Savannah Resources Plc (LON:SAV) shares jumped 6% higher on Monday after its chief executive David Archer said the 200% increase in the resource at Mina do Barroso marked it out as one of Europe's most promising lithium projects.
The company said it will now press ahead with “second pass” metallurgical test work. A scoping study should be commissioned soon, which would then lead to a definitive feasibility study later this year.
WATCH: Savannah Resources reports 200% increase in resource at Mina do Barroso
“We believe that we are moving towards defining a project that will sustain one of Europe's most significant, long-term, lithium mining operations," said Archer.
The figures stack up
Drilling in northern Portugal boosted the inferred mineral resource to 9.1Mt at 1.03% lithium oxide (Li₂O) containing 94,100t at a 0.5% cut-off.
The results were drawn from work on three deposits - Reservatorio, Grandao and NOA – though there are at least eight lithium-rich anomalies known as pegmatites.
Unsurprisingly, further drilling is now underway at Mina do Barroso targeting both down dip and strike extensions of currently defined mineral resource estimate.
Just the start
Savannah has identified an initial exploration target for the Grandao and Reservatorio deposits of 8-12Mt at 1.0% to 1.2% Li₂O, which if confirmed, would boost the resource figure to 17-21Mt.
“Whilst we are delighted with the results to-date, the exploration target underscores the potential to increase the aggregate mineral resource estimate over the coming months, especially as we now have two drilling rigs on site,” said CEO Archer.
In mid-morning trading, Savannah Resources shares were 6.6% higher at 6.5p.
In a note to clients, analysts at Northland Capital Partners said: "A 200% increase in the Mineral Resource Estimate is a sizeable achievement completed in a short space of time and additional expansion drilling is ongoing and expected to lead to an another updated Mineral Resource Estimate from the Company in due course."
-- Adds share price, broker comment --