Savannah Resources moves to secure 100% ownership of flagship project
Savannah Resources confirmed on Monday that it will move to secure 100% ownership of its flagship asset, the Mina do Barroso Lithium Project in Portugal, which is Europe's most significant spodumene lithium deposit
The remaining 25% interest is to be acquired from minority shareholders, the largest of its vendors and an existing shareholder in Savannah, via an all share offer ahead of the completion of a feasibility study and a decision to mine.
Savannah said this will be satisfied through the issue of 163m new ordinary shares in Savannah at $0.073 (circa 5.63p) per share for a transaction value of roughly circa $11.9m and equating to 15.6% of the enlarged issued share capital of the AIM traded company.
The transaction remains subject to Savannah entering into a legally binding share purchase agreement with the vendors and will be subject to shareholders approving the requisite resolutions to issue new ordinary shares at the company's 2019 annual general meeting.
David Archer, chief executive of Savannah, said:"We believe this transaction, which will give Savannah complete control of the project, provides welcome simplification, clarity and valuable optionality as we seek to progress our negotiations regarding lithium and co-product offtake agreements along with the project's proposed financing. The company remains focused on completing the project's definitive feasibility study and environmental impact assessment and permitting process, which will allow a development decision to be made."
The largest of the vendors, resource investment specialist, Slipstream, will see its stake in Savannah increase from 5.1% to 16.0%.
Geoffrey Stewart, chief executive of Slipstream, said: "It has been a truly remarkable achievement that, in under two years, Savannah has developed what was a promising exploration project into what is likely to be Europe's first significant producer of high-grade, low impurity spodumene concentrate. We are excited and confident that the project will become both economically and strategically important in Europe's rapidly developing EV industry."
Savannah Resources' shares were up 0.88% at 5.70p at 1611 BST.