Savannah Resources set to team up with Galp for Portuguese lithium project

Savannah Resources PLC (LON:SAV) has inked an agreement with Galp for a proposed partnership in the lithium field around the Mina do Barroso mining project in northern Portugal.

The heads of agreement with the major Portuguese energy group envisages Galp taking a 10% stake in Savannah’s subsidiary via a US$6.4mln investment, to support a definitive feasibility study.

Together the partners intend to work on a possible offtake agreement for up to 100,000 tonnes per annum of lithium concentrate from Mina do Barroso. This would represent around 50% of the mine’s expected output.

READ: Savannah inches closer on path to regulatory approval

Savannah, in a statement, described the proposal as a significant step in commercialising Mina do Barroso and in the securing of financing for the project.

Chief executive David Archer highlighted: “We are delighted to announce Galp as a potential investor and future strategic partner in our Portuguese project.

“We believe Mina do Barroso’s low carbon footprint lithium concentrate will provide a key foundation for Europe’s energy transition to electric mobility and we are delighted to be joined by Galp on this journey.”

He added: “Mina do Barroso will provide a series of compelling economic, social, demographic and environmental benefits to the Project’s region, to Portugal and to Europe. In particular the Project will provide a catalyst for the development in Portugal of potential new industries in the midstream and upstream part of Europe’s lithium-ion battery ecosystem.

”In the meantime, we will continue to press forward with the Definitive Feasibility Study of the expanded scope of the Mina do Barroso mine and provide information to a further request from Agência Portuguesa do Ambiente (‘APA’), the Portuguese environmental regulator”.

Story by ProactiveInvestors