TIDMSAV
RNS Number : 4080D
Savannah Resources PLC
26 June 2019
26 June 2019
Savannah Exercises Option to Acquire the Aldeia Mining Lease
Application
Adding to its Flagship Mina do Barroso Lithium Project
Highlights
-- Savannah adds to its 100% owned Mina do Barroso Lithium
Project portfolio in northern Portugal with the exercise of the
Aldeia Option to Acquire the Aldeia Mining Lease Application
areas
-- Acquisition Option exercised over the 2.94km(2) Aldeia Mining
Lease application areas following excellent drilling results to
date and declaration of Maiden JORC Resource
-- The Aldeia Mining Lease application consists of three blocks
(A, B and C) located adjacent to Mina do Barroso
-- A maiden JORC Mineral Resource Estimate of 3.5Mt at 1.3%
Li(2) O was published for one deposit on Block A in May 2019
confirming that;
o A significant, well mineralised pegmatite body is present
o The deposit remains open to further resource extension
o There is potential for further mineralised pegmatites within
the vicinity of the main Aldeia pegmatite
-- Further evaluation work planned on remaining blocks, all of
which are prospective for pegmatite-hosted lithium
mineralisation
-- Acquisition to be made using a long-term, staged payment
structure, commencing once the Mining Lease Application has been
granted and the transfer of the mining rights to a Savannah nominee
approved
Savannah Resources plc (AIM: SAV, FWB: SAV and SWB: SAV)
('Savannah' or the 'Company'), the AIM quoted resource development
company, confirms that, further to the announcement of 25 September
2018, it has now exercised its option (the 'Option') with private
Portuguese company Aldeia & Irmão S.A. ('Aldeia') to purchase a
Mining Lease application ('Mining Lease Application') which, once
granted, will cover areas of land bordering the Company's Mina do
Barroso Lithium Project ('Mina do Barroso' or the 'Project') in
northern Portugal. To view the press release with the illustrative
maps and diagrams please use the following link:
http://www.rns-pdf.londonstockexchange.com/rns/4080D_1-2019-6-25.pdf
Savannah's CEO, David Archer said: "Our decision to exercise the
Option granted by Aldeia over the three blocks which make up the
Mining Lease Application follows the excellent exploration results
recorded to date and the maiden JORC Mineral Resource Estimate made
on one pegmatite deposit situated in Block A. As previously
reported, the drilling on Block A has returned the highest grade
lithium intercept associated with the Mina do Barroso Project to
date of 45m at 1.67% Li(2) O, including 22m at 2.00% Li(2) O, and
the initial 3.5Mt Indicated and Inferred Mineral Resource Estimate
averages 1.3% Li(2) O or c.25% higher than the current average for
the Mina do Barroso deposits. The Aldeia deposit also remains open
to further resource expansion and bears many similar
characteristics to the Grandao orebody, located just 2km away.
"Following the recent acquisition of the minority 25%
shareholding in Mina do Barroso, our decision to now acquire the
adjacent Aldeia blocks further demonstrates Savannah's intention to
secure and develop a strategically significant, long life,
spodumene lithium operation in northern Portugal.
"We believe the addition of the Aldeia blocks to our portfolio
of lithium assets will both benefit and complement the Mina do
Barroso Lithium Project by providing an increased Li(2) O resource
inventory, as well offering more flexibility in locating the
Project's surface infrastructure.
"Our Portuguese operations will provide the lithium raw material
required for the significant market demand predicted to develop in
Europe over the next decade. Following our increase of the Mineral
Resources, resulting in the potential for an increase to the life
of mine ('LOM') of the Project, Savannah's spodumene lithium
production will be key to groups interested in securing lithium
chemicals in Europe, which is a high priority for the EU and
highlights Savannah's potential role in the development of Western
Europe's nascent lithium supply chain. Global lithium production
deficits will likely drive lithium prices higher in the next few
years and will provide an excellent industry setting for
Savannah.
"Furthermore, the payment structure of the deal is attractive
for Savannah, as the Company will pay for the acquisition via
instalments over a 6-year period. These instalments will commence
once the current Mining Lease Application has been approved and
transferred to a Savannah subsidiary company. We are very pleased
with our decision to exercise our Option to Acquire Aldeia and
firmly believe it will be pivotal in Savannah's journey towards
expanding our mine life and firmly embedding ourselves at the heart
of the lithium raw material market with a high grade and reliable
product."
Background to the Aldeia transaction
Savannah announced on 18 July 2018 that it had entered into a
70-day exclusive due diligence period in respect of an Option to
Acquire the three block, 2.94km(2) , Mining Lease Application for
lithium, feldspar and quartz from private Portuguese company,
Aldeia & Irmão, S.A. ('Aldeia'). Savannah believes that the
Aldeia Mining Lease Application covers key areas of the lithium
pegmatite bearing structural corridors both adjacent to and within
the vicinity of the Company's Mina do Barroso Mining Lease.
Figure 1. Mina do Barroso Project Summary Map showing key
deposits and drilling completed to date
Based on satisfactory legal and financial due diligence, desktop
studies and an initial surface exploration programme, Savannah
announced on the 25 September 2018 that it had purchased the
exclusive Option to Acquire the Mining Lease, once granted (the
'Option'). The Option was exercised prior to its expiry on 25 June
2019 at the cost of EUR350,000, payable in instalments. As of the
date of publication, two instalment payments remain and are due by
25 September 2019.
Acquisition Terms
Exercising of the option has triggered a 'Commitment to
Purchase' subject to prior approval of the competent government
authorities. Upon approval of the Mining Lease, Aldeia shall
thereafter submit a Request for Transfer with the DGEG
('Direcção-Geral de Energia e Geologia') and apply to register the
Lease in the name of Savannah or a Savannah nominee.
The total purchase price for the acquisition of the Proposed
Lease Area (once granted) is EUR3.25m, which would only be due once
the Mining Lease Application has been granted and the Mining Rights
transferred to Savannah's subsidiary. Once triggered, the agreed
payment schedule consists of an initial EUR55,000 payment upon
execution with the balance due in 71 equal monthly instalments.
Hence, there is no payment due upon exercise of the Option.
Mineral Resource Estimate on Aldeia Block A
A series of highly prospective pegmatites have been identified
on all three blocks at Aldeia, but the largest and most extensive
pegmatite identified to date is on Block A, where quarrying
operations are taking place (Figure 2).
Figure 2. Panorama Photo of the Pegmatite Quarry on Block A
Following the purchase of the Option, Savannah commenced a
maiden drilling campaign on Block A in early 2019, which to date
has included 33 reverse circulation ('RC') and diamond drill holes
for a total of 3,399m.
As previously announced, data from 18 RC drill holes, 5 diamond
holes and 6 RC holes with diamond tails were used to generate a
maiden 3.5Mt Mineral Resource Estimate for Aldeia Block A which was
published on 31 May 2019 along with an Exploration Target for the
deposit (Table 1 and 2). At 1.3% Li(2) O, the Aldeia resource has
the highest average grade of the five resource-bearing deposits
across the two project areas, which is approximately 23% above the
total resource average of 1.06% Li(2) O.
The Aldeia deposit is contained largely within a single
moderately west dipping tabular body, defined over an area of 250m
north-south with a dip extent of 340m. The body appears to
bifurcate and varies in thickness from 10m to 45m and is typically
mineralised across the full width. The main pegmatite extends to
surface and is visible in outcrop over a portion of the deposit.
The pegmatite mineralisation is predominantly fresh with a shallow
weathering profile affecting the material 10m to 20m below surface.
The main pegmatite zone remains open along strike to the north and
down dip (Figures 3 and 4), and a number of minor pegmatites are
also defined at the deposit.
Table 1. May 2019 Mineral Resource Summary (0.5% Li(2) O
cut-off)
Deposit Resource Tonnes Li(2) Fe(2) Li(2) O
Classification O O(3)
Mt % % Tonnes
------- ------ ------ --------
Aldeia Measured
Indicated 1.6 1.3 0.5 21,300
Inferred 1.8 1.3 0.4 23,700
--------------------------- ------- ------ ------ --------
Total 3.5 1.3 0.4 45,000
--------------------------- ------- ------ ------ --------
*Rounding discrepancies may occur
Table 2. Exploration Target Summary
Deposit Tonnage Range (Mt) Li(2) O
%
Lower Upper
---------- --------- ---------
Aldeia 2.0 4.0 1.0-1.3%
---------- --------- ---------
*Cautionary Statement: The potential quantity and grade of the
Exploration Targets is conceptual in nature, there has been
insufficient exploration work to estimate a mineral resource and it
is uncertain if further exploration will result in defining a
mineral resource.
This resource formed part of the fifth JORC compliant Mineral
Resource Estimate increase on the Mina do Barroso Project, which
currently stands at a total Mineral Resource of 27Mt at 1.06% Li(2)
O for 285,900t Li(2) O contained.
Figure 3. Aldeia pegmatite and drilling (looking north)
Figure 4. Aldeia Cross Section (Southernmost Oblique Section)
(looking NE)
Figure 5. Aldeia Resource Model coloured by Li(2) O content
(looking North)
Figure 6. Aldeia Geological Model and Mapped Pegmatites
Competent Person and Regulatory Information
The information in this announcement that relates to exploration
results is based upon information compiled by Mr Dale Ferguson,
Technical Director of Savannah Resources Limited. Mr Ferguson is a
Member of the Australasian Institute of Mining and Metallurgy
(AusIMM) and has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent
Person as defined in the December 2012 edition of the "Australasian
Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves" (JORC Code). Mr Ferguson consents to the inclusion in
the report of the matters based upon the information in the form
and context in which it appears.
The Information in this report that relates to Mineral Resources
is based on information compiled by Mr Paul Payne, a Competent
Person who is a Fellow of the Australasian Institute of Mining and
Metallurgy. Mr Payne is a full-time employee of Payne Geological
Services. Mr Payne has sufficient experience that is relevant to
the style of mineralisation and type of deposit under consideration
and to the activity being undertaken to qualify as a Competent
Person as defined in the 2012 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves". Mr Payne consents to the inclusion in the report of the
matters based on his information in the form and context in which
it appears.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
**ENDS**
For further information please visit www.savannahresources.com
or contact:
David Archer Savannah Resources Tel: +44 20 7117 2489
plc
David Hignell / Charlie SP Angel Corporate Tel: +44 20 3470 0470
Bouverat (Nominated Adviser) Finance LLP
Christopher Raggett (Joint finnCap Ltd Tel: +44 20 7220 0500
Broker)
Grant Barker (Joint Broker) Whitman Howard Tel: +44 20 7659 1225
Melissa Hancock/ Cosima St Brides Partners Tel: +44 20 7236 1177
Akerman (Financial PR) Ltd
About Savannah
Savannah is a diversified resources group (AIM: SAV) with a
portfolio of energy metals projects - lithium in Portugal and
copper in Oman - together with the world-class Mutamba Heavy
Mineral Sands Project in Mozambique, which is being developed in a
consortium with the global major Rio Tinto. The Board is committed
to serving the interests of its shareholders and to delivering
outcomes that will improve the lives of the communities we work
with and our staff.
The Company is listed and regulated on AIM and the Company's
ordinary shares are also available on the Quotation Board of the
Frankfurt Stock Exchange (FWB) under the symbol FWB: SAV, and the
Börse Stuttgart (SWB) under the ticker "SAV".
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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