06 Jul Savannah Resources hit with CEO departure and permitting speedbump
AIM-listed European lithium project developer Savannah Resources has received a double blow in the shape of the sudden departure of its long-serving CEO and a complication in the licencing process for its flagship Mina do Barroso project in Portugal.
The company today announced CEO David Archer’s resignation after nine years in the post, along with an instruction from Portugal’s environmental regulator, Agência Portuguesa do Ambiente (APA), for an additional step in Mina de Barroso’s Environmental Impact Assessment (EIA) process.
Interim CEO Dale Ferguson said the additional step in the licencing would add to the overall development schedule, but within a clearly-defined timeline.
“Savannah’s team will make its best endeavours to submit any revised plans to APA as soon as practicable, but under the legislation, a DIA decision would be reached no later than March 2023,” he said.
The project is also facing local opposition, according to analyst Tim Worstall from Asktraders.com. “Socio-economic considerations include the impact of the project on other local businesses, which is anywhere between not a worry and a very large worry,” he noted.
Savannah’s share price had receded by 30% by mid-afternoon trading in London, leaving it with a market capitalisation of US$40 million.
The permitting delay serves as a blow to Savannah’s hopes of Mina de Barroso becoming Europe’s first large-scale operating lithium mine. It holds a resource estimate of 27 million tonnes of lithium, which the company believes to be enough to supply a ‘material proportion’ of Europe’s lithium demand over the coming decades.
Recent results from the latest phase of metallurgical test work programme at the mine highlights the potential for lower capital and operating costs than those originally estimated.