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EVENTS OF MIDAS FALL: MAKE A PROFIT FROM THE BOOM OF ELECTRIC BATTERIES WITH SAVANNAH RESOURCES

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Botticas is one of the poorest regions of Portugal. Located in the northeast, its population has shrunk by almost 15 percent over the past decade as industry has shrunk and unemployment has risen.

However, now the prospects of Boticas may be on the verge of radical change. In this area is one of the most important lithium mines in Europe, owned by Savannah Resources, which is included in the AIM list.

Savannah’s share price is 4.2 pence and should rise significantly as the company develops its mine and moves into commercial production.

Revolution: Lithium is the lightest metal in the world, just one of the reasons it is a key component of batteries for electric vehicles

Lithium is the lightest metal in the world, just one of the reasons that it is a key component of batteries for electric vehicles.

Last year alone, more than 2.3 million electric cars were sold in Europe, equivalent to 17% of all cars sold.

Experts predict steady market growth for at least the next ten years as we fight to reduce our dependence on oil and gas. This leads to an increase in demand for lithium – and rising prices.

This trend should prove to be very beneficial for Savannah, which plans to produce lithium concentrate up to 200,000 tons by 2025, which is enough to power half a million cars.

CEO David Archer, an Australian who speaks simple and has many years of mining experience, acquired the Savannah mine in 2017.

A year later, when the group completed the initial survey, lithium prices hovered around $ 400 (£ 320) per tonne, and Archer thought long-term prices would be set at $ 700 per tonne.

The group is expected to be one of the cheapest lithium miners in the world

In recent weeks, the price has risen to $ 6,000 per tonne. Even if it turns out to be short-lived, most forecasters expect prices to be at least $ 1,500 per tonne for the next few years.

At such rates Savannah could bring in an annual profit of more than £ 120 million. The group is expected to be one of the cheapest lithium miners in the world, taking advantage of cheap local labor and a mine that produces spodumene, a mineral that is particularly high in lithium.

Archer also hopes that annual production could exceed 200,000 tons as exploration develops and accelerates.

However, there are some key steps that need to be taken before Savannah can move into commercial production.

First and foremost, Archer needs the environmental permission of the Portuguese government. This was restrained by early elections earlier this year and bureaucracy at the local and national levels.

However, there are strong indications that a permit will be issued in the coming months. Most of the lithium is currently recycled in China, but the West is looking to change that, and Portugal is looking to establish itself as a lithium hub for Europe.

The government supported the construction of a huge Gigafactory outside Lisbon last December, and this will obviously require lithium as a raw material, and the Savannah mine is the most obvious choice.

Base: Savannah Mine is located in the Portuguese region of Botticas, and the company seeks to benefit the local community through work and financial support

Base: Savannah Mine is located in the Portuguese region of Botticas, and the company seeks to benefit the local community through work and financial support

Archer has also made every effort to ensure that his mine exceeds environmental standards, benefiting the local Boticas community through work and financial support.

Discussions are underway with potential financial patrons, and Archer is looking to move to construction in 2024 and begin commercial sales a year later.

The company already produces more than 10,000 tons of quartz and feldspar a year, from which produce decorative tiles and utensils, which are famous in Portugal and Spain.

Once Savannah moves to full-scale lithium production, its mine is expected to produce up to 300,000 tons of quartz and related minerals, bringing in annual revenues of at least $ 10 million.

Midas sentence: Lithium is a metal whose time has come. Savannah Resources has one of the most exciting mines in Europe that can be launched in three years.

At 4.2p the shares were restrained for fears that the Portuguese government would refuse to allow Savannah to move into construction.

But there is good reason for optimism, and if all goes well, stocks can bring substantial rewards. An attractive purchase for adventurous investors.

Traded on: CALVES Ticker: SAV Contact: savannahresources.com or 020 7117 2489

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