Savannah Resources PLC is raising £11.5 million for the next stage of development of its Mina do Barroso lithium property in Portugal as well as to progress projects in Mozambique and Oman.

The company is planning to complete a feasibility study on the project, targeting a decision to mine in early 2019.

A recent scoping study on Mina do Barroso defined an after-tax net present value of US$241 million, using an 8% discount rate, with a 48.6% internal rate of return. Initial CapEx is estimated at US$109 million.

Savannah said July 5 that it is undertaking an oversubscribed placing, comprising 92,535,277 new shares and commitments for 35,811,979 shares all priced at 9 pence apiece, with settlement expected July 11. The company also received a letter of intent from major shareholder Al Marjan Ltd. which could increase proceeds by £1 million.

The company will also use a portion of the proceeds for its Mutamba heavy mineral sands joint venture in Mozambique and its Block 4 and Block 5 copper projects in Oman, which are undergoing mining lease applications, as well as for working capital.