Rio Tinto and Savannah announce new Consortium arrangement, starting Mozambique operations immediately

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Rio Tinto and Savannah announce new Consortium arrangement, starting Mozambique operations immediately

9:17 CAT | 11 Oct 2016

Savanah Resources (File photo)

Savannah Resources Plc announces a new Consortium arrangement with Rio Tinto covering Savannah’s Jangamo Project and Rio Tinto’s Chilubane and Mutamba Projects, including the Jangamo, Dongane and Ravene heavy mineral sands deposits, all of which are located in a world class, heavy minerals sands province in Mozambique, that will enable Savannah to commence work immediately.

David Archer, Savannah’s Chief Executive Officer said today: “Following consultation with the Ministry of Mineral Resources and Energy of Mozambique (MIREME) we’re delighted to have agreed to a new Consortium arrangement with Rio Tinto, a leading global mining and metals company, that will enable operations to start immediately in a combination on materially the same commercial terms as previously agreed and announced.

“Agreeing an arrangement that enables exploration activities to be conducted on a unified basis across the Mutamba, Dongane and Jangamo projects makes significant commercial sense, effectively combining three areas which are part of the same, continuous mineralisation trend. Mutamba/Jangamo includes an established 65Mt at 4.2% THM resource and significant expansion potential and an exploration target of between seven and 12 billion tonnes at a grade ranging from 3% to 4.5% THM.”

“Savannah will operate the combined projects and can earn up to a 51% beneficial interest in the combined Mutamba/Jangamo Project in stages by undertaking scoping, pre-feasibility and feasibility studies. Our focus is now on commencing activity on the ground, with a scoping study due to commence immediately and targeted for completion in Q1 2017. Importantly, the Projects are located close to existing road, grid power, water, and port infrastructure and Rio Tinto will be providing access to its existing camp, facilities and equipment.”

Commencement of operations is expected to bring immediate new jobs and investment to Mozambique and Inhambane Province.

To expedite commencement of Savannah’s operatorship, the Company and Rio Tinto have agreed to transfer legal ownership of their projects to a Consortium company only at a future date (which is expected to be subsequent to grant of a mining lease), subject to receiving the prior written approval of the MIREME to transfer of legal ownership in accordance with Mozambique’s mining law and regulations.

Source: Savannah Resources Plc.