Savannah Resources PLC (AIM:SAV, ETR:SAV, OTC:SAVNF) said 2022 remains a critical year for the company as it seeks to make progress on the Barroso lithium project in Portugal.
“Our key goals for the year remain to secure the EIA [Environmental Impact Assessment] approval for the development of the project, and an offtake/investment agreement for our lithium concentrate production,” said chairman Matthew King in a statement ahead of the company’s annual general meeting.
King said the company shares the frustrations of its shareholders regarding the time taken for the EIA review process - it passed the second anniversary of lodging the EIA in May 2022 - and noted it is a political process over which it has little control.
An impromptu general election in January further impacted the process as appointments to the relevant cabinet positions were not made until March.
“We are confident though that the new administration is now in a position to make a decision and remain hopeful of a positive outcome,” said King.
The company noted a near 800% increase in the price of lithium concentrate over the last 12 months to USD$6,200 per tonne, far exceeding the price it assumed in its scoping study of USD$685 per tonne.
“As a result of the current macro environment in the European and global lithium markets, and the growing concern around future supply among consumers of lithium feedstock, we find that in 2022 we are in a great position to secure suitable offtakes and/or partnerships,” said King. “This interest will only increase further assuming a positive decision on the EIA is received."
Barroso is Europe's most significant lithium spodumene deposit, containing about 285,900 tonnes of lithium oxide, which the company said it believes is sufficient to supply a material proportion of Europe's lithium demand over the coming decades.
“We believe the market backdrop is hugely supportive for the development of the project and we remain convinced of our project's excellent potential,” King concluded.
“We are also keenly aware of the need to deliver progress during the second half of this year and we are working relentlessly to unlock the project's value."