Savannah Resources' drill rig at Mina do Barroso
London-listed Savannah Resources has signed a heads of agreement (HoA) with Portuguese diversified energy group Galp Energia on a proposed strategic investment and alliance regarding the lithium field around the Mina do Barroso lithium project, in Portugal.
Galp intends to secure a 10% shareholding in Savannah’s Portuguese subsidiaries, which own Mina do Barroso, for $6.4-million in cash, which Savannah will use to progress the project’s definitive feasibility study.
Galp’s strategic presence and experience operating in Portugal is expected to help drive the project to production.
Savannah CEO David Archer comments that Galp is one of the leading European companies in the energy and renewables space, with a commitment to the energy transition and a wealth of experience in developing large-scale projects such as this.
“Their knowledge and experience will be invaluable to Savannah as we further progress the project forward in a responsible and sustainable way into development,” he adds.
The companies will also evaluate exclusive terms for an offtake agreement for up to 100 000 t/y of lithium concentrate from Mina do Barroso, equating to about 50% of its planned yearly production.
The agreement represents a significant step in commercialising the project and will be an important factor in securing financing for construction of the project, Savannah notes.
Mina do Barosso is expected to provide a series of economic, social, demographic and environmental benefits to the region, the country and Europe.
Particularly, the project can be a catalyst for development of new industries in the midstream and upstream part of Europe’s lithium-ion battery ecosystem, the company states.