Savannah Resources PLC (LON:SAV) said its losses from continuing operations narrowed in 2020 helped by cost control measures and that the outlook for the company was “very promising”.
The resource development company’s losses from continuing operations fell to £2.9mln from £3.6mln in 2019. It has no revenue.
Due to COVID-19 related restrictions and a cost control programme, exploration spending was slashed 60% to £1.58mln, which, along with an oversubscribed £2.34m placing completed last September, contributed to the group’s year end cash position of £2.0mln.
All senior management and remunerated board members voluntarily agreed to a temporary 20% reduction in salaries in 2020 as part of the cost-saving measures.
Since the year end, Savannah has raised a further £10.3mln before expenses from an oversubscribed placing completed in April 2021. The AIM-listed company said it has the necessary financial reserves to advance its flagship Mina do Barroso lithium project towards development, maintain the Mutamba heavy mineral sands project and undertake project acquisition and exploration to expand its lithium portfolio.
“In simple terms, while some of our plans have been disrupted and delayed by the pandemic, the impact on the group could have been much worse,” said chairman Matthew King. “Despite the ongoing disruptions to our working practices caused by COVID-19, the outlook for Savannah is very promising.”
“Electric vehicle sales have continued to grow in the first quarter of 2021, lithium prices have rebounded, interest in our flagship project and its spodumene concentrate have increased and the group is in a strong financial position,” he said.
Yesterday, the company announced it had received increasing interest from groups seeking to undertake strategic investment in Mina do Barroso or Savannah with or without requiring a offtake deal.
Savannah said today that it is looking to increase its exposure to lithium and will dedicate a portion of the funds raised recently to growing this business.
“We are awaiting the Portuguese Government’s lithium exploration tender and intend to be very active in that process once it is initiated,” said chief executive David Archer. “We are also looking at other early-stage opportunities, including across the border in Spain.”
Story by ProactiveInvestors
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