium Market in 2024
2024 has continued to see ongoing weakness in the price of lithium from the
highs of $80,000 per tonne in 2022 to below $15,000 per tonne in 2024. The
lithium market has grown very rapidly from being a relatively small niche
market from a global perspective. Partly as a consequence of this, the pricing
of lithium has historically been quite volatile if looked at over a purely
short-term basis. The price tends to overshoot in the short term on both the
high and low side, as shown in the swings from 2022 to 2023. However, pricing
remains materially higher than the prices seen in the previous cyclical low of
2018-19.
It is important to note that the Company deliberately took a conservative long
term price assumption of $22,500/t in its PEA in 2022 to ensure the robustness
of its financial forecasts. This can be shown in comparison to other
projects that have issued studies since Zinnwald's PEA was published with
their assumed pricing noted below:
The financial analysis included in the 2022 PEA indicated that the Project
could be relatively robust financially even at a reduced lithium price.
There are large parts of the current supply chain, most notably Chinese
lepidolite production, that produces at a materially higher cost than those
estimated for the Project.
In Canaccord's most recent quarterly assessment of pricing for end Q2 2024, it
states: "We have flat lined our price forecast until 2026. We see SC6 pricing
being range bound between US$1,000-1,500/t until 2027 on adequate supply.
Excursions below US$1,000/ t will result in the supply removal and a quicker
rebalancing of the market. We forecast average chemical pricing of US$15,129/t
out to 2027. From 2027, we believe the supply additions will have abated and
demand growth from North America and Europe will drive pricing higher. We
continue to place LT pricing at US$1,500/t (SC6) and US$22,500/t (chemicals);
it remains our view that this is needed to stimulate supply longer term."
Accordingly, the Company continues to believe that a Lithium Hydroxide price
of $22,500 per tonne is a reasonable long-term assumption.
Outlook
The Project's updated MRE that has shown the potential size and scale of the
Project has re-positioned it in terms of its relevance to the German and EU
Battery Chain. The Company's near-term priorities are to progress and complete
the PFS Study for publication in Q1 2025. The Company will also continue to
advance the work required to successfully permit the Project, including the
Spatial Planning submission and the start of its formal ESIA Scoping Study.
Alongside this, advancing the Project from a technical and permitting aspect,
the Company will continue to advance its long-term financing strategy
including discussions with potential financing partners.
Financial Review
Notwithstanding that the Company is a UK Plc with its ordinary shares admitted
to trading on AIM, the Company presents its accounts in its functional
currency of Euros, since the majority of its expenditure, including that of
its subsidiary Zinnwald Lithium, is denominated in this currency.
The Group is still at an exploration and development stage and not yet
producing minerals, which would generate commercial income. The Group is not
expected to report overall profits until it is able to profitably
commercialise its Zinnwald Lithium project in Germany.
During the period, the Group made a loss before taxation of €1.2m compared
with a loss of €1.3m for the six-month period ended 30 June 2023. In the
six months to 30 June 2024, administrative expenses remained at €1.2m in
line with the previous period. It includes the costs related to being a
public listed company, including the costs of non-executive directors,
brokers, nominated adviser and other advisers. There was also a share-based
payment expense of €0.3m in both 2024 and 2023, arising from the issuance of
new Options and RSUs in each period. There was rental income in each period
of €0.1m arising from the sub-leasing of space at its offices and core shed
in Freiberg, which has now ended. Interest income on the Group's cash
balances increased to €0.2m in the period reflecting the higher cash balance
flowing through from the Company's fund raise in March 2023.
The Total Net Assets of the Group decreased to €38.9m as at 30 June 2024
compared with €39.9m at 31 December 2023. The Group's Intangible asset
balance increased to €30.6m at 30 June 2024 from €27.6m at 31 December
2023 and cash balances decreased to €9.3m from €14.3m at the end of 2023,
which all reflects ongoing spend on the Zinnwald Lithium Project. As at the
date of this report, the Group's cash balance is €8.1m.
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 2024
30 June 2024 30 June 2023
Unaudited Unaudited
Notes € €
Continuing operations
Administrative expenses (1,231,500) (1,178,600)
Other operating income 5 68,415 68,957
Share based payments charge 14 (304,818) (255,111)
Operating Loss 4 (1,467,903) (1,364,754)
Finance income 6 241,332 32,792
Loss before taxation (1,226,571) (1,331,962)
Tax on loss - -
Loss for the financial period (1,226,571) (1,331,962)
Other Comprehensive Income - -
Total comprehensive loss for the period (1,226,571) (1,331,962)
Earnings per share from continuing operations attributable to the owners of 7
the parent company
Basic (cents per share) (0.25) (0.34)
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 2024
30 June 2024 30 June 2023 31 December 2023
Unaudited Unaudited Audited
Notes € € €
Non-current assets
Intangible Assets 8 30,617,235 22,654,530 27,652,152
Property, plant and equipment 9 413,768 353,077 386,788
Right of Use Assets 10 220,035 - -
31,251,038 23,007,607 28,038,940
Current assets
Trade and other receivables 11 409,378 507,920 357,463
Right of Use Assets 10 120,049 116,280 46,131
Cash and cash equivalents 12 9,287,751 19,689,789 14,306,191
9,817,178 20,313,989 14,709,785
Total Assets 41,068,216 43,321,596 42,748,725
Current liabilities
Trade and other payables 13 (492,325) (934,725) (1,469,564)
Lease Liabilities < 1 year 10 (116,612) (118,454) (47,795)
(608,937) (1,053,179) (1,517,359)
Net current assets 9,208,241 19,260,818 13,192,426
Non-current Liabilities
Deferred tax liability (1,382,868) (1,382,868) (1,382,868)
Lease Liabilities > 1 year 10 (224,490) - -
(1,607,358) (1,382,868) (1,382,868)
Total liabilities (2,216,295) (2,436,047) (2,900,227)
Net Assets 38,851,921 40,885,548 39,848,498
Equity
Share capital 15 5,377,253 5,365,379 5,365,379
Share premium 39,476,355 39,403,810 39,403,810
Other reserves 2,042,106 1,623,039 1,896,531
Retained earnings (8,043,793) (5,506,680) (6,817,222)
Total equity 38,851,921 40,885,548 39,848,498
ZINNWALD LITHIUM PLC
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2024
Share Capital Share premium account Other reserves Retained earnings Total
€ € € € €
Balance at 1 January 2024 5,365,379 39,403,810 1,896,531 (6,817,222) 39,848,498
Six months ended 30 June 2024
Loss and total other comprehensive income for the period - - - (1,226,571) (1,226,571)
Currency translation difference - - 38 - 38
Total comprehensive income for the period - - 38 (1,226,571) (1,226,533)
Issue of share capital 11,874 72,545 - - 84,419
Share issue costs - - - - ,
Credit to equity for equity settled share-based payments - - 145,537 - 145,537
Total transactions with owners directly in equity 11,874 72,545 145,537 - 229,956
Balance at 30 June 2024 5,377,253 39,476,355 2,042,106 (8,043,793) 38,851,921
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 recognised 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
ZINNWALD LITHIUM PLC
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
30 June 2024 30 June 2023
Unaudited Unaudited
Notes
Cash flows from operating activities
Cash used in operations 16 (2,154,765) (859,168)
Net cash outflow from operating activities (2,154,765) (859,168)
Cash flows from investing activities
Exploration expenditure (2,955,592) (3,689,166)
Purchase of property, plant and equipment (80,385) (50,707)
Proceeds from sale of tangible assets - -
Interest received 241,332 32,792
Net cash used in investing activities (2,794,645) (3,707,081)
Cash flows from financing activities
Proceeds from the issue of shares - 21,163,453
Lease payments (69,030) (72,000)
Net cash (used in) / generated from financing activities (69,030) 21,091,453
Net (decrease)/increase in cash and cash equivalents (5,018,440) 16,525,204
Cash and cash equivalents at beginning of period 14,306,191 3,164,585
Cash and cash equivalents at end of period 12 9,287,751 19,689,789
ZINNWALD LITHIUM PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
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 2024.
Name of undertaking Registered office Nature of business Class of shares held Direct holding Indirect holding
Zinnwald Lithium Holdings Ltd United Kingdom Exploration Ordinary 100.0% -
Zinnwald Lithium GmbH Germany Exploration Ordinary - 100.0%
Zinnwald Lithium Services GmbH Germany Leasing Ordinary - 100.0%
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 Zinnwald Lithium
Services GmbH is now at Antonstrasse 3a, 01097, Dresden, Germany, with effect
from 21 June 2024.
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 2023, which have been prepared in accordance with
UK-adopted International Accounting Standards (UK IAS) and IFRIC
interpretations and with those parts of the Companies Act 2006 applicable to
companies reporting under UK IAS (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 2023 were approved by the Board of Directors on 21 March 2024 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 2023.
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 2024 was
€1.176955.
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.
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.
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 €9.3m at the period end and keeps a tight control over all
expenditure. The Board maintains an ongoing strategy to enable the
curtailing of a number of areas of expenditure to enable it to meet its
minimum fixed costs for the next 12 months, even without raising further
funds, whilst still maintaining all licenses in good standing. Thus, the
going concern basis of accounting in preparing the Financial Statements
continues to be adopted.
Intangible assets
Capitalised Exploration and Evaluation costs
Exploration and evaluation assets are capitalised as Intangible Assets and
represent the costs incurred on the exploration and evaluation of potential
mineral resources. They include direct costs (such as permitting costs,
drilling, assays and flowsheet testwork done by consulting engineers), licence
payments and fixed salary/consultant costs, capitalised in accordance with
IFRS 6 "Exploration for and Evaluation of Mineral Resources". Exploration
and Evaluation assets are initially measured at historic cost. Exploration
and Evaluation Costs are assessed for 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.
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 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.
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.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held at call with
banks.
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, which expired in April 2024 and have
been replaced by new office leases in Dresden and Core Shed in Altenberg that
both started on 1 May 2024.
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is
typically the case) this is not readily determinable, in which case the
group's incremental borrowing rate on commencement of the lease is used.
Variable lease payments are only included in the measurement of the lease
liability if they depend on an index or rate. In such cases, the initial
measurement of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments are
expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also
includes:
· amounts expected to be payable under any residual value
guarantee;
· the exercise price of any purchase option granted in favour of
the group if it is reasonably certain to assess that option;
· any penalties payable for terminating the lease, if the term of
the lease has been estimated on the basis of termination option being
exercised.
Right of use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received, and increased for:
· lease payments made at or before commencement of the lease;
· initial direct costs incurred; and
· the amount of any provision recognised where the group is
contractually required to dismantle, remove or restore the leased asset
Subsequent to initial measurement lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made. Right-of-use assets are amortised on a straight-line
basis over the remaining term of the lease or over the remaining economic life
of the asset if, rarely, this is judged to be shorter than the lease term.
Judgements and key sources of estimation uncertainty
In the application of the accounting policies, the directors are required to
make judgements, estimates and assumptions about the carrying amount of assets
and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised where the revision affects only that period, or in the
period of the revision and future periods where the revision affects both
current and future periods.
Critical judgements
The following judgements and estimates have had the most significant effect on
amounts recognised in the financial statements.
Share-based payments
Estimating fair value for share based payment transactions requires
determination of the most appropriate valuation model, which depends on the
terms and conditions of the grant. This estimate also requires determination
of the most appropriate inputs to the valuation model including the expected
life of the share option or appreciation right, volatility and dividend yield
and making assumptions about them. For the measurement of the fair value of
equity settled transactions with employees at the grant date, the Group and
Company use the Black Scholes model.
Impairment of Capitalised Exploration Costs
Group capitalised exploration costs had a carrying value as at 30 June 2024 of
€30,617,236 (31 December 2023: €27,652,152), which solely relate to the
Zinnwald Lithium Project, Management tests annually whether capitalised
exploration costs have a carrying value in accordance with the accounting
policy stated in note 1.6. Each exploration project is subject to a review
either by a consultant or an appropriately experienced Director to determine
if the exploration results returned to date warrant further exploration
expenditure and have the potential to result in an economic discovery. This
review takes into consideration long-term metal prices, anticipated resource
volumes and grades, permitting and infrastructure as well as the likelihood of
on-going funding from 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.
In Germany, ZLGs core mining license at Zinnwald is valid to 31 December 2047,
which underpins the PEA published in September 2022. In February 2024, and
further updated in June 2024, the group published an updated Mineral Resource
Estimate that showed a materially increased resource that underpins both the
size of the Project and its long mine life. It shows that the Project is the
second largest hard-rock lithium project in the EU and the third largest in
Europe as a whole. ZLG has additional exploration licenses at Falkenhain valid
to 31 December 2025, at Altenberg to 15 February 2027, at Sadisdorf to 30 June
2026 and at Bärenstein, newly granted in 2023 and valid to 30 June 2028.
The 2022 PEA showed a material increase in size and output of the Project and
underpinned a pre-tax NPV of $1.6 billion and a post-tax NPV of $1.0 billion
and post-tax IRR of 29%. Accordingly, the Board has concluded that no
impairment charge is required for these assets.
Segmental reporting
The Group operates in the UK and Germany. Activities in the UK include the
Head Office corporate and administrative costs whilst the activities in
Germany relate to ongoing development work at the group's wholly owned
Zinnwald Lithium Project. The reports used by the Board and Management are
based on these geographical segments. Non-core Assets related to the
historic Abbeytown Zinc Project, which was sold in April 2023.
Non-core Assets Germany UK Total
2024 2024 2024 2024
€ € € €
Administrative expenses - (520,159) (808,446) (1,328,605)
Share based payment charge - - (304,818) (304,818)
Gain/(loss) on foreign exchange - - 99,296 99,296
Other operating income - 68,415 - 68,415
Finance income - - 241,332 241,332
Interest Paid - (2,191) - (2,191)
Loss from operations per reportable segment - (453,935) (772,636) (1,226,571)
Reportable segment assets - 30,156,337 10,911,880 41,068,217
Reportable segment liabilities - 2,062,391 153,905 2,216,296
Non-core Assets Germany UK Total
2023 2023 2023 2023
€ € € €
Administrative expenses (8,839) (446,466) (811,663) (1,266,968)
Share based payment charge - - (255,111) (255,111)
Gain/(loss) on foreign exchange - - 88,368 88,368
Other operating income - 68,957 - 68,957
Finance income - - 32,792 32,792
Interest Paid - (2,511)
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
Operating loss
2024 2023
€ €
Operating loss for the period is stated after charging / (crediting)
Exchange (gains)/losses (99,296) (88,368)
Depreciation of Right of Use Assets 66,194 69,005
Depreciation of owned property, plant and equipment 30,457 25,219
Amortisation of intangible assets 13,494 800
Share-based payment expense 304,818 255,111
Operating lease charges 44,906 23,712
Exploration costs expensed 423,407 351,197
Other operating income
2023 2022
€ €
Other operating income 68,415 68,957
Other operating income primarily comprises includes rental and utilities
income from sub-lessors at the Group's former offices in Freiberg.
Finance income
Group
2024 2023
€ €
Interest income
Interest on bank deposits 241,332 32,792
Earnings per share
2024 2023
€ €
Weighted average number of ordinary shares for basic earnings per share 474,458,825 385,948,016
Effect of dilutive potential ordinary shares
- Weighted average number of outstanding share options/RSUs and 22,276,104 9,343,321
PSUs
Weighted average number of ordinary shares for diluted earnings per share 496,734,629 395,293,337
Earnings
Continuing operations (1,226,571) (1,331,962)
Loss for the period for continuing operations
Earnings for basic and diluted earnings per share distributable to equity (1,226,571) (1,331,962)
shareholders of the company
Earnings per share for continuing operations
Basic and diluted earnings per share
Basic earnings per share (0.25) (0.34)
There is no difference between the basic and diluted earnings per share for
the period ended 30 June 2024 or 2023 as the effect of the exercise of options
would be anti-dilutive.
Intangible Assets
Group Total
€
Cost
At 1 January 2024 27,655,638
Additions - group funded 2,955,593
Reclassified from tangible assets 25,075
At 30 June 2024 30,636,306
Amortisation and impairment
At 1 January 2024 3,486
Amortisation charged for the period 13,494
Reclassified from tangible assets 2,090
At 30 June 2024 19,070
Carrying amount
At 30 June 2024 30,617,236
Intangible assets comprise capitalised exploration and evaluation costs
(direct costs, licence fees and fixed salary / consultant costs) of the
Zinnwald Lithium project in Germany.
Property plant and equipment
Leasehold, land and buildings Fixtures, fittings and equipment Motor vehicles Total
€ € € €
Cost
At 1 January 2024 70,990 360,263 66,593 497,846
Additions - group funded 49,909 30,476 - 80,385
Reclassified to intangibles - (25,075) - (25,075)
Exchange adjustments - 139 - 139
At 30 June 2024 120,899 365,803 66,593 553,295
Depreciation and impairment
At 1 January 2024 - 80,158 30,900 111,058
Depreciation charged for the year 416 23,398 6,643 30,457
Reclassified to intangibles - (2,090) - (2,090)
Exchange adjustments - 102 - 102
At 30 June 2024 416 101,568 37,543 139,527
Carrying amount
At 30 June 2024 120,483 264,235 29,050 413,768
Right of Use Assets and Lease Liabilities
In May 2022, Zinnwald 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 and expired in April 2024. The instalments for the
lease were €12,000 per month, fixed for the duration of the lease.
In May 2024, Zinnwald Lithium GmbH entered into two new commercial lease
agreements for an office in Dresden and a Core Shed in Altenberg. The
duration of both leases are for 3 years and expire in April 2027. The
monthly combined leases instalments are €10,515 per month, fixed for the
duration of the leases. The right of use asset and lease liability for each
new leases were recognised on 1 May 2022 on inception of the leases.
Movements in the period are shown as follows:
Right of use asset €
Cost
At 1 January 2024 278,690
Initial recognition of new leases on 1 May 2024 360,147
Expiration of completed leases (278,690)
At 30 June 2024 360,147
Depreciation
At 1 January 2024 232,559
Expiration of completed leases (278,690)
Depreciation charged in the period 66,194
At 30 June 2024 20,063
Carrying amount
At 30 June 2024 340,084
- Recognised in Current Assets 120,049
- Recognised in Non-Current Assets 220,035
Lease Liability
As at 1 January 2024 47,795
Initial recognition of new leases on 1 May 2024 360,147
Interest in the period 2,191
Lease Payments in the period (69,030)
As at 30 June 2024 341,103
- Recognised in Short Term Payables 116,612
- Recognised in Payables >1 year 224,491
Trade and other receivables
30 June 2024 31 December 2023
Amounts falling due within one year: € €
Trade Receivables - 4,418
Other receivables 258,059 216,696
Prepayments and accrued income 151,319 136,349
At period end 409,378 357,463
Cash and cash equivalents
30 June 2024 31 December 2023
€ €
Cash and cash equivalents 9,287,751 14,306,191
At period end 9,287,751 14,306,191
Trade and other payables
30 June 2024 31 December 2023
Amounts falling due within one year: € €
Trade payables 266,272 234,817
Other taxation and social security 18,785 54,082
Other payables 23,894 30,892
Accruals and deferred income 183,374 1,149,773
At period end 492,325 1,469,564
Share based payment transactions
30 June 2024 30 June 2023
Expenses recognised in the year € €
Options issued under the Share Option Plan (2017) 104,158 103,061
RSUs issued under RSU Scheme (2020) 151,007 152,050
PSUs issued under PSU Scheme (2020) 49,653 -
At period end 304,818 255,111
Share Option Plan (2017)
A 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. A further
total of 4,350,000 Options were granted to employees, consultants and
Directors of the Group on 15 January 2024 at a price of 6.75p. All awards
vest 1/3 on award, 1/3 after 12 months and 1/3 after 24 months. The charges
are calculated using the Black Scholes method and expensed over the two year
relevant vesting period.
RSU Scheme (2020)
A total of 3,406,780 RSUs were issued on 23 March 2023 with an automatic
vesting and exercise date of two years from issue. These are expensed based
on the share price at the date of issue being 10.41p and expensed over the two
year vesting period. A further total of 4,228,475 RSUs were issued on 15
January 2024 with an automatic vesting and exercise date of two years from
issue. These are expensed based on a calculation using the Black Scholes
method and expensed over the two year vesting period.
PSU Scheme (2020)
The first grant of 4,500,000 PSUs were issued on 15 January 2024 with a two
year vesting period. These are expensed based on a calculation using the
Black Scholes method and expensed over the two year vesting period.
Share Capital
30 June 2024 31 December 2023
Ordinary share capital € €
Issued and fully paid
474,536,675 ordinary shares of 1p each (2023 : 473,524,624) 5,377,252 5,365,379
5,377,252 5,365,379
The Group's share capital is issued in GBP £ but is converted into the
functional currency of the Group (Euros) at the date of issue of the shares.
Reconciliation of movements during the period:
Ordinary Number Ordinary Value
€ €
Ordinary shares of 1p each
At 1 January 2024 473,524,624 5,365,379
Issue of fully paid shares (exercise of RSUs) 1,012,051 11,873
At 30 June 474,536,675 5,377,252
2024
Cash (used in)/generated from group operations
2024 2023
€ €
Loss for the period after tax (1,226,571) (1,331,962)
Adjustments for:
Investment income (241,332) (32,792)
Lease interest 2,191 2,511
Gain on disposal of fixed assets - -
Depreciation of Right of Use Assets 66,194 69,005
Depreciation of property, plant and equipment 30,457 25,219
Amortisation of Intangible Assets 13,494 800
Equity-settled share-based payment expense 304,818 255,111
RSUs expensed in previous period (74,862) -
Movements in working capital:
(Increase) in trade and other receivables (52,665) (198,125)
Increase / (decrease) in trade and other payables (976,489) 351,065
Cash used in operations (2,154,765) (859,168)
Approval of interim condensed consolidated financial statements
These interim condensed financial statements were approved by the Board of
Directors on 19 September 2024.
*ENDS*
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