Savannah Resources PLC (LON:SAV) expects to be able to “significantly” increase the existing resource and potential life of the mine at its Mina do Barroso lithium project in Portugal as the ongoing drill programme continues to yield high grade intersects.
Among the latest results was an intersect of 22 metres at 2% lithium oxide on the Aldeia block – the highest grade reported so far at Mino do Barroso.
Pegmatite – the rock lithium is found in – has been consistently intersected over a strike length of more than 250m and has been traced to 120m below surface, which Savannah says confirms the potential of a “significant mineralised body”.
Over 30,000m of drilling has already been carried out in under two years, but the AIM company isn’t done yet; drilling is continuing at the project to see how much further the pegmatite goes.
Mino do Barroso currently has an existing resource of 23.5mln tonnes of ore at 1.02% lithium dioxide, but Savannah expects the recent results to contribute to a “significant increase” of that figure.
Savannah a ‘key strategic player’ in lithium mining
“These latest results from Aldeia and Grandao include the highest-grade ever reported at Mino do Barroso, demonstrating that the full scope of Mina do Barroso's exciting potential is still being realised,” said chief executive David Archer.
“High-grade mineralisation has been identified along strike and at depth, indicating the potential to further expand the existing resource and significantly increase the potential life of mine."
He added: “Results from recent workflow have continued to solidify Mina do Barroso's status as Western Europe's most significant new spodumene lithium discovery positioning Savannah as a key strategic player in Europe's upstream lithium value chain.”
In a note to clients, analysts at ‘house’ broker finnCap commented: “The new drilling programme has returned some excellent results, with high grades encountered over significant widths.
“The Mina do Barroso lithium project is already by some way the largest and most significant spodumene lithium project in Western Europe, and looks set to become larger.”
finnCap maintained a 22p price target on Savannah Resources' shares which in afternoon trading were up 0.9% at 5.50p.
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