No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Savannah Resources said on Wednesday that it is advancing its Barroso Lithium Project in northern Portugal following an oversubscribed 9.8m fundraising, as rising lithium prices, strengthening European policy support and growing commercial interest reinforced the project's strategic position within Europe's emerging battery supply chain.
The AIM-traded company said it now holds cash reserves of around 21m, providing funding to progress the Barroso project through key milestones ahead of a final investment decision expected next year.
It said the deposit was the largest spodumene lithium resource in Europe, and had been designated a 'strategic project' under the EU's Critical Raw Materials Act.
Savannah said global lithium demand had continued to accelerate in the second half of 2025, with the spodumene concentrate price rising by roughly 80% since June to around $1,100 per tonne, surpassing $1,200 per tonne in recent trading.
The firm attributed the rally to robust electric vehicle sales and even faster growth in stationary battery energy storage systems, trends it expected to support higher long-term pricing.
Chief executive Emanuel Proena said the improved market backdrop supports Savannah's commercial strategy.
"The recent oversubscribed fundraise gives us fresh impetus to push on with the development of our Project," he said.
"While we focus on the many tasks at hand, the lithium market continues to improve.
"This trend is consistent with Savannah's view that lithium markets will remain volatile but persistently tight for years to come, and for the industry to function properly, incentive prices will need to be significantly above the minimal threshold for our project to thrive."
The company said it was finalising the acquisition of the Aldeia Mining Lease adjoining the Barroso project.
Previous drilling at Aldeia Block A identified a JORC-compliant resource of 3.5 million tonnes at 1.30% lithium oxide, the highest-grade material across the project area and 24% above the overall resource grade.
Savannah said it intended to incorporate the Aldeia resource into its definitive feasibility study, which remained contingent on the approval of a temporary land access order and ongoing drilling.
The company also reported progress on project financing.
Staff from Germany's KfW IPEX-Bank visited the site this month as part of due diligence on a potential German government-backed loan guarantee of up to $270m, tied to a planned offtake agreement for 90,000 tonnes a year of spodumene concentrate over 10 years.
The company said it was continuing to assess additional financing options through its adviser, Cutfield Freeman & Co.
At the same time, Savannah said it had bolstered its technical team with the appointment of Joo Nunes as operations readiness manager.
Proena said Nunes "brings significant mining sector experience to the Company, having spent nearly 30 years leading both complex construction projects and complete operational teams."
The company also highlighted a shift in European policy momentum following recent statements from European Commission president Ursula von der Leyen, who announced the launch of the 'RESourceEU' initiative to secure alternative sources of critical minerals.
In her speech, von der Leyen said, "Europe cannot do things the same way anymore ... so it is time to speed up and take the action that is needed.
"Whether on energy or raw materials, defence or digital, Europe has to strive for its independence. And this is our moment to do it."
Savannah said it would seek to leverage its strategic status under the Critical Raw Materials Act and its domestic resource base to access any potential support from EU and national programmes.
Proena added that confidence in the project was continuing to build.
"It is also an important development to see the European Commission expressing a strong focus and sense of urgency around the development of its domestic and international critical raw material supply chains.
"All of us at Savannah stand ready to contribute," he said.
At 1100 GMT, shares in Savannah Resources were up 7.25% at 3.7p.
Reporting by Josh White for Sharecast.com.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.