Savannah Resources (LON:SAV) – CORP: Mutamba/Jangamo update
Market Cap: £17m; Current Price: 4p
New Consortium agreement allows work to commence
Savannah Resources and Rio Tinto have agreed to a new Consortium arrangement on Rio Tinto’s Chilubane and Mutamba Projects and Savannah Resources Jangamo Project which will allow Savannah to commence work immediately.
This agreement has been entered into following consultation with the Ministry of Mineral Resources and Energy of Mozambique.
To expedite Savannah’s operatorship, Rio Tinto and Savannah have agreed to transfer legal ownership of the projects to a Consortium Company at a future date following the granting of a mining licence, subject to prior written approval from the Ministry.
Savannah will operate the combined Mutamba/Jangamo Project and will have an initial 10% beneficial interest in the combined projects with the potential to earn 51% by achieving the previously announced milestones.
A scoping study is expected to commence immediately and be completed before the end of Q117. The study will focus on a assessing the potential for a dry mining operation for stage development.
Northland Capital partners view: The Consortium approach is a major positive development for Savannah Resources that will allow the Company to get started on its eagerly awaited initial work programme at the combined Mutamba/Jangamo Project. This work-around to the previous delayed joint venture arrangement that was awaiting Government approval has been implemented following consultation with the Ministry of Mineral Resources and Energy of Mozambique, which should reduce any geopolitical risk. Savannah is not wasting any time, with work to commence immediately and a scoping study expected in Q117.