Savannah Resources Share Discussion Threads

[paleje] 13/8/2019 00:19

True the share price is a pain, FQ, but volume is small only net ~30k has caused today’s slide. There are lots of headwinds hitting sentiment at the moment but if you were looking at this dispassionately, as a new potential investor, you might be thinking it was a good entry point.
It hasn’t been great to sit tight on this one but it isn’t all down to DA, some of it perhaps but mostly circumstances beyond his control. Maybe some complacency on all our parts too but now we’re where we are, is it worth risking switching funds into something else? I personally think not although I did earlier in the year.

[paleje] 12/8/2019 00:52

There’s a several page article in the Sunday Times mag about EVs and why the slow uptake by consumers. Only Norway in Europe has managed to get anywhere near their targets and they’ve only done it with determined government involvement and inducements. The truth is people won’t buy the cars at the prices they’re asking until they can be certain of getting top-ups as easily as with petrol/diesel and they want longer cruise range and shorter charge times.

Bizarrely the article said that once they do get the support needed to really kick start demand, they will face further problems because of a shortage of essential battery materials, lithium and cobalt were the ones they mentioned, which could hamper production. I think they might have got that wrong as there is no shortage of those resources in the ground, only the financial incentive to dig them out until demand gets going. When it does there’ll be a rush and deep pockets will ensure supplies.

But it certainly needs some co-ordination and cross border cooperation, as you say inbrackets, to tempt us away from the Petrol pumps.

[inbrackets] 10/8/2019 12:29

I would have thought they would be taking a longer term view of establishing an industry for the nation rather than a spot price. A number of the moving parts in the jigsaw eg the deeper testing required by the OEM's, would still seem to be unsettled and of course, holiday season crept up. With the economic news around Europe, and especially for the car industry, one might easily imagine a combined front of pan European stimuli being pushed through shortly after they have packed away their Bermudas.

[paleje] 10/8/2019 11:37

True they don't seem to be in any hurry to back their words with actions, maybe they feel they won't get the best bids in current market conditions.

[broncowarrior] 09/8/2019 11:45

All good posts, thanks.

The massive plus point for SAV's project is that it is in Portugal, not a far flung difficult to reach place. Transport costs, political risk etc etc are all very low.

[paleje] 09/8/2019 11:12

Fair summary busraker1 thanks. We're not actually all that far below our base case assumptions, about 13% I reckon, whereas copper for instance is more that 20% lower than forecasts and cobalt 40% down. Assuming we're somewhere near the low point and that EVs are finally gradually starting to move (ads on TV is a good sign), and that our costs are in the lowest quartile which they are, then it's just a case of patience.

Plenty going on in the background I'm sure, we just tend to look on the bleak side when sp's are depressed, human nature.

[busraker1] 08/8/2019 21:13

He did mention a possible sale of the Oman asset but his preference was to put it in to a separate entity to ringfence it away from Portugal, because financing both projects within SAV would be 'challenging'...and you'd have to agree with that.

I guess that would mean SAV retaining the controlling share in that entity, but it can sort its own financing out without diluting SAV. In other words he'd prefer to retain majority ownership and have access to the future rewards rather than sell it off too cheap now. He talked about making it a mid-cap copper mining company, so that's a few hundred million mkt cap....as opposed to selling now for a tenth of that.

SAV may find it hard in the current environment to find financing for the Lithium mine, unless the lithium price and our share price rise this year rather than next which is possible. Of course, Europe may be keen to finance things hopefully. It is likely to involve some equity and the recent broker note had the assumption that SAV would issue another 700m shares to raise their part of the money for the lithium mine, plus hopefully a big loan etc. I hope that's 350m shares at 10p and not 700m at 5p!

Personally, I think the lithium price will start to rise in response to growing demand within the next 3 to 9 months, which would encourage greater financing to come on tap.

Some negative forecasters, including Morgan Stanley, still think we will be in an increasing lithium supply glut through to 2023. If that proves to be the case then we should all move on now! They will turn soon enough when it suits them!!

Some smaller independent forecasters think the demand will be 2 to 3 times that forecast by some of these big players. In that case, we'll get the promised lithium price surge and it should stay high for a little while. In those peaks we'll get our share price rewards, assuming SAV haven't really messed up the difficult steps that still lie ahead.

imho.

[paleje] 08/8/2019 20:09

Got that BW and I agree. But it does seem he'd prefer to dispose under the right deal, the licences will be needed either way.
Market isn't looking too kindly on EV related stuff at the mo. Unfortunately. We need a lot of good news ahead to lift us from this quagmire.

[broncowarrior] 08/8/2019 16:25

Paleje, if they were going to develop the mine in Oman they would need to build the infrastructure to do so. DA has always indicated it would be easy to get funding and not expensive but these things aren't cheap.

[paleje] 08/8/2019 14:35

Good brief interview, lets hope there are no further delays. Thanks Ged. It sounded as if David's preference would be to offload into a new group, what would that mean in terms of cash for SAV/ might there be in specie shares for investors I wonder.

BW why do you mention fund raise, I should think they've got 3-4m in the bank, it wouldn't be pleasant for LTHs at this level depending on the amount and purpose.

[broncowarrior] 08/8/2019 14:04

Fees are 50k - good news!

[broncowarrior] 08/8/2019 13:58

Looks like the market thinks some sort of fund raise is coming. Would be good to get some info from the board about likely costs for the Oman development.

35% of the costs would need to be met by SAV's partner of course.

[greatfull dead] 08/8/2019 13:33

Get,

Thank you.

Excellent interview with some good point on how David Archer wants to move forward in Oman ans Portugal. Also more news to come from Portugal soon.


ATB,
GD

[ged5] 08/8/2019 13:10

Sorry wrong one. Here's the longer version:-

[ged5] 08/8/2019 13:05

Thanks GD.

Latest interview:-

[greatfull dead] 08/8/2019 12:33

Savannah Resources* (SAV LN) 4.05p, Mkt Cap £42.4m –Update on grant of permits in Oman
• Savannah Resources has announced that it has received notice from the Public Authority for Mining (PAM) in
Oman of PAM’s intention to grant mining licences over the Mahab 4 and Maqail South copper deposits.
• The licences, are to be awarded once the scale of fees applicable under Oman’s new Mining Law, which came
into force in March this year, have been set and the relevant payments made.
• “Savannah is a 65% shareholder in the Omani company Al Fairuz Mining LLC, the holder of the Block 5 Exploration Licence which includes these two high-grade deposits”.
• Savannah Resources’ CEO, David Archer, welcomed the news and explained that the “Mahab 4 and Maqail South are examples of the type of high-grade copper deposits that are characteristic of the Oman Ophiolite Belt
and will be in the vanguard of new copper mine developments in Oman. Block 5 remains highly prospective for the discovery of further high-grade deposits that could further augment the planned hub-and-spoke mine
development based around Mahab and Maqail South. We look forward to announcing the final award of the Mining Licences in due course.”

Conclusion: Oman has a history of copper mining and the news of PAM’s intention to award licences at Mahab 4 and Maqail South indicates that Savannah Resources is well placed to develop the next generation of mines.

GLA,
GD

[greatfull dead] 08/8/2019 08:26

Another foundation stone in place.

GLA,
GD

[dropside] 08/8/2019 08:21

It's great news, Oman had been written off. All the benefits of early cash generation from this are back on the table. Bought a few more this morning.

[fqr714bhp] 08/8/2019 08:01

Some great news at last.

Lets see what the share price does today???

[greatfull dead] 08/8/2019 07:56

Yes good news...

GLA,
GD

[edgein] 08/8/2019 07:36

Good stuff fellas, looks like the ML's are on their way at last.

Regards,
Ed.