Europe's Strategic Lithium Player Targeting 2027 Production

• Savannah Resources is positioning itself to be a leading producer of lithium concentrates in Europe, with production targeted to begin in 2027.
• The company's Barroso project in Portugal is comparable in size to Pilbara Minerals when it started, with plans to produce 200,000 tons of spodumene concentrate at 5.5% lithium content.
• The project has received strategic designation under Europe's Critical Raw Materials Act, opening doors to financing options including support from the European Investment Bank and the German development bank KFW.
• Savannah has secured its first offtake agreement with AMG Critical Materials, who has also become a shareholder, providing commercial validation of the project.

Savannah Resources is positioning itself as a future leading producer of lithium concentrates in Europe, with its flagship Barroso Lithium Project in Portugal targeting production by 2027. In a recent interview, CEO Emanuel Proença outlined the company's strategy and progress amid the current challenging lithium market environment. With extensive experience in energy transition and mobility, Proença leads a team composed of industry veterans from companies including Arcadium, SQM, and MinRes, complemented by his own background in strategy consulting and business leadership. The Barroso project comes at a critical time for Europe's attempts to secure domestic supply of critical minerals and reduce dependence on Chinese dominance in the battery supply chain.

Current Lithium Market Dynamics

The lithium market has experienced significant volatility in recent years, with dramatic price swings creating uncertainty for investors and project developers. Proença acknowledges this reality while maintaining a pragmatic outlook on market fundamentals.

"Commodities in construction always have boom and bust cycles, and lithium has gone through a few booms and a few busts. It certainly is now in the period in which you are at the bottom or were at the bottom only a few months ago and are still trying to define exactly when momentum comes back in."

Despite recent negative sentiment surrounding the lithium sector and electric vehicle demand, Proença emphasizes that global demand for lithium grew by over 25% last year. This remarkable growth trajectory is expected to continue, particularly as battery storage systems emerge as a significant new demand driver alongside electric vehicles.

The Barroso Lithium Project

Savannah's Barroso project represents one of Europe's most advanced hard rock lithium developments. The initial phase will produce approximately 200,000 tons of spodumene concentrate at 5.5% lithium content annually, a scale comparable to successful Australian producers like Pilbara Minerals in their early stages.

The company has defined a resource of 28 million tons within its licensed 20 million ton area, with mineralization remaining open in multiple directions. This suggests significant potential for resource expansion, though the company is currently focused on advancing the existing resource to production rather than expansion drilling.

One of the project's key competitive advantages is its favorable strip ratio of 6:1, which Proença describes as "top benchmark" and "one of the best strip ratios that you will have in the sector." The project also boasts a 73% recovery rate that is "close to top class," with laboratory-scale testing actually achieving higher recoveries.

Additional value streams may come from by-products including quartz, feldspar, and mica, which can be sold to nearby ceramics and insulation industries in Portugal and Spain. The project benefits from access to skilled local workforce at competitive costs and abundant renewable energy resources.

European Lithium Landscape

Europe's push for strategic autonomy in critical minerals has created a supportive environment for domestic lithium projects. While China established its dominance in battery materials 10-15 years ahead of Western economies, Europe is now moving decisively to catch up.

"If we were in a football match, we would probably be in minute 15 of the first half, and China would have scored the goal. They clearly are ahead of the game, but there is plenty still to be played."

European authorities have recognized that failing to develop domestic battery supply chains would mean losing "a very relevant share of their jobs, of their value added, of their industry," particularly in the automotive sector which accounts for approximately 15 million jobs across the continent.

The European Commission's Critical Raw Materials Act has moved at "warp speed" by European standards, demonstrating the urgency attached to securing strategic mineral supplies. Financial institutions including the European Investment Bank have already supported two mining projects in the past year after three decades of avoiding the sector.

Interview with Chief Executive Officer, Emanuel Proença

Strategic Partnerships & Financing

Savannah has secured its first offtake agreement with AMG Critical Materials, a company with decades of experience in critical minerals including an operating mine in Brazil and Europe's first large lithium refinery in Bitterfeld, Germany. AMG has also become a shareholder in Savannah, providing important commercial validation of the project.

Proença highlighted the increasing willingness of European institutions to support critical minerals projects.

"We've seen actually German banks funding Canadian projects, 700 million bucks to Troilus Gold a couple of weeks ago for their copper components." 

The company has received a letter of intent from the German development bank KFW, supported by a bank guarantee from Allianz Trade. This came even before the project received its strategic designation under the Critical Raw Materials Act, suggesting strong institutional support for Savannah's development plans.

Proença believes the company has an opportunity to secure favorable financing terms, potentially with a higher debt component than is typical for mining projects, due to the strategic importance of European lithium supply and the project's strong ESG credentials.

Social License & Community Engagement

Recognizing that mining projects often face social acceptance challenges, particularly in densely populated Europe, Savannah has prioritized community engagement and building local relationships. Proença notes that the project area is in an economically challenged region that has lost population to emigration in recent decades, presenting an opportunity for positive economic impact.

"When I joined the project, I had a clear mandate to make the project more Portuguese, more understood locally, and more accepted by everyone. The community overall in the region has understood that we are here to do something good."

Notably, there are no residential structures within the concession area, meaning no relocations will be required - a significant advantage for a European mining project. The company has already begun hiring locally, providing tangible benefits to surrounding communities.

Path to Production

Savannah is currently completing its Definitive Feasibility Study (DFS), expected by the end of 2025, with plans to begin construction in 2026 and commence production in 2027. The company reports being fully funded through the DFS stage.

The project is "mostly permitted," according to Proença, suggesting that permitting is unlikely to be a critical bottleneck. However, land control remains a focus area, with the company making "significant progress" in securing necessary land access rights through either negotiation or legal instruments. The project economics appear robust, with Proença stating that even at current depressed lithium prices, the Barroso project would be profitable. 

"At the scoping study level, we showed numbers in which we would break even at $600. [The project aims to be] in the middle of the global cost curve while producing in Europe."

The Investment Thesis for Savannah Resources

• European Supply Security Play: Positioned to be one of Europe's first significant lithium producers, aligned with the EU's Critical Raw Materials Act and strategic autonomy goals.
• Production Timeline Matches Market Recovery: Targeting production in 2027-2028, coinciding with analysts' projected lithium price recovery to $1,500-2,000 per ton.
• Competitive Economics: Favorable strip ratio (6:1), high recovery rates (73%), and proximity to renewable energy provide cost advantages to compete globally.
• Strategic Validation: First offtake agreement and equity investment from AMG Critical Materials provides commercial validation.
• Institutional Support: Letter of intent from German development bank KFW and strategic project designation under EU's Critical Raw Materials Act opens favorable financing options.
• Expanding Resource: Current 28 million ton resource with mineralization open in multiple directions provides expansion potential beyond initial 200,000 ton annual production.
• By-product Revenue Potential: Ability to monetize quartz, feldspar, and mica by-products to nearby ceramics and insulation industries.
• Strong Local Support: Growing Portuguese ownership (25% of shares) and community acceptance in an economically challenged region.

Macro Thematic Analysis

The European Union's push for strategic autonomy in critical minerals represents a fundamental shift in industrial policy, driven by both economic and geopolitical imperatives. With the automotive sector employing approximately 15 million people across the continent, the transition to electric vehicles presents both an existential threat and a transformative opportunity. China's decade-long head start in battery materials has created a significant competitive disadvantage that European policymakers are now urgently addressing through initiatives like the Critical Raw Materials Act.

The European Investment Bank's decision to finance mining projects after a three-decade hiatus demonstrates the extraordinary priority now placed on securing domestic critical mineral supplies. This policy shift coincides with growing recognition that battery energy storage systems will create additional demand beyond electric vehicles, potentially accelerating lithium demand growth beyond current projections.

As Proença aptly summarizes the opportunity: 

"Europe is not known to be fast in transformations, but it certainly is known to be an economic block that delivers and that continues to deliver very high quality in a variety of fronts, and the automotive industry is tremendously important for it." 

This fundamental industrial imperative provides the foundation for European lithium projects like Savannah's Barroso development.