Savannah Resources Plc 200% Increase in Lithium Mineral Resource Estimate to 9.1Mt

26 February 2018 Savannah Resources Plc 200% Increase in Lithium Mineral Resource Estimate to 9.1Mt and Significant Exploration Target at Mina do Barroso Lithium Project, Portugal Savannah Resources plc (AIM: SAV and SWB: SAV) ('Savannah' or 'the Company'), the AIM quoted resource development company, is pleased to announce a revised JORC 2012-Compliant Inferred Mineral Resource Estimate and an initial Exploration Target for the Mina do Barroso Lithium Project (‘Mina do Barroso’ or the ‘Project’), located in northern Portugal (Figure 1). Overview: ~200% increase in Inferred Mineral Resource Estimate to 9.1Mt at 1.03% Li₂O containing 94,100t of Li₂O using a 0.5% Li₂O cut-off grade Deposit Tonnes (Mt) Li2O% Li2O Tonnes Reservatorio 3.2 1.00 32,000 Grandao 5.5 1.04 56,500 NOA 0.5 1.23 5,600 Total 9.1 1.03 94,100 Mineral Resource Estimate covers three of at least eight known pegmatites on the Mina do Barroso Mining Lease Further drilling is now underway utilising both Reverse Circulation (RC) and diamond drill rigs, targeting both down dip and strike extensions of currently defined Mineral Resource Estimate Further Mineral Resource Estimate updates are expected during 2018 as the drill programme advances – Grandao resource is based on the first 40 holes drilled only (of the 61 drilled to date) Savannah remains on track to make a development decision by the end of the year In addition, an initial Exploration Target* for the Grandao and Reservatorio deposits of 8-12Mt at 1.0% to 1.2% Li₂O has been defined. This gives a project target (including Mineral Resources) of 17-21Mt at 1.0-1.2% Li₂O *Cautionary Statement: The potential quantity and grade of the Exploration Targets is conceptual in nature, there has been insufficient exploration work to estimate a mineral resource and it is uncertain if further exploration will result in defining a mineral resource. Savannah’s CEO, David Archer said: “The Mineral Resource Estimate defined from our 2017 drill programme supports our belief that Mina do Barroso is one of Europe’s most promising lithium projects. Whilst we are delighted with the results to-date, the Exploration Target underscores the potential to increase the aggregate Mineral Resource Estimate over the coming months, especially as we now have two drilling rigs on site. “This potential is matched by excellent first pass metallurgical test results with conventional processes, the spodumene dominant nature of the deposits, open-cut potential, access to excellent infrastructure including roads and ports, and the premier nature of the jurisdiction. “Looking ahead, we are progressing with more detailed, second pass metallurgical test work and hope to shortly commission a Scoping Study to lead into a Definitive Feasibility Study later this year. We believe that we are moving towards defining a project that will sustain one of Europe’s most significant, long-term, lithium mining operations.” Figure 1. Mina do Barroso Project Summary Map showing prospects and drilling completed to date Mineral Resource Estimate A Mineral Resource Estimate for the Grandao and NOA Lithium Deposits has been completed by Payne Geological Services Pty Ltd, an external and independent mining consultancy - http://www.paynegeo.com.au/paul-payne. The Deposits form part of Savannah’s Mina do Barroso Lithium Project, located in northern Portugal. The Grandao Deposit comprises two separate pegmatite intrusions. The upper part of the Deposit occurs within a broad, flat-lying pegmatite body with a typical thickness of 20m-40m. The lower portion appears to be a steep dipping dyke, which is 15m-20m in true width. The geometry of the lower zone is not clear due to the current sparse drilling in this portion of the Deposit, where only three holes drilled to the depths to intersect the zone. The overall Grandao Mineral Resource Estimate is based on results from 40 RC drill holes completed by Savannah in 2017. Both pegmatite zones remain open along strike (Figure 2-3). Figure 2. Grandao Resource Model Figure 3. Cross Section through Grandao Resource Model At the NOA Deposit, mineralisation is hosted in a steep dipping, NW trending tabular dyke 5m-10m in true width. The Mineral Resource Estimate is based on results from 9 reverse circulation drill holes completed by Savannah in 2017. The Deposit outcrops over a strike length of approximately 400m and remains open along strike and at depth (Figure 4-5). Figure 4. NOA Resource Model Figure 5. Cross Section through NOA Resource Model The Mineral Resource Estimate has been classified as an Inferred Mineral Resource Estimate in accordance with the JORC Code, 2012 Edition and are shown in Table 1. Table 1. Grandao and NOA Deposits Inferred Mineral Resource Estimate (above 0.5% Li2O cut-off grade) Deposit Tonnes Li2O Fe2O3 Li2O Mt % % Tonnes Grandao 5.5 1.04 1.2 56,500 NOA 0.5 1.23 1.3 5,600 RESOURCE SUMMARY – GRANDAO AND NOA LITHIUM DEPOSITS Geology At Mina do Barroso, lithium mineralisation occurs predominantly in the form of spodumene-bearing pegmatites, which are hosted in metapelitic and mica schists, and occasionally carbonate schists of upper Ordovician to lower Devonian age. The main Grandao pegmatite is a flat-lying, tabular zone defined over an area of 400m north-south and 330m east-west and varies in thickness from 10m-50m. It is very close to surface and is visible in outcrop over a significant area. A lower zone of mineralisation is also present at Grandao, hosted in what is interpreted to be a steep-dipping, tabular pegmatite dyke 15m-20m in true width. The geometry is not well defined due to the currently sparse drilling (Figure 4). Figure 6. Grandao Geological Model At the NOA Deposit, the host pegmatite is a steep dipping, northwest trending dyke, which is 5-10m in true width. It has been mapped in outcrop over much of the interpreted 400m strike length of the Mineral Resource Estimate. Figure 7. NOA Geological Model At the Project, lithium is present in most aplite compositions and laboratory test work confirms that the lithium is almost exclusively within spodumene. Distinct lithium grade zonation occurs within the pegmatites, with weakly mineralised zones often evident at the margins of the dykes. Minor xenoliths and inliers of schist are observed on occasions. The weathering profile comprises a shallow, surficial zone of weak to moderate oxidation, particularly of the schistose country rock. A zone of deeper weathering exists on the western side of the Grandao Deposit with moderate oxidation to a depth of up to 50m. Drilling A total of 40 RC holes define the Grandao Inferred Mineral Resource Estimate. The holes were drilled on an approximate grid spacing of 40m-60m. All holes were drilled by Savannah in 2017. The NOA Deposit is defined by 9 RC holes. In the southeast portion of the deposit, holes are drilled at 30m spacings on 50-60m spaced cross sections. The northwest portion of the deposit is defined by single drill holes on 60-80m spaced sections. Drill collar locations are recorded in Universal Traverse Mercator (“UTM”) coordinates using hand-held GPS, with elevations adjusted to a regional topographic Digital Terrain Model (“DTM”). All Savannah drilling has been down-hole surveyed using a gyroscopic tool. Sampling and Sub-Sampling Techniques For the Savannah drilling, a face-sampling hammer was used with samples collected at 1m intervals from pegmatite zones with composite sampling of typically 4m in the surrounding schists. The 1m samples were collected through a rig-mounted rotary splitter and were 4kg-6kg in weight. The 4m composites were collected by spear sampling of the 1m intervals. Samples were weighed to assess the sample recovery which was determined to be satisfactory. Sample Analysis Method For all Savannah drilling, whole samples were crushed then riffle split to produce a 250g split for pulverizing and analysis. The samples were analysed using ALS laboratories ME-MS89L Super Trace method which combines a sodium peroxide fusion with ICP-MS analysis and a multi-element suite was analysed. QAQC protocols were in place for the drilling programmes and included the used of standards and field duplicates. The data has confirmed the quality of the sampling and assaying for use in Mineral Resource estimation. Estimation Methodology For the Grandao Mineral Resource Estimate, a Surpac block model was constructed with block sizes of 20m (EW) by 10m (NS) by 5m (elevation) with sub-celling to 5m by 2.5m by 1.25m. The typical drill hole spacing is 40m-60m. For the NOA Mineral Resource Estimate, block size used was 20m (EW) by 5m (NS) by 5m (elevation) with sub-celling to 5m by 1.25m by 1.25m. Interpretation of the pegmatite dykes was completed using detailed geological logging and Fe geochemistry. Wireframes of the pegmatites were prepared and within those the sample data was extracted and analysed. A clear break in the grade distribution occurs at 0.5% Li2O and this grade threshold was used to prepare the internal grade domains for estimation. Zones of unmineralised schist within the pegmatite body were selectively wireframed and excluded from the estimate. At Grandao, pegmatite and mineralisation domains were extrapolated up to 40m horizontally from the drill hole intersections. At NOA, wireframes were extended 40m-60m down dip from intersections and for 40m along strike. Sample data was composited into 1m intervals then block model grades estimated using ordinary kriging (OK) grade interpolation at Grandao and inverse distance squared (ID2) grade interpolation at NOA. A first pass search range of 50m was used and oriented to match the dip and strike of the mineralisation. A minimum of 10 samples and a maximum of 24 samples were used to estimate each block. The majority of the Mineral Resource Estimate (63% Grandao, 61% NOA) was estimated in the first pass with expanded search radii of 100m and 200m used for the blocks not estimated in the first pass. No high-grade cuts were applied to the estimate. Iron within the pegmatites is uniformly low, with a mean Fe2O3 grade of 1.2% at Grandao and 1.3% at NOA. Other similar deposits have reported that a large proportion of the assayed iron is due to contamination from the abrasion of steel drilling and sample preparation equipment and this will be investigated as part of ongoing studies at the project. Bulk density determinations (helium pycnometer) were carried out on 87 sample pulps. Bulk density values applied to the estimates were 2.5t/m3 for oxide lithologies, 2.7t/m3 for unoxidized pegmatite and 2.8t/m3 for unoxidized schist. Mineral Resource Classification The Mineral Resource Estimate was classified in accordance with the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC, 2012). The main pegmatite dyke at Grandao has generally been defined by 40m to 60m spaced drill holes. The majority of holes have consistently intersected pegmatite, with the majority intersecting resource grade Li2O mineralisation and the continuity of lithium mineralisation is good. The deep dyke has been delineated by only three drill holes. Detailed collar and topographic surveys were not available for the deposit and until these are received the deposit has been classified as an Inferred Mineral Resource Estimate. The NOA Deposit has been drilled at 30m to 80m hole spacings. All holes have intersected resource grade lithium mineralisation but due to the broad hole spacing and small number of intersections, the Deposit has been classified as an Inferred Mineral Resource Estimate. The main shallow pegmatite at Grandao lies entirely above 90m vertical depth. The deep pegmatite has been reported to a depth of 260m vertical. The NOA mineralisation has been reported to a maximum vertical depth of 90m. Cut-off Grades The shallow, outcropping nature of both deposits and the flat lying, shallow nature of the Grandao pegmatite suggests good potential for open pit mining if sufficient resources can be delineated to consider a mining operation. The lower pegmatite at Grandao has favourable geometry and thickness to consider low-cost underground mining. As such, the Mineral Resource Estimate has been reported at a 0.5% Li2O lower cut-off grade to reflect assumed exploitation by low cost mining methods. Metallurgy Metallurgical test work has been conducted by Savannah on representative mineralisation at Mina do Barroso. The work was completed by Nagrom Metallurgical in Australia and confirmed that high-grade lithium, low grade iron concentrate can be generated from the mineralisation using conventional processing technology. Microscopy confirmed that the concentrate was almost entirely spodumene. Modifying Factors No modifying factors were applied to the reported Mineral Resource Estimate. Parameters reflecting mining dilution, ore loss and metallurgical recoveries will be considered during the any future mining evaluation of the project. Exploration Target During its first six months of exploration, Savannah has defined a Mineral Resource Estimate from three deposits in the Mina do Barroso Project area. All three deposits remain open and untested by drilling either down dip or along strike of the defined Mineral Resource Estimate and there is excellent potential to extend the deposits with further drilling. In addition, there are numerous other outcropping pegmatite dykes that require drill testing to determine if they are also lithium bearing. Savannah has been drilling at Mina do Barroso since mid-2017 and ongoing programmes for 2018 have commenced which are designed to test for extensions of the defined deposits and to test other outcropping pegmatite targets in the Project area. Infill drilling to increase the confidence in the reported Inferred Mineral Resource Estimate is also being planned. To quantify the potential of the Project beyond the currently defined Inferred Mineral Resource Estimate, an initial Exploration Target* for the Grandao and Reservatorio Deposits of 8-12Mt at 1.0% to 1.2% Li₂O has been defined. This gives a project target (including Mineral Resource Estimate) of 17-21Mt at 1.0-1.2% Li₂O. Table 2. Exploration Targets for Mina do Barroso Project Deposit Tonnage Range (Mt) Li2O % Lower Upper Reservatorio Bottom of Inferred to 200m Vertical Depth 5.0 7.0 1.0-1.2% Grandao 50% Expansion of Upper Pegmatite 2.0 3.0 1.0-1.2% 100% Expansion of Lower Pegmatite 1.0 2.0 1.0-1.2% Total Mina do Barroso Exploration Target 8.0 12.0 1.0-1.2% *Cautionary Statement: The potential quantity and grade of the Exploration Targets is conceptual in nature, there has been insufficient exploration work to estimate a mineral resource and it is uncertain if further exploration will result in defining a mineral resource. Reservatorio Exploration Target A Mineral Resource Estimate was completed for the Reservatorio Deposit in December 2017. It was modelled and estimated for the full extent of the SAV drilling and the Inferred Mineral Resource Estimate was extended between 40m and 100m down dip from the deepest drill holes. There is no information to suggest that the pegmatite and lithium mineralisation does not continue with the same characteristics and grade as the drilled portion. As a result, beneath the Inferred Mineral Resource Estimate boundary, a wireframe model was created, assuming continuation of the mineralisation down-dip to 200m below surface. Applying a density of 2.6t/m3 as used in the Reservatorio Inferred Mineral Resource Estimate, and assuming the same lithium grade observed in the drilled portion, the Exploration Target has been defined as 5 Mt to 7 Mt at a grade of 1.0% to 1.2% Li2O. Grandao Exploration Target An Inferred Mineral Resource Estimate was completed for the Grandao Deposit in February 2018. It was modelled and estimated for the area drilled in detail by SAV. The Inferred Mineral Resource Estimate was extended between 20m and 40m along strike from drilled area. The shallow pegmatite appears to be closed off by drilling to the northeast and to the southeast. To the west and northwest, the mineralisation remains open and untested. To the south some sparse drilling has confirmed the presence of mineralised pegmatite for up to 150m from the Mineral Resource Estimate boundary and the limits of the mineralisation have not been found. There is no information to suggest that the pegmatite and lithium mineralisation does not continue to the west and northwest with the same characteristics and grade as the drilled portion. The Exploration Target for the shallow pegmatite is considered to be at least 50% of the defined Mineral Resource Estimate for that portion of the deposit so the Exploration Target has been defined as 2 Mt to 3 Mt at a grade of 1.0% to 1.2% Li2O. The deep pegmatite has been intersected in only three holes which have recorded thick, high grade mineralisation. The mineralisation is open in all directions and the Exploration Target has been defined as a 100% increase on the defined Mineral Resource Estimate which gives a Exploration Target of 1 Mt to 2 Mt at a grade of 1.0% to 1.2% Li2O. Competent Person and Regulatory Information The information in this announcement that relates to exploration results is based upon information compiled by Mr Dale Ferguson, Technical Director of Savannah Resources Limited. Mr Ferguson is a Member of the Australian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Ferguson consents to the inclusion in the report of the matters based upon the information in the form and context in which it appears. The Information in this report that relates to Mineral Resources and Exploration Targets is based on information compiled by Mr Paul Payne, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Payne is a full-time employee of Payne Geological Services. Mr Payne has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Payne consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014. CONTACT US For further information please visit www.savannahresources.com or contact: David Archer Chief Executive Officer Savannah Resources plc Tel: [phone] David Hignell / Gerry Beaney (Nominated Adviser) Northland Capital Partners Ltd Tel: [phone] Christopher Raggett / Emily Morris (Joint Broker) finnCap Ltd Tel: [phone] Jon Belliss (Joint Broker) Beaufort Securities Ltd Tel: [phone] Charlotte Page / Lottie Wadham (Financial PR) St Brides Partners Ltd Tel: [phone] About Savannah We are a diversified resources group (AIM: SAV and SWB: SAV) with a portfolio of energy metals projects - lithium in Portugal and copper in Oman - together with the world-class Mutamba Heavy Mineral Sands Project in Mozambique, which is being developed in a consortium with the global major Rio Tinto. We are committed to serving the interests of our shareholders and to delivering outcomes that will improve the lives of our staff and the communities we work with. The group is listed and regulated on AIM and the Company’s ordinary shares are also available on the Börse Stuttgart (SWB) under the ticker “SAV” Please refer to the Savannah Resources website for the full RNS, www.Savannahresources.com