Savannah Resources Plc (LON:SAV) is to press ahead with a drilling programme at Mina do Barroso project in northern Portugal after metallurgical test work indicated the potential for high grade lithium.
A sample from Barroso confirmed a very pure, low iron spodumene concentrate, which can produce a high grade of lithium using relatively straightforward processing techniques.
Savannah has a 75% interest in Slipstream Resources Portugal Unipessol Lda, which is the registered holder of the Mina do Barroso mining licence.
WATCH: Savannah Resources gives green light to Mina do Barroso drilling after 'very very positive' test work
David Archer, chief executive, said: "We are delighted with these results as they confirm that a high-grade, low impurity spodumene concentrate can be produced using conventional, well understood processing techniques.
Furthermore, based on the quality of the results, we believe that our spodumene concentrate is likely to be highly sought after by manufacturers of battery grade lithium.
"Whilst it is still early days, we are working to highlight what we believe to be the superior characteristics of our Portuguese lithium project, namely: Spodumene dominant mineralisation; Granted Mining Leases; Conventional and well understood processing techniques; High-grade, low impurity spodumene concentrates; Extensive lithium mineralisation over at least 6km; and ccellent regional lithium exploration potential from extensive pegmatite fields.
Spodumene is typically found in lithium-rich pegmatites in association with other lithium minerals and typically has fewer contaminants compared to lithium produced from brine.
In a note to clients, analysts at finnCap said: “These results show that a very pure low iron spodumene concentrate can be produced from Mina do Barroso ore using simple gravity methods.”
They repeated an 11p price target on Savannah Resources shares, which in late afternoon trading were 5%, or 0.25p high at 5.25p.
-- Adds broker comment, share price --