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RNS Number : 1749G
Savannah Resources PLC
25 May 2017
 

 

Savannah Resources Plc / Index: AIM / Epic: SAV / Sector: Mining

 

25 May 2017

Savannah Resources Plc

Strategic Lithium Project Acquisition with Near-Term Production Potential, Portugal

 

Savannah Resources plc (AIM: SAV) ('Savannah' or 'the Company'), is pleased to announce that it has entered into an agreement with a consortium of vendors led by Slipstream Resources Investments Pty Ltd ('Vendors' or 'Slipstream') to acquire a series of highly prospective lithium projects with near-term production potential in the north of Portugal (the "Transaction").  To view the press release with the illustrative maps and diagrams please use the following link:

http://www.rns-pdf.londonstockexchange.com/rns/1749G_-2017-5-24.pdf

 

TRANSACTION HIGHLIGHTS

·     Strategic opportunity to become the first significant lithium producer in Europe having acquired the Mina do Barroso prospect in northern Portugal;

·     Approved Mining Plan ('MP'), Environmental Impact Assessment ('EIA') and a 30-year mining concession/Mining Licence ('ML') means that with a defined JORC resource a development decision could be made by the end of 2018;

·     Significant exploration results include:

o  Due diligence rock chip sampling identifying desirable spodumene pegmatites >70m wide with Li2O grades > 3.12%

o  Continuous rock chipping returning broad zones of lithium mineralisation including 30m at 1.18% Li2O, 30m at 1.35% Li2O and 35m at 1.67% Li2O

o  High-grade drill results which commence from at or near surface including 32m at 1.16% Li2O from 20m, 12m at 1.6% Li2O from 1m and 16m at 1.35% Li2O from surface;

·     Preliminary metallurgical test work has indicated that a high-grade (over 6% Li2O), clean, low iron, lithium concentrate can be produced;

·     Further exploration underway including mapping and rock chip sampling with drilling expected to commence in around two weeks with the initial focus on defining a JORC resource at Mina do Barroso to support a potential mine development;

·     Acquisition is part of an enlarged acquisition that included a 75% interest in four project areas covering up to 1,018km2 of tenure with proven high-grade lithium mineralisation offering additional upside potential;

·     Secured Portuguese operating partner Mineralia Minas, Geotecnia e Construcoes, Lda., which has commissioned over 11 quarries and mines in Portugal;

·     Portugal has consistently ranked highly in the world for desirability for investment (2016 Fraser Institute study) and is in the top 7 lithium-producing countries (linked to the ceramics industry); and

·     Consideration for the Transaction will comprise of initial cash consideration of AUD$1.0million plus the issue of 20,000,000 ordinary shares of 1p each in Savannah ('Ordinary Shares') to the Vendors.

·     Additional milestone based, conditional consideration, as summarised below, which could lead to an aggregate consideration of AUD$10.1m (£5.8m) (cash and shares) based on Savannah's closing share price on 24 May 2017.

 

 

Savannah's CEO, David Archer said: "This transaction provides Savannah with a unique opportunity to secure what we believe to be one of the most advanced lithium mining concessions in Europe, in a low-cost and stable political environment.  With an approved Mining Plan, Environmental Impact Assessment, Mining Licence and the potential to produce high grade lithium product, we believe the Mina do Barroso prospect could transform the European lithium / Electric Vehicle ('EV') industry by becoming the first producer of battery quality lithium in Europe.

 

"Mainland Europe currently consumes around 25% of the world's lithium and is an early adopter of EVs and battery storage solutions.  With battery production by major European manufacturers rapidly expanding, any potential local supplies from mainland Europe are being keenly sought and we believe the Mina do Barroso, together with our enlarged portfolio of lithium assets in Portugal, is ideally situated to address this strategic need.  Work is now underway to define a JORC resource at Mina do Barroso so that we may be in a position to make a development decision by the end of 2018.  This is undoubtedly a highly strategic and valuable growth opportunity for Savannah."

 

FURTHER INFORMATION

 

Savannah is acquiring a 75% interest in actual and contingent assets spread over four project areas with over 1,018km2 of tenure including: one granted mining concession (5.42km2), and nine pending exploration licence applications (the 'Projects').

 

Of the 1,018km2 Project area relating to the pending applications: 348km2 is on track for government approval and 670km2 is currently subject in part to overlapping exploration licence applications from third parties.

 

1) TECHNICAL INFORMATION ON THE PROJECTS

The advanced nature of the Mina do Barroso prospect, with an approved ML, MP and EIA means that with the definition of a JORC resource, a development decision could potentially be made by the end of 2018.  Mina do Barroso is part of the enlarged Covas do Barroso Project area.

Figure 1. Mining Licence Details

Region

Concession Name

Area

Expiry*

Covas do Barroso

C-100: 'Mina do Barroso'

5.42km2

12/05/2036

 

*Mining licence may benefit from a contract extension of 20 years at agreement of licence holder and Portuguese State.

 

Figure 2. Exploration Licence Applications Details

Region

Tenement Name

Area (km2)

Approximate Overlap by Other Applications (km2)

% Economic Interest Held by Slipstream Resources Unipessoal Lda

Covas do Barroso

Vilar

99

79

100%

Beça

21

Nil

100%

Reigoso

83

Nil

100%

Serra D'Arga

Calvelo

73

Nil

100%

Ponte de Lima

294

147

100%

Caminha

193

174

100%

Barca D'Arga

Meda

171

Nil

60%

Almendra

57

17

100%

Tâmega

Caramos

29  

26

100%

 

Figure 3. Country Map for the Projects - see PDF link

 

Figure 4. Location of the Projects - see PDF link

 

(i) Covas do Barroso Project

The presence of swarms of known 'lithium-bearing pegmatite dykes' has made this region a key focus for Savannah. The initial emphasis is on the Covas do Barroso area, which includes:

 

1)    the advanced 'Mina do Barroso' prospect with approved mining licence;

2)    the highly prospective Vilar (223km--2), and Beca prospects; and

3)    Reigoso which contains extensive un-explored spodumene bearing pegmatites.

 

The Barroso-Alvão region is characterised by the presence of a large field of several dozen pegmatite and aplite-pegmatite dykes of granitic composition.  Pegmatite dykes are mainly intruded in the granitic rocks of the region whilst aplite-pegmatite dykes are hosted by low- to medium-grade metasedimentary rocks of Silurian age that are strongly deformed (B. CHAROY et al.,1992).  The thickness of these dykes ranges from less than 1m up to 70m with the primary focus on lithium rich spodumene-rich aplite-pegmatite dykes.

 

Mina Do Barroso Prospect

Based on the work Savannah has undertaken to date, the Directors believe that the Mina Do Barroso prospect is arguably one of the most advanced lithium development projects in Europe with the potential to be fast tracked into production.

 

Past Exploration

Previous work on the prospect has focused on the production of ceramics and not lithium. As a result, the lithium work is largely unstructured but points to significant potential in a relatively underexplored series of pegmatites that have not had their strike, width or down dip potential defined. Work has included reconnaissance geological mapping, trenching, drilling and preliminary metallurgical test work.

 

Geology and Rock Chip Sampling

The Mina do Barroso Prospect comprises a series of well-defined pegmatites up to 50m in width and 400m in length, with past exploration confirming the presence of lithium within the pegmatites. A series of high priority opportunities have been defined within the prospect area (Savannah Rock Chips Appendix 2A, Vendor Rock Chips Appendix 2B), these include:

 

NOA

Rock chip sampling by Savannah during April 2017 including continuous rock chips and scattered rock chips average 1.5% Li₂O. The continuous rock chipping outlined significant widths of mineralisation including:

-      30m at 1.18% Li2O in NOA 1

-      30m at 1.35% Li2O in NOA 2

-      35m at 1.67% Li2O in NOA 3

 

This sampling confirms the prospectivity of the NOA area with a series of pegmatites in the area which require further detailed and systematic exploration.

 

 

Reservatorio

Rock chip sampling by Savannah during April 2017 targeting spodumene bearing pegmatites has confirm the prospectivity of the Reservatorio Lens as the samples ranged from 0.87% Li2O to 2.7% Li2O and averaged 1.6% Li2O. Significant potential exists in the Reservatorio area with the potential for the pegmatite to extend over 400m in strike length.

 

Grandao

The Grandao area contains some of the most extensive pegmatite outcrop in the Mina do Barroso prospect area. Recent rock chip sampling by Savannah in April 2017 in the area returned results of 1.41% Li₂O to 2.07% Li₂O with an average 1.79% Li2O, the highest average grade for any of the Mina do Barroso aplo-pegmatites. However, it should be noted that there is only limited sampling to date and further work is required to determine the potential of the area.

 

Figure 5. Two zones of pegmatites within the metasedimentary sequence in the Minas do Barroso area - see PDF link

 

 

Figure 6. Below Left: Coarse-grained Lithium bearing pegmatites from the Mina do Barroso tenement.

Below Right: Close-up of coarse-grained spodumene from the Mina do Barroso tenement - see PDF link

 

Figure 7. Mina Do Barroso Prospect exploration results summary map - see PDF link

 

Trenching

A programme of 26 trenches was completed during 2002 ranging from 10m to 125m in length has identified a series of pegmatites ranging from 10-50m in width and up to 400m in length. The trenching was focused on identifying the pegmatites and testing the near surface material for ceramics properties, no lithium sampling was completed.

 

Figure 8. 2002 trenching being conducted - see PDF link

 

Drilling

Exploration work by past explorers has included a series of shallow drill holes (115 holes ranging from 7m to 84m in depth, with 75 holes confirmed to contain anomalous lithium) targeting near surface ceramic material (refer to Appendix 1).  Lithium analysis has highlighted significant anomalies including:

 

·     10m at 1.1% Li2O from surface in CB2 (EOH)

·     19m at 1.03% Li2O from 21m in RES01C

·     7m at 1.22% Li2O from surface in CB2 (EOH)

·     8.5 at 1% Li2O from 2m RES06 (EOH)

·     16m at 1.35% Li2O from surface in GRA05

·     14m at 1.04% Li2O from surface in RES07

·     17m at 1% Li2O from 7m GRA15

·     32m at 1.16% Li2O from 20m in RES019

·     8m at 1.43% Li2O from 32m in GRA028

·     11m at 1.1% Li2O from 43m in RES023

·     22m at 1.1% Li2O from 3m in NOA01 (EOH)

·     12m at 1.6% Li2O from 1m in RES030

·     15m at 1% Li2O from 7m in NOA13

·     12m at 1.22% Li2O from 16m in SAC01 (EOH)

·     10m at 1.5% Li2O from 2m in RES01 (EOH)

·     13m at 1.24% Li2O from surface in SP2(EOH)

 

Note: Intercepts calculated using a 0.7% Li2O cut-off with no more than 1m of internal dilution and a minimum mineralised width of 7m and an average grade of over 1% Li2O.

 

Preliminary Metallurgy

Initial preliminary metallurgical test work has been completed by past explorers which indicates that a clean, high quality spodumene product (over 6% Li2O) can be produced from the mineralised rock. The mineralisation at Mina do Barroso compares very favourably to the mineralisation at the Pilgangoora deposits of both Altura and Pilbara Minerals in Australia, and a simple comparison is provided below.

·     Altura, Pilgangoora: Resource Grade 1.15% Li2O, 1.7% Fe2O3; concentrate grade >6% Li2O

·     Pilbara Minerals, Pilgangoora: Resource Grade 1.29%Li2O, 1.19% Fe2O3; concentrate grade >6% Li2O

·     Mina do Barroso: Mineralisation Grade approximately 1.1% Li2O, 0.5�2O3; concentrate grade >6%Li2O

 

Approved 30 Year Mining Licence, Mine Plan and Environmental Impact Assessment

One of the significant advantages of the Mina do Barroso project is the approved Environmental Impact Assessment and Mine Plan to remove approximately 7Mt of lithium, quartz and feldspar from seven pegmatites within the approved mining licence. The term of the current licence is 30 years: commencing in 2006 and expiring in 2036.

 

The approvals would need to be modified for the extraction of additional material and to build a plant specific to lithium processing, with this process expected to take in the order of 6-8 months as the changes are an amendment to the existing approvals.

 

 

Reigoso Prospect

Field reconnaissance at the Reigoso Prospect highlighted an area of at least, 3 x 1.5km with many outcrops of large pegmatites rich in coarse spodumene. The larger pegmatites seem to be sub-horizontal "sills", indicating that they may have large volumes of pegmatite near surface following the down dip extension of the bodies. The main body seems to be quite extensive with at least one of the bodies with the potential to be at over 50m width and 500m in strike at surface with many other smaller pegmatite bodies. Detailed mapping and sampling of the area is now required to determine the potential of the area.

 

Figure 9. Reigoso main outcropping pegmatite - see PDF link

 

Figure 10. Reigoso Prospect, massive spodumene crystals up to 1m in size - see PDF link

 

(iii) Serra d'Arga Project

Savannah has pegged three tenements in the Serra d'Arga area including Calvelo, Ponte de Lima and Caminha. The Serra d'Arga project area covers a swarm of sills associated with the evolution of the diapiric Serra d'Arga granite. The sills exhibit complex associations of lithium minerals.

 

The spodumene-bearing bodies of aplite and pegmatite can occur intra-granitic, but are mainly found beyond the pluton. In the coastal area north of Viana do Castelo, the bodies of aplite-pegmatite are enclosed in well-exposed metasedimentary host rocks where spodumene may account for up to 20% of the volume of the bodies, and crystals may attain 30cm in length (Gomes & Nunes 1990, Gomes 1992).

 

The modal proportion of petalite attains 15% in some bodies in the Formigoso area. Some bodies of homogeneous aplite and pegmatite approach 8,000ppm lithium, contain disseminated spodumene-petalite, and lepidolite-bearing pegmatites in the same field may exceed 12,000ppm lithium.

 

From this exploration, a large pegmatite (>80m) can be seen and the surface indications for W and E indicate that it has, at least, >400m length (see Figures 11 and 12). These bodies seem to be sub-horizontal, so they may have more volume of pegmatite near the surface, following the dip. The presence of feldspar is actually very rare and the percentage of spodumene in this body seems to be around 30 - 40%.

 

Figure 11. Outcropping spodumene bearing pegmatite in Caminha permit - see PDF link

 

Figure 12. Outcropping spodumene bearing pegmatite in Caminha permit - see PDF link

 

Figure 13. Serra D'Agra Project exploration results summary map - see PDF link

 

(iv) Barca d'Alva Project

The Almendra-Souto (AS) region is a high priority for lithium resources. Surrounded by highly evolved granitoids, it is a region with metalogenic potential, known by its Sn, W and lithium mineralisation. The region is well known for the presence of pegmatite-aplite veins with the lithium minerals lepidolite, spodumene and petalite (Gaspar 1997; Charoy & Noronha 1999). Savannah has pegged two tenements in the region, Meda and Almendra, covering a number of known swarms.

 

The Meda project surrounds a small mining lease that covers one of the larger veins of this pegmatite-aplite field (an open pit for the ceramic industry known as Bajoca mine). This vein has an extension of 700m, with variable thickness between a few metres to more than 30m. There are many other lithium occurrences in the area but to date they have been largely explored for ceramic mate rial with little exploration directed toward the supply of lithium carbonate for the battery industry.

 

(v) Tâmega Project

The area contains numerous pegmatite-aplite veins and rare-element-rich granites. Lithium minerals are dominated by layered petalite, spodumene and montebraisite, hosted in NW-trending aplite-pegmatites that surround a leucogranite. Reserves of lithium as spodumene were mined from the Vieiros tin mines 10km to the NW.  Slipstream has pegged the Caramos tenement.

 

Portuguese Operating Partner

 

Savannah has formed a strong working and business relationship in Portugal with Mineralia Minas, Geotecnia e Construcoes, Lda. ('Mineralia').  Mineralia is a geological and engineering firm that has commissioned over 11 quarries and mines in Portugal and has been involved in the local mining industry for over 50 years.

 

Current Valuation

The Projects are not currently capitalised in the financial accounts of the Vendors but costs incurred in relation to previous exploration programmes have been expensed both by the Vendors and by the previous owners of the Projects.

 

The Company commissioned an independent valuation report utilising the Kilburn Geosciences Rating Method indicating that the value of the Covas do Barroso tenements is between USD851,000 - USD2,240,000 in their current state.  In addition, the Company understands that historical expenditure by the prior owner of the Projects prior to Slipstream's ownership (mapping, assaying, drill testing, metallurgical testwork, market studies, and activities associated in applying for and being granted mining licenses and associated environmental and technical studies) was significantly in excess of Slipstream's costs.

 

2) KEY COMMERCIAL TERMS OF THE TRANSACTION

 

Savannah has acquired the Portuguese assets through the purchase of an effective 75% shareholding in Slipstream Resources Unipessoal Lda (the registered holder of the Mina do Barroso Mining Licence and the registered applicant for the above mentioned nine pending exploration licence applications).

 

Savannah acquired its equity interest in Slipstream Resources Unipessoal Lda through a transaction with a consortium of vendors led by Slipstream Resources Investments Pty Ltd ('Vendors').

 

Savannah and the Vendors will form a joint-venture in relation to both the Mina do Barroso Mining Licence and the remaining exploration licence applications, with Savannah taking 75% controlling equity interest in Slipstream Resources Unipessoal Lda. Savannah shall fund the operations of the joint venture up until a decision to mine is made, after which funding of the joint venture shall be shared pro-rata to respective equity interests.

 

Consideration

The initial consideration for the Transaction is a mixture of cash and the issue of Ordinary Shares to the Vendors, being AUD $1.0m purchase price and the issue of 20,000,000 Ordinary Shares at the current market price at the time of issue. These 20,000,000 Ordinary Shares (to be held in escrow for six months from the date of issue) will be issued to the Vendors shortly and a further announcement will be made at that time.

 

Deferred consideration of AUD$1.5m cash and a further 20,000,000 Ordinary Shares of the Company (to be subject to orderly market provisions for six months) has also been agreed to be paid to the Vendors upon the announcement by Savannah of a JORC-compliant Indicated Mineral Resource of 7.5 million tonnes at no less than 1% Li2O ('Milestone 1').

 

In addition, upon the announcement by Savannah of a further JORC-compliant Indicated Mineral Resource of a minimum of 7.5m tonnes at no less than 1% lithium; final consideration of AUD$1.5m cash and an additional 20,000,000 Ordinary Shares (to be subject to orderly market provisions for six months) be paid to the Vendors ('Milestone 2') (together with Milestone 1, 'the Milestones').

 

Assuming the Milestones are achieved, the total consideration for the Transaction could equate to an aggregate value of AUD$10.1m (£5.8m) based on the deferred consideration being calculated using the Company's closing share price on 24 May 2017. The consideration is heavily geared towards the Vendors' receipt of Ordinary Shares in Savannah, which will align the respective parties Joint Venture interests and therefore further improve business cooperation in respect of the Projects.

 

A majority of the consideration paid pursuant to the terms of the Transaction is subject to the successful development of the Project(s) as a result of the Milestones (outlined above), thus minimising initial cost of the Transaction and linking future consideration to a successful Joint Venture and the increase in value in the Project(s).

 

Mr Dale Ferguson

Mr Dale Ferguson, the Company's Technical Director, is also a Director of and minority shareholder in Slipstream Resources Investments Pty Ltd (one of the Vendors).

 

As such, Dale Ferguson has been excluded from any of Savannah's commercial negotiations with the Vendors and is precluded from voting on any matters relating to the sale and purchase agreement between Savannah and the Vendors.

 

Furthermore, as part of the technical due diligence process, Savannah engaged Wardell Armstrong International to prepare a technical report on the Projects.

 

3) DEMAND FOR LITHIUM

 

The Directors believe there is a revolution underway in how we generate and use energy. As such, the demand for materials such as lithium, which is a key component in new energy storage solutions, is rising at record rates. 

 

Respected US group, Morningstar Institutional Equity Research, made the following comments in November 2016: "Accelerating electric vehicle adoption will drive global lithium demand far beyond consensus expectations, affording attractive investment opportunities for long-term investors. We expect EV penetration to surge from less than 1% of global auto sales in 2015 to 10% in 2025, well ahead of the market view for only 4%-6% penetration by 2025. We forecast 16% annual lithium demand growth over the next decade, faster than we've witnessed for almost any major commodity over the past century."

 

Figure 14. Projected increasing lithium demand, Morningstar Institutional research Nov 2016 - see PDF link

 

Highlight Issued of the European Lithium Market:

 

·     apart from small Iberian production for local ceramics/glass use, the EU has no internal lithium supply;

·     the EU is a major importer of lithium consuming 24% of global market (second only to China); and

·     lithium processing sites from imported material in several EU countries.

 

Most of the large car manufacturers are launching models that integrate lithium ion battery technology whilst Tesla, Inc. is aiming to bring electric vehicles to the mass market by lowering costs and entering into battery manufacture with their 'Gigfactory' in Nevada which will initially produce 500,000 units per annum.

 

It will invariably take time for leading car manufacturers and society to adopt electric vehicles to a point which will impact the lithium market. However, there is growing concern by governments to take action to reduce global warming and pollution of cities by use of fossil fuels and the adoption of electric vehicles can play a significant role. The market for lithium ion batteries has grown markedly following the adoption by consumer technologies - and car batteries require substantially more lithium to power electric vehicles.

 

Increased use of lithium ion batteries for heavy duty power storage particularly linked to sources of renewable energy off-grid was also projected by Roskill. The increasing use of lithium-aluminium alloys in aircraft manufacture to lighten weight and improve fuel efficiency has good growth potential.

 

In global terms, China is the largest consumer of lithium - providing approximately 35% of the market's consumption, with Europe as the second largest consumer (24% consumption), and thereby followed by Japan and South Korea.

 

Competent Person Statement

 

The information in this document that relates to technical information is based upon information compiled by Mr Dale Ferguson, Technical Director of Savannah Resources Limited. Mr Ferguson is a Member of the Australian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" ('JORC Code'). Mr Ferguson consents to the inclusion in the report of the matters based upon the information in the form and context in which it appears.

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

**ENDS**

 

For further information please visit www.savannahresources.com or contact:

 

David Archer

Savannah Resources plc

Tel: 44 20 7117 2489

David Hignell / Gerry Beaney (Nominated Adviser)

Northland Capital Partners Ltd

Tel: 44 20 3861 6625

Jon Belliss / Elliot Hance

(Corporate Broker)

Beaufort Securities Ltd

Tel: 44 20 7382 8300

Charlotte Page /

Lottie Brocklehurst

St Brides Partners Ltd

Tel: 44 20 7236 1177

 

Notes

Savannah Resources Plc (AIM: SAV) is a growth oriented, multi-commodity, mineral development company.

 

Mozambique

Savannah operates the Mutamba heavy mineral sands project in Mozambique in collaboration with Rio Tinto, and can earn a 51% interest in the related Consortium, which has an established initial Indicated and Inferred Mineral Resource Estimate of 3.5 billion tonnes at 3.8% THM over the Jangamo and Dongane deposits.  Under the terms of the Consortium Agreement with Rio Tinto, upon delivery by Savannah of the following Savannah will earn the corresponding interest in the Mutamba Project: scoping study - 20%; pre-feasibility study - 35%; feasibility study - 51%. Additionally, the Consortium Agreement includes an offtake agreement on commercial terms for the sale of 100% of production to Rio Tinto (or an affiliate).

 

Oman

Savannah has interests in two copper blocks in the highly prospective Semail Ophiolite Belt in Oman.  The projects, which have an Indicated and Inferred Mineral Resource of 1.7Mt @ 2.2% copper and high-grade intercepts of up to 56.35m at 6.21% Cu, with gold credits, provide Savannah with an excellent opportunity to potentially evolve into a mid-tier copper and gold producer in a relatively short time frame. Together with its Omani partners, Savannah aims to outline further mineral resources to provide the critical mass for a central operating plant to develop the deposits and in December 2015 outlined exploration targets of between 10,700,000 and 29,250,000 tonnes grading between 1.4% and 2.4% copper.

 

Portugal

Savannah holds a 75% interest one mining licence and nine prospective applications for the exploration and development of lithium, covering an area in excess of 1,018km2 in northern Portugal.  This includes the highly strategic Mina do Barroso prospect, which with an approved Mining Plan ('MP'), Environmental Impact Assessment ('EIA') and a 30-year mining concession/Mining Licence ('ML'), means that with a defined JORC resource a development decision could be made as early as Q4 2018.

 

Finland

Savannah has Reservation Permits over two new lithium projects, Somero and Erajarvi, covering an area of 159km² in Finland.  Savannah holds a 100% interest in these projects through its Finnish subsidiary Finkallio Oy.  Geological mapping by the Finnish Government within the project areas has highlighted the presence of lithium minerals spodumene, lepidolite and petalite with the Government also identifying Somero and Erajarvi as one of the most prospective areas to discover lithium deposits in Finland.  Savannah plans to initiate an exploration programme including data compilation, geological mapping and surface sampling with the aim of generating drill ready targets during 2016.

 

 

Appendix 1. List of historical drill Holes completed by past explorers (Datum: UTM36, all holes were vertical)

 

Refernce

SISTEMA HAYFORD-GAUSS, DATUM 73

Altitude

Depth

Inclination

Azimuth

CAM01

216985.991

28809.167

556.28

10

-90

0

CAM02

216980.717

28810.585

555.927

19

-90

0

CAM03

216899.117

28858.168

553.652

13

-90

0

CAM04

216972.627

28765.313

549.921

13

-90

0

CAM05

216898.638

28749.455

551.492

13

-90

0

CAM06

216857.849

28762.144

550.307

19

-90

0

CAM07

216774.075

28788.118

551.366

16

-90

0

CAM08

216769.360

28786.860

550.541

13

-90

0

CAM09

216864.780

28834.347

561.683

16

-90

0

CAM10

216918.505

28808.607

560.508

13

-90

0

CAM11

216921.391

28802.941

560.446

13

-90

0

CB1

216686.570

26416.650

Unknown

13

-90

0

CB2

216677.790

26394.560

Unknown

16

-90

0

CB3

216704.650

26409.830

Unknown

7

-90

0

CB4

216703.600

26414.830

Unknown

10

-90

0

GRA01

216533.654

29735.557

590.042

13

-90

0

GRA01C

216502.759

29677.151

584.881

49.25

-90

0

GRA02

216511.539

29701.783

589.5

25

-60

50

GRA02C

216554.377

29732.927

584.423

50.65

-90

0

GRA03

216492.443

29634.906

576.105

10

-90

0

GRA04

216488.371

29704.274

585.997

16

-90

0

GRA05

216433.876

29800.609

572.372

25

-90

0

GRA06

216393.432

29780.665

570.073

25

-60

135

GRA07

216421.455

29833.988

577.062

25

-90

0

GRA08

216271.482

29686.967

571.708

25

-90

0

GRA09

216301.008

29689.524

572.07

22

-90

0

GRA10

216328.960

29769.273

595.593

25

-90

0

GRA11

216327.260

29772.162

596.482

25

-60

55

GRA12

216312.061

29826.885

597.697

16

-90

0

GRA13

216127.218

29673.722

602.599

25

-90

0

GRA14

216159.632

29594.982

589.047

19

-90

0

GRA15

216465.018

29758.783

578.356

31

-90

0

GRA16

216496.330

29747.830

589.487

49

-90

0

GRA17

216574.147

29734.825

581.175

37

-90

0

GRA18

216532.309

29800.724

588.61

28

-90

0

GRA19

216593.933

29815.495

587.575

22

-90

0

GRA20

216609.605

29745.825

571.714

22

-90

0

GRA21

216630.887

29695.654

563.183

40

-90

0

GRA22

216625.439

29684.962

564.397

55

-90

0

GRA23

216565.915

29653.589

564.279

37

-90

0

GRA24

216521.111

29593.644

563.098

25

-90

0

GRA25

216548.923

29589.928

558.558

25

-90

0

GRA26

216472.028

29625.394

568.555

52

-90

0

GRA27

216560.015

29718.304

581.613

64

-90

0

GRA28

216543.872

29695.451

581.168

52

-90

0

GRA29

216593.843

29673.597

564.679

70

-90

0

GRA30

216649.53

29757.155

563.571

31

-90

0

NOA01

217927.423

27050.364

689.929

25

-90

0

NOA01C

217949.379

26964.205

688.855

25.4

-70

180

NOA02

217922.289

26989.187

696.528

10

-90

0

NOA03

217935.442

26945.09

695.919

10

-90

0

NOA04

217930.474

26934.224

695.487

10

-90

0

NOA05

218135.9

26802.348

682.899

10

-90

0

NOA06

218130.538

26832.993

687.097

13

-90

0

NOA07

218151.273

26784.416

680.969

13

-90

0

NOA08

218140.089

26796.964

683.368

13

-90

0

NOA09

218127.363

26791.088

685.069

13

-90

0

NOA10

218051.072

26758.72

688.037

16

-90

0

NOA11

217944.088

27042.307

689.131

25

-70

190

NOA12

217948.301

26989.999

689.744

31

-70

180

NOA13

217957.925

26948.318

687.655

28

-70

180

NOA14

217978.795

26916.067

682.408

37

-70

160

NOA15

218014.671

26962.206

672.857

31

-60

180

NOA16

217980.807

27028.687

680.501

31

-70

170

NOA17

217981.494

26986.163

680.54

19

-70

170

NOA18

217990.891

26941.089

680.279

34

-70

170

PGR01

217389.547

28213.799

536.804

22

-90

0

PGR02

217419.387

28139.954

530.975

16

-90

0

PGR03

217400.538

28130.008

532.492

16

-90

0

PGR04

217441.822

28117.918

516.136

16

-90

0

PGR05

217414.089

28082.582

522.014

13

-90

0

PGR06

217377.778

28243.222

538.141

13

-90

0

PGR09

217422.249

28211.18

528.728

22

-90

0

PGRP01

217325.558

27996.046

494.211

22

-90

0

RES01

217666.695

27797.776

585.285

19

-90

0

RES01C

217637.252

27555.293

598.395

52.45

-90

0

RES02

217698.375

27763.957

592.658

16

-60

120

RES02C

217629.294

27449.518

595.475

15.95

-90

0

RES03

217692.524

27760.329

594.009

16

-90

0

RES04

217691.466

27760.133

593.957

13

-60

120

RES05

217346.668

27516.754

573.76

22

-60

95

RES06

217308.787

27566.463

561.046

16

-90

0

RES07

217482.392

27404.824

597.352

22

-90

0

RES08

217599.126

27540.016

584.538

10

-90

0

RES09

217609.099

27487.610

587.46

13

-90

0

RES10

217592.711

27453.538

591.754

19

-90

0

RES11

217534.765

27472.747

591.915

10

-90

0

RES12

217553.003

27388.772

605.365

10

-90

0

RES13

217651.212

27428.685

603.281

10

-90

0

RES14

217644.648

27488.622

596.448

10

-90

0

RES15

217624.603

27538.707

593.255

25

-90

0

RES16

217656.975

27677.694

594.743

22

-90

0

RES17

217506.996

27455.964

590.375

19

-90

0

RES18

217526.417

27414.684

600.389

19

-90

0

RES19

217673.914

27598.770

607.177

61

-90

0

RES20

217658.092

27535.668

603.914

70

-90

0

RES21

217687.398

27688.169

600.181

46

-90

0

RES22

217698.264

27454.664

611.802

40

-90

0

RES23

217689.289

27528.710

611.428

84

-90

0

RES24

217651.288

27476.240

596.846

55

-90

0

RES30

217688.450

27754.200

Unknown

22

-90

0

RES31

217622.420

27656.500

Unknown

22

-90

0

SAC 1

216735.36

26374.39

Unknown

28

-90

0

SAC 2

216706.18

26388.29

Unknown

12

-90

0

SAC 3

216764.55

26436.96

Unknown

6

-90

0

SAC 5

217350.73

25646.71

Unknown

6

-90

0

SAC 6

217417.24

25654.78

Unknown

8

-90

0

SAC 7

218052.79

25130.53

Unknown

8

-90

0

SGA 3

213701.79

27052.94

Unknown

10

-90

0

SGA 4

213745.87

27052.22

Unknown

9

-90

0

SSP 2

214931.63

29274.05

Unknown

Unknown

-90

0

SSP 3

214961.86

29273.24

Unknown

Unknown

-90

0

SSP 4

215399.65

29199.4

Unknown

Unknown

-90

0

SP1

215558.180

29397.320

Unknown

10

-90

0

SP2

215429.860

29326.010

Unknown

19

-90

0

 

 

 

Appendix 2A. Rock Chip Sampling completed by Savannah during April 2017

 

PROJECT: Mina do Barroso

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UTM 29

WGS 84

 

 

Li

Li

Li2O

Ta

Ta2O5

Nb

Nb2O5

Sn

Be

Cs

 

SAMPLE ID

Easting

Northing

Length (m)

Field Notes

ppm

%

%

%

ppm

ppm

ppm

ppm

ppm

ppm

ppm

 

NOA 1A

599135

4609422

25

Rim of old open-cut - centre point

5030

0.503

1.07

1.07

25

31

38

55

43

134

30

 

NOA 1-01

599148

4609433

0 to 5

5m x 5m block - centre point

1310

0.131

0.28

 

52

64

71

102

631

147

115

 

NOA 1-02

599146

4609248

5 to 10

5m x 5m block - centre point

3280

0.328

0.70

 

31

37

45

65

187

119

77

 

NOA 1-03

599145

4609243

10 to 15

5m x 5m block - centre point

9660

0.966

2.06

1.18

17

21

29

42

30

94

21

N

NOA 1-04

599146

4609418

15 to 20

5m x 5m block - centre point

7830

0.783

1.67

5

7

15

21

27

65

35

O

NOA 1-05

599146

4609414

20 to 25

5m x 5m block - centre point

6910

0.691

1.48

11

14

24

34

31

82

36

A

NOA 1-06

599150

4609408

25 to 30

5m x 5m block - centre point

4120

0.412

0.88

17

20

41

59

39

142

25

 

NOA 2-01

599173

4609401

0 to 5

5m x 5m block - centre point

4550

0.455

0.97

7

9

18

25

26

94

29

L

NOA 2-02

599173

4609405

5 to 10

5m x 5m block - centre point

8860

0.886

1.89

6

7

17

24

29

79

18

E

NOA 2-03

599174

4609410

10 to 15

5m x 5m block - centre point

6620

0.662

1.41

9

11

18

26

30

88

18

N

NOA 2-04

599175

4609414

15 to 20

5m x 5m block - centre point

4190

0.419

0.89

15

18

39

56

33

148

24

S

NOA 2-05

599175

4609420

20 to 25

5m x 5m block - centre point

9310

0.931

1.99

15

18

27

39

37

110

39

 

NOA 2-06

599176

4609425

25 to 30

5m x 5m block - centre point

4330

0.433

0.92

18

21

36

52

46

101

29

1

NOA 3-01

599200

4609427

0 to 5

5m x 5m block - centre point

5520

0.552

1.18

13

16

23

32

102

55

28

 

NOA 3-02

599207

4609420

5 to 10

5m x 5m block - centre point

6100

0.61

1.30

 

10

13

23

33

39

105

17

 

NOA 3-03

599200

4609423

10 to 15

5m x 5m block - centre point

 

 

 

 

 

 

 

 

 

 

 

 

NOA 3-04

599201

4609418

15 to 20

5m x 5m block - centre point

4930

0.493

1.05

1.67

29

35

42

60

48

127

27

 

NOA 3-05

599200

4609413

20 to 25

5m x 5m block - centre point

9420

0.942

2.01

 

8

10

18

26

25

95

17

 

NOA 3-06

599199

4609409

25 to 30

5m x 5m block - centre point

14400

1.44

3.07

 

11

13

17

24

23

52

11

 

NOA 3-07

599193

4609406

30 to 35

5m x 5m block - centre point

6560

0.656

1.40

 

23

28

47

68

37

150

20

 

NOA 4

599229

4609414

0 to 5

5m circle - radius

8710

0.871

1.86

1.85

14

17

26

37

32

99

22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOA

NOA 5

598965

4609650

-

Random chips - 10m radius

9910

0.991

2.12

14

17

28

39

20

85

17

LENS

NOA 6

599046

4609677

-

Scattered o/c - 25m length

5540

0.554

1.18

8

9

19

27

17

93

12

3

NOA 7

599059

4609649

-

Random chips - 10m radius

4840

0.484

1.03

22

27

35

49

46

117

18

 

NOA 8

598995

4609602

-

Random chips - 10m radius

7060

0.706

1.51

 

9

11

20

29

31

75

15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RES 1-01

600016

4609146

0 to 20

20m x 10m block

8100

0.81

1.73

 

11

14

23

32

30

89

20

 

RES 1-02

600000

4609163

20 to 40

20m x 10m block

6750

0.675

1.44

 

7

9

20

28

45

62

28

 

RES 1-03

599983

4609175

40 to 60

20m x 10m block

8310

0.831

1.77

 

7

9

21

30

39

58

17

 

RES 1-04

599946

4609185

60 to 80

20m x 10m block

7780

0.778

1.66

1.55

11

14

20

29

18

36

13

 

RES 1-05

599601

4608962

-

Random chips - 20m radius

2740

0.274

0.58

 

10

12

20

28

42

112

53

 

RES 1-06

599616

4608870

-

Random chips - 20m radius

8250

0.825

1.76

 

11

13

23

33

44

90

33

 

RES 1-07

599727

4608836

-

Random chips - 10m radius

8760

0.876

1.87

 

18

22

33

47

101

84

18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GRA 1

601934

4608026

-

Chips round top of hill (Peg 1)

4060

0.406

0.87

 

12

15

23

33

57

84

53

 

GRA 2

602008

4607944

-

Site of Bh 005 (Peg 2)

8850

0.885

1.89

 

16

19

29

42

43

98

43

 

GRA 3

601915

4607767

-

Chips on isolated outcrop (Peg 2)

9710

0.971

2.07

1.79

17

21

23

33

55

98

68

 

GRA 4

601999

4607835

-

Chips on top of hill (Peg 2)

6620

0.662

1.41

 

6

8

14

19

33

50

56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2948

599097

4609467

-

Spot sample - top large dump

5280

0.528

1.13

 

17

20

27

39

61

121

26

 

2949

 

 

-

Spot sample - regular intervals (~3m)

 

 

 

 

 

 

 

 

 

 

 

 

2950

 

 

-

Spot sample - regular intervals (~3m)

5370

0.537

1.15

 

17

20

27

38

62

111

24

D

2951

 

 

-

Spot sample - regular intervals (~3m)

5590

0.559

1.19

20

25

31

44

71

130

27

U

2952

 

 

-

Spot sample - regular intervals (~3m)

5440

0.544

1.16

24

29

35

50

137

138

26

M

2953

 

 

-

Spot sample - regular intervals (~3m)

5450

0.545

1.16

19

23

35

50

32

137

18

P

2954

 

 

-

Spot sample - regular intervals (~3m)

3930

0.393

0.84

21

26

37

52

37

161

19

 

2955

 

 

-

Spot sample - regular intervals (~3m)

4040

0.404

0.86

 

21

25

37

54

36

139

18

 

2956

 

 

-

Spot sample - regular intervals (~3m)

5050

0.505

1.08

 

22

26

40

57

35

141

20

 

2957

 

 

-

Spot sample - regular intervals (~3m)

5240

0.524

1.12

 

25

31

43

61

42

119

22

 

2958

599072

4609479

-

Spot sample (coarse material)

4200

0.42

0.90

 

21

26

35

50

33

136

19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOA 9

 

 

 

 

7060

0.706

1.51

 

9

11

20

29

31

75

15

 

 

Appendix 2B. Rock Chip Sampling completed by Vendor during 2016

Project

Sample No

Datum

Co-ord Type

Easting

Northing

Comments

Li PPM

Li2O %

Imeryss

IMY001

WGS84

UTM

598599

4608155

Pegmatite near CB2

7500

1.61

Imeryss

IMY002

WGS84

UTM

598622

4608179

Drill spoils from aroud CB3

3100

0.67

Imeryss

IMY003

WGS84

UTM

598621

4608182

Pegmatite near CB3

5810

1.25

Imeryss

IMY004

WGS84

UTM

597849

4608834

Pegmatite drilled by SAC6

5230

1.12

Imeryss

IMY005

WGS84

UTM

597845

4608859

Pegmatite

2450

0.53

Imeryss

IMY006

WGS84

UTM

599030

4609608

Large pegmatite near pit

8050

1.73

Imeryss

IMY007

WGS84

UTM

598963

4609533

Pegmatite near mine

2600

0.56

Imeryss

IMY008

WGS84

UTM

598952

4609538

Pegmatite from small pit

3590

0.77

Imeryss

IMY009

WGS84

UTM

599088

4609431

Pegmatite from large pit

1920

0.41

Imeryss

IMY010

WGS84

UTM

599110

4609434

Pegmatite from large pit

5970

1.28

Imeryss

IMY011

WGS84

UTM

599160

4609430

Drill spoils from aroud NOA01C

5430

1.17

Imeryss

IMY012

WGS84

UTM

599777

4609113

Pegmatite

3290

0.71

Imeryss

IMY013

WGS84

UTM

599956

4609180

Pegmatite near colar of RES004

14500

3.12

Imeryss

IMY014

WGS84

UTM

601593

4607017

Pegmatite near colar of SP001

 

0.0000

Imeryss

IMY015

WGS84

UTM

601593

4607030

Pegmatite

137.5

0.03

Imeryss

IMY016

WGS84

UTM

601553

4606948

Drill spoils from colar of SP002

1770

0.38

Imeryss

IMY017

WGS84

UTM

601547

4606941

Pegmatite

9970

2.14

Imeryss

IMY018

WGS84

UTM

601552

4606925

Pegmatite

7300

1.57

Imeryss

IMY019

WGS84

UTM

602012

4607834

Pegmatite near GRA006

7630

1.64

Imeryss

IMY020

WGS84

UTM

601999

4607840

Pegmatite

9140

1.97

Imeryss

IMY021

WGS84

UTM

601953

4608026

Pegmatite

2140

0.46

Imeryss

IMY022

WGS84

UTM

601963

4608033

Pegmatite

138.5

0.03

Imeryss

IMY023

WGS84

UTM

601932

4608083

Pegmatite

1340

0.29

Imeryss

IMY024

WGS84

UTM

601911

4608115

Pegmatite

295

0.06

Imeryss

IMY025

WGS84

UTM

601374

4606885

Pegmatite near SP2 and 3

4110

0.88

Imeryss

IMY026

WGS84

UTM

601390

4606889

Pegmatite near SP2 and 4

7500

1.61

 

Appendix 3. JORC 2012 Table 1

 

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria

JORC Code explanation

Commentary

Sampling techniques

·    Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

·      Information presented and referred to in this release relate to a combination of historical rock chip samples, bulk samples, channel sampling, RC drilling and diamond drilling sources from a combination of open sourced academic literature and private company information and recent rock chip sampling completed by both the vendor of the project and Savannah.

·      Key open file reports referenced include Barroso-Alvao Aplite-Pegmatite Field. Granitic Pegmatites: the state of the art - International Symposium. Field Trip Book; Lima, A and Noronha, F, 1999. Spodumene-Petalite-Eucryptite: Mutual relationships and pattern of alteration in Li-rich aplite-pegmatite dykes from northern Portugal The Canadian Mineralogist Vol. 39, pp. 729-746 (2001) Charoy, Noronha and Lima, 2010 The Crystal Chemistry of Spodumene in Some Granitic Aplite-Pegmatite Bodies of Northern Portugal. The Canadian Mineralogist. Vol. 32, pp 223-226. and Moura, S, Leal Gomes, C, and Lopes Nunes, J, 2010. Spatial analysis applied to the Barroso-Alvão rare-elements pegmatite field (Northern Portugal); David Barbose Da Silva, 2014

·      Reverse circulation (HQ size) and diamond drill (NQ size) samples were taken on either 1 intervals. Most holes were RC holes were drilled vertically and diamond holes angled at 60degree dip at various azimuths. RC samples were collected in large plastic bags from a cyclone then rifle split and a 2-3kg representative sample taken for analysis. Diamond samples were cut and sampled

 

·    Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

·      Drilling was conducted on a irregular spacing based on geological targets using RC and drilling technology, an industry standard drilling technique. Drilling rods are 3m or 6m long and 1 sample is taken for each rod interval.

·      Collar surveys are carried using hand held GPS with an accuracy to within 5m, and the z direction was determined by satellite derived elevation data and is accurate to less than a metre. 

 

·    Aspects of the determination of mineralisation that are Material to the Public Report.

·    In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

·      Lithium mineralisation is confined to the pegmatite bodies and is predominantly spodumene with petalite.

·      Down hole sampling is carried out at 1 or 2m intervals from which 3kg of pulverized material (RC) or 3kg of cut material (diamond) was pulverized to produce a 50g charge for assaying

 

Drilling techniques

·    Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

·       Diamond drilling with hole diameter approximately 81mm, and a drill rod diameter of approximately 75mm, all holes 60degrees inclined to geology which produced a full rock core for sampling. RC drilling at a diameter of 120mm is a form of reverse circulation drilling requiring annular drill rods. Compressed air is pumped down the outer tube and the sample is collected from the open face drilling bit and blown up the inner tube.

Drill sample recovery

·    Method of recording and assessing core and chip sample recoveries and results assessed.

 

·       Field assessment of sample volume. A theoretical dried sample mass was estimated to be within the range of 18 kg to 24 Kg, 70% of samples are within the expected range. Lower than average sample recovery is recorded only for the very top of the drill hole due to air and sample losses into the surrounding soil

 

·    Measures taken to maximise sample recovery and ensure representative nature of the samples.

·       In the case of diamond drilling, speeds and ground conditions were monitored to ensure good recoveries.

·       In the case of RC drilling sample weights were monitored to ensure samples were maximized. Samples were carefully loaded into a splitter and split in the same manner ensuring that the sample split to be sent to the assay laboratories were in the range of 2-3kg.

 

·    Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

·       No obvious releationships

 

Logging

·    Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

·    Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

·    The total length and percentage of the relevant intersections logged.

·       Historical RC drill logs show that all drill holes were logged in the field at the time of sampling. Each 1m sample interval was carefully homogenized and assessed for lithology, colour, grainsize, structure and mineralization.

·       The diamond drill core was logged onto paper to geological intervals and structural measurements taken where appropriate

·       Recent rock chip samples were geologically logged

 

Sub-sampling techniques and sample preparation

·    If core, whether cut or sawn and whether quarter, half or all core taken.

·    If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

·       Records show that the diamond drilling was cut in half and half the core taken for assaying.

·       Pictures and indicate that the RC samples were rifle split and sampled dry

 

·    For all sample types, the nature, quality and appropriateness of the sample preparation technique.

·       A review of the historical sample preparation method indicates that it was appropriate.

·       For recent rockchip sampling at least 2kg of representative rock material from a 2m radius around the sample point was collected 

 

·    Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

·       It is not clear from the historical records what practices were in place

·       For recent sampling 1 in 25 samples were duplicated in the field

 

 

·    Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

·       It is not clear from the historical records what practices were in place

·       Every effort was made to ensure that the samples were representative and not bias in anyway

 

·    Whether sample sizes are appropriate to the grain size of the material being sampled.

·       The 18-24kg sample of the rig, the 2-3kg rifled lab samples and the 50g charge is considered appropriate for the rock type.

·       A minimum sample size of 2kg was collected for recent rock chip sampling

Quality of assay data and laboratory tests

·    The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

·       Laboratory and procedures for historical sampling unknown

·       Fine crushing of rock chip and drill samples to 90% nominal -2mm

·       Split sample using a rotary splitter

·       Pulverize entire sample up to 85% passing 75 microns.

·       48 element 4 acid digest with ICP-AES/ICP-MS finish

·       REE's may not be totally soluble in this method.

 

·    For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

·       Not used.

 

·    Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

·       Unknown for historical samples

·       Standards and duplicates we used and we off acceptable levels of accuracy

Verification of sampling and assaying

·    The verification of significant intersections by either independent or alternative company personnel.

·       Unknown for historical samples

 

 

·    The use of twinned holes.

·       No drill holes appear to be twinned

 

·    Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

·      Most assays are Li2O occasionally they are Li assays and the conversion used was Li2O = Li x 2.153

 

·    Discuss any adjustment to assay data.

·       No adjustments are made to the assay data for the purposes of public reporting.

Location of data points

·    Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

·    Specification of the grid system used.

 

·    Quality and adequacy of topographic control.

·       The coordinate of each rockchip was taken at the time of collecting using a handheld GPS with an accuracy of 5m.

 

·       The grid system used is the Portuguese national ETRS89 - PT-TM06 datum.

·      Topographic accuracy was /- 5m

Data spacing and distribution

·    Data spacing for reporting of Exploration Results.

·    Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

·    Whether sample compositing has been applied.

·       Historical drilling was at irregular spacing and geological targets

·       Drill data is not currently at sufficient spacing to define a mineral resource.

 

·      Some samples were composited on a 2m basis based on geological criteria

Orientation of data in relation to geological structure

·    Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

·    If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

·       Unknown due to limited data

 

·       Unknown due to limited data

Sample security

·    The measures taken to ensure sample security.

·       Samples were delivered to a courier and chain of custody is managed by Savannah.

Audits or reviews

·    The results of any audits or reviews of sampling techniques and data.

·       Internal company auditing

 

 

 

 

 

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria

JORC Code explanation

Commentary

Mineral tenement and land tenure status

·    Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

·    The security of the tenure held at the time of reporting along with any known impediments to obtaining a license to operate in the area.

·       Covas do Barroso Project: Mina do Barroso, Vilar, Beca and Regioso

·       Serra D'Agra Project: Calvelo, Ponte de Lima and Caminha

·       Barca D'Alve Project: Almedra and Meda

·       Tamega Project: Caramos

·       Vilar, Calvelo and Ponte de Lima tenements are subject to partial competing tenure as outlined in the maps below

·       Caramos is subject to a 100% competing tenure.

·       It is Savannahs current understanding based on advice from the DGEG that the areas subject to competing tenure will be the subject of a closed tender between the parties who have applied for the areas.

·       It is Savannahs opinion that it is well placed to win the tenders for the competing areas.

·       Overlapping areas at the Serra D'Arga Project

 

·       Overlapping areas at the Covas de Barroso project

Exploration done by other parties

·    Acknowledgment and appraisal of exploration by other parties.

·      include Barroso-Alvao Aplite-Pegmatite Field. Granitic Pegmatites: the state of the art - International Symposium. Field Trip Book; Lima, A and Noronha, F, 1999. Spodumene-Petalite-Eucryptite: Mutual relationships and pattern of alteration in Li-rich aplite-pegmatite dykes from northern Portugal The Canadian Mineralogist Vol. 39, pp. 729-746 (2001) Charoy, Noronha and Lima, 2010 The Crystal Chemistry of Spodumene in Some Granitic Aplite-Pegmatite Bodies of Northern Portugal. The Canadian Mineralogist. Vol. 32, pp 223-226. and Moura, S, Leal Gomes, C, and Lopes Nunes, J, 2010. Spatial analysis applied to the Barroso-Alvão rare-elements pegmatite field (Northern Portugal); David Barbose Da Silva, 2014

Geology

·    Deposit type, geological setting and style of mineralisation.

·       The lithium mineralization is predominantly in the form of Spodumene-bearing pegmatites which are hosted in meta-pelitic and mica schists, and occasionally carbonate schists of upper Ordovician to lower Devonian age. The pegmatites are unzoned and vary in thickness from 10m-50m. Lithium is present in most aplite compositions.

Drill hole Information

·    A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

o easting and northing of the drill hole collar

o elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar

o dip and azimuth of the hole

o down hole length and interception depth

o hole length.

·    If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

·       See table in main release

Data aggregation methods

·    In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

·    Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

·    The assumptions used for any reporting of metal equivalent values should be clearly stated.

·       Significant intercepts were calculated using a 0.7%Li2O cut off, no more than 1m of internal dilution and only results over 4m at 1% Li2O have been reported in the summary table of results.

 

Relationship between mineralisation widths and intercept lengths

·    These relationships are particularly important in the reporting of Exploration Results.

·    If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

·    If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg 'down hole length, true width not known').

·       Exploration results are reported as length weighted averages.

·       No high grade cuts have been applied to the reporting of the exploration results.

·       No metal equivalent values have been used.

·       The drill holes are vertical and the mineralisation is sub vertical.

Diagrams

·    Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

·       Relevant diagrams and maps have been included in the main body of the release.

Balanced reporting

·    Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

·       All results have been reported.

Other substantive exploration data

·    Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

·       The interpretation of the results is consistent with the observations and information obtained from historical data collected.

Further work

·    The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

·    Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

·       Rock chip sampling, channel sampling and RC drilling. Once planning has been completed the detail will be provided

 

 


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