Savannah Resources Regulatory News (SAV)

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

25 February 2015

Savannah Resources Plc ('Savannah' or the 'Company')

Financial Results for the Year Ended 31 December 2014

and

Notice of Annual General Meeting

Savannah Resources plc (AIM: SAV) announces its audited financial results for the year ended 31 December 2014 and notice of Annual General Meeting.

HIGHLIGHTS:

· Transformational move into mineral rich Oman, diversifying commodity and geographic reach - acquired interests in Blocks 4, 5 and 6 copper projects in the Sultanate of Oman, which includes an Indicated and Inferred Mineral Resource Estimate ("MRE") of 1.7Mt at 2.2% copper with significant opportunity to supplement this

· Maiden Inferred Mineral Resource Estimate of 65Mt at 4.2% Total Heavy Minerals ("THM") defined from Jangamo Heavy Mineral Sands Project, Mozambique with considerable further upside potential

· Operating loss of £1,917,190 reflects the increased tempo of operational activities around the Company's prospective copper and heavy mineral sands projects in Oman and Mozambique and finance expenses of £491,851 principally attributable to movements in the valuation of derivatives

· Other comprehensive loss for the period attributable to the equity owners of Savannah Resources Plc loss of £2,191,872 attributable principally to losses of £2,223,222 relating to a write down of the value of the Company's investment in Alecto Minerals Plc

· Solid cash position and listed company shareholdings totalling £2,907,940 as at 31 December 2014

· Raised £3.8 million funds in 2014

Savannah's CEO, David Archer said, "Savannah continues to distinguish itself within the junior exploration arena by a high level of activity. This was rewarded with the announcement of a maiden Inferred Mineral Resource Estimate of 65Mt at 4.2% THM from a modest initial round of resource drilling over part of the eastern arm of the Jangamo tenement in Mozambique. The mineralisation remains open along strike. Importantly, the deposit we have identified is part of the very large Mutamba heavy mineral sands system with excellent potential to further expand the Mineral Resource in Savannah's tenement area. Consequently, we have established a very solid resource base, which we plan to build upon with further drilling.

"In addition, our acquisition of rights to three highly prospective copper projects in Oman marked a transformational move into a highly prospective copper producing region. We intend to leverage our in-country advantage to ultimately become a mid-sized copper producer. In line with this, we are increasing the tempo of the exploration programme, with drilling already started."

Availability of Annual Report and Financial Statements

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

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

Annual General Meeting

The Company's next Annual General Meeting ('AGM') will be held at 11:00 on 15 April 2015 at the offices of RFC Ambrian Limited, Condor House, 10 St. Paul's Churchyard, London, EC4M 8AL. A formal Notice of AGM and proxy form are expected to be posted to shareholders in the next few days and will be available to download today from the Company's website at www.savannahresources.com.

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

CHAIRMAN'S STATEMENT

I am pleased to report that this has been another year of growth and development for Savannah, which has been defined by a number of key milestone developments, resulting in the transformational restructure of our portfolio. In addition to advancing our 180km² Jangamo heavy mineral sands project in Mozambique ('Jangamo'), we are now also focussed on the evaluation of three highly prospective copper blocks, located in mineral rich Oman, which we acquired in 2014. Additionally, during the period, and as part of this restructure, we divested interests in our legacy Mali gold projects to AIM quoted Alecto Minerals Plc.

Blocks 4, 5 and 6 Copper Projects, Oman

We remain focussed on implementing an active exploration programme at our copper blocks in Oman, where we have a current Indicated and Inferred Mineral Resource of 1.7Mt at 2.2% copper at the Mahab 4 prospect in Block 5. With a number of highly prospective targets now identified through targeted reconnaissance and sampling work, these assets continue to prove their investment value. Additionally, Oman continues to present itself as a compelling copper investment opportunity, offering a relatively low operating cost setting and enjoying the benefits of an extensive array of road, power, smelting and port infrastrucure. With this in mind, and following the completion of the acquisition of Gentor Resources Limited, we took the strategic decision during the year to increase our tenement holdings in Oman. In November 2014 we secured an interest in Block 4, which builds upon our current Block 5 and Block 6 holdings, and increases our in-country tenement package to over 1,270 km². With a strengthened in-country position and key target prospects identified via geophysics, we commenced drilling in late January 2015.

Jangamo Heavy Mineral Sands, Mozambique

Our most recent achievement during this period has been the delineation of a maiden Inferred Mineral Resource Estimate of 65Mt at 4.2% Total Heavy Minerals ('THM') at our Jangamo Project. This notable development, which we announced in December 2014, not only validates our exploration concept but also marks a significant step in unlocking the value potential of our project. Importantly, this resource was defined from a modest initial round of resource drilling over a small area of the eastern part of the large Jangamo tenement and the mineralisation remains open along strike. Consequently I am confident that significant upside opportunity remains to increase this resource, which we intend to target through future exploration scheduled to commence after the end of the wet season late in the first half of 2015.

Portfolio Investment in Alecto

During the year we increased our shareholding in AIM listed Alecto Minerals Plc ('Alecto') by 42.8% via the conversion of a loan note and the divestment of the Company's legacy Mali projects (Karan and Diatissan) to Alecto in March 2014 for £250,000 worth of shares in Alecto. At the end of 2014 we had a 19.6% shareholding in Alecto and as of 23 February 2015 the shareholding had reduced to 14.5%.

Annual General Meeting

At the forthcoming AGM Shareholders will be asked to renew the usual equity securities issue authorities, which includes a resolution in respect of a Share Exchange Agreement to acquire an 80% shareholding in Matilda Minerals Lda. This requires the Company to issue up to AUD$1,500,000 worth of shares as deferred consideration should a JORC Indicated Resource of up to 500Mt @ 3% THM at the Jangamo project be established.

Financials

As is to be expected with an exploration company, Savannah is reporting a loss for the year of £1.92m (2013: £2.04m), and Other Comprehensive Income loss for the year of (£2.19m) (2013: £1.48) for which the significant driver is the write down in the value of the Company's investment in Alecto, whose share price had been at a 2 ½ year high at the end of 2013. Net assets have remained unchanged at £4.75m (2013: £4.75m) and as at 31 December 2014, cash balances were £1.78m (2013: £0.85m). This is reflective of our increased tenement holdings in Oman and targeted evaluation programmes at our projects.

Cash balances during the period were also bolstered with a placing of £1.5 million cash in March 2014 and two placings in November 2014, which collectively raised £1.6 million cash. These placings were with both new and existing investors and the funds raised were used to support exploration efforts in Oman and Mozambique and to provide working capital.

During the period the Board also took the strategic decision to terminate the private placing agreement it had with the Bergen Global Opportunity Fund, LP. This agreement, which was made in April 2014, provided a flexible source of working capital. A total of £1.0m was raised under this facility.

The Company recognises the necessity to reward key executives fairly and appropriately for performance so that it can operate on a sustainable basis. Mr Archer was paid neither Directors' fees nor salary either from the time of his appointment as a Director in April 2013 or from the time of his appointment as CEO in August 2013. As a result of the Company's significant progress and the transformational changes made, which saw the disposal of all the Mali projects and the addition of projects in Mozambique and Oman, the Board elected to commence paying a salary to the CEO effective from April 2014.

Social Responsibility

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

Outlook

With an established portfolio of highly prospective projects in place I am delighted with the progress we continue to make. Your Board remains committed to maintaining an active growth path for the Company through 2015.

In Mozambique, with a Mineral Resource established and significant upside opportunity identified, the recommencement of drilling, will be another substantial milestone in unlocking the project's inherent value. This is expected to commence late in the first half of 2015. In tandem with this planned exploration programme, drilling of multiple, high calibre, near surface drill targets in Oman is currently underway. Although we have a strong understanding of our licence areas thanks to the thorough evaluation work conducted to date by both previous explorers and our ourselves, the collection and analysis of drill data will provide greater clarity to the resource potential of these mineral rich blocks.

Importantly, we have a proven team with an excellent track record in identifying promising exploration assets and advancing them into profitable, producing companies. With this industry experience, a highly prospective portfolio of assets in place, and targeted development path to pave the road ahead, I expect 2015 to be a very active year for the Company.

This will be the last Chairman's Statement that I write as I will be stepping down from the Board with effect from tomorrow. It has been my pleasure to serve as the Company's Chairman for two years during which time there has been significant portfolio transformation and organisational growth in size and capability.

Finally, I would like to take this opportunity to thank our shareholders, advisers and management team for their continued support and hard work and to welcome the incoming Chairman, Matthew King, who has enjoyed a very successful career and who is due to commence his appointment tomorrow.

Mike Johnson

Chairman

Date: 24 February 2015

CHIEF EXECUTIVE OFFICER'S REPORT

During 2014 Savannah has remained committed to its strategy of building a geographically diverse, multi-commodity exploration and development portfolio. I am delighted to report on the significant operational progress that we have made during the period across our portfolio, which comprises the Blocks 4, 5 and 6 Copper Projects in the highly prospective, copper-rich, Semail Ophiolite belt in the Sultanate of Oman, and our Jangamo Heavy Mineral Sands Project in Mozambique.

With two points of commodity focus, copper and mineral sands, I believe we have secured a significant portfolio from which to realise solid growth for the year ahead and in-turn realise shareholder value.

I am delighted to say that it has been a very active year. We have completed multiple drilling and geophysical exploration programmes over multiple projects in multiple geographies on time and on budget. This is a clear demonstration of the technical and operational capabilities of Savannah's team. Our activity is both designed to get results and to leverage the maximum impact off our fixed cost base.

Blocks 4, 5 and 6 Copper Projects, Oman

Savannah has rights to three highly prospective blocks covering 1,270km² in the copper-rich, Semail Ophiolite belt in the Sultanate of Oman, which is proven to host clusters of moderate to high grade copper deposits with gold credits and metallurgically simple ores. The three blocks are located some 180km north west of Muscat, the capital city of Omanand within close proximity to the export Port of Sohar.

We are focusing our exploration on the discovery of Cyprus type Volcanic Massive Sulphide ('VMS') deposits. They occur on and below fossil seafloors, generally within mafic to intermediate volcanic rocks and lesser metalliferous sediments/umbers. Mineralisation is comprised of two key zones, a massive sulphide zone and an underlying stringer zone.

We believe the Blocks provide Savannah with an excellent opportunity to potentially evolve into a mid-tier copper producer in a relatively short time frame. Together with our Omani partners, we aim to outline further mineral resources on Blocks 4, 5 and 6, to provide the critical mass for a central operating plant to develop the deposits as part of a broad consolidation strategy.

We very strongly believe that this is exactly the right time in the cycle to be building an aggregated copper resource in Oman. Projections by most informed copper commentators and analysts highlight a copper deficit appearing in the period 2017 to 2020. This is projected to support an increase in the copper price towards the USD$4.00 per lb mark from today's USD$2.50.

The strategic market setting is therefore favourable and this is matched by the extremely attractive features for copper mining in Oman. These features include a favourable fiscal and legislative regime, a government that is strongly supportive of mining, an excellent infrastructure base (roads, power, water, ports and a copper smelter) and a favourable cost setting with very low transport and fuel costs.

Savannah has the right to earn a 65% interest in Block 4, a 65% holding in Block 5 and the right to earn up to a 70% interest in Block 6. The acquisition of Gentor Resources Limited, which has the rights to Blocks 5 and 6, was completed in July 2014 for an initial outlay of USD$0.8 million cash with deferred consideration of USD$3.0 million in cash and shares payable on achievement of milestones relating to a potential mine development (further information relating to the terms of the acquisition can be found in Note 21). As we believe the region hosts a number of highly prospective exploration opportunities we took the strategic decision to expand our in-country position through the acquisition of Block 4; in November 2014 Savannah entered into an agreement to acquire up to a 65% shareholding in Al Thuraya LLC by spending up to USD$4.6 million over 4 years. Al Thuraya wholly owns the highly prospective Block 4 (further information relating to the terms of the acquisition can be found in Note 23). This acquisition increases the Company's total land package in Oman to 1,270 km².

Block 5 currently holds a near-surface, collective Indicated and Inferred Mineral Resource of 1.7Mt @ 2.2% Cu (including a high-grade zone of ~0.5Mt @ 4.5% Cu) which spans the Mahab 4 and Maqail South target areas. Previous drilling on Block 5 has highlighted its prospectivity with high grade intersections from multiple areas including 56.35m at 6.21% Cu from the Mahab 4 prospect, 6.68m at 7.42% Cu from Maqail South, 5.54m at 3.96% Cu from Hara Kilab and 5m at 2.81% Cu from Mahab 2. Block 4 includes over 35km in strike of prospective ophiolite with multiple prospective contacts, has seen very little exploration using modern techniques and is a prime target for the application of technologies such as VTEM.

Exploration undertaken by Savannah has initially focussed on evaluating potential open pittable targets. First round re-processing of geophysical data (Versa​tile Time Domain Electromagnetic airborne survey ('VTEM') originally completed in 2010) was undertaken by Savannah in mid-2014 and 94 prospective anomalies were identified, with eight Priority 1 and 12 Priority 2 exploration targets identified on Blocks 5 and 6.

In addition, field reconnaissance by way of a ground based electro-magnetic ('EM') survey of high priority VTEM targets identified a new cluster of targets within Block 5 and Block 4: Sarami West (Block 5), Wadi Ahin (Block 5) and Ghayth Prospect (Block 4). To better understand the mineralisation potential, Versatile Time Domain Electromagnetic Surveying ('VTEM') was completed in December 2014 over these targets, with the results published post period end in January 2015.

The strongest anomaly was identified at Sarami West, which has a very high conductance, spans over 200m, and remains open to the south. Importantly, Sarami West appears to be larger and of similar intensity to the nearby Mahab 4 copper deposit anomaly where an Inferred Mineral Resource has been previously defined, illustrating the potential for resource expansion should the drilling be successful. Furthermore, the VTEM survey did not identify any potential sources for a false anomaly, increasing the chances that the anomalies are potentially the result of copper bearing sulphides at depth.

It is our intention for the year ahead to advance Blocks 4, 5 and 6 up the value curve and accordingly a 1,200m diamond drilling programme commenced in January 2015.

With a highly capable exploration team already in place I look forward to utilising our in-country advantage within Oman's mineral exploration industry as we focus on establishing the Company as a mid-sized copper producer. I look forward to updating shareholders on this progress throughout the year.

Jangamo Heavy Mineral Sands, Mozambique

As previously noted, our 180km² Jangamo project is located in a world-class mineral sands province in southern Mozambique. The Project is located immediately to the west of Rio Tinto's ('Rio') Mutamba deposit along an extensive dune system prospective for mineral sands including ilmenite, zircon and rutile near the village of Jangamo, approximately 350km north east of the capital Maputo. Mutamba is one of two major deposits Rio has defined in Mozambique, which, together with the other deposit has a collective exploration target of 7-12Bn tonnes at 3-4.5% THM (published in 2008)1.

The prices for the main constituents of mineral sands, (the TiO2 feedstocks, ilmenite, rutile and zircon) are cyclically weak at present. Existing producers are struggling and investment in exploration is limited. Consumer demand for paints, paper and plastics will inevitably turn up as will prices for TiO2 feedstocks. Companies like Savannah that secure strong resource positions at this point of the cycle can be well rewarded.

We believe Mozambique is an ideal geography to put this plan in place. The long, heavy mineral rich coastline of Mozambique still remains relatively underexplored and our experience over the last 18 months is that the Mozambique government is very supportive of our exploration investment in the country.

We have made significant progress during 2014 with the completion of three major rounds of scout and resource definition drilling and an airborne geophysical survey. The programmes have highlighted Jangamo's potential to host higher grade, commercial, heavy mineral sands deposits. Significantly, our exploration indicates that the geology and geomorphology of Jangamo is similar to that of Mutamba.

Consistent with our promise to the market we reached a major milestone in December 2014 with the announcement of a maiden JORC compliant Inferred Mineral Resource of 65Mt at 4.5% total heavy minerals ('THM'). This was calculated after two separate drilling programmes of 3,990m and 1,920m, and importantly, in line with our strategy, successfully targeted extensions of the Mutamba mineralisation in the Jangamo tenement with the primary focus of defining mineralisation at the upper end of the grade range for the Mutamba deposit of over 4% THM. Details of the resource are contained in Table 1 below.

Table 1

Note: The table above has been prepared on a gross basis showing 100% interest. Savannah has an 80% indirect interest in the Jangamo Project.

At this juncture I feel it is important to note the significant upside potential of the Jangamo project. The maiden Mineral Resource was defined and announced in not much more than 12 months after we started our ground work in Mozambique on what was essentially a green fields' tenement. Resource evaluation is staged in nature and we will be looking to further expand the Mineral Resource during calendar 2015.

It is noteworthy that the maiden resource was defined over two small areas in the eastern arm of the tenement. These areas are a small part of the 180km² Jangamo tenement. The Mineral Resource remains open along strike and there are a number of areas identified during the 2014 exploration programme, which require follow up work and resource drilling.

Jangamo is a large system and we are focused on defining a higher grade project that has superior economic characteristics for the development of a profitable mining operation with modest capital costs. This complements the favourable local infrastructure setting that benefits from nearby roads, power, and port.

In this vein, further work is already planned for the 2015 field season including: metallurgical testwork to characterise the potential product from any project development; further drilling around the newly defined Inferred Mineral Resource to further expand the resource base; and further grid based resource drilling around anomalous exploration drill holes.

Significantly we have also identified a major HMS system in the western part of the tenement. Scout drilling undertaken along the 15km strandline has intersected encouraging zones of mineralisation with excellent intersections of up to 45m at 3.51% THM from 12m in JMRC133. The western system, which extends over at least 10km in strike, will form one of the main focuses of the ongoing exploration programme in 2015.

Chairman

I would also like to bring to shareholders' attention the fact that Mike Johnson has decided to step down as Chairman and effective tomorrow is due to be replaced by Matthew King. This change is a result of Mike having successfully steered the Company through its recent transitional phase where it exited its West African gold projects and acquired interests in projects in its two new core geographies of Oman and Mozambique in copper and heavy minerals respectively. Under Mike's stewardship the Company has strengthened its balance sheet, established a key management group and secured a valuable portfolio of new projects. Mike had always made it clear that once this transitional phase had been successfully implemented he would look to stand down and in that regard the Company wishes to thank Mike very much for his very significant contribution and to also wish him well in all his future endeavours.

The Company is very fortunate to be able to appoint a successor with the experience and qualifications of Matthew King. Matthew has had a long and distinguished career in international banking. His particular competencies are in the arenas of corporate governance, operational risk and compliance.

Share Price

Savannah's share price has traded in a very wide range over the last 12 months. In recent days it has traded at new lows. Clearly some of this is the result of the difficult market conditions generally for small cap explorers. This has been exacerbated by the recent decline in the prices of a wide range of commodities including copper. We remain convinced that copper is the leading industrial metal and the recent drop in its price will be short lived.

Despite what the share price might suggest we have achieved a lot in 2014. We have secured a commanding position in the Oman Ophiolite Belt which hosts a prolific number of copper deposits, and we have executed on our plan; starting in July 2014 with the completion of the acquisition of Blocks 5 and 6 in Oman, which was followed by the acquisition of Block 4, we have identified prospective drill targets and are currently drilling away - all within some seven months of starting. The timely execution of these initial steps highlights both our intent and capability to move forward and develop as a copper producer. At the same time we have underscored the prospectivity of Jangamo with the declaration of a maiden Mineral Resource.

In summary, Savannah is a much more resilient company in 2015 than it was in 2014 and is well positioned to deliver shareholder value during 2015.

Outlook

We have two very able operations teams in Oman and Mozambique implementing our exploration and evaluation activities. In Oman the next step in our evaluations will be to complete a 1,200m drilling programme which started in late January 2015 at Block 5 and Block 4, on a number of high priority targets identified. In conjunction with this, we look forward to building upon the now established Inferred Mineral Resource of 65Mt at 4.2% total heavy minerals at our Jangamo Heavy Mineral Sands Project in Mozambique through further drilling, planned to begin late in the first half of 2015.

In parallel with our existing activities as outlined here we are working on other significant associated initiatives which could result in a major step change for the Company. I firmly believe that 2015 will be one of great opportunity for Savannah, and I look forward to providing shareholders with regular updates on these developments in due course.

David S Archer

Chief Executive Officer

Date: 24 February 2015

Competent Person

The information in this document that relates to exploration results is based upon information compiled by Mr Dale Ferguson, Technical Director of Savannah Resources Limited. Mr Ferguson is a Member of the Australian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is 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 as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code). Mr Ferguson consents to the inclusion in the report of the matters based upon the information in the form and context in which it appears.

The information in this document that relates to the Jangamo resource estimation is based upon information compiled by Mr Colin Rothnie who is an independent consultant and a Member of the Australian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is 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 as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code). Mr Rothnie consents to the inclusion in the report of the matters based upon the information in the form and context in which it appears.

Notes

1http://www.riotinto.com/documents/ReportsPublications/Titanium_mineral_sands_exploration_target_in_Mozambique.pdf

Technical Glossary

Inferred Mineral Resource Estimate - as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code).

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2014

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2014

COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2014

The Financial Statements were approved by the Board of Directors on 24 February 2015 and were signed on its behalf by:

D S Archer

Executive Director

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2014

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

Reserve Description and purpose

Share capital Amounts subscribed for share capital at nominal value.

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

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

operations into Pound Sterling.

Warrant reserve Fair value of the warrants issued.

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

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

Retained earnings Cumulative net gains and losses recognised in the consolidated

statement of comprehensive income.

Merger reserve Amounts resulting from acquisitions under common control.

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2014

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

Reserve Description and purpose

Share capital Amounts subscribed for share capital at nominal value.

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

Warrant reserve Fair value of the warrants issued.

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

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

Retained earnings Cumulative net gains and losses recognised in the consolidated

statement of comprehensive income.

Merger reserve Amounts resulting from acquisitions under common control.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2014

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2014