Savannah Resources plc (LON:SAV), the AIM quoted resource development company, has today announced its audited financial results for the year ended 31 December 2017. The Company also gives notice that its Annual General Meeting (‘AGM’) will be held on 10 May 2018 at 10:00am at The Great Room, London Executive Offices, 25 Southampton Buildings, WC2A 1AL.
HIGHLIGHTS
Operations
LIHTIUM IN PORTUGAL
· Fast-tracking the advanced Mina do Barroso Lithium Project in Portugal into production – provides an opportunity to become the first significant raw lithium producer in Europe
· Within less than a year of acquisition Savannah has established an Inferred Mineral Resource of 9.1Mt at 1.03% Li₂O containing 94,100t of Li₂O and outlined a rapid development strategy
· Significant further upside:
o Resource remains open along strike with an Exploration Target* of 8-12Mt at 1.0% to 1.2% Li₂O giving a total project target of 17-21Mt at 1.0-1.2% Li₂O
o In March 2018 drill testing of the Exploration Target to the west and southwest of the main Grandao Deposit led to the discovery of new high-grade lithium mineralisation, with grades as high as 1.71% Li₂O and lengths of up to 90m, which has been named “Grandao Extended”
o Only three of at least eight pegmatites have been drilled to date
· Low cost development profile as proven, conventional metallurgical processes will produce a highly sought after spodumene concentrate with recoveries of at least 80% at a concentrate grade of over 6% Li2O
· Near surface mineralisation indicates project will benefit from a very low stripping ratio
· Scoping study underway and due for completion Q2 2018
· With a Mining Lease, established resource, proximal infrastructure and strong market demand, Savannah is set to make a development decision by early 2019 with mining targeted to commence late 2019
*Cautionary Statement: The potential quantity and grade of the Exploration Targets is conceptual in nature, there has been insufficient exploration work to estimate a mineral resource and it is uncertain if further exploration will result in defining a mineral resource.
COPPER IN OMAN
· High-grade potential near term mine developments, with mining due to commence later this year
· Licencing approvals well advanced and strong interest received from copper off-takers
· Mines to utilise a central processing plant and tailings storage facility to minimise costs, with capacity to support multiple mine developments
HEAVY MINERAL SANDS IN MOZAMBIQUE
· World-class asset with significant scale being evaluated in a joint venture with Rio Tinto
· Following successful delivery of the Scoping Study, Savannah has increased its interest from 10% to 20% in the Mutamba Project
· Pre-Feasibility Study now underway
· Mining licence applications submitted and production targeted to commence in 2020, with average annual production of 456,000t of roasted ilmenite and 118,000t of non-magnetic concentrate (rutile and zircon)
Financials
· Raised a total of £8.47m in 2017 including private placements to both new and existing shareholders, and, post year end, raised a further £1.52m cash as well as receipt of letters of intent for subscriptions of £0.58m in March 2018
· Continued cornerstone support received from Al Marjan Limited
· Operating loss of £2.84m reflects the increased tempo of operational and investing activities in 2017
· £4.74m increase in Intangible assets and £1.18m increase in Property, plant and equipment
· Pro-forma cash balance of approximately £2.41m following the issue of new shares and receipt of letters of intent as announced on 3 April 2018
David Archer, Savannah Resources plc Chief Executive Officer said, “There is an unprecedented rise in demand for energy metals as a result of the rapid rise of electric vehicles and new forms of energy storage. Globally, all significant hard-rock lithium mines currently supplying export markets produce spodumene concentrates. Mina do Barroso continues to shape up as the European near-analogue to these highly successful Western Australian spodumene producers and our focus is now on advancing Mina do Barroso so that we can become the first significant spodumene lithium producer in Europe to cater to rapidly growing demand. We have already highlighted the significant potential of the project and the pace of our development approach through the establishment of a meaningful resource, and with a scoping study due for completion in Q2 2018, further drilling and metallurgical test work underway to improve our resource confidence still further, and a development on track due to be made early 2019, the coming year is set to be equally active.
“Alongside Mina do Barroso, we have wider development portfolio. Our copper project in Oman is on track to commence mining later this year, offering near term cash flow potential, whilst our mineral sands project in Mozambique continues to prove its world class scale as we advance it in a joint venture with Rio Tinto. With a strong portfolio of highly strategic and complementary assets, and multiple value accretive milestones due in the coming year, we look forward to building Savannah into a leading energy metals group.”
