Savannah Resources PLC (LON:SAV) said it raised £10.3mln, before expenses, through an oversubscribed placing and direct subscription and that the net proceeds will mainly go towards progressing its flagship Mina do Barroso project in Portugal.
“We are particularly pleased to welcome a number of new European investors to our register,” said chief executive David Archer.
“The £10.3mln raised combined with the US$6.4mln investment expected from Galp Energia SGPS, SA in the Mina do Barroso project holding company, and our existing cash reserves, puts Savannah in a strong financial position as we continue to move towards the development phase at Mina do Barroso.”
It raised £10mln through the placing of 250 million shares at 4p each and £0.3mln via a direct subscription of about 8.0 million shares at 4p per share.
“Our greatly increased capital position will not only allow Savannah to complete the appraisal of Mina do Barroso, but to complement that work by evaluating opportunities to further enhance the project’s ESG credentials, undertaking exploration to define additional resources, and adding key personnel to our project team as we proceed to the development phase,” Archer said.
Savannah is seeking to become Europe’s most significant producer of spodumene lithium from its Mina do Barroso project. Lithium is a key component in electric vehicle (EV) batteries.
“The global lithium industry is experiencing a period of strong recovery after a two-year period of falling prices,” said Archer. “Lithium raw material prices have all experienced significant increases since Q4 2020, including the spodumene price which has risen approximately 70% since November, as supply tightness has coincided with greater demand driven by the rapid growth in EV sales.
“Nowhere is this more apparent than in Europe with well over a million EVs sold last year despite the impact of COVID-19. The European Commission expects the region’s demand for lithium to increase 18x by 2030, while the capacity of the region’s domestic battery manufacturing industry is forecast to grow more than 10x as Europe’s battery value chain expands rapidly in support of the e-mobility revolution.
“Savannah is already one of the leading players in Europe’s new lithium raw material supply industry and should now leverage its hard-earned position to further expand its lithium supply business in Europe to maintain and grow its future share of the market.
The company said it also remained committed to completing the technical and corporate review of the Mutamba mineral sands project in Mozambique with its partner, Rio Tinto PLC (LON:RIO), and will use some of the funds raised on that project.
Story by ProactiveInvestors
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