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Savannah ups Mina do Barroso resource for third time

Savannah Resources (AIM:SAV) has increased the mineral resource estimate for its Mina do Barroso lithium project in northern Portugal by 44%.
Savannah ups Mina do Barroso resource for third time Savannah ups Mina do Barroso resource for third time Savannah ups Mina do Barroso resource for third time Savannah ups Mina do Barroso resource for third time Savannah ups Mina do Barroso resource for third time

Savannah has again upped the mineral resource estimate at its Mina do Barroso project in Portugal

Staff reporter

The estimate for the project is now 20 million tonnes at 1.04% Li2O for 209,000 tonnes of contained Li2O after it increased the estimate for the Grandao deposit by 64% to 16.4Mt at 1.04% Li2O for 171,400t of contained Li2O.

The resources increase was the third in seven months.

Savannah CEO David Archer said the increase showed the project was a long-life asset that could "anchor the up-stream end of the European lithium value chain".

The company said about 90% of the mineralisation within the first stage of the Grandao pit had been converted to measured and indicated resource estimates.

This represented the first four-to-five years of mining inventory based on an average production of 175,000t per annum of spodumene concentrate at 6% Li2O.

It said it had also identified significant volumes of new mineralisation at Grandao below the stage one and two pits, which supported the potential to further expand the current mining inventory.

Savannah now has an updated exploration target for Mina do Barroso of 9-15Mt at1-1.2% Li2O to give a potential mineral inventory of more than 30Mt.

It said there was the chance of further upside during the 2018 drilling programme, with infill and expansion drilling underway at the Reservatorio deposit to convert the stage one pit into measured and indicated mineral resource estimates and test for potential extensions.

Savannah said the feasibility study for Mina do Barroso, which would build on the June 2018 scoping study, was on track to be completed in the March 2019 quarter.

The scoping study gave a base case pre-tax net present value of US$356 million and internal rate of return of 63% based on the previous resource estimate of 14Mt at 1.1% Li2O.

SP Angel said, with a feasibility study underway at Mina do Barroso, it imagined the larger resource base "may provide flexibility to reconsider development options either in terms of scale and/or of mine sequencing to optimise the economics of the project," which was something to look forward to. 

The market was pleased with the increase, with Savannah's shares up 2.4% Monday morning to 8.55p (US11c).