SAVANNAH RESOURCES PLC

Interim / Quarterly Report • Sep 21, 2018

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RNS Number : 4795B

Savannah Resources PLC

21 September 2018

21 September 2018

Savannah Resources Plc

Interim Results

Savannah Resources plc (AIM: SAV, FWB: AFM and SWB: SAV) ('Savannah' or the 'Company'), the AIM quoted resource development company, is pleased to announce its interim financial results for the six months ended 30 June 2018.

HIGHLIGHTS

•      Portugal:

o  Mineral Resource at the Mina do Barroso Lithium Project ("the MdB Project") increased to over 20Mt (over 200,000t contained Li2O) underpinning the project as the largest of its kind in Western Europe

o  Positive Scoping Study completed on the MdB Project - study reports a base case pre-tax NPV8% of US$356m and pre-tax IRR of 63% generated from 175,000tpa of 6% spodumene concentrate production over an 11 year life of mine

o  Feasibility Study for the MdB Project on track for completion Q2-2019

o  MdB Project development decision expected Q2-2019

o  Strong expansion potential - due diligence underway on option to acquire Mining Lease application adjacent to the MdB Project and rolling drill programme underway targeting resource upgrades and expansions at the MdB Project

•      Oman: Awaiting anticipated decisions for Mining Lease applications - Letters of No Objection received from all eight Ministries for development of the Mahab 4 and Maqail South copper projects

•      Mozambique: Mining Lease Applications submitted for Heavy Mineral Sands project, and scoping phase of Pre-Feasibility Study progressing

•      Corporate:

o  Investments in intangible and exploration project assets of £3.98m, primarily related to the MdB Project in Portugal

o  Greatly strengthened cash position following £2.1m (gross) equity raise completed at 5.5p per share in April 2018 and record £12.5m (gross) equity raise at 9.0p per share in July 2018, which included funds from existing shareholders and Tier 1 institutional investors (Current cash position £11.4m)

o  SAV now fully financed to development decision point for the MdB Project

o  Operating loss of £1.20m reflects the continued high tempo of mine development activities

o  Secondary listing completed on the Frankfurt Stock Exchange in September 2018 to support increased European marketing activities

CHAIRMAN'S STATEMENT

2018 to date has been a pivotal period for Savannah with the acceleration of our work programmes at the Mina do Barroso lithium Project ("the MdB Project"), culminating in a highly positive Scoping Study on the asset and a 500%+ increase in its resource base. The momentum created by this rapid and successful appraisal programme allowed us to complete a record £12.5m equity financing in July raised principally from existing shareholders and new institutional investors. This will provide funding for the work necessary to reach a mine development decision on the MdB Project, and to progress our projects in Mozambique and Oman.

Mina do Barroso, Portugal

As the recent Scoping Study showed, the MdB Project's lithium mineralogy and grade, along with its scale, near surface position and geographical location combine to produce a very attractive opportunity. Following the July 2018 fundraise, Savannah is now fully financed past the expected mine development decision point in Q2-2019 which is when the recently commissioned Feasibility Study is due to have been completed.

This project is taking shape at a time of increasing pressure to replace petrol and diesel cars with electric vehicles. For example, the UK Government has set a target that three-fifths of new cars should be electric by 2030 and that sales of conventional petrol and diesel vehicles should be phased out by 2040. To deliver on these targets, locking in supplies of key battery raw materials such as lithium is critical.

With no current European producer of spodumene concentrate, the dominant lithium mineral product traded internationally, we believe the fast-tracked development of the MdB Project could help Savannah become Western Europe's first major domestic spodumene supplier, giving us a strong commercial advantage. Our recent secondary listing on the Frankfurt Stock Exchange is the latest step in our strategy to build our brand and investor base on the continent. 

Critical to the viability of any mining project is its deposit.  The MdB Project has been proven to host Western Europe's largest new spodumene (hard rock) lithium discovery. The Company recently published its fourth Mineral Resource Estimate since acquiring the project in May 2017. In that time Savannah has been able to increase the overall Mineral Resource Estimate at the project by over 500% to 20.1Mt with the contained lithium (Li₂O) inventory growing by a similar percentage to 209,000t. This significant increase in overall Mineral Resource Estimate tonnage and contained metal has been accompanied by an equally significant increase in the statistical confidence of the Mineral Resource Estimate. For example, the latest estimate, announced on 10 September 2018, placed over 50% of the 20.1Mt total in the higher, Measured and Indicated JORC Resource categories, including 90% of the mining inventory of Stage 1 of the Grandao pit as defined in the June 2018 Scoping Study. This bodes well for the maiden JORC-2012 Mineral Reserve Estimate that will be taken from the Measured and Indicated Resource Estimate as part of the Feasibility Study due for completion in Q2-2019. Furthermore, the current JORC Exploration Target* of 9-15Mt only includes the Grandao and Reservatorio deposits. There is further upside potential from the other high priority exploration targets within the project area.

*Cautionary Statement: The potential quantity and grade of the Exploration Targets is conceptual in nature, there has been insufficient exploration work to estimate a mineral resource and it is uncertain if further exploration will result in defining a mineral resource.

In June 2018, we completed a Scoping Study based on the then current resource estimate of 13.9Mt. The study returned a base case pre-tax NPV8% of US$356m and pre-tax IRR of 63%, with a Life of Mine ('LOM') EBITDA of US$805m, annual average EBITDA of US$72m and a pre-tax payback period of 1.7 years. These results are a very positive indication of the project's commercial potential, particularly given the increase in the resource estimate to 20.1 Mt since the Scoping Study was carried out.

Drilling continues to advance across all three of our primary target areas from which we have delineated the Mineral Resource Estimate to date - Grandao, Reservatorio and NOA.  In particular, drilling results to date at Grandao have been very encouraging with lithium mineralisation intersected over significant widths and extensions to the known mineralised pegmatites, leading to the discovery of a new Grandao Extended area.  These extensions support our belief in the potential for further increases in the Mineral Resource Estimate. Experienced lithium consulting engineers, Primero Group have been commissioned to lead a Feasibility Study which is now underway to advance the project to the next point of economic confidence so that a development decision can be made in Q2-2019. Primero is a global leader in the evaluation, design and construction of hard rock, open-cut, spodumene mines such as Mina do Barroso. 

In support of development, the project's estimated C1 cash costs of US$210/t spodumene concentrate produced in the first four years and US$271/t LOM average, put the project at the lower end of the spodumene lithium cost curve. The initial CAPEX is estimated to be US$109m. Based on these results, we are on track to become a low-cost producer of quality spodumene lithium concentrate by early-2020.  We are working hard to deliver on this objective and maximise shareholder value. 

Looking at wider market dynamics, while some commentators have suggested lithium prices will be affected by supply outweighing demand, we remain confident in the commodity's prospects.  We see a need for several new mines to come into operation to meet projected demand now and in the future. Even with new supply this year, global contract prices for lithium salts remain strong. It is also noteworthy that 28% of world's cumulative EV sales in H1-2018 have been in Europe, but the continent currently has no lithium production for battery grade chemicals, meaning all materials are imported.  Additionally, leading battery producers, like LG Chem and Samsung SDI have opened or are planning to open battery plants in Europe this year.  Whilst there are a number of new lithium projects vying to come on stream internationally, we believe our near-term production potential, low cost profile, high quality product and strategic location gives us a competitive edge. 

Finally, looking at further growth opportunities, in July 2018 we entered into an exclusive due diligence and option agreement with Aldeia & Irmão, S.A. ('Aldeia'), a private Portuguese company, with a view to increasing our tenement holdings in the MdB Project area.  Under the terms of the agreement, we are looking to acquire a Mining Lease, which, once granted, will include over 2.94km² of land abutting the southern end of the Reservatorio target area.  At least five known spodumene bearing lithium pegmatites occur on these areas, and if acquired, this tenement not only provides further resource expansion potential but also further space to optimise the layout for any potential mine development.  Due diligence is now underway.  All payments for the potential acquisition will be on a staged basis and are expected to be made principally from anticipated revenues generated from the MdB Project mine, once developed.

Copper Projects, Oman

In Oman two high-grade, low CAPEX copper mine developments are currently awaiting final licencing approval. Letters of approval or "No Objection" have been received from all eight Ministries and we are now working on concluding the mine licencing process with the Public Authority of Mining for the issuance of the two Mining Licences.  In support of the overall strategy of developing a hub and spoke copper development in Oman we have a drilling programme underway on the promising Bayda and Hara Kilab copper deposits on respectively Block 4 and Block 5 in Oman. These deposits could provide further tonnages for the overall development.

Heavy Mineral Sands Projects, Mozambique

In Mozambique we are continuing to work on the world class Mutamba Mineral Sands Project under a Consortium Agreement with Rio Tinto.  Three mining lease applications, covering a total area of 417km² for the Jangamo, Dongane, Ravene and Chilubane deposits, are currently being considered by the Mozambican mines department.  Alongside this, work continues on several fronts in the lead up to the anticipated grant of mining leases, with the scoping phase of the Pre-Feasibility Study ('PFS') now well advanced and the initial key studies underway.  These studies include hydrology studies, port options and the collection of a 10 tonne bulk sample, which will be processed at our recently constructed and commissioned pilot plant.  The results from this test work and the PFS will guide us in the infrastructure, power, mine planning and process plant requirements, allowing us to progress to the next stage of commercialisation.

Financial Summary

As is to be expected for an active and expanding resource development group, Savannah is reporting a loss for the period of £1.20m (30 June 2017: £1.53m) (31 December 2017: £2.84m), which reflects the continued high tempo of mine development activities. The decrease compared to the prior year is mainly due to the non-cash costs relating to share options issued as long-term incentives in H1-2017 amounting to £0.28m. Net assets have increased to £15.68m (30 June 2017: £9.26m) (31 December 2017: £13.14m) due to the increase in exploration activity during the period, predominantly with the lithium project in Portugal, which also saw the first of two milestones at the MdB Project being triggered and settled, with additions to non-current assets amounting to £3.61m.

In April 2018 Savannah raised £2.10m cash (before expenses) that contributed towards the ongoing development of the Company's projects in Portugal, Oman and Mozambique. After the reporting date, in July 2018 the Company raised £12.5m cash (before expenses). This has provided a current cash balance of £11.4m. The Company's strong cash position means Savannah is fully funded to deliver on the feasibility study of a mine development and to add to the Mineral Resource inventory via a continuing programme of resource drilling at the MdB Project, and to progress our projects in Mozambique and Oman.

Outlook

The upcoming six months will be active for Savannah as we finalise key economic studies at our MdB lithium project so that we are able to make a development decision in Q2-2019.  With low technical risk thanks to its open pit mining and conventional processing model, a quality resource that is proven to be highly sought after by electric vehicle manufacturers, and a defined development schedule that will see us commence concentrate production in 2020, we are firmly focused on realising the full value potential of this significant, near-term production asset. 

We believe that the MdB Project's spodumene lithium concentrate will be highly sought after by end-users and look forward to progressing discussions currently being undertaken with potential offtake partners as part of our commercialisation process.  Alongside this, we will continue to prove up the resource potential of the project, with drilling continuing to progress at pace, and we are also completing due diligence with a view to increasing the project area further via the proposed Aldeia acquisition.  Both of these work programmes have the potential to extend the current 11-year life of mine as defined in the Scoping Study and enhance the already attractive economics of the project.

We look forward to updating shareholders on progress as we advance the MdB Project further, maintaining the active development approach we have implemented since first acquiring the project in May 2017.

Finally, I would like to thank our long-term shareholders for their continued support and also welcome the new investors to Savannah's share register following our recent fundraise.  We look forward to continuing to build the value of our company for the benefit of all stakeholders.

I would also like to give my thanks to our highly committed management and operational team who have already proven their ability to execute multiple fast-track work programmes to rapidly build the value of our resource portfolio. 

We look forward to delivering on the next commercial milestones in the upcoming months.

Chairman

Matthew King

20 September 2018

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2018

	Notes	Unaudited Six months to 30 June 2018	Unaudited Six months to 30 June 2017	Audited Year ended 31 December 2017
		£	£	£
CONTINUING OPERATIONS
Revenue		-	-	-
Administrative expenses		(1,126,994)	(1,529,071)	(2,835,684)
Impairment of assets classified as held for sale		(140,024)	-	-
Gain on disposal of investments		68,717	-	-
OPERATING LOSS		(1,198,301)	(1,529,071)	(2,835,684)
Finance income		342	-	948
Finance costs		(3,841)	(2,256)	(7,549)
LOSS BEFORE AND AFTER TAX ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT		(1,201,800)	(1,531,327)	(2,842,285)
OTHER COMPREHENSIVE INCOME
Items that will or may be reclassified to profit or loss:
Change in market value of investments		(58,665)	(16,656)	45,644
Transfer to realised gain on disposal of investments		(68,717)	-	-
Exchange (losses)/gains on translation of foreign operations		159,009	(54,052)	(197,120)
OTHER COMPREHENSIVE INCOME FOR THE YEAR		31,627	(70,708)	(151,476)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR		(1,170,173)	(1,602,035)	(2,993,761)
Loss per share attributable to equity owners of the parent expressed in pence per share:
Basic and diluted
From operations	3	(0.18)	(0.31)	(0.53)

The notes form part of this Interim Financial Report.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2018

	Notes	Unaudited 30 June	Unaudited 30 June	Audited 31 December
		2018	2017	2017
		£	£	£
ASSETS
NON-CURRENT ASSETS
Intangible assets	4	13,907,901	7,888,034	9,809,994
Property, plant and equipment	5	1,195,292	197,729	1,196,084
Other receivables	6	270,876	165,852	239,300
Other non-current assets	7	215,681	-	220,213
TOTAL NON-CURRENT ASSETS		15,589,750	8,251,615	11,465,591
CURRENT ASSETS
Investments		32,168	107,816	170,203
Trade and other receivables	6	191,300	459,971	155,959
Other current assets	7	251,752	-	20,011
Cash and cash equivalents		786,764	1,294,539	2,455,968
		1,261,984	1,862,326	2,802,141
Assets classified as held for sale		-	-	138,543
TOTAL CURRENT ASSETS		1,261,984	1,862,326	2,940,684
TOTAL ASSETS		16,851,734	10,113,941	14,406,275
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital	9	7,016,155	5,345,401	6,358,504
Share premium		21,100,658	14,849,523	18,105,108
Foreign currency reserve		353,887	337,946	194,878
Warrant reserve		1,278,846	419,671	1,405,958
Share based payment reserve		600,416	752,523	691,194
Shares to be issued reserve		30,000	-	-
Retained earnings		(14,702,504)	(12,448,310)	(13,612,758)
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT		15,677,458	9,256,754	13,142,884
LIABILITIES
NON-CURRENT LIABILITIES
Loans and borrowings		22,401	-	22,847
TOTAL NON-CURRENT LIABILITIES		22,401	-	22,847
CURRENT LIABILITIES
Loans and borrowings		6,630	-	10,276
Trade and other payables	8	1,145,245	857,187	1,228,757
		1,151,875	857,187	1,239,033
Liabilities classified as held for sale		-	-	1,511
TOTAL CURRENT LIABILITIES		1,151,875	857,187	1,240,544
TOTAL LIABILITIES		1,174,276	857,187	1,263,391
TOTAL EQUITY AND LIABILITIES		16,851,734	10,113,941	14,406,275

The interim financial report was approved by the Board of Directors on 20 September 2018 and was signed on its behalf by:

………………………………………………..

D S Archer

Chief Executive Officer

Company number: 07307107

The notes form part of this Interim Financial Report.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2018

	Share capital £	Share premium £	Foreign currency reserve £	Warrant reserve £	Share based payment reserve £	Shares to be issued reserve £	Retained earnings £	Total equity £
At 1 January 2017	4,509,465	11,226,706	391,998	386,794	455,309	-	(10,900,327)	6,069,945
Loss for the period	-	-	-	-	-	-	(1,531,327)	(1,531,327)
Other comprehensive income	-	-	(54,052)	-	-	-	(16,656)	(70,708)
Total comprehensive income for the period	-	-	(54,052)	-	-	-	(1,547,983)	(1,602,035)
Issue of share capital (net of expenses)	835,936	3,655,694	-	-	-	-	-	4,491,630
Issue of share options	-		-	-	297,214	-	-	297,214
Lapse of options	-		-	-	-	-	-	-
Issue of warrants	-	(32,877)	-	32,877	-	-	-	-
At 30 June 2017	5,345,401	14,849,523	337,946	419,671	752,523	-	(12,448,310)	9,256,754
Loss for the period	-	-	-	-	-	-	(1,310,958)	(1,310,958)
Other comprehensive income	-	-	(143,068)	-	-	-	62,300	(80,768)
Total comprehensive income for the period	-	-	(143,068)	-	-	-	(1,248,658)	(1,391,726)
Issue of share capital (net of expenses)	1,013,103	4,241,872	-	-	-	-	-	5,254,975
Issue of share options	-	-	-	-	22,881	-	-	22,881
Lapse of options	-	-	-	-	(84,210)	-	84,210	-
Issue of warrants	-	(986,287)	-	986,287	-	-	-	-
At 31 December 2017	6,358,504	18,105,108	194,878	1,405,958	691,194	-	(13,612,758)	13,142,884
Loss for the period	-	-	-	-	-	-	(1,201,800)	(1,201,800)
Other comprehensive income	-	-	159,009	-	-	-	(127,382)	31,627
Total comprehensive income for the period	-	-	159,009	-	-	-	(1,329,182)	(1,170,173)
Issue of share capital (net of expenses)	657,651	2,995,550	-	-	-	-	-	3,653,201
Issue of share options	-	-	-	-	21,546	-	-	21,546
Exercise of options	-	-	-	-	(95,797)	-	95,797	-
Lapse of options	-	-	-	-	(16,527)	-	16,527	-
Exercise of warrants	-	-	-	(35,972)	-	-	35,972	-
Lapse of warrants	-	-	-	(91,140)	-	-	91,140	-
Warrants pending exercise	-	-	-	-	-	30,000	-	30,000
At 30 June 2018	7,016,155	21,100,658	353,887	1,278,846	600,416	30,000	(14,702,504)	15,677,458

The notes form part of this Interim Financial Report.

CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2018

	Notes	Unaudited Six months to June 2018 £	Unaudited Six months to June 2017 £	Audited Year ended December 2017 £
Cash flows used in operating activities
Loss for the period		(1,201,800)	(1,531,327)	(2,842,285)
Depreciation and amortisation charges	5	10,427	728	14,895
Impairment of assets classified as held for sale		140,024	-	-
Gain on disposal of investments		(68,717)	-	-
Share based payments reserve charge		21,546	297,214	320,095
Shares issued in lieu of payments to extinguish liabilities		-	82,431	98,630
Finance income		(342)	-	(948)
Finance expense		3,841	2,256	7,549
Exchange losses		(23,111)	47,925	75,156
Cash flow from operating activities before changes in working capital		(1,118,132)	(1,100,773)	(2,326,908)
Increase in trade and other receivables		(32,286)	(466,095)	(71,288)
(Decrease)/Increase in trade and other payables		(51,903)	218,251	39,620
Net cash used in operating activities		(1,202,321)	(1,348,617)	(2,358,576)
Cash flow used in investing activities
Purchase of intangible exploration assets		(2,487,352)	(1,471,957)	(3,276,715)
Purchase of tangible fixed assets		(221,885)	(120,816)	(1,069,056)
Purchase of investments		-	-	(87)
Proceeds from sale of investments		104,283	-	-
Payments for guarantees for mining activity		(231,741)	-	(199,755)
Interest received		342	-	948
Net cash used in investing activities		(2,836,353)	(1,592,773)	(4,544,665)
Cash flow from / (used in) financing activities
Proceeds from issues of ordinary shares (net of expenses)		2,348,287	3,093,000	8,257,418
Proceeds from warrants pending exercise		30,000	-	-
Interest paid		(3,841)	(2,256)	(7,549)
Net cash from financing activities		2,374,446	3,090,744	8,249,869
(Decrease)/Increase in cash and cash equivalents		(1,664,228)	149,354	1,346,628
Cash and cash equivalents at beginning of period		2,455,968	1,172,347	1,172,347
Exchange (losses)/gains on cash and cash equivalents		(4,976)	(27,162)	(63,007)
Cash and cash equivalents at end of period		786,764	1,294,539	2,455,968

The notes form part of this Interim Financial Report.

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL REPORT

FOR THE SIX MONTHS ENDED 30 JUNE 2018

1.     BASIS OF PREPARATION

The financial information set out in this report is based on the consolidated financial statements of Savannah Resources Plc and its subsidiary companies (together referred to as the 'Group'). The interim financial report of the Group for the six months ended 30 June 2018, which is unaudited, was approved by the Board on 20 September 2018. The financial information contained in this interim report does not constitute statutory accounts as defined by s434 of the Companies Act 2006. The statutory accounts for the year ended 31 December 2017 have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain a statement under section 498 (2) or 498 (3) of the Companies Act 2006.

The financial information set out in this report has been prepared in accordance with the accounting policies set out in the Annual Report and Financial Statements of Savannah Resources Plc for the year ended 31 December 2017.  New standards and amendments to IFRS effective as of 1 January 2018, including IFRS 15 and IFRS 9, have been reviewed by the Group and there has been no material impact on the financial information set up on this report as a result of these standards and amendments.

The Group interim financial report is presented in Pound Sterling.

Going Concern

The financial statements have been prepared on a going concern basis. Following the cash subscriptions approved in July 2018, amounting to £12.5m (before expenses) (Note 12), the Group had a cash balance of £11.4m on 20 September 2018. The Directors have reviewed the cashflow projection for the Group and consider that it has sufficient ability to meet its financial commitments for at least 12 months. 

2.      SEGMENTAL REPORTING

The Group complies with IFRS 8 Operating Segments, which requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker, which the Company considers to be the Board of Directors. In the opinion of the Directors, the operations of the Group comprise of exploration and development in Oman, exploration and development in Mozambique, exploration and development in Portugal, former exploration in Finland, headquarter and corporate costs and the Company's third party investments.

Based on the Group's current stage of development there are no external revenues associated to the segments detailed below. For exploration and development in Oman, Mozambique, Portugal and former exploration in Finland the segments are calculated by the summation of the balances in the legal entities which are readily identifiable to each of the segmental activities. In the case of the Investments, this is calculated by analysis of the specific related investment instruments. Recharges between segments are at cost and included in each segment below. Inter-company loans are eliminated to zero and not included in each segment below.

	Oman Copper	Mozambique Mineral Sands	Portugal Lithium	Finland Lithium	HQ and Corporate	Invest-ments	Elimination	Total
	£	£	£	£	£	£	£	£
Period 30 June 2018
Revenue	-	-	-	-	434,235	-	(434,235)	-
Interest income	-	-	-	-	342	-	-	342
Finance costs	-	(3,841)	-	-	-	-	-	(3,841)
Share based payments	-	-	-	-	21,546	-	-	21,546
(Loss) for the year	(122,251)	(249,791)	(184,437)	(144,196)	(569,842)	68,717	-	(1,201,800)
Total assets	4,632,337	4,928,165	6,558,838	2,343	697,883	32,168	-	16,851,734
Total non-current assets	4,510,283	4,619,171	6,449,096	-	11,200	-	-	15,589,750
Additions to non-current assets	201,272	206,447	3,609,894	-	-	-	-	4,017,613
Total current assets	122,055	308,994	109,741	2,343	686,683	32,168	-	1,261,984
Total liabilities	(100,964)	(105,335)	(734,360)	(2,098)	(231,519)	-	-	(1,174,276)

	Oman Copper	Mozambique Mineral Sands	Portugal Lithium	Finland Lithium	HQ and Corporate	Invest-ments	Elimination	Total
	£	£	£	£	£	£	£	£
Period 31 December 2017
Revenue	-	-	-	-	639,108		(639,108)	-
Interest income	-	-	-	-	948	-	-	948
Finance costs	(2,035)	(1,166)	-	-	(4,348)	-	-	(7,549)
Share based payments	-	-	-	-	320,095	-	-	320,095
(Loss) for the year	(308,616)	(631,731)	(171,056)	(8,164)	(1,722,718)	-	-	(2,842,285)
Total assets	4,365,898	4,640,081	2,902,257	138,543	2,189,293	170,203	-	14,406,275
Total non-current assets	4,224,672	4,387,977	2,833,907	-	19,035	-	-	11,465,591
Additions to non-current assets	951,312	2,801,960	2,823,802	-	19,035	-	-	6,596,109
Total current assets	141,226	252,104	68,350	138,543	2,170,258	170,203	-	2,940,684
Total liabilities	(112,807)	(398,825)	(411,302)	(1,511)	(338,946)	-	-	(1,263,391)

	Oman Copper	Mozambique Mineral Sands	Portugal Lithium	Finland Lithium	HQ and Corporate	Elimination	Total
	£	£		£	£	£	£
Period 30 June 2017
Revenue	-	-	-	-	254,214	(254,214)	-
Finance costs	-	1,370	-	-	886	-	2,256
Share based payments	11,963	44,370	-	-	240,881	-	297,214
(Loss) / Gain for the year	(187,211)	(281,801)	(25,600)	(4,980)	(1,031,735)	-	(1,531,327)
Total assets	3,939,037	2,695,063	2,120,317	132,740	1,226,784	-	10,113,941
Total non-current assets	3,844,054	2,177,590	2,094,898	127,690	7,383	-	8,251,615
Additions to non-current assets	457,852	640,400	2,094,128	5,103	7,382	-	3,204,865
Total current assets	94,982	517,474	25,419	5,050	1,219,401	-	1,862,326
Total liabilities	(110,431)	(395,701)	(92,244)	(4,831)	(253,980)	-	(857,187)

3.            EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

In accordance with IAS 33 as the Group is reporting a loss for both this and the preceding period the share options are not considered dilutive because the exercise of share options and warrants would have the effect of reducing the loss per share.

Reconciliations are set out below:

	Unaudited Six months to 30 June 2018	Unaudited Six months to 30 June 2017	Audited Year ended 31 December 2017
Basic loss per share:
Loss from operations attributable to ordinary shareholders (£)	(1,201,800)	(1,531,327)	(2,842,285)
Loss attributable to ordinary shareholders (£)	(1,201,800)	(1,531,327)	(2,842,285)
Weighted average number of shares (number)	667,935,800	490,020,180	538,585,436
Loss per share from operations (pence)	0.18	0.31	0.53
Basic and diluted loss per share (pence)	0.18	0.31	0.53

4.            INTANGIBLE ASSETS

			Exploration and evaluation assets
			£
At 1 January 2017			5,066,750
Additions			2,897,871
Exchange differences			(76,587)
At 30 June 2017			7,888,034
Additions			2,142,425
Transfer to Assets classified as Held for Sale			(118,804)
Exchange difference			(101,661)
At 31 December 2017			9,809,994
Additions			3,984,416
Exchange differences			113,491
At 30 June 2018			13,907,901

5.         PROPERTY, PLANT AND EQUIPMENT

	Motor vehicles	Office Equipment	Plant and Machinery	Land	Total
					£
Cost
At 1 January 2017	36,607	11,401	-	-	48,008
Additions	6,991	1,735	119,081	44,819	172,626
Exchange difference	(2,833)	(174)	9,528	1,116	7,637
At 30 June 2017	40,765	12,962	128,609	45,935	228,271
Additions	34,206	11,025	924,940	837	971,008
Exchange difference	392	(75)	40,916	(497)	40,736
At 31 December 2017	75,363	23,912	1,094,465	46,275	1,240,015
Additions	-	7,853	590	-	8,443
Exchange differences	557	354	1,430	(170)	2,171
At 30 June 2018	75,920	30,412	1,096,485	46,105	1,250,629

Depreciation
At 1 January 2017	21,164	10,674	-	-	31,838
Charge for the year	728	-	-	-	728
Exchange difference	(1,598)	(426)	-	-	(2,024)
At 30 June 2017	20,294	10,248	-	-	30,542
Charge for the year	11,811	2,356	-	-	14,167
Exchange difference	(461)	(317)	-	-	(778)
At 31 December 2017	31,644	12,287	-	-	43,931
Charge for the year	9,290	1,137	-	-	10,427
Exchange differences	774	205	-	-	979
At 30 June 2018	41,708	13,629	-	-	55,337

Net Book Value
At 30 June 2017	20,471	2,714	128,609	45,935	197,729
At 31 December 2017	43,719	11,625	1,094,465	46,275	1,196,084
At 30 June 2018	34,212	16,783	1,096,485	46,105	1,195,292

6.         TRADE AND OTHER RECEIVABLES

		Unaudited 30 June 2018	Unaudited 30 June 2017	Audited 31 December 2017
		£	£	£
Non-Current
Other receivables - VAT		270,876	82,551	239,300
Other receivables - Deposits		-	83,301	-
		270,876	165,852	239,300

Current
VAT recoverable		96,880	25,263	51,069
Other receivables		94,420	434,708	104,890
		191,300	459,971	155,959

7.         OTHER NON-CURRENT ASSETS

		Unaudited 30 June 2018	Unaudited 30 June 2017	Audited 31 December 2017
		£	£	£
Non-Current
Guarantees		202,237	-	199,755
Other receivables - Deposits		13,444	-	20,458
		215,681	-	220,213

Current
Guarantees		251,752	-	20,011
		251,752	-	20,011

8.           TRADE AND OTHER PAYABLES

		Unaudited 30 June 2018	Unaudited 30 June 2017	Audited 31 December 2017
		£	£	£
Current
Trade payables		647,636	286,985	481,436
Other payables		30,403	25,431	45,054
Accruals and deferred income		467,206	544,771	702,267
		1,145,245	857,187	1,228,757

9.         SHARE CAPITAL

Allotted, issued and fully paid

	Six months to 30 June 2018		Six months to 30 June 2017		Year ended 31 December 2017
	£0.01 ordinary shares number	£	£0.01 ordinary shares number	£	£0.01 ordinary shares number	£
At beginning of period	635,850,386	6,358,504	450,946,455	4,509,465	450,946,455	4,509,465
Issued during the period:
Share placement	38,181,818	381,818	61,904,764	619,047	161,423,950	1,614,239
Bonus paid in shares	-	-	1,688,870	16,889	1,688,870	16,889
Exercise of share options	4,708,336	47,083	-	-	-	-
Exercise of warrants	1,875,000	18,750	-	-	-	-
In lieu of cash for acquisition of Portugal lithium project	20,000,000	200,000	20,000,000	200,000	21,791,111	217,911
Issued as condition of JV agreement	1,000,000	10,000	-	-	-	-
At end of period	701,615,540	7,016,155	534,540,089	5,345,401	635,850,386	6,358,504

The par value of the Company's shares is £0.01.

10.       GROUP CONTINGENT LIABILITIES

Details of contingent liabilities where the probability of future payments is not considered remote are set out below, as well as details of contingent liabilities, which although considered remote, the Directors consider should be disclosed. The Directors are of the opinion that provisions are not required in respect of these matters, as at the reporting date have not been triggered, it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.

Deferred consideration payable in relation to the acquisition of Gentor Resources Ltd (Oman copper project)

On 15 July 2014 the Company completed an acquisition of interests in the highly prospective Block 5 and Block 6 copper projects in the Semail Ophiolite belt in the Sultanate of Oman from the TSX-Venture listed Gentor Resources Inc. The Company paid initial consideration of USD $800,000 (~GBP £615,000) with the following deferred consideration (up to 50% payable in Savannah shares) required to complete the acquisition of 100% of the issued share capital of Gentor Resources Ltd ("GRL"):

(a)   a milestone payment of USD $1,000,000 (~GBP £769,000) upon a formal final investment decision for the development of the Block 5 Licence;

(b)   a milestone payment of USD $1,000,000 (~GBP £769,000) upon the production of the first saleable concentrate or saleable product from ore derived from the Block 5 Licence; and

(c)   a milestone payment of USD $1,000,000 (~GBP £769,000) within six months of the payment of the Deferred Consideration in (b).

Deferred consideration payable in relation to the acquisition of Slipstream PORT Pty Ltd (Portugal lithium project)

On 24 May 2017 the Group acquired a series of highly prospective lithium projects with near-term production potential in the north of Portugal. The Group paid an initial consideration of AUD$ 1,000,000 (~GBP £591,000) in cash and issued 20,000,000 ordinary shares in the Company. Additional milestone payments, to be satisfied by cash and the issue of ordinary shares in SAV, are payable as follows:  

(a)     AUD$ 1,500,000 (~GBP £886,500) cash and a further 20,000,000 ordinary shares of SAV upon the announcement by SAV of a JORC-compliant Indicated Mineral Resource Estimate of 7.5 million tonnes at no less than 1% Li2O. In February 2018 the Company announced the completion of a revised JORC 2012 - Compliant Inferred Mineral Resource Estimate of 9.1Mt at 1.03% Li2O and this milestone was triggered. The Company paid AUD$ 1,500,000 (~GBP £842,028) in cash and issued 20,000,000 ordinary shares in the Company in March 2018. This has been accounted for in this financial report.

(b)     AUD$1,500,000 (~GBP £886,500) cash and an additional 20,000,000 ordinary shares of SAV upon the announcement by SAV of a further JORC-compliant Indicated Mineral Resource Estimate of a minimum of 7.5m tonnes at no less than 1% Li2O. In September 2018 the Company announced the completion of a revised JORC 2012 - Compliant Inferred Mineral Resource Estimate of 20.1Mt at 1.04% Li2O and this milestone was triggered (Note 12). This has not been accounted for in this financial report as the milestone was reached after the reporting date.

11.       SHARE OPTIONS AND WARRANTS

Share options and warrants to subscribe for Ordinary Shares in the Company are granted to certain employees, Directors and investors. Some of the options issued vest immediately and others over a vesting period and may include performance conditions. Options are forfeited if the employee leaves the Group before the options vest.

The Directors' interests in the share options and warrants of the Company are as follows:

At 30 June 2018

	Quantity  at 1 Jan 2018	Quantity granted during the period	Lapsed during the period	Options / Warrants at 30 Jun 2018	Exercise price	Date of the grant	First date of exercise	Final date of exercise
Share Options
Dale Ferguson	5,321,776	-	-	5,321,776	3.0p	21/07/13	20/07/14	20/07/18
Dale Ferguson	2,000,000	-	-	2,000,000	7.59p	01/03/17	01/03/17	28/02/21
Matthew King	1,500,000	-	-	1,500,000	3.0p	16/03/16	16/03/16	15/03/20
David Archer	7,000,000	-	-	7,000,000	7.59p	01/03/17	01/03/17	28/02/21
Investor Warrants
David Archer	11,111,112	-	-	11,111,112	3.0p	24/09/13	24/09/13	19/07/18
David Archer	2,857,143	-	-	2,857,143	6.0p	14/07/17	14/07/17	14/07/20

At 31 December 2017

	Quantity  at 30 June 2017	Quantity granted during the period	Lapsed during the period	Options / Warrants at 31 Dec 2017	Exercise price	Date of the grant	First date of exercise	Final date of exercise
Share Options
Dale Ferguson	5,321,776	-	-	5,321,776	3.0p	21/07/13	20/07/14	20/07/18
Dale Ferguson	2,000,000	-	-	2,000,000	7.59p	01/03/17	01/03/17	28/02/21
Matthew King	1,500,000	-	-	1,500,000	3.0p	16/03/16	16/03/16	15/03/20
David Archer	7,000,000	-	-	7,000,000	7.59p	01/03/17	01/03/17	28/02/21
Warrants
David Archer	11,111,112	-	-	11,111,112	3.0p	24/09/13	24/09/13	19/07/18
David Archer	-	2,857,143	-	2,857,143	6.0p	14/07/17	14/07/17	14/07/20

At 30 June 2017

	Quantity  at 1 Jan 2017	Quantity granted during the period	Lapsed during the period	Options / Warrants at 30 Jun 2017	Exercise price	Date of the grant	First date of exercise	Final date of exercise
Share Options
Dale Ferguson	5,321,776	-	-	5,321,776	3.0p	21/07/13	20/07/14	20/07/18
Dale Ferguson	-	2,000,000	-	2,000,000	7.59p	01/03/17	01/03/17	28/02/21
Matthew King	1,500,000	-	-	1,500,000	3.0p	16/03/16	16/03/16	15/03/20
David Archer		7,000,000	-	7,000,000	7.59p	01/03/17	01/03/17	28/02/21
Investor Warrants
David Archer	11,111,112	-	-	11,111,112	3.0p	24/09/13	24/09/13	19/07/18

12.       EVENTS AFTER THE REPORTING DATE

In July 2018 the Company approved a cash Placing and Subscription of £11.5m (before expenses) through the issue of 128,347,256 ordinary shares at an issue price of 9 pence per share. Additionally, the Company received letter of intent for an additional £1m cash subscription from Directors' related party (Al Marjan Ltd) for when the Company is not in a "close period". Subsequently Al Marjan acted upon this letter of intent and subscribed for 11,111,111 ordinary shares at a price of 9 pence per share, giving gross proceeds of £12.5m (together with the Placing and Subscription).

In July 2018 the Company issued 860,000 new ordinary shares in respect of 2016 Investors warrants at an exercise price of 6 pence per share following the exercise of warrants, for proceeds of £0.05m.

In July 2018 the Company issued 19,382,888 new ordinary shares following the exercise of options and warrants over Ordinary Shares. David Stuart Archer exercised Warrants over 11,111,112 Ordinary Shares at 3 pence each. Dale John Ferguson exercised Options over 5,321,776 Ordinary Shares at 3 pence each. Other employees exercised 1,200,000 Options, 1,500,000 Options and 250,000 Options at an exercise price of 4.62, 3.00 and 6.75 pence each respectively, for proceeds of £0.61m.

In August 2018, the Company granted 343,432 warrants over ordinary shares in the Company to a financial advisor of the Company in connection with the Company's fundraise in July 2018.

In September 2018 the Company announced the completion of a revised JORC 2012 - Compliant Inferred Mineral Resource Estimate of 20.1Mt at 1.04% Li2O. This triggered the second deferred consideration (Milestone (b)) to be paid under the acquisition agreement of Slipstream PORT Pty Ltd (Note 10). The Company is due to pay AUD$ 1,500,000 (~GBP £834,000) in cash and issue 20,000,000 ordinary shares in the Company in October 2018.

SHAREHOLDING

Shareholders as at 31 August 2018 which hold more than 3% in the Company is disclosed as follows:

Beneficial owners (the ultimate underlying shareholders holding shares either directly or indirectly through a bank, broker-dealer, trust, or combination of these, which are the registered shareholders):

Shareholder	Shares Held	Percentage of Issued Capital
Al Marjan Limited	208,262,589	24.18%
Husain Salman Ghulam Al-Lawati	42,019,792	4.88%
David Archer	41,756,649	4.85%
Slipstream Resources Investments Pty Ltd	30,000,000	3.48%
Mr Karl-Erik von Bahr	30,052,525	3.49%
Total	352,091,555	40.88%
Total Number of shares on issue	861,316,795

Registered shareholders (the shareholders holding shares directly with the Company, either on its behalf or on behalf of the beneficiary owner):

Shareholder	Shares Held	Percentage of Issued Capital
Al Marjan Limited	208,262,589	24.18%
Hargreaves Lansdown (nominees) Limited	78,840,653	9.15%
Interactive Investor Services Nominees Limited	47,702,560	5.54%
Hussain Salman Ghulam Al- Lawati	42,019,792	4.88%
Nortrust Nominees Limited	36,781,138	4.27%
Barclays Direct Investing Nominees Limited	34,514,062	4.01%
Slipstream Resources Investments Pty Ltd	30,000,000	3.48%
Securities Services Nominees Limited	28,196,462	3.27%
Total	506,317,256	58.78%
Total Number of shares on issue	861,316,795

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

Competent Person and Regulatory Information

The information in this announcement that relates to exploration results is based upon information compiled by Mr Dale Ferguson, Technical Director of Savannah Resources Limited. Mr Ferguson is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is 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 as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code). Mr Ferguson consents to the inclusion in the report of the matters based upon the information in the form and context in which it appears.

The Information in this report that relates to Mineral Resources is based on information compiled by Mr Paul Payne, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy.  Mr Payne is a full-time employee of Payne Geological Services.  Mr Payne has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves".  Mr Payne consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

**ENDS**

For further information please visit www.savannahresources.com or contact:

David Archer	Savannah Resources plc	Tel: +44 20 7117 2489
David Hignell / Dugald J. Carlean (Nominated Adviser)	Northland Capital Partners Ltd	Tel: +44 20 3861 6625
Christopher Raggett / Camille Gochez (Broker)	finnCap Ltd	Tel: +44 20 7220 0500
Grant Barker (Equity Adviser)	Whitman Howard	Tel: +44 020 7659 1225
Charlotte Page / Lottie Wadham (Financial PR)	St Brides Partners Ltd	Tel: +44 20 7236 1177

About Savannah

We are a diversified resources group (AIM: SAV) with a portfolio of energy metals projects - lithium in Portugal and copper in Oman - together with the world-class Mutamba Heavy Mineral Sands Project in Mozambique, which is being developed in a consortium with the global major Rio Tinto. We are committed to serving the interests of our shareholders and to delivering outcomes that will improve the lives of our staff and the communities we work with.

The Company is listed and regulated on AIM and the Company's ordinary shares are also available on the Quotation Board of the Frankfurt Stock Exchange (FWB) under the symbol FWB: AFM, and the Börse Stuttgart (SWB) under the ticker "SAV".

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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