By Anthony O. Goriainoff
Savannah Resources PLC said Wednesday that it will exit a consortium agreement in Mozambique with Rio Tinto PLC with immediate effect, and that it will also exit its remaining assets in the country.
The AIM-listed mining company said Rio Tinto has paid $9.5 million in cash as termination compensation to Savannah's wholly-owned U.K. subsidiary, AME East Africa Ltd, in respect of the agreement's termination and the transfer of the company's in-country team to Rio Tinto.
Rio Tinto will now take full responsibility for the Mutamba heavy mineral sands project in Mozambique, it said.
Savannah said the move will free up cash resources and management time to be redirected to its flagship Barroso lithium project in Portugal.
The company said it will immediately start the divestment of its residual interests in Mozambique, these being primarily Matilda Minerals Lda and mining concession 9735C.
Shares at 1220 GMT were up 84 pence, or 1.8%, at 4,696.50 pence.
Write to Anthony O. Goriainoff at firstname.lastname@example.org
(END) Dow Jones Newswires