REG - Savannah Resources - Project update: Excellent progress being made

Savannah ResourcesAnnouncement

14/01/2025 07:00

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RNS Number : 1662T  Savannah Resources PLC  14 January 2025

 

 

 

14 January 2025

Savannah Resources Plc

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

 

Excellent progress made as Barroso Lithium Project moves towards development

 

Savannah Resources Plc, the developer of the Barroso Lithium Project (the
'Project') in Portugal, Europe's largest spodumene lithium deposit, is pleased
to announce that it has made significant progress in the remaining study works
and licensing process to bring the Barroso Lithium Project into production.

 

Highlights:

·    Definitive Feasibility Study ('DFS'): Fieldwork advancing quickly
after restarting a month ago, with drilling now underway at the Reservatório
orebody. Marked progress on many other fronts relating to layout, equipment
procurement and updated costings.

·    Environmental licencing: Various studies advanced for the 'RECAPE'
phase of the licencing process, along with stakeholder engagement to ensure
optimum design and minimised impact.

·    Infrastructure: Preliminary bypass road design complete, stakeholder
consultation underway and work well advanced towards submission for separate
DIA approval.

·    Recruitment: The team in Portugal has grown to over 25 staff
including 17 across the Technical, Community Relations and Communications
teams. Recent recruitment has included people from the small villages in the
region for a variety of roles, and seasoned professionals in key specialty
roles (some of which are moving to Boticas).

·    Stakeholder Engagement: Widespread communication undertaken in
support of current fieldwork, whilst finalising key frameworks for long term
stakeholder engagement.

·    Long-term Land access: Savannah is in the process of purchasing
another set of plots and has initiated the process for compulsory acquisition
of relevant land which it does not own at the Project (which is always needed
in a variety of situations, e.g. for plots with inheritance issues, undefined
ownership, or very small dimensions, etc.). At present Savannah continues to
offer landowners the opportunity to sell or lease land to the Company based on
its previously proposed frameworks and rates.

 

Savannah's CEO, Emanuel Proença, said, "Following the award of the temporary
land access order last month, the technical team has made a great start to the
latest fieldwork campaign with drilling already underway at Reservatório and
starting imminently at Pinheiro. They have been ably assisted by our Community
Relations team, which, as usual, has been highly active on the ground
communicating our plans and activities to local residents. This fieldwork
programme will provide much of the outstanding data we need to complete the
DFS and environmental licencing process later this year.

 

"Following the bureaucratic delay experienced with the temporary land access
order last year, we are firmly focused on all fronts to keep moving the
Project forward towards production in a timely manner. Our local
infrastructure has also been subject to improvements, with the inauguration of
our new Geology Centre and works under way for the rehabilitation of houses in
Covas do Barroso and the expansion of our office in Boticas.

 

"As our Chair, Rick Anthon, said in his 2024-year end statement just before
Christmas, we expect 2025 to be our busiest year to date at the Project with
major progress made and significant news flow generated. I am excited and
proud to be executing it with a growing team of excellent professionals, now
already predominantly based in the region."

 

 

Further Information

 

Definitive Feasibility Study

The DFS is the detailed analysis of the technical, commercial and economic
feasibility of the Project. Recent progress on DFS-related matters includes:

 

·    Drilling Programme: The second phase of drilling required to complete
updates on the Project's JORC compliant Resources as well as gathering
outstanding geotechnical and hydrogeological data is underway. To date 37
drill pads are ready to receive rigs with a further 10 in the final stages of
preparation. Drilling will take place across Pinheiro, Grandão and
Reservatório with 117 holes planned for a total of 12,961m.

·    Site layout: The locations for the processing plant, pits, waste
dumps, tailings and water storage facilities, roads and HV power
infrastructure have been finalised.

·    Mining: Pit and waste dump designs have been completed pending
finalisation of geotechnical assessment. Mine scheduling has also been
completed.

·    Processing Plant: Process flowsheet finalised and feasibility
design/3D model development is well advanced.

·    Procurement: Budget quotations for all significant mechanical
equipment have been received. Budget quotations requests for electrical
equipment, steel/pipe fabrication and installation contracts are being
prepared.

·    Tailings and Water Storage: The preliminary designs have been
completed for the Tailings Storage Facility, water reservoirs and
environmental control dams.

·    Hydrogeology: The site investigation work including drilling of water
bores and pump testing has been completed. Hydrogeological modelling is in
progress.

·    Decarbonisation: There are two main sources of emissions from the
Project, the processing plant and the mining fleet.

o  Savannah continues to explore opportunities to transition the Project's
initial mining fleet (expected to be diesel) to technologies that allow a
significant reduction in carbon emissions, including hybrid and/or fully
electric equipment. Savannah recently attended a conference event organised by
a leading mine fleet OEM to explore its current and future work with hybrid
and fully electric equipment and supporting infrastructure.

 

o  The processing plant will be powered from the national grid, which during
January to November 2024, included over 80% renewable power generation.
Savannah plans to negotiate a 100% renewable supply for Project.

·    Ceramics by-products: Savannah continues to engage with significant
potential customers/partners in the ceramics industry for the Project's
feldspar-quartz by-product. The Company is also executing an independent
product characterisation and market study with a reputable Portuguese
consultant.

 

Figure 1. Drilling underway at Reservatório

 

Environmental Licencing

Good progress has been made on many of the studies required for the compliance
phase ('RECAPE') of the environmental licencing process, which is underway
following the Project's receipt of a positive environmental impact declaration
('DIA') in May 2023. Recent progress includes:

 

·    Studies: Studies on ecology (flora and fauna), noise and vibration,
landscape, archaeological and water resources were all completed during Q4
2024.

·    Study area: At the request of the regulator, the study areas were
expanded to cover the various elements associated with the Project (e.g. power
line, northern access road and other elements located partially outside of the
Mining Concession).

·    Stakeholder Engagement: Engagement (including meetings, emails
communication and exchange of information) has been ongoing to ensure that
stakeholders' input is reflected in the RECAPE design.

 

Figure 2. Ground and surface water sampling as part of RECAPE studies

Infrastructure

The studies and design work for the Project's supporting infrastructure are
now well advanced, with excellent progress made on several fronts including:

 

·    Site (Northern) access Road: Preliminary design work on the northern
access road, which will directly link the Project to the new Boticas bypass
road and ultimately the national highway network, has been completed and is
under consultation with the relevant government agencies and stakeholders
prior to geotechnical field work for the final design.

·    Bypass Road: The preliminary road alignment was finalised and
underwent stakeholder review and feedback. The design is now undergoing a
revision to incorporate stakeholder observations where possible. Geotechnical
field tests have been conducted and the final road design, associated studies
and environmental impact assessment are expected to be completed in February
2025 for review and submission to the Portuguese regulator.

·    Internal haul roads: Preliminary design of the Project's internal
haul roads is in progress.

·    HV Power: Preliminary design for the revised powerline layout and
associated substation has been completed and the DFS level design and
permitting commenced.

 

Figure 3. Map showing the potential layout of Project-related road and power
infrastructure

 

Recruitment

The team in Portugal has grown to over 25 staff including 17 across the
Technical, Community Relations and Communications teams. Recent senior hires
include a second Senior Geologist and an HR Manager. Further hires to the
technical team are expected over the coming weeks.

 

Stakeholder Engagement

Savannah is continuing to work closely with the Project's stakeholders with
key areas of recent focus including:

 

·    Active Stakeholder Engagement: Savannah is continually refining how
it interacts with communities with the focus on meaningful engagement. Through
one-on-one meetings, community meetings and informal gatherings, we listen to
diverse voices and incorporate feedback into our initiatives. A Stakeholder
Engagement Plan, being crafted with Community Insights Group, underpins these
efforts, ensuring community concerns are addressed and considered in
decision-making.

·    Building trust through transparency: Trust starts with transparency,
and Savannah is committed to open communication at every step. By sharing
project updates through accessible channels like our information centres,
community journals, and media channels, we aim to ensure clarity and build
credibility. Transparent engagement fosters stronger relationships and
empowers our stakeholders with timely, accurate information.

·    Proximity and local integration: Savannah is mixing increasingly with
the community by enhancing its local presence and fostering personal
connections. Increased staff interaction in daily life, the upcoming
repurposing of one of our Information Centres into a community hub, and
initiatives like guided mine visits and support for local projects reflect our
commitment to being a partner in regional development.

·    Amplified social responsibility: With a strong focus on community
impact, Savannah is scaling up its social initiatives. From the development of
livelihood restoration plans, discussions with local organisations for the
creation of joint partnership initiatives, to community transportation and
expanded local event sponsorship, Savannah is driving tangible benefits that
resonate with stakeholders. More frequent community meetings and diversified
local partnerships further strengthen its commitment to shared growth.

·    Operational excellence for trust and growth: Savannah is taking
proactive steps to foster trust and mitigate conflict, including finalising
key frameworks like the Stakeholder Engagement Plan and Grievance Mechanism
Protocol. Enhanced collaboration with regional authorities and strategic
training initiatives underline the company's focus on long-term stability and
community alignment, ensuring sustainable success for all.

 

Figure 4. A recent community meeting in Savannah's newly refurbished Geology
Centre

 

Long-term land access

Following the granting of a temporary land access order in December 2024,
which has allowed fieldwork at the Project to proceed, Savannah has now
initiated the process for compulsory acquisition of relevant land (primarily
the land to the eastern side of the Project area where Pinheiro, Grandão, the
process plant and related infrastructure are located) which it does not own at
the Project. This is a right provided by the mining law in Portugal for
mineral exploitation under mining licences, and compulsory acquisition is
common practice in the country in relation to infrastructure projects across
the power and transport sectors. Furthermore, it offers a practical solution
in a variety of situations, e.g. for plots with inheritance issues, undefined
ownership, or which have very small dimensions, etc. All relevant landowners
have been notified about the compulsory acquisition process (either
individually by post, through official advertisements at local entities or via
the media with public advertisements) and values for the land plots concerned
have been calculated by independent surveyors certified by the Portuguese
Courts.

 

Savannah will now officially submit the request for a Declaração de
Utilidade Publica (Declaration of Public Utility ('DPU')) to the relevant
governmental authorities for approval. This is the mechanism that grants
public utility which is necessary for compulsory acquisitions. This DPU, once
approved, will allow the Company to compulsorily acquire the properties that
it wasn't able to do so already. In the meantime, all efforts to obtain
friendly agreements will continue.

 

To date under its own land acquisition programme, Savannah has purchased well
over 100 plots and the Company continues to offer landowners the opportunity
to sell or lease land to the Company based on the previously proposed
frameworks and rates. These are on average two times the values calculated by
the independent surveyors in the compulsory purchase process for private land
(€2 or €2.50€/m(2) depending on land type under Savannah's proposal
versus €1 based on the independent valuation), and four times higher for the
Covas do Barroso Baldios land over the life of the Project as defined by the
2023 DIA (€8.6m based on Savannah's proposal versus €2.2m based on the
independent valuation). However, should the compulsory acquisition process be
used, stakeholders would still be assured of an alternative and equally
transparent process as that proposed by Savannah.

 

Key milestones and expected future news flow during H1 2025:

·        DFS:

o  Completion of current drilling programme with assay results and updates
released periodically during the programme.

o  Updates to the Pinheiro, Grandão and Reservatório JORC compliant
Resource estimates.

o  Completion of update on the Project's CAPEX and OPEX estimates based on
finalisation of designs for key project infrastructure.

o  Completion of independent product characterisation and market study for
feldspar-quartz by-product

·        Environmental Licencing: Finalisation of key work streams for
RECAPE submission.

·        Infrastructure: Completion of the bypass road design and
submission of the DIA application.

·        Recruitment: Continuing expansion of the technical team in
support of the current field programme.

·        Stakeholder engagement: Ongoing relationship building through
events, community initiatives and comprehensive communications.

·        Long-term land access: Process for potential utilisation of
compulsory acquisition.

 

 

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)

 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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