Savannah Resources PLC (LON:SAV) announced growing interest for offtake deals and strategic investments in its Mina do Barroso lithium project.
The strong lithium market has resulted in the company receiving increasing interest from groups seeking to undertake strategic investment in the project or Savannah with or without requiring a spodumene offtake.
Savannah is seeking to become Europe's most significant producer of spodumene lithium from its Mina do Barroso project in Portugal.
The interest reflects the growing appetite for exposure to the lithium value chain within the wider investment community, it said.
Savannah noted that the Heads of Agreement with Galp, announced in January, has expired, and that talks between the two companies relating to strategic investment and offtake deals will continue outside of the exclusive terms of that agreement.
The AIM-quoted company said it is evaluating its many strategic options.
“This process may include alternative or supplementary offtake contracts, with or without investment from the offtaker(s) in Savannah or the project directly. It may also result in strategic investments in the company independent of offtake, or the sale of a portion of the Mina do Barroso project,” the company said.
“The increased commercial interest the project is receiving reflects the rapid change in the dynamic the lithium sector has been experiencing since late 2020, with demand remaining robust despite the ongoing COVID-19 situation,” said chief executive David Archer
“The previous inventory overhangs have been consumed, current supplies of lithium raw material are largely covered by existing offtake agreements and demand is expected to grow multiple times over the next decade.
"This has resulted in price rises in all lithium raw materials, including an increase of approximately 80% in the spodumene concentrate price since the start of the year,” he said.