Category Archives: Sovereign Metals (SVML)

Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX: SVMLF) (Sovereign or the Company) is
pleased to announce the results of an Optimised Pre-feasibility Study (OPFS) for its Kasiya RutileGraphite Project (Kasiya or the Project) undertaken following a strategic investment by Rio Tinto Mining and Exploration Limited (Rio Tinto) in 2023, which established a joint Technical Committee to advance the development of Kasiya.

Following input from various organisations, including world-class consultancies, the Company’s owner’s team, and subject matter experts from Rio Tinto, the OPFS has reconfirmed Kasiya as a leading global future supplier of strategic critical minerals outside of China.

The OPFS proposes a large-scale, long-life operation to deliver substantial volumes of natural rutile and graphite while generating significant returns.

Table 1 summarises the key findings from the OPFS and includes a comparison to the PreFeasibility Study (PFS) results released 16 months ago, in September 2023. It is important to note that the results for the 2023 PFS in Table 1 have not been updated or adjusted for inflation since their release in September 2023.

SUMMARY OF OPTIMISATIONS

The OPFS optimises seven key areas compared to the 2023 PFS as summarised below.

Mining Method
The PFS proposed a 25-year initial LOM based on a hydraulic mining process where slurry material would be screened and pumped overland to processing plants.

Based on findings from the mining trials undertaken as part of the Pilot Mining and Land Rehabilitation (Pilot Phase), the OPFS proposes a large-scale open-pit dry mining operation using draglines and trucking of material to the processing plants. The change in mining method has not changed the initial mine life of 25 years.

Operating Model

The 2023 PFS envisaged mining would take place on a contractor basis.

During the OPFS, Sovereign undertook a trade-off analysis between the following operating options:
• Fully owner-operated mine with draglines and trucks purchased by the owner
• Owner-operated mine with draglines and trucks leased by the owner
• Mining contractor operation using excavators and trucks

Due to the preference for draglines and maintaining flexibility, an owner-operated mine with leased equipment is selected as the preferred operating model.

Plant Configuration
Dry mining Kasiya means the material received at the plant is not pre-wet and pre scrubbed. Therefore, the OPFS proposes a process plant front end consisting of two scrubbers and two oversize screens per 12Mt plant. No further changes are proposed to the processing plant flowsheet.

Plant Location
Per the 2023 PFS, mining would commence in the southern area of the Kasiya deposit, ramping up to 12Mt per annum and then scaling up to 24Mt per annum in Year 5 by constructing a second plant module in the same area, reaching nameplate capacity by the end of the year.

In Year 10 of production, another new 12Mt per annum plant module would be built and commissioned in the northern area of Kasiya, supported by the relocation to the north of one of the southern plants to maintain a steady state of 24Mt per annum.

However, the OPFS has determined the most efficient plant locations to be an initial 12Mtpa South Kasiya plant followed by the construction of another 12Mtpa North Kasiya plant in year 5 of production, negating any relocation requirements in later years.

The OPFS maintains the ROM schedule with operations commencing with 12Mt per annum of throughput during the first four years of production (Stage 1) and expanding to 24Mt per annum in year 5, with full capacity reached by end of year 5 (Stage 2).

Tailings Management

Per the PFS, a conventional process would be used to produce rutile and graphite concentrate with tailings in separate sand and fines streams being pumped to a conventional TSF. Mined out pit areas would be backfilled as part of a rehabilitation process.

The OPFS proposes maximising backfilling of pits as undertaken during the Pilot Phase and the introduction of mud farming on the TSF to accelerate dewatering. This approach has reduced tailings volumes in the TSF by 44% from 187 Mm³ to 105 Mm³.

Mud farming is a technique used by Rio Tinto at operations such as its 100%-owned Weipa bauxite operations in Queensland, Australia, which has been in production since 1963 and produced 35.1Mt of bauxite in 2023.

Water Management
The PFS proposed that the primary water supply for the Kasiya mining complex would be created by building a dam and collecting run-off water from the greater catchment area. Following the introduction of dry mining and mud farming, the size of the water dam proposed in the PFS has been significantly reduced, with less process water required and more process water recovered.

The OPFS mining trials and material deposition tests indicated a water demand of 10.2 Mm³ per annum, almost a 40% decrease in water requirement from the PFS (16.7 Mm³). The effect on the raw water dam wall could be a reduction in volume from 0.79 Mm³ to 0.57 Mm³ and a reduction in dam wall height from 20 metres to 17 metres.

Power
The 2023 PFS envisaged a hybrid hydro-generated grid power plus solar power system solution.

The Malawi grid reliability has improved since completion of the PFS and is expected to further improve considerably with the commissioning of the country’s first HV transmission interconnector to Mozambique in Q2 2025.

This will provide the Project with sufficient power and therefore the OPFS proposes to connect the Project’s power system to the hydro-sourced grid network only. This mitigates any risks associated with commissioning a new solar power project and reducing the overall power tariff by eliminating the need for an Independent Power Producer as per the 2023 PFS.

OPTIMISATION MAINTAINS KASIYA’S GLOBAL LEADER POTENTIAL

Kasiya, located in central Malawi, is the world’s largest known natural rutile deposit and second largest flake graphite deposit.

Natural Rutile is the purest, highest-grade form of naturally occurring titanium feedstock.

Natural Graphite is required for various technological and industrial applications.

Both titanium and graphite have been designated “Critical Minerals” by the USA and the EU.
In December 2024, NATO designated both titanium and graphite as defence-critical, strategic minerals essential for the Allied defence industry.

Over the 25-year LOM, Kasiya is set to produce an average of 222kt of natural rutile and 233kt of natural flake graphite per annum. At steady state throughput of 24 million tonnes of ore per annum the Project is anticipated to produce approximately 246kt of natural rutile and 265kt of natural graphite per annum, positioning Sovereign as potentially the world’s largest producer of natural rutile and natural flake graphite.

Further, the depletion of rutile reserves at Lenoil Company Limited’s Area 1 Mine1 in the coming 2-3 years and the recent cessation of mining activities at Energy Fuels Inc.’s Kwale Operations2 in Kenya means that Sovereign could potentially become the world’s only primary natural rutile producer of scale (see Appendix 2).

The incremental cost of producing a tonne of graphite from Kasiya under the OPFS is US$241/t3. Based on public disclosures by listed graphite companies that have undertaken project studies up to a pre-feasibility stage or later, an incremental graphite cost of production of US$241/t would make Sovereign the world’s lowest-cost graphite producer outside of China (see Appendix 3).

The rutile-graphite-rich mineralisation will be extracted from surface and trucked to the process plant front end to scrub and screen ROM before it enters a Wet Concentration Plant (WCP) where a low-energy requirement, chemical-free process using gravity spirals produces a Heavy Mineral Concentrate (HMC). The HMC is transferred to the dry Mineral Separation Plant (MSP) where premium quality rutile (+95% TiO2) is produced via electrostatic and magnetic separation.

The high quality Kasiya rutile product will be amenable for use in high-end titanium products including aerospace and defence applications.

Graphite rich concentrate is collected from the gravity spirals and processed in a separate graphite flotation plant, producing a high purity, high crystallinity and high value coarse-flake graphite product.

1 In 2024, the previous owner of the Area 1 Mine, Sierra Rutile Limited, was acquired by Lenoil Company Limited, a private company based in Sierra Leone. 2 In 2024, the previous owner of the Kwale Operations, Base Resources Limited was acquired by Energy Fuels Inc., a US-based uranium and critical minerals company.
3 Incremental cost of graphite production is calculated with the following costs attributed to rutile production: all mining costs, all G&A, all material handling costs except for graphitic fines reclamation and graphite concentrate transport, and approximately half of total processing costs. Incremental cost of graphite production therefore includes only those costs incurred on top of primary rutile production to produce an incremental tonne from the process plant and transport the graphite to market. Unit cost of rutile production under this scenario would be US$628/t (FOB Nacala)).

Kasiya’s graphite has been confirmed to produce outstanding anode materials suitable for battery production as well as demonstrating suitability for traditional industrial uses such as the production of refractory materials.

The Project has excellent surrounding infrastructure including sealed roads, a high quality rail line connecting to the deep-water port of Nacala on the Indian Ocean and hydro-sourced grid power.

For the duration of the operation, Kasiya’s highly sought-after rutile and graphite products will be railed directly from a purpose-built rail dry port at the mine site eastward via the Nacala Logistics Corridor (NLC) to the port of Nacala. The southern port of Beira, connecting Kasiya via the recently refurbished Sena Rail Line, offers a secondary export route.

Enquiries
Frank Eagar, Managing Director & CEO
South Africa / Malawi
+27 21 065 1890

Sapan Ghai, CCO
London
+44 207 478 3900

Link here to view full OPFS and Appendices