Savannah Resources PLC (LON:SAV) told investors that the Mozambique government has issued a mining licence for the ‘9228C’ area, which is the third and final licence for the Mutamba heavy mineral sands project.
The project, which is being advanced in partnership with mining major Rio Tinto plc (LON:RIO), spans some 11,807 hectares and is now covered by a mining licence that’s valid until September 2044, with a possible 25-year extension.
In early deals, Savannah Resources shares advanced 8.47% to trade at 2.87p.
"The issue of licence 9228C by the Government of Mozambique completes the licensing process for the three core Mutamba concessions,” said David Archer, Savannah chief executive in a statement.
“The process has been rigorous and demanding but we have now achieved one of the most important milestones in the orderly progression towards mine development.
In the short term, our focus will be to continue to progress the Mutamba pre-feasibility study (PFS) towards completion, which, upon delivery, will trigger the increase in our interest in the Project from 20% to 35%.
“With an indicated and inferred mineral resource of 4.4Bt at 3.9% total heavy minerals, the global significance of the opportunity is clear and compelling," Archer added.
Savannah holds a 20% stake in the joint venture with Rio Tinto and the AIM-quoted firm has the opportunity to increase its stake to 35% by delivering a pre-feasibility study and to 51% by delivering a feasibility study.
Mutamba hosts 4.4bn tonnes of indicated and inferred mineral resources, grading 3.9% total heavy minerals.
The project is located within close proximity to the infrastructure - the Port of Inhambane, reliable power supply and excellent road connections.