RNS Number : 6582R

Savannah Resources PLC

04 March 2019

Savannah Resources Plc

Project Update

Significant New Higher-Grade Lithium Discovery

Mina do Barroso Lithium Project, Portugal

HIGHLIGHTS:

· Reverse Circulation ('RC') drilling on Aldeia Block A has identified a new higher-grade lithium bearing pegmatite body about 2km to the south east of the Grandao Deposit, bringing total discoveries to five with further targets still to be tested.

· Key lithium intersections include:

- 21m at 1.50% Li₂O from 34m in 19ALARC03

- 20m at 1.36% Li₂O from 75m in 19ALARC021

- 21m at 1.24% Li₂O from 17m in 19ALARC012

- 14m at 1.41% Li₂O from 37m in 19ALARC004

- 11m at 1.50% Li₂O from 54m in 19ALARC005

· Pegmatite consistently intersected over a strike length of over 200m and has been traced down dip for a distance of over 200m, confirming the potential for the presence of a significant mineralised body.

· RC drilling is continuing on the Aldeia pegmatite and is focused on tracing the pegmatite body further down dip and along strike to the west where there is potential to extend the strike and dip extents of the mineralisation.

· With the recent discovery of the Pinheiro and Aldeia pegmatites, work is being fast tracked to define the potential size and metallurgy of these deposits so that they can be considered as part of a potential development. Work will also focus on determining if they have a material effect on the already highly favourable economics of Mina do Barroso.

· Diamond drilling to collect metallurgical test samples at Pinheiro has been completed and work at Aldeia is expected to be completed in March. These samples will be shipped to lithium specialists Nagrom in Perth to conduct the metallurgical test work programme.

· Both the Aldeia and Pinheiro deposits will now be incorporated in an expanded and fully funded DFS the completion of which will now extend into the second half of the year.

· The Project continues to be developed and is ideally positioned to anchor the up-stream part of the lithium value chain for the European Electric Vehicle ('EV') market.

Savannah Resources plc (AIM: SAV, FWB: SAV and SWB: SAV) ('Savannah' or the 'Company'), the resource development company, is pleased to announce further results from the ongoing Reverse Circulation ('RC') drilling programme at the Mina do Barroso Lithium Project ('the Project') located in northern Portugal (Figure 1). The Project, currently with a 20Mt Mineral Resource, is Western Europe's most significant new spodumene lithium discovery.

To view the press release with the illustrative maps and diagrams please use the following link:

http://www.rns-pdf.londonstockexchange.com/rns/6582R_1-2019-3-1.pdf

Savannah's CEO, David Archer said: "The discovery of this new higher grade Aldeia Block A pegmatite is likely to add further tonnage to the overall Mineral Resource inventory of the Mina do Barroso Project, which currently stands at 20.1Mt with low impurities. The Block A lithium mineralisation is both close to surface and shows excellent grades. These excellent results mean we will now look to incorporate these deposits as part of the early mining schedule of a potential mine development. Following our drilling success both from Aldeia Block A and Pinheiro, we will look to broaden the scope of the mine planning for the current Definitive Feasibility Study to incorporate both deposits. This will include further resource definition drilling and metallurgical test work. This extra work will mean that the completion of the DFS will extend into the second half of the year. The Block A and Pinheiro deposits have the potential to extend the current mine life of 11 years and to provide a long-life, base load feed of spodumene lithium for a potential lithium refinery in Europe.

"We remain extremely excited about the Project which is strategically positioned to supply the expanding demand for spodumene lithium for the European EV market. The significance of the project is underscored by the high level of interest we are fielding from potential off-takers and strategic partners, both European and international."

Figure 1. Mina do Barroso Project Summary Map showing Prospects and Drilling Completed

Further Information

To date a total of 27 RC and diamond drill holes for 2,031m have been drilled on Aldeia Block A as part of the ongoing RC and diamond drill programme at the Mina da Barroso Project.

Results have now been received for the first 21 holes, which have confirmed a lithium bearing pegmatite is present with excellent potential to have a higher overall grade of lithium mineralisation than the currently defined deposits (Figure 2-4, Table 1). Key lithium intersections include:

- 21m at 1.50% Li₂O from 34m in 19ALARC03

- 20m at 1.36% Li₂O from 75m in 19ALARC021

- 21m at 1.24% Li₂O from 17m in 19ALARC012

- 14m at 1.41% Li₂O from 37m in 19ALARC004

- 11m at 1.50% Li₂O from 54m in 19ALARC005

Drilling has defined a shallow dipping pegmatite over a strike length of 220m, with a dip extent of 200m and a thickness of 10m-20m. The pegmatite has been defined from surface and is dipping at 30 degrees to the north west. Lithium mineralisation identified to date is typical of the Mina do Barroso region with spodumene being observed in the drill cuttings and also in a small quarry which is being mined to supply material to the local ceramics industry.

The pegmatite mineralisation remains open down dip and to the west where there is excellent potential to extend the strike and dip extents mineralisation. Work is ongoing with RC drilling to further test the potential extensions. Two diamond holes are also being completed to collect samples for sighter metallurgical test work.

Option Agreement with Aldeia

As announced on 25 September 2018, the Company has entered into a Pledge and Purchase Agreement to acquire an Option to purchase the Aldeia License Area, which includes among others Block A, following the award of a mining concession from relevant government/competent authorities (the 'Option') for a total Option Purchase Price of EUR 358,000.

The Option may be exercised no later than 25 June 2019. Upon Savannah providing such option exercise notice, the parties shall have a maximum of five years (which cannot exceed 25 September 2024) to submit, and to have approved, a mining lease application for the Aldeia Licence Area. Upon approval of the mining lease, Aldeia shall thereafter apply to register the lease in the name of a subsidiary of Savannah.

The total purchase price for the acquisition of the Aldeia Licence Area (once granted) is EUR3.25m, of which EUR55,000 would be paid upon transfer of the mining lease and the balance in 71 monthly instalments following the transfer of the mining lease to a subsidiary of Savannah.

Figure 2. Summary of drilling at Aldeia Pegmatite showing significant assay results

Table 1. Summary of drill results for Aldeia Pegmatite using a 0.5% Li₂O cut-off

Hole ID	Prospect	Northing	Easting	rL	Azimuth	Dip	EOH	From (m)	To (m)	Down hole	Grade
				rL	(Deg)	(Deg)	(m)			Interval (m)	% Li₂O
19ALARC001	Aldeia Quarry	4606656	603074	584	0	-90	80	NSA
19ALARC002	Aldeia Quarry	4606656	603074	610	330	-60	63	35.00	37.00	2.00	0.97
19ALARC003	Aldeia Quarry	4606690	603034	580	330	-60	69	1.00	9.00	8.00	0.92
								16.00	25.00	9.00	0.96
								34.00	55.00	21.00	1.50
								60.00	69.00	9.00	1.14
19ALARC004	Aldeia Quarry	4606723	603010	583	150	-70	90	37.00	51.00	14.00	1.41
								60.00	66.00	6.00	0.94
19ALARC005	Aldeia Quarry	4606722	603010	584	0	-90	81	39.00	47.00	8.00	1.31
								54.00	65.00	11.00	1.50
19ALARC006	Aldeia Quarry	4606617	603076	571	0	-90	60	1.00	8.00	7.00	1.20
19ALARC007	Aldeia Quarry	4606560	603102	572	0	-90	39	NSA
19ALARC008	Aldeia Quarry	4606683	603123	619	0	-90	69	NSA
19ALARC009	Aldeia Quarry	4606723	603099	607	0	-90	105	6.00	13.00	7.00	1.09
19ALARC010	Aldeia Quarry	4606749	603082	615	0	-90	70	14.00	26.00	12.00	1.23
19ALARC011	Aldeia Quarry	4606750	603078	609	147	-60	72	13.00	23.00	10.00	1.28
19ALARC012	Aldeia Quarry	4606750	603079	610	327	-60	70	17.00	38.00	21.00	1.24
19ALARC013	Aldeia Quarry	4606787	603141	636	0	-90	100	62.00	68.00	6.00	0.91
19ALARC014	Aldeia Quarry	4606789	603146	630	327	-55	110	NSA
19ALARC015	Aldeia Quarry	4606762	603170	615	0	-90	75	35.00	39.00	4.00	1.04
19ALARC020	Aldeia Quarry	4606749	602986	603	0	-90	96	70.00	84.00	14.00	1.02
								61.00	65.00	4.00	0.59
19ALARC021	Aldeia Quarry	4606767	602966	600	0	-90	105	75.00	95.00	20.00	1.36

Figure 3. Aldeia Cross Section 1

Figure 4. Aldeia Cross Section 2

Figure 5. Photograph of the Quarry

Competent Person and Regulatory Information

The information in this announcement that relates to exploration results is based upon information compiled by Mr Dale Ferguson, Technical Director of Savannah Resources Limited. Mr Ferguson is a Member of the Australasian 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 / Charlie Bouverat (Nominated Adviser) (Nominated Adviser)	SP Angel Corporate Finance LLP Partners Ltd	Tel: 44 20 3470 0470
Christopher Raggett / Camille Gochez (Broker)	finnCap Ltd	Tel: 44 20 7220 0500
Grant Barker (Equity Adviser)	Whitman Howard	Tel: 44 020 7659 1225
Melissa Hancock/ Cosima Akerman (Financial PR)	St Brides Partners Ltd	Tel: 44 20 7236 1177

About Savannah

Savannah is a diversified resources group (AIM: SAV) with a portfolio of energy metals projects - lithium in Portugal and copper in Oman - together with the world-class Mutamba Heavy Mineral Sands Project in Mozambique, which is being developed in a consortium with the global major Rio Tinto. The Board is committed to serving the interests of its shareholders and to delivering outcomes that will improve the lives of the communities we work with and our staff.

The Company is listed and regulated on AIM and the Company's ordinary shares are also available on the Quotation Board of the Frankfurt Stock Exchange (FWB) under the symbol FWB: SAV, and the Börse Stuttgart (SWB) under the ticker "SAV".

APPENDIX 1 - 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 (e.g. 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.	· Reverse circulation (HQ size) samples were taken on either 1m intervals for pegmatite or 4m composites in surrounding schist. RC samples were collected in large plastic bags from an on-board rig splitter and a 4-6kg representative sample taken for analysis.
	· 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 nominal 80m by 40m spacing based on geological targets using RC drilling technology, an industry standard drilling technique. Drilling rods are 3m 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. · A downhole survey for each hole was completed
	· 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 (e.g. '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 (e.g. submarine nodules) may warrant disclosure of detailed information.	· The lithium mineralization is predominantly in the form of Spodumene-bearing pegmatites, the pegmatites are unzoned and vary in thickness. · Down hole sampling is carried out on either a 1 or 4m interval from which 4-6kg of pulverized material (RC) was pulverized to produce a 50g charge for assaying
Drilling techniques	· Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. 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).	· 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.	· 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 4-6kg.
	· 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 relationships
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.	· RC 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. · A representative chip sample produced from RC drilling was washed and taken for each 1m sample and stored in a chip tray which was photographed
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.	· RC samples were split by the rotary splitter on the drill rig and sampled dry
	· For all sample types, the nature, quality and appropriateness of the sample preparation technique.	· The sampling was conducted using industry standard techniques and were considered appropriate
	· Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.	· The 4m composites were collected using a spear with the spear inserted into the bag at a high angle and pushed across the sample to maximise representivity of the sample
	· 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.	· 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.	· All samples were taken once they went through the on-board splitter from the drill rig. Depending on the rock types on average a 4-6kg sample was sent to the lab for analysis and the remaining material averaged 18-24kg and remains stored on site for any further analysis required
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.	· Samples were received, sorted, labelled and dried · Samples were crushed to 70% less than 2mm, riffle split off 250g, pulverize split to better than 85% passing 75 microns and 5g was split of for assaying · The samples were analysed using ALS laboratories ME-MS89L Super Trace method which combines a sodium peroxide fusion with ICP-MS instrumentation utilizing collision/reaction cell technologies to provide the lowest detection limits available. · A prepared sample (0.2g) is added to sodium peroxide flux, mixed well and then fused in at 670°C. The resulting melt is cooled and then dissolved in 30% hydrochloric acid. This solution is then analysed by Inductively Coupled Plasma - Mass Spectrometry and the results are corrected for spectral inter-element interferences. · The final solution is then analysed by ICP-MS, with results corrected for spectral inter-element interferences.
	· 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 (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.	· Standards/blanks and duplicates we inserted on a 1:20 ratio for both to samples taken · Duplicate sample regime is used to monitor sampling methodology and homogeneity. · A powder chip tray for the entire hole is completed for both RC and RAB. A sub-sample is sieved from the large RC bags at site into chip trays over the pegmatite interval to assist in geological logging. These are photographed and kept on the central database · Routine QA/QC controls for the method ME-MS89L include Blanks, certified reference standards of Lithium and duplicate samples. Samples are assayed within runs or batches up to 40 samples. At the fusion stage that quality control samples are included together with the samples, so all samples follow the same procedure until the end. Fused and diluted samples are prepared for ICP-MS analysis. ICP instrument is calibrated through appropriate certified standards solutions and interference corrections to achieve strict calibration fitting parameters. Each 40 samples run is assayed with 2 blanks, 2 certified standards and one duplicate samples and results are evaluated accordingly. · A QA/QC review of all information indicated that all assays were inside reasonable tolerance levels.
Verification of sampling and assaying	· The verification of significant intersections by either independent or alternative company personnel.	· All information was internally audited by company personnel
	· The use of twinned holes.	· Several historical holes we twinned for comparison purposes with the modern drilling
	· Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.	· Savannah's experienced project geologists supervise all processes. · All field data is entered into a custom log sheet and then into excel spreadsheets (supported by look-up tables) at site and subsequently validated as it is imported into the centralized Access database. · Hard copies of logs, survey and sampling data are stored in the local office and electronic data is stored on the main server.
	· Discuss any adjustment to assay data.	· Results were reported as Li(ppm) and were converted to a percentage by dividing by 10,000 and then to Li₂O% by multiplying by 2.153
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 drill hole was taken at the time of collecting using a handheld GPS with an accuracy of 5m. · The grid system used is WSG84 · 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.	· Drilling was on a nominal 80m by 40m spacing and based on geological targets · Drill data is not currently at sufficient spacing to define a mineral resource. · Some samples were composited on a 4m basis based on geological criteria, these areas were all outside the pegmatite bodies where 1m sampling was completed
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.	· Drilling was orientated perpendicular to the known strike of the pegmatites · Drill holes we orientated at either -60 degrees or -90 degrees depending on the dip of the pegmatite in an attempt to get drill holes as close to true width as possible
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.	· All work was completed inside Block A of the Aldeia option tenement
Exploration done by other parties	· Acknowledgment and appraisal of exploration by other parties.	· N/A
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-20m. 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.	· Grid used WSG84 · No material data has been excluded from the release · All hole details are in Table 1 of the main release
Data aggregation methods	· In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. 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.	· High Grade Intercepts are weighted averages using a 0.5% Li₂O cut off with no more than 2m of internal dilution · Narrow zones of schist (less than 5m) have been included in the significant intercepts where they are mineralised
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 (e.g. 'down hole length, true width not known').	· Exploration results are reported as down hole intercepts · No metal equivalent values have been used. · The drill holes are detailed in the table in the main release and the pegmatite at Aldeia appears to dip at around 30degrees to the north west
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 relevant results available 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 the data collected.
Further work	· The nature and scale of planned further work (e.g. 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.	· Further RC drilling to track the pegmatite down dip and along strike to the west is underway

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