Shares of mineral mining company Savannah Resources (LON: SAV) are rising on Tuesday after the company revealed it has signed a Heads of Agreement with Portuguese energy Group Galp Energia.
The companies will team up for strategic investment and alliance in the lithium field around the Mina do Barroso Lithium Project in northern Portugal.
Savannah Resources shares rose as high as 5.97p on the news. They are currently priced at 5.40p, up 20%.
Galp intends to secure a 10% stake in Savannah’s Portuguese subsidiaries, that own Mina do Barroso, for $6.4 million, which will further Savannah’s progress in its Definitive Feasibility Study.
The two groups will also evaluate an offtake agreement for up to 100,000tpa of lithium concentrate from Mina do Barroso, which is approximately 50% of annual production. The deal is a significant step in commercialising Mina do Barroso and will be an essential factor in securing financing for the project's construction.
“We are delighted to announce Galp as a potential investor and future strategic partner in our Portuguese project,” commented David Archer, Savannah’s CEO.
“We believe Mina do Barroso's low carbon footprint lithium concentrate will provide a key foundation for Europe's energy transition to electric mobility and we are delighted to be joined by Galp on this journey,” added Archer.