The last environmental gate before construction

Savannah Resources (LSE:SAV) has entered what it describes as the final environmental licensing stage for its Barroso lithium project in northern Portugal. On 5 November 2026 the company submitted its Environmental Compliance Report of the Execution Project, known by the Portuguese acronym RECAPE, to the Agência Portuguesa do Ambiente, the environment agency.

The filing is intended to show that the detailed engineering design, mitigation measures and monitoring plans meet the conditions attached to the project's conditional environmental impact declaration, issued in May 2023. The evaluation committee has up to 50 working days to review the document, including a 15-working-day public consultation, and Savannah expects a decision before the end of January 2027. A favourable outcome would take the form of a compliance declaration, valid for four years.

About lithium and spodumene

Lithium is a key material in rechargeable batteries. Spodumene is a lithium-bearing mineral that is mined from hard rock and concentrated before being sent to refiners, who convert it into lithium chemicals. Barroso's designation as a Strategic Project under the European Union's Critical Raw Materials Act reflects the aim of securing a European source of the metal.

Project and company background

LSE:SAV is an AIM-quoted developer whose principal asset is Barroso, which is designated a Strategic Project under the European Union's Critical Raw Materials Act. The definitive feasibility study published in July 2026 envisages a 14-year operation producing an average of about 183,000 tonnes a year of spodumene concentrate grading at least 5.5% lithium oxide, from a probable ore reserve of around 20 million tonnes at 0.99%. Spodumene concentrate is an intermediate product that must be refined before use in batteries.

Costs, funding and economics

The study put initial Capital Expenditure at US$417m including contingencies, or US$377m without them. The company has access to a non-repayable Portuguese state grant of up to €110m. A portion is allocated to eligible initial development spending. In September it raised about £30.1m, roughly US$40.2m, by issuing approximately 547.1m shares at 5.5p, and management has said combined funds exceed US$53m, which it considers sufficient to advance the project to its next stage.

Using a spodumene price assumption of US$1,788 a tonne, the study estimated a post-tax unlevered net present value of about US$913m at an 8% discount rate and an internal rate of return of 43.2%. Those are modelled figures under specific assumptions rather than a measure of Shareholder value. It also estimated C1 operating costs of US$473 a tonne and all-in sustaining costs of about US$646.

Why the filing matters

Lenders typically want permitting risk resolved before committing construction debt, so the RECAPE outcome links directly to financing. LSE:SAV has sought conditional offers from commercial banks and other lenders, which it expects towards the end of 2026, and targets a final Investment decision in early 2027, construction later that year and first concentrate towards the end of 2028. Recent groundwork supports that sequence: geotechnical works were completed in late October, and on 19 October the company received a positive, conditional environmental decision for the Boticas bypass road, which would route project traffic towards the regional highway.

What could still go wrong

The January date is the company's expectation, not a statutory guarantee, and requests for design changes could push it back. Even after a compliance declaration, Savannah would still need its final single environmental licence and other operating permits. Project finance, offtake beyond the existing relationship with AMG Critical Materials, and the full construction budget are not yet secured. Returns are highly sensitive to lithium prices and capital costs, and further share funding could dilute shareholders. The project has faced local opposition and earlier delays to land access and environmental work.

The RECAPE process

The report was submitted on 5 November 2026. A review period of up to 50 working days, which includes 15 working days of public consultation, would end around the middle of January 2027, assuming no pauses, in line with the company's expectation of a decision before the end of January. A compliance declaration valid for four years would give the company a period in which to proceed with construction. The environmental impact declaration issued in May 2023 set the conditions that the report addresses.

Capital and funding

Initial capital of US$417m including contingencies compares with the funds the company holds, which management says exceed US$53m, and a state grant of up to €110m, which is about US$120m at recent exchange rates. The grant is non-repayable, which reduces the amount needed from investors or lenders, but only a portion is allocated to eligible initial development spending. The funding gap beyond these sources would have to be met by debt, new shares or a partner, and the company has not described how it will be filled.

The September raise of about £30.1m from approximately 547.1m shares at 5.5p matches the stated figure, since 547.1m times 5.5p is about £30.1m.

Study economics

Production of about 183,000 tonnes a year over 14 years would give about 2.6 million tonnes of spodumene concentrate in total. The study's net present value of about US$913m at an 8% discount rate compares with initial capital of US$417m, a ratio of about 2.2 times. An internal rate of return of 43.2% is high, but it relies on the spodumene price assumption of US$1,788 a tonne, which is a modelled figure. If prices differ, both measures would change.

The remaining approvals

The compliance declaration is described as the final stage of environmental licensing, though other permits and approvals may be needed for construction and operation. A reserve of about 20 million tonnes at 0.99% lithium oxide supports the 14-year mine life. The concentrate must still be refined before it can be used in batteries, which means the project would sell to processors.

Dates to watch

The disclosed sequence is the public consultation during the review, an expected agency decision by the end of January 2027, conditional Debt offers around the turn of the year and a final investment decision targeted for early 2027. Each step depends on the one before it, so a slip at the regulatory stage would likely move the rest of the schedule.