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Everything looks great for Savannah Resources
Savannah Resources (SAV:AIM) 4.85p
Gain to date: 21.3%
Original entry point: Buy at 4p, 3 November 2016
We rate Savannah Resources (SAV:AIM) as one of the best mining stocks on AIM. It has interests in copper and mineral sands – both these commodity groups have a positive outlook in terms of pricing.
The high grade copper prospects are located in Oman. Savannah hopes to start mining later this year and produce its first concentrate in early 2018.
‘It should be easy to finance,’ says CEO David Archer. ‘We’ve seen strong interest from Omani banks and we have a major Omani shareholder associated with a big family conglomerate.
‘Another firm to the south of us, Alara Resources, has just signed an offtake with a copper trader and got money upfront.’
He says there is ‘enormous interest’ in copper concentrate from Oman because it is quite clean with low impurities and high grade metal. ‘Omani material can be blended with dirty material from Chile to get a product that meets smelter requirements,’ adds Archer. ‘Traders really like this.’
Archer says Savannah’s Mozambique mineral sands joint venture with Rio Tinto (RIO) will apply for a mining licence this year, even though a development decision won’t be taken until 2018.
‘We think this is a real company maker,’ says the Savannah boss.
Shares says: Buy at 4.85p