Savannah Resources Plc (LON:SAV) Chief Executive Officer David Archer caught up with DirectorsTalk for an exclusive interview to discuss the significant copper resource potential identified within Blocks 4 and 5 in Oman
Q1: On Monday, Savannah Resources Plc released an exploration target for Block 4 and 5 copper projects, totalling between 10 and 30 million tonnes, how do you see the significance of this?
A1: Well I think it’s significant in that it provides investors, I think for the first time, a total sort of global overview of the opportunity on our blocks in Oman and rather than giving a JORC assessment with some small slices, we thought it was best to define what the overall scope of the project looked like and that’s very significant. The target range is from between 10 and 30 million tonnes in grades between 1.4% and 2.4% copper. I think the important thing is to understand that this district actually produced around 212,000 tonnes of copper in its life and we’ve been able to define at least a minimum of 150,000 tonnes of copper so that provides us with an excellent base on which to build a mine. The other key point too is that the grade is very attractive, grades between 1.2% and 2.4% copper, anything between 75% and 200% greater than average head grade on new mine developments globally. So I think our shareholders should be pretty pleased that the resource is sort of shaping up to maybe something that could be very attractive and certainly will support a mine development.
Q2: Now, what are your plans for 2016 for the Oman projects?
A2: With this very sort of strong database we have here based around really an extraordinary legacy or around about 100km of historical drilling, we’ve really got all the data that will allow us to start training up a notable economic evaluation of the mine development. So we’re doing that at the moment and that will provide us with a sort of a path to an ultimate mine development and production in 2017. In the meantime, we’ll be focussed on securing funding next year and I’m pleased to report that we’ve already seen some very strong interest, both from specialist private equity funds in the resource space and from individual Middle-Eastern investors, I’m in Oman at the moment in fact. So financing will be a main activity and of course, moving through the process of JORC assessment, scoping and feasibility studies.
Q3: Good news. How do you see investor sentiment for commodities in 2016?
A3: Well I think it’ll be changing and I think it was very interesting to see this morning in The Times reporting the Wellcome Trust taking position in oil, I think that is a pretty early and significant call by a very respective investor so I think that’s sort of showing the way. I think they’ll probably be 2 specific main influences, I think the bulk commodities; iron ore and coal, will sort of continue to struggle but I think some of the individual commodities; the cobalt’s, the lithium’s, the coppers, should see some strong price support. From Savannah Resources’ point of view, I think with this rather brutal commodity cycle we’ve seen in 2015, that’s really laid all of the seed for a good soar upward move in commodity prices and specifically copper in the next few years. What that will mean is there’ll be a very lucid supply response to capital investment and we at Savannah hope to nip in under the wire with copper production in late 2017 and very strong production throughout the course of calendar 2018 and onwards.
