Savannah Resources (LSE:SAV) is advancing project financing options with independent due diligence advisors regarding the development of the Barroso Lithium Project in Portugal.
The company has received first non-binding offers and expects to receive post due diligence conditional project finance offers from commercial banks in the coming months.
As part of the lender process, Savannah has continued discussions with KfW IPEX-Bank and Euler Hermes regarding a potential German Government loan guarantee and debt facility.
The company is also negotiating with a shortlist of high-quality potential partners and expects to secure a second potential offtake partnership later this year. This partnership is expected to complement the existing agreement with AMG Critical Materials.
Non-binding letters of intent have also been negotiated and signed with numerous potential offtakers for future by-product streams indicating potential demand of up to 865,000 tonnes per year.
In conjunction, Savannah is assessing a potential dual listing on a regulated market to improve access to its shares for investors outside of the UK. This is anticipated to support future financing plans. The company expects the listing to take place in 2027.
CEO Emanuel Proença says the lithium market is buoyant and Savannah has a “meaningful” amount of good-quality concentrate available for sale.
“The support the project has received from Portugal and the European Commission is helping to build confidence among potential counterparties,” Proença says.
“We expect to strike a positive agreement on this material with terms that will support the project’s development.
“With lots of developments underway on multiple fronts, the remainder of the year is going to be a very busy, exciting, and decisive period for the company.”
Barroso
This news comes after Savannah completed a Definitive Feasibility Study (DFS) last week. The DFS outlines a 14-year mine life over the phase one operations, producing 2.56 million tonnes (Mt) of spodumene concentrate — equivalent to enough lithium for more than seven million electric vehicles — based on a 20Mt probable reserve.
Based on an average concentrate price of US$1,788 ($2,550) per tonne over the mine life, Barroso will generate US$3.2 billion in earnings before interest, taxes, depreciation, and amortisation (EBITDA).
The project also has US$1.9 billion in free cash flow, with an unlevered post-tax net present value of US$913 million and an internal rate of return of 43%.
Savannah’s Barroso Project has a resource of 39Mt @ 1.05% lithium oxide for 411,900 tonnes across five ore bodies.
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
