Savannah Resources PLC (LON:SAV) gains gained today on news the firm has established a maiden resource of 3.2 million tonnes of ore grading 1% lithium oxide at the Reservatorio deposit in Portugal, one of three targets currently being advanced as part of the ongoing exploration and development programme for the Mina do Barroso lithium project.
Further upside remains, as the drill programme is ongoing. The aim is to expand the Reservatorio resource to define new JORC-compliant resource estimates at other deposits.
READ: Savannah Resources hits "some of best grades ever seen in Europe" at lithium deposit in Portugal
Reservatorio is one of at least eight pegmatite deposits on Mina do Barroso. A maiden resource for the Grandao deposit is expected during the first quarter of 2018.
"That we have an estimated 3.2 million tonne Resource from just one of at least eight pegmatite deposits at our Mina do Barroso Lithium Project gives an indication of the potential scale of this project,” said Savannah chief executive David Archer.
“The drilling results announced to date continue to underscore the potential of the Mina do Barroso lithium project to be a strategic upstream feature in the European lithium value chain.
"We believe Mina do Barroso is the closest European analogue to the very successful Australian hard-rock, open cut mine developments, which produce highly sought-after lithium spodumene concentrates for international markets.
"Our focus is therefore on rapidly advancing the project so that we can look to provide a European source of battery-grade lithium to supply the growing number of European battery manufacturers.”
In late afternoon trading, Savannah Resources shares were 2% higher at 6.25p.
Beaufort Securities encouraged
In a note to clients, analysts at Beaufort Securities commented: “The maiden resource estimate for Reservatorio underpins the significant potential of the Mina do Barroso lithium project as a source for spodumene concentrates.”
They added: “We are also encouraged with the near-surface mineralisation and thick intercepts (c.100m) and grades over 2% Li2O. With multiple deposits and excellent existing infrastructure, we believe Mina do Barroso could be a significant source for spodumene concentrates. Given that the global lithium demand is expected to treble by 2025 on the back of the burgeoning battery market, Savannah is looking to capitalise on the lithium market with a strategic European lithium (spodumene) source.”
The analysts maintained a ‘speculative buy’ rating on the stock.
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