TIDMZNWD
RNS Number : 2711K
Zinnwald Lithium PLC
24 August 2023
Zinnwald Lithium plc / EPIC: ZNWD.L / Market: AIM / Sector:
Mining
24 August 2023
Zinnwald Lithium plc
("Zinnwald Lithium" or the "Company")
Interim Results
Zinnwald Lithium plc, the European focused lithium company,
developing the Zinnwald Lithium Project in Germany, is pleased
announce its Interim Results for the period ended 30 June 2023.
HIGHLIGHTS
Six months to 30 June 2023
-- Fundraise of GBP18.75m completed in March 2023 cornerstoned by AMG Critical Minerals N.V.
-- 44 drill holes completed over 14,000 metres in the period
-- Intersections into the Albite Granites yielding consistent
and extensive mineralised intervals
-- Representative bulk sample sent to Metso and UVR-FIA for pilot scale testwork
-- Completion of sale of Erris Zinc Ltd to Ocean Partners
Post period end to 23 August 2023
-- Further 17 drill holes completed over 5,800 metres bringing
the total to 25,300 metres over 77 holes
-- Granting of the Bärenstein exploration license
Chairman's Statement
As a key transition metal required to deliver on net zero
commitments, it is widely recognised that lithium production needs
to increase significantly and that supply chains must be brought
closer to their end markets. This is particularly relevant in the
EU, which has already both relaxed State Aid rules for energy
transition materials and proposed the new Critical Raw Materials
Act ("CRMA"), which includes targets for domestic capacities for
extraction and processing of at least 10% and 40% respectively. New
UK/EU Rules of Origin are also being phased in from 2024 that will
see tariffs of up to 10% being applied to manufacturers that fail
to demonstrate that 50-60% of battery materials originate from the
EU.
Against this background, Zinnwald Lithium's integrated lithium
hydroxide ("LiOH") project (the "Project"), located central to
Germany's automotive and chemical industries, is positioned to be a
key supplier of lithium to the European battery industry.
As the macro environment moves in Zinnwald's favour, it is
imperative that at a micro-level we fully capitalise on the
opportunities opening up for us and position ourselves to do so.
Accordingly, in March this year we secured GBP18.75 million via a
fundraise at a 26% premium to the closing share price on the date
of the fundraise announcement and welcomed global critical
materials company AMG Critical Materials N.V ("AMG") as a
cornerstone investor. Shortly thereafter we welcomed AMG Lithium
GmbH's Chief Executive Officer, Dr. Stefan Scherer, to Zinnwald's
Board.
With funds in place, we have been able to accelerate our efforts
to advance the Project towards completing a bankable feasibility
study ("BFS") by early in the first half of 2024. Since completing
the fundraise, we have significantly increased our drilling
activity, utilising up to six drill rigs and completing 45 drill
holes totalling 14,800 metres since the beginning of April to the
date of this report. The total number of metres drilled since the
beginning of the in-fill drill campaign now stands at 25,300m over
77 holes.
The aim of the drilling programme is to increase drillhole and
data density in parts of the deposit to further optimise the
geological model to support BFS level mine planning, metallurgical
and geotechnical engineering workstreams. In addition, it will
generate further geological and geometallurgical data to support
potential inclusion of the mineralised Albite Granite ("Greisenised
Granite" or "Type 2") lithology to upgrade the existing Mineral
Resource Estimate ("MRE") as the lithium demand and price have
radically increased since the last MRE was conducted. The Albite
Granite contains disseminated zinnwaldite mineralisation that can
be laterally and vertically extensive, reaching up to 80m
(vertical) thickness in places.
Thus far, intersections in Albite Granite lithology continue to
yield consistent and extensive mineralised intervals supporting the
Company's strategy of planning for high productivity mining methods
and higher lithium output. We anticipate completing the drill
campaign at the core Zinnwald license area within the coming weeks,
and, once all assays are received and reviewed, publishing the new
MRE in Q4 2023.
Alongside the drill campaign, we are undertaking extensive
testwork with regard to the process flow sheet. A representative
bulk sample of "new ore feed" has been sent for confirmatory
metallurgical testwork and piloting to Metso in Finland. A pilot
test trial will be conducted in late summer / early autumn 2023 to
affirm insights from bench scale testing and provide further input
for the upcoming engineering processes.
While the priority for the Company remains advancing the core
Zinnwald Project, it does control an extensive license area
adjacent to the core Zinnwald Mining License. Work done on the
Falkenhain license areas continues to confirm the prospectivity of
this area which could support further scale and upside for the
Project going forward. In addition, during July the Company was
granted the Bärenstein exploration license area, which lies
adjacent to and directly to the north-east of the Company's
Altenberg-DL licence and almost completely encloses the Falkenhain
license. Following further exploration work on these license areas,
there is the potential to increase the resource base and lifetime
of the planned mine and mineral processing facilities related to
the Project. Furthermore, the Company continues to investigate the
broader Bärenstein area as a location for future mining and
processing operations. To hold the mineral rights for these areas
has therefore been a priority to maintain planning flexibility as
well as legal certainty.
In terms of the lithium market, news headlines in the half of
2023 saw much commentary around the significant decline in the spot
market price for lithium products into China from peaks of circa
$80,000 per tonne at the end of 2022 to a low of just over $30,000
per tonne in April 2023 with a recovery to circa $40,000 in August.
It should be emphasised that the spot market in general is a small
portion of the overall global market, and this specific index is
often more volatile in relation to what is happening elsewhere.
Indeed, in August 2023, SQM (the world's largest supplier of
battery grade lithium products) reported its H1 2023 results that
showed an average price of circa $41,000 per tonne. SQM
specifically noted that they see a "positive dynamic in lithium
market supported by strong EV sales volumes in different markets
and expect the global lithium demand growth to reach at least 20%
this year." Other major producers, such as Albermarle and Livent,
have forecast improving prices for the second half of 2023 as
destocking comes to an end and the structural undersupply issues
continue.
It is important to note that Zinnwald used a long-term price of
$22,500 per tonne in its Preliminary Economic Assessment ("PEA"),
which the Company continues to believe is a sensible, conservative
long-term price for the Project.
In terms of financial markets, share prices of junior mining
companies have been under considerable pressure in recent months,
as investors have grappled with risks of significant inflationary
pressures, and an economic downturn exacerbated by the continuing
conflict in Ukraine and the resulting energy crisis. As such, we
are fortunate to have put the Company on a sound financial footing
with the fundraise in March, and to be able to move forward rapidly
with the next phase of the Project development. We are confident
that the inherent strengths of our Project will, ultimately, be
reflected in our market value as we continue to deliver against our
plan.
Financials
The Company continues to maintain its extremely disciplined
approach to expenditure and cash management and as such is well
funded through completion of the BFS and into the follow-on
detailed engineering work in 2024, with cash of EUR18.9m as at the
date of this report.
Outlook
Looking ahead, we have an extremely active work schedule. The
Company's near-term priorities are the completion of the in-fill
and hydrogeological drill campaigns at the Zinnwald Project,
detailed mine planning and testwork programmes related to mineral
and chemical processing.
The PEA demonstrated a robust project with very attractive
economics and the team is working hard to advance this to the next
stages of an updated MRE in 2023 and on to the BFS in early 2024.
The additional work completed supports the potential to increase
the scale of the Project and is being explored further as part of
the next phase.
We look forward to updating the market on progress on all of
these fronts as we continue our various work programmes.
Jeremy Martin
Non-Executive Chairman
Operational Review
The first half of 2023 saw Zinnwald Lithium Plc (the "Company")
and its wholly owned subsidiary, Zinnwald Lithium GmbH ("ZL GmbH"
and together the "Group") accelerate its development strategy for
its integrated Zinnwald Lithium Project (the "Project"). During the
six months to 30 June, the Company's priorities were the in-fill
drill campaigns at the Zinnwald Project as well as detailed mine
planning and testwork programmes related to mineral and chemical
processing.
Six months to 30 June 2023
Fund Raise
On 29 March 2023, the Company completed a GBP18.75m fundraise at
a 26% premium to its share price at close on 22 March 2023. This
raise was cornerstoned by AMG, existing significant shareholders,
and new German institutional investors. These funds have enabled
the Company to accelerate its various workstreams and will finance
it beyond completion of the BFS. As part of the investment from
AMG, the Company has welcomed Dr Stefan Scherer to the Board.
The fundraise included an offering via PrimaryBid, which
reflects the Company's ongoing commitment to enabling its retail
shareholders to participate. The Board appreciates that this
process can inherently only be done at very short notice and with a
small window of opportunity to act and will continue to explore any
alternate avenues that might enable a wider participation.
Infill and Resource Delineation Drill Programme
The successful fundraise completed at the end of March 2023
enabled the Company to significantly accelerate its resource
delineation drilling activities. During the six months to 30 June,
it completed 14,100m of diamond core drilling across 44 drill
holes. This brought the total metres drilled to 19,500 metres
across 60 drill holes at the Zinnwald Mining license during this
drill campaign. Since the end of the reporting period, an
additional 5,800 metres across 17 holes of drilling have been
completed.
The objectives of the programme are to:
-- Increase drillhole and data density in parts of the deposit
to further optimise the geological model to support BFS level mine
planning, metallurgical and geotechnical engineering
workstreams;
-- Generate additional geological and geometallurgical data to
support inclusion of the mineralised Albite Granite (Type 2)
lithology in order to upgrade the existing Mineral Resource
Estimate ("MRE");
-- Improve resolution of the extents of the Type 1 (high grade Greisen mineralisation); and
-- Improve confidence in available existing historical drillhole data.
Following completion of the drilling programme, anticipated
during Q3 2023, the results will be used to update the geological
and mineralisation models with the objective of producing an
updated MRE later in 2023. SRK Consulting (UK) ("SRK") has been
commissioned to complete the MRE.
The Albite Granite (previously called the "Greisenised Granite"
or "Type 2") is recognised as a mineralised alteration halo
surrounding the higher-grade Greisen type mineralisation ("Type
1"). Here the Albite Granite contains disseminated zinnwaldite
mineralisation that can be laterally and vertically extensive,
reaching up to 80m (vertical) thickness in places. In the 2019
NI43-101 Technical report, the potential in-situ mineral inventory
of Albite Granite was estimated at 214 Mt at a Li grade of 0.37 %
Li2O (1,700 ppm Li). One of the objectives of the ongoing drilling
programme is to better delineate and quantify this style of
mineralisation for possible inclusion in the updated MRE.
The Company anticipates that the inclusion of Albite Granite
mineralisation will increase the Zinnwald Lithium Project's Mineral
Resource base. This will also serve to better align the Project's
metrics with other known zinnwaldite deposits as well as strengthen
the Company's operational and production capacity. Here, the
inclusion of the Albite granite will also allow consideration of
higher productivity mining methods, such as AVOCA or Sublevel
Stoping that will drive productivity and simplify operational
planning.
Key insights from results of the current drill programme are
(see relevant graphics included at the end of this release):
-- The Greisens, which host the strongest levels of Li
mineralisation, trend along a North West-South East axis across the
granite cupola (see overview map and sections in appendix).
-- There are further opportunities for expansion to the west,
south towards the national boundary, and in particular to the South
East where high-grade mineralisation remains open.
-- Intersections in Albite Granite lithology continue to yield
consistent and extensive mineralised intervals including up to 92.3
m with average grade of 0.48 % Li2O in (ZGLi-045), supporting the
Company's strategy of planning for high productivity mining
methods.
-- Shorter drill spacing in the deposit will be used to provide
the Company with a sufficient information basis to support detailed
mine planning, geotechnical and hydrogeological work in the
upcoming phase.
-- The Company has a robust working model for the deposit,
demonstrated by new logging and assay results from the ongoing
drilling programme, which are consistent with the geometries of the
mineralisation and expected grades.
Significant drill intersections and assay results from the
current drilling campaign include:
-- ZGLi 045/2023 :
o 158 m (156.0 m - 314.0 m) at average grade 0.56 % Li2O (383.7
ppm Sn)
-- Within this lies a high-grade interval of 65.7 m (156.0 m -
221.7 m) with an average Li grade 0.68 % Li2O (517.9 ppm Sn)
-- ZGLi 036/2022 in the north of the deposit:
o 81.7 m (158.7 m - 240.4 m) at average grade 0.46 % Li2O (76.9
ppm Sn)
-- ZGLi 031/2022 in the central part of the deposit:
o High-grade interval of 12.9 m (79.9 m - 92.8 m) with an
average Li grade 0.70 % Li2O (963.9 ppm Sn)
o 81.1 m (129.9 m - 211.0 m) at average grade 0.55 % Li2O (205.4
ppm Sn)
-- ZGLi 042/2023 :
o High-grade interval of 24.6 m (85.4 m to 110.0 m) with an
average Li grade 0.78 % Li2O (1,463.7 ppm Sn)
o 66.4 m (188.5 m to 254.9 m) at average grade 0.42 % Li2O
(246.8 ppm Sn)
The results of the infill drilling campaign continue to validate
and support the geological model in line with the Company's
expectations.
Other critical work areas that the Company is focusing on
including the hydrogeological testing and modelling, which
represents an essential piece of work for both technical planning
as well as EIA permitting requirements. It is planned to conduct
further geotechnical and hydrogeological drill holes later in the
year. The Company is supported by a group of consultants in this
effort, including SRK, Geologische Landesuntersuchung Freiberg GmbH
("GLU"), Fugro, and CSA Global.
To fully understand the impact of a new mineral resource, which
would potentially comprise new ore feed characteristics, sampling
from larger diameter drill core has been completed across the
deposit, supported by SRK, with the aim to produce a representative
bulk sample for confirmatory metallurgical testing. This sample was
taken in Q1 of this year and is currently being used for test work
by Metso in Finland (see Metallurgical Process Development section
below).
Mine Planning Activities
The drill programme has enabled further optimisation of the
geological model and understanding of zinnwaldite/grade
distribution throughout the deposit, and this enabled the Company
and SRK to update and revise the mine design. It is envisaged that
the revised mine design will incorporate the strategy of higher
productivity mining methods, as well as operating the mine using a
fully electrified trackless equipment fleet. This current work
focuses on the understanding of key drivers of costs and efficiency
across the entire production operation, taking all technical
aspects of the Project into consideration. Detailed understanding
of geotechnical aspects at Zinnwald as well as downstream process
efficiencies and cost assumptions are crucial to adequately
determine future metrics defining the Cut-off-Grade ("COG") and
optimal production capacity scenarios.
Metallurgical Process Development / Testwork
Working with several partners including Metso (formerly
Metso:Outotec) and UVR FIA, the Company is focused on confirming
and optimising the existing mineral processing flowsheet. Metso has
been supplied with a representative two-ton bulk sample of drill
core to undertake confirmatory bench and pilot scale mineral
processing testwork. The primary goal of this work is to confirm
previous testwork results on a feed material that now also includes
the lithium bearing Albite Granite lithology and therefore may
differ from the process as described in the PEA. The bench scale
results will also deliver additional engineering parameters that
will feed into downstream engineering processes.
Mineral processing tests at UVR FIA GmbH in Freiberg earlier
this year investigated the efficacy of magnetic separation methods
specifically on the Albite Granite lithology, which have yielded
further encouraging results and will be taken into account in
on-going bench-scale testing at Metso. The target is now to
optimise method parameters further in the application of magnetic
separation as well as potential down-stream froth flotation stages
in a scavenger circuit arrangement.
Ultimately, a pilot test trial will be conducted in late summer
/ early autumn 2023 to affirm insights from bench scale testing and
provide further input for the upcoming engineering processes.
Mineral concentrate from this pilot test will be used to validate
existing process assumptions and engineering for pyro- and
hydro-metallurgical processing at Metso's test centres in the USA
and Finland.
Exploration Licenses - Falkenhain, Altenberg, Sadisdorf
In the time since the last operational update, the Company has
been focussing its efforts on the development the core Zinnwald
Project. However, additional work has been undertaken over the
Company's other exploration licenses including:
-- Completion of drill hole LiSH-001 at Falkenhain on the
Schenkenshöhe with results announced to the market on the 30th
January 2023 and key highlight intercept including:
o 80 m (114m - 194m) with average 0.62 % Li2O; 492 ppm Sn and
271 ppm W
-- Including 51 m (140.0m - 191.0m) at average 0.73 % Li2O;
519ppm Sn and 361 ppm W
o 10m (334.0m - 344.0m) with average 0.69 % Li2O; > 1,924 ppm
Sn and 83 ppm W
-- Re-assay of available historic core from Falkenhain has been
carried out to guide further exploration works. This effort yielded
highly promising results at the historic hole "SnFhiDi-045",
drilled on the "Schenkenshöhe" part of the Falkenhain license by
the GDR state in 1973 whilst exploring for tin resources in the
area. The core material for this hole is available to the Company
and has been re-logged, re-sampled and re-assayed. Whilst the
Company recognises the indicative character of results originating
from a historic drill hole, it considers these as very valuable in
directing further exploration efforts at the Falkenhain
license.
The assay results from the c. 600 m deep hole include the
following drill intercepts:
o 174.5-187.0 m (12.5 m) average 0.53 % Li2O (824.3 ppm Sn)
o 216.5-346.6 m (119.1 m) average 0.98% Li2O (484.3 ppm Sn)
-- Planning of further exploration and drilling stages at
Falkenhain, Altenberg and Sadisdorf licenses will be undertaken in
the upcoming phase of project development.
Infrastructure
In collaboration with the owner of the historic Zinnerz
Altenberg mine, the LMBV, the Company has undertaken the
digitisation of historic mine plans of the Zinnerz mine in
Altenberg. The digital plans now cover more than three production
and mine infrastructure levels of the historic mine that operated
at commercial scale in Altenberg as "VEB Zinnerz Altenberg" for 40
years, but with mining activities dating back to medieval times.
These digital plans are vital in the process of developing detailed
construction plans and mine designs that will also include
utilisation of the existing historic mine infrastructure in
Altenberg. This will result in significantly reduced disruption to
local residents by hauling the ore underground on the 500m RL
elevation towards the processing site, northeast of Altenberg
(including via the "De-Watering Tunnel" as mentioned in previous
announcements).
Further updates with regards to Infrastructure and Tailings
Management Planning:
-- On-going evaluation for tailings management are supported by
Knight Piesold (UK), which specialise in tailings management &
engineering. The Company is strongly committed to progress planning
for a Dry Stack Facility "'DSF"), for which multiple design and
site options are being evaluated.
-- DSF tailings are becoming industry standard for new projects
and present multiple advantages including:
o Increased capacity compared with volume / storage capacity of
conventional wet tailings facilities;
o Limited long-term risk of dam failure and liquefaction as
designed to be self-supporting;
o No or limited requirement for embankment or retention
structures;
o Re-naturation / rehabilitation can be completed in step with
stack construction; and
o Option to re-claim materials from stack, presenting
opportunities for materials re-utilisation in the future, in line
with UN Sustainable Development Goals.
Sustainability / ESG Matters
Zinnwald continues to comply with the QCA corporate governance
code and its guidance on sustainability matters. The Company views
sustainability as a guiding principle of its development strategy
and is dedicated to delivering on the commitments to its
shareholders, future investors, clients, employees, local
communities, and other stakeholders with this in mind. It believes
that transparency and ethical behaviour are central to any
successful group and undertakes all development with respect to the
environment and neighbouring communities.
Environmental
Zinnwald is committed to applying the highest standards for
environmental protection, not only in its future operations, but
more immediately in its current on-going exploration phases of the
Project. In conjunction with its environmental surveyors and
consultants, the team is focused on defining its future
environmental management strategies and delivery of its
Environmental Impact Assessment ("EIA"). The Company has already
commenced its monitoring and baseline studies at its preferred site
locations through GLU and Umweltberatung Schulz since September
2022 and this will cover a minimum 12-month (all four seasons)
timeframe.
The Company formally submitted its Scoping Document to the
Mining Authority on the 21st of April, which started the formal
permitting process for the construction and operation in Germany.
The Mining Authority is expected to arrange a Scoping Meeting with
Stakeholder Authorities later in summer, which will serve as a
platform to clarify the Project and get first feedback from
Stakeholder Authorities on all aspects of the planned Project,
which can be considered and taken forward in subsequent formal
application stages.
As previously announced, the Company is pursuing a Mandatory
Framework Operating Permit ("MFOP") to cover all operations. It has
been agreed that the Saxony Mining Authority will be the
determining body for the overall permitting pathway for the
processes permitted under the Mining Act. This also provides
clarity for participating stakeholder authorities and legal
certainty for the Project in the future.
The Projects' permitting is supported by GLU, which has
extensive experience of mine and resource project permitting in the
region. The Company intends to maintain international best practice
in the permitting by keeping a transparent approach to project
development and stakeholder engagement.
Social
With the Project gaining momentum, the Company has increased its
staff numbers to support the accelerated exploration activities as
well as on-going feasibility study development work. The Company is
also working to expand its long-term operational owners' team in
Germany. In total, the Project team now consists of eight
geologists that are working at the Project site, as well as the
Freiberg core-logging and sample preparation facilities. In total,
the Project team includes 23 professionals working across
disciplines in both Freiberg and London office locations.
Engagement with the local community of Zinnwald has always been
a high priority to the Company, especially given the increased
number of drill rigs in the town and its surroundings. In May, the
Company held a well-attended information event at the Zinnwald town
hall that outlined the on-going drill-campaign as well as future
development plans. This enabled local residents and stakeholders to
raise concerns and pose questions directly to the local project
team as well as the UK executive team. The event included a visit
to one of the nearby drill rigs and an explanation of the steps
taken to keep noise to a minimum, as well as how the Company
remediates all drill holes and keeps its environmental impact as
low as practicable.
Governance
The Company is working on its formal engagement process with its
main stakeholders and will be sending out detailed questionnaires
to enable the completion of a formal Materiality Risk Assessment.
This will enable the Company to better tailor its operational
policies, activities and reporting to the risks identified.
The Board has decided to formally rebrand the entire Group under
the "Zinnwald Lithium" banner and completed this name change
process in Germany in July. This reflects the close ties that the
Group and the Project has to the local town and community and
indeed to the very name of the mineral (Zinnwaldite) we will be
processing. The Group will retain the trademark to "Deutsche
Lithium" and will use it as the branding for the ultimate end
product. As part of this rebranding, the Group will be relaunching
its website later in the year to better support the Group's three
core audiences - investors, local stakeholders, and the ultimate
end users.
Ireland
In order to focus its efforts on the Zinnwald Project, in March
2023, Zinnwald signed a Heads of Terms Agreement with Ocean
Partners UK Ltd for it to acquire Erris Zinc Ltd, the Company's
subsidiary that owns the Abbeytown Zinc License in Ireland
('Abbeytown'). On 24 June 2023, the Irish GeoSciences Department
approved the transaction and the sale was completed. Zinnwald shall
receive a 1% Net Smelter Royalty and a EUR200,000 cash payment due
six months after commencement of commercial production from
Abbeytown.
Post Balance Sheet events to 23 August 2023
In-fill drilling at Zinnwald Lithium Deposit close to
completion
As at 23 August 2023, the Company has almost completed its
in-fill drilling programme at the Zinnwald License and has drilled
a further 17 holes over 5,800 metres since the end of June bringing
the total campaign to 25,200 metres over 77 holes. The Company
expects to complete the final in-fill drill holes over the coming
weeks Core logging, sampling and assaying is expected to be
completed in the weeks following completion of drilling, subject to
laboratory availability. The results will be incorporated in a
revised MRE which is expected to be published in Q4 2023.
Granting of additional Barenstein exploration license
On 6 July 2023, the Company announced that it had been granted
an additional exploration licence (the 'Bärenstein Licence')
covering approximately 4,933.9 hectares ('ha') in the Erzgebirge
region of Saxony, Germany. The Bärenstein Licence has the potential
to provide additional resource upside to the Company's Project and
results in continuous licence coverage from the Zinnwald Mining
Licence to the Falkenhain Exploration licence, thus complementing
the Company's strategy to potentially develop future operations in
this area.
The new license area shown in the map below closes the gap
between Falkenhain and Altenberg Exploration licences and adds a
substantial land area to the mineral exploration titles of the
Company in the region that now stands at combined 9,959.6 ha. The
greenfield Bärenstein Licence holds significant mineral potential
and was historically mined for tin and silver between the 15th and
19th centuries. The Bärenstein Licence area includes land that is
being evaluated for the future mining and processing operations of
the Project.
Lithium Market in 2023
Headlines in the first few months of 2023 saw much commentary
around the significant decline in the spot market price for lithium
products into China from peaks of circa $80,000 per tonne at the
end of 2022 to a low of just over $30,000 per tonne in April 2023
with a recovery to circa $40,000 in August. It should be emphasised
that the spot market in general is a small portion of the overall
global market and this specific index is often more volatile in
relation to what is happening elsewhere. Indeed, in August 2023,
SQM (the world's largest supplier of battery grade lithium
products) reported its H1 2023 results that showed an average price
of circa $41,000 per tonne. SQM specifically noted that they see a
"positive dynamic in lithium market supported by strong EV sales
volumes in different markets and expect the global lithium demand
growth to reach at least 20% this year. " Other major producers,
such as Albermarle and Livent, have forecast improving prices for
the second half of 2023 as destocking comes to an end and the
structural undersupply issues continue.
It is important to note that Zinnwald used a long-term price of
$22,500 per tonne in its PEA, which the Company continues to
believe is a sensible, conservative long-term price for the
Project.
In terms of the wider regulatory context for the battery
materials market, the impact of the US Inflation Reduction Act
("IRA") continues to reverberate and influence global structures.
In March 2023, the EU announced the planned details behind its
Critical Raw Materials Act ("CRMA"). These include that lithium is
defined as both a "Critical and Strategic" raw material. It
proposes benchmarks of 10% of the EU's annual consumption for
extraction and 40% for processing - both relevant to Zinnwald. The
CRMA plans to simplify permitting procedures for projects in the
EU, as well as identifying selected strategic projects to benefit
from EU financial support. It should be noted that the CRMA is
still to pass through the European Parliament and the EU Council,
and these key strategic projects have not yet been identified. The
Board believes that the Zinnwald Project should be one of these
projects.
One slightly less well publicised event that potentially has a
greater and more immediate relevance to Zinnwald is the relaxation
of the European State Aid rules. On 9 March 2023, the European
Commission adopted the Temporary Crisis and Transition State aid
Framework ("TCTF") aimed at boosting and retaining clean tech
investments in Europe. The TCTF allows Member States to provide
undertakings with significant State aid support in order to develop
and boost businesses that will drive the EU's energy transition.
These rules apply from the end of 2025 with a further three years
from receipt of the aid to deliver the projects.
Shareholder Evolution
The Company has undertaken a formal review of its underlying
beneficial shareholder base that shows an ever-increasing ownership
by German and EU investors. Based on the latest share register, the
Company now shows UK holders at 46%, large German institutional and
corporate investors at 31%, other German and EU investors at 13%
and Rest of the World at 10%.
Outlook
The Company's near-term priorities are the completion of the
in-fill and hydrogeological drill campaigns at the Zinnwald
Project, detailed mine planning and test work programmes related to
mineral and chemical processing. The satisfactory completion of
these items, which are being done in conjunction with external
parties, will impact the timing of the BFS. While the objective
remains to complete this as soon as possible, the permitting of
certain of these activities as well as the limited availability of
necessary testing facilities and staffing carries the risk that the
timing will move beyond the end of this year. However, the team
remains confident that completion of the BFS by early in the first
half of 2024 is highly achievable and is working to ensure that the
overall timetable of the Project is not unduly impacted.
The PEA demonstrated a robust Project with very attractive
economics and the team is working hard to advance this to the next
stage. The additional work supports the potential to increase the
scale of the Project and is being explored further as part of the
next phase.
The Company has now almost completed the infill drilling
programme at the core Zinnwald license that commenced in July 2022.
This has been an extensive programme which, upon completion, will
see a total of more than 26,700 metres drilled across 83 drill
holes. The objective of the drill programmes is to better define
the Resources and Reserves that lie within the ore body, as well as
determine the detailed early years' mining plan.
In addition, the Company will continue to develop the
technologies planned for its processes. Individual processing
methods and stages are well established in mining and other
industries. The Company is working with Metso, a global leader in
process engineering, to develop and refine the mineral and chemical
processing solution for the Project. A representative bulk ore
sample was delivered to Metso in February, and this is being used
to thoroughly test the processing steps for the Project. The
Company will also continue to refine its plans for reducing its
overall CO2 footprint and operating costs, such as via the use of
electric mining equipment.
The Company has already commenced its EIA and other permit
application process, including baseline studies and other reports.
The detailed scoping meeting with permitting authorities will be
held in late August 2023.
The Company continues to liaise with individual, State and
Federal owners of local infrastructure regarding access rights
and/or acquisition. The Company will also advance negotiations for
service contracts for electric power and natural gas with local
power companies as well as supply contracts for required reagents
and materials.
Financial Review
Notwithstanding that the Company is a UK plc, admitted to
trading on AIM, the Company presents its accounts in its functional
currency of Euros, since most of the exploration expenditure,
including that of its subsidiary Zinnwald Lithium, is denominated
in this currency.
The Group is still at an exploration and development stage and
not yet producing minerals, which would generate commercial income.
The Group is not expected to report overall profits until it is
able to profitably commercialise its Zinnwald Lithium project in
Germany or disposes of its historic exploration project in
Ireland.
During the period, the Group made a loss before taxation of
EUR1.3m compared with a loss of EUR1.4m for the period ended 30
June 2022. Whilst the overall amounts are relatively similar, the
underlying expenditure areas are different. In the six months to 30
June 2023, administrative expenses increased to EUR1.2m compared
with EUR0.9m in the previous period. This is due to the Group has
also increased its overall staffing levels to reflect the increased
workstreams to advance the Project. There was also a share-based
payment expense of EUR0.3m in the current period compared with
EUR0.6m for the period ended 30 June 2022, arising from the
issuance of new Options and RSUs in March 2023.
The Total Net Assets of the Group increased to EUR40.9m at 30
June 2023 from EUR21.7m at 30 June 2022, due to increased capital
investment in the Intangible Assets of the Project together with
increased cash balances following the fund raise in March 2023. The
Company's management team itself secured the majority of the funds
raised in March 2023 and consequently only paid EUR0.2m of
commission on the raise, equating to 0.9% of the total funds
raised.
The closing cash balance for the Group at the period end was
EUR19.7m which is greater than the EUR6.1m at the end of the same
period in the prior year, due primarily to the funds raised in
March 2023, offset by ongoing development and operational
expenditure. As at the date of this report, the Group's cash
balance is EUR18.9m.
On behalf of the board
Cherif Rifaat,
CFO and Director
ZINNWALD LITHIUM PLC
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE SIX MONTHSED 30 JUNE 2023
30 June 2023 30 June 2022
Unaudited Unaudited
Notes EUR EUR
Continuing operations
Administrative expenses (1,178,600) (858,953)
Other operating income 68,957 2,187
Share based payments charge 13 (255,111) (591,099)
Operating Loss 4 (1,364,754) (1,447,865)
Finance income 5 32,792 18
Loss before taxation (1,331,962) (1,447,847)
Tax on loss - -
Loss for the financial period (1,331,962) (1,447,847)
Other Comprehensive Income -
------------- -------------
Total comprehensive loss for
the period (1,331,962) (1,447,847)
Earnings per share from continuing
operations attributable to the
owners of the parent company 6
Basic (cents per share) (0.34) (0.49)
Total loss and comprehensive loss for the year is attributable
to the owners of the parent company.
ZINNWALD LITHIUM PLC
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 30 JUNE 2023
30 June 2023 30 June 2022 31 December
Unaudited Unaudited 2022
Audited
Notes EUR EUR EUR
Non-current assets
Intangible Assets 7 22,654,530 16,852,308 18,966,165
Property, plant and
equipment 8 353,077 188,062 327,528
Right of Use Assets 9 116,280 - 185,285
23,123,887 17,040,370 19,478,978
Current assets
Trade and other receivables 10 507,920 194,918 309,795
Cash and cash equivalents 11 19,689,789 6,020,170 3,164,585
20,197,709 6,215,088 3,474,380
Total Assets 43,321,596 23,255,458 22,953,358
Current liabilities
Trade and other payables 12 (934,725) (123,324) (583,660)
Lease Liabilities <
1 year 9 (118,455) - (140,149)
(1,053,180) (123,324) (723,809)
Net current assets 19,144,529 6,091,764 2,750,570
------------- ------------- ------------
Non-current Liabilities
Deferred tax liability (1,382,868) (1,382,868) (1,382,868)
Lease Liabilities >
1 year 9 - - (47,795)
------------- ------------- ------------
(1,382,868) (1,382,868) (1,430,663)
------------- ------------- ------------
Total liabilities (2,436,048) (1,506,192) (2,154,472)
------------- ------------- ------------
Net Assets 40,885,548 21,749,266 20,798,886
============= ============= ============
Equity
Share capital 14 5,365,379 3,316,249 3,316,249
Share premium 39,403,810 20,289,487 20,289,487
Other reserves 1,623,039 1,413,880 1,367,868
Retained earnings (5,506,680) (3,270,350) (4,174,718)
------------- ------------- ------------
Total equity 40,885,548 21,749,266 20,798,886
============= ============= ============
ZINNWALD LITHIUM PLC
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE SIX MONTHSED 30 JUNE 2023
Share Share Other Retained Total
Capital premium reserves earnings
account
EUR EUR EUR EUR EUR
Balance at 1 January
2023 3,316,249 20,289,487 1,367,868 (4,174,718) 20,798,886
Six months ended 30
June 2023
Loss and total other
comprehensive income
for the period (1,331,962) (1,331,962)
Currency translation
difference - - 60 - 60
Total comprehensive income
for the period - - 60 (1,331,962) (1,331,902)
Issue of share capital 2,049,130 19,282,326 - - 21,331,456
Share issue costs (168,003) - - (168,003)
Credit to equity for
equity settled share-based
payments 255,111 - 255,111
Total transactions with
owners directly in equity 2,049,130 19,114,323 255,111 - 21,418,564
Balance at 30 June 2023 5,365,379 39,403,810 1,623,039 (5,506,680) 40,885,548
Share Share Other Retained Total
Capital premium reserves earnings
account
EUR EUR EUR EUR EUR
Balance at 1 January
2022 3,316,249 20,289,487 822,781 (1,822,503) 22,606,014
Six months ended 30
June 2022
Loss and total other
comprehensive income
for the period - - - (1,447,847) (1,447,847)
Total comprehensive income
for the period - - - (1,447,847) (1,447,847)
Credit to equity for
equity settled share-based
payments - - 591,099 - 591,099
Total transactions with
owners recognised directly
in equity - - 591,099 - 591,099
Balance at 30 June 2022 3,316,249 20,289,487 1,413,880 (3,270,350) 21,749,266
ZINNWALD LITHIUM PLC
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2023
30 June 2023 30 June 2022
Unaudited Unaudited
Notes
Cash flows from operating
activities
Cash used in operations 15 (859,168) (1,430,043)
Net cash outflow from operating
activities (859,168) (1,430,043)
Cash flows from investing
activities
Exploration expenditure (3,689,166) (687,664)
Purchase of property, plant
and equipment (50,707) (180,603)
Proceeds from sale of tangible
assets - 26,471
Interest received 32,792 18
Net cash used in investing
activities (3,707,081) (841,778)
Cash flows from financing
activities
Proceeds from the issue of 21,163,453 -
shares
Lease payments (72,000) -
Net cash generated from 21,091,453 -
financing activities
Net (decrease)/increase
in cash and cash equivalents 16,525,204 (2,271,821)
Cash and cash equivalents
at beginning of period 3,164,585 8,291,991
Cash and cash equivalents
at end of period 11 19,689,789 6,020,170
ZINNWALD LITHIUM PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2023
1. Accounting Policies
Company Information
Zinnwald Lithium Plc ("the Company") is a public limited company
which is listed on the AIM Market of the London Stock Exchange
domiciled and incorporated in England and Wales. The registered
office address is 29-31 Castle Street, High Wycombe,
Buckinghamshire, United Kingdom, HP13 6RU.
The group consists of Zinnwald Lithium Plc and its wholly owned
subsidiaries, as follows as at 30 June 2023.
Name of undertaking Registered Nature Class of Direct Indirect
office of business shares held holding holding
Zinnwald Lithium Holdings United Kingdom Exploration Ordinary 100.0% -
Ltd
Zinnwald Lithium GmbH Germany Exploration Ordinary - 100.0%
Zinnwald Lithium Services
GmbH Germany Rental Leasing Ordinary - 100.0%
The registered office address of Zinnwald Lithium Holdings Ltd
(formerly Deutsche Lithium Holdings Ltd) is 29-31 Castle Street,
High Wycombe, Bucks, HP13 6RU.
The registered office address of both Zinnwald Lithium GmbH and
Zinnwald Lithium Services GmbH is at Am Junger-Loewe-Schacht 10,
09599, Freiberg, Germany. In July 2023, the Group completed the
process of renaming both companies under the "Zinnwald Lithium"
banner to better reflect the Group's ties to the local
community.
On 14 June 2023, the Company completed the sale of its
previously wholly owned subsidiary, Erris Zinc Ltd, whose
registered office address is The Bungalow, Newport Road, Castlebar,
Co. Mayo. F23YF24. Accordingly, the results of this company are
only consolidated in the accounts of the Group up to the date of
disposal.
1.1 Basis of preparation
These unaudited interim condensed consolidated financial
statements have been prepared under the historical cost convention
and in accordance with the AIM Rules for Companies. As permitted,
the Company has chosen not to adopt IAS 34 "Interim Financial
Statements" in preparing this interim financial information. The
unaudited interim condensed financial statements should be read in
conjunction with the annual report and financial statements for the
year ended 31 December 2022, which have been prepared in accordance
with UK-adopted International Accounting Standards and IFRIC
interpretations and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS (except as otherwise
stated).
The unaudited interim condensed consolidated financial
statements do not constitute statutory financial statements within
the meaning of the Companies Act 2006. They have been prepared on a
going concern basis in accordance with the recognition and
measurement criteria of UK adopted international accounting
standards. Statutory financial statements for the year ended 31
December 2022 were approved by the Board of Directors on 22 March
2023 and delivered to the Registrar of Companies. The report of the
auditor on those financial statements was unqualified.
The same accounting policies, presentation and methods of
computation are followed in these unaudited interim condensed
financial statements as were applied in the preparation of the
audited financial statements for the year ended 31 December
2022.
The financial statements are prepared in euros, which is the
functional currency of the Company and the Group's presentation
currency, since the majority of its expenditure, including funding
provided to Deutsche Lithium, is denominated in this currency.
Monetary amounts in these financial statements are rounded to the
nearest EUR.
The EUR to GBP exchange rate used for translation as at 30 June
2023 was EUR1.163027.
1.2 Basis of consolidation
The consolidated financial statements incorporate those of
Zinnwald Lithium Plc and all of its subsidiaries, as listed above
(i.e., entities that the group controls when the group is exposed
to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its
power over the entity).
All intra-group transactions, balances and unrealised gains on
transactions between group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred.
Subsidiaries are fully consolidated from the date on which
control is transferred to the group. They are deconsolidated from
the date on which control ceases.
1.3 Going concern
At the time of approving the financial statements, the directors
have a reasonable expectation that the Group has adequate resources
to continue in operational existence for the foreseeable future.
The Company had a cash balance of EUR19.7m at the period end and
keeps a tight control over all expenditure. Thus, the going concern
basis of accounting in preparing the Financial Statements continues
to be adopted.
1.4 Intangible assets
Capitalised Exploration and Evaluation costs
Capitalised Exploration and Evaluation Costs consist of direct
costs, licence payments and fixed salary/consultant costs,
capitalised in accordance with IFRS 6 "Exploration for and
Evaluation of Mineral Resources". The Group recognises expenditure
in Exploration and Evaluation assets when it determines that those
assets will be successful in finding specific mineral assets.
Exploration and Evaluation assets are initially measured at cost.
Exploration and Evaluation Costs are assessed for impairment when
facts and circumstances suggest that the carrying amount of an
asset may exceed its recoverable amount. Any impairment is
recognised directly in profit or loss.
1.5 Property, plant and equipment
Property, plant and equipment are initially measured at cost and
subsequently measured at cost, net of depreciation and any
impairment losses.
Depreciation is recognised so as to write off the cost or
valuation of assets less their residual values over their useful
lives on the following bases:
Leasehold land and buildings No depreciation is charged on these balances
Plant and equipment 25% on cost
Fixtures and fittings 25% on cost
Computers 25% on cost
Motor vehicles 16.7% on cost for new vehicles, 33.3% on cost for
second-hand vehicles
Low-value assets (Germany) 100% on cost on acquisition for items
valued at less than EUR800
The gain or loss arising on the disposal of an asset is
determined as the difference between the sale proceeds and the
carrying value of the asset and is recognised in the income
statement.
1.6 Impairment of non-current assets
At each reporting period end date, the group reviews the
carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible to
estimate the recoverable amount of an individual asset, the group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
Intangible assets not yet ready to use and not yet subject to
amortisation are reviewed for impairment whenever events or
circumstances indicate that the carrying value may not be
recoverable.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in
profit or loss, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease.
1.7 Right of Use Assets and Lease Liabilities
On 1 January 2019, the Group adopted IFRS 16, which supersedes
IAS 17 and sets out principles for the recognition, measurement,
presentation and disclosure of leases for both parties to a
contract. All leases are accounted for by recognising a
right-of-use assets due to a lease liability except for:
-- Lease of low value assets; and
-- Leases with duration of 12 months or less
The Group reviews its contracts and agreements on an annual
basis for the impact of IFRS 16. The Group has such short duration
leases and lease payments are charged to the income statement with
the exception of the Group's lease for the Freiberg office and core
shed.
Lease liabilities are measured at the present value of the
contractual payments due to the lessor over the lease term, with
the discount rate determined by reference to the rate inherent in
the lease unless (as is typically the case) this is not readily
determinable, in which case the group's incremental borrowing rate
on commencement of the lease is used. Variable lease payments are
only included in the measurement of the lease liability if they
depend on an index or rate. In such cases, the initial measurement
of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments
are expensed in the period to which they relate.
On initial recognition, the carrying value of the lease
liability also includes:
-- amounts expected to be payable under any residual value guarantee;
-- the exercise price of any purchase option granted in favour
of the group if it is reasonably certain to assess that option;
-- any penalties payable for terminating the lease, if the term
of the lease has been estimated on the basis of termination option
being exercised.
Right of use assets are initially measured at the amount of the
lease liability, reduced for any lease incentives received, and
increased for:
-- lease payments made at or before commencement of the lease;
-- initial direct costs incurred; and
-- the amount of any provision recognised where the group is
contractually required to dismantle, remove or restore the leased
asset
Subsequent to initial measurement lease liabilities increase as
a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right-of-use
assets are amortised on a straight-line basis over the remaining
term of the lease or over the remaining economic life of the asset
if, rarely, this is judged to be shorter than the lease term.
2 Judgements and key sources of estimation uncertainty
In the application of the accounting policies, the directors are
required to make judgements, estimates and assumptions about the
carrying amount of assets and liabilities that are not readily
apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors
that are considered to be relevant. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised where the revision
affects only that period, or in the period of the revision and
future periods where the revision affects both current and future
periods.
Critical judgements
The following judgements and estimates have had the most
significant effect on amounts recognised in the financial
statements.
Share-based payments
Estimating fair value for share based payment transactions
requires determination of the most appropriate valuation model,
which depends on the terms and conditions of the grant. This
estimate also requires determination of the most appropriate inputs
to the valuation model including the expected life of the share
option or appreciation right, volatility and dividend yield and
making assumptions about them. For the measurement of the fair
value of equity settled transactions with employees at the grant
date, the Group and Company use the Black Scholes model.
Impairment of Capitalised Exploration Costs
Management tests annually whether capitalised exploration costs
have a carrying value in accordance with the accounting policy
stated in note 1.6. Each exploration project is subject to a review
either by a consultant or an appropriately experienced Director to
determine if the exploration results returned to date warrant
further exploration expenditure and have the potential to result in
an economic discovery. This review takes into consideration
long-term metal prices, anticipated resource volumes and grades,
permitting and infrastructure as well as the likelihood of on-going
funding from joint venture partners. In the event that a project
does not represent an economic exploration target and results
indicate that there is no additional upside, or that future funding
from joint venture partners is unlikely, a decision will be made to
discontinue exploration.
The Company's sole focus is on the Zinnwald Lithium Project and
the majority of capitalised exploration and development expenses
are held at Deutsche Lithium level. Management have reviewed the
carrying value of these intangible assets at period end and do not
believe that any impairment is required. Management believe that
this is supported by the robust potential economic value of the
Project, as identified by the PEA published in September 2022 and
further supported by the material investment in the Group made by
AMG in March 2023.
In Ireland, the Group fully impaired the carrying value of its
license at Abbeytown (PL 3735) in 2021 and accordingly the Ireland
assets were held on the balance sheet at a Nil value. In June 2023,
the Group completed the sale of this asset and has only
consolidated results up to the date of disposal.
3 Segmental reporting
The Group now operates solely in the UK and Germany having
disposed of its Ireland operations in June 2023. Activities in the
UK include the Head Office corporate and administrative costs
whilst the activities in Germany relate to the work done by
Deutsche Lithium on the Group's primary asset of the Zinnwald
Lithium Project. The reports used by the Board and Management are
based on these geographical segments.
Non-core Germany UK Total
Assets
2023 2023 2023 2023
EUR EUR EUR EUR
Cost of sales and administrative (8,839) (446,466) (811,663) (1,266,968)
Gain/loss on foreign exchange - - 88,368 88,368
Other operating income - 68,957 - 68,957
Finance income - - 32,792 32,792
Share based payment charge - - (255,111) (255,111)
Profit/(loss) from operations
per reportable segment (8,839) (377,509) (945,614) (1,331,962)
Reportable segment assets - 22,667,315 20,654,281 43,321,596
Reportable segment liabilities - 2,415,318 20,730 2,436,048
Non-core Germany UK Total
Assets
2022 2022 2022 2022
EUR EUR EUR EUR
Cost of sales and administrative (3,172) (225,941) (627,630) (856,743)
Gain/loss on foreign exchange - - (2,210) (2,210)
Other operating income - 2,187 - 2,187
Finance income - - 18 18
Share based payment charge - - (591,099) (591,099)
Profit/(loss) from operations
per reportable segment (3,172) (223,754) (1,220,921) (1,447,847)
Reportable segment assets 11,972 16,897,083 6,346,403 23,255,458
Reportable segment liabilities - 71,237 52,087 123,324
Non-Core Assets comprises the former Ireland assets, which were
disposed of in June 2023.
4 Operating loss
Group
2023 2022
EUR EUR
Operating loss for the year is stated after
charging / (crediting)
Exchange (gains)/losses 88,368 (2,210)
Depreciation of Right of Use Assets 69,005 -
Depreciation of owned property, plant and equipment 25,219 18,980
Amortisation of intangible assets 800 442
Share-based payment expense 255,111 591,099
Operating lease charges 23,712 64,836
Exploration costs expensed 351,197 210,328
======== ========
5 Finance income
Group
2023 2022
EUR EUR
Interest income
Interest on bank deposits 32,792 18
======= =====
6 Earnings per share
2022 2021
EUR EUR
Weighted average number of ordinary shares
for basic earnings per share 385,948,016 293,395,464
Effect of dilutive potential ordinary shares
* Weighted average number of outstanding share options 5,553,591 5,900,000
Weighted average number of ordinary shares
for diluted earnings per share 391,501,607 299,295,464
============ ============
Earnings
Continuing operations
Loss for the period for continuing operations (1,331,962) (1,447,847)
Earnings for basic and diluted earnings per
share distributable to equity shareholders
of the company (1,331,962) (1,447,847)
============ ============
Earnings per share for continuing operations
Basic and diluted earnings per share
Basic earnings per share (0.34) (0.49)
============ ============
There is no difference between the basic and diluted earnings
per share for the period ended 30 June 2023 or 2022 as the effect
of the exercise of options would be anti-dilutive.
7 Intangible Assets
Group Germany Ireland Total
EUR EUR EUR
Cost
At 1 January 2023 18,967,989 2,059,272 21,027,261
Additions - group funded 3,689,166 - 3,689,166
Disposals (2,059,272) (2,059,272)
----------- ------------ ------------
At 30 June 2023 22,657,155 - 22,657,155
----------- ------------ ------------
Amortisation and impairment
At 1 January 2023 1,824 2,059,272 2,061,096
Amortisation charged for
the period 800 - 800
Disposals - (2,059,272) (2,059,272)
----------- ------------ ------------
At 30 June 2023 2,624 - 2,624
----------- ------------ ------------
Carrying amount
At 30 June 2023 22,654,530 - 22,654,530
=========== ============ ============
Intangible assets comprise capitalised exploration and
evaluation costs (direct costs, licence fees and fixed salary /
consultant costs) of the Zinnwald Lithium project in Germany, as
well as the fully impaired Ireland Zinc Project, which was sold in
June 2023.
8 Property plant and equipment
Leasehold, Fixtures, Motor vehicles Total
land and fittings
buildings and equipment
EUR EUR EUR EUR
Cost
At 1 January 2023 40,990 277,195 66,593 384,778
Additions - group funded - 50,707 - 50,707
Disposals - - -
Exchange adjustments - 160 - 160
----------- --------------- --------------- --------
At 30 June 2023 40,990 328,062 66,593 435,645
----------- --------------- --------------- --------
Depreciation and impairment
At 1 January 2023 - 39,636 17,614 57,250
Depreciation charged for the
year - 18,576 6,643 25,219
Exchange adjustments - 99 - 99
----------- --------------- --------------- --------
At 30 June 2023 - 58,311 24,257 82,568
----------- --------------- --------------- --------
Carrying amount
At 30 June 2023 40,990 269,751 42,336 353,077
=========== =============== =============== ========
9 Right of Use Assets and Lease Liabilities
In May 2022, Deutsche Lithium GmbH entered into a commercial
lease agreement for and office and core shed property in Freiberg,
Germany. The duration of the lease is for 2 years. The instalments
for the lease are EUR12,000 per month, fixed for the duration of
the lease.
The right of use asset and lease liability was recognised on 1
May 2022 on inception of the lease. Movements in the period are
shown as follows:
EUR
Right of use asset
Initial Recognition on 1 January 2023 185,285
Depreciation charged in the period (69,005)
---------
Balance as at 30 June 2023 116,280
---------
Lease Liability
Initial Recognition on 1 January 2023 187,944
Interest charged for the period 2,511
Lease payments in the period (72,000)
---------
Balance as at 30 June 2023 118,455
---------
* Recognised in Short Term Payables 118,455
-
* Recognised in Payables >1 year
10 Trade and other receivables
30 June 31 December
2023 2022
Amounts falling due within EUR EUR
one year:
Other receivables 430,318 248,692
Prepayments and accrued income 77,602 61,103
-------- ------------
At period end 507,920 309,795
======== ============
11 Cash and cash equivalents
30 June 31 December
2023 2022
EUR EUR
Cash and cash equivalents 19,689,789 3,164,585
----------- ------------
At period end 19,689,789 3,164,585
=========== ============
12 Trade and other payables
30 June 31 December
2023 2022
Amounts falling due within EUR EUR
one year:
Trade payables 827,454 321,277
Other taxation and social security - 34,974
Other payables 25,737 13,082
Accruals and deferred income 81,534 214,327
-------- ------------
At period end 934,725 583,660
======== ============
13 Share based payment transactions
Group
2023 2022
EUR EUR
Expenses recognised in the year
Options issued under the Share Option
Plan (2017) 103,061 490,705
RSUs issued under RSU Scheme (2020) 152,050 100,394
---------- --------------
255,111 591,099
========== ==============
Share Option Plan (2017)
A total of 4,000,000 Options were granted to employees,
consultants and Directors of the Group on 15 January 2022 at a
price of 18.10p. A further total of 2,450,000 Options were granted
to employees, consultants and Directors of the Group on 23 March
2023 at a price of 10.41p. All awards vest 1/3 on award, 1/3 after
12 months and 1/3 after 24 months. They are expensed over the
vesting period.
RSU Scheme (2020)
The first awards of RSUs under the new scheme were made on 15
January 2022 relating to the initial performance period from 1
October 2020 to 31 December 2021. A total of 1,909,531 RSUs were
issued and have been expensed based on the share price at the date
of issue being 18.10p and expensed over the vesting period.
The second awards of RSUs under the new scheme were made on 23
March 2023 relating to the initial performance period from 1
January 2022 to 31 December 2022. A total of 3,406,780 RSUs were
issued and have been expensed based on the share price at the date
of issue being 10.41p and expensed over the vesting period.
14 Share Capital
30 June 31 December
2023 2022
Ordinary share capital EUR EUR
Issued and fully paid
473,524,624 ordinary shares of 1p each
(2022 : 293,395,464) 5,365,379 3,316,249
---------- ------------
5,365,379 3,316,249
========== ============
The Group's share capital is issued in GBP 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 Ordinary
Number Value
EUR EUR
Ordinary shares of 1p each
At 1 January 2023 293,395,464 3,316,249
Issue of fully paid shares (cash subscription) 180,129,160 2,049,130
------------ ----------
At 30 June 2023 473,524,624 5,365,379
============ ==========
15 Cash (used in)/generated from group operations
2023 2022
EUR EUR
Loss for the period after tax (1,331,962) (1,447,847)
Adjustments for:
Investment income (32,792) (18)
Lease interest 2,511 -
Gain on disposal of fixed assets - (4,288)
Depreciation of Right of Use Assets 69,005 -
Depreciation of property, plant and equipment 25,219 19,422
Amortisation of Intangible Assets 800 -
Equity-settled share-based payment expense 255,111 591,099
Movements in working capital:
(Increase) / decrease in trade and other
receivables (198,125) (73,075)
Increase / (decrease) in trade and other
payables 351,065 (515,336)
------------ ------------
Cash used in operations (859,168) (1,430,043)
============ ============
16 Approval of interim condensed consolidated financial statements
These interim condensed financial statements were approved by
the Board of Directors on 23 August 2023.
The technical information relating to geology, the drill results
summary, mining and processing in this announcement has been
extracted from the Company's Operational & Corporate Update
which was published on 14 June 2023 and was reviewed on behalf of
Zinnwald Lithium by Martin Pittuck CEng, FGS, MIMMM of SRK
Consulting. Mr Pittuck is a Corporate Consultant of SRK Consulting
Ltd. Mr Pittuck has sufficient experience relevant to the style of
mineralisation and type of deposit under consideration, and to the
activity which he is undertaking to qualify as a Competent Person
in accordance with the guidance note for Mining, Oil & Gas
Companies issued by the London Stock Exchange in respect of AIM
Companies, which outlines standards of disclosure for mineral
projects. Mr Pittuck consents to the inclusion in this announcement
of the matters based on his information in the form and context in
which it appears.
*ENDS*
For further information visi t www.zinnwaldlithium.com or
contact:
Anton du Plessis Zinnwald Lithium info@zinnwaldlithium.com
Cherif Rifaat plc
David Hart Allenby Capital
Dan Dearden-Williams (Nominated Adviser) +44 (0) 20 3328 5656
---------------------- --------------------------------
Oberon Capital
Michael Seabrook Ltd
Adam Pollock (Joint Broker) +44 (0) 20 3179 5300
---------------------- --------------------------------
Tamesis Partner
Richard Greenfield LLP
Charles Bendon (Joint Broker) +44 (0) 20 3882 2868
---------------------- --------------------------------
Isabel de Salis St Brides Partners zinnwald@stbridespartners.co.uk
Paul Dulieu (Financial PR)
---------------------- --------------------------------
Notes
AIM quoted Zinnwald Lithium plc (EPIC: ZNWD.L) is focused on
becoming an important supplier of lithium hydroxide to Europe's
fast-growing battery sector. The Company owns 100% of the Zinnwald
Lithium Project in Germany, which has an approved mining licence,
is located in the heart of Europe's chemical and automotive
industries and has the potential to be one of Europe's more
advanced battery grade lithium projects.
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END
IR BXLLLXVLFBBE
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