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Savannah Resources says well placed to continue work at Mina do Barroso lithium project

Published: 05:34 22 Sep 2021 EDT

Savannah Resources PLC -

Savannah Resources PLC (AIM:SAV, FRA:SAV, ETR:SAV, OTC:SAVNF), a lithium development company, said it is well placed to press ahead with its work at Mina do Barroso in Portugal and has sufficient capital to meet its ongoing commitments in Mozambique.

Its cash balance stood at £9.7mln at the end of June, helped by an oversubscribed placing in April, the company said alongside its interim results.

Its total attributable losses narrowed to £1.2mln for the six months to end June, from £6.0mln in the year-earlier period when it took a non-cash write-down of £5.5mln associated with a project divestment in Oman.

Savannah said it expects to receive news on the review process for the Mina do Barroso Environmental Impact Assessment (EIA) in the final quarter of 2021. The Portuguese environmental regulator extended the public consultation phase of the review from June 2 to July 16 and is now reviewing the submissions received.

A definitive feasibility study is now expected to be completed in 2022 following ongoing COVID-19 restrictions on fieldwork and the EIA process.

Savannah said that encouraging discussions were ongoing with multiple, commercial counterparties regarding potential offtake agreements and investment. It was also upbeat about the outlook for lithium. 

“With EV [electric vehicle] sales expected to accelerate during the second half of the year to reach 6.4mln units, almost double 2020's annual sales, and scant lithium inventory available, prices have continued to rise in the second half of the year,” said chairman Matthew King.

He noted that the price of Australian spodumene concentrate, as reported by Pilbara Minerals at its second online auction last week, was more than US$2,200 a tonne.

“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.“

"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," he said.

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