TIDMSAV
RNS Number : 8076F
Savannah Resources PLC
09 November 2022
9 November 2022
Savannah Resources Plc
(AIM: SAV, FWB: SAV and SWB: SAV) ('Savannah', or the
'Company')
Heads of Agreement for potential divestment of last remaining
Mozambique Mining Concession
Savannah Resources, the European lithium development company, is
pleased to announce that its subsidiary AME EAST AFRICA LIMITED
('AME') has signed a Binding Heads of Agreement ('HoA') with MRG
Metals Limited (ASX: MRQ, 'MRG') in relation to an option agreement
under which MRG could acquire Mining Concession 9735C ('ML 9735C',
the 'Licence') in Mozambique, owned by the Company's subsidiary
Matilda Minerals Lda ('Matilda') (the "Proposed Transaction").
Key aspects of the Proposed Transaction include:
-- MRG is given an exclusive 45-day due diligence period
commencing on 8 November 2022 ('Due Diligence' and 'Due Diligence
Period' respectively) to validate all relevant costs, technical
aspects of the Licence and any legal, regulatory, tax or commercial
matters.
-- On completion of the Due Diligence Period, if MRG chooses to
proceed with the Proposed Transaction, the parties will execute an
Option Agreement providing MRG a 16-month option period (the
'Option' and 'Option Period' respectively), which can be extended
by mutual consent.
-- During the Due Diligence Period, AME will take all reasonable
steps to prepare a draft Option Agreement with which to negotiate
with MRG in anticipation of it being entered into by the parties
within 5 working days following the expiry of the Due Diligence
Period, or earlier by agreement between both parties.
-- During the Option Period, MRG will fund the estimated US$0.5m
to complete a Work Programme by mid-October 2023. The Work
Programme is focussed on commitments necessary to satisfy Instituto
Nacional de Minas ('INAMI') but may include infill/extension
drilling to improve resource quality and quantity.
-- During the Option Period, MRG may exercise the Option to
acquire ML 9735C based on the following terms:
o US$0.8m, payable at the sole discretion of MRG in cash, or in
new ordinary shares in MRG based on the 20-day volume weighted
average price at time of exercise of the Option, or a combination
of cash and new ordinary shares in MRG (the 'Acquisition
Consideration'); and
o In years where the Licence area generates a net profit after
tax, MRG to make a 1% royalty payment to AME on revenues from
product sold, calculated annually for the year completed, capped at
no more than 50% of Net Profit after Tax in any given year.
-- If MRG choose to exercise the Option, the Licence will be
transferred and the Acquisition Consideration paid by MRG to
AME.
-- If MRG does not exercise the Option to acquire the Licence:
o MRG will return all data to AME including all new data created
during the Option Period; and
o MRG will return any drilling sites used by MRG to original
condition at its own cost.
Dale Ferguson, CEO of Savannah Resources said, "We are delighted
to have entered this HoA with MRG in relation to Savannah's last
remaining Mining Concession in Mozambique. MRG has been operating
in Mozambique for a number of years and has shown its commitment to
the country's mineral sands sector through the planned development
of its Corridor Sands Project.
Through the Proposed Transaction, Savannah would retain some
risk-free exposure to Jangamo's development through future royalty
payments, and potentially to MRG's broader growth strategy through
a shareholding in the Company. The Proposed Transaction would
complete Savannah's planned withdrawal from Mozambique and enable
us to focus 100% on the ongoing licensing and development of the
Barroso Lithium Project.
I look forward to providing further updates regarding the
Proposed Transaction as MRG progresses Due Diligence."
MRG Metals Chairman, Mr Andrew Van Der Zwan said: "We are
pleased to have worked with Savannah to reach the terms for the
Proposed Transaction that allows both parties to potentially gain
from a small, yet high quality, asset in the Jangamo Project.
We are now commencing the Due Diligence period and will advise
the market upon developments."
About MRG Metals
MRG Metals Limited is a junior ASX explorer (ASX: MRQ) which has
made a world-class JORC classified heavy mineral sands (HMS)
discovery and is now working towards a 100-year mine development in
Mozambique.
The Company's key HMS assets in Mozambique comprise:
-- Corridor Sands - Mineral resources estimates (MREs), Scoping
Study and Preliminary Economic Assessment delivered for Koko
Massava, Nhacutse and Poiombo HMS deposits
-- Marão - three large targets identified for testing during aircore drilling programme
-- Corridor North - complimentary HMS exploration prospect currently under application
-- Linhuane - exciting HMS exploration prospect currently under application
The Company is diversifying to include Rare Earths and Uranium
in the exploration portfolio:
-- Patricio, Fotinho and Adriano - high potential Rare Earths
and Uranium exploration prospects currently under application
MRG has a dual speed approach - to explore for Heavy Mineral
Sands, Rare Earths and Uranium across multiple tenements while
progressing to mine development at Corridor Central and South.
Regulatory Information
This Announcement contains inside information for the purposes
of the UK version of the market abuse regulation (EU No. 596/2014)
as it forms part of United Kingdom domestic law by virtue of the
European Union (Withdrawal) Act 2018 ('UK MAR').
Savannah - Enabling Europe's energy transition.
**ENDS**
Follow @SavannahRes on Twitter
Follow Savannah Resources on LinkedIn
For further information please visit www.savannahresources.com
or contact:
Savannah Resources PLC Tel: +44 20 7117 2489
Dale Ferguson, CEO
SP Angel Corporate Finance LLP (Nominated Tel: +44 20 3470 0470
Advisor)
David Hignell/ Charlie Bouverat (Corporate
Finance)
Grant Barker/ Abigail Wayne (Sales & Broking)
Tel: +44 (0) 20 7653 4000
RBC Capital Markets (Joint Broker)
Farid Dadashev/ Jamil Miah
Camarco (Financial PR) Tel: +44 20 3757 4980
Gordon Poole/ Emily Hall
About Savannah
Savannah is the owner of the Barroso Lithium Project, located
close to key infrastructure in Northern Portugal which contains the
most significant spodumene lithium resource in Western Europe.
Following a positive Scoping Study which outlined a conventional
operation producing 175,000t of spodumene concentrate per annum,
Savannah is progressing the development and environmental licencing
of the Barroso Lithium Project.
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'.
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END
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