Name of the Project
Mina do Barroso lithium project.

Location
The project is located near Boticas, in northern Portugal.

Project Owner/s
Savannah Resources.

Project Description
A scoping study has confirmed that Mina do Barroso has the potential to be a major European producer of spodumene lithium, with robust project economics and the potential to deliver substantial shareholder value.

The study is considered a base case for the project and is based on a mine and concentrator-only development for the production of spodumene concentrate.

The project will use a contract miner and fleet.

Conceptual openpit mine planning has been developed, targeting a plant feed rate of 1.3-million tonnes a year, with an estimated average life-of-mine (LoM) mill head grade of 1.02% (diluted) lithium oxide and an average overall strip ratio of 5.2:1 (waste:ore ratio). The project LoM will exceed 11 years.

The flowsheet comprises a combined 1.3-million-tonne-a-year dense-media separation and flotation circuit, with an overall plant availability of 85% for the recovery of spodumene. The study estimates average production of 175 000 t/y of spodumene concentrate at 6% lithium oxide.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at an 8% discount rate, of $356-million and an internal rate of return of 63.2%, with a payback of 1.7 years.

Capital Expenditure
Initial capital expenditure is estimated at $109-million.

Planned Start/End Date
Construction is expected to start in the second quarter of 2019, with production expected to start in the first quarter of 2020.

Latest Developments
A report commissioned by Savannah Resources into the potential economic impacts of developing the Mina do Barroso has highlighted significant benefits for the local, national and broader European economy.

The report, which was undertaken over the past year, was conducted by a team of economists from the University of Minho, based in the city of Braga, located about 80 km from the project.

Its economic analysis drew on the results of the company's 2018 scoping study on the project; publicly available information, including policy documents of the Portuguese government and the European Commission; statistical data; and relevant academic papers.

The report finds that the project can be beneficial at local level, with the potential to create more than 200 long-term direct jobs (about 17% of the current employment pool), help arrest the engrained trend of depopulation, have a significant positive impact on the local economy, and generate a substantial increase in income for the municipality.

It also highlights that the project has benefits at national level, whereby the Portugal economy stands to benefit from the generation of more than €1.2-billion of export revenues.

Further, the report notes that the project has the potential to boost Portugal’s value of metal ore exports by 20%, increase its gross output by more than €1.1-billion and gross domestic product by more than €400-million, and create as many as 300 direct jobs and 2 500 indirect jobs in the construction phase and nearly 1 500 during the operational phase.

According to the findings of the report, the project could also act as a template and incentive for more in-country resource project development, particularly in the lithium sector, and stimulate the development of downstream activities, such as chemical and battery production, in the lithium industry.

In terms of benefits at a European Union (EU) level, the report points to the project’s partially assisting in completing the lithium battery value chain, which is considered strategic by the European Commission.

It has also recommended that Savannah deepen links with local government and the local communities to meet the needs identified, consequently securing the social licence to operate; develop strategies to contract service providers, focusing on local firms; and establish a plan for the hiring of local workers and a training plan to develop the necessary skills.

It also recommends that Savannah communicate in a transparent and timely manner with all stakeholders and contribute yearly to a community development fund to be administered by a foundation.

Key Contracts and Suppliers
Hatch (engineering services); PayneGeo (geological model and resource estimations); Minesure (analysis and definition of the scoping level mining inventory and contractor costs); Primero Group (primary engineering group and lead manager for the feasibility study); Knight Piésold (lead geotechnical and hydrological engineering); Quadrant (consultant on transport and logistics requirements), Nagrom (assay and metallurgical testwork services), ALS (assay and metallurgical testwork services); VISA Consultores (environmental-impact statement assessment); CV&A Consultores and S317 Consulting (stakeholder management strategy, community engagement plan and sourcing of European Union funding); and Noah’s Rule (financial adviser).

Contact Details for Project Information
Savannah Resources, David Archer, tel +44 20 7117 2489.