Savannah Resources denies reports of Barroso project, company sale

Savannah Resources (AIM: SAV) denied on Monday reports indicating it had kicked off a sale process for its Barroso project in Portugal, slated to be western Europe’s largest lithium mine, and/or the company itself.

The miner said Portuguese press speculation was “unfounded and misleading.” It added the project has received “significant” commercial interest for years and that was now working to identify a shortlist of potential partners.

“Savannah is focusing on identifying groups which are willing to assist with the financing of the project’s construction and bring complementary skills or additional opportunities to a long-term partnership with Savannah,” it said.

It noted it expected to provide an update toward the end of the year.

Savannah’s comments come as the company published an updated corporate presentation to mark Emanuel Proença’s first day as its new chief executive officer.

The miner said it continues to progress on the permits front. It received in May the environmental impact assessment (EIA) from the Portuguese government, which it had hoped to secure last year, but it got caught up in red tape.

Savannah acquired a 75% interest in the lithium project in May 2017, maintaining a fast paced development approach since. January’s 2022 parliamentary election in Portugal, chairman Matthew King recently said, impacted the timing of the assessment as meetings with government officials were postponed.

Barroso is expected to help Europe reduce its dependence on fossil fuels and speed up its green energy transition.

The company has also a plan to significantly cut the project’s direct emissions (or Scope 1) to zero. Indirect emissions (or Scope 2), which are those tied to inputs a miner purchases, could be lowered by 54% from the original 2019 forecast, thanks to a potential reduction in the plant’s power requirement.

The project holds a resource estimate of 27 million tonnes of lithium with over 285,900 tonnes contained Li2O, which the company believes to be enough to supply a “material proportion” of Europe’s lithium demand over the coming decades.

Savannah expects to have all permits in place by the end of 2024, which will allow it to make an investment decision and start construction in 2025. First production will target 191,000 tonnes of spodumene concentrate per year and is slated for 2026.

The mine will also yield a feldspar and quartz co-product used in the ceramics industry, which will be sold to customers locally and in neighbouring Spain.

Portugal, already Europe’s top lithium producer, accounts for about 11% of the global market, but its output is entirely used to make ceramics and glassware, which is why Europe relies on lithium imports from Latin America’s Lithium Triangle, as well from Australia and China.