Savannah Resources Plc (LON:SAV) Chief Executive Officer David Archer caught up with DirectorsTalk for an exclusive interview to discuss the resource upgrade at their Mina do Barroso lithium project.
Q1: So, we’ve seen some significant resource news from Savannah Resources this morning, a 52% increase I believe on the previous resource. Can you give me a bit more information on today’s result?
A1: Well, I suppose the particular significance is that we’ve really now identified Europe’s largest spodumene mineral resource and spodumene is the key lithium mineral and of course, lithium is really very much a strategic metal these days. It’s a vital piece of the whole development of electric vehicles and I suppose that’s runs to the importance of the car manufacturing industry in Europe so it’s very sort of constituent with the way Europe is looking to go.
Q2: As you mentioned, the type of lithium you have is spodumene, what exactly is this and how does it compare to other types of lithium?
A2: Spodumene is a lithium mineral, there are a number of lithium minerals but spodumene is the most internationally traded of the lithium minerals so it’s almost like as hematite is in the iron ore industry, spodumene is the primary lithium mineral in the lithium industry. So, we’re very fortunate to have a project there in which we have a number of deposits and each one of those deposits contains the spodumene mineral, sounds a bit technical but it’s an important point.
Q3: Now, this is the second Mineral Resource Estimate upgrade you have made in the last two months, and crucially you’ve managed to define a resource of this level within less than a year of acquiring the project. It’s a significant achievement really, do you expect to maintain this rapid pace?
A3: Yes, we’re continuing with our drill programme at Mina do Barroso, we have both an RC and diamond rig there at the moment and we continue to be encouraged by the drilling results that we’re achieving. We’re continuing to step out of the mineralisation and expand the mineralised envelope, so we feel as if we’ll be able to continue to increase the mineral resource over the coming months.
We’ve attempted to guide the market by defining an 8-12 million tonne exploration target, some of which we will now have delivered on with this existing resource upgrade. Overall, guiding the market towards a number of around 20 million tonnes that’s in our at least immediate resource target.
Q4: In terms of next steps for the project, I see that the resource drilling continues so this must mean you are confident with the further expansion potential that exists?
A4: Absolutely. Really, it’s been very much a project that continues to deliver for us, both on the metallurgical test work side, the results are certainly very favourable and show that we can produce a 6% plus lithium concentrate which is the international metric that you need to be able to deliver to. So, that work is ongoing at the moment, that’s supplemented and complimented by the full scoping study that’s been undertaken by Hatch and we hope to have those results out in the next month or so. That will lead immediately into a full feasibility study and we’ve got a very aggressive development timetable we’re working to for this project.
The reason why we are so aggressive is we’re so confident in terms of what we’ve being seeing to date and we also sort of see this particular project will play a very important role in the development of the European lithium value chain and we’re very keen to achieve first-mover advantage by being the first major producer of lithium in Europe.
Q5: Finally, I see that the scoping study is on track for completion in Q2 this year and that you plan to make a development decision by early 2019. Near-term production potential is always good news, but timing wise this must also be strategic, given the rising demand that we are seeing for lithium from battery and electric vehicle manufacturers particularly in Europe?
A5: Indeed, and we see Savannah Resources’ project as perhaps the most latent of the budding new projects in Europe and the European Union is very concerned to ensure security of supply and having production within the walls of the European Union, I think, is very complimentary to the overall strategic objectives of European governments and will help to underpin the continued prosperity of the European industry.