More progress made at the Barroso Lithium Project

8 April 2025                                                                                  

Savannah Resources Plc

(AIM: SAV) ('Savannah', or the 'Company')

Further progress made at the Barroso Lithium Project

Savannah Resources plc, the developer of the Barroso Lithium Project (the 'Project') in Portugal, one of the European Commission's 'Strategic Projects' under the Critical Raw Materials Act and Europe's largest spodumene lithium deposit, is pleased to provide an update on a number of ongoing Project workstreams. The Company continues to make good progress towards completion of the Definitive Feasibility Study ('DFS') and licencing phase in the Project's overall development into a key asset in Europe's lithium battery value chain.

Highlights (Mid-January to date):

·    Strategic Project status: The Project was classified as a 'Strategic Project' by the European Commission under the Critical Raw Materials Act and hence will benefit "from coordinated support by the Commission, Member States and financial institutions to become operational".

·    Definitive Feasibility Study:

o  Fieldwork: Good progress continues to be made with the phase 2 drilling programme, with up to 6 drill rigs working in parallel across multiple orebodies. As at 2 April, 71 holes have been drilled for 6,916m in the planned 117/c.13,000m programme.

o  Assays were received from the first 20 holes (see RNS 27 March 2025) with a number of notable intercepts reported, including 26m @ 1.40% Li₂O from 70m in hole 25PNRRC027 at Pinheiro and 23.1m @ 1.28% Li₂O from 99m in hole 25RESRC054 at Reservatório.

o  Work on all other fronts is proceeding as scheduled, including considerable progress in 3D modelling, metallurgical testwork, surface and ground water modelling, processing plant equipment specification and vendor engagement, and road network designs.

·    JORC Resources & Exploration upside:

o  Ahead of new JORC Resource estimates later in the year for Grandão, Reservatório and Pinheiro, Savannah reconfirms the overall JORC (2012) compliant Resource, including the upgraded NOA resource announced in May 2024, at 28Mt at 1.05% Li₂O, which includes 18.7Mt at 1.03% Li₂O in the Measured and Indicated categories.

o  The current drilling programme continues to demonstrate the existing orebodies remain open along strike and at depth, while a separate exploration programme (see 22 January 2025 RNS) highlighted significant lithium mineralisation located at additional locations on the Project's two Mining Leases.

·    Environmental licencing: Commencement of preparation of the "Plano De Lavra" (Mining Plan) and good progress made with continuing RECAPE works and required field studies.

·    Infrastructure:

o  The Environmental Impact Assessment and accompanying Preliminary Design report for the 16km bypass road will be submitted to the Portuguese Environmental Agency in the coming days.

o  Preliminary design for the internal haul roads between the processing plant and mining areas is nearing completion.

o  Preparations are being made for the geotechnical fieldwork required on the northern access road following completion of its design.

·    Land: Savannah has maintained its dual approach to land acquisition and access, with a further 3 properties purchased under its land acquisition programme while also continuing with the process to secure compulsory purchase rights over land it does not own.

·    Stakeholder engagement: The team continued to engage regularly with local stakeholders through supporting, hosting, and sponsoring local events and providing accurate information on key aspects of the Project, particularly around the topics of land and access.

·    Recruitment: The team in Portugal was further expanded, including with more recruits from the local community, across geology, community relations and corporate.

·    Next Steps: Over the remainder of H1 2025, Savannah will continue to push on with all its workstreams as it looks to finalise the DFS and make its submission for the final, confirmatory phase of the Environmental Licence by the end of the year.

Savannah's Chief Executive Officer, Emanuel Proença said, "The team has continued to make good progress with the Project's many workstreams over recent months, as we get ever closer to our long-term objective of lithium production. We are now over halfway through the current drilling programme and have passed a number of other milestones during this period. With much work still to do, the validation given to the Project by the European Commission through its classification as a 'Strategic Project' provides great assurance that our efforts, and the significance of the Project, are appreciated at the highest levels.

"With that backing, alongside the ongoing support of our shareholders and growing support by the Project's many stakeholders, we look forward to continuing with the Project's development and providing regular updates on our progress."

Further Information

Strategic Project classification under European Critical Raw Materials Act

In late March 2025 the European Commission announced the selection of the Barroso Lithium Project as one of the first 47 projects considered 'Strategic' for Europe under the Critical Raw Materials Act ('CRMA').

According to the European Commission, critical raw material projects which are classified as Strategic "will be able to benefit from coordinated support by the Commission, Member States and financial institutions to become operational, notably regarding access to finance and support to connect with relevant off-takers. They will also benefit from streamlined permitting provisions, to ensure predictability for project promoters while safeguarding environmental, social and governance standards. In line with the CRMA, the permit-granting process will not exceed 27 months for extraction projects and 15 months for other projects".

Definitive Feasibility Study

The DFS is the detailed analysis of the technical, commercial and economic feasibility of the Project. Recent progress on DFS-related matters includes:

·    Drilling Programme: The second phase of drilling required to complete updates on the Project's JORC compliant Resource as well as gathering outstanding geotechnical and hydrogeological data continues to progress well. With a total of 6 drill rigs (3 diamond core and 3 reverse circulation) working across the Pinheiro, Reservatório and Grandão deposits, daily drilling meterage has increased and, as of 2 April, a total of 71 holes have been drilled for 6,916m. Hence, Savannah is well passed the halfway point in its planned 117 hole/13,000m programme and has now also passed the milestone of 40,000m of drilling on the Project to date.

Figure 1. Barroso Lithium Project summary map showing deposits and drill hole locations.

·    Significant intercepts and assays to date: Savannah reported late last month (see 27 March 2025 RNS for full details) that it had received assay results from the first 20 holes drilled (7 at Pinheiro, 10 at Reservatório and 3 at Grandão) including results from 14 complete holes and 6 pre-collars which still require diamond drill tails to fully test the pegmatite target. Highlights of those initial results included:

o  At Pinheiro, 26m @ 1.40% Li₂O from 70m in hole 25PNRRC027 and 21m @ 1.26% Li₂O from 95m in hole 25PNRRC026, with the previous trend for pegmatite widths being thicker and have higher lithium grades than originally modelled, continuing from the Phase 1 programme last year. The initial results also confirmed mineralisation continues along strike to the north and south in both the Western and Eastern Pegmatites, further highlighting the additional resource potential.

Figure 2. Recent Reverse Circulation drilling at Pinheiro

o  At Reservatório significant mineralised intersections included, 23.1m @ 1.28% Li₂O from 99m in hole 25RESRC054 and 21m @ 1.10% Li₂O from 68m in hole 25RESRC053. Importantly, the RC drilling has shown good continuity of contained lithium grades within the depth extension of the pegmatite, which builds further confidence in the existing geological model and current JORC (2012) compliant Resource estimate for Reservatório of 4.2Mt at 0.94% Li₂O.

o  At Grandão, initial results included 9m @ 1.38% Li₂O from 2m in hole 25GRARC136, confirming that mineralisation continues in the shallow extensions of the deposit.

·    Future assays results: Samples from the remaining 51 holes are being processed at the laboratory and Savannah expects to be receiving the next set of results during the current quarter. Once reviewed and evaluated Savannah will announce relevant results in due course.

·    Site layout: Progress continues to be made on the design of the internal and project access roads (see the Infrastructure section below for further details about roads). Savannah expects the roads footprint to be finalised within weeks., This will complete the required site layout which is also an important element in the project's RECAPE.

·    3D Model: The 3D model for the Project is now complete (see Figure 3).

·    Mining: Life Of Mine scheduling work continued with the objective to obtain more detailed data on mining, drilling and explosive volumes, as well as ex-pit haulage profiles and cycles. This data will then be used as a basis to start preliminary market pricing exploration.

·    Processing Plant: The major equipment list has been finalised and the CAPEX estimation exercise is continuing.

·    Metallurgical testwork: Further x-ray diffraction and flotation testing are underway, with the current phase of the metallurgical testwork programme expected to be completed in April. Additionally, further options are being considered to treat residual water from the processing plant to increase the water recycling capacity.

·    Procurement: Budget quotation requests are being prepared for electrical equipment, steel/pipe fabrication and installation contracts. Engagement with potential vendors is planned to start later this month.

·    Tailings and Water Storage: The preliminary designs have been completed for the Tailings Storage Facility, water reservoirs and environmental control dams.

·    Hydrogeology: The site investigation work including drilling of water bores and pump testing has been completed. Hydrogeological numerical modelling is expected to be finished later this month.

·    Decarbonisation: Savannah's decarbonisation strategy continues to be focused on the processing plant and mobile mining fleet, which are the two largest sources of CO₂ emissions. The Project's processing circuit will be fully powered from Portugal's public grid, which has a significant percentage of power sourced from renewable generation (e.g. 80.5% during Jan-Feb 2025, source: APREN), guaranteeing that the Barroso Lithium Project will already avoid a considerable amount of greenhouse gas emissions from the very start of operations. Additionally, Savannah has engaged with leading OEMs to conduct preliminary studies to assess the feasibility of incorporating fully electrical mobile equipment units into the mining fleet once the project reaches nameplate operational metrics.

·    Ceramics by-products: The Company has executed an independent product characterisation and market study with a reputable Portuguese consultant, which will provide valuable technical and economic information to be incorporated into the Project's DFS. In addition, the Company continues its engagement with entities in the ceramics sector to explore business or partnership opportunities.

Figure 3. Barroso Lithium Project 3D Model

Current JORC Resource estimate & exploration upside

Following the updated estimate for the NOA orebody made last year by Ashmore Advisory Pty Ltd, an external and independent mining consultancy (see RNS 2 May 2024) and ahead of new JORC resource estimates for Grandão, Reservatório and Pinheiro which are expected later in the year, the Company confirms the current overall JORC Resource (2012) compliant estimate for the Project. The total JORC Resource is 28Mt at 1.05% Li₂O (See Table 1) and the Exploration Target is maintained at 11.0-19.0Mt at 1.0-1.2% Li₂O (See Table 2). See Appendix 1 for further details.

Table 1. Updated Mineral Resource Estimation Summary (May 2024)

*Rounding discrepancies may occur

Table 2. Exploration Target Summary (June 2023)

*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.

In addition to the potential Resource expansion offered by the existing orebodies, Savannah also reconfirmed the presence of many other mineralised targets on the Project's two Mining Leases. As highlighted in January (RNS 22 January 2025), surface exploration identified new mineralised pegmatites at the western end of the C-100 licence and on Aldeia Block B. Highlights from rockchip and channel sampling included 3.01% Li₂O from Alto dos Corticos on the C-100 licence and 2.11% Li₂O and 4m at 2.62% Li₂O on Aldeia Block B. Given Savannah's experience on the C-100 licence to date with orebodies such as Grandão, the Company believe that the full extent of the mineralisation at the Project is easily underestimated from outcrops alone. Hence, these additional targets represent exciting additional exploration upside to complement the Project's already compelling lithium development story.

Environmental Licencing

Field studies and RECAPE preparation works continued during the period. Recent progress includes:

·    Studies: Study related fieldwork and monitoring programmes has continued across several fronts:

o  Noise: Following feedback by APA's assessment committee, an additional noise study was carried out in March. The study aimed to show, unequivocally, that there is no noise impact on the closest populations and the results obtained confirmed the absence of impact, as expected.

o  Covas River water flow monitoring: Three flow meters were installed in the Covas River, two upstream and one downstream, to gather data and comply with the requirements of the project's DIA.

o  Biodiversity: The final round of seasonal surveys is scheduled to take place during the Spring, which will serve to update the data collected during the 2024 campaign.

·    Plano De Lavra (Mining Plan) Preparation of the new mining plan to support the submission of the RECAPE is now underway.

Figure 4. Noise Monitoring Campaign as part of RECAPE studies

Figure 5. Water Flow Meter at Covas River

Infrastructure

The studies and design work for the Project's supporting infrastructure are now well advanced, with excellent progress made on several fronts including:

·    Site (Northern) access Road: Following completion of the preliminary design work on the northern access road (11km), which will directly link the Project to the new Boticas bypass road and ultimately the national highway network, consultation with the relevant government agencies and stakeholders continues prior to the execution of the required geotechnical field work for the final design. Savannah continues its effort to expedite access to the study area in order to accelerate the commencement of fieldwork.

·    Bypass Road: The Environmental Impact Assessment ('EIA') and accompanying Preliminary Design ('PD') report for the 16km bypass road will be submitted to Agência Portuguesa do Ambiente, ('APA'), the Portuguese Environmental Agency in the coming days. The bypass will join to the west with the national road R311 to subsequently link to the Project's proposed northern access road, and to the east with the A24 motorway that provides access to the Inner North Freeway, towards the main port facilities.

Submission of the EIA will be a major milestone for Savannah as this step represents the culmination of over 8 months of work by the Company's Project team and consultants, and underlines Savannah's commitment to minimising the impact of Project-related traffic on local communities. The EIA and the PD have been prepared by TPF - Consultores de Engenharia e Arquitetura, S.A., one of Portugal's leading Engineering companies and experts in the Water, Environment, Energy, Buildings and Transport sectors. The designs were developed through extensive interaction with Infrastructures of Portugal ('IP'), the entity responsible for managing road infrastructures in Portugal, and are based on IP's criteria of Design Standards. The new infrastructure, which will be made up of new and improved existing sections of road will also benefit the region and the population, by reducing the intensity of traffic on existing roads, through better distribution of flows.

Submission will initiate the 150-business day assessment period available to APA and the EIA will be made public by APA once it is satisfied that the report is in conformity with its application requirements whereupon a mandated period of public consultation (30 business days) with stakeholders will commence. The issue of a favourable DIA will allow Savannah to proceed to the RECAPE and Detail Design phase for the bypass.

·    Internal haul roads: Preliminary design of the Project's internal haul roads is in progress and is expected to be completed in April.

·    HV Power: The DFS level design and permitting process are continuing.

Figure 6. Map showing the potential layout of Project-related road and power infrastructure

Land

·    Land acquisitions: Savannah's land acquisition is continuing with three further private properties acquired and multiple negotiations underway, which Savannah expects to be converted into acquisitions in the short term.

·    Additional land easement: In support of the fieldwork and geotechnical studies required for the detailed design of the Project's infrastructure, a second land easement application has been submitted to the Government.

·    Compulsory land acquisition process: After notifying the interested parties in December 2024, the Company submitted its application for a 'Declaração de Utilidade Publica' (Declaration of Public Utility ('DPU')) to the relevant governmental authorities for approval during Q1 2025. This is the mechanism that grants public utility which is necessary for compulsory acquisitions. Once approved, the DPU will allow the Company to compulsorily acquire the properties that it wasn't able to do so already through its ongoing land acquisition programme.

Recruitment

The team continues to expand to meet the Company's operational needs. In February and March, we added five new members to the field team, including geologists and field assistants, and also added personnel to our corporate function.

Stakeholder Engagement

Savannah is intensifying its stakeholder engagement efforts, focusing on meaningful and transparent communication, building trust, and deepening community integration. Key recent actions include:

·    Enhancing transparency through the distribution of information leaflets explaining the land acquisition process, easement agreements, and compulsory acquisition procedures.

·    Increasing local presence with the hiring of a new junior community advisor- a local resident from a neighboring parish - and the recent refurbishment of a house in Covas do Barroso to accommodate four staff members locally, in addition to the three existing team members who are already residents of Covas.

·    Expanding social initiatives, through sponsorships of local community activities, and the implementation of livelihood restoration efforts directed at enabling the continuation of agricultural activities affected by the Project.

Key milestones and expected future news flow during H1 2025:

·    Strategic Project/Critical Raw Materials Act: Engagement with the European Commission and its relevant agencies to fully leverage the opportunities which the new project classification provides.

·    DFS:

o  Completion of current drilling programme with assay results and updates released periodically during the programme.

o  Completion of updates on the Project's CAPEX and OPEX estimates based on finalisation of designs for key Project infrastructure.

o  Use of data and samples from the ongoing drilling programme to complete the remaining metallurgical testwork and detailed geotechnical work for the pits.

o  Completion of independent product characterisation and market study for feldspar-quartz by-product

·    Environmental Licencing: Finalisation of key work streams for RECAPE submission.

·    Infrastructure: Submission of bypass road EIA and DP, completion of haul road designs, start of geotechnical fieldwork and studies required for the detailed design of all the project infrastructure.

·    Recruitment: Continuing expansion of the technical team in support of the current field programme and the corporate team in preparation for Final Investment Decision, Project Financing and further strategic partnerships.

·    land access: Complete processes for second land easement in relation to northern access road and compulsory purchase of land elsewhere.

·    Stakeholder engagement: Ongoing relationship building through events, community initiatives and comprehensive communications.

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 Australasian 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) and a Qualified Person under the AIM Rules for Companies. 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 release that relates to Mineral Resources for the NOA deposit is based on information compiled by Mr Shaun Searle who is a Member of the Australasian Institute of Geoscientists. Mr Searle is an employee of Ashmore Advisory Pty Ltd and independent consultant to Savannah Resources Plc. Mr Searle has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Searle consents to the inclusion in this report of the matters based on this information in the form and context in which it appears.

The Information in this report that relates to Mineral Resources and Exploration Targets for the Grandão, Reservatório, Pinheiro and Aldeia deposits 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.

Regulatory Information

This Announcement contains inside information for the purposes of the UK version of the market abuse regulation (EU No. 596/2014) as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").

Savannah - Enabling Europe's energy transition.

**ENDS**

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About Savannah

Savannah Resources is a mineral resource development company and the sole owner of the Barroso Lithium Project (the 'Project') in northern Portugal. The Project is the largest battery grade spodumene lithium resource outlined to date in Europe and was classified as a 'Strategic Project' by the European Commission under the Critical Raw Materials Act in March 2025.

Through the Project, Savannah will help Portugal to play an important role in providing a long-term, locally sourced, lithium raw material supply for Europe's lithium battery value chain. Once in operation the Project will produce enough lithium (contained in c.190,000tpa of spodumene concentrate) for approximately half a million vehicle battery packs per year and hence make a significant contribution towards the European Commission's Critical Raw Material Act goal of a minimum 10% of European endogenous lithium production from 2030.

Savannah is focused on the responsible development and operation of the Barroso Lithium Project so that its impact on the environment is minimised and the socio-economic benefits that it can bring to all its stakeholders are maximised.

The Company is listed and regulated on the London Stock Exchange's Alternative Investment Market (AIM) and trades under the ticker "SAV".

Appendix 1

Mineral Resource Estimate

A Mineral Resource Estimate for the NOA Lithium Deposit was prepared by Ashmore Advisory Pty Ltd, an external and independent mining consultancy as announced on 02 May 2024.  The Deposit forms part of Savannah's Barroso Lithium Project, located in northern Portugal.  The Mineral Resource Estimates for the deposits at the project have been classified as Measured, Indicated and Inferred Mineral Resource in accordance with the JORC Code, 2012 Edition and are summarised in Table 3 and Appendix 1.

Table 3. May 2024 Mineral Resource Summary (0.5% Li₂O cut-off)

*Rounding discrepancies may occur

NOA Mineral Resource Estimate

At the NOA deposit, the host pegmatite is a steep dipping, northwest trending body which is 5-10m in true width. It has been mapped in outcrop over much of the interpreted 440m strike length of the Mineral Resource.

The weathering profile comprises a shallow, surficial zone of weak to moderate oxidation, particularly of the schistose country rock. The main pegmatite zone remains open along strike and down dip (Figures 7 to 9).

The NOA Mineral Resource Estimate is based on results from 58 RC drill holes and 7 diamond holes. All holes were completed by Savannah in 2017, 2018 and 2023.

Figure 7. NOA pegmatite and drilling (looking SW)

Figure 8. NOA Cross Section (looking West)

Figure 9. NOA Resource Model (Main Domains) Coloured by Li₂O content (looking SW)

Geology

At the Mina Do Barroso Project, 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. Lithium is present in most pegmatite 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 intrusions. Minor xenoliths and inliers of schist are observed on occasions.

At the NOA deposit, the host pegmatite is a steep dipping, northwest trending body which is 5-10m in true width. It has been mapped in outcrop over much of the interpreted 440m strike length of the Mineral Resource. The weathering profile comprises a shallow, surficial zone of weak to moderate oxidation, particularly of the schistose country rock.

Drilling

The deposit is defined by a total of 58 RC drill holes and 7 diamond holes. All holes were completed by Savannah in 2017, 2018 and 2023.  The holes were drilled on an approximate hole spacing of 25m by 20m, out to 40m by 40m.

The vast majority of holes were drilled at 60^o to the south south-west.

Drill collar locations are recorded in Universal Traverse Mercator ("UTM") coordinates using differential GPS.  All Savannah drilling has been down-hole surveyed using a gyroscopic tool.

Sampling and Sub-Sampling Techniques

RC drilling by Savannah was carried out using a face sampling hammer (120mm). Savannah reported that drilling conditions were good, samples were generally dry and measured sample recoveries were good other than some recorded sample loss near the hole collar in some holes.

Samples were collected at 1m intervals from pegmatite zones. For the 2017 drilling, composite sampling of typically 4m was conducted in the surrounding schists. For drilling conducted since 2018, schist was only sampled for 5m each side of the pegmatites. The 1m samples were collected through a rig-mounted riffle splitter and were 4-6kg in weight.

Diamond drilling commenced in PQ diameter and reduced to HQ diameter when competent rock was intersected. Core recovery was excellent. For sampling, core was aligned then marked with a centre line. Core was cut with a saw with half-core taken for bulk metallurgical samples. The remaining half core was cut again to produce quarter core samples for analysis. Samples were to geological boundaries then typically at 1m intervals.

Sample Analysis Method

The samples were analysed using ALS Laboratories ME-MS89L Super Trace method which combines a sodium peroxide fusion with ICP-MS instrumentation utilising collision/reaction cell technologies to provide the lowest detection limits available.

A prepared sample (0.2g) is added to sodium peroxide flux, mixed well and then fused in at 670°C. The resulting melt is cooled and then dissolved in 30% hydrochloric acid. This solution is then analysed by ICP-MS and the results are corrected for spectral inter-element interferences. The final solution is then analysed by ICP-MS, with results corrected for spectral inter-element interferences.

QAQC protocols were in place for the drilling programmes and included the use of blanks, 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 NOA Mineral Resource Estimate, a Surpac block model was constructed with a block size of 5m NS by 10m EW by 5m with sub-celling to 1.25m by 2.5m 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.

Sample data was composited into 1m intervals. The pegmatites at the deposit were estimated using ordinary kriging ("OK") grade interpolation.  A first pass search range of 40m was used and oriented to match the dip and strike of the mineralisation.  A minimum of 6 samples and a maximum of 16 samples were used to estimate each block.  The majority of the Mineral Resource Estimate (91%) was completed in the first pass with expanded search radii of 80m used for the blocks not estimated in the first pass.  No extreme high grades were present in the Li2O and Fe data, and the CV of less than 1 for all elements suggested that high grade cuts were not required.  However, a small number of outliers of Ta were present at NOA and a high grade cut of 100ppm was applied to all Ta values.

Iron contamination via abrasion of RC drilling equipment and/or sample preparation equipment is a recognized problem when evaluating lithium deposits.  To test the potential for iron contamination at the MBLP, SAV carried out a preliminary program of check assays and a series of comparisons were undertaken on samples from the Grandão deposit. 

It was concluded from the Grandão study that a significant proportion of the iron being reported in the drilling assay data was introduced as contamination during the sample preparation process.  It was determined that the amount of contamination was proportional to the lithium content of the samples.  A regression formula was calculated using all samples, with the derived regression formula being:

Fe_contamination = (0.1734 * Li₂O grade) + 0.2308.

The amount of Fe contamination was determined using the derived regression formula.  A new field "Fe_factored" was inserted into the drill hole database, and the original Fe value minus the calculated contamination was stored in that field.  This allowed a "Fe_factored" value to be extracted from the database and used for grade estimation in the Mineral Resource.

Bulk density values applied to the NOA estimate were based on values used at the Grandão deposit which were derived from a substantial number of drill core samples, as well as some samples obtained from NOA.  Values applied to the NOA estimate were 2.5t/m³ for oxidised pegmatite, 2.65t/m³ for unoxidised pegmatite and 2.67t/m³ for unoxidised 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).

Mineral Resource classification was considered on the basis of drill hole spacing, continuity of mineralisation and data quality.   Accurate drill hole collar and topographic surveys have been obtained for the deposit, so the spatial location of data and topography has a high level of confidence.  The quality of the drilling and assaying has been confirmed through independent verification of procedures and through a satisfactory QAQC protocol.

The continuity of the NOA pegmatite is well defined within the drilled portion of the deposit.  Where the NOA pegmatite is exposed, the interpretation is supported by mapped contacts at surface and within the small mined open pit.

The portion of the NOA pegmatite defined by 20m to 40m spaced drill holes and showing good continuity of pegmatite and Li₂O distribution has been classified as Indicated Mineral Resource. The Indicated portion was extended for the full length of the pegmatite which had been exposed and mapped in the pit and was extrapolated up to 20m past drill hole intersections. Inferred Mineral Resource was assigned to those areas of the NOA deposit defined by a drill hole spacing of greater than 40m.

Cut-off Grades

The shallow nature of the main NOA pegmatite suggests good potential for open pit mining if sufficient resources can be delineated to consider a mining operation.  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 SAV on representative mineralisation at the Grandão deposit. 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.

This test work indicates that the material can be utilised in the plant feed to generate a spodumene concentrate of >5.5% Li₂O. To achieve this, the composite samples were ground to a particle size of P₈₀ 150µm, which demonstrated an average Li₂O processing recovery of 75.3%.

Additional metallurgical test work is underway and there is no reason to consider that the NOA mineralisation will behave any differently to the Grandão deposit.

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.

APPENDIX 4 - JORC 2012 Table 1 -DFS Infill Drilling

JORC Table 1 Section 1 Sampling Techniques and Data

JORC Table 1 Section 2 Reporting of Exploration Results

JORC Table 1 Section 3 Estimation and Reporting of Mineral Resources