Savannah Resources raises $10M for Europe’s biggest lithium project

Savannah Resources (AIM: SAV) said on Friday it had raised £6.1 million ($10.4 million) through equity, which allows it to move forward with its Barroso lithium project in Portugal, slated to be western Europe’s largest mine of the battery metal.

The company fetched £2.4 million through the placing of 51.2 million shares at 4.67 pence each, alongside £3.7 million through the subscription of 79.2 million shares at the same price.

CEO Dale Ferguson said Savannah now has the monetary reserves available to complete the feasibility study drilling program, the resource estimate upgrade and other work, including processing plant and infrastructure design.

Savannah Resources is also progressing on the permits front. It received in May the environmental impact assessment  from the Portuguese government, which the company had hoped to secure last year, but it got caught up in red tape.

The company acquired a 75% interest in the lithium project in May 2017, maintaining a fast paced development approach since. The 2022 parliamentary election in Portugal, Savannah chairman Matthew King said, impacted the timing of the assessment as meetings with government officials were postponed.

Barroso is expected to help Europe reduce its dependence on fossil fuels and speed up its “green transition.”

The company also plans to significantly cut the project’s direct (or Scope 1) emissions to zero. Indirect emissions (or Scope 2), which are those tied to inputs a miner purchases, could be lowered by 54% from the original 2019 forecast, thanks to a potential reduction in the plant’s power requirement.

The project holds a resource estimate of 27 million tonnes of lithium with over 285,900 tonnes contained lithium oxide (Li₂O), at an average grade of 1.06% Li₂O, which the company believes to be enough to supply a “material proportion” of Europe’s lithium demand over the coming decades.

The mine will also yield a feldspar and quartz co-product used in the ceramics industry, which will be sold to customers locally and in neighbouring Spain.

Portugal, already Europe’s top lithium producer, accounts for about 11% of the global market, but its output is entirely used to make ceramics and glassware, which is why Europe relies on lithium imports from Latin America’s Lithium Triangle, as well from Australia and China.