Savannah Resources plc (LON:SAV), the AIM quoted resource development company, announced today that it has raised approximately £1.52 million cash (before expenses) through the subscription by both new and existing investors (the ‘Subscription’) for 27,636,361 new ordinary shares of 1p each (‘Ordinary Shares’) at a placing price of 5.5p per ordinary share (‘Subscription Shares’). The Company has received letters of intent for a further £0.58 million giving gross proceeds of £2.1 million (together with the Subscription, the ‘Fundraise’).
HIGHLIGHTS:
· Subscription has raised gross proceeds of approximately £1.52 million cash in oversubscribed fundraise
· Letters of intent received from a Directors’ related party (Al Marjan Ltd) for an additional £0.565 million cash for new shares once the Company has exited its current close period
· Funds to be used to advance Savannah’s project pipeline:
o continue resource definition drilling and scoping study at the Mina do Barroso Lithium Project in Portugal as the Company fast-tracks it to a decision to mine;
o continue activities to commence copper mining in Oman later this year; and
o advance the Preliminary Feasibility Study for the world-class Mutamba Heavy Mineral Sands Project in Mozambique.
David Archer, Savannah Resources plc Chief Executive Officer said today, “The oversubscribed Fundraise evidences the continued strong support from both our cornerstone shareholder, Al Marjan Ltd, and from a number of other existing and new shareholders. The funds raised will be principally directed to continuing resource definition drilling of the Mina do Barroso Mining Lease in Portugal, so that we can build upon the existing Mineral Resource of 9.1Mt at 1.03% Li₂O, containing 94,100t of Li₂O. Alongside this we are undertaking further metallurgical test work and are focussed on completing the Scoping Study being undertaken by Hatch. We believe the project has the potential to be the first significant lithium producer in Europe.”
Details of the Fundraise
The Company will have a pro-forma cash balance of £2.4 million following the receipt of the net proceeds of the Fundraise and upon actioning of the letters of intent.
The Company, which is currently in a “close period” that restricts Directors’ and applicable employees trading in the Company’s Ordinary Shares, has received letters of intent in respect of subscribing on the same terms as the Subscription from a Directors’ related party (this is consistent with the Relationship Agreement between the Company and Al Marjan) and from a number of employees once the Company has exited the “close period”. This would potentially result in further cash proceeds of £0.58 million (and issue of up to 10,545,457 Ordinary Shares) if such letters of intent are subsequently acted upon, and Al Marjan Ltd, the Company’s largest shareholder, shall have 28.2% with a subscription of £0.565 million cash.
The net proceeds of the Fundraise will be used by Savannah to advance its pipeline of projects. This includes further drilling at the Mina do Barroso Lithium Project in Portugal, where there are ongoing Reverse Circulation and diamond core drilling programmes underway and metallurgical test work. In addition, a scoping study is being undertaken by internationally recognised consultants, Hatch. The funds raised will also be used to advance the Company’s high-grade copper mine development in Oman. Additionally, funds raised will be used for the Preliminary Feasibility Study of the Mutamba Heavy Mineral Sands Project in Mozambique.
