AIM-listed Savannah Resources has indicated that it has been conditionally awarded a third mining concession, by the Minister of Mineral Resources and Energy in Mozambique, for the Mutamba Heavy Mineral Sands Project, over which the company operates a joint venture with global mining giant Rio Tinto.
The mining concession 9228C is valid up until 3 September 2044, with the possibility of an additional 25-year extension.
David Archer, Savannah’s CEO said: “The conditional award of the third mining concession to Mutamba Minerals Sands SA completes the tenement set of the Mutamba project in Jangamo/Inharrime and represents a significant achievement for Savannah in its joint venture with Rio Tinto. To finalise the process, the normal administrative payments and processes need to be completed; these are currently underway for all three licences.”
He explained that the company is completing the administrative conditions in a chronological manner following which all three licences will be fully formalised in due course, which, when completed, will continue to consolidate its position in the Mozambican mining industry.
“The project area covered by the mining concessions contains an indicated and inferred mineral resource of 4.4Bt at 3.9% total heavy minerals and constitutes one of the largest remaining mineral sands deposits in the world that is yet to be developed.
“Therefore, with the conditional approval of Concession 9228C, the potential to create and operate a significant global project within the sector can be realised, thus adding value to the company and our shareholders.”
Archer said that once these three concessions are formalised, they will enable the joint venture with Rio Tinto to progress the pre-feasibility study (PFS) towards completion.
“Upon delivery of the PFS, our interest in this world-class heavy mineral sands project will rise from 20% to 35%, an exciting prospect for Savannah as we continue to develop and diversify our portfolio of assets.”
The Mutamba project comprises one of the most significant undeveloped heavy mineral sands deposits in the world and contains an Indicated and inferred mineral resource of 4.4Bt, grading 3.9% total heavy minerals.
Savannah is the operator of the project, with an existing 20% interest in a consortium agreement with Rio Tinto, which covers the project area.
Savannah can increase its equity to 35% upon delivery of the PFS, which is currently underway, and ultimately to 51% upon delivery of a feasibility study. Notably, the consortium agreement includes an offtake agreement on commercial terms for the sale of 100% of production to Rio Tinto (or an affiliate).