Savannah Resources Plc (LON:SAV) has announced another significant increase in the mineral resource estimate at the Mina do Barroso lithium project in northern Portugal.
In a statement, the AIM-listed resource development company reported a 52% increase in the JORC 2012-Compliant Indicated and Inferred Mineral Resource Estimate for Mina do Barroso, which now stands at 14 metric tonnes (Mt) at 1.1% of lithium dioxide (Li₂O).
WATCH: Savannah Resources reports significant increase in resource at Mina do Barroso
The group noted that Mina do Barroso is believed to be Western Europe's largest spodumene - a lithium bearing mineral resource.
Savannah Resources said the resource - defined from three deposits, and expansion - marks around an 87% increase in the total mineral resource estimate at the Grandao deposit to 10.3Mt at 1.1% Li₂O containing 111,600t of Li₂O
The miner added that around 70% of the Grandao deposit is now reported at the higher confidence Indicated classification, with an increase in Li₂O grade of ~6% compared to its February 2018 estimate.
The firm said significant upside remains and further mineral resource estimate updates are expected during 2018.
It added that drilling is now underway, targeting both down dip and strike extensions of the current mineral resource estimate.
The group said the scoping study is on track for completion in the second quarter of 2018 while a development decision is expected by early-2019.
Savannah's CEO, David Archer commented: "This is the second Mineral Resource Estimate upgrade we have made in the last two months, outlining our rapid development approach.”
Major new European mineral discovery
He added: "Mina do Barroso is shaping up as a major new European mineral discovery. With the strong growth prospects for lithium ion batteries for Electric Vehicles and for electricity storage from the grid this is a critical time to be bringing a project of Mina do Barroso's scale, grade and location, on stream.
“We believe that Mina do Barroso has the potential to be a key piece of Europe's emerging lithium value chain that could help support the shift by European car manufacturers to the production of Electric Vehicles."
In a note to clients, analysts at ‘house’ broker Northland Capital commented on the Mina do Barroso upgrade; “Compared to its global peer group, it is not currently one of the largest spodumene deposits or one of the higher-grade spodumene deposits, but its jurisdiction combined with its existing mining license, the near-surface position of the mineralisation, the extensive supporting infrastructure, and relatively short development timeframe make it an attractive asset, when compared to its global peer group.”
They added; “The Scoping Study is due to be completed this quarter and this will give us a clearer idea of how the Project’s expected metrics compare to its peer group.”
In morning trading, Savannah shares were up 12.5% at 6.3p.
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