Savannah Resources (LON: SAV) shares are up 5% today on an announcement to the stock exchange. At which point it’s really very difficult indeed to see what the price impact of this information is supposed to be. Even, why Savannah has gone to the bother of making the information release. Unless we want to be truly cynical and mutter something about any information’s good to release if it pushes the share price up.
For what seems to be driving this is that they’ve published a community newsletter. No, really. The announcement: “Savannah Resources, the European lithium development company, is pleased to announce that it has published the first iteration of its Barroso Lithium Community Newspaper. This initiative provides stakeholders with updated information about the Barroso Lithium Project (the "Project"), including upcoming activities and events. Savannah is committed to ensuring transparency around its operations, and that reliable information regarding the Project and the Company is readily available to all stakeholders. The physical newspaper has been distributed in the municipality of Boticas, and can also be found at our local Information Centres and online.
And, umm, yes, that is it.
Savannah Resources share price from Google Finance
Now we have looked at Savannah Resources before: “Savannah Resources (LON: SAV) (OTCPK: SAVNF) is up 24% today on the news that the Portuguese authorities have approved the environmental licence for the Barroso lithium project. This is a necessary step in the development process - you don't get to build a mine without an EIA. However, while it's a necessary part of the process it's not a sufficient one that leads to the inevitability of mining, revenue and profit. As Savannah themselves say: “The positive DIA allows the Company to progress key economic studies on the Project, including the publication of an updated Scoping Study expected in early H2 2023, and the recommencing of the Definitive Feasibility Study.””
Our read on this is that yes, there’s a real mine to be built there. We’d not claim omniscience, but an economic deposit that can be mined at a profit is our general view. The biggest problem is local community opposition - which we think is not so local nor so community but driven by the usual Nimbys who don’t want any industrial development of anything. And yes, we do know Portugal quite well, we are confident in that part of our analysis.
What we think though is that this announcement is, umm, joyous. Not just the idea of announcing to the stock exchange that a community newspaper has been published. Having looked at it it’s the normal sort of corporate guff, most journalists could write this in their sleep. Yes, the water will be fine, lots of jobs, it’ll be lovely.
The thing we really enjoy. That proposed mine is up near Tras os Montes, a very rural, even isolated, area. So the community newspaper, that thing to persuade the locals, is published in English. In a conservative, rural area of Portugal. Surely that’s worth 5% on the Savannah share price?