Savannah Resources (LSE:SAV) reveals that the Barroso Project, located in Portugal, is set to become a ‘major’ European producer of low-cost, sustainably sourced spodumene concentrate, after receiving the phase one Definitive Feasibility Study (DFS) results.
Phase one operations highlight a 14-year mine life, producing 2.56 million tonnes (Mt) 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 per tonne over the mine life, Barroso will generate US$3.2 billion ($4.57 billion) in earnings before interest, taxes, depreciation, and amortisation (EBITDA).
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%.
Capital expenditure includes a new US$61 million 17km national road that the project will contribute to the region, as well as investment in processing capacity growth optionality.
CEO Emanuel Proença says that, with this project, Savannah Resources will establish Portugal as an ‘important player’ in Europe’s battery value chain.
“Under the tight technical constraints of this level of study, the project again shows its potential to deliver significant economic returns,” Proença says.
“Our expected second quartile operating costs place our project alongside or ahead of a number of the world’s largest and most reputed spodumene projects in Australia, the Americas, Africa, and China. Importantly, this economic return will be delivered in parallel with significant socio-economic benefits for its region.
“In addition to the taxes and royalties the project will generate are the hundreds of onsite long-term jobs created. It will also provide the catalyst for local infrastructure development, which will improve connectivity with the exterior and create new opportunities for the population and local businesses.”
What’s next for Savannah?
Proença adds that the DFS gives the company a ‘great platform’ from which to move into the next phase of development.
“Its findings will now be fed into the work our team is advancing on project finance, including compliance with obligations under the Portuguese State Grant contract, submission of the detailed design compliance report, commercial offtake discussions, front-end engineering design, and long-lead item ordering as we move towards construction next year.”
Preparation for construction in 2027 will now become the key priority, backed by a €110 million Portuguese State grant awarded in January 2026.
Earlier this year, Savannah Resources secured a second immediate temporary access to land on the Barroso Project. The access allowed the company to conduct geotechnical fieldwork and drilling relevant to the Barroso Project’s processing plant and infrastructure.
As Mining.com.au reported, the EU is highly dependent on lithium imports, as it produces less than 0.1% of the global lithium mine production and has very limited production of refined lithium for batteries, according to the European Union.
Per the EU, lithium demand is forecast to reach 58,000 tonnes per year in 2030.
Meanwhile, global demand for raw materials, including nickel, graphite, and lithium, is projected to increase in 2040 by 20, 19, and 14 times, respectively, compared to 2020, as reported by the European Commission.
Savannah’s Barroso Project has a resource of 39Mt @ 1.05% lithium oxide for 411,900 tonnes across five orebodies.
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
