JOHANNESBURG (miningweekly.com) – Aim-listed Savannah Resources has raised £550 000 through the placing of 21.9-million new ordinary shares at a placing price of 2.5p apiece with both new and existing investors, it said on Monday.

CEO David Archer said in a statement that the funding would be directed towards progressing the recently announced joint venture (JV) with Rio Tinto over the Mutamba/Jangamo project, in Mozambique.

“Today's placement will be directed at funding activities that are designed to result in the achievement of a series of major milestones this year. For example…the definition of a mineral resource and, later in the year, the completion of a scoping study that will define the high-level parameters around a potential mine development,” he commented.

Archer added that the funds were being raised at a premium of 25% to the 20-day volume-weighted average price prior to the Rio Tinto JV announcement.

Following the issue and admission of the placing shares for gross cash proceeds of £547 500, the company would have a proforma cash and tradeable securities position of £1.24-million.

Meanwhile, preliminary results from a versatile time domain electromagnetic (VTEM) survey at Savannah’s Block 4 copper-gold project, in northern Oman, had indicated potential clusters of volcanic massive sulphides (VMS), allowing the group to “dramatically” shorten the process of identifying high-priority massive sulphide copper targets, both brownfield and greenfield. 

“The VTEM survey over Block 4 has allowed us to… move much closer to our objective of discovering copper orebodies which, either in aggregate or individually, can be mined in this very favourable infrastructure setting,” commented Archer.

He believed the results demonstrated both the efficacy of the VTEM as an airborne metal detector and its ability to quickly generate high-quality exploration targets.

Archer added that it was “particularly encouraging” to see a string of strong, priority VTEM anomaly responses found around the Lasail VMS deposit.

“More priority targets are clustered around the old copper mines at Aarja and Bayda and further south in the greenfield Zuha area,” he said.

Savannah, which was working to earn a 65% shareholding in the Omani company that owned the Block 4 licence, was in the process of developing a reverse circulation drill programme over select targets to further define the mineralisation potential, and aimed to start drilling in the third quarter of the year.

"These early results underscore Savannah's strategy that through the application of systematic exploration an excellent opportunity exists in Oman to build a significant midtier copper producer, using a central processing facility to support the development of a set of satellite deposits,” said Archer.