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Savannah Resources exits Mozambique to focus on lithium project in Portugal

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(Kitco News) - Savannah Resources, the European lithium development company, said today that following the completion of the strategic review on its mineral sands operations in Mozambique, it is to exit the Consortium Agreement with Rio Tinto with immediate effect.

Importantly, the company added it will also exit its remaining assets in Mozambique and that Rio Tinto will now take full responsibility for the Mutamba heavy mineral sands project.

According to the company's statement, Rio Tinto has paid US$9.5m cash primarily to Savannah's wholly owned UK subsidiary in respect of the termination of the Consortium Agreement and the transfer of the in-country Savannah team to Rio Tinto.

Savannah said that the proceeds of the transaction will be committed to the development of its flagship Barroso lithium project in Portugal, for which Savannah's firm commitment is to plan and deliver a responsible operation, which increases the wellbeing of local communities.

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CEO David Archer commented, "With the company's focus moving to the further development and commercialization of the Barroso lithium project, Mutamba has become non-core to Savanah and an exit from Mutamba has been agreed with our partner, Rio Tinto. The transaction allows us to concentrate both management resources and our increased cash reserves exclusively to lithium in the Iberian Peninsula."

Savannah is the owner of the Barroso lithium project, located close to key infrastructure in Northern Portugal which contains the most significant spodumene lithium resource in Western Europe. A positive Scoping Study outlined a conventional mine and concentrator operation producing 175,000t of spodumene concentrate per annum.

The company indicated that a Definitive Feasibility Study is underway, and that Portugal's environmental regulator is currently evaluating Savannah's Environmental Impact Assessment study.

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