Savannah Resources declares maiden 20Mt lithium reserve at Barroso

Savannah turns resources into a mineable reserve

Savannah Resources has reached an important technical milestone at its Barroso Lithium Project in Portugal, declaring a maiden JORC-compliant Probable Ore Reserve of 20.0 million tonnes at 0.99% lithium oxide.

That reserve underpins the full 14-year production profile in the project's Phase 1 Definitive Feasibility Study, or DFS. A DFS is a detailed assessment of whether a mining project can be developed and operated economically.

For investors, the key word here is "reserve". A Mineral Resource identifies material with reasonable prospects for eventual economic extraction. An Ore Reserve goes further, representing the part considered economically mineable after factors such as costs, processing performance, mine design and permitting have been assessed.

This does not mean Barroso is ready to start producing tomorrow. It does mean Savannah now has a firmer technical foundation for its proposed mine plan.

The key numbers

Metric	July 2026 figure
Probable Ore Reserve	20.0Mt
Reserve grade	0.99% Li2O
Total Mineral Resource	39.2Mt
Resource grade	1.05% Li2O
Measured Resource	8.7Mt
Indicated Resource	18.1Mt
Inferred Resource	12.3Mt
Phase 1 production profile	14 years
Reserve pricing assumption	US$1,200/t SC6
Spot price cited by Savannah	c.US$2,250/t
Exploration Target	35-62Mt

The reserve has been drawn from approximately 27Mt of combined Measured and Indicated Resources. No reserves have been derived from Inferred Resources, which carry a lower level of geological confidence and cannot be converted directly into an Ore Reserve.

Grandão makes the largest contribution, with 11.4Mt of reserves at 0.98% lithium oxide. Reservatório contributes 4.4Mt, followed by Pinheiro at 2.1Mt, Aldeia at 1.6Mt and NOA at 0.5Mt.

Why the price assumption matters

Savannah says the reserve was calculated using a long-term spodumene concentrate price of US$1,200 per tonne on an SC6 basis. SC6 refers to spodumene concentrate containing 6% lithium oxide and is a common industry pricing benchmark.

That assumption compares with the approximately US$2,250 per tonne spot price cited in the announcement.

Using a price well below the stated spot level provides a degree of conservatism. It suggests the reserve has not been justified using peak or unusually optimistic commodity pricing.

However, lithium prices are volatile. The gap between the reserve assumption and current spot pricing should not be treated as guaranteed financial upside. Savannah's appendix states that the project is sensitive to concentrate prices and operating costs.

The proposed plant is designed to produce a 5.5% lithium oxide concentrate, with metallurgical recoveries generally assumed at approximately 65% to 74%. Processing would use conventional methods including crushing, dense media separation and flotation.

Scope to extend the mine life

The current 20Mt reserve supports the proposed 14-year Phase 1 production profile, but it does not capture all of Barroso's defined resources.

Savannah identifies three possible routes to further reserve growth:

1. Converting remaining Measured and Indicated Resources into reserves.
2. Upgrading the existing 12.3Mt of Inferred Resources through additional drilling before seeking reserve conversion.
3. Converting some of the separate 35-62Mt Exploration Target into resources and, eventually, reserves.

A further 2.8Mt of Indicated Resources at Reservatório could also become available for reserve conversion following a future concession adjustment.

This creates genuine expansion potential, but investors should keep the classifications straight. The Exploration Target is conceptual, with insufficient work completed to estimate a Mineral Resource. There is no certainty that further exploration will convert it into resources or reserves.

The resource update is steady rather than transformative

Barroso's overall JORC Mineral Resource remains approximately 39Mt, with the detailed figure now standing at 39.2Mt at 1.05% lithium oxide. This contains an estimated 409,200 tonnes of lithium oxide.

The update principally reflects a revised estimate for the Aldeia orebody. Aldeia now contains 3.5Mt at 1.21% lithium oxide, split between 1.8Mt of Indicated Resources and 1.7Mt of Inferred Resources.

Aldeia's grade is higher than the project-wide average, although Savannah says no Aldeia samples had been included in the completed metallurgical testing at the time of the report. Samples had been collected and were being tested.

What investors should like

The maiden reserve is a meaningful de-risking step because it connects Barroso's geology to an economically assessed mine plan. The 20Mt figure is also large enough to cover the entire initial 14-year schedule.

Other encouraging points include:

• The reserve uses a US$1,200 per tonne SC6 price assumption, below the spot price cited by Savannah.
• The project uses conventional open-pit mining and established spodumene processing technology.
• The resource base includes 26.8Mt in the higher-confidence Measured and Indicated categories.
• Savannah sees several routes to extending the mine life beyond Phase 1.
• The feasibility-level economic assessment reports a post-tax net present value of approximately US$376 million at an 8% discount rate.

The project model also includes pre-production capital expenditure of US$418 million, including US$40 million of contingency, and a Portuguese Government grant of US$126.5 million.

The risks have not disappeared

Barroso remains a pre-production mining project, so the reserve declaration should not be confused with a final construction decision or operating success.

The most obvious challenge is financing. The estimated US$418 million pre-production capital requirement is substantial, and the announcement does not disclose a complete funding package. Even with the government grant included in the project model, Savannah will still need to secure the balance.

Permitting also remains important. The project has received a positive Environmental Impact Statement and is progressing through the RECAPE process for the final environmental licence. Aldeia has not yet received final approval, while the transfer of mining rights covering that pit is still underway.

Technical uncertainties include metallurgical variability between deposits and limited testing of weathered and lower-grade material. Test work has also been weighted towards Grandão, although this is the largest reserve contributor.

Finally, the development depends on lithium pricing, cost control, construction delivery and continued engagement with nearby communities and regulators. Social licence remains a key consideration because some communities are located within approximately 2km of the proposed development.

The bottom line

Savannah's maiden 20Mt reserve is a solid step forward for Barroso. It validates enough economically mineable material to underpin the full 14-year Phase 1 production profile and moves the project beyond a resource-only story.

There is also visible potential for mine-life extensions from existing resources and future drilling. But the next phase will be less about proving lithium exists and more about securing permits, financing construction and delivering the project within its technical and cost assumptions.

In short, Savannah has cleared an important hurdle, but Barroso still has several major ones ahead before it becomes a producing lithium mine.