Multi-commodity mine developer
Flagship lithium project in Portugal
Grant of mining permits means Oman copper assets likely to be put into another entity
Mozambique (mineral sands) and Finland (lithium)
House broker has 23p price target
What it owns
The group’s asset portfolio encompasses:
• The Mina do Barroso lithium project in Portugal
• Block 4 and 5 Copper projects in Oman
• The Mutamba Mineral Sands project in Mozambique
• Somero and Eräjärvi lithium projects in Finland
How is it doing
In August, David Archer, chief executive, said the multiple workstreams were underway for the feasibility study at its flagship Mina do Barroso project.
Savannah has “second mover advantage” as it applies lessons learned from the first wave of Australian lithium developments to its Portuguese project.
The project is attracting interest from potential industry partners and off-takers as well as an opportunity to develop a lithium conversion plant in Portugal, which would allow the company to “lock-down from end-to-end the whole lithium value chain in Europe”.
Archer has also hailed the establishment of a European cross-border battery cell consortium, which was set up by Germany and France.
"The Franco-German decision to establish this initiative, as well as the EU's plans to launch a European raw materials investment facility, highlights the seriousness of the EU to strongly commit to increasing its investment in the European lithium battery industry”, he said.
In Oman, Savannah’s subsidiary has been awarded two licences to mine at Mahab 4 and Maqail South.
“These are the type of high-grade copper deposits that are characteristic of the Oman Ophiolite Belt and will be in the vanguard of new copper mine developments in Oman, “ said Archer.
The pair will be the first new mines in Oman for ten years, but developing two projects at the same time will be a stretch for Savannah, so Archer wants to set up a new entity for the copper mines.
What the boss says: David Archer, CEO
“It is evident that Mina do Barroso could support the development of a mineral conversion plant with the required tonnages of the lithium raw material inputs of spodumene concentrates to act as a base -oad for a major lithium hydroxide production plant and a new industry for Portugal.”
Broker ups price target
In June, house finnCap slightly increased its target price to 23p from 22p, reflecting the lithium explorer’s recent resource update.
On 31 May, the AIM-listed firm said the estimated mineral resources at its Mina do Barroso lithium project in Portugal have been increased by around 15% to 27mln tonnes at 1.06% Li₂O for 285,900 tonnes of contained Li₂O.
“Savannah Resources offers exposure to a diversified portfolio of mining assets including lithium in Portugal, heavy mineral sands in Mozambique and copper in Oman.
“The Mina do Barroso lithium project in Portugal is the most advanced of the three projects, with a Definitive Feasibility Study expected to be completed in H2 2019.”
“This now hosts Europe’s largest spodumene deposit and is expected to form an integral part of the current EU initiative to build a Strategic Battery Value Chain in Europe.”
- Definitive feasibility study for Mina Do Barroso
- European initiative to develop electric battery capacity in Europe should aid Savannah
- Price target of 23p from finncap compared to 3.9p in market
- By the year 2025, European lithium-ion batteries are expected to represent a market worth €250bn annually