Savannah Resources (AIM:SAV), developer of the Barroso lithium project in Portugal, said its project finance debt process is advancing, with independent due diligence advisers now appointed across technical, environmental, social and legal workstreams.
The AIM-listed company has received first non-binding offers from commercial banks and expects post-due diligence conditional offers in the coming months.
Savannah has appointed Palaris for technical due diligence and ERM for social and environmental work, alongside Portuguese firm Morais Leitão Advogados and Herbert Smith Freehills Kramer for legal advice.
The company continues talks with KfW IPEX-Bank and Euler Hermes over a potential German government loan guarantee and debt facility, linked to its existing offtake terms with AMG Critical Materials.
Savannah is negotiating with a shortlist of potential partners and expects to secure a second spodumene offtake agreement later this year, alongside signed non-binding letters of intent covering by-product demand of up to approximately 865,000 tonnes per annum, above the 600,000 tonnes assumed in last week's Definitive Feasibility Study.
The Barroso project, Europe's largest spodumene lithium deposit and a Strategic Project under the EU Critical Raw Materials Act, carries a post-tax net present value of $913m under the completed Phase 1 DFS.
"Interest from lenders is strong based on the project's underlying robust economics, its location in a low-risk jurisdiction and the strategic value placed on lithium by the European Union and its member states," said chief executive Emanuel Proenca.
Savannah expects to secure conditional project finance offers by the end of the year.
News Intelligence what this means for the company
Savannah Resources has appointed independent due diligence advisers across technical, environmental, social and legal workstreams for project finance on Barroso, with first non-binding bank offers already received and conditional offers expected by year end. The company is also negotiating a second spodumene offtake agreement to complement its existing AMG Critical Materials deal, with non-binding letters of intent covering by-product demand up to 865,000 tonnes per annum—above the 600,000 tonnes modelled in last week's Definitive Feasibility Study. This marks concrete progress on two of the three critical paths to construction: debt financing and offtake partnerships are now moving from announcement to execution, following the DFS release that was expected to advance financing discussions ahead of planned construction in 2027.
- AMG Critical Materials remains the anchor offtake partner; a second agreement would diversify revenue risk and validate market demand at the DFS price assumption of $1,788/t spodumene concentrate.
The appointment of tier-one advisers and receipt of first non-binding offers signal lender confidence in Barroso's $913m post-tax NPV and EU strategic status. Securing conditional debt and a second offtake by year end would remove two major execution risks and materially de-risk the path to the 2027 construction start and 2028 first production targets.
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SP Angel repeats Buy rating
City stockbroker SP Angel reckons Savannah is making good progress on project funding for the Barroso lithium project, with a number of lenders now at an advanced stage.
The broker, in a note, repeated a BUY rating and said that conditional project finance offers are expected in the coming months, while discussions continue on a potential German loan guarantee of up to US$270m.
SP Angel also highlighted advancing offtake talks, expecting a second spodumene agreement later in 2026 and noting non‑binding LOIs for by‑products covering roughly 865,000 tonnes per annum versus the 600,000tpa assumed in the DFS.
