Final Results

RNS Number : 6540G

Savannah Resources PLC

09 May 2014

 



Savannah Resources Plc / Index: AIM / Epic: SAV / Sector: Mining

9 May 2014

Savannah Resources Plc

Financial Results for the Year Ended 31 December 2013

Savannah Resources plc (AIM: SAV) announces its audited financial results for the year ended 31 December 2013.

Availability of Annual Report and Financial Statements

Copies of the Company's full Annual Report and Financial Statements are expected to be posted to shareholders in the next few days and will also be made available to download today from the Company's website www.savannahresources.com.

The Annual Report and Financial Statements will also be made available for inspection at the Company's business office during normal business hours on any weekday. The Company's business office is at 2nd Floor, 18 Pall Mall, London, SW1Y 5LU.

Annual General Meeting

The Company's next Annual General Meeting ("AGM") will be held the offices of N+1 Singer, One Bartholomew Lane, London, EC2N 2AX on 16 June 2014 at 11:00 a.m. A formal Notice of AGM and proxy form are expected to be posted to shareholders in the next few days and will be available to download today from the Company's website at www.savannahresources.com.

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

David Archer	Savannah Resources plc	Tel: [phone]
James Maxwell / Jen Boorer	N+1 Singer	Tel: [phone]
Felicity Edwards/ Charlotte Heap	St Brides Media & Finance Ltd	Tel: [phone]

The financial information set out below does not constitute the Company's statutory accounts for the years ended 31 December 2013 or 2012, but is derived from those accounts.  The auditors have reported on those accounts.  

CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013

It is with positive reflection that I write my second Chairman's Statement for your Company which has achieved much, and been transformed significantly, in the last year. This advance, underscored by the change in name from African Mining & Exploration Plc to Savannah Resources Plc, has included the announcement of a maiden JORC resource (which was subsequently securitised into a strategic investment in Alecto Minerals Plc ("Alecto"), the recapitalisation of the Company with around £3 million of investment inflows, and an overhaul of the Company's exploration portfolio which saw the acquisition of a heavy mineral sands project in a world class mineral sands province in Mozambique plus entering into an agreement to acquire two copper projects in Oman's highly prospective Semail Ophiolite belt which is expected to be completed in May 2014.

The Company's current investment portfolio demonstrates a diversification of commodities, geographies and investment types and underlies the significant progress that has been made by the Company on its journey to becoming a leading diversified multi-commodity exploration and development company. This is especially pleasing considering the modest expenditure to achieve the progress and the reduced country and commodity risks that the Company now faces.

Under the direction of the Board the recent transformation process has been ably led by the Company's CEO David Archer. The Company's former CEO, Mark Jones, was appointed as CEO of Alecto Minerals where he continues his valued stewardship of the Kossanto Gold Project. The transformation included renaming the Company from African Mining & Exploration Plc to Savannah Resources Plc to underscore the change in strategy.

Jangamo Heavy Mineral Sands - Mozambique

In October 2013 the Company acquired an 80% interest in the Jangamo Heavy Mineral Sands Project in a world class mineral sands province in Mozambique. This borders Rio Tinto's Mutamba deposit, one of two major deposits Rio Tinto has defined in Mozambique, that collectively have an exploration target of 7-12Bt at 3-4.5% total heavy minerals ("THM"). A scout drilling programme, which commenced within one month of the acquisition, has confirmed that the style of mineralisation at Jangamo is similar to that reported by Rio Tinto.

Copper Projects in Oman

In April 2014 the Company announced it had entered into an agreement to acquire interests in the Block 5 (65%) and Block 6 (up to 70%) copper projects in Oman from Gentor Resources Limited. The acquisition is expected to be completed in May 2014.

The projects in the Semail Ophiolite, the world's largest and best preserved thrust sheet of oceanic crust and upper mantle, provide Savannah with an excellent opportunity to potentially evolve into a mid-tier copper producer in a relatively short time frame.  Small to medium sized Cyprus-type Cu-Au volcanic massive sulphide deposits have been worked in the Semail Ophiolite since ancient times. Modern exploration has identified many small to medium sized high grade copper deposits within the belt which as yet have not been brought into production. Together with our Omani partners, Savannah will look for ways to aggregate and explore as many of these opportunities as possible with a view to providing the critical mass for constructing a central operating plant to realise the value of the deposits.

Mali Portfolio - JORC Resource and Divestment

Following the acquisition of Caracal Gold Mali SARL ("Caracal") in July 2012, the Company's experienced team was able to fast track an exploration programme leading to the announcement of a maiden Mineral Resource of 107,000 Oz gold in June 2013. As part of the Company's portfolio transformation this project was sold in October 2013 to Alecto for £1.25 million worth of shares in Alecto. In March 2014 the remainder of the Company's exploration portfolio in Mali was sold to Alecto for £250,000 worth of shares in Alecto.

Strategic Investment in Alecto Minerals Plc

As a result of the sale of the projects and a cash investment of £500,000 in Alecto, the Company owns an effective 20.9% strategic shareholding in Alecto. This provides Savannah with exposure to both the highly prospective Kossanto Gold Project in the prolific Kenieba inlier in Mali and also to the Wayu Boda and Aysid Meketel gold / base metal projects in Ethiopia for which Alecto has a joint venture with Centamin Plc. Under this joint venture, Centamin Plc is committing up to a total of US$14m in exploration funding to earn up to 70% of each project. The Company's former CEO Mark Jones became CEO of Alecto when the sale of the Kossanto Project was concluded and I hold the position of Chairman of Alecto.

Annual General Meeting

At the forthcoming AGM the Shareholders will be asked to renew the usual equity securities issue authorities, which this year include a resolution in respect of a Share Exchange Agreement to acquire an 80% shareholding in Matilda Minerals Lda. This requires your Company to issue up to AUD 1,500,000 in shares as deferred consideration establishment of a JORC Indicated Resource of 500Mt @ 3% THM at the Jangamo project. The financing agreement entered into with Bergen which the Company entered into to provide security of funding as it expands its exploration portfolio, whilst providing robust protections for existing shareholders based on stringent restrictions around short selling and trading volumes. I hope you will once again support the Board by putting these authorities in place.

Additionally, the Directors appointed since the last AGM, are required to be offered for re-election in line with the Company's Articles of Association. I commend their re-election to you as an endorsement of the Company's stewardship.

Financial

Whilst the Company had a cash position of £1.76 million at 31 December 2012, the Board recognised the financing challenges for the junior exploration sector and took the pro-active decision, announced on 1 March 2013, to implement prudent cash preservation measures. Of the appointments to the Board in 2013, the Non-Executive Directors and the CEO were eligible for initial nominal salaries of £1 each while the recapitalisation of the Company was put in place.

These prudent measures, combined with; the securitisation of the Company's Mali exploration portfolio; cash placements of approximately £3 million; and a financing agreement with Bergen Global Opportunity Fund, LP ("Bergen") offering up to $5.5 million cash in the next 11 months, have resulted in the Company being in a very strong financial position to undertake exploration of its current portfolio and potential new projects. The agreement with Bergen provides robust protections for existing shareholders based on stringent preventive restrictions around short-selling and trading volumes and was carefully crafted with Bergen to provide flexibility in various market scenarios.

In line with the prudent management concepts, the Company has built a solid base of assets with over £4 million in cash and equity securities at the reporting date. At 6 May 2014 the Company's cash balance was £2.14 million and it held equity securities in Alecto worth £1.72 million.

Social responsibility

The Company, and its management, are cognisant of its social and environmental responsibilities in the areas in which we operate and are committed to the development and maintenance of good relationships with stakeholder communities. To this end, the board has formulated a Health, Safety, Environment and Community Relations policy that focuses on the positive interaction with all stakeholders. This policy has been adopted and already forms the basis for effective community relations in our permit areas.

Board changes

In July and September 2013 David Archer began the process of recapitalising the Company with a cash investment of £500,000 for ordinary shares in the Company and his appointment to CEO was confirmed in August 2013. David brings a wealth of experience in the junior and mid-tier resources industry and has successfully led both Savage Resources and Hillgrove Resources from microcap companies to companies valued at approximately $400M AUD and $200M AUD respectively at the time of leaving.

Dale Ferguson joined the Board as Technical Director in October 2013 and is an outstanding geologist with extensive commercial experience.  He has been integral to building the Company's evolving exploration portfolio and will be instrumental in continuing the growth of the Company.

Mark Jones retired as a Director and CEO of the Company in 2013 and I would like to thank him for his hard work in establishing your company from its formation. Recognition is particularly deserved for his foresight in the acquisition of the Kossanto Gold Project that he now leads in his role of CEO of Alecto.

Outlook

Following the change in strategic direction announced in July 2013 the Company has successfully delivered on its stated goals. Furthermore it has received significant interest and support from the investment community which has resulted in the Company having a strong current financial position.

We continue to build your Company into a leading diversified multi-commodity exploration and development entity, utilising the strengths of experienced professionals and partners to deliver significant investment return with managed risk and considering: the Company's recent transformation; it's strategic investment in Alecto which offers exposure without any funding requirements or management time to a very attractive portfolio of gold exploration projects in sub-Saharan Africa; the Company's own highly prospective exploration portfolio; the leadership provided by David Archer; and the healthy financial and funding position. In combination these provide a firm foundation for your Company to move forward positively in 2014.

The Company's own exploration projects in Mozambique and Oman provide a solid foundation in their own right and also facilitate the possibility to add further attractively-priced prospective projects via strategic acquisitions or joint venture arrangements.

Finally, we have a small team of dedicated staff and on behalf of the Company I would like to thank them for their significant efforts during the year and I look forward to the coming year, which I hope will be exciting and rewarding for the Company and all its shareholders.

Mike Johnson

Chairman

Date: 8 May 2014

CHIEF EXECUTIVE'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2013

I am delighted to report on the significant progress made by your Company during the past year, in my inaugural statement as CEO of Savannah Resources. This has been an extremely active year, which has seen us cement our position as a diversified, multi commodity, exploration and development company.

During the period under review we have established a solid portfolio of assets from which I believe we can deliver considerable value during the coming year and beyond through defined exploration and development programmes. This includes defining a potential maiden resource at our 80% owned Jangamo Heavy Minerals Sands Project in Mozambique, which is located in a world class mineral province. In addition, we are also focussed on securing a major position in the Oman copper belt following our recently agreed (April 2014) right to acquire two highly prospective copper blocks in north-east Oman. Savannah also holds an effective 20.9% strategic shareholding in AIM quoted Alecto Minerals Plc (ALO), which provides us with exposure to both the highly prospective Kossanto Gold Project in the prolific Kenieba inlier in Mali and also to the Wayu Boda and Aysid Meketel gold/base metal projects in Ethiopia for which Alecto has a joint venture with Centamin Plc.  Under this joint venture, Centamin Plc is committing up to US$14m in exploration funding to earn up to 70% of each project. 

Jangamo Heavy Mineral Sands Project, Mozambique

In October 2013 Savannah acquired an 80% shareholding in Matilda Minerals Limitada ('Matilda'), a privately owned Mozambican heavy mineral sands explorer. Matilda holds the highly prospective Jangamo tenement ('Jangamo' or 'the Project'), which is located in a world class mineral sands province in Southern Mozambique prospective for ilmenite, zircon and rutile. Jangamo covers an area of 180km² along an extensive dune system near the village of Jangamo, about 350km to the east-northeast of the capital Maputo, with excellent infrastructure in place to support potential operations, including grid power, access to the main EN1 highway and close proximity to the port of Inhambane.

Jangamo lies immediately to the west of Rio Tinto's ('Rio') Mutamba deposit, one of two major deposits Rio has defined in Mozambique, which collectively have an exploration target of 7-12 billion tonnes at 3-4.5% total heavy minerals ('THM').  Significantly, our recent exploration work conducted at the Project suggests that the geology and geomorphology of Jangamo is similar to that of Rio's adjacent Mutamba deposit, giving an indication of the Project's potential value. In addition, the Project is covered by a series of north-east trending Quaternary dunal and fluvial deposits, many of which have been proven to host total heavy minerals ('THM'), and scout sampling in the region by the Company has returned up to 18.1% THM with ilmenite, zircon and rutile recorded in the mineral concentrate.

To unlock the economic potential of Jangamo, Savannah has implemented an aggressive exploration programme. In October 2013, shortly after formally acquiring the Project, the Company commenced a 27 hole, 1,812m reverse circulation ('RC') drilling programme to further define Jangamo's prospectivity and test key dunal systems. The results, which were further analysed in March 2014, were extremely encouraging, confirming broad mineralised zones up to 39 metres deep with up to 5% THM recorded.

As part of this, three mineralised dunal systems were found to host strong THM grades in three strand lines: the eastern finger with 18m at 3.5% THM; the eastern line of 6km in length with intersections such as 24m at 3.2% THM; and the western line of 10kms in length with intersections such as 10m at 2.2% and 39m at 2.0% THM. Additionally, a new mineralised dune system was also discovered in the north of 10km in length in the western part of the Project, which significantly expands the exploration potential.

Importantly these results are consistent with the grades published for Rio's adjacent Mutamba deposit. In addition, there are examples of mineralisation starting from surface which appear to contain low levels of deleterious elements such as chromium, uranium and thorium contaminants, positively impacting the economics of the Project, as any potential mining operation would have a very low strip ratio.

Given the early stage of the exploration programme and the large distances between the scout drill holes, in many cases over 5km, this drill programme marked a major validating first-step in identifying a major heavy minerals system. The Company is now focussed on more precisely defining the strike and lateral extents of the heavy mineral sequences, and in line with this commenced a fast paced, results oriented 2014 field exploration programme in early April 2014. This will target more precisely defining and characterising the mineralised dune systems.

The first step in this 2014 exploration programme involved a two week ground magnetic survey. The results of this, which were announced in late April 2014, demonstrated that it is should be possible to detect the geophysical signature of the heavy mineral deposits using an airborne platform. A heliborne magnetic and radiometric survey is now planned to commence in the first half of May 2014 to define the extent of the mineralised system and any re-worked strand lines, which are likely to carry higher grades.  The results from these two geophysical programmes will enable the Company to identify the target zones for a second round of scout drilling scheduled to commence in the second half of May 2014, which will in turn enable the Company to define a potential maiden JORC compliant Mineral Resource and commence a scoping study in the second half of 2014.

In line with these developments, in March 2014 the Company commissioned globally leading heavy minerals consultancy, TZ Minerals International Pty Limited, to scope out and characterise the potential of Jangamo and outline a path for evaluation through to a scoping study. In addition, in May 2014 the Company appointed a Mozambique Exploration Manager and Mozambique Exploration Professional to ensure a rigorous and effective exploration approach.

With a strengthened regional exploration team in place, a highly prospective resource and defined development plan in place, Jangamo is at a very exciting stage of evaluation.

Blocks 5 and 6 Copper Project, Oman

On 10 April 2014 the Company made a transformational prime mover initiative into mineral rich Oman following an agreement to acquire interests in the highly prospective Block 5 and Block 6 copper projects (the 'Blocks') in the Sultanate of Oman ('Oman') from TSX-V listed Gentor Resources Inc. (TSX-V: GNT). The acquisition, which gives the Company the right to acquire a 65% interest in Block 5 and up to 70% in Block 6 is expected to be completed in May 2014.

The Blocks cover 870km² of the highly prospective copper-rich Seminail Ophiolite belt in Oman, 180km west of Muscat, the capital city of Oman, and respectively 40km and 60km south of major export port of Sohar. The Ophiolite belt is characterised by medium to high grade copper deposits with gold credits and metallurgically simple ores that have been shown to be amenable to profitable, open-cut development, to produce high quality copper concentrates for local or overseas smelters. Despite the region's rich history of copper production there has however been limited modern exploration in Oman; the Company and its Omani partners aim to capitalise on this by applying rigorous, modern exploration techniques. With excellent infrastructure (proximity to a major deep sea port, bitumen roads across both Blocks and adjacent power lines), low fuel and labour costs and a favourable fiscal and tax regime, the Company is of the opinion that mining profitability in Oman will be significantly enhanced by this very favourable development setting. The Company believes that with the application of systematic exploration and evaluations the opportunity exists in Oman to build a significant mid-tier copper producer.

The Blocks have a current Indicated and Inferred Mineral Resource of 1.7Mt at 2.2% copper ('Cu'), including a high-grade zone of ~0.5Mt at 4.5% Cu.  Importantly, the Company has identified a significant opportunity to increase this resource through the evaluation of multiple high priority targets, identified at various stages of exploration from preliminary evaluation up to advanced exploration. This includes the Mahab 4 prospect, where high grade intersections of 56.35m at 6.21% Cu from 63.15m have been reported. In addition, Maqail South (6.68m at 7.42% copper), Hara Kilab (5.54m at 3.96% copper) and Mahab 2 (5m at 2.81% copper) have been targeted for future exploration. In line with this, the Company intends to initiate a fast paced exploration programme in May 2014 with a view to commencing drilling in H2 2014.

The acquisition of the two highly prospective blocks is a major milestone in cementing the Company's position as a multi-commodity exploration and development company and will represent the first step in establishing the Company as a potential mid-tier copper producer. With an established medium to high grade copper resource and multiple target areas identified, the Company has exposure to one of the best Ophiolite belts in the world and is well set to commence a targeted, fast paced exploration programme to realise value for shareholders.  

Investment Portfolio

During the period since our last Annual Report we have significantly restructured our asset portfolio. In addition to acquiring interests in the aforementioned projects in Mozambique and Oman, we completed the strategic sale of a portfolio of gold projects in Mali to AIM quoted Alecto Mineral Plc (ALO) ('Alecto') in October 2013 and March 2014.

Following these acquisitions, the Company owns an effective 20.9% strategic shareholding in Alecto, which provides the Company with exposure to the Alecto's prospective assets whilst eliminating the associated exploration funding requirements. In Mali, Alecto operates the Kossanto Gold Project, located in the prolific Kenieba inlier, which has a current Inferred Resource of 193,000 oz Au with a cut-off grade of 0.5g/t Au. The company holds the Wayu Boda and Aysid Meketel gold/base metal projects in Ethiopia for which Alecto has a joint venture with Centamin Plc. Under this joint venture, Centamin Plc is committing up to US$14 million in exploration funding to earn up to 70% of each project. Finally, in Mauritania, Alecto operates three gold and base metal licences located in Chegar (756km²), Wad Armour (613km²) and Zreibya (459km²), providing exposure to a highly prospective and emerging mineral district targeting Iron Oxide Copper Gold (IOCG) style mineralisation.

Outlook

This has been a very active period for Savannah, which has seen us finalise two major acquisitions to affirm our position as a multi commodity, exploration and development company. To reflect these changes and its evolution, the Company changed its name to Savannah Resources Plc and I am confident that we now have a solid foundation to support strong growth.

At Jangamo, we are focussed on delineating a potential maiden resource and commencing a scoping study in the second half of 2014 to underscore the potential of the Project.

In addition, we look forward to completing the acquisition of two copper blocks in Oman, which have a current Indicated and Inferred Mineral Resource of 1.7Mt at 2.2% Cu. With a number of high priority targets identified, the Company intends to commence an exploration programme in May 2014. The Company is confident that its initiative in Oman will provide a unique opportunity to secure a major opportunity in a world-class copper belt, and help transition the Company into a mid-tier copper producer.

The Company will continue to follow Alecto's development with interest and also maintains an active growth strategy aimed at expanding the Company's geographic and commodity reach; the Company will consider any asset which it believes represents a compelling investment opportunity and complements its existing portfolio.  

With defined exploration programmes planned across its prospective portfolio of assets, the Company is on track to maintain a fast-paced evaluation campaign and has the foundations in place for solid growth in for the year ahead.

D S Archer          
Chief Executive Officer

Date: 8 May 2014

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2013

	Notes			2013 £		2012 £
CONTINUING OPERATIONS
Revenue				-		-
Administrative expenses				(905,576)		(897,085)
OPERATING LOSS BEFORE IMPAIRMENT				(905,576)		(897,085)
Impairment of intangible assets		11		(1,362,402)		-
OPERATING LOSS				(2,267,978)		(897,085)
Finance income		5		228,433		12,763
LOSS BEFORE TAX		6		(2,039,545)		(884,322)
Taxation		7		-		-
LOSS FOR PERIOD FROM CONTINUING OPERATIONS				(2,039,545)		(884,322)
Loss for the period from discontinued operations		8		(2,198)		(57,099)
LOSS FOR THE YEAR ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT				(2,041,743)		(941,421)
OTHER COMPREHENSIVE INCOME
Change in market value of investments		13		1,430,435		-
Exchange gains/(losses) arising on translation of foreign operations				51,990		(30,298)
OTHER COMPREHENSIVE INCOME FOR THE YEAR				1,482,425		(30,298)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT				(559,318)		(971,719)
Loss per share attributable to equity owners of the parent expressed in pence per share: Basic and diluted From Loss for the year attributable to equity owners of the parent From Continuing operations From Discontinued operations		10 10 10		(2.04) (2.04) -		(1.12) (1.05) (0.07)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 DECEMBER 2013

	Notes		2013 £		2012 £
ASSETS
NON-CURRENT ASSETS
Intangible assets	11		699,138		2,086,667
Property, plant and equipment	12		-		177,174
Investments	13		2,830,435		-
Other receivables	15		2,998		-
TOTAL NON-CURRENT ASSETS			3,532,571		2,263,841
CURRENT ASSETS
Loan receivables	14		573,380		-
Trade and other receivables	15		108,215		73,133
Cash and cash equivalents	16		859,616		1,767,381
TOTAL CURRENT ASSETS			1,541,211		1,840,514
TOTAL ASSETS			5,073,782		4,104,355
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital	17		1,383,658		842,133
Share premium			5,460,305		4,997,699
Foreign currency reserve			35,578		(16,412)
Warrant reserve			850,611		579,500
Share based payment reserve			497,181		577,260
Merger reserve			572,314		572,314
Retained earnings			(4,045,757)		(3,646,829)
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT			4,753,890		3,905,665
LIABILITIES
CURRENT LIABILITIES
Trade and other payables	18		319,892		198,690
TOTAL LIABILITIES			319,892		198,690
TOTAL EQUITY AND LIABILITIES			5,073,782		4,104,355

The Financial Statements were approved by the Board of Directors on 8 May 2014 and were signed on its behalf by:

D S Archer

Chief Executive Director

Company number: 07307107

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2013

	Share capital	Share premium	Foreign currency reserve	Warrant reserve	Share based payment reserve	Retained earnings	Merger reserve	Total equity
	£	£	£	£	£	£	£	£
At 1 January 2012	842,133	4,997,699	13,886	579,500	407,133	(2,705,408)	572,314	4,707,257
Loss for the year	-	-	-	-	-	(941,421)	-	(941,421)
Other comprehensive income	-	-	(30,298)	-	-	-	-	(30,298)
Share based payments	-	-	-	-	170,127	-	-	170,127
At 31 December 2012	842,133	4,997,699	(16,412)	579,500	577,260	(3,646,829)	572,314	3,905,665
Loss for the year	-	-	-	-	-	(2,041,743)	-	(2,041,743)
Other comprehensive income	-	-	51,990	-	-	1,430,435	-	1,482,425
Total comprehensive income for the year	-	-	51,990	-	-	(611,308)	-	(559,318)
Issue of share capital	541,525	733,717	-	-	-	-	-	1,275,242
Issue of warrants	-	(271,111)	-	271,111	-	-	-	-
Share based payments	-	-	-	-	132,301	-	-	132,301
Share options lapsed	-	-	-	-	(212,380)	212,380	-	-
At 31 December 2013	1,383,658	5,460,305	35,578	850,611	497,181	(4,045,757)	572,314	4,753,890

The following describes the nature and purpose of each reserve within owners' equity:

Reserve                                                           Description and purpose

Share capital                                                   Amounts subscribed for share capital at nominal value.

Share premium                                              Amounts subscribed for share capital in excess of nominal value.

Foreign currency reserve                                Gains/losses arising on retranslating the net assets of Group                                  

                                                                             operations into Pound Sterling.

Warrant reserve                                            Fair value of the warrants issued.

Share based payment reserve                Represents the accumulated balance of share based payment

                                                                             charges recognised in respect of share options granted by
Savannah Resources Plc, less transfers to retained losses in respect of options exercised and lapsed.

Retained earnings                                        Cumulative net gains and losses recognised in the consolidated

                                                                             statement of comprehensive income.

Merger reserve                                              Amounts resulting from acquisitions under common control.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2013

			Notes	2013 £		2012 £
Cash flows used in operating activities
Loss for the year				(2,041,743)		(941,421)
Depreciation and amortisation charges				30,231		39,172
Impairment of intangible assets			11	1,362,402		-
Profit on disposal of subsidiaries			4	(180,048)		-
Share based payment reserve charge				132,301		170,127
Shares issued in lieu of payments to extinguish liabilities				75,750		-
Finance income			5	(228,433)		(12,763)
Cash flow from operating activities before changes in working capital				(849,540)		(744,885)
Increase in trade and other receivables				(81,973)		(23,273)
Increase/(decrease) in trade and other payables				140,066		(9,037)
Net cash used in operating activities				(791,447)		(777,195)
Cash flow used in investing activities
Disposal of subsidiaries				(21,653)		-
Purchase of intangible assets (exploration expenditure) Purchase of tangible fixed assets				(593,638) (6,380)		(808,588) (35,209)
Purchase of convertible loan notes				(350,000)		-
Purchase of investments				(150,000)		-
Interest received				5,053		12,763
Net cash used in investing activities				(1,116,618)		(831,034)
Cash flow from financing activities
Proceeds from issues of ordinary shares				968,491		-
Net cash from financing activities				968,491		-
Decrease in cash and cash equivalents				(939,574)		(1,608,229)
Cash and cash equivalents at beginning of year				1,767,381		3,378,474
Exchange differences				31,809		(2,864)
Cash and cash equivalents at end of year				859,616		1,767,381

**ENDS**

About Savannah

Savannah Resources Plc (AIM: SAV) is a multi-commodity focussed exploration and development company. Through its 80% ownership of Matilda Minerals Limitada it operates the Jangamo exploration project in a world class mineral sands province in Mozambique which borders Rio Tinto's Mutamba deposit, one of two major deposits Rio Tinto has defined in Mozambique, which collectively have an exploration target of 7-12Bn tonnes at 3-4.5% THM¹ (published in 2008).

Savannah also holds the right to two copper projects in the highly prospective Semail Ophiolite Belt in Oman.   The projects, which have an Indicated and Inferred Mineral Resource of 1.7Mt @ 2.2% copper and high grade intercepts of up to 56.35m at 6.21% Cu, provide Savannah with an excellent opportunity to potentially evolve into a mid-tier copper producer in a relatively short time frame. Together with its Omani partners Savannah will look for ways to aggregate and explore as many opportunities as possible to provide the critical mass for a central operating plant to develop the deposits.

In addition, Savannah owns an effective 20.9% strategic shareholding in Alecto Minerals Plc which provides Savannah with exposure to both the highly prospective Kossanto Gold Project in the prolific Kenieba inlier in Mali and also to the Wayu Boda and Aysid Meketel gold / base metal projects in Ethiopia for which Alecto has a joint venture with Centamin Plc.  Under this joint venture, Centamin Plc is committing up to US$14m in exploration funding to earn up to 70% of each project.  The Company is also evaluating additional opportunities to expand its portfolio and geographical focus.

 

END

 

 

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