Savannah Resources PLC (AIM:SAV, ETR:SAV, OTC:SAVNF) saw its shares drop 30% after the company announced an additional stage in the environmental licensing process for its Barroso lithium project in Portugal and the departure of its chief executive.
The company said David Archer was stepping down immediately after almost nine years as chief executive and that Dale Ferguson, the company's technical director, will assume the role on an interim basis while Savannah searches for a new full-time replacement.
Portugal's environmental regulator, Agência Portuguesa do Ambiente (APA), has proposed that the Environmental Impact Assessment (EIA) for the project should now continue under Article 16, an intermediate and optional step in the EIA evaluation process, before the APA makes its final Declaration of Environmental Impact (DIA) decision.
Under Article 16, Savannah has up to six months to work with APA to further optimise certain physical aspects of the project's design and associated environment, ecology and socio-economic considerations and resubmit them for consideration.
"While this additional stage in the environmental licensing of the project adds to the overall development schedule, it does have a clearly defined timeline in law," said Ferguson.
“Savannah's team will make its best endeavours to submit any revised plans to APA as soon as practicable, but under the legislation, a DIA decision point would be reached no later than March 2023.
“Assuming a positive DIA decision is received at that time, or before, we believe the project's development would still be on track for it to be able to supply concentrate to Europe's first generation of lithium conversion plants as they come online in the mid-2020s.”
The company had hoped to secure EIA approval for the project this year.
Chairman Matthew King recently said he shared the frustrations of 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 was a political process over which the company has little control.
READ: Savannah Resources keen to make progress at Barroso lithium project
Under Article 16, some adjustments may have to be made to the project's infrastructure, such as the access road and waste storage areas, and the management of local water resources, landscape impacts and ecological systems.
Socio-economic considerations include the impact of the project on other local businesses, availability of Savannah's resources and technical expertise to stakeholders, and finding further ways to deepen the links between the project and the local population.
Savannah said it has a healthy cash position that will enable it to get through the licensing process and into the next phase of the definitive feasibility study.
Barroso is Europe's most significant lithium spodumene deposit. The company has said it believes Barroso will be able to supply a material proportion of Europe's lithium demand over the coming decades.
Interim CEO
Ferguson has been involved with the project since the beginning and has been a member of Savannah’s board for nine years. He also has a strong financial interest in the company, both directly and via his holding in Savannah’s second-largest shareholder, Slipstream Resources Investments, amounting to a 2.94% stake in Savannah.
"I am delighted to have been asked to fill the position of CEO on an interim basis and help the company achieve its next phase of development,” Ferguson said.
“I will increasingly be based in Portugal and London to progress licencing, commercial matters, and conclude the ongoing process to appoint a senior in country leader in Portugal. “
The company’s shares dropped as much as 37% in early trading, before recovering some losses to trade 31% lower at 2.30 pence by mid morning.
--Adds details on environmental licencing, CEO departure