RNS Number : 8012N

Savannah Resources PLC

31 October 2016

Savannah Resources Plc / Index: AIM / Epic: SAV / Sector: Mining

31 October 2016

Savannah Resources Plc

Broad High Grade Copper Intersected in Oman - Resource Drilling Update

Savannah Resources plc (AIM: SAV) ('Savannah' or 'the Company'), the AIM quoted resource development company, announces that it has now received further results from the ongoing drill programme over its highly prospective Block 4 and 5 properties in the Sultanate of Oman, which are prospective for copper and gold.  Savannah is earning a 65% shareholding in the Omani company, Al Thuraya LLC, the owner of the Block 4 Project, and is a 65% shareholder in Al Fairuz Mining, the holder of the Block 5 licence. To view the press release with the illustrative maps and diagrams please use the following link: http://www.rns-pdf.londonstockexchange.com/rns/8012N_-2016-10-28.pdf  

HIGHLIGHTS:

·    Results from a further six drill holes at Mahab 4 and four holes at Maqail South have now been received returning some of the broadest and highest-grade results at the project to date

·    Results point towards a potential expansion of the current high-grade portions of both the Mahab 4 and Maqail South resources, which are part of the current Indicated and Inferred Mineral Resource of 1.7Mt at 2.2% copper

·    Mahab 4

o 16B5DD009*: 67.4m at 4.64% copper, 1.13% zinc and 0.3g/t gold from 18.6m incl. 35.4m at 8.30% copper, 2.1% zinc and 0.4g/t gold from 18.6m

o 16B5DD010:    10.05m at 10.51% copper, 2.67% zinc and 0.4g/t gold from 34.95m

o 16B5DD013:    19.8m at 6.15% copper, 1.8% zinc and 0.4g/t gold from 65.2m

o 16B5DD015:    13.55m at 6.43% copper, 0.68% zinc and 0.2g/t gold from 84.45m

o 16B5DD017*:  47m at 6.07% copper, 1.43% zinc and 0.3g/t gold from 52m

* drilled oblique to section to maximise sample size for metallurgical test work

·    Maqail South

o 16B5DD004:    5.8m at 4.42% copper and 0.2g/t gold from 58.6m

o 16B5DD007:    2.15m at 3.7% copper and 0.1g/t gold from 80.7m

·    Highest individual assays of 32.07% copper between 19-20m and 30.69% zinc between 20-21m in 16B5DD008 (recovered from different samples)

·    Drilling for the current programme on Block 5 is now complete, with the next drill programme targeting further resource definition at Aarja and Bayda on Block 4 due to get underway in Q4 2016

·    An updated Mineral Resource estimate for both Maqail and Mahab 4 is expected to be published in Q4 2016 and both deposits remain open indicating further upside potential

·    Drilling will also assist the completion of initial geotechnical and metallurgical testwork for both Blocks 4 and 5, which will feed into feasibility studies and ultimately Ore Reserves as the Company continues to target production in late-2017

David Archer, Savannah's Chief Executive Officer said today "This new set of results has returned some of the broadest and highest-grade copper intersections from the Mahab 4 deposit to date, further underpinning our confidence in the potential of the deposit.  These positive results point towards a potential expansion of the current high-grade portions of both Maqail and Mahab 4, which will build upon the soon to be published updated Mineral Resource estimate for both deposits, which is expected by the year-end.  With the added upside of the additional high priority targets yet to be drilled at Block 4, it is clear that the tempo of our work programmes in country are continuing to increase as we target production in late-2017 and I look forward to providing further updates along the way."

Figure 1. Location Map showing Position of Drilling - see PDF

DRILLING PROGRAMME UPDATE

The current phase of exploration and resource drilling, which included 19 diamond holes, has now been completed with details of the drilling and the results summarised in Table 1. Assay results for 18 of the holes have now been returned, with the 19 drill holes split across four prospects, including:

·    Aarja/Dogs Bone (Block 4):    - 1 drill hole for 261m

·    Bayda (Block 4):                      - 2 drill holes for 289m

·    Maqail South (Block 5):           - 8 drill holes for 663.5m

·    Mahab 4 (Block 5):                  - 8 drill holes for 868.45m

Table 1. Drill Hole Collar and Significant Drill Intercept Summary Table

Hole ID	Prospect	Northing	Easting	rL	Azimuth	Dip	EOH	From	To	Down hole	Grade	Grade	Grade	Grade
					(Deg)	(Deg)	(m)	(m)	(m)	Interval (m)	% Cu	% Zn	g/t Au	g/t Ag
16B5DD001	Maqail South	2661240.0	453578.0	403.0	276	-54	93.00	49.37	75.00	25.63	2.66	0.02	0.1	1
16B5DD001A	Maqail South	2661240.0	453578.0	403.0	276	-54	75.00	48.95	68.50	20.55	3.09	0.00	0.1	3
16B5DD002	Maqail South	2661240.0	453578.0	403.0	314	-55	81.50	47.50	49.50	2.00	6.84	0.02	0.3	5
16B5DD003	Maqail South	2661240.0	453578.0	403.0	135	-80	72.80	56.00	57.35	1.35	7.86	0.00	0.0	4
	including							56.95	57.35	0.40	23.47	0.00	0.1	14
16B5DD004	Maqail South	2661278.0	453520.0	390.0	180	-75	80.00	58.60	64.40	5.80	4.42	0.00	0.2	2
16B5DD005	Maqail South	2661210.0	453553.0	407.0	23	-72	80.20	62.12	63.10	0.98	5.20	0.00	0.1	3
16B5DD006	Maqail South	2661210.0	453553.0	407.0	259	-71	90.00	81.30	82.20	0.90	1.95	0.00	0.2	4
16B5DD007	Maqail South	2661230.0	453530.0	412.0	261	-70	91.00	80.70	82.85	2.15	3.70	0.00	0.10	0
16B4DD001	Dogs Bone/Aarja	2692584.0	440376.0	225.0	342	-72	261	109.30	115.10	5.75	1.84	0.09	0.8	8
								131.12	133.60	2.51	2.62	0.07	1.0	6
								155.65	168.00	12.35	0.20	0.38	0.3	2
16B4DD002	Bayda	2694175.0	441040.0	226.0	270	-74	139	45.00	47.00	2.00	0.49	0.00	0.0	0
								72.00	76.00	4.00	0.50	0.00	0.0	0
								105.90	109.00	3.10	0.51	0.00	0.0	0
16B4DD003	Bayda	2694275.0	440997.0	223.0	0	-90	150	87.00	120.40	33.40	0.69	0.00	0.1	1
	including							101.00	105.00	4.00	1.56	0.15	0.5	3
	including							111.90	117.00	5.10	1.22	0.00	0.1	1
16B5DD008	Mahab 4	2656070.0	468769.0	218.0	256	-60	67.45	18.20	24.00	5.80	9.53	15.06	1.7	49
	including							18.20	20.00	1.80	28.99	6.00	1.7	52
16B5DD009	Mahab 4	2656070.0	468769.0	218.0	256	-68	109.00	18.60	86.00	67.40	4.64	1.13	0.3	15
	including							18.60	54.00	35.40	8.30	2.10	0.4	28
16B5DD010	Mahab 4	2656125.0	468767.0	221.0	256	-53	59.00	34.95	45.00	10.05	10.51	2.67	0.4	19
16B5DD012	Mahab 4	2656216.0	468700.0	251.0	103	-55	81.00	57.50	59.40	1.90	4.39	7.60	0.5	37
								62.50	77.68	15.18	4.02	1.00	0.2	12
16B5DD013	Mahab 4	2656216.0	468700.0	251.0	103	-62	105.00	65.20	85.00	19.80	6.15	1.80	0.4	18
16B5DD015	Mahab 4	2656216.0	468700.0	251.0	51	-60	120.00	84.45	98.00	13.55	6.43	0.68	0.2	11
16B5DD017	Mahab 4	2656305.0	468760.0	220.0	256	-63	147.00	52.00	99.00	47.00	6.07	1.43	0.3	16
								108.00	110.00	2.00	3.37	1.75	0.3	6
16B5DD018	Mahab 4	2656202.0	468639.0	238.0	113	-25	180.00	Assays Pending

·    New results marked in bold

·    Full details can be found in the JORC Table 1 attached

·    16B5DD009 and 16B5DD017 were drilled oblique to section to maximise sample size for metallurgical test work

These excellent results summarised in Table 1 continue to substantiate the exceptional grade and consistency of the Mahab 4 and Maqail South massive sulphide mineralisation.  The recent drilling has now infilled the massive sulphide portion of the resource to a nominal 25m pattern in preparation of updated Mineral Resource estimates at both projects.  The Mahab 4 deposit remains open down dip to the north and the Maqail South deposit open to the west highlighting the potential to further expand these resources with additional drilling.

The drilling has also allowed for the collection of material for metallurgical and geotechnical assessments, the results of which will be incorporated into scoping studies into the development of the projects.

Figure 2. Diamond drill core from 16B5DD008 showing the massive sulphide zone - see PDF

Figure 3. Mahab 4 - Vertical Long Section showing new drilling targeting the high-grade portion of the resource - see PDF

Figure 4. Maqail South - Longitudinal Projection (Plan View) showing new drilling - see PDF

Competent Person

The information in this announcement that relates to exploration results is based upon information compiled by Mr Dale Ferguson, Technical Director of Savannah Resources Limited. Mr Ferguson is a Member of the Australian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code). Mr Ferguson consents to the inclusion in the report of the matters based upon the information in the form and context in which it appears.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

**ENDS**

For further information please visit www.savannahresources.com or contact:

David Archer	Savannah Resources plc	Tel: +44 20 7117 2489
David Hignell / Gerry Beaney (Nominated Adviser)	Northland Capital Partners Ltd	Tel: +44 20 3861 6625
Jon Belliss / Elliot Hance (Corporate Broker)	Beaufort Securities Ltd	Tel: +44 20 7382 8300
Charlotte Page / Lottie Brocklehurst	St Brides Partners Ltd	Tel: +44 20 7236 1177

Notes

Savannah Resources Plc (AIM: SAV) is a growth oriented, multi-commodity, development company.

Mozambique

Savannah operates combined projects with Rio Tinto, and can earn a 51% interest in heavy mineral sands projects in Mozambique, which have a combined exploration target of 7-12Bn tonnes at 3-4.5% THM (published in 2008). Under the terms of the agreement with Rio Tinto Savannah must deliver the following to earn corresponding interest in the combined projects: Scoping Study - 20%; pre-feasibility study - 35%; feasibility study - 51%. Additionally there is an offtake agreement for Rio Tinto to take 100% of production.

Oman

Savannah has interests in two copper blocks in the highly prospective Semail Ophiolite Belt in Oman.  The projects, which have an Indicated and Inferred Mineral Resource of 1.7Mt @ 2.2% copper and high grade intercepts of up to 56.35m at 6.21% Cu, with additional gold upside potential, provide Savannah with an excellent opportunity to potentially evolve into a mid-tier copper and gold producer in a relatively short time frame. Together with its Omani partners, Savannah aims to outline further mineral resources to provide the critical mass for a central operating plant to develop the deposits, and in December 2015 outlined exploration targets of between 10,700,000 and 29,250,000 tonnes grading between 1.4% and 2.4% copper.

Finland

Savannah has Reservation Permits over two new lithium projects, Somero and Erajarvi, covering an area of 159km² in Finland.  Savannah holds a 100% interest in these projects through its Finnish subsidiary Finkallio Oy.  Geological mapping by the Finnish Government within the project areas has highlighted the presence of lithium minerals spodumene, lepidolite and petalite with the Government also identifying Somero and Erajarvi as one of the most prospective areas to discover lithium deposits in Finland.  Savannah plans to initiate an exploration programme including data compilation, geological mapping and surface sampling with the aim of generating drill ready targets during 2016.

APPENDIX 1 - Mahab 4 and Maqail South JORC 2012 Table 1

Section 1 Sampling Techniques and Data

Criteria	JORC Code explanation	Commentary
Sampling techniques	·    Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. ·    Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. ·    Aspects of the determination of mineralisation that are Material to the Public Report. ·    In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.	·    All data at the Maqail South and Mahab 4 Prospects has been gathered from diamond core.  HQ and NQ core sizes have been used.  Majority of holes have been angled to optimally intersect lithology structures. ·    Sampling from diamond drilling is by half core sampling of NQ or HQ core ·    Core is geologically logged and samples selected based on geological logging.  Samples are then dispatched to Bureau Veritas in Turkey for analysis using the following process route. ·      Whole sample is dried at 85°C, Crush to 70% -10 mesh (2mm), 100% pulverize to 85%passing -200 mesh (75 μm). ·      Au: 30gr Fire Assay / lead collection fusion / AAS finish / 5ppb - 10ppm ·      Au>10ppm (& Ag if also over-limit): 30gr / fire assay fusion / GRAVIMETRIC finish ·      24 Element (Mo, Cu, Zn, Ag, Ni, Co, Mn, Fe, As, Sr, Cd, Sb, Bi, Ca,P, Cr, Mg, Al, Na K, W, Hg, S) Aqua Regia Digest ICP-OES finish. ·    Bulk density determinations are made for all samples that are assayed, using the Archimedes method.  This measurement is completed in Oman by Savannah employees.
Drilling techniques	·    Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).	·    Diamond drilling used HQ2 or NQ2 sized equipment.  Diamond core was not orientated. ·    Down hole surveys are completed using a single shot Tropari device at approximately 30-50m intervals down hole.
Drill sample recovery	·    Method of recording and assessing core and chip sample recoveries and results assessed. ·    Measures taken to maximise sample recovery and ensure representative nature of the samples. ·    Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.	·    Diamond core recoveries were recorded in the drill logs.  It is unknown if a relationship exists between sample recovery and grade. ·    Areas of poor recoveries were observed in some areas and recorded in the logging. ·    In areas of poor recovery additional drilling muds were applied to improve recovery.
Logging	·    Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. ·    Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. ·    The total length and percentage of the relevant intersections logged.	·    All drill holes were logged for recovery, RQD, geology and structure. ·    Logging of recorded lithology, mineralogy, mineralisation, weathering, colour and other features of the samples. Diamond core was photographed wet. ·    All drill holes were logged in full.
Sub-sampling techniques and sample preparation	·    If core, whether cut or sawn and whether quarter, half or all core taken. ·    If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. ·    For all sample types, the nature, quality and appropriateness of the sample preparation technique. ·    Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. ·    Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. ·    Whether sample sizes are appropriate to the grain size of the material being sampled.	·    HQ and NQ core was cut in half using a core saw.  ·    Certified reference standards, blanks and duplicates are routinely inserted in the sample sequence to assess the quality of sampling and analysis. ·    Sample sizes are considered appropriate for the style of mineralisation expected.
Quality of assay data and laboratory tests	·    The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. ·    For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. ·    Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.	·    The analytical techniques used are appropriate for the elements and mineralization styles being explored for. ·    Savannahs QAQC protocol is to industry standards with standard reference material and blanks submitted at a minimum of 5% frequency rate.
Verification of sampling and assaying	·    The verification of significant intersections by either independent or alternative company personnel. ·    The use of twinned holes. ·    Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. ·    Discuss any adjustment to assay data.	·    No independent or alternative verification of the assays has been made ·    No twin holes have been drilled ·    No adjustments have been made to the assay data
Location of data points	·    Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. ·    Specification of the grid system used. ·    Quality and adequacy of topographic control.	·    Holes have been located DGPS unit by a licensed surveyor using WGS84 Zone 40N co-ordinates. ·    Holes have been downhole surveyed using a Tropari single shot device ·    Detailed topographic data is available for immediate area surrounding Maqail South and Mahab 4 projects. ·    The quality of the topographic data is excellent with elevations recorded to an accuracy of 0.1m.
Data spacing and distribution	·    Data spacing for reporting of Exploration Results. ·    Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. ·    Whether sample compositing has been applied.	·    Hole spacing is approximately 25m by 25m at Maqail South. ·    Hole spacing at Mahab 4 is approximately at 25m centers or less and have been designed to selectively target the mineralized zone. ·    Data at Maqail South and Mahab 4 is sufficient to establish geological and grade continuity needed for Mineral Resource estimation.  The current drilling is infilling previously reported Mineral Resources.
Orientation of data in relation to geological structure	·    Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. ·    If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.	·    Majority of drill holes are angled approximately perpendicular to the orientation of the lithological trends.  Some holes have been angled down the dip of the structure to collected material for  metallurgical testing. ·    Orientation of the holes does not bias sampling data. ·    Reported intervals are down hole widths and are not necessarily true widths of mineralisation.
Sample security	·    The measures taken to ensure sample security.	·    Chain of custody is managed by Savannah. Samples are stored on site in a locked yard.  Samples are then transported to Turkey by airfreight.  Savannah personnel have no contact with the samples once they have been dispatched.
Audits or reviews	·    The results of any audits or reviews of sampling techniques and data.	·    No audits or reviews of the sampling techniques or data have been completed.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code explanation	Commentary
Mineral tenement and land tenure status	·    Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. ·    The security of the tenure held at the time of reporting along with any known impediments to obtaining a license to operate in the area.	·    The Maqail South and Mahab 4 prospects are located with the exploration permit referred to as Block 5 Savannah has a 65% interest in the Block with the remainder being held by a local JV partner. ·    The tenement is in good standing with no known impediment to renewal.
Exploration done by other parties	·    Acknowledgment and appraisal of exploration by other parties.	·    Previous exploration has been completed at Maqail South and Mahab 4 by Gentor Resources between 2010 - 2012.
Geology	·    Deposit type, geological setting and style of mineralisation.	·    The deposit type being tested is the Cyprus type VMS model.  VMS mineralisation is interpreted to have formed on a mid ocean ridge and then emplaced as an ophiolite on the Arabian Craton.  Several examples of this model exist in the region.
Drill hole Information	·    A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: o easting and northing of the drill hole collar o elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar o dip and azimuth of the hole o down hole length and interception depth o hole length. ·    If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.	·    The location of the drilling at Mahab 4 and Maqail South are summarised in Table 1 in the body of this release. ·    Previously completed holes by Gentor at Maqail South are not all reported in this release. ·    Not all holes completed in this program by Savannah have been reported in this release.
Data aggregation methods	·    In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated. ·    Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. ·    The assumptions used for any reporting of metal equivalent values should be clearly stated.	·    Significant intersections are based on assays greater than 0.5% Cu and may include up to a maximum of 3.0m of internal dilution, with a minimum composite grade of 0% Cu.  The minimum width for an intersection is 0.2m. ·    Cu grades used for calculating significant intersections are uncut. ·    Minimum and maximum diamond core sample intervals used for intersection calculation are 0.2m and 1.2m respectively subject to location of geological boundaries. ·    No metal equivalents are used in the intersection calculation. ·    Where core loss occurs; the average length weighted grade of the two adjacent samples are attributed to the interval for the purpose of calculating the intersection.  The maximum interval of missing core which can be incorporated with the reported intersection is 1m.
Relationship between mineralisation widths and intercept lengths	·    These relationships are particularly important in the reporting of Exploration Results. ·    If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. ·    If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg 'down hole length, true width not known').	·    Exploration results are reported as length weighted averages. ·    No high grade cuts have been applied to the reporting of the exploration results. ·    No metal equivalent values have been used. ·    Down hole intervals have been reported.  True widths are not known.
Diagrams	·    Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.	·    Relevant diagrams and maps have been included in the main body of the release.
Balanced reporting	·    Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.	·    All results have been reported.
Other substantive exploration data	·    Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.	·    The interpretation of the results at Maqail South and Mahab 4 are consistent with the observations and information obtained from historical data collected.
Further work	·    The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling). ·    Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.	·    No further drilling is planned for Mahab 4 or Maqail South.  Recent results will be incorporated into an updated mineral resource estimate.

This information is provided by RNS

The company news service from the London Stock Exchange

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