Savannah reports significant progress at Barroso Lithium Project

The AIM-traded firm said it had a robust position in commercial negotiations due to its full ownership of the Barroso Project.

It also noted increased interest from potential strategic partners following the project's endorsement by Portuguese environmental regulators.

While it had not yet committed to any offtake agreements, it said it was in the process of identifying a shortlist of potential partners willing to assist with the project's construction financing.

An update on the commercial arrangements was expected by the end of the year.

On the technical front, the company said it had issued six tenders related to the definitive feasibility study (DFS) and environmental licensing process, known as RECAPE, with four tenders already awarded and two under final review.

The DFS processing work package had been awarded to a collaboration between Sedgman and Minsol Engineering.

In addition, the DFS drilling programme first phase, expected to start in mid-September, had been awarded to EDASU and SPI.

The company said it was aiming to complete both the DFS and the RECAPE process by the second half of 2024.

Savannah said the contract for the Barroso Lithium Project RECAPE had been awarded to Quadrante Engenharia e Consultoria, and the company had also completed a social impact assessment through Community Insights Group.

The company said it was also making strides in acquiring the necessary land for the Barroso Project.

To date, it had either acquired or was in the process of acquiring about 45% of the private land it required from more than 40 local landowners.

It said it expected to spend around €5m on private land acquisitions.

Moreover, the firm explained that it had extended offers totaling an estimated €10m to two community land management groups, known as 'Baldios,' for long-term access to community lands.

Those offers included compensation arrangements for community members.

Savannah emphasised its commitment to reaching mutually acceptable agreements with all involved landowners and Baldios groups.

“As the summer in Europe draws to a close, Savannah is completing its preparations for the next phase in the development of the Barroso Lithium Project,” said chief executive officer Dale Ferguson.

“The project contains the largest JORC-compliant spodumene resource in Europe making it hugely strategic in the continent's plans for a domestic lithium battery value chain.

“Savannah owns 100% of the project, meaning the company is fully leveraged to the potential value that can be created by advancing the Project in this supportive environment.”

Ferguson said that, regarding the company’s ongoing work on licensing and technical aspects of the project, it was “encouraged” by the number and quality of the proposals which it had received from the six tenders for the RECAPE and definitive feasibility study work, which had enabled it to build a team of “first-class consultants” primarily based in Portugal.

“We are pleased that two key consultants who contributed to the positive DIA from the Portuguese environmental regulator in May, Quadrante and Community Insights, will again be on the team to help us through the final stages of the project's licensing.”

Dale Ferguson added that the 30-year mining lease granted in 2006 safeguarded Savannah's access to land that might be necessary for the development of the Barroso Lithium Project.

“Despite the existing legal coverage, Savannah will always favour direct agreement with landowners and representatives of the Baldios.

“The company will use the mechanisms provided in Portuguese law but only when it is not possible to reach an agreement.

“Savannah wants to build the Barroso Lithium Project with the community, to benefit its members, not to impact them.”

At 1318 BST, shares in Savannah Resources were up 0.54% at 3.72p.

Reporting by Josh White for Sharecast.com.