Savannah Resources PLC (AIM:SAV, ETR:SAV, OTC:SAVNF), the European lithium development company, has today signed a binding heads of agreement (HoA) with MRG Metals (ASX:MRQ) Limited via its subsidiary AME East Africa Limited.
Under the agreement, MRG may acquire Savannah’s final mining concessions in Mozambique, owned by Savannah's subsidiary Matilda Minerals Lda, for US$800,000 paid in cash or shares.
MRG has an exclusive 45-day due diligence period commencing on 8 November 2022 to validate all relevant costs, technical aspects of the licence, and any legal, regulatory, tax or commercial matters.
Dale Ferguson, chief executive officer of Savannah Resources said: "We are delighted to have entered this HoA with MRG in relation to Savannah's last remaining mining concession in Mozambique.
“MRG has been operating in Mozambique for a number of years and has shown its commitment to the country's mineral sands sector through the planned development of its Corridor Sands Project.”
MRG has agreed to pay a 1% royalty in years where the licence area generates a net profit after tax.
MRG Metals chairman, Andrew Van Der Zwan said: "We are pleased to have worked with Savannah to reach the terms for the proposed transaction that allows both parties to potentially gain from a small, yet high-quality, asset in the Jangamo Project.