Savannah Resources (LSE:SAV) reveals there is significant resource growth potential at the Barroso Lithium Project in Portugal, which it plans to pursue following phase one production.
Speaking to Mining.com.au, CEO Emanuel Proença says the company knows there is a “big opportunity” to continue growing the resource and to transform it into a reserve.
“But first things first, we want to get this company and this project into operating mode and be successful at that,” Proença tells this news service.
Savannah’s Barroso Project has a resource of 39 million tonnes (Mt) @ 1.05% lithium oxide for 411,900 tonnes across five ore bodies. The project’s exploration target ranges between 35–62Mt at an average grade of between 0.9 and 1.2% lithium oxide.
Once the phase one operations are completed, which is expected to follow construction taking place in 2027, Savannah will look to grow Barroso’s resources.
“There are plenty of opportunities there. If you look at the numbers, the reserve outlined in the Feasibility Study is 20 million tonnes. The resource is already twice that right now, and the additional exploration target could position the project at five times that,” Proença explains.
Honing in on production
Despite the resource growth opportunities, Savannah is all-in on becoming a lithium producer, with Proença saying that goal has the company’s full attention for now.
This news comes after the company delivered a Definitive Feasibility Study (DFS) for the phase one operations earlier this month. The DFS outlines a 14-year mine life, producing 2.56Mt of spodumene concentrate, which is enough lithium for more than 7 million electric vehicle batteries, based on a 20Mt probable reserve.
Based on an average concentrate price of US$1,788 ($2,560) per tonne over the mine life, Barroso is expected to generate US$3.2 billion in earnings before interest, taxes, depreciation, and amortisation.
The project also has a US$1.9 billion free cash flow, with an unlevered post-tax net present value of US$913 million and an internal rate of return of 43%.
Proença says the “numbers speak for themselves — it’s a good quality project in a jurisdiction that is particularly interesting and relevant”.
“With these numbers and the size that we can reach over the course of the next few years, things can become very interesting,” the CEO adds.
Savannah is currently in an advanced stage of commercial development work, which is expected to accelerate in the coming months and reach conclusions before the end of 2026.
As previously reported, Savannah has received its first non-binding offers amid continuing discussions with KfW IPEX-Bank and Euler Hermes regarding a potential German Government loan guarantee and debt facility. Negotiations are also progressing with a shortlist of high-quality potential partners and Savannah expects to secure a second offtake partnership later this year. This partnership is expected to complement the existing agreement with AMG Critical Materials (AMS:AMG).
In conjunction, the company is preparing for construction and recruiting key personnel.
Proença says that the team will be the backbone of the operations team, and as such, the company is ensuring that they are hiring with a view of “building the skeleton of the operations team”.
“There has also been a lot of work in terms of community engagement and stakeholder relations locally, and that work has yielded a lot of good results,” Proença notes.
Savannah Resources is a lithium-focused developer which owns the Barroso Project in Portugal.
Write to Aaliyah Rogan at Mining.com.au
Images: Savannah Resources
