8 June 2022
Savannah Resources Plc
(AIM: SAV, FWB: SAV and SWB: SAV) ('Savannah', 'Savannah Resources' or the 'Company')
AGM Statement and New Corporate Presentation
Savannah hosts its Annual General Meeting ("AGM") today at 09:00 BST at The Royal Institution of Great Britain, 21 Albemarle Street, London W1S 4BS. Ahead of the AGM, the Company is providing the Chairman's Statement below. Additionally, Chief Executive Officer, David Archer, will present an overview of the Company and its current activities. An updated Corporate Presentation will be available today for download on the Company's website at https://www.savannahresources.com/investors/presentations/
"2022 remains a critical year for Savannah as we progress the Barroso Lithium Project in Northern Portugal (the "Project"). Before outlining our progress and outlook, it is worth reminding ourselves of the size of the prize: the Project is Europe's most significant lithium spodumene deposit, hosting a very sizeable resource of 27MT containing 285,900t of Lithium Oxide (Li2O) at an average grade of 1.06% Li2O, which we believe is sufficient to supply a material proportion of Europe's lithium demand over the coming decades. The Project also benefits from a relatively simple mining process, a now defined process flowsheet and excellent infrastructure in a developed, Western European country. We are seeking to bring the Project into development during a time of constrained supply, increasing demand and increased pricing for lithium which directly benefits the already compelling economics the Project enjoys. In short, the Project should be at the centre of Europe's growing lithium value chain, the importance of which has only been further highlighted by recent supply chain problems and the need to build energy independence with renewables. This was underscored in May when the European Commission launched the REPowerEU initiative: a plan to rapidly reduce Europe's dependence on Russian fossil fuels and fast-forward the green transition.
Our key goals for the year remain to secure the EIA approval for the development of the Project, and an offtake/investment agreement for our lithium concentrate production.
As to the first goal, we share the frustrations of our shareholders with the time that the EIA review process has taken. We passed the second anniversary of lodging the EIA on 25 May 2022 and the executive team continues to work hard to bring this to a resolution. It is important to note that the finalisation of the EIA is a political process over which Savannah has little control. This time last year, we had expectations that the decision would have been received by now. However, in November 2021 an impromptu General Election was called for 30 January 2022. This impacted the timing on the EIA as appointments to the relevant cabinet positions were not made until March 2022. We are confident though that the new administration is now in a position to make a decision and remain hopeful of a positive outcome.
In the meantime, Savannah continues to manage its own conduct and responses to the challenges we face. We have acknowledged in previous announcements the opposition the Project faces from some local people. We continue to engage actively with the communities in a constructive manner and have a number of initiatives which, in aggregate, illustrate our commitment to them and the region generally. We have four major ESG programmes - the Benefit Sharing Plan, the Good Neighbour Plan, a Land Stewardship Plan, and we are developing a plan for the creation of community owned companies which could provide contracted services such as progressive rehabilitation over the life of the Project. At a regional level we estimate that the Project will bring some 200 direct jobs, 400-600 indirect jobs and will help to address the demographic challenges the region faces. At a national level, the discovery of lithium has already catalysed the announcement of two major lithium refining initiatives in the country - the Galp/Northvolt refinery at Setúbal and an alignment between Bondalti and Neometals.
More encouragingly, our cautious approach to offtake and investment has been vindicated as we have seen a near 800% increase in the price of lithium concentrate over the last 12 months to USD$6,200 per tonne, far in excess of the price we assumed in our Scoping Study of USD$685 per tonne.
I noted earlier the size of the prize that we have firmly in our sights. We retain that in mind during all of our negotiations. As a result of the current macro environment in the European and global lithium markets, and the growing concern around future supply among consumers of lithium feedstock, we find that in 2022 we are in a great position to secure suitable offtakes and/or partnerships. This interest will only increase further assuming a positive decision on the EIA is received.
As a well-funded operator, we have the latitude to be patient and secure a transaction that reflects the importance and economic robustness of the Project. We would rather do the right deal that fairly reflects the Project's value as opposed to the first or easiest one that may undersell our Project. To that end, we remain in active discussions with multiple, well-positioned offtake candidates and are confident that these negotiations will move forward quickly and beneficially over the coming months.
In short, we believe the market backdrop is hugely supportive for the development of the Project and we remain convinced of our Project's excellent potential. We are also keenly aware of the need to deliver progress during the second half of this year and we are working relentlessly to unlock the Project's value."
This Announcement contains inside information for the purposes of the UK version of the market abuse regulation (EU No. 596/2014) as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").
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For further information please visit www.savannahresources.com or contact:
Savannah Resources PLC
David Archer, CEO
Tel: 44 20 7117 2489
SP Angel Corporate Finance LLP (Nominated Advisor)
David Hignell/ Charlie Bouverat
Tel: 44 20 3470 0470
finnCap Ltd (Joint Broker)
Christopher Raggett/ Tim Redfern
RBC Capital Markets (Joint Broker)
Farid Dadashev/ Jamil Miah
Tel: 44 20 7220 0500
WH Ireland Limited (Joint Broker)
Jessica Cave/ Ben Good (Corporate Finance)
Aimee McCusker (Corporate Broking)
Tel: 44 20 7220 1666
Camarco (Financial PR)
Gordon Poole/ Emily Hall
Tel: 44 20 3757 4980
Savannah is the owner of the Barroso Lithium Project, located close to key infrastructure in Northern Portugal which contains the most significant spodumene lithium resource in Western Europe. Following a positive Scoping Study which outlined a conventional operation producing 175,000t of spodumene concentrate per annum, Savannah is progressing the development and environmental licencing of the Barroso Lithium Project. A Definitive Feasibility Study is underway, and Portugal's environmental regulator is currently evaluating Savannah's Environmental Impact Assessment study. The Company is listed and regulated on AIM and the Company's ordinary shares are also available on the Quotation Board of the Frankfurt Stock Exchange (FWB) under the symbol FWB: SAV, and the Börse Stuttgart (SWB) under the ticker "SAV".