(Alliance News) - Savannah Resources PLC on Tuesday said it has struck a deal with Portuguese energy firm Galp Energia SGPS SA to secure an investment and partnership at the Mina do Barroso lithium project.
Savannah shares were 17% higher at 5.27 pence each in London on Tuesday morning.
Galp will part with USD6.4 million to take a 10% stake in Savannah's units which own the project, located roughly 150 kilometres north-east of the Portuguese city of Porto.
The cash will further Savannah's progress towards a definitive feasibility study at the asset.
"Galp will add material value through its participation at the project's board level and the transfer of its significant experience in developing large scale resource projects in Portugal," Savannah said.
"Galp and Savannah are set to evaluate, under exclusive terms, an offtake agreement for up to 100,000 tonnes per annum of lithium concentrate from Mina do Barroso equating to approximately 50% of annual production. The agreement represents a significant step in commercialising Mina do Barroso and will be an important factor in securing financing for the construction of the project," Savannah added.
Galp, listed in Lisbon, has a market cap of roughly EUR7.86 billion.
By Eric Cunha; ericcunha@alliancenews.com
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Savannah Resources (SAV)