Savannah Resources’ Mina Do Barroso project underpinned by strategic importance, says broker

Savannah Resources PLC (LON:SAV) Mina do Barroso lithium project is underpinned by its strategic value to the European Union, according to broker fiinnCap.

Mina do Barroso in northern Portugal is the only large-scale lithium spodumene project in Europe, says the broker.

Lithium chemicals are in demand by Europe’s fast-growing battery manufacturing sector, said finnCap.

The industry will need to import some raw materials from outside the region, but the European Commission’s target is to “boost primary and secondary production from European sources” such as Barroso.

How development progresses, in terms of permitting, technical studies and funding will help determine Savannah’s performance over the next 12 months.

“A large part of this progress is funding, and Savannah received a significant boost in May when it signed an agreement with the EU-backed organisation EIT InnoEnergy,” the broker adds.

“EIT InnoEnergy has invested EUR570m in the sustainable energy sector and represents a proven source of direct and indirect/introduced funding for projects like Barroso.”

Finncap has a share price target of 10.5p compared to 2.2p in the market currently.

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