Savannah Resources (SAV.L) is making good progress in trying to open a high-grade copper mine in Oman, as it has now filed and completed all regulatory applications for both the Mahab 4 (underground) and Maqail South (open pit) zone. This environmental process is expected to take approximately three months, but keep in mind delays are quite frequent in the mining sector.
Meanwhile, Savannah continues to work on an economic study to fine-tune the economics of both copper mines, and the company now expects to be able to update the market during July, and this will give us much more information about the value that could be created by developing and mining these copper deposits.
In other news, Savannah Resources has entered into an agreement with a consortium of vendors to acquire several lithium prospects in Portugal. Savannah will issue 20 million shares and an pay an initial A$1M in cash to the vendors, which will also be entitled to milestone payments totalling A$10.1M.
Savannah claims the projects it’s acquiring are some of the most advanced lithium concessions in Europe, and the company will be earning a 75% stake in concessions spread out over four areas with a surface area of in excess of 1,000 square kilometers.
Historical metallurgical test work has shown the Covas de Barroso zone could produce a clean lithium concentrate with an average grade of in excess of 6%. Based on spodumene price levels announced by other companies, a concentrate with an average grade of 6% could be sold at $850-900/t. With an approved mining license on one part of the project, Savannah Resources could indeed hit the ground running and become the first new supplier of lithium concentrate in Europe, as the timeline towards production could be very short – Savannah reckons it could be in a position to make a construction decision by the end of 2018.
Lots of things are happening at Savannah Resources, and the company has now also completed and published a scoping study on its Mutamba mineral sands project in Mozambique, which we will discuss in a separate update.
Go to Savannah’s website
The author has no position in Savannah Resources. Please read the disclaimer
