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Savannah Resources (AIM: SAV), the British company behind the Barroso lithium project in Portugal, has hired investment bank Barclays and financial consultancy Barrenjoey to find partners for the proposed mine in the country’s north.
The miner started looking for strategic partners in July, inviting interested parties to submit proposals outlining how they would help develop the mine as part of a long-term commercial relationship.
Savannah said on Monday that interest in the project has picked up since it received a favourable environmental impact statement from the Portuguese Environment Agency in May.
“We have received attractive draft proposals from players situated at a number of different points along the lithium battery value chain, and from groups looking to gain exposure to this critical new industry,” chief executive officer Emanuel Proença said in the statement.
The next step, Proença noted, would be to evaluate all the proposals received to identify those parties willing to help Savannah secure financing and that can offer additional benefits to the company and its stakeholders through the partnership.
Savannah Resources, which acquired a 75% interest in the Barroso lithium project in 2017, said that initial capital needed is estimated at $236 million.
Barroso, slated to be western Europe’s largest spodumene lithium mine, will also yield a feldspar and quartz co-product used in the ceramics industry, which will be sold to customers locally and in neighbouring Spain.
Savannah has a plan to significantly cut the project’s direct emissions (or Scope 1) to zero. Indirect emissions (or Scope 2), which are those tied to inputs a miner purchases, could be lowered by 54% from the original 2019 forecast, thanks to a potential reduction in the plant’s power requirement.
Over the estimated 14-year mine life, Barroso is forecast to reach a throughput of about 1.5 million tonnes a year (t/y), based on a resource of 20.5 million tonnes at 1.05% lithium oxide.
Potential production is estimated at 191,000 t/y of 5.5% spodumene, which the company believes to be enough to supply a “material proportion” of Europe’s lithium demand over the coming decades.
Portugal, already Europe’s top lithium producer, accounts for about 11% of the global market, but its output is entirely used to make ceramics and glassware, which is why Europe relies on lithium imports from Latin America’s Lithium Triangle, as well from Australia and China.
