Savannah Resources plc (LON:SAV), the AIM quoted resource development company, has today announced that results of a hydrogeological baseline assessment will bolster the “in principle” approval of its proposed TSF and that key approvals relating to the Block 5 Mahab 4 and Maqail South mining licence applications for copper development in Oman have been received.
HIGHLIGHTS:
· Successfully completed hydrogeological baseline assessments for the proposed tailings storage facility (‘TSF’), which will support development at both mines, and which already has approval in principle from the Ministry of Environment and Climate Affairs (‘MECA’) subject to studies and test work being presented
· This is a key study to bolster the TSF’s in principle approval concept which is subject to further studies and test work being presented to MECA
· Solid progress towards the grant of mining licences for the first two of a planned series of high grade copper mine developments in Oman
o Regulatory approval or “No Objection” received from five Ministries for the Maqail South Licence application to date – targeting open cut development
o Regulatory approval or “No Objection” received from four Ministries for the Mahab 4 Licence application to date – targeting underground development
· Commenced the Environmental Impact Assessment (‘EIA’) into the design and efficacy of the proposed TSF and copper concentrator / processing plant
· Economic scoping study for the potential mine development is approaching completion
· Targeting commencement of mining in H1 2018
David Archer, Savannah Resources Chief Executive Officer said today “Solid progress continues to be made towards the award of mining licences for each of the initial mine developments, the processing plant and the TSF. We are working towards the mining licences being awarded around the year end, with the licence for the TSF targeted to be granted soon thereafter. In parallel, we have largely completed the economic scoping study for the initial mine developments; this is based on two run-of-mine ore streams being treated at a common, centrally located copper concentration plant with an associated TSF. The study has been conceived and undertaken so that it can be converted into a detailed design with relative ease and speed to meet our development timelines of commencing production in H1 2018. Furthermore, the proposed plant and TSF have been designed to treat ores from both Maqail South and Mahab 4 but also offer the potential to treat ore from other high-grade copper deposits, located in Oman, adding further potential upside.”
Figure 1. Project Location Map
Savannah has a 65% shareholding in the Omani company Al Fairuz Mining LLC, the holder of the Block 5 licence and is earning a 65% shareholding (currently has 51% shareholding) in the Omani company, Al Thuraya LLC, the holder of the Block 4 licence.
The process for permitting mining activities in Oman is administered through the Public Authority of Mining (”PAM”). Upon submission of the mining licence application, approval or “No Objection” is required from eight Ministries for the licence to be granted. Savannah has now received “No Objection” letters from five of the required ministries for the Maqail South application and four of the eight Ministries for the Mahab 4 application. Positive discussions are continuing for the remaining Ministries at both projects, with final approvals expected to all be received in Q4 2017.
A summary of the Ministries and their approval status is given in Table 1.
| Ministry | Status (Mahab 4) | Status (Maqail South) |
| Ministry of Defence | No objection received | No objection received |
| Royal Oman Police | No objection received | No objection received |
| Ministry of Culture and Heritage | No objection received | No objection received |
| Ministry of Tourism | No objection received | Under review |
| Ministry of Environment and Climate Affairs | EIA under review | EIA under review |
| Ministry of Regional Municipalities and Water Resources (‘MRMWR’) | EIA under review | No objection received |
| Ministry of Interior | Under review | No objection received |
| Ministry of Housing | Under review | Under review |
| Public Authority of Mining | Preliminary Economic Assessment to be Submitted | Preliminary Economic Assessment to be Submitted |
EIA Update
· Good progress has been made with the MRMWR with a “No Objection” being received for Maqail South and discussions on going for Mahab 4.
· Savannah’s hydro-geological consultants, Andam International, have completed the collection of baseline hydrology and assessment of the aquifers surrounding the proposed processing plant and tailings storage facility areas to determine if there are likely to be any adverse impacts on the area.
· The TSF now has in principle approval from MECA and their work has commenced on reviewing this option in detail.
· Preparation of the final EIA documentation for the tailings dam and processing facility is now underway.
Mining Licence Application:
· Good progress made with the Maqail South mining licence. The Wali Sohar and the community council gave their “No Objection” to the project and forwarded their letter to the Ministry of Interior.
· Other ministerial approvals are awaited with five of the eight having been received for Maqail South and four out of eight for Mahab 4.
Feasibility Studies
· The scoping study for the development of the Mahab 4 and Maqail South projects is in final stages with the majority of work for the evaluation having been completed and now being reviewed.
· Inputs are being sought from Ministries as to the taxation and royalty rates that might apply as a final element in the study.
· For the underground mine at Mahab 4, the scoping study has introduced a refinement to the mine design with the location of the decline and vent shaft moved to the hanging wall side of the mineralisation, so to remain in the more competent Geotimes basalts.
· The vent shaft has been replaced with a series of vent rises that are less capital intensive and require less skill and equipment expertise.
Processing Options
· Discussions are continuing with an Australian company about potentially providing a hire plant option in addition to owner operator options.
Community Relations
· We continue to see good support from local communities and the Wali (community leaders) from the Sohar and Saham regions where the projects are located.
Public Authority of Mining (”PAM”)
· We continue to work closely with PAM as the relevant licencing authority. In conjunction with the receipt of the balance of the Ministerial approvals being received we will submit an economic assessment for their assessment. We anticipate that the final Ministerial approvals will be received in December 2017 and that the mining licences for each of the mines will be issued shortly thereafter.
