Project & Stakeholder update

Savannah advances Barroso Lithium Project, but major value remains years away and unfinanced.

What the company is saying

Savannah Resources is announcing the start of the final pre-construction drilling programme at its Barroso Lithium Project in Portugal, positioning the project as Europe's largest spodumene lithium deposit and a 'Strategic Project' under the European Critical Raw Materials Act. The company highlights recent milestones: publication of a Definitive Feasibility Study with a 20Mt JORC Reserve, new land access agreements covering 150 hectares, and the signing of its seventh local partnership this year, including an MoU with the parish church of Boticas. Management frames these developments as evidence of technical progress, community engagement, and readiness for the next project phase. The tone is optimistic and forward-looking, with CEO Emanuel Proença quoted on the importance of the drill programme and team expansion, including the appointment of Jose Almeida as FEED Engineer. The company also notes a Portuguese State development grant approval of up to €110 million and claims future output of 183,000 tonnes per annum of spodumene concentrate, enough for half a million vehicle battery packs annually. The narrative emphasizes momentum toward construction and financing, but does not claim these are complete.

What the data suggests

The announcement provides concrete figures on project scale and milestones: a 20 million tonne JORC Reserve, 150 hectares of new land access, and a €110 million Portuguese State grant approved in January 2026. The current drilling programme is scheduled for approximately four weeks, with two rigs on site and two more expected within the month. The company expects to fill ten additional roles by year-end 2026 and has selected a FEED vendor, with work starting imminently. Once operational, the project is projected to produce 183,000 tonnes per annum of spodumene concentrate, supporting about 500,000 vehicle battery packs per year and contributing to the EU's 10% endogenous lithium production goal by 2030. Despite these specifics, the announcement lacks binding project finance, construction start dates, or offtake agreements. Most operational and financial benefits remain contingent on future execution, and no revenue, cost, or cash flow data is disclosed. The evidence supports late-stage project development, but the pathway to cash generation is not yet secured.

Analysis

The announcement is upbeat and highlights several tangible milestones, such as the start of the final pre-construction drilling programme, publication of the Definitive Feasibility Study, and the approval of a €110m state grant. However, many of the key claims are forward-looking, including expectations for future lithium production, completion of engineering studies, and team expansion. The most significant benefits (large-scale lithium output, vehicle battery pack supply) are contingent on successful project financing, construction, and commissioning, all of which are multi-year processes. The capital intensity is high, as evidenced by the €110m grant, but there is no immediate earnings impact or disclosure of profitability, revenue, or cash flow. The language around 'well advanced' due diligence, 'expected' arrivals of rigs, and future hiring inflates the sense of progress relative to what is actually realised. The data supports that Savannah is advancing through late-stage project development, but the gap between narrative and measurable, near-term financial benefit remains substantial.

Risk flags

• ●Project financing is not yet secured. While technical and environmental due diligence is said to be 'well advanced,' there are no binding commitments from lenders or investors, leaving the project exposed to funding delays or shortfalls.
• ●Permitting and licensing remain incomplete. The announcement references ongoing engineering and the need for an Execution Project report as part of the RECAPE process, indicating regulatory approvals are still pending and could be a source of delay.
• ●Operational execution risk is high. The transition from drilling and engineering to construction and production involves complex logistics, hiring, and supply chain management, with no evidence yet of construction contracts or offtake agreements.
• ●Forward-looking production claims are contingent on multiple unproven steps. The stated annual output of 183,000 tonnes of spodumene concentrate and the ability to supply half a million vehicle battery packs per year are projections, not realised outcomes, and depend on successful project delivery.
• ●Community and stakeholder relations, while actively managed, could still present challenges. Multiple MoUs have been signed, but local opposition or shifting political priorities could impact project timelines or terms.

Bottom line

Savannah Resources is making tangible progress on the Barroso Lithium Project, with final pre-construction drilling underway, a €110 million state grant approved, and a 20Mt JORC Reserve now published. The company has expanded land access and is building local partnerships, but has not yet secured project financing, construction contracts, or offtake agreements. The projected output of 183,000 tonnes per annum of spodumene concentrate is significant but remains years from realisation and is subject to substantial execution and permitting risks. Investors should see this as a late-stage development update, not an imminent production or cash flow event. The most important takeaway is that while Savannah is moving closer to construction readiness, the real investment inflection point will come only when financing and regulatory hurdles are cleared. Watch for binding finance agreements and construction start dates as the next critical milestones.

Announcement summary

(AIM:SAV) Savannah Resources Plc announced the start of the final pre-construction drilling programme at the Barroso Lithium Project in Portugal, which is classified as a 'Strategic Project' under the European Critical Raw Materials Act and is Europe's largest spodumene lithium deposit. The company has signed a Memorandum of Understanding with Fábrica da Igreja da Freguesia de Boticas, marking the seventh partnership agreement with local entities this year. Recent milestones include the publication of the Definitive Feasibility Study for Phase 1 of the Barroso Lithium Project and the initial 20Mt JORC Reserve Statement, as well as land access and benefit sharing agreements with two local communities, granting access to a further 150 hectares. Two rigs are currently operating on site, with a third and fourth rig expected to arrive soon to accelerate the geotechnical programme, which is expected to take approximately 4 weeks to complete. Data from the drilling will inform the geotechnical study and final detailed engineering designs for key infrastructure. Technical and Environmental & Social due diligence processes for Project Finance are well advanced, with final reports expected to be available to shortlisted potential lenders. Detailed engineering of water reservoirs is also well advanced, and the Process plant Front-End Engineering Design (FEED) vendor has been selected, with FEED workstream expected to start later this week. Team expansion continues, with Jose Almeida joining as FEED engineer in August and ten additional roles expected to be filled by end of 2026. The MoU with Fábrica da Igreja da Freguesia de Boticas includes nominating a representative to the Project's Local Consultative and Monitoring Committee. Savannah sponsored the 16th Quadrennial Symposium of the International Association on the Genesis of Ore Deposits (IAGOD) in Porto from 30 August to 2 September 2026. The Barroso Lithium Project was approved for a Portuguese State development Grant of up to €110m in January 2026 and is expected to produce enough lithium (contained in approximately 183,000tpa of spodumene concentrate) for about half a million vehicle battery packs per year.

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