REG - Savannah Resources - Chairman's Year End Statement

Savannah ResourcesAnnouncement

19/12/2024 07:00

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RNS Number : 6679Q  Savannah Resources PLC  19 December 2024

 

19 December 2024

Savannah Resources Plc

(AIM: SAV) ('Savannah', or the 'Company')

 

 Year End Statement from Savannah's Chair

 

Savannah Resources Plc, the developer of the Barroso Lithium Project (the
'Project') in Portugal, Europe's largest spodumene lithium deposit, is pleased
to present the following year end statement from Rick Anton, the Company's
Chair.

 

Dear shareholders,

 

As we come to the end of 2024 and I reach the milestone of six months as Chair
of the Savannah Board, I am pleased to have the opportunity to provide a brief
recap on the Company's achievements this year, as well as some guidance on
what we can all look forward to in 2025.

 

As a result of our team's great work over the last 12 months, Savannah has
significantly advanced the Barroso Lithium Project.

 

We now have AMG Critical Materials onboard as a strategic partner, shareholder
and proposed first offtaker. Already the value of this partnership has been
demonstrated by AMG's equity investment in Savannah and the recently announced
confirmation of the Project's eligibility for a loan guarantee of up to US$270
million from the Federal Republic of Germany. The likely use of some of our
lithium concentrate as feed for the lithium battery value chain in Germany was
crucial in opening up the possibility of receiving this financing. AMG has
been instrumental in this process and we look forward to their continuing
support as we go deeper into this financing process with the German
institutions, KfW-IPEX Bank and Euler Hermes. I am sure many more benefits of
this European-focused partnership will present themselves as we proceed
together.

 

Savannah has also greatly benefitted from the significant support it has
received from our new Portuguese investors. Portuguese individuals and
institutions, including retail investors from the Boticas region as well as
some of the country's most prominent entrepreneurs and businesses such as
Mario Ferreira and Grupo Lusiaves, now own close to 20% of the Company,
following consistent buying in the market over recent months. I believe the
size of the shareholding speaks volumes as to the growing in-country interest
and support for our Project. This is not only as an investment opportunity,
but also as part of a wider national industrial development based on
Portugal's substantial natural resources, its existing infrastructure and
high-quality workforce.

 

We have also been further encouraged by the recent actions of the Portuguese
State including the award of a Mining Lease on the three 'Aldeia' land blocks
at our Project and the initiation of a wide ranging Critical Raw Materials
Action Plan.

 

These developments and the doubling of Savannah's share price, which has made
us one of the best performing lithium stocks in the last 12 months, were
achieved despite the ongoing tough conditions in the lithium market and
numerous negative headlines about EV sales. Pleasingly, the spodumene
concentrate price has shown a modest improvement from its lows in August and
the reality of global EV sales is in fact a 25% rise from January to November
(15.2 million vehicles sold, source: Rho Motion) versus the same period last
year, with good signs of a reacceleration coming in the last quarter of the
year. Clearly, these are not the statistics of a market in serious decline, as
some media outlets appear to want to portray.

 

In addition, there was notable M&A activity in the sector during the
period, indicating that the industry itself continues to mature. This began
last January with the completion of the merger of my former company, Allkem, a
company I joined when it was at a similar stage to Savannah now, with Livent
to create a new lithium major, Arcadium Lithium ('Arcadium'). Arcadium
subsequently received a US$6.7bn proposed takeover from Rio Tinto in October,
which represented a 90% premium to Arcadium's market value at the time.

 

Turning to 2025, there is much ahead to look forward to. Yes, there is short
term uncertainty in the outlook for lithium prices and the pace of development
of the energy transition. However, as a pre-production lithium company with a
very competitive and valuable resource, I believe Savannah is largely
insulated from these issues and can focus firmly on the tasks it has to
execute.

 

The first of these is to progress our Project as quickly as we can towards
production. In that way, we will be ready to take advantage of the more
favourable conditions and higher prices, which will return to the market in
the future. My confidence in this recovery is sustained due to the lithium
market's secure foundation, which is built upon emission reduction-related
legislation in all major global markets and the established position that
lithium-ion batteries have achieved as the energy storage technology of choice
for multiple applications.

 

The second task is to communicate our story as clearly, transparently and
widely as we can. This will not only help to further build our standing with
our local stakeholders via the distribution of accurate and consistent
information and through growing positive engagement, but also increase
awareness of Savannah as an attractive investment opportunity in the battery
metals and energy transition sectors.

 

We will be starting the New Year on a firm footing and expect 2025 to be the
Company's busiest year yet. In preparation for this work, we have continued to
build out both our technical, communication and community relations teams. We
have recruited members of the local community, as well as new recruits from
further afield who are coming to live in the local area. Additional
accommodation has been secured for our new personnel in the heart of our local
communities as we continue to deepen our links with the area and become an
established part of local society. Investment has also been made in our
'Geo-centre' building where our larger technical team now have all the
facilities they need to work efficiently on the data being generated by our
extensive fieldwork programme.

 

As we announced last week, we have now been granted temporary access to land
which we do not own at the project yet. Coupled with our healthy cash balance
(circa £18.3 million as at end of November) this access allows us to progress
the fieldwork, including the 13,000m second phase drilling programme, required
for the Project's Definitive Feasibility Study and environmental licence. Work
is well underway preparing drill pads and we will be providing regular updates
about developments on the ground. Our expectation remains to complete the DFS
and environmental licencing process in the second half of next year, which
will be huge milestones for the Project. As we move towards those goals,
publishing new data and providing frequent updates as we progress, I'm sure
there will be plenty of opportunity for the market to form a fresh perspective
on our Project's strategic and economic value as well.

 

Very significant progress was made in 2024 and we look forward to 2025 with
great confidence, knowing that we have all the key elements in place to
significantly advance the Project. We are looking forward to achieving these
objectives and showcasing the value and benefits which can be created by
responsible lithium raw material production in Europe, for Europe.

 

With Seasons Greetings and best wishes for the New Year.

 

Rick Anthon

Chair, Savannah Resources

 

 

About Rick Anthon

Rick Anthon is a seasoned Lithium industry professional, having worked full
time in the Lithium sector for almost 10 years. Prior to joining Savannah in
June 2024, Mr Anthon was the director of Corporate Development at Allkem
Limited. He worked with Allkem from its initial IPO as a small exploration
company up until its recent AUD 16Bn merger with Livent to form NYSE listed
Arcadium Lithium, now one of the world's largest producers of finished Lithium
chemicals.

 

At Allkem, Mr Anthon worked on a number of major transactions including
partnering with Toyota Tsushu Limited to develop the Olaroz Lithium Facility
and the Naraha Lithium Hydroxide Plant, the establishment of Advantage Lithium
Corp, a number of major capital market fund raisings, including the merger of
Orocobre with Galaxy Resources Limited, creating Allkem which ultimately
merged with the Livent Corporation to form Arcadium Lithium. Mr Anthon also
worked closely with the Project teams for both brine and hard rock projects
and Allkem's community and sustainability team.

 

 

Regulatory Information

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

 

Savannah - Enabling Europe's energy transition.

 

**ENDS**

 

Follow @SavannahRes on X (Formerly known as Twitter)

 

Follow Savannah Resources on LinkedIn

 

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

 Savannah Resources PLC                                                  Tel: +44 20 7117 2489

 Emanuel Proença, CEO

 SP Angel Corporate Finance LLP (Nominated Advisor & Joint Broker)       Tel: +44 20 3470 0470

 David Hignell/ Charlie Bouverat (Corporate Finance)

 Grant Barker/Abigail Wayne (Sales & Broking)

 SCP Resource Finance (Joint Broker)                                     Tel: +44 204 548 1765

 Filipe Martins/Chris Tonkin

 Camarco (Financial PR)                                                  Tel: +44 20 3757 4980

 Gordon Poole/ Emily Hall / Nuthara Bandara

 LPM ( Portugal Media Relations)                                         Tel: +351 218 508 110

 Herminio Santos/ Jorge Coelho/ Margarida Pinheiro

 

 

About Savannah

Savannah Resources is a mineral resource development company and the sole
owner of the Barroso Lithium Project (the 'Project') in northern Portugal, the
largest battery grade spodumene lithium resource outlined to date in Europe.

 

Through the Project, Savannah will help Portugal to play an important role in
providing a long-term, locally sourced, lithium raw material supply for
Europe's lithium battery value chain. Once in operation the Project will
produce enough lithium (contained in c.190,000tpa of spodumene concentrate)
for approximately half a million vehicle battery packs per year, and hence
make a significant contribution towards the European Commission's Critical Raw
Material Act goal of a minimum 10% of European endogenous lithium production
from 2030. Savannah is being supported in its development goals by its
strategic partner and largest shareholder AMG Critical Materials N.V., the
global critical materials business.

 

Savannah is focused on the responsible development and operation of the
Barroso Lithium Project so that its impact on the environment is minimised and
the socio-economic benefits that it can bring to all its stakeholders are
maximised.

 

The Company is listed and regulated on the London Stock Exchange's Alternative
Investment Market (AIM) and trades under the ticker "SAV".

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