Interim results: big lithium resource upgrade, timeline nudged
Savannah Resources has delivered a meaty interim update for the six months to 30 June 2025. The headline is a 40% jump in the Barroso Lithium Project’s JORC resource to 39.1Mt at 1.05% Li2O, with contained Li2O up 41%. The project was also formally recognised by the European Commission as a Strategic Project under the Critical Raw Materials Act, which matters for permitting, visibility and access to European funding channels.
There is a timetable tweak. The second temporary land easement needed for geotechnical work is now expected in Q4 2025, pushing Definitive Feasibility Study completion into H1 2026 and first production to 2028. Not ideal, but there is solid evidence of progress across drilling, permitting inputs and infrastructure design.
Barroso lithium resource: what changed and why it matters
Following a 12,463m, 103‑hole drilling programme between January and July, Savannah has upgraded and expanded its JORC (2012) compliant Mineral Resource to 39.1Mt at 1.05% Li2O. Management highlights that 68% of the ore and Li2O sits in the higher confidence Measured and Indicated categories, which is the pool from which reserves for the first mine plan can be drawn.
- Grandão: 18.1Mt at 1.05% Li2O, with Measured and Indicated increasing to 13.7Mt and contained Li2O up 9% to 144.2kt.
- Reservatório: 12.1Mt at 0.97% Li2O, a 188% tonnage increase versus May 2024. Indicated moved to 8.1Mt with 81.2kt contained Li2O.
- Pinheiro: 4.8Mt at 1.09% Li2O, tonnage up 140% and contained Li2O up 159%.
- NOA: 0.7Mt at 1.03% Li2O. Aldeia (under option): 3.5Mt at 1.30% Li2O.
In plain terms, the drilling didn’t just fill gaps. It found extensions, higher grade zones and, at Grandão, a parallel pegmatite. That de-risks the project geology and improves the chance of a robust first reserve and mine schedule in the DFS.
Exploration Target lifted by over 200%
Savannah has also raised its Exploration Target to 35‑62Mt at 0.9‑1.2% Li2O across deposits and regional prospects. That implies room to grow beyond the current 39.1Mt resource and potentially extend mine life. Important caveat: Exploration Targets are conceptual and not mineral resources.
Permitting, infrastructure and land: steady advances with one bottleneck
On environmental licensing, Savannah has been progressing the RECAPE phase inputs. RECAPE is the confirmatory step that checks the final design against conditions of the 2023 Declaration of Environmental Impact. Submission is expected after the remaining geotechnical drilling, so into 2026.
Infrastructure is moving along. Preliminary internal haul road design is nearing completion. The 16km bypass road EIA was filed in April; the regulator requested revisions and Savannah plans to resubmit in October 2025. Overhead power line and switching station designs have been submitted to E‑REDES.
Land remains the critical path. Savannah owns 109 plots with a further 10 under promissory note. The second temporary land easement for geotechnical drilling is expected in Q4 2025. Compulsory acquisition processes are underway with bank guarantees of €2,052,668 and €699,304 posted. The delay here is the reason the schedule has slid to DFS in H1 2026 and first production in 2028.
Lithium market backdrop is improving
Sector sentiment has brightened since June. Spodumene concentrate is reported around US$800/t, more than 30% above the mid‑June low, as EV sales remained robust at 10.7m globally for Jan‑Jul 2025, up 27% versus the same period in 2024. It is early days, but a tighter market supports project finance discussions and long‑term pricing assumptions. Savannah has not published updated economics in this RNS.
Financing and partnerships: more pieces on the board
AMG Critical Materials remains the largest shareholder, strategic partner and proposed offtaker. If project financing is secured, heads of terms anticipate increasing and extending offtake to 90ktpa for 10 years from 45ktpa for 5 years. The partnership is also the basis for a potential German Government loan guarantee of up to US$270m via Euler Hermes and KfW IPEX‑Bank. Due diligence is underway.
Cutfield Freeman & Company has been appointed as Project Finance Adviser. Public funding options in Portugal and via the CRMA are being explored, though not assumed in current plans. Notably, Savannah retains 100% ownership of Barroso and at least 50% of future concentrate to place with other partners, which gives room to optimise value.
H1 2025 financials: spend up on drilling, losses down, cash topped up post period end
The company increased investment at Barroso while tightening overheads.
| Metric | H1 2025 | Comparison |
|---|---|---|
| Cash at 30 June 2025 | £9.5m | £21.6m at 30 June 2024 |
| Cash after July fundraise | £13.3m | £4.78m gross raised at 3.5p |
| Loss from continuing operations | £1.5m | Down 21% vs £1.9m in H1 2024 |
| Exploration cash expenditure | £3.2m | Up 39% vs £2.3m in H1 2024 |
| Intangible assets | £25.8m | Up 19% vs year end 2024 |
| Total assets | £42.2m | £42.7m at 31 Dec 2024 |
The going concern note is frank. On current plans, the group can complete DFS and RECAPE with existing cash, but if it keeps all activities on the critical path and completes the potential Aldeia mining licence acquisition, additional funding would be needed during H1 2026. Given the Strategic Project status, AMG alignment and the prospective German guarantee, management is confident. It is still a funding milestone investors should watch closely.
Governance, legal and team
Government and EU engagement has deepened. The project now has support from AICEP’s Permanent Committee for Investor Support, which should help unblock administrative processes. Locally, Savannah reports broader community engagement and new pro‑engagement representation via the Future of Barroso Association.
On legal matters, the Operation Influencer investigation remains ongoing with no contact since Q1 2024. Other cases progressed procedurally but have not affected the mining lease or DIA. A Mozambique capital gains tax provision of £460,953 is carried while that matter is resolved.
Key hires arrived, including CFO Henrique Freire, a Project Finance Manager, an Offtake Adviser and a Group Head of HR. This is consistent with a company moving into financing and pre‑construction mode.
My take: a bigger project, a slightly longer road
This is a net positive update. The resource upgrade is material and underpins a healthier reserve and mine plan. The Strategic Project badge and German ECA pathway are valuable de‑riskers for a European lithium project. The market backdrop helps.
The negatives are time and funding. The second land easement delay pushes the schedule to 2028 first production, and the company will likely need more capital during 2026. That said, Savannah has optionality on offtake, multiple financing avenues, and a larger resource base to support them.
What to watch next
- Second temporary land easement approval in Q4 2025 and swift start to geotechnical drilling.
- Bypass road EIA resubmission in October 2025 and subsequent decision from APA.
- Progress on the German Government loan guarantee and broader financing package.
- Any offtake expansion beyond AMG to diversify sales and funding.
- DFS and RECAPE completion in H1 2026, including the first JORC Reserve estimate and mine plan.
- Further resource or Exploration Target updates as drilling and surface work continue.
Overall, Barroso looks bigger and better defined. If Savannah can convert today’s political and market tailwinds into a binding finance package, the 2028 start line remains a realistic and potentially lucrative target.
