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(Sharecast News) - Savannah Resources announced on Monday that Mozambique's Minister of Mineral Resources and Energy has conditionally awarded a third mining concession to the Mutamba Project.
The AIM-traded firm confirmed that concession 9228C had been awarded to Mutamba Mineral Sands, subject to the usual administrative conditions, with the concession covering an area of 11,807 hectares, valid until 3 September 2044.
It said the Mutamba Project comprised "one of the most significant" undeveloped heavy mineral sands deposits in the world, containing an indicated and inferred mineral resource of 4.4 billion tonnes, grading at 3.9% total heavy minerals.
The concession was contiguous with concessions 9735C and 9229C, which covered ground in the districts of Inharrime and Jangamo in southern Mozambique.
Savannah said the project benefited from "high quality" established transport infrastructure, including Mozambique's main north-south EN1 highway running through the project area, with the port of Inhambane near the area and a daily air service operating to the nearby city of Inhambane.
A reliable grid power supply was also already installed, and available in close proximity to the concessions.
Savannah operates a joint venture over the project with Rio Tinto.
"The conditional award of the third Mining Concession to Mutamba Minerals Sands completes the tenement set of the Mutamba Project in Jangamo-Inharrime, and represents a significant achievement for Savannah in its joint venture with Rio Tinto," said chief executive David Archer.
"To finalise the process, the normal administrative payments and processes need to be completed; these are currently underway for all three licences.
"We are completing the administrative conditions in a chronological manner following which all three licences will be fully formalised in due course, which, when completed, will continue to consolidate our position in the Mozambican mining industry."
Archer said the area covered by the concessions constituted one of the largest remaining mineral sands deposits in the world that was yet to be developed.
"Therefore, with the conditional approval of concession 9228C, the potential to create and operate a significant global project within the sector can be realised, thus adding value to the company and our shareholders.
"Once these three concessions are formalised, they will enable the joint venture with Rio Tinto to progress the pre-feasibility study towards completion."
Upon delivery of the pre-feasibility study, Archer said the company's interest in the project would rise from 20% to 35%, which he said would be "an exciting prospect" for Savannah as it continued to develop and diversify its portfolio of assets.
"I look forward to updating our shareholders on this opportunity and also on our flagship asset, the Mina do Barroso Lithium Project in Portugal, which we are continuing to develop."
At 1118 GMT, shares in Savannah Resources were up 3.37% at 2.3p.
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