Savannah Resources has garnered £16m ($20m) from AMG Critical Materials Group, making AMG the largest shareholder with a 15.77% stake in the company.

The investment is important for the Barroso Lithium Project in northern Portugal, as it secures the necessary funding for Savannah to advance towards a final investment decision (FID).

AMG acquired 342,612,420 new ordinary shares at £4.67p each, providing Savannah with the capital to complete essential workstreams.

These include the definitive feasibility study, environmental licensing, team expansion and land acquisitions for the Barroso Lithium Project, which is recognised as Europe’s largest spodumene lithium deposit.

Additionally, the partnership between Savannah and AMG extends beyond the investment, with an offtake heads of terms agreement in place.

This agreement outlines that AMG may purchase up to 45,000 tonnes per annum (tpa) of spodumene concentrate from the project for an initial five years, with the potential to increase to 90,000tpa over ten years, subject to market prices and the successful negotiation of final agreements.

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Furthermore, AMG will play a crucial role in securing full project financing for the development of the Barroso Lithium Project.

The companies also committed to a cooperation agreement to explore mutually beneficial opportunities, including the construction of a feldspar/spodumene pilot plant in Portugal and a potential Spodumene-to-Lithium Carbonate refinery in either Portugal or Spain.

These collaborative efforts aim to bolster Portugal’s position within the European lithium battery value chain.

Savannah CEO Emanuel Proença said: “We are delighted to announce this partnership with AMG, which represents another huge de-risking step for the Barroso Lithium Project.

“The Savannah team and I are really looking forward to working closely with AMG Lithium’s team from now on. With this investment, which follows a significant due diligence exercise, Savannah is now fully funded to complete all its current workstreams. Pleasingly, shareholder dilution and commitment of offtake have been kept to a minimum, providing Savannah with opportunities for further partnerships and commercial arrangements in the future.”