Savannah Resources PLC on Monday announced results from a new scoping study on its Barroso lithium project in northern Portugal.
The London-based Europe-focused lithium development company said the base case post-tax net present value of the project was $953 million, with an internal rate of return of 77%.
It added that it has the potential to provide a life of mine revenue of around $4.2 billion over around 14 years, with earnings before interest, tax, depreciation and amortisation of $2.8 billion and post-tax free cash flow of $1.7 billion over the life of the mine.
The result of the scoping study was ahead of schedule, with the planned release originally being in the second half of 2023.
Chief Executive Officer Dale Ferguson said: ‘The new scoping study now highlights the outstanding investment case of the proposed development. Based on long term forecast prices, which are below current spodumene prices, the project generates an exceptional IRR and significant cash generation. Hence, we hope that this scoping study makes clear the inherent value in this project which Savannah seeks to unlock for shareholders, for customers, for Portugal, for Europe, and all stakeholders.’
Savannah Resources expects to complete the environmental licencing process and the definitive feasibility study in the second half of 2024. It expects production start in mid 2026.
Savannah Resources shares rose 8.7% to 5.00 pence each on Monday morning in London.
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