Savannah Resources Regulatory News (SAV)

Savannah Resources Plc / Index: AIM / Epic: SAV / Sector: Mining

17 February 2014

Jangamo Project Drilling Confirms Broad Mineralised Zones, Mozambique

Savannah Resources plc (AIM: SAV) announces that it has received positive initial assay results from a 27 hole, 1,812m scout drilling programme (Figure 1) at its highly prospective 180km² Jangamo heavy mineral sands project ('Jangamo' or the 'the Project'), located in a world-class mineral sands province in southern Mozambique (Figure 2). To view the press release with the illustrative maps and images please use the following link: 

http://www.rns-pdf.londonstockexchange.com/rns/1744A_-2014-2-16.pdf

Highlights:

· Excellent progress made towards identifying a major heavy minerals system within the Jangamo tenement

· XRF assay results confirm broad zones up to 45 metres wide of anomalous titanium dioxide ('TiO₂') and zirconium dioxide ('ZrO₂')

· Low levels of deleterious elements such as chromium, uranium and thorium contaminants also recorded

· Two major mineralised dunal systems identified with strike lengths of at least 6km and 10km

· Discovered a new mineralised dune system in the north western part of the Project area, which significantly expands the exploration potential of Jangamo

· Further test work is continuing including mineralogy and metallurgy on selected anomalous intersections to determine the percentage Total Heavy Minerals ('THM') content of the intervals and the heavy mineral species present

· World class province - Jangamo is adjacent to Rio Tinto's major Mutamba1 mineral sands deposit which, along with another licence area in Mozambique, has an exploration target of 7-12 billion tonnes at 3-4.5% THM

Savannah's CEO, David Archer said, "We are delighted with the results received to date from our initial scout drilling campaign at our flagship Jangamo Project. The initial XRF assay results have returned anomalous and highly encouraging TiO₂ and ZrO₂ numbers over some very broad widths in two major zones, with strike lengths of at least 6km and 10km. The eastern finger of the tenement has shown particularly encouraging grades and widths with a number of the holes finishing in mineralisation. Importantly, the results highlight the excellent potential for significant widths and concentrations of heavy minerals such as ilmenite, zircon and rutile to be returned with the completion of further analysis to be completed shortly.

"Given the early stage of the exploration programme and the large distances between the scout drill holes, in many cases over 5km, we have made excellent progress towards identifying a major heavy minerals system within the tenement and are confident that follow up test work to determine the percentage THM content of the key intersections will continue to underpin the value potential of the Project. Indeed, with the discovery of a new area of mineralisation within the north western part of the Project, which significantly increases the resource potential, we believe we are well placed to rapidly advance Jangamo up the value curve. We look forward to reporting the final analysis results in due course."

Project Geology

A 1,812m reverse circulation ('RC'), scout drilling programme was completed in November 2013 to investigate the prospectivity of, and to test key dunal systems within, the Jangamo Project area. Geological reconnaissance and scout drilling work has confirmed that the Project is covered by a series of north-east trending Quaternary dunal and fluvial systems. The area has three morphological zones, composed of two inland dunes (red sands), which are the areas with the highest elevation, separated by a low lying area (alluvial sands), with different sedimentary characteristics (Figure 1).

The recent scout drill programme focused on preliminary testing each of these three morphological zones to determine their prospectivity to host mineral sands. Drilling has indicated that the most anomalous results have come from holes JMRC 018, 020 and 025 in the north-west area of the tenement and JMRC 026 and 027 in the south eastern area of the tenement. Given the spacing between the scout drill holes, in many cases over 5km, these initial results are very encouraging.

Geochemistry - XRF Analysis

Following the return of the drill samples to Perth, first pass XRF analysis was used as a cost-effective method to confirm which samples have heavy minerals in them so that a more thorough targeted analytical programme can be completed. The initial geochemistry is very positive with broad zones of anomalous TiO₂ and ZrO₂ of up to 45 metres being intersected. The preliminary assays also suggest low levels of deleterious elements such as chromium, uranium and thorium in the samples.

It is important to note when reviewing the XRF results that there is no direct correlation between the assay percentages and the percentage of the minerals (ilmenite, zircon and rutile for example) in the samples. Stage 2 of the assaying, including heavy media separation, mineralogy and metallurgy, must be completed to identify which minerals are present and to determine accurate percentages.

Common heavy minerals such as ilmenite are made up of both iron and titanium. FeTiO₃ is the most common form of ilmenite but can have minor amounts of magnesium and manganese, whilst zircon is a zirconium silicate (ZrSiO₄) for example.

Until the second analytical phase is completed, the final percentages and identities of the mineral species present will not be known.

Next Steps

Savannah is now finalising the next stage of analysis with the laboratory to determine the minerals present in the samples and the percentages in which they are present.

Given the encouraging results obtained from the initial scout drilling programme, Savannah is now beginning to plan the second phase of exploration and drilling to further define the prospectivity of the Jangamo Project area.

Further Information

Jangamo Project - Exploration Licence 3617L

The Jangamo Project is located in Southern Mozambique within a world class mineral sands province and is highly prospective for mineral sands including zircon, ilmenite and rutile. The Project covers an area of 180km² along an extensive dune system near the village of Jangamo, about 350km to the North East of the capital, Maputo.

The Jangamo Project lies immediately to the west of Rio Tinto's ('Rio') Mutamba deposit, one of two major deposits Rio has defined in Mozambique1, which collectively have an exploration target of 7-12Bn tonnes at 3-4.5% THM (published in 2008). Importantly, exploration work conducted at the Project to date indicates that the geology and geomorphology of Jangamo is similar to that of Rio's adjacent Mutamba deposit.

The Project area features excellent infrastructure with both grid power and the main EN1 highway cutting through the middle of the Project. The nearby town of Inhambane is serviced daily by LAMAir flights out of Maputo and there is excellent logistics in place to support operations, including a small port. The licence is valid until 10 December 2017.

Mozambique Mineral Sands

Based on extensive heavy mineral sand deposits located along most of the 2,700km long coastline, Mozambique has the potential to grow as one of the world's foremost producers of titanium and zirconium minerals. The country is currently the world's fourth largest producer of titanium feedstocks and the fifth largest producer of zircon. Furthermore, in Mozambique, FTSE 250 listed Kenmare Resources Plc has developed the producing Moma Mine, which has a Proved and Probable Ore Reserve of 869Mt @ 3.7% THM and a Measured Indicated and Inferred Mineral Resource of 7.4Bt @ 2.9% THM. Other large deposits, which further underpin Mozambique's prospectivity, includes the Chibuto heavy sands deposit, which averages 4% THM and has a reserve of 72 million tonnes of ilmenite, 2.6 million tonnes of zircon and 400,000 tonnes of rutile, and Rio Tinto's Mutamba and Mutamago deposits, which combined have an exploration target of 7-12Bn tonnes at 3-4.5% THM.

Competent Person

Dale Ferguson: The technical information related to Exploration Results contained in this Announcement has been reviewed and approved by Mr D. Ferguson. Mr Ferguson has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity to which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Ferguson is a Director of Savannah Resources plc and a Member of the Australasian Institute of Mining and Metallurgy. Mr Ferguson consents to the inclusion in this announcement of such information in the form and context in which it appears.

Notes

1http://www.riotinto.com/documents/ReportsPublications/Titanium_mineral_sands_exploration_target_in_Mozambique.pdf

For further information please visit www.savannahresources.com or contact:

Notes

About Savannah

Savannah Resources Plc (AIM: SAV) is a multi-commodity focussed exploration and development company. Through its 80% ownership of Matilda Minerals Limitada it operates the Jangamo exploration project in a world class mineral sands province in Mozambique which borders Rio Tinto's Mutamba deposit, one of two major deposits Rio Tinto has defined in Mozambique, which collectively have an exploration target of 7-12Bn tonnes at 3-4.5% THM (published in 2008). In addition, Savannah owns an effective 19% strategic shareholding in Alecto Minerals Plc which provides Savannah with exposure to both the highly prospective Kossanto Gold Project in the prolific Kenieba inlier in Mali and also to the Wayu Boda and Aysid Meketel gold / base metal projects in Ethiopia for which Alecto has a joint venture with Centamin Plc. Under this joint venture, Centamin Plc is committing up to US$14m in exploration funding to earn up to 70% of each project. The Company is also evaluating additional opportunities to expand its portfolio and geographical focus.

APPENDIX 1 - Drill Hole Summary

Note: GPS Zone 37

APPENDIX 2 - Sampling Procedures

Drilling occurred in 3m stages, dictated by the length of the drill rods provided by Agua Terra. The sand was collected via a hose coming directly from the RC head, into a cyclone on a stand. Two men would hold a large plastic bag, which had been numbered with the relevant finish depth, at the bottom of the cyclone and collect the sample coming out until the drill rod had travelled its course. The plastic bag was then carried over to the sampling area to be subsampled into numbered calico bags. After a new rod had been added, the driller would flush the rods and hose before starting to drill and a new plastic bag put under the cyclone.

In all the holes drilled the top 3 to 12 metres was generally a dry sample, however below this level the water table had an influence on the ability for the sand to pass through the inner tube of the drilling rods due to the clay in the sand getting too sticky. At this stage water was pumped into the compressed air stream and aided in flushing the sample to the surface. This however, meant that the sample collected was water soaked. Care had to be taken to make sure there was no spillage of the sample from the bag, whilst being transferred to the sampling table.

Prior to being sampled into a bags, a bottle cap full of sample taken from near the bottom of the plastic bag was placed in a gold panning dish and washed and panned to help visually determine the approximate concentration of heavy minerals.

The samples bags were sampled using a stainless steel scoop of sand which was placed into the plastic sample bags and cut from the top down to the bottom of the bag to take a representative sample. In all cases two samples were taken and placed into separate calico bags. The primary sample was placed into a bag with a SAV sample number, which had been predetermined by printed sample sheets, and was recorded next to the depth interval of the hole. A secondary sample was also taken as a reference or backup in case of problems with the primary sample, the bag in this case was marked with the hole number and sample interval. Every 25th sample was taken as a field duplicate and given a separate sample number from the primary sample taken for the specific interval. Every 50th sample was reserved for a blank and a standard, which was added after sample preparation and the samples have been sent to Australia.

The samples from each hole were moved to permanent storage facility in Tofo, a small coastal town about an hour's drive from the project area, where they were laid out in the sun and dried prior to shipping. All the primary samples were checked and bagged ready for transport to the Bureau Veritas sample preparation laboratory in Tete. Once the samples arrived in Tete, they were dried, homogenised and split down to 500g for transport to Perth for analysis.

Appendix 3 - Summary table of selected XRF Results

It is important to note when reviewing the XRF results that there is no direct correlation between the assay percentages and the percentage of heavy minerals in the samples. Stage 2 of the assaying must be completed to identify which heavy minerals are present and to to obtain actual percentages of the identified mineral species.

Common heavy minerals such as Ilmenite are made up of both iron and titanium, FeTiO3 is most common form of ilmenite but can have minor amounts of Mg and Mn, whilst zircon is a zirconium silicate (ZrSiO4) for example. Until phase 2 of the sampling is completed final percentages and minerals present will not be known.

· 500gms of sample was received at Bureau Veritas in Perth, a quarter was riffle split from the sample which was pulverised for XRF analysis.

· The remainder was retained in reserve for the second phase of the test work including mineralogical and metallurgical test work.

· XRF analysis for TiO2, Fe2O3, ZrO2, SiO2, Al2O3, SO3, MgO, MnO, CeO2, U, Th, P2O5, V2O5, Nb2O5, CaO, K2O, Cr2O3, LOI @ 1000°C.

· Both lab and Savannah QA/QC sampling was reviewed and found to have excellent repeatability.

· Only results >0.5% TiO2 over 12m with no internal dilution have been reported.

· XRF: X-Ray Flourescence, a method of multi element analysis.

**ENDS**