Savannah Resources Plc Outstanding Lithium Results identified at the Mina do Barroso

Savannah Resources plc (LON: SAV) the AIM quoted resource development company, has today announced new and outstanding results from the ongoing reverse circulation (‘RC’) drill programme at the Mina do Barroso Lithium Project (‘Mina do Barroso’ or the ‘Project’) located in Portugal (Figure 1). The drill programme, which is aiming to generate a JORC – 2012 compliant Mineral Resource Estimate, has returned significant intersections of lithium mineralisation. To view the press release with the illustrative maps and diagrams please use the following link: Savannah PDF

HIGHLIGHTS:

· Total of 66 holes for 5,558m completed to date as part of the ongoing RC drill programme

· Drill results from three deposits being targeted confirm the outstanding potential of Mina do Barroso – Savannah believes these intercepts represent some of the best lithium spodumene intersections ever reported for a European deposit

· Grandao:

o Mineralised zone over 100m intersected: results from recent drilling has recorded the broadest and most significant results for the project to date. Key results include:

§ 109m at 1.04% Li₂O from surface (uncut), including 52m at 1.32% Li₂O in 17GRARC17

§ 71m at 1.06% Li₂O from 88m, including 57m at 1.2% Li₂O in 17GRARC19

§ 31m at 1.2% Li₂O from surface in 17GRARC12

§ 25m at 1.15% Li₂O from 36m in 17GRARC23

o New high-grade zone discovered: drill testing of a newly identified sub-vertical pegmatite body has been successful, identifying a new high-grade zone of mineralisation. Results from the first drill hole include:

§ 25m at 1.49% Li₂O from 32m including 14m at 2.1% Li₂O in 17GRARC20

o Drill programme extended – an additional 16 holes have been added to the drilling programme to help outline the full potential of the Grandao deposit

o Pegmatite and structural experts on site, to assist in developing the mineralisation model for these outstanding new results at Grandao

· Reservatorio:

o Deposit expanded – assay results confirm that the lithium mineralisation extends to over 400m strike length, with good down dip extensions of at least 100m. New assay results include:

§ 32m at 1.05% Li₂O from 78m in 17RESRC17

§ 15m at 1.19% Li₂O from 79m in 17RESRC16

o Maiden Mineral Resource Estimate for Reservatorio, expected by the end of 2017

· NOA – further drilling and results pending: drilling of a further 6 holes has confirmed the presence of lithium mineralisation over a 200m strike length together with good down dip extensions of at least 50m and pegmatite widths up to 15m

· Phase 2 of the metallurgical test work programme underway – samples taken from Grandao, Reservatorio and NOA being tested with results expected in early 2018

Savannah’s CEO, David Archer said: “We believe these are outstanding results that represent some of the best lithium spodumene intersections ever reported for a European deposit. Additionally, they highlight the potential of the extensive pegmatite systems in the northern part of Portugal to host major deposits of lithium.

“The results from Grandao are particularly exciting as there are some exceptional widths and high-grades reported and the geometry of what we are seeing suggests that there is potential for a low stripping ratio, open-cut mine development. It is important to remember that all of the results are from deposit areas for which we have a granted mining lease.

“These results continue to underscore the potential of the Mina do Barroso Project to be a strategic upstream feature in the European lithium value chain. From an investment perspective, we see the Project as the closest European analogue to the very successful Australian hard-rock, open cut mine developments which produce highly sought-after lithium spodumene concentrates for international markets.

“Ongoing drilling and metallurgical test work will be used to support an early scoping study around a potential mine development.”

Figure 1. Mina do Barroso Project Summary Map showing prospects and 2017 drilling – see PDF link

Grandao

A total of 36 drill holes for 2,809m (17GRARC01-36) have been completed targeting the flat lying pegmatite body at Grandao and two newly identified sub vertical pegmatite bodies nearby the flat body. Results for drill holes 17GRARC10 to 23 have now been received and returned the most significant set of results for the Project to date (Table 1-3 and Figure 2-3).

Drilling targeted at intersecting the near surface, flat or shallowly west dipping pegmatite body has continued to meet with significant success, with extensive mineralisation now being defined. Drilling has confirmed a zone of lithium mineralisation extending to over 400m in length, reaching up to 150m in width and with continuous anomalous mineralisation recorded as deep as 109m below surface. Significant drill results targeting the flat lying pegmatite body are summarised in Table 1.

Table 1. Summary of drill results for Grandao flat lying pegmatite using a 0.2% and 0.5% Li2O cut-off

It is important to note that a number of angled drill holes will be completed in the vicinity of 17GRARC17 and 19 as part of the ongoing drill programme to confirm the current geological interpretation in this area.

In addition, mapping has highlighted a series of at least four sub-vertical pegmatite bodies, many of which can be traced over 200m in strike and in places reach widths up to 40m. Limited drill testing of two of these bodies to date has met with early success including the identification of a high-grade lithium bearing pegmatite body. Recently received results are summarised in Table 2.

Table 2. Summary of drill results for Grandao new vertical pegmatites using a 0.2% and 0.5% Li₂O cut-off

The pegmatite bodies identified to date remain open in all directions; further work is underway including RC drilling, geological and mineralogical mapping to better understand and define the full potential of the Grandao pegmatite bodies.

Table 3. Summarised downhole geology for drill assays received from Grandao

Figure 2. Summary of drilling at Grandao showing significant assay results and holes with pending assays – see PDF 

Figure 3. RC drill chips from 17GRARC17 which returned a result of 109m at 1.04% Li₂O (uncut) from surface – see PDF

Reservatorio

A total of 20 RC holes (17RESRC01-20) totalling 1,981m have been completed at Reservatorio and results for the last 6 holes (17RESRC15-20) have now been received (Table 4-5 and Figure 4).Lithium mineralisation has been identified along a 400m strike length and to a depth of at least 100m. Drilling in an area of faulting and shearing on the eastern part of the pegmatite has caused the pegmatite to become weathered resulting in some zones of near surface depletion. Further infill drilling is now required to further define these zones.

Table 4. Summary of drill results for Reservatorio reported at a 0.2% and 0.5% Li₂O cut-off

Table 5. Summarised downhole geology for drill assays received from Reservatorio

Figure 4. Summary of drilling at Reservatorio, showing drilling completed and significant assays received – see PDF 

NOA Deposit

Drilling at the NOA deposit now totals 10 holes for 768m (17NOARC01-10) with results from 5 holes (17NOARC06-10) still pending. Drilling results from the NOA prospect have been encouraging with 10-15m wide zones of pegmatite being intersected over a strike length of 200m and a down dip depth of around 50m (Figure 5).

Figure 5. Summary of drilling at NOA of holes with pending assays – see PDF

Ongoing Drill Programme

Based on the new results an additional 16 RC drill holes have been added to the programme at Grandao in order to further evaluate the potential of this prospect area.

Lithium Mineralisation

All geological mapping, drill hole logging and metallurgical have confirmed that the predominant lithium mineral (over 95%) is spodumene and to date no lithium mica mineralisation has been identified.

Grandao Mineralisation Model

Portuguese lithium pegmatite expert Professor Alexandre Lima and structural expert Professor Pablo Gumiel are currently on site working with the Savannah team to develop a mineralisation and exploration model based on these very significant new results.

Metallurgical Testwork

A series of scoping tests on a 100kg composite sample from Grandao, Reservatorio and NOA are currently underway at specialist lithium laboratory Nagrom in Perth, to find out the response of the ore to gravity separation. The work will determine the crush size and the density at which a 6% concentrate can be produced and mass yield. These are the three fundamental design parameters for developing a gravity process flow sheet based on the dense medium (DMS) process.

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 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.