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(Alliance News) - Savannah Resources PLC on Monday said it has raised GBP5 million cash through a share placing, subscription, and investment from its major shareholder to complete the definitive feasibility study on the Mina do Barroso lithium project located in northern Portugal.
The resource development company said it has issued 161.4 million shares through a placing and 26.5 million shares via subscription, both at a price of 2 pence each, raising GBP3.8 million. finnCap and Whitman Howard acted as joint bookrunners in respect of the placing.
Savannah shares were trading 33% lower on Monday in London at 2.04p each, giving the company a market capitalisation of GBP21.8 million.
Savannah also said Al Marjan Ltd, one of its major shareholders, has invested a further GBP1.2 million, subscribing for 62.1 million shares.
In aggregate, the placing, subscription and investment shares will, when issued, represent 19% of Savannah's enlarged share capital.
The company explained that the funds will be used for the definitive feasibility study at the Mina do Barroso project, which will incorporate additional mineral resources delineated during 2019 into the mine plan and a comprehensive metallurgical test work programme across all the project's deposits. Savannah expects to complete the definitive feasibility study in the second quarter of 2020.
"Savannah is committed to rigorously de-risking Mina do Barroso as much as possible prior to the start of production," explained Chief Executive David Archer.
He added: "This will be achieved by including as much of our current 27 megatons mineral resource as we can in our maiden reserve estimate for the definitive feasibility study, and completing our comprehensive metallurgical test work programme so we have confidence that our targeted lithium recovery rate can be achieved from all the deposits at the project."