Savannah Resources : Interim Results 30 June 2021

22 September 2021

S a v a n n a h R e s o u r c e s P l c

I n t e r i m R e s u l t s

Savannah Resources plc (the "Company" or "Savannah"), the European lithium development company, is pleased to announce its interim financial results for the six months ended 30 June 2021.

First half and recent highlights include:

Corporate

• Cash balance: Stood at £9.7m as at 30 June (31 December 2020: £2.0m) after the oversubscribed placing completed in April 2021, raising gross proceeds of £10.3m
• Net loss from continuing operations: Reported at £1.4m (2020: £1.1m). The total attributable loss reduced
  to £1.2m (2020: £6.0m) as there was no repeat of the non-cashwrite-down (£5.5m) associated with the Oman project divestment
• Corporate Environmental and Social Management System ("ESMS"): Initiated our Corporate ESMS which is being aligned with internationally recognised ESG standards
• Recruitment: To support the Company's continued growth, key new staff with a range of skills have been added to our project and corporate teams in Portugal and the UK respectively
• COVID-19:Mitigation measures continued with staff and stakeholder wellbeing a priority

Mina do Barroso, Portugal

Technical:

• Environmental Impact Assessment ("EIA"): The Portuguese environmental regulator extended the public consultation phase of the review from 2 June 2021 to 16 July 2021. We understand the regulator is now reviewing the submissions received and we expect to receive news on the EIA review process in the final quarter of 2021
• Lab and Field work: Lab-based process design work continued in Australia throughout the period. We expect to be able to return to meaningful fieldwork before the end of the year following the lifting of COVID-related restrictions
• Definitive Feasibility Study ("DFS"): The DFS is now expected to be completed in 2022 following ongoing COVID-restrictions on fieldwork and the definition of EIA requirements from the ongoing EIA process

Commercial:

• Offtake and Investment: Encouraging discussions were ongoing with multiple, well credentialed commercial counterparties during the period and are continuing into the 2H 2021. Useful precedents have been set by the significant number of offtake, investment and M&A transactions in the lithium sector in the year to date
• EV sales: EV-volumes.com reported global 1H 2021 EV sales of 2.65m units (+168% vs. 1H 2020) including
  1m vehicles sold in Europe. Full year sales forecast at 6.4m units (2020: 3.2m units)
• Lithium prices: 1H 2021 lithium chemical prices in China rose on average by 80% vs. year-end 2020 and
  spodumene prices doubled to around US$800/t (source: S&P Global Platts). On 14 September 2021, Pilbara Minerals achieved a price of over US$2,200/t for 5.5% spodumene concentrate at its second online auction

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• Partnerships: Savannah became a founding member of the Portuguese Association for the Battery Cluster, created to maximise Portugal's potential across the battery value chain and promoting the country as a future leader in European lithium production

Public and Government Relations:

• Local stakeholder engagement: Savannah continued to engage and inform the local community about the Project through multiple channels; support was also maintained for local ventures and services
• Wider stakeholder engagement: As travel restrictions eased, interaction with civil society, business and academic leaders, and journalists was stepped up. We expect to increase our market and stakeholder engagement activities in the remainder of the year
• Post-COVIDGovernment funding: Savannah is currently assessing the possibility of applying for funding from the Portuguese Government following approval of the country's €16.6bn Recovery & Resilience facility funding by the European Commission

Mutamba Minerals Sands Project, Mozambique

• Fieldwork and studies: Continued during the period dominated by landowner identification and communication programmes, collecting a bulk sample for metallurgical test work by Rio Tinto, and initiating baseline studies for the EIA on each licence
• Business review: A comprehensive review of the project's technical parameters and its future corporate positioning has been undertaken since last October. We remain on track to inform shareholders of the outcome of this review by year end.

CHAIRMAN'S STATEMENT

Savannah has continued to establish its position in the new European lithium value chain effectively, despite the ongoing challenges posed by the COVID pandemic during the first half of 2021. Forecasts of a significant lithium shortage by the middle of this decade and associated higher prices have been in the market for some years but it is still remarkable how rapidly this market has tightened, and prices have risen since late last year. Growing EV uptake is underpinning lithium's recovery with global first half sales, as reported by EV-volumes.com, reaching 2.65m units (+168% vs. 1H20), including over 1m vehicles sold in Europe and 1.15m in China. Lithium chemical prices in China rose on average by 80% in the first half while spodumene prices in Australia doubled to around US$800/t (source: S&P Global Platts). Savannah was able to utilise this step change in the market to complete an oversubscribed placing to new and existing shareholders to provide greater working capital for the exciting period that lies ahead. We were also able to broaden our commercial negotiations with multiple parties all keen to secure exposure to Mina do Barroso's lithium.

With EV sales expected to accelerate during the second half of the year to reach 6.4m units, almost double 2020's annual sales, and scant lithium inventory available, prices have continued to rise in the second half of the year. Lithium chemical prices in China are now up on average 170% versus. December 2020, and the price of Australian spodumene concentrate as reported by Pilbara Minerals at its second online auction on 14 September is more than 460% higher at over US$2,200/t. Shareholders will remember that our 2018 Scoping Study on Mina do Barroso assumed an average sales price for spodumene of US$685/t, so from an economic perspective, the future of Mina do Barroso looks ever brighter. Our focus therefore remains on turning that potential into reality and developing the project in a responsible manner which minimises its impact and shares economic and other benefits with local communities.

With the COVID-restrictions now easing, we look forward to getting back in the field to resume gathering the data we need to complete the Definitive Feasibility Study ("DFS"). To this end, we have added to our in-country technical team. We are also aware that the technical robustness of the project is only one factor in our future success, and that we must work equally hard to ensure sufficient support for the project among the key stakeholder groups. Hence, we have added capacity to our governmental and public relations efforts in Portugal and expanded our investor relations and media team in the UK. I take this opportunity to welcome our new staff members and advisers to the Savannah family and we look forward to announcing more appointments as we continue to grow the business and move towards construction and production in Portugal.

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In Mozambique, we remain active on the ground as we continue to progress the key tasks as the joint venture with Rio Tinto moves the project forward towards development. We have been also voluntarily playing our part in the in-country COVID vaccination programme and have maintained our strong links with our stakeholder communities and key administrators.

Overarching our work on each project is the progress we are making in formalising, expanding and equalising our Corporate Social Responsibility ("CSR") and Environmental, Social & Governance ("ESG") activities through our Corporate Environmental and Social Management System ("ESMS") which we announced in May. Savannah has always made a firm commitment to CSR but by formalising our efforts across the Company we will be best placed not only to deliver effective CSR programmes for our project stakeholders but also effectively measure our performance and therefore meet and surpass the expectations of investors and lenders who are increasingly focusing on these parameters.

Mina do Barroso, Portugal

At Mina do Barroso during the first half of the year, we continued to move ever closer to the next three major project milestones: the Environmental Impact Assessment ("EIA"), an offtake agreement, and the DFS. COVID restrictions aside, the Board and I acknowledge that reaching these milestones is taking longer than we had first envisaged. However, Mina do Barroso and its significant lithium production represents a wholly new endeavour for Portugal, the European Union, and Savannah. Hence, it is vital that the project is executed in a way that demonstrates that this new industry is one that can be conducted responsibly, and which brings far-reaching benefits. There can be no doubt that the recent price movements in lithium which I have already highlighted, give a clear indication of how important it is for Europe to begin to develop its domestic supply of such critical raw materials if it is to meet its own long term energy transition and climate change goals.

Regarding the EIA, as we flagged in the 2020 Annual Report, Agência Portuguesa do Ambiente ("APA"), the Portuguese environmental regulator, revised the closing date for the public consultation phase of the review programme from 2 June 2021 to 16 July 2021. We welcomed the opportunity for all interested parties to register their views on the project and will respond to APA as quickly and comprehensively as we can if it requests any further information from us. We understand APA is now reviewing the submissions received and we expect to receive news on the EIA review process in the final quarter of 2021. Should we receive a 'Declaration of the Environmental Impact' this milestone won't represent the conclusion of the environmental licencing process as approval of detailed final designs is subsequently required, but it will demonstrate the Regulator's satisfaction with the project's operating parameters and Savannah's innovative plans to eliminate, mitigate and manage any environmental and social impacts, and to utilise the project to create meaningful long-term benefits for stakeholders throughout Portugal and beyond.

As we have highlighted previously, conducting the outstanding fieldwork required for the DFS has been severely impacted by COVID-related restrictions in the past 18 months. Pleasingly, as restrictions lift and contractor availability improves, we expect to be able to return to meaningful field work before the end of the year. We have also talked previously about the need for APA to state its preferences on several features of the project on which it required Savannah to present it with options in our EIA submission. Until these decisions are made as part of the EIA approval process, Savannah won't be able to fully finalise the project design and encapsulate that in the DFS. A brighter point for the DFS's progression has been the lab-based process design work in Australia which has been continuing with little disruption throughout the period. Overall, however, after much effort internally to revise and rework the DFS schedule, shareholders should expect its conclusion next year and not by the end of 2021 as previously guided. Alongside the DFS we have also begun to engage with Portugal's leading power companies around the provision of wholly renewable energy to the project and some leading manufacturers of mobile mining plant and equipment regarding the potential to supply electrically powered units to the project in the future.

While referring to fieldwork, I am also pleased to report that our programme of land acquisition across the C- 100 Mining Lease area which covers the project has progressed well since the turn of the year and will be continuing alongside our other project commitments for the remainder of 2021 and beyond. We have been delighted to be able to strike mutually beneficial agreements with a number of local landowners which will allow Savannah to own, manage and remediate these areas responsibly during the project's life, before returning them to the community once the project has ceased operating.

On a commercial front, buoyed by the much stronger lithium price environment, encouraging discussions are ongoing around offtake and associated investment with multiple, well credentialed counterparties. This includes

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with Galp Energia, SGPS, S.A. ("Galp") and other European and non-European industrial groups. A significant number of offtake, investment and M&A transactions have been completed in the lithium sector during the year to date which set useful precedents for Savannah in its own commercial discussions. We hope to bring more news on the project's future commercial arrangements later in the year.

Away from the project itself, we continue to consolidate our position in Portugal's commercial and political spheres as we receive growing recognition for the critical position Savannah will play as the main supplier of raw material to the country's much anticipated new lithium industry. In June we announced that we had become a founding member of the new Portuguese Association for the Battery Cluster which brings together a large group of industrial, academic and government bodies to work together to develop a new lithium-ion battery industry in Portugal under the co-ordination of the International Nanotechnology Laboratory.

Portugal has also been the first country to have its post-COVID Recovery and Resilience facility funding plan approved by the European Commission with €2.2bn of the €16.6bn package already received. With nearly €1bn of this package earmarked for business innovation and green agendas, Savannah is currently assessing the possibility of applying for funding from this facility to put towards the project's capital expenditure.

With travel restrictions now easing, David Archer, our CEO, has been spending an extended period of time on the ground in Portugal in recent weeks working closely with our in-country team and our public and governmental relationship advisers. This has resulted in a series of meetings with key government officials, leaders from the business and academic communities, potential commercial partners and journalists from national and international publications. We expect to increase our marketing and stakeholder engagement activities still further in the remainder of the year.

We continue to believe that our proposals for the development and operation of Mina do Barroso combined with our proposals around sharing the project's economic and social benefits with stakeholders represent a modern and responsible approach to managing the production of a raw material essential to the transition to cleaner energy provision and reduced transport-related greenhouse gas emissions. The Portuguese Government has stated its desire to create a new lithium industry in the country based on its enviable resources of the mineral and the European Commission, through its 2020 Action Plan on Critical Raw Materials, has set forward its target of securing access to reliable sources of raw materials to support Europe's Green Deal and to maintain Europe's leadership in technologies of the future. Savannah would be delighted to be part of making these targets into a reality.

Mineral Sands Project, Mozambique

As I outlined in my statement in the 2020 Annual Results in June, there are three elements to Savannah's work on the Mutamba Minerals sands project in Mozambique; licence-related studies and fieldwork; our engagement programmes; and the business and project review.

Despite ongoing COVID-related restrictions and cases amongst our own staff, work on the ground has continued (with appropriate safety protocols) as we seek to ensure compliance with the requirements set by the Mining Licences the consortium was awarded in late 2019 and early 2020. Identification and communication with relevant landowners to secure land use and utilisation agreements (DUATs) has been the major work programme, but the team has also been able to produce a bulk sample of material for a metallurgical test work programme being run by Rio Tinto overseas and is underway with baseline studies for the EIA work on each of the licences.

Regarding the business review we initiated last autumn, we continue to work very closely on this with our consultant, Bruce Griffin of Farview Solutions, and Rio Tinto. Since that time, we have carried out a comprehensive review of the project's technical parameters and its future corporate positioning. As a result, we believe that we have identified a suitable course of action and remain on track to inform shareholders of the outcome before the end of the year.

Corporate Social Responsibility

Our Corporate ESMS is being aligned with internationally recognised ESG standards, namely the requirements of the International Finance Corporation's Performance Standards on Environmental and Social Sustainability, as well as the World Bank Group's Environmental Health & Safety, Mining and General Guidelines. As a UK listed entity, the policy will also reflect the principles and provisions of the Quoted Companies Alliance's Corporate Governance Code. Savannah's operating subsidiaries will be responsible for ESG management and performance

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at their respective projects, through the development and implementation of project-specific ESMSs, aligned with the Corporate ESMS, and in compliance with all applicable ESG-related laws, regulations and permits of the host country.

In Portugal during the first half of the year, we were delighted to be able to re-open our local Information Centre in May, staffed by a new recruit from the Boticas area, after its closure due to COVID-related restrictions. The Information Centre is currently displaying a 3D model of the proposed project, so that residents can get a better understanding of the project's layout and the steps being taken to minimise its impact on the local environment. While the EIA review process is ongoing (there were two public sessions held in May hosted by APA), Savannah continues to engage with the local community keeping residents informed about APA's review process, the Benefit Sharing and the Good Neighbour Plans that have been proposed, and by making further donations of locally purchased provisions to the area's firefighting team. We have also maintained our multi-channel communication through newsletters, content in local publications and radio announcements. I have already touched on our engagement with national level media and we will continue this engagement in the remainder of the year as interest builds in Portugal's lithium battery chain, while maintaining our locally focused communication efforts as well as sponsorship of local rally car and mountain biking teams.

In Mozambique, the Company made COVID-19 vaccinations available to all staff and their adult family members, and also purchased and donated 200 double vaccines to the Ministry of Health in Inhambane Province to help protect vulnerable individuals. We were also delighted to provide support to the Provincial Environment Day which helped to raise awareness of Environmental issues in the Province and we remain committed to, and supportive of, other community interventions in Jangamo and Inharrime districts

Financial Summary

Savannah recorded a first half net loss from continuing operations of £1.4m (2020: £1.1m) with much of the £0.3m increase the result of a move from an exchange rate gain in 1H 2020 to an exchange rate loss in 1H 2021. However, without the one-offwrite-down (£5.5m) associated with the Oman project divestment, which was recorded in last year's accounts, the total attributable loss reduced significantly to £1.2m (2020: £6.0m).

Of greater interest to shareholders will be the Group's cash balance which stood at £9.7m on 30 June (2020: £2.0m, 31 December 2020) after the oversubscribed placing, raising £10.3m gross proceeds in April. This stronger cash position, along with a £0.6m increase in Intangible Assets to £17.8m resulted in a 42% increase in Savannah's Net Assets to £29.1m (2020: £20.5m).

Outlook

The Board and I are very grateful for the ongoing interest and commitment shown towards the Company by its shareholders. With the capital now in reserves, Savannah is well placed to press ahead with its work programmes at Mina do Barroso and its engagement with all stakeholders and relevant commercial groups. We also have sufficient capital available to meet our ongoing commitments in Mozambique. As ever, our dedicated staff will undertake this work and I thank them for their efforts to date and for their efforts in the future.

The lithium market is proving to be an exciting and rapidly developing sector with Europe set to be a major part of the world's new lithium battery industry. Savannah is determined to take its place in this market and we look forward to reporting on developments relating to the three project milestones I have outlined above from 4Q 2021 onwards. We also look forward to updating the market on Mutamba, so that the project's stakeholders and our shareholders are clear on its future direction and that of Savannah.

Matthew King

Chairman

Date: 21 September 2021

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