TIDMZNWD
RNS Number : 5138Z
Zinnwald Lithium PLC
15 September 2022
Zinnwald Lithium plc / EPIC: ZNWD.L / Market: AIM / Sector:
Mining
15 September 2022
Zinnwald Lithium plc
("Zinnwald Lithium" or the "Company")
Interim Results
Zinnwald Lithium plc, the German focused lithium development
company, is pleased to announce its Interim Results for the period
ended 30 June 2022.
Zinnwald Lithium's CEO, Anton du Plessis, will be providing a
live investor presentation at 10:00am BST today relating to the
Company's plans to advance its integrated Zinnwald Lithium Project
in Germany. Investors and potential investors can sign up to join
the meeting at:
https://www.investormeetcompany.com/zinnwald-lithium-plc/register-investor
.
OVERVIEW
-- Revised development path for the Project to increase its
scale and pivot it to battery-grade lithium hydroxide to better
align with the requirements of European off-takers
-- Considerable work undertaken during the period ahead of the
PEA, which was published post period end on 7 September
-- PEA highlighted robust economics: pre-tax NPV8 of US$1,605m,
IRR of 39.0%, $192m average annual EBITDA and a payback of 3.3
years
-- Annual production capacity of 12,000t LiOH in the PEA
compares to annual production of 5,000t lithium fluoride under the
previous technical concept
-- Significant progress made in designing a project that
generates low or "zero" waste and where energy efficiency and
minimisation of CO2 emissions is core
-- Post period end, commenced drilling campaigns at the Zinnwald
deposit, which will assist with detailed mine planning, and at the
Falkenhain exploration license, which could represent important
upside for the Project
-- Ongoing strong lithium market in 2022 driven by EV and battery storage demand
-- Well-funded into 2023 with cash of EUR5.4m as at the date of this report
-- Extremely active schedule ahead to crystallise the value of
the Project as it works towards delivering a BFS by the end of
2023
CHAIRMAN'S STATEMENT
The half year to the end of June has been extremely busy for
Zinnwald Lithium. As is typical for development stage projects such
as our integrated lithium hydroxide project ('the Project') in
Germany, some of the work undertaken is not always immediately
visible to investors as large pieces need to be completed and put
in context before publication. The Preliminary Economic Assessment
('PEA') that we published post period end on 7 September is an
example of this and is the culmination of a tremendous amount of
underlying work by both the management team and external
consultants.
As we have previously stated, we had identified the need to
revise the development path for the Project by focusing on
increasing its scale in terms of annual output, as well as pivoting
it to focus on battery-grade lithium hydroxide as a primary product
to better align with the requirements of European off-takers and
overall developments in the battery market. The results of the PEA
support this approach as highlighted by the robust economics
showing a headline pre-tax NPV8 of US$1,605m, IRR of 39.0%, $192m
average annual EBITDA and a payback of just 3.3 years. Furthermore,
annual production capacity of 12,000t LiOH in the PEA compares to
annual production of 5,000t lithium fluoride under the previous
technical concept. In addition, significant progress has been made
in designing a project that generates low or "zero" waste and where
energy efficiency and minimisation of CO2 emissions is core.
Underlying the PEA was detailed work on the flow sheet to
produce a battery grade lithium hydroxide product. Producing
battery grade lithium products from zinnwaldite does differ from
the process for producing these products from spodumenes, which
represent the bulk of current hard rock sources of lithium.
However, all aspects of the flow sheet incorporate tried and tested
technologies applied in many other areas of mining. In addition,
relative to the "typical" spodumene process, the flow sheet is less
energy intensive and has a higher overall recovery than typical
spodumene-based processes. The development of the flow sheet has
been based on extensive work, including pilot scale test work.
Alongside the PEA, the Company continues to progress on multiple
fronts. Not only have we commenced an in-fill drilling campaign at
the Zinnwald deposit, which will assist with detailed mine planning
but we also started an exploration drilling programme at our
Falkenhain exploration license, which is located just 5km from the
core Zinnwald deposit. A detailed review of historic drill data
from this area indicated the clear potential for significant
lithium resource at this location which, if it can be proven, could
represent important upside for the Project.
In terms of the lithium market in 2022 thus far, pricing has
continued to be extremely strong with spot prices for LiOH reaching
levels in excess of US$70,000 / ton and contract prices reported by
current producers such as SQM and Elkem of between US$35,000 and
US$40,000 / ton. Many commentators point to an expectation for a
continued supply deficit, which is supportive for pricing. EV
demand remains robust and growing strongly despite broader economic
headwinds. The PEA assumed a long-term price of US$22,500/t for
LiOH, which we believe to be very defensible given the wider
pricing backdrop in the sector.
It is also worth mentioning the importance of delivering
sustainable lithium to the market. Currently, Europe imports all of
the lithium needed for its rapidly growing battery industry, but to
achieve its NetZero targets, it must develop its own resources. Our
focus is on developing responsible mining and processing operations
which help deliver these NetZero targets.
Our Project enjoys a number of key advantages that support this
strategy: it is located close to its end markets meaning reduced
transport emissions; it has access to existing infrastructure; it
will bring industrial activity and jobs back to a region long
steeped in mining history; it aims to utilise sustainable
technologies and processes including the use of electric mining
equipment; and it has the potential to produce a meaningful volume
of a valuable commodity that supports the green energy transition
at a competitive cost over a long period of time.
In terms of financial markets, share prices of junior mining
companies have been under considerable pressure in the year thus
far as investors have grappled with risks of an economic downturn
exacerbated by the conflict in Ukraine and the resulting energy
crisis. However, we are confident that the inherent strengths of
our Project as enumerated in the PEA 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 into 2023, with cash of EUR5.4m as at the date of this
report.
Outlook
As we reflect on where we are now post the publication of the
PEA, we are extremely proud of having moved Zinnwald from a company
with 50% of a 5,000 tonne niche lithium product project, to full
ownership of a 12,000 tonne lithium hydroxide one with what we hope
is the scope to expand still further.
Looking ahead, we have an extremely active work schedule. We are
already working on a Bankable Feasibility Study, which we intend to
deliver by the end of 2023, and will continue to evaluate
processing and manufacturing options to ensure the Project achieves
economic and environmental excellence; our aim is to become one of
the more sustainable and investable lithium projects worldwide.
In the short term we continue to make progress on our drill
programmes as well as having an active schedule of mineral and
chemical processing test work to further refine these aspects of
the Project. Permitting is also another key work stream and
progress on this is key to meeting the timelines that we have laid
out.
We look forward to updating the market on progress on all of
these fronts.
Jeremy Martin
Non-Executive Chairman
STRATEGIC REPORT
Highlights
6 Months to 30 June 2022
-- Testwork confirmed viability to produce at least 10,000 tonnes annually of Lithium Hydroxide
-- Testwork confirmed viability to produce economically significant by-products
-- Hyper-spectral scanning tested to produce accurate
quantitative information on ore types and ore grades
-- Commenced discussions with owners of local infrastructure
-- Engaged SRK Consulting (UK) Ltd to provide competent person support
-- Joined the EU funded Horizon Europe "Exploration Information Systems" project
-- Strengthened the operational team in Germany
Post period end to 14 September 2022
-- Completion of PEA on revised Project plan showing robust economic results.
-- Lithological ore-sorting proven to be viable in pilot tests carried out by Tomra
-- Commencement of in-fill drilling campaign at Zinnwald license
-- Commencement of exploration drilling campaign at Falkenhain
-- Entered into Option Agreement to acquire more land in vicinity of Altenberg
Operational Review
The first half of 2022 saw Zinnwald Lithium Plc (the "Company")
and its wholly owned subsidiary, Deutsche Lithium GmbH ("DL" and
together the "Group") continue with the revised development
strategy for its Zinnwald Lithium Project (the "Project"). The
Group's management team took the decision following the completion
of the acquisition of the remaining 50% of DL in June 2021 to
reposition the Project to better reflect the significant and rapid
developments in the Global and European Lithium markets.
The original scope of the Project, as defined in its 2019 NI
43-101 feasibility study ("2019 FS"), was based on a smaller scale,
niche end-product (Lithium Fluoride) project designed to be
internally financed and integrated to the original owners'
operational strategy. The Project's revised strategy is now to
focus on a larger scale operation that produces battery-grade
Lithium Hydroxide Monohydrate ("LiOH") products; to optimise the
Project from a cost perspective, and also to minimise the potential
impact on the environment and local communities. All aspects of the
Project from mining through to production of the end product will
now be located near to the deposit itself.
To progress this revised strategy, the Group has completed a
number of steps in the further definition, design and study work
required. Some of these items were completed during the period of
this report and others after period-end, all of which culminated in
the publication on 7th September 2022 of the "Preliminary Economic
Assessment ("PEA") for the revised Zinnwald Lithium Project.
Six months to 30 June 2022
Hydrometallurgy - Production of battery-grade LiOH and
co-products
In March 2022, the Company announced the successful completion
of pilot scale testwork that demonstrated the technical and
economic viability of producing high purity (>99.9% purity)
lithium hydroxide from Zinnwaldite concentrate is technically and
economically viable. The test work also confirmed the potential to
produce economically significant amounts of commercially saleable
co-products, such as high-purity potassium sulphate ("SOP") and
precipitated calcium carbonate ("PCC").
In these tests, almost 50kg of battery grade LiOH was produced
out of several tons of Zinnwaldite concentrate. The test work was
conducted in Germany by a leading industry specialist, K-UTEC AG
Salt Technologies ('K-UTEC') and verified by a third-party
laboratory through chemical and physical analysis. The lithium
recovery from the Zinnwaldite concentrate to the LiOH was proven to
be above 80% and comparable to lithium processes from other types
of lithium resources. Non-saleable side streams were proven to
contain very low amounts of soluble, possibly environmentally
problematic elements.
The Company further commissioned K-UTEC to conduct an initial,
scoping level study on upgrading the SOP and PCC by-products of the
process. This new study will evaluate the commercial feasibility of
the production of these high purity by-products. These by-product
credits already have a meaningful impact on the operational cost
economics of the Project, but could be even further improved as,
for instance, the price of high purity SOP has historically been up
to double that of fertilizer grade product.
Mining and Geometallurgy
TheiaX GmbH, a local German company, reported initial
hyperspectral core scanning tests on both existing drill core from
previous drilling campaigns, and crushed ore samples from the
previous pilot tests. The hyperspectral scanning produced clear
quantitative information on Zinnwaldite (Li-mineral), Muscovite,
Clay minerals and Topaz from both the drill core and the crushed
product. In comparison to standard one metre assay intervals, the
hyperspectral imaging produced information on five cm intervals and
detected lower grade inclusions from the core giving a very clear
indication that online hyperspectral imaging could be used for
value-based bulk or particle sorting of crushed ore.
In a separate campaign, Metso: Outotec / Tomra tested the
amenability of Zinnwaldite ore for particle sorting. All
Zinnwaldite lithologies, ore and waste, were tested. Different
lithologies could easily be distinguished and hence particle
sorting was found to be suitable for Zinnwald ore.
If successful, this could also lead to an increase in total
Mineral Resources. The current Mineral Resource excludes Ore Type 1
lenses thinner than two meters due to processing cost per tonne
waste rock mined. With better understanding of the small-scale
grade variation and application of sorting process, it may be
possible to lower the Li cut-off grade of Ore Type 1. In addition,
a considerable amount of lithium at the Project is contained in the
"Greisenized Granite" rock, which could potentially be included in
Mineral Resources. This material can be understood as an alteration
halo surrounding the Ore Type 1 and is estimated at 214 Mt at a Li
grade of 1700 ppm. It is currently not included in the Project's
Mineral Resources of 40.4 million tonnes (35.5 million tonnes
measured and indicated plus 4.9 million tonnes inferred), as set
out in the PEA.
Pyrometallurgy
Calcination (roasting of pre-treated Zinnwaldite concentrate)
testwork was carried out by IBU-tec Advanced Materials AG. The
calcination testwork focused on pre-treatment of the concentrate
with different additives, agglomeration and roasting of the
agglomerate. The test targeted the possibility of utilising cheaper
additives and a higher leach rate of lithium and potassium from
calcine. The tests for calcine leaching of the calcined material
were carried out by K-UTEC.
The tests indicated that Flue Gas Desulfurization ('FGD') Gypsum
is suitable for the purpose. FGD Gypsum is readily available and
inexpensive and would represent a cost saving versus using primary
gypsum. The tests also showed an increased lithium recovery rate of
90% (previously 87%) and an increased potassium recovery rate of
70% (previously 50%) from Zinnwaldite ore compared with what was
demonstrated in the 2019 FS.
Access to Legacy Mining Infrastructure
In March 2022, the Company was granted access to portions of the
existing mining infrastructure in the vicinity of the Project for
inspection purposes. This infrastructure includes a 4km drainage
tunnel, and disused ventilation and access shafts, which
potentially could be used as part of its operations. The
infrastructure was found to be in excellent condition and easily
accessible. The Company continues to develop its plans for the
possible utilisation of this infrastructure to beneficially impact
the Project and is also in discussion with the owners of the assets
for access and usage.
ESG Matters
In line with its progressive ESG policy, the Company is
committed to delivering benefits to the local community. The
Company has held several meetings with different stakeholders
regarding its plans for the future. Members of the management team
have met with local and provincial authorities to keep them updated
regarding progress and plans for the Project.
As part of the public engagement effort, an encouraging
consultation and information meeting was held in the village of
Zinnwald in March 2022 to explain the drill programme and plans to
develop the Project. In order to assist in keeping the public and
the authorities informed about the Project, a local project office
has now been established for the duration of the drilling
campaign.
Occupational Health and Safety ('OHS')
As the team expands and new physical work stages advance, the
OHS aspects have been reconsidered. The Company targets zero
incidents through training, selection of work methods and
continuous auditing.
Horizon Europe
In May 2022, the Company joined the "Exploration Information
Systems" project, part of the EU funded Horizon Europe Research and
Innovation scheme. The research project focuses on developing new
exploration techniques that are based on large datasets, artificial
intelligence and deep learning methods to identify new sources of
raw materials. Precise techniques that can take several factors
into consideration to determine prospectivity of deposits, aim to
lead to more effective exploration decision making and consequently
reduced project development costs. The Company believes that such
projects are crucial in securing the necessary materials for future
generations and is proud to contribute to this effort by providing
a case study site in Germany.
Management and Staffing in Germany
Dr Armin Mueller stepped down from his role as Managing Director
of DL to pursue other opportunities. He was succeeded by Dr Torsten
Bachmann. Dr Bachmann is Dipl.-Ing. of Environmental Technology and
has a PhD in Chemistry. He has over 15 years' experience in science
and industry in the area of photovoltaics and inorganic chemistry
and long-term experience in the management of national research
projects. He was team leader in the "Lithium Zinnwald Project" from
2011 to 2015 and since 2017 has been responsible for "Chemical
Processing" aspects of the Project.
In addition, the Company has further strengthened the team in
Germany, adding skills in several key disciplines including
geology, mining, and logistics.
Post Balance Sheet events to September 2022
In-fill drilling at Zinnwald Lithium Deposit
In August 2022, the Company received its final permits and
started an in-fill drilling programme at the core Zinnwald Lithium
license. The purpose of the in-fill drilling programme is to study
the mining scale variability of the ore with the view of applying
larger scale mining methods. The ultimate aim is to accommodate
greater mining capacity for expanded Li-product output.
Zinnwald Lithium has engaged SRK Consulting (UK) Ltd to provide
competent person support for the drill campaign and geometallurgy.
The drilling is being conducted by GEOPS Bolkan Drilling Services
Ltd. The Company has also leased and taken occupancy of new
warehouse space in Freiberg that will be used for core storage and
core logging and processing of new drill core when the drill
programme commences. The facility is being outfitted with the
latest safe and environmentally friendly equipment.
Exploration drilling at Falkenhain Licence Area
In September 2022, the Company received its final permits and
started an exploration drilling programme at its Falkenhain Lithium
license. This exploration licence is located 7km north from the
core Zinnwald License. The licence area was historically
extensively explored for occurrences of tin and tungsten with
drilling undertaken most recently from 1963 to 1990. The Company
has performed a detailed review of the historic data including
assaying samples of the surviving core from these campaigns. The
outcome from this work has identified the potential for a lithium
resource. The Company has therefore designed an exploration drill
campaign of ten diamond drill holes to test the historic drill data
and better determine the resource potential of the licence.
Option on Land in Altenberg
In August 2022, the Company announced that it had entered into
an option agreement with Projektgesellschaft Altenberg mbH, an
entity owned by the town of Altenberg in Germany, that gives the
Company the right to acquire approximately 14,000 square metres of
industrial land in the Europark industrial area near to Altenberg.
The option agreement is valid until August 2025. The land subject
to the option agreement is adjacent to land already owned by the
Company and combined would bring the Company's total land holding
in this area to approximately 30,000 square metres. This industrial
land has the potential to be used for access and other operational
aspects of the Zinnwald Lithium Project.
Ore-sorting pilot test by Tomra
After successful preliminary test work, pilot ore-sorting tests
were carried out by Tomra in Hamburg, Germany. The pilot confirmed
that >10 mm crushed material particles can be effectively sorted
with off-the-self ore-sorters.
The objective of these testwork campaigns is to reduce ore
processing costs by removing waste and low-grade material from the
Mineral Processing circuit before the expensive grinding, drying
and magnetic separation stages, as well as minimising the quantity
of fine material produced as by-product.
Preliminary Economic Assessment
On 7th September 2022, the Company published its NI 43-101
standard Preliminary Economic Study ('The Technical Report' or
'PEA') on the revised Zinnwald Lithium Project. The full report is
published on the Company's website at
https://www.zinnwaldlithium.com/investors/reports-and-presentations/.
The economic analysis included in this Technical Report
demonstrates the robust economics and financial viability of the
Project.
As shown below, the PEA demonstrates the financial viability of
the Project at an initial minimum design production rate of
approximately 12,011 t/a LiOH (battery grade 99.5 %). The Project
is currently estimated to have a payback period of 3.3 years. Cash
flows are based on 100 % equity funding. The economic analysis
indicates a pre-tax NPV, discounted at 8 %, of approximately US$
1,605m and an Internal Rate of Return (IRR) of approximately 39%.
Post-tax NPV is approximately US$1,012m and IRR 29.3%.
PEA Key Indicators Unit Value
Pre-tax NPV (at 8 % discount) US$ m 1,605
------------------ --------
Pre-tax IRR % 39.0%
------------------ --------
Post-tax NPV (at 8 % discount) US$ m 1,012
------------------ --------
Post-tax IRR % 29.3%
------------------ --------
Simple Payback (years) Years 3.3
------------------ --------
Initial Construction Capital Cost US$ m 336.5
------------------ --------
Average LOM Unit Operating Costs (pre US$ per tonne
by-product credits) LiOH 10,872
------------------ --------
Average LOM Unit Operating Costs (post US$ per tonne
by-product credits) LiOH 6,200
------------------ --------
Average LOM Revenue US$ m 320.7
------------------ --------
Average Annual EBITDA with by-products US$ m 192.0
------------------ --------
Annual Average LiOH Production Tonnes per annum 12,011
------------------ --------
LiOH Price assumed in model US$ per tonne $22,500
------------------ --------
Annual Average SOP Production Tonnes per annum 56,887
------------------ --------
Blended SOP Price assumed in model EUR per tonne 875
------------------ --------
The Project described in this Technical Report includes an
underground mine with a nominal output of approximately 880,000 t/a
ore at estimated 3,004 ppm Li and 75,000 t/a barren rock. Ore
haulage is via a 7km partly existing network of underground drives
and adits from the "Zinnerz Altenberg" tin mine which closed in
1991. Processing including mechanical separation, lithium
activation, and lithium fabrication will be carried out at an
industrial facility near the village Bärenstein, in close proximity
to the existing underground mine access and an existing site for
tailings deposition with significant remaining capacity.
The nominal output capacity of the project is targeted at c.
12,000 t/a LiOH with c. 56,900 t/a of SOP, which is used as a
fertilizer, as a by-product. Another by-product that is
contemplated is PCC, a key filling material in the paper
manufacturing process. The estimated mine life covers >35 years
of production. The optimisation of mining methods has been a key
consideration to realise increased total mined tonnage from the
Zinnwald mine. This includes utilising more efficient techniques
such as sub-level stoping and Avoca wherever possible and in
preference to the less efficient room and pillar method.
Lithium Market in 2022
Building on an extremely strong performance in 2021, the lithium
market in 2022 has continued to perform strongly with very high
levels of spot prices positively impacting contract pricing. There
is a growing consensus around the worsening Supply / Demand
imbalance, which is generally accepted economic pre-cursor to
increased prices. In terms of what that means for long term lithium
hydroxide prices, back in Q3 2021 Benchmark forecast a price of
$12,110 long term, but this is before the step change in balance in
the market. In March 2022, Roskill forecast an inflation adjusted
long term price of $23,609 per tonne through to 2036 with a nominal
rate of $33,200 by 2036.
The global lithium market is expanding rapidly due to an
increase in the use of lithium-ion batteries for electric vehicle
and energy storage applications. In recent years, the compound
annual growth rate of lithium for battery applications was over 22%
and is projected by Roskill to be more than 20% per year to 2028.
This expansion is being driven by global policies to support
decarbonisation towards carbon neutrality via electrification,
which is underpinned by Carbon Emission Legislation (COP26, EU
Green Recovery, Paris Accord); Government regulation and subsidies;
and Automakers commitment to EVs. Global electric car sales
totalled 4.2 million units in 2021, more than double the level in
2020 and up 200% versus 2019 with no slowdown anticipated in
2022.
Benchmark Minerals highlighted that there are 282 Gigafactories
at various stages of production/ construction, up from only 3 in
2015 (by May 2022, this number had gone over 300). If all these
plants did come online in the planned 10-year timeframe, it would
equate to 5,777 GWh of battery capacity, equivalent to 109 million
EVs. But more relevantly it would require 5m tonnes of Lithium each
year, as compared with 480,000 tonnes produced in 2021. They noted
that the lack of supply is not due to any geological constraints
but to a simple lack of capital investment to build future mines
and estimated $42bn needs to be spent by 2030 to meet demand for
lithium.
In April 2022, the Belgium-based research university KU Leuven
published a report "Metals for Clean Energy" on behalf of Europe's
metal industry group, Eurometaux, and endorsed by the EU. This
report explored in detail the supply, demand and sustainability
factors at play around critical raw materials, especially in
Europe. It noted that Europe's 2030 energy transition goals would
require 100-300kt of lithium rising to around 600-800kt by 2050,
equivalent to 3,500% of Europe's low consumption levels today. In
terms of direct European supply, Eurometaux comments that "Several
projects are subject to local community opposition (most visibly in
Portugal, Spain, and Serbia). Others are dependent on untested
technologies to be viable or have less certain economics. However,
the EU has made it a strategic priority to improve its
self-sufficiency for lithium."
Ireland
The Company has retained its sole license at Abbeytown and has
met all expenditure requirements to maintain the license through to
June 2023. The license is being kept on care and maintenance,
whilst the Company is seeking either a partner or purchaser for the
assets. No expenditure was made on the license during the
period.
Share Price performance in 2022
The Board shares the frustration of shareholders at the weakness
of the Company's share price in 2022. The wider equity markets,
especially for smaller companies, have been under sustained
pressure in 2022 due to wider macro-economic factors. Zinnwald has
had two specific equity events that occurred at the end of December
2021 (the distribution of 91m Zinnwald shares owned by Bacanora
Lithium Plc on completion of its takeover by Ganfeng Lithium Ltd;
and the expiration of the lock-in on the majority of the 50m
Zinnwald shares originally issued to creditors of the SolarWorld AG
estate) which resulted in there being a number of material
shareholders that were unlikely to be natural holders of the
Company's stock. The Board understands that a significant number of
these shareholders have sold all or the majority of their holdings
over the course of 2022. The Board is grateful for the new and
existing shareholders that have absorbed this volume of stock.
Outlook
The Company has already commenced an infill drilling programme
at the core Zinnwald license with the objective of better defining
the Resources and Reserves that lie within the ore body, as well as
determine the detailed early years' mining plan. This will likely
lead to revised Resource and Reserves Estimate being included in
the new Bankable Feasibility Study ("BFS") planned for the
re-scoped Project as defined in this PEA Study. The Company has
also commenced an exploration drilling campaign at its nearby
Falkenhain license to determine the potential for expansion of both
the project's resources and the production level. The Company's
goal is to be able to publish this updated BFS by the end of 2023,
subject to appropriate financing.
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. As the recognition
of Zinnwaldite as a source for battery metals is more recent, the
application of methods such as high-intensity magnetic separation
has not previously been used in beneficiation of this specific type
of lithium ore but is utilised and well established in the
beneficiation of other ore types. Evaporators and crystallizers are
common processing methods in the production of fertiliser salts.
The Company has also completed the initial phases of bulk and
particle sorting techniques designed to increase the type of
resource available to 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.
This will be the highest priority area over the coming
quarters.
The Company will continue 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 Deutsche 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
EUR1.4m compared with a loss of EUR0.9m for the period ended 30
June 2021. Whilst the overall amounts are relatively similar, the
underlying expenditure areas are materially different. In the six
months to 30 June 2022, administrative expenses increased to
EUR0.9m compared with EUR0.4m in the previous period. This is due
in part to the Company consolidating the costs of Deutsche Lithium
in the current period, which it did not do in the comparator as it
was still a Joint Venture. The Group has also increased its overall
staffing levels to reflect the sole ownership of the Project and
the increased workstreams to advance the Project. There was also a
share-based payment expense of EUR0.6m in the current period,
arising from the issuance of new Options and RSUs in January 2022.
In the previous period to 30 June 2021, there was a project
impairment charge of EUR1.55m for Abbeytown together with the
revaluation gain of EUR1.03m on the original investment in Deutsche
Lithium, such costs being one off in that period.
The Total Net Assets of the Group increased to EUR21.7m at 30
June 2022 from EUR16.8m at 30 June 2020, due to increased capital
investment in the Intangible Assets of the Project, as part of the
work on the PEA together with increased cash balances following the
fund raise in December 2021.
The closing cash balance for the Group at the period end was
EUR6.1m which is greater than the EUR2.9m at the end of the same
period in the prior year, due primarily to the funds raised in
December 2021, offset by ongoing development and operational
expenditure. As at the date of this report, the Group's cash
balance is EUR5.4m.
On behalf of the board
Cherif Rifaat,
CFO and Director
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE SIX MONTHSED 30 JUNE 2022
30 June 2022 30 June 2021
Unaudited Unaudited
Notes EUR EUR
Continuing operations
Cost of sales - (13,797)
Ireland and Sweden exploration
projects impairment - (1,549,875)
Administrative expenses (858,953) (357,579)
Other operating income 2,187 -
Share based payments charge 17 (591,099) -
Operating Loss 5 (1,447,865) (1,921,251)
Revaluation gain on original joint
venture holding 6 - 1,038,252
Share of loss of joint venture 7 - (52,911)
Finance income 8 18 422
Loss before taxation (1,447,847) (935,488)
Tax on loss - -
Loss for the financial period (1,447,847) (935,488)
Other Comprehensive Income - -
Total comprehensive loss for
the period (1,447,847) (935,488)
Earnings per share from continuing
operations attributable to the
owners of the parent company 9
Basic (cents per share) (0.49) (0.44)
Diluted (cents per share) (0.48) (0.44)
Total loss and comprehensive loss for the year is attributable
to the owners of the parent company.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 30 JUNE 2022
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
Notes EUR EUR EUR
Non-current assets
Intangible Assets 10 16,852,308 8,303,034 16,165,085
Goodwill 11 - 5,531,474
Property, plant and equipment 12 188,062 46,974 48,621
17,040,370 13,881,482 16,213,706
Current assets
Trade and other receivables 13 194,918 122,137 121,845
Cash and cash equivalents 14 6,020,170 2,908,955 8,291,991
6,215,088 3,031,092 8,413,836
Total Assets 23,255,458 16,912,574 24,627,542
Current liabilities
Current tax liabilities - - 23,802
Trade and other payables 15 123,324 143,974 614,858
123,324 143,974 638,660
Net current assets 6,091,764 2,887,118 7,715,176
Total liabilities 123,324 143,974 638,660
Total assets less current
liabilities 23,132,134 16,768,600 23,988,882
Deferred tax liability (1,382,868) - (1,382,868)
Net Assets 21,749,266 16,768,600 22,606,014
Equity
Share capital 16 3,316,249 2,867,979 3,316,249
Share premium 20,289,487 14,112,654 20,289,487
Other reserves 1,413,880 818,654 822,781
Retained earnings (3,270,350) (1,030,687) (1,822,503)
Total equity 21,749,266 16,768,600 22,606,014
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE SIX MONTHSED 30 JUNE 2022
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 - - 591,099 - 591,099
Total transactions
with owners 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
Share Share Other Retained Total
Capital premium reserves earnings
account
EUR EUR EUR EUR EUR
Balance at 1 January
2021 2,278,155 7,362,699 814,281 (95,199) 10,360,476
Six months ended
30 June 2021
Loss and total other
comprehensive income
for the period - - - (935,488) (935,488)
Total comprehensive
income for the period - - - (935,488) (935,488)
Issue of share capital 589,824 6,749,955 - - 7,339,779
Credit to equity for
equity settled share-based
payments - - 3,833 - 3,833
Total transactions
with owners recognised
directly in equity 589,824 6,749,955 3,833 - 7,343,612
Balance at 30 June
2021 2,867,979 14,112,654 818,654 (1,030,687) 16,768,600
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2022
30-Jun-22 30-Jun-21
Unaudited Unaudited
Notes
Cash flows from operating
activities
Cash used in operations 18 (1,427,833) (390,310)
Net cash outflow from operating
activities (1,427,833) (390,310)
Cash flows from investing
activities
Investment in Deutsche Lithium
as Joint Venture - (735,800)
Purchase of remaining 50% of
Deutsche Lithium - (1,500,000)
Cash acquired on purchase of
Deutsche Lithium - 486,213
Exploration expenditure in (687,664) -
Germany
Exploration expenditure in
Ireland and Sweden - (3,764)
Purchase of property, plant (180,603) -
and equipment
Proceeds from sale of tangible
assets 26,471
Interest received 18 422
Net cash used in investing
activities (841,778) (1,752,929)
Cash flows from financing
activities
Proceeds from the issue of
shares - 58,717
Net cash generated from financing
activities - 58,717
Net (decrease)/increase in
cash and cash equivalents (2,269,611) (2,084,522)
Cash and cash equivalents at
beginning of period 8,291,991 4,846,528
Effect of foreign exchange
rates (2,210) 146,949
Cash and cash equivalents
at end of period 14 6,020,170 2,908,955
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2022
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 2022.
Name of undertaking Registered Nature of Class of Direct Indirect
office business shares held holding holding
Deutsche Lithium United Kingdom Exploration Ordinary 100.0% -
Holdings Ltd
Deutsche Lithium
GmbH Germany Exploration Ordinary - 100.0%
Erris Zinc Limited Ireland Exploration Ordinary 100.0% -
The registered office address of Deutsche Lithium Holdings Ltd
(formerly Erris Resources (Exploration) Ltd) is 29-31 Castle
Street, High Wycombe, Bucks, HP13 6RU.
The registered office address of Deutsche Lithium GmbH is at Am
Junger-Loewe-Schacht 10, 09599, Freiberg, Germany
The registered office address of Erris Zinc Ltd is The Bungalow,
Newport Road, Castlebar, Co. Mayo. F23YF24.
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 2021, 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 2021 were approved by the Board of Directors on 22
February 2022 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
2021.
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
2022 was EUR1.16189.
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 EUR6.0m 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 Nil
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 Joint Arrangements
Up to 24 June 2021, the Group's core activities in relation to
the Zinnwald Lithium project were conducted through joint
arrangements in which two or more parties have joint control. A
joint arrangement is classified as either a joint operation or a
joint venture, depending on the rights and obligations of the
parties to the arrangement.
Joint operations arise when the Group has a direct ownership
interest in jointly controlled assets and obligations for
liabilities. The Group does not currently hold this type of
arrangement.
Joint ventures arise when the Group has rights to the net assets
of the arrangement. For these arrangements, the Group uses equity
accounting and recognises initial and subsequent investments at
cost, adjusting for the Group's share of the joint venture's income
or loss, dividends received and other comprehensive income
thereafter. When the Group's share of losses in a joint venture
equals or exceeds its interest in a joint venture it does not
recognise further losses. The transactions between the Group and
the joint venture are assessed for recognition in accordance with
IFRS. The Group recognised a share of the Joint Venture's profit or
loss up until 24 June 2021.
No gain on acquisition, comprising the excess of the Group's
share of the net fair value of the investee's identifiable assets
and liabilities over the cost of investment, has been recognised in
profit or loss. The net fair value of the identifiable assets and
liabilities have been adjusted to equal cost.
Joint ventures are tested for impairment whenever objective
evidence indicates that the carrying amount of the investment may
not be recoverable under the equity method of accounting. The
impairment amount is measured as the difference between the
carrying amount of the investment and the higher of its fair value
less costs of disposal and its value in use. Impairment losses are
reversed in subsequent periods if the amount of the loss decreases
and the decrease can be related objectively to an event occurring
after the impairment was recognised.
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.
Joint venture investment
The Group applied IFRS 11 to all joint arrangements and
classified them as either joint operations or joint ventures,
depending on the contractual rights and obligations of each
investor. The Group held 50% of the voting rights of its joint
arrangement with SolarWorld AG. The Group determined itself to have
joint control over this arrangement as under the contractual
agreements, unanimous consent is required from all parties to the
agreements for certain key strategic, operating, investing and
financing policies. The Group's joint arrangement was structured
through a limited liability entity, Deutsche Lithium GmbH, and
provided the Group and SolarWorld AG (parties to the joint venture
agreement) with rights to the net assets of Deutsche Lithium under
the arrangements. Therefore, this arrangement was classified as a
joint venture up to 24 June 2021 when the Company acquired the
remaining 50% of Deutsche Lithium and thereafter consolidated its
full results
The investment was assessed at each reporting period date for
impairment. An impairment is recognised if there is objective
evidence that events after the recognition of the investment have
had an impact on the estimated future cash flows which can be
reliably estimated. In addition, the assessment as to whether
economically recoverable reserves exist is itself an estimation
process. Under IFRS 3, on acquisition of the additional stake in
the joint venture, the Company remeasured the fair value of its
original investment in the joint venture and recognised a gain in
the period to 30 June 2021.
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 now 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 recently published
PEA.
In Ireland, the Group has retained the core license at Abbeytown
(PL 3735), which remains valid until June 2023. The Board concluded
that a full impairment of the carrying value of this license be
incurred in 2021 and accordingly the Ireland assets are held on the
balance sheet at a Nil value.
3 Segmental reporting
The Group operates principally in the UK and Germany with a
largely dormant subsidiary in Ireland. 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. As noted earlier, the results of Germany
were reported as an Investment in Joint Venture for the period to
24 June 2021, and from thereon are reported on a fully consolidated
basis.
Non-core Germany UK Total
Assets
2022 2022 2022 2022
EUR EUR EUR EUR
Cost of sales and administrative (3,172) (225,941) (1,218,729) (1,447,842)
Project impairment - - - -
Gain/loss on foreign exchange - - (2,210) (2,210)
Other operating income - 2,187 18 2,205
Share of loss from joint - - - -
venture
Profit/(loss) from operations
per reportable segment (3,172) (223,754) (629,840) (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 Germany UK Total
Assets
2021 2021 2021 2021
EUR EUR EUR EUR
Cost of sales and administrative (5,331) - (514,642) (519,973)
Project impairment (1,549,875) - - (1,549,875)
Gain/loss on foreign exchange 11 - 148,586 148,597
Other operating income - - 1,038,674 1,038,674
Share of loss from joint
venture - (52,911) - (52,911)
Profit/(loss) from operations
per reportable segment (1,555,195) (52,911) 672,618 (935,488)
Reportable segment assets 19,032 14,395,408 2,498,134 16,912,574
Reportable segment liabilities - 41,122 102,852 143,974
Non-Core Assets includes Ireland and Scandinavia. Ireland is the
only one with material balances within this category and makes up a
majority of the balances. The Scandinavia assets were fully
disposed of in 2021.
4 Impairments
Impairment tests have been carried out where appropriate and the
following impairment losses have been recognised in profit or
loss:
2022 2021
Notes EUR EUR
In respect of
Intangible assets in Ireland and Sweden 10 - 1,549,875
Recognised in
Administrative expenses - 1,549,875
The impairment losses in respect of financial assets are
recognised in other gains and losses in the income statement.
5 Operating loss
Group
2022 2021
EUR EUR
Operating loss for the year is stated after
charging / (crediting)
Exchange (gains)/losses (2,210) 148,597
Depreciation of owned property, plant and equipment 18,980 488
Amortisation of intangible assets 442 -
Ireland and Sweden exploration projects impairment - 1,549,875
Share-based payment expense 591,099 3,833
Operating lease charges 64,836 11,891
Exploration costs expensed 210,328 5,331
6 Other gains and losses
2022 2021
EUR EUR
Gain on re-measurement of initial 50% interest
in Deutsche Lithium - 1,038,252
7 Share of results in Joint Venture
Group
2022 2021
EUR EUR
Share of loss in joint venture - (52,911)
8 Finance income
Group
2022 2021
EUR EUR
Interest income
Interest on bank deposits 18 422
9 Earnings per share
2022 2021
EUR EUR
Weighted average number of ordinary shares for
basic earnings per share 293,395,464 213,439,290
Effect of dilutive potential ordinary shares
* Weighted average number of outstanding share options 5,900,000 2,700,000
Weighted average number of ordinary shares for
diluted earnings per share 299,295,464 216,139,290
Earnings
Continuing operations (1,447,847) (935,488)
Loss for the period for continuing operations
Earnings for basic and diluted earnings per
share distributable to equity shareholders of
the company (1,447,847) (935,488)
Earnings per share for continuing operations
Basic and diluted earnings per share
Basic earnings per share (0.49) (0.44)
Diluted earnings per share (0.48) (0.44)
There is no difference between the basic and diluted earnings
per share for the period ended 30 June 2022 or 2021 as the effect
of the exercise of options would be anti-dilutive.
10 Intangible Assets
Group Germany Ireland Total
EUR EUR EUR
Cost
At 1 January 2022 16,165,914 2,059,272 18,225,186
Additions - group funded 687,665 - 687,665
At 30 June 2022 16,853,579 2,059,272 18,912,851
Amortisation and impairment
At 1 January 2022 829 2,059,272 2,060,101
Amortisation charged for
the period 442 - 442
At 30 June 2022 1,271 2,059,272 2,060,543
Carrying amount
At 30 June 2022 16,852,308 - 16,852,308
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 now fully impaired Ireland Zinc Project.
11 Business Combination
Remeasurement of fair value of initial holding in Deutsche
Lithium
Under IFRS 3, on acquisition of the controlling stake, the
Company remeasured the fair value of its original investment in
Deutsche Lithium. In terms of calculating that revaluation and any
resulting gain or loss, the Directors noted that both transactions
were conducted on an arms-length basis with unconnected
third-parties. The Directors considered that there was a
significant control premium in acquiring the second 50% of Deutsche
Lithium and used an estimate of 30% in its calculations of the
revaluation of the fair value of the initial shareholding.
EUR EUR
Control premium (30%)
Value of second acquisition 8,781,062 of Net Value 2,388,525
Fair Value of original
Less: Cash in company (486,213) investment 5,573,224
Less: Free Carry eliminated (333,100) Cash 486,213
Release of obligation 333,100
Net Value of second acquisition 7,961,749 Value of second Acquisition 8,781,062
Carrying Value at 24 June
2021 4,534,972
Gain recognised on revaluation 1,038,252
On consolidation as at 24 June 2021, a calculation was required
under normal acquisition rules to calculate the goodwill arising at
the date of acquisition but taking into consideration the 50%
already owned at that date. The previously held 50% investment in
Deutsche Lithium at Fair Value is derecognised and replaced with
the assets and liabilities of Deutsche Lithium, so that going
forward it is consolidated in full as normal as a subsidiary
undertaking. The Directors have concluded that there should be no
adjustment to the carrying value of Deutsche Lithium's Net Assets.
The Directors undertook a detailed review of Deutsche Lithium's
balance sheet at the time of the Company's acquisition of the
remaining 50% of Deutsche Lithium it did not own and concluded that
no adjustments were required. Since that date, Deutsche Lithium has
continued with the same accounting policies, which are in
accordance with those of the Company.
Fair Value of consideration given to acquire the controlling EUR
interest
Cash payment of EUR1.5m 1,500,000
Issuance of 49,999,996 new ordinary shares 7,281,062
Total consideration 8,781,062
Fair value of 50% investment in Deutsche Lithium as at
24 June 2021 5,573,224
14,354,286
Fair value of net assets acquired in Deutsche Lithium as
at 24 June 2021 (8,822,812)
Goodwill - re-allocated to Deutsche Lithium intangible
exploration assets at 31 December 2021 5,531,474
12 Property plant and equipment
Leasehold, Fixtures, Motor vehicles Total
land and fittings
buildings and equipment
EUR EUR EUR EUR
Cost
At 1 January 2022 9,817 24,642 32,427 66,886
Additions - group funded - 147,158 33,446 180,604
Disposals - - (22,183) (22,183)
Exchange adjustments - - - -
At 30 June 2022 9,817 171,800 43,690 225,307
Depreciation and impairment
At 1 January 2022 - 13,143 5,122 18,265
Depreciation charged for the
year - 12,025 6,955 18,960
Exchange adjustments - - - -
At 30 June 2022 - 25,168 12,077 37,245
Carrying amount
At 30 June 2022 9,817 146,632 31,613 188,062
13 Trade and other receivables
30 June 31 December
2022 2021
Amounts falling due within EUR EUR
one year:
Other receivables 120,610 83,982
Prepayments and accrued income 74,308 37,863
At period end 194,918 121,845
14 Cash and cash equivalents
30 June 31 December
2022 2021
EUR EUR
Cash and cash equivalents 6,020,170 8,291,991
At period end 6,020,170 8,291,991
15 Trade and other payables
30 June 31 December
2022 2021
Amounts falling due within EUR EUR
one year:
Trade payables 68,562 313,391
Other taxation and social security - 23,802
Other payables 7,893 13,509
Accruals and deferred income 48,869 287,958
At period end 123,324 638,660
16 Share Capital
30 June 31 December
2022 2021
Ordinary share capital EUR EUR
Issued and fully paid
293,395,464 ordinary shares of 1p each 3,316,249 3,316,249
3,316,249 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.
17 Share based payment transactions
Group
2022 2021
EUR EUR
Expenses recognised in the year
Options issued under the Share Option
Plan (2017) 490,705 3,833
RSUs issued under RSU Scheme (2020) 100,394 -
591,099 3,833
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. All awards vested 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.
18 Cash (used in)/generated from group operations
2022 2021
EUR EUR
Loss for the year after tax (1,447,847) (935,488)
Adjustments for:
Investment income (18) (422)
Impairment of intangible assets in Ireland
and Sweden - 1,549,875
Depreciation and amortisation of property,
plant and equipment 19,422 488
Profit on disposal of fixed assets (4,288) -
Gain on remeasurement of initial interest
in Joint Venture - (1,038,252)
Share of loss of Joint Venture - 52,911
Equity-settled share-based payment expense 591,099 3,833
Exchange gains / (losses) 2,210 (146,949)
Movements in working capital:
Decrease/(increase) in trade and other receivables (73,075) 79,674
Increase in trade and other payables (515,336) 44,020
Cash used in operations (1,427,833) (390,310)
19 Approval of interim condensed consolidated financial statements
These interim condensed financial statements were approved by
the Board of Directors on 14 September 2022.
*ENDS*
For further information visit www.zinnwaldlithium.com or
contact:
Anton du Plessis Zinnwald Lithium plc info@zinnwaldlithium.com
David Hart Allenby Capital Limited
Freddie Wooding Nominated Adviser +44 (0) 20 3328 5656
Michael Seabrook Oberon Capital Ltd
Adam Pollock Broker +44 (0) 20 3179 5300
Isabel de Salis St Brides Partners Ltd zinnwald @stbridespartners.co.uk
Catherine Leftley Financial PR
Notes
Zinnwald Lithium plc (EPIC: ZNWD.L) is an AIM quoted, German
focused lithium development company focussed on becoming an
important supplier to Europe's fast-growing battery sector. The
Company owns 100% of the Zinnwald Lithium Project in Germany, a
development project with attractive economics and approved mining
licence. The Project is located in the heart of Europe's chemical
and automotive industries and has the potential to be one of
Europe's most advanced battery grade lithium projects.
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END
IR BIGDCRXBDGDS
(END) Dow Jones Newswires
September 15, 2022 02:00 ET (06:00 GMT)
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