London based mining company, Savannah Resources, has struck high-grade lithium oxide at the exploratory drilling stage the Mina do Barroso lithium project.
Savannah, valued at around £30 million, now owns 75% of Slipstream Resources Portugal which holds the mining licence for Mina do Barroso in the very north of the country near the Spanish border.
In May this year, Savannah bought its controlling stake in the strategic mine as the project already had an approved plan, an environmental impact assessment and a 30-year mining concession licence.
The company now needs to find recoverable deposits of lithium oxide if it is to go ahead with commercial production from the end of 2018.
The first phase of the investigation was to define the extent of lithium bearing areas before drilling.
Previous work at the mine focused on the production of ceramics, not lithium but with a worldwide lithium boom starting, caused by the growth in demand for battery packs for electric vehicles, Portugal is keen to offer mining companies the chance to develop resources and last year banked €3.8 million from 30 applications for the right to prospect for lithium over a 2,500 square kilometer area.
The lithium mining at Mina de Barroso had been unstructured but recent work has included geological mapping, trenching, drilling and preliminary metallurgical testing showing relatively high grades of lithium oxide with samples showing up to 1.67% lithium oxide.
Savannah Resources said that over the next two weeks it will be drilling to 5,000 metres to try and asses reserves before deciding whether fully to develop the mine from the end of 2018.
Speaking to Interactive Investor, Savannah’s CEO, David Archer, commented, "We're pleased that our mapping, as a preliminary to drilling, has extended the surface expressions of three major lithium bearing pegmatites* at Mina do Barroso. Based on previous drilling and channel sampling, the three pegmatites mapped have been shown to have relatively high-grades of lithium oxide and we look forward to converting this into a commercial resource."
Savanna Resources sees a market opportunity as mainland Europe currently consumes around 25% of the world’s lithium and is an early adopter of electric vehicles and battery storage systems.
With battery production by major European manufacturers rapidly expanding, any potential local supplies from mainland Europe are being keenly sought, “Savannah believes that the Mina do Barroso, together with its enlarged portfolio of lithium assets, is ideally positioned to address this strategic need.”
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* Pegmatites are extreme igneous rocks that form during the final stage of a magma's crystallization. They are extreme because they contain exceptionally large crystals and they sometimes contain minerals that are rarely found in other types of rocks.
