Mina do Barroso

Key Info

The Mina do Barroso Lithium Project in northern Portugal is Western Europe’s largest new spodumene lithium discovery. Thanks to the project’s grade, scale and location Savannah has the unique and highly strategic opportunity to become the first significant lithium producer in Europe. With a granted Mining Lease (valid until 2036, extendable for 20 years), a 14Mt Mineral Resource which has the potential to increase further, robust project economics, established infrastructure, and preliminary metallurgical test work indicating that a high-grade (over 6% Li2O), clean, low iron spodumene concentrate can be produced, Mina do Barroso offers significant and very attractive near-term production potential.

Savannah acquired a 75% interest in the project in May 2017, and has maintained a fast paced development approach.

Mineral Resources

Based on results received to date Savannah, believes 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.

The project has a current Mineral Resource of 14Mt at 1.1% Li₂O containing 149,300t of Li₂O. Of this, 10.3Mt at 1.1% Li₂O containing 111,600t of Li₂O has been defined at the Grandao deposit, with ~70% now reported at the higher confidence Indicated classification. The remaining Mineral Resources have been defined at the NOA and Reservatorio deposits.

Scoping Study 

The Scoping Study published in June 2018 highlights the robust features and outstanding investment appeal of Mina do Barroso with a very high-IRR of 63% and strong cash generation, even with conservative spodumene prices. The project, which is anticipated to produce average annual production of ~175,000tpa of spodumene concentrate at 6% Li₂O, has demonstrated an excellent base case pre-tax NPV8 of US$356m and a life of mine revenue of US$1,555m. This is matched by an attractive initial CAPEX estimate of US$109m, which includes the circuit for feldspar and quartz. The Project’s cash costs put it at the lower end of the spodumene lithium cost curve at US$271 per tonne of concentrate (CIF China).

Development Plan

It is Savannah's intention to be in a position to make a decision for a mine development by early 2019. To be able to advance a project from acquisition to making a development decision within two years will undoubtedly be a significant achievement. Hard rock lithium production has been identified as the key for future lithium supply to meet burgeoning international demand especially for batteries for Electric Vehicles. Savannah believes Mina do Barroso's location and near-term production potential will make its product highly sought after and it can be a strategic up-stream feature for the build-out of the European lithium value chain.

In support of this,  with the Scoping Study around a potential mine development, now in hand, this provides Savannah with a solid basis to fast track the project towards a Feasibility Study and this fast-tracked development could see the project producing concentrate in Q1 2020. Alongside this, work has begun to modify the licencing conditions under the Mining Lease Savannah currently has for the project; the Company has the right to mine approximately 7Mt of lithium, quartz and feldspar ore from seven mining nucleos and will be modifying the conditions for the extraction of additional tonnages and to build a plant specific to lithium processing.

The Company is also looking to secure offtakes with existing spodumene lithium converters.

Additional Resource Potential

Mina do Barroso is one of a number of areas within an 1,018km2 tenement portfolio operated by Savannah comprising both exploration license applications and the Mining Lease. This larger exploration license applications package covers areas with existing identified pegmatites that could host lithium mineralisation.

Market Opportunity

Mainland Europe currently consumes around 24% of the world's lithium and is an early adopter of EVs and battery storage solutions. With battery production by major European manufacturers rapidly expanding, any potential local supplies from mainland Europe are being keenly sought; Savannah believes that the Mina do Barroso project, together with its portfolio of lithium exploration areas, is ideally positioned to address this strategic need.

The Mina do Barroso Lithium Project, June 2018

Western Europe’s largest spodumene (a lithium bearing mineral) deposit

Opportunity to become the first significant lithium producer in Europe

Approved Mining Plan, Environmental Impact Assessment and Mining Licence

14Mt Inferred Mineral Resource with significant expansion potential

Scoping Study demonstrates robust project economics with excellent base case pre-tax NPV8 of US$356m, an IRR of 63% and attractive initial CAPEX estimate of US$109m

Fast-paced development strategy - targeting development decision by early 2019

Preliminary test work has indicated that a high-grade (over 6% Li₂O), clean, low iron, lithium spodumene concentrate product can be produced

Located in a low-cost and stable political jurisdiction

Ideally positioned to cater to significant European demand from battery / EV markets

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