Savannah Resources Plc (LON:SAV) has said it believes that €100mln (£87.5mln) is a reasonable estimate of the lithium miner’s possible future financing requirement and added that it has no present plans to move from AIM.
In a statement clarifying the contents of an article published in the Sunday Express on 3 June 2018, the resource development company said the figure quoted looks reasonable “having regard to potential development costs based on peer group comparisons.”
The company noted that, during the course of an interview with the Sunday Express, its CEO David Archer spoke about the potential development of the company's flagship Mina do Barroso Lithium Project located in northern Portugal.
As notified by the company in March 2018, the group said mining at the project is targeted to commence in late 2019, and in conjunction with its on-ground progress, Savannah added, it “regularly conducts active and ongoing reviews of the equity capital markets' listing platforms as to their appropriateness and applicability to serve the best interests of the company and its stakeholders in the future.”
The company stressed, however, that it does not have a present intention, nor has it made any decision to migrate from AIM and seek admission to the official list of the London Stock Exchange.
With regards to financing requirements, Savannah said that should it decide to commence the development of its Portuguese lithium project then, implicitly, project financing (commonly a mixture of debt/equity), would be required to fund its 75% share of the capital cost of a mine development.
The group added that leading international consulting engineering group, Hatch is currently undertaking a scoping study of a mine development and the company expects the results will be released this month.
It said this will “provide more definition around the key features of a mine development including capital costs.”
In early afternoon trading, Savannah Resources’ shares were nearly 6% lower at 7.90p.