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Savannah Resources jumps as it discovers three new lithium deposits at Mina do Barroso project

The mining firm said the three new pegmatites covered a “considerable” strike of over 250 metres and depths of over 100m
Lithium element
Savannah added that there was “significant potential” to increase the current mineral resource estimate

Savannah Resources PLC (LON:SAV) shares jumped in late-morning trading Wednesday after it discovered three new lithium pegmatites in the Pinheiro deposit at its Mina do Barroso project in Portugal.

The mining firm said the three new pegmatites covered a “considerable” strike of over 250 metres and depths of over 100m.

WATCH: Europe's biggest Lithium Mine just got bigger says Savannah

Savannah added that there was “significant potential” to increase the current mineral resource estimate of the project, which currently stands at over 20mln tonnes.

The key intersections at Pinheiro included:

-     23m at 1.14% Li₂O (lithium oxide) from 9m in 18PNRRC003

-     14m at 1.21% Li₂O from 18m in 18PNRRC004

-     90m at 1.23% Li₂O from 39m incl. 34m at 1.6% Li₂O from 94m in 18PNRRC005

-     69m at 1.29% Li₂O from 20m incl. 24m at 1.58% Li₂O from 48m in 18PNRRC007

-     35m at 1.19% Li₂O from 16m incl. 21mm at 1.45% Li₂O from 19m in 18PNRRC009

The company said the new discoveries were likely to positively impact the current feasibility study, with further work at Pinheiro to be fast-tracked to include the results.

The firm also said drilling at its Reservatorio and NOA deposits confirmed the continuity and grade of the mineral resource estimate reported in February.

These included:

• Reservatorio:

- 23m at 1.29% Li₂O from 24m in 18RESRC023

- 27m at 1.03% Li₂O from 24m in 18RESRC026

-  24m at 1.00% Li₂O from 26m in 18RESRC029

- 42m at 1.21% Li₂O from 51m in 18RESRC033

- 27m at 1.08% Li₂O from 58m in 18RESRC037

• NOA:

- 19m at 0.97% Li₂O from 99m in 18NOARC012

- 21m at 0.92% Li₂O from 57m in 18NOARC013

Savannah also said that phase 3 of the metallurgical test work programme was ongoing and is scheduled to be completed in the fourth quarter.

David Archer, chief executive of Savannah, said: “The drilling has outlined what is now the fourth major deposit on the mining lease and highlights the still unconstrained nature of the resource potential of the overall lease area.

He added: “Having already increased our Mineral Resource Estimate by +500% in a little over a year we are excited by the discovery of three new pegmatites at the Pinherio deposit which could further enhance the scheduling flexibility of a mine development and add to the overall mine life at Mina do Barroso."

In a note to clients, analysts at City broker Northland Capital Partners said the results "clearly hold potential" to increase the project's mineral resource estimate, adding that the discovery of a "fourth major deposit" highlighted the "unconstrained nature of the resource potential of the overall lease area".

Shares were up 4.2% at 6.2p.

-- Updates share price and adds broker comment --

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Savannah Resources PLC Timeline

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