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Savannah impresses with mineral sands resource update
Savannah Resources (SAV:AIM) 4.5p
Gain to date: 12.5%
Previous Shares view: Buy at 4p, 3 November 2016
A positive resource update on Savannah Resources’ (SAV:AIM) mineral sands project in Mozambique helps to drive shares in the miner.
The resource estimates is 3.5bn tonnes at a grade of 3.8% total heavy minerals. It contains 81m tonnes of ilmenite, 2.2m tonnes of rutile and 3.8m tonnes of zircon.
House broker Northland Capital says the Mutamba project is one of the largest ilmenite-dominant mineral sands deposits on the east coast of Africa.
Savannah’s resource statement covers two of the four deposits that make up Mutamba. It owns 10% of the project and is earning up to 51%.
A scoping study on the project should be completed within three to four months. ‘The resource estimate will form the foundation of the scoping study that will focus on the high-grade areas where there is little or no overburden,’ says Northland.
We wrote last week that Savannah was focused on only bringing the best parts of the project into production, in order to maximise return on investment.
Savannah’s copper interests in Oman will be brought into production before the mineral sands assets. This may potentially happen in late 2017, according to the company. (DC)
Our trade on Savannah is up 12.5% in just a week. We’re really excited about its prospects and see considerable upside for the share price. Buy.