Name of the Project
Mina do Barosso lithium project.

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

Client
Savannah Resources.

Project Description
A scoping study has confirmed that Mina do Barosso 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 over the life-of-mine (LoM) mill head grade of 1.02% (diluted) lithium oxide (Li₂O), and an average overall strip ratio of 5.2:1 (waste:ore ratio). The project will have an LoM exceeding 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% Li₂O.

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.

Value
Initial capital expenditure is estimated at $109-million.

Duration
Construction is expected to start in the second quarter of 2019, with production expected to start in the first quarter of 2020.

Latest Developments
Savannah Resources has completed its technical and legal due diligence process with private company Aldeia & Irmão, and executed an agreement to purchase a mining lease application covering areas of land bordering the Mina do Barroso lithium project.

The Aldeia licence has the potential to expand the company’s current mineral resource base, providing an opportunity to extend the Mina do Barroso’s mine life of 11 year. It could also potentially increase processing rates.

The total purchase price for the acquisition of the proposed licence area, once granted, is €3.25-million.

Savannah Resources announced its third mineral resource estimate for the lithium project in less than seven months in September this year, with the resource increasing past the 20-million-tonne mark.

The mineral resource estimate of the Grandao deposit has increased by 64% to 16.4-milion tonnes 1.04% Li₂O, increasing the total resource of Mina do Barroso lithium to 21-million tonnes at 1.04% Li₂O for 209 000 t of contained Li₂O.

About 90% of the Stage 1 Grandao pit, defined as part of the scoping study, has now been converted to measured and indicated resource estimates, which represents the first four to five years of the mining inventory based on an average production of 175 000 t/y of spodumene concentrate at 6% Li₂O.

Savannah Resources CEO David Archer has said that there will be considerable potential to further expand the resource estimate and has announced an updated exploration target of 9-million tonnes to 15-million tonnes at 1% to 1.2% Li₂O for a potential mineral inventory of more than 30-million tonnes.

Three drill rigs are currently on site.

The project is making good progress with its feasibility study, with mine development decision expected in 2019.

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); and Primero Group (feasibility study).

On Budget and on Time?
Not stated.

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