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#SVML Sovereign Metals LTD – Outstanding Graphite Purification Results

10th March 2025 / Leave a comment

OUTSTANDING GRAPHITE PURIFICATION RESULTS

Testwork Demonstrates Potential Benefits of Using Kasiya Coarse Flake Graphite for Future Downstream Customers

· Testwork confirms Kasiya coarse flake graphite can be purified to:

o 99.95% using acid purification

o 99.98% using alkaline purification

· Suitable for use in high margin applications including powder metallurgy, isostatically pressed refractory products, and high-grade expanded graphite products such as foils or sheets

· Successful purification of Kasiya’s coarse flake graphite via two methods showcases potential for future downstream customers to reduce reagent consumption and waste generation

Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX: SVMLF) (Sovereign or the Company) is pleased to announce the results of purification testing of coarse flake graphite concentrate from the Company’s Kasiya Rutile-Graphite Project (Kasiya or the Project) for applications requiring a higher-grade product, such as powder metallurgy, isostatically-pressed refractory products and high-grade expandables (e.g. flame retardants). These applications typically require less than one percent ash in coarse flake graphite, i.e. a loss of ignition (LOI) purity of more than 99%.

Sovereign engaged ProGraphite GmbH (ProGraphite) to conduct the testwork using coarse (>180-micron) flake graphite from Kasiya and to investigate acid and alkaline purification alternatives under conditions typically used to achieve the +99% LOI target. Purification of Kasiya coarse flake achieved 99.95% LOI purity using acid purification and 99.98% LOI purity using alkaline purification, which is significantly higher than the >99.0% target.

Managing Director and CEO Frank Eagar commented: “These are truly outstanding results – effectively achieving battery grade purities of +99% and less than 0.05% ash under conditions that typically result in under 1% ash. For our future customers, this has the potential to significantly reduce reagent consumption and waste generation in the production of high-purity flake or targeted high-end applications.

This is yet further confirmation that Kasiya graphite concentrate is a premium graphite suitable for the anode, refractory, expandables and now also the high-purity powder metallurgy markets. We are delighted with the significant commercial optionality it brings to the Kasiya Rutile and Graphite Project.”

High-Purity Coarse Flake Graphite

High-quality coarse flake graphite can achieve grades of 97%-98% in minerals processing. However, specific coarse flake applications require less than 1% ash content in the flake, i.e. a LOI purity of more than 99%.

To achieve this target, the coarse flake is typically purified using either:

· acid purification, using hydrofluoric (HF) acid as the primary acid to remove silicates and other impurities; or

· alkaline purification, where HF is replaced with sodium hydroxide (NaOH), i.e. caustic soda, to remove silicates before being washed and then acid leached to remove residual metals.

The conditions required to achieve a >99% purity are less aggressive than those needed to achieve battery grades (>99.95%). ProGraphite targeted the purification of coarse (>180 microns) Kasiya flake under conditions typically used to meet the >99% target. The LOI purity and residual impurities are summarised in Table 1, with all other elements below 1ppm or below the detection limit.

Table 1: LOI and Residual Impurities Analysis of Purified Kasiya >180-micron flake
		Acid Purification	Alkaline Purification
LOI Purity	%	99.95%	99.98%
Ash	%	0.05%	0.02%
Si	ppm	65	<2.8
Fe	ppm	23.6	10.1
Al	ppm	55.6	3.88
Ba	ppm	21	6.45
Ca	ppm	18.6	0.98
K	Ppm	<2.2	<2.1
Mg	ppm	10.7	1.63
Mn	ppm	1.26	6.15
P	ppm	1.85	0.97
Na	ppm	<1.5	40.8
Ti	ppm	15.8	0.56
Zr	ppm	6.54	0.74

Testing on Kasiya coarse flake effectively achieved battery-grade purities (≥99.95%) using a single-stage HF purification and an exceptional 99.98% purity with alkaline purification under standard conditions that typically reach a >99% target. HF (a high-cost toxic reagent that requires careful management) is normally required to remove residual silicates in natural graphite. However, these results indicate that the saprolite-hosted Kasiya graphite is amenable to alkaline purification. This will provide downstream customers with process flexibility.

The results indicate potential for customers to reduce reagents consumption to produce standard products (>99%) purity, or, subject to market demand, produce very high-purity coarse flake. Typical uses for high-purity coarse flake include powder metallurgy, isostatically pressed refractory products, and high-purity expandables.

Enquires

Frank Eagar, Managing Director & CEO

South Africa / Malawi

+27 21 140 3190

Sapan Ghai, CCO

London

+44 207 478 3900

Nominated Adviser on AIM and Joint Broker
SP Angel Corporate Finance LLP	+44 20 3470 0470
Ewan Leggat Charlie Bouverat

Joint Brokers
Stifel	+44 20 7710 7600
Varun Talwar
Ashton Clanfield

Berenberg	+44 20 3207 7800
Matthew Armitt
Jennifer Lee

Buchanan	+ 44 20 7466 5000

Competent Person Statement

The information in this report that relates to Metallurgical Testwork is based on information compiled by Dr Surinder Ghag, PhD., B. Eng, MBA, M.Sc., who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM). Dr Ghag is engaged as a consultant by Sovereign Metals Limited. Dr Ghag 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 (and a Qualified Person under the AIM Rules)as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Ghag consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Exploration Results is based on information compiled by Mr Malcolm Titley, a Competent Person who is a member of The Australasian Institute of Mining and Metallurgy (AusIMM). Mr Titley consults to Sovereign Metals Limited and is a holder of ordinary shares and unlisted performance rights in Sovereign Metals Limited. Mr Titley has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person (and a Qualified Person under the AIM Rules)as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Titley consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to operating costs and graphite marketing is extracted from an announcement dated 22 January 2025, which is available to view at www.sovereignmetals.com.au. Sovereign confirms that: a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions and technical parameters underpinning the Production Target, and related forecast financial information derived from the Production Target included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this presentation have not been materially modified from the original announcement.

Forward Looking Statement

This release may include forward-looking statements, which may be identified by words such as “expects”, “anticipates”, “believes”, “projects”, “plans”, and similar expressions. These forward-looking statements are based on Sovereign’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Sovereign, which could cause actual results to differ materially from such statements. There can be no assurance that forward-looking statements will prove to be correct. Sovereign makes no undertaking to subsequently update or revise the forward-looking statements made in this release, to reflect the circumstances or events after the date of that release.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (‘MAR’). Upon the publication of this announcement via Regulatory Information Service (‘RIS’), this inside information is now considered to be in the public domain.

Appendix 1: JORC CODE, 2012 EDITION – TABLE 1

SECTION 1 – SAMPLING TECHNIQUES AND DATA

Criteria

JORC Code explanation

Commentary

Sampling Techniques

Nature and quality of sampling (e.g. 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.

Metallurgical Composite Sample:

The sample was a composite of multiple hand anger drill samples drilled in 2022 and 2023. Dilling of these samples was within the Kingfisher pit. Clusters of holes were drilled in eight locations.

Block 15 Site 1 – PT15BLK00143 – PT15BLK00152 (Hole ID: NSPT0017 – refer ASX Announcement dated 15/03/2022)

Block 15 Site 2 – PT15BLK00125 – PT15BLK00142 (Hole ID: KYAC0149 – refer ASX Announcement dated 30/01/2023)

Block 15 Site 3 – PT15BLK00103 – PT15BLK00124 (Hole ID: KYAC0142 – refer ASX Announcement dated 30/01/2023)

Block 15 Site 4 – PT15BLK00075 – PT15BLK00094, PT15BLK00124, PT15BLK00134 (Hole ID: KYAC0025 – refer ASX Announcement dated 8/09/2022)

Block 15 Site 5 – PT15BLK00061 – PT15BLK00074, PT15BLK00099 – PT15BLK00102, PT15BLK00106 – PT15BLK00108 (Hole ID: KYAC0088 – refer ASX Announcement dated 26/10/2022)

Block 15 Site 6 – PT15BLK00035 – PT15BLK00060, PT15BLK00076 – PT15BLK00077, PT15BLK00095 – PT15BLK00098, PT15BLK00114 – PT15BLK00117 (Hole ID: KYAC0090 – refer ASX Announcement dated 26/10/2022)

Block 15 Site 7 – PT15BLK00013 – PT15BLK00014, PT15BLK00022 – PT15BLK00034 (Hole ID: KYAC0091 – refer ASX Announcement dated 26/10/2022)

Block 14 Site 8 – PT15BLK00003 – PT15BLK00012, PT15BLK00015 – PT15BLK00021, PT15BLK00036 – PT15BLK00039 (Hole ID: KYAC0079 – refer ASX Announcement dated 26/10/2022)

All samples within the pit shell were added to the composite resulting in a sample of 15,766kg.

Samples were processed separately for the eight locations through Sovereign’s Malawi metallurgical laboratory.

The following workflow was used to generate a pre-concentrate graphite feed:

· Wet screen at 2mm to remove oversize

· Dry screen at 1mm to remove oversize

· Wet screen at 600µm

· Wet screen at 45µm to remove -45µm material

· Pass +45µm -600µm (fine sand) fraction over laboratory wet shaking table to produce a heavy mineral concentrate, light middling and wet table tailings which is the graphite concentrate.

· The +45µm -600µm (fine sand) graphite concentrate and <1000µm >600µm screen fraction were combined to provide flotation feed. The >1000µm fraction was not included.

· Flotation was performed at Maelgwyn in Johannesburg.

· Fine and coarse gravity tailing samples contain approximately 75%-80% of the graphite present in the feed sample. The majority of the graphite lost is contained in the -45µm fines.

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

Placer Consulting (Placer) Resource Geologists have reviewed Standard Operating Procedures (SOPs) for the collection of HA and Push Tube (PT) drill samples and found them to be fit for purpose.

Drilling and sampling activities are supervised by a suitably qualified Company geologist who is present at all times. All bulk 1-metre drill samples are geologically logged by the geologist at the drill site.

The primary metallurgical composite sample is considered representative for this style of mineralisation.

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 (e.g. ‘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 (e.g. submarine nodules) may warrant disclosure of detailed information.

HA drilling was used to obtain samples. The bulk metallurgical sample was a composite of selected samples from routine resource drilling.

Existing rutile and graphite exploration results were used to determine the 1-metre intervals suitable to contribute to the two bulk sample composites.

Drilling Techniques

Drill type (e.g. core, reverse circulation, open‐hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. 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).

Hand-auger drilling is completed with 75mm diameter enclosed spiral bits with 1-metrelong steel rods. Each 1m of drill sample is collected into separate sample bags and set aside. The auger bits and flights are cleaned between each metre of sampling to avoid contamination.

Placer has reviewed SOPs for hand-auger drilling and found them to be fit for purpose and support the resource classifications as applied to the MRE.

Drill Sample Recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

The configuration of drilling and nature of materials encountered results in negligible sample loss or contamination.

Samples are assessed visually for recoveries. Overall, recovery is good. Drilling is ceased when recoveries become poor generally once the water table has been encountered.

Auger drilling samples are actively assessed by the geologist onsite for recoveries and contamination.

Measures taken to maximise sample recovery and ensure representative nature of the samples.

The Company’s trained geologists supervise auger drilling on a 1 team 1 geologist basis and are responsible for monitoring all aspects of the drilling and sampling process.

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.

No bias related to preferential loss or gain of different materials has occurred.

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.

All individual 1-metre auger intervals are geologically logged, recording relevant

data to a set template using company codes.

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography.

All logging includes lithological features and estimates of basic mineralogy. Logging is generally qualitative.

The total length and percentage of the relevant intersection logged

100% of samples are geologically logged.

Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

Not applicable – no core drilling conducted.

If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry.

Primary individual 1-metre samples from all HA and PT holes drilled are sun dried, homogenised and riffle split.

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

Metallurgical Composite Sample:

Full length of the Hand Auger (HA) Holes were processed in total 15,767kg.

Graphite concentrate sent to Maelgwyn was ~4800kg

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

The sample preparation techniques and QA/QC protocols are considered appropriate for the nature of this test-work.

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.

The sampling best represents the material in situ.

Whether sample sizes are appropriate to the grain size of the material being sampled.

The sample size is considered appropriate for the nature of the test-work.

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.

Metallurgical Composite Sample:

The following workflow was used to generate a graphite product;

· Rougher graphite flotation

· Polishing grind of rougher graphite concentrate

· Primary cleaner flotation milled rougher concentrate

· Attrition milling of primary cleaner concentrate

· Secondary cleaning of attritioned primary cleaner concentrate

· Attrition milling of secondary cleaner concentrate

· Tertiary cleaner flotation of attritioned secondary cleaner concentrate

· Final concentrate dewatering, drying and sizing

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.

Acceptable levels of accuracy and precision have been established. No handheld methods are used for quantitative determination.

Nature of quality control procedures adopted (e.g. standards, blanks, duplicate, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

Acceptable levels of accuracy and precision have been established in the preparation of the bulk sample composites.

Verification of sampling & assaying

The verification of significant intersections by either independent or alternative company personnel.

No drilling intersections are being reported.

The use of twinned holes.

No twin holes completed in this program.

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

All data was collected initially on paper logging sheets and codified to the Company’s templates. This data was hand entered to spreadsheets and validated by Company geologists.

Discuss any adjustment to assay data.

No adjustment to assay data has been made.

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.

A Trimble R2 Differential GPS is used to pick up the collars. Daily capture at a registered reference marker ensures equipment remains in calibration.

No downhole surveying is completed. Given the vertical nature and shallow depths of the holes, drill hole deviation is not considered to significantly affect the downhole location of samples.

Specification of the grid system used.

WGS84 UTM Zone 36 South.

Quality and adequacy of topographic control.

DGPS pickups are considered to be high quality topographic control measures.

Data spacing & distribution

Data spacing for reporting of Exploration Results.

Metallurgical Composite Sample: The hand-auger holes contributing to this metallurgical were selected from pit area Kingfisher and broadly represent early years of mining as contemplated in the OPFS (Approximately the first three years).

It is deemed that these holes should be broadly representative of the mineralisation style in the general area.

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.

Not applicable, no Mineral Resource or Ore Reserve estimations are covered by new data in this report.

Whether sample compositing has been applied.

Metallurgical Composite Sample:

The sample was composited as described under Sampling Techniques in this Table 1.

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

No bias attributable to orientation of sampling has been identified.

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.

All holes were drilled vertically as the nature of the mineralisation is horizontal. No bias attributable to orientation of drilling has been identified.

Sample security

The measures taken to ensure sample security

Samples are stored in secure storage from the time of drilling, through gathering, compositing and analysis. The samples are sealed as soon as site preparation is complete.

A reputable international transport company with shipment tracking enables a chain of custody to be maintained while the samples move from Malawi to Johannesburg. Samples are again securely stored once they arrive and are processed at Maelgwyn.

Graphite concentrate samples were shipped to German laboratories using a reputable international transport company with shipment tracking to enable a chain of custody to be maintained while the samples moved from Johannesburg to Germany. Concentrate samples are securely stored once they arrive and are processed in Germany.

At each point of the sample workflow the samples are inspected by a company representative to monitor sample condition. Each laboratory confirms the integrity of the samples upon receipt.

Audits or reviews

The results of any audits or reviews of sampling techniques and data

It is considered by the Company that industry best practice methods have been employed at all stages of the exploration.

Malawi Field and Laboratory visits have been completed by Richard Stockwell in May 2022. A high standard of operation, procedure and personnel was observed and reported.

SECTION 2 – REPORTING OF EXPLORATION RESULTS

Criteria	Explanation	Commentary
Mineral tenement & 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 environment settings.	The Company owns 100% of the following Exploration Licences (ELs) under the Mines and Minerals Act 2019 (Malawi), held in the Company’s wholly-owned, Malawi-registered subsidiaries: EL0609, EL0582, EL0492, EL0528, EL0545, EL0561, EL0657 and EL0710. A 5% royalty is payable to the government upon mining and a 2% of net profit royalty is payable to the original project vendor. No significant native vegetation or reserves exist in the area. The region is intensively cultivated for agricultural crops.
Mineral tenement & land tenure status	The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.	The tenements are in good standing and no known impediments to exploration or mining exist.
Exploration done by other parties	Acknowledgement and appraisal of exploration by other parties.	Sovereign Metals Ltd is a first-mover in the discovery and definition of residual rutile and graphite deposits in Malawi.
Geology	Deposit type, geological setting and style of mineralisation	The rutile deposit type is considered a residual placer formed by the intense weathering of rutile-rich basement paragneisses and variable enrichment by eluvial processes. Rutile occurs in a mostly topographically flat area west of Malawi’s capital, known as the Lilongwe Plain, where a deep tropical weathering profile is preserved. A typical profile from top to base is generally soil (“SOIL” 0-1m) ferruginous pedolith (“FERP”, 1-4m), mottled zone (“MOTT”, 4-7m), pallid saprolite (“PSAP”, 7-9m), saprolite (“SAPL”, 9-25m), saprock (“SAPR”, 25-35m) and fresh rock (“FRESH” >35m). The low-grade graphite mineralisation occurs as multiple bands of graphite gneisses, hosted within a broader Proterozoic paragneiss package. In the Kasiya areas specifically, the preserved weathering profile hosts significant vertical thicknesses from near surface of graphite mineralisation.
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: easting and northings of the drill hole collar; elevation or RL (Reduced Level-elevation above sea level in metres of the drill hole collar); dip and azimuth of the hole; down hole length and interception depth; and hole length	All intercepts relating to the Kasiya Deposit have been included in public releases during each phase of exploration and in this report. Releases included all collar and composite data and these can be viewed on the Company website. There are no further drill hole results that are considered material to the understanding of the exploration results. Identification of the broad zone of mineralisation is made via multiple intersections of drill holes and to list them all would not give the reader any further clarification of the distribution of mineralisation throughout the deposit.
Drill hole information	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	No information has been excluded.
Data aggregation methods	In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high-grades) and cut-off grades are usually Material and should be stated.	No data aggregation was required.
	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.	No data aggregation was required.
	The assumptions used for any reporting of metal equivalent values should be clearly stated.	Not applicable
Relationship between mineralisation widths & intercept lengths	These relationships are particularly important in the reporting of Exploration Results.	The mineralisation has been released by weathering of the underlying, layered gneissic bedrock that broadly trends NE-SW at Kasiya North and N-S at Kasiya South. It lies in a laterally extensive superficial blanket with high-grade zones reflecting the broad bedrock strike orientation of ~045° in the North of Kasiya and 360° in the South of Kasiya. No drilling intercepts are being reported in this announcement.
	If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.	The mineralisation is laterally extensive where the entire weathering profile is preserved and not significantly eroded. Minor removal of the mineralised profile has occurred where alluvial channels cut the surface of the deposit. These areas are adequately defined by the drilling pattern and topographical control for the resource estimate.
	If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’.	No drilling intercepts are being reported.
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 the drill collar locations and appropriate sectional views.	The original exploration results and plan view of the drill holes for the samples used in relation to the metallurgical composite test work conducted in this announcement, are included in Sovereign’s announcements dated 15 March 2022, 8 September 2022, 26 October 2022 and 30 January 2023. These announcements are accessible on the Company and ASX websites.
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 are included in this report and in previous releases. These are accessible on the Company’s webpage.
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.	Limited lateritic duricrust has been variably developed at Kasiya, as is customary in tropical highland areas subjected to seasonal wet/dry cycles. Lithological logs record drilling refusal in just under 2% of the HA/PT drill database. No drilling refusal was recorded above the saprock interface by AC drilling. Sample quality (representivity) is established by geostatistical analysis of comparable sample intervals.
Further work	The nature and scale of planned further work (e.g. test for lateral extensions or depth extensions or large-scale step-out drilling).	Having recently completed an OPFS, the Company is working towards completing a definitive feasibility study.
Further work	Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.	Refer to diagrams and plan views disclosed in previous announcements. These are accessible on the Company’s website as discussed above.

#SVML Sovereign Metals LTD – Half-year Report

7th March 2025 / Leave a comment

INTERIM FINANCIAL REPORT

FOR THE HALF YEAR ENDED

31 DECEMBER 2024

abn 71 120 833 427

ASX: SVM; aim:SVML; OTCQX: SVMlf

CORPORATE DIRECTORY

Directors Mr Benjamin Stoikovich Chairman Mr Frank Eagar Managing Director and CEO Mr Ian Middlemas Non-Executive Director Dr Julian Stephens Non-Executive Director Mr Mark Pearce Non-Executive Director Mr Nigel Jones Non-Executive Director CFO and Company Secretary Mr Dylan Browne London Office Unit 3C, 38 Jermyn Street, London SW1Y 6DN, United Kingdom Telephone: +44 207 478 3900 Cape Town Office Ground Floor, Block C, The Terraces, Steenberg Office Park Cape Town, South Africa Telephone: +27 21 065 1890 Operations Office Area 4 Lilongwe Malawi Registered and Principal Office Level 9, 28 The Esplanade Perth WA 6000 Telephone: +61 8 9322 6322 Stock Exchange Listings Australia Australian Securities Exchange ASX Code: SVM – Ordinary Shares United Kingdom London Stock Exchange (AIM) AIM Code: SVML – Depository Interests Quotations United States OTCQX Best Market OTCQX code: SVMLF	Nominated Advisor & Broker SP Angel Corporate Finance LLP Prince Frederick House 35-39 Maddox Street London W1S 2PP, United Kingdom Brokers Stifel Nicolaus Europe Limited 150 Cheapside London EC2V 6ET United Kingdom T: +44 20 7710 7600 Berenberg, Gossler & Co, KG, London Branch 60 Threadneedle Street London EC2R 8HP United Kingdom T: +44 20 3753 3132 Share Register Australia Computershare Investor Services Pty Ltd Level 17 221 St Georges Terrace Perth WA 6000 Telephone: 1300 850 505 International: +61 8 9323 2000 Facsimile: +61 8 9323 2033 United Kingdom Computershare Investor Services PLC The Pavilions, Bridgewater Road, Bristol BS99 6ZZ Telephone: +44 370 702 0000 Solicitors Thomson Geer Simmons & Simmons Auditor Ernst & Young – Perth Bankers Australia – National Australia Bank Limited Malawi – Standard Bank

CONTENTS

Directors’ Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Competent Person Statement
Auditor’s Independence Declaration
Independent Auditor’s Review Report

DIRECTORS’ REPORT

The Directors of Sovereign Metals Limited present their report on Sovereign Metals Limited (Sovereign or the Company or Parent) and the entities it controlled at the end of, or during, the half year ended 31 December 2024 (Consolidated Entity or Group).

REVIEW AND RESULTS OF OPERATIONS

KASIYA RUTILE-GRAPHITE PROJECT

Sovereign is focused on the development of its Kasiya rutile-graphite project (Kasiya or the Project) in Malawi. The recently completed Optimised Pre-Feasibility Study (OPFS) confirmed Kasiya as a potentially major critical minerals project delivering industry-leading economic returns and sustainability metrics.

The Company’s objective is to develop a large-scale, long life rutile-graphite operation, focusing on developing an environmentally and socially responsible, sustainable operation.

A map of a project Description automatically generated

Figure 1: Kasiya Regional Project Location

HIGHLIGHTS DURING AND SUBSEQUENT TO PERIOD END

Optimised PFS Results Reaffirm Kasiya’s Globally Strategic Significance

· In January 2025, the OPFS was completed with oversight from Sovereign-Rio Tinto Technical Committee

· Results of the OPFS reaffirm Kasiya’s potential to become the largest and lowest-cost producer of natural rutile and natural flake graphite while generating exceptional economics

· Various optimisations have led to superior project delivery, operational flexibility, environmental and social outcomes compared to the 2023 Prefeasibility Study (PFS)

Pilot Phase Advanced to Rehabilitation Stage following Mining Trials and Backfilling

· In December 2024, material mined and stockpiled during the Pilot Mining and Land Rehabilitation (Pilot Phase) was placed back in the test pit, filling it to its original ground level

· On-site soil remediation and land rehabilitation activities are underway, testing Sovereign’s proposed rehabilitation approach and demonstrating how mined land can support sustainable farming post-closure

Rio Tinto Invests Additional A$19m Increasing Shareholding to 19.9%

· In July 2024, Rio Tinto invested a further A$18.5 million via the exercise of options to increase its shareholding in Sovereign. To date Rio Tinto has invested A$60 million for 19.9% of Sovereign

Positive Test Results for Use of Kasiya Graphite

· Very high quality Coated Spherical Purified Graphite (CSPG) anode material produced from Kasiya graphite concentrate with performance characteristics comparable to highest quality natural graphite battery material produced by dominant Chinese anode manufacturers

· In November 2024, Sovereign announced that preliminary tests confirmed that graphite concentrate produced from Kasiya exhibits prerequisite characteristics for selling graphite to the refractory materials sector

· In February 2025, further test work confirmed Kasiya’s graphite also has the key characteristics required for use in expandable (fire retardant) and expanded (gaskets, seals, and brake lining) applications

Infill Drilling Program Complete

· In October 2024, Sovereign announced the completion of an infill drilling program designed to upgrade Kasiya’s Mineral Resource Estimate (MRE) and to facilitate conversion of Ore Reserves from Probable to Proven category, with the upgrade due in the coming months

Next Steps

· Sovereign will continue to advance the Definitive Feasibility Study (DFS), provide updates on the rehabilitation component of the Pilot Phase, publish an upgrade to the MRE, continue with further graphite testwork to support potential offtake discussions and further its community and social development programs in Malawi

A large area of dirt with a hole in the middle Description automatically generated with medium confidence An aerial view of a farm AI-generated content may be incorrect.

Figure 2: Pilot Phase test pit during mining trials (left) and subsequently backfilled and rehabilitated (right)

Optimised PFS Results Reaffirm Kasiya’s Globally Strategic Significance

Subsequent to the half year, the Company announced the results of an OPFS for Kasiya which was undertaken following a strategic investment by Rio Tinto Mining and Exploration Limited (Rio Tinto) in 2023. Under the Investment Agreement, a joint Technical Committee was established to oversee the development of Kasiya; the OPFS was conducted with oversight from the Sovereign-Rio Tinto Technical Committee.

Following input from various organisations, including internationally recognised, independent 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 below summarises the key findings from the OPFS and includes a comparison to the 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.

TABLE 1: KEY OPFS METRICS
	Units	OPFS Results Jan 25	2023 PFS Sep 23
Production
Initial Mine Life	Years	25	25
Plant Throughput (Stage 1: Years 1-4)	Mtpa	12	12
Plant Throughput (Stage 2: Years 5-25)	Mtpa	24	24
Average Annual Rutile Produced (95%+TiO₂₎	ktpa	222	222
Annual Average Graphite Produced (96% TGC)*	ktpa	233	244
Operating and Capital Expenditure
Capex to First Production (Stage 1)	US$M	665	597
Total LOM Development Capex	US$M	1,127	1,250
Total LOM Sustaining Capex	US$M	397	470
Operating Costs (FOB Nacala)	US$/t product	423	404
Financial Performance
Total Revenue*	US$M	16,367	16,121
Annual Revenue (Average LOM)	US$M	640	645
Annual EBITDA (Average LOM)	US$M	409	415
NPV₈ (real, pre-tax)	US$M	2,322	2,419
IRR (pre-tax)	%	27%	32%
Revenue to Cost Ratio	x	2.8	2.8

*Annual average graphite produced includes 292kt of graphite processed and sold in two years post cessation of active ore mining. Average graphite produced during the 25-year initial mine life only is 240ktpa; total revenue during the same period is US$15,990 million. All rutile is produced and sold during the 25-year initial mine life. Note: All cashflows and costs are presented in US$ real January 2025 terms unless otherwise stated. Operating costs exclude mineral royalties and community development support costs.

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 the processing plants.

Based on findings from the mining trials undertaken as part of the 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 benefit of 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 (Mtpa) and then scaling up to 24Mtpa in Year 5 by constructing a second plant module in the same area, reaching nameplate capacity by the end of that year.

In Year 10 of production, another new 12Mtpa 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 24Mtpa.

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 12Mtpa of throughput during the first four years of production (Stage 1) and expanding to 24Mtpa 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 water storage 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 storage 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 water storage 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.

Pilot Phase Advanced to Rehabilitation Stage Following Mining Trials and Backfilling

In December 2024, the Company announced that the test pit mined during the Pilot Phase at the Kasiya Project had been successfully backfilled. This allowed Sovereign to commence on-site soil remediation and land rehabilitation activities, testing our proposed rehabilitation approach and demonstrating that the mined land can support sustainable farming post-closure.

During the Pilot Phase mining trials, 170,000m³ was mined using a conventional excavator fleet. The fleet was used to place mined material back into the pit, filling the pit to the original ground level in less than two months and ahead of schedule.

In March 2025, the Company announced the success of the rehabilitation program with landowners given immediate access to land to start maize crop farming without missing a planting season.

Positive Test Results for Use of Kasiya Graphite in Refractory and Expandable Markets

The Company has announced that downstream testwork targeting the traditional graphite market, conducted at leading independent consultancies ProGraphite GmbH (ProGraphite) and Dorfner Anzaplan (DorfnerA) in Germany, have delivered very positive test results, which will be used for customer engagement and potential offtake discussions.

Preliminary tests confirmed that graphite concentrate produced from Kasiya in Malawi exhibits prerequisite characteristics required for graphite sales into the refractory materials sector and for use in expandable (fire retardant) and expanded (gaskets, seals, and brake lining) applications.

Traditional demand for natural graphite is primarily tied to the steel industry where it is used as a component in bricks that line both blast and electric arc furnaces (“refractories”) and as a liner for ladles and crucibles. It is used in brake linings, gaskets and clutch materials in the automotive industry. Graphite has many other industrial uses in lubricants, carbon brushes for electric motors, fire retardants, and insulation and reinforcement products.

Graphite’s key properties for use in refractory applications are its resistance to oxidation, chemical inertness and good thermal conductivity.

A key use for expandable graphite is as a flame retardant. Growth for expandable graphite flame retardants, is driven by concerns over halogen-based flame retardants, which include brominated and chlorinated flame retardants. Many of these chemicals are now recognised as global contaminants and are associated with adverse health effects in animals and humans, including endocrine and thyroid disruption, immunotoxicity, reproductive toxicity, and cancer (National Institute of Health).

Expanded graphite is used in gaskets, seals, brake linings, bi-polar plates for fuel cells, and thermal management in electronic devices, where the inherent properties of graphite are combined with the flexibility of expanded graphite.

A blue pie chart with white text AI-generated content may be incorrect.

Figure 3: Natural graphite market per application (Benchmark Minerals Intelligence, 2025)

Infill Drilling Program Complete

In October 2024, the Company announced the completion of an infill drilling program at Kasiya to support an upgrade of the MRE.

Aircore drilling, supported by hand auger, push tube and diamond core drilling, was completed in the southern part of Kasiya. The drilling was focused on the designated pits proposed to provide ore feed in the first eight years of the Project’s production schedule. Ore Reserves in these areas are expected to convert from the Probable to Proven category with an upgrade of the current MRE from Indicated to the Measured category under the JORC (2012) Code.

Offsite laboratories in South Africa and Australia will assay all samples for rutile and graphite. The drilling program’s results and subsequent Resource upgrade are expected in early 2025.

Kasiya is already the world’s largest rutile deposit and second-largest flake graphite deposit, with over 66% of the current MRE in the Indicated category.

Corporate Update

Sovereign remains in a strong financial position with cash at bank of approximately A$34 million and no debt.

Next Steps

The Company plans to update the market on the following progress in the coming months:

· Planned MRE upgrade

· Further graphite test work results as the Company continues to advance the qualification of its graphite product for the lithium-ion battery and traditional graphite sectors

· Progress in discussions with future potential end-users of rutile and graphite

· Updates on community and social development programs

· Further rehabilitation aspects of the Pilot Phase

· Progress of the DFS, which is targeted for completion in Q4, 2025

DIRECTORS

The names of Directors in office at any time during the financial period or since the end of the financial period are:

Mr Benjamin Stoikovich Chairman

Mr Frank Eagar Managing Director and CEO

Mr Ian Middlemas Non-Executive Director

Dr Julian Stephens Non-Executive Director

Mr Mark Pearce Non-Executive Director

Mr Nigel Jones Non-Executive Director

All Directors were in office from 1 July 2024 until the date of this report, unless otherwise noted.

OPERATING RESULTS

The net operating loss after tax for the half year ended 31 December 2024 was $19,546,116 (2023: $6,976,503) which is attributable to:

(i) Interest income of $1,025,751 (2023: $938,402) earned on cash term deposits held by the Group;

(ii) exploration and evaluation expenditure of $16,495,513 (2023: $5,027,397) in relation to the Kasiya Project. This is attributable to the Group’s accounting policy of expensing exploration and evaluation expenditure incurred by the Group subsequent to acquisition of the rights to explore and up to the completion of feasibility studies; and

(iii) non-cash share based payment expenses of $1,904,852 (2023: $1,089,974) relating to performance rights. The fair value of incentive options and rights is measured at grant date and recognised over the period during which the performance rights holders become unconditionally entitled to the incentive securities.

FINANCIAL POSITION

At 31 December 2024, the Company had cash and cash equivalents of $33,531,689 (30 June 2024: $31,564,130) and no debt (30 June 2024: nil). The Company had net assets of $35,927,994 (30 June 2024: $34,358,774), an increase of $1,569,220 or approximately 4% compared with the prior period. This is largely attributable to the increase in cash reserves following the investment made by Rio Tinto in the period offset by exploration and evaluation spend on the project to complete the Pilot Phase and OPFS.

SIGNIFICANT POST BALANCE DATE EVENTS

On 22 January 2025, the Company announced the results of an OPFS for Kasiya which reaffirm Kasiya’s potential to become the largest and lowest-cost producer of natural rutile and natural flake graphite while generating exceptional economics.

Other than the above, there are no matters or circumstances which have arisen since 31 December 2024 that have significantly affected or may significantly affect:

· the operations, in periods subsequent to 31 December 2024, of the Group;

· the results of those operations, in periods subsequent to 31 December 2024, of the Group; or

· the state of affairs, in periods subsequent to 31 December 2024, of the Group.

AUDITOR’S INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires our auditors, Ernst & Young, to provide the directors of Sovereign Metals Limited with an Independence Declaration in relation to the review of the half year financial report. This Independence Declaration is on page 17 and forms part of this Directors’ Report.

This report is made in accordance with a resolution of the directors made pursuant to section 306(3) of the Corporations Act 2001.

For and on behalf of the Directors

Frank Eagar

Managing Director and CEO

7 March 2025

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE HALF YEAR ENDED 31 DECEMBER 2024

	Notes	Half Year Ended 31 December 2024 $	Half Year Ended 31 December 2023 $
Interest income		1,025,751	938,402
Exploration and evaluation expenses		(16,495,513)	(5,027,397)
Corporate and administrative expenses		(779,930)	(572,119)
Business development expenses		(1,004,695)	(996,548)
Share based payment expense	9(a)	(1,904,852)	(1,089,974)
Other expenses	3	(386,877)	(173,386)
Demerger expenses		–	(55,481)
Loss before income tax		(19,546,116)	(6,976,503)
Income tax expense		–	–
Loss for the period		(19,546,116)	(6,976,503)

Other comprehensive income, net of income tax:
Items that may be reclassified subsequently to profit or loss
Exchange differences on foreign entities		80,624	3,530
Other comprehensive income for the period, net of income tax		80,624	3,530
Total comprehensive loss for the period		(19,465,492)	(6,972,973)

Loss attributable to members of Sovereign Metals Limited		(19,465,492)	(6,972,973)

Total comprehensive loss attributable to members of Sovereign Metals Limited		(19,465,492)	(6,972,973)

Basic and diluted loss per share from continuing operations (cents per share)		(3.3)	(1.1)

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2024

	Notes	31 December 2024 $	30 June 2024 $
ASSETS
Current Assets
Cash and cash equivalents		33,531,689	31,564,130
Other receivables	4	506,258	315,597
Other financial assets		175,000	560,000
Total Current Assets		34,212,947	32,439,727

Non-current Assets
Property, plant and equipment	5	2,009,700	1,149,771
Exploration and evaluation assets	6	5,086,129	5,086,129
Total Non-current Assets		7,095,829	6,235,900

TOTAL ASSETS		41,308,776	38,675,627

LIABILITIES
Current Liabilities
Trade and other payables		5,184,642	4,138,353
Provisions		86,849	56,782
Other financial liabilities	7(a)	41,378	35,288
Total Current Liabilities		5,312,869	4,230,423

Non-Current Liabilities
Other financial liabilities	7(b)	67,913	86,430
Total Non-Current Liabilities		67,913	86,430

TOTAL LIABILITIES		5,380,782	4,316,853
NET ASSETS		35,927,994	34,358,774

EQUITY
Issued capital	8	136,965,491	117,835,631
Reserves	9	(1,374,794)	(3,360,270)
Accumulated losses		(99,662,703)	(80,116,587)
TOTAL EQUITY		35,927,994	34,358,774

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE HALF YEAR ENDED 31 DECEMBER 2024

	Issued Capital $	Share Based Payment Reserve $	Demerger Reserve $	Foreign Currency Translation Reserve $	Accumulated Losses $	Total Equity $
Balance at 1 July 2024	117,835,631	3,605,751	(7,336,678)	370,657	(80,116,587)	34,358,774
Net loss for the period	–	–	–	–	(19,546,116)	(19,546,116)
Other comprehensive income	–	–	–	80,624	–	80,624
Total comprehensive income/(loss) for the period	–	–	–	80,624	(19,546,116)	(19,465,492)
Transactions with owners, recorded directly in equity
Issue of placement shares	19,174,395	–	–	–	–	19,174,395
Cancelation of unvested performance rights	–	(22,754)	–	–	–	(22,754)
Share based payment expense	–	1,927,606	–	–	–	1,927,606
Share issue costs	(44,535)	–	–	–	–	(44,535)
Balance at 31 December 2024	136,965,491	5,510,603	(7,336,678)	451,281	(99,662,703)	35,927,994
Balance at 1 July 2023	74,508,488	4,155,950	(7,336,678)	(139,498)	(61,515,693)	9,672,569
Net loss for the period	–	–	–	–	(6,976,503)	(6,976,503)
Other comprehensive income	–	–	–	3,530	–	3,530
Total comprehensive income/(loss) for the period	–	–	–	3,530	(6,976,503)	(6,972,973)
Transactions with owners, recorded directly in equity
Issue of placement shares	40,598,258	–	–	–	–	40,598,258
Transfer from SBP reserve upon conversion of performance rights	2,853,400	(2,853,400)	–	–	–	–
Share based payment expense	–	1,089,974	–	–	–	1,089,974
Share issue costs	(124,515)	–	–	–	–	(124,515)
Balance at 31 December 2023	117,835,631	2,392,524	(7,336,678)	(135,968)	(68,492,196)	44,263,313

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE HALF YEAR ENDED 31 DECEMBER 2024

	Half Year Ended 31 December 2024 $	Half Year Ended 31 December 2023 $
Cash flows from operating activities
Payments to suppliers and employees – exploration and evaluation	(15,479,030)	(5,433,663)
Payments to suppliers and employees – other	(1,764,767)	(1,616,960)
Interest received	1,031,209	744,942
Net cash used in operating activities	(16,212,588)	(6,305,681)

Cash flows from investing activities
Payments for purchase of plant and equipment	(916,061)	(205,902)
Repayment of loan receivable from NGX Limited	–	34,434
Net cash used in investing activities	(916,061)	(171,468)

Cash flows from financing activities
Proceeds from issue of shares	19,174,395	40,598,258
Payments for share issue costs	(44,535)	(248,778)
Payments for finance lease	(31,777)	–
Net cash from financing activities	19,098,083	40,349,480

Net increase in cash and cash equivalents	1,969,434	33,872,331
Net foreign exchange differences	(1,875)	–
Cash and cash equivalents at the beginning of the period	31,564,130	5,564,376
Cash and cash equivalents at the end of the period	33,531,689	39,436,707

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED 31 DECEMBER 2024

1. MATERIAL ACCOUNTING POLICY INFORMATION

Sovereign Metals Limited (the “Company”) is a for profit company limited by shares and incorporated in Australia, whose shares are publicly traded on the Australian Securities Exchange, the AIM Market of the London Stock Exchange and a Quotation on OTCQX in the U.S. The consolidated interim financial statements of the Company as at and for the period from 1 July 2024 to 31 December 2024 comprise the Company and its subsidiaries (together referred to as the “Group”). The nature of the operations and principal activities of the Group are as described in the Directors’ Report.

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the audited annual report of Sovereign for the year ended 30 June 2024 (where comparative amounts have been extracted from) and any public announcements made by the Group during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

(a) Basis of Preparation of Half Year Financial Report

The consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise stated. There have been no changes in the critical accounting judgements or key sources of estimation since 30 June 2024.

(b) Statement of Compliance

The consolidated interim financial report complies with Australian Accounting Standards, including AASB 134 which ensures compliance with International Financial Reporting Standard (“IFRS”) IAS 34 “Interim Financial Reporting” as issued by the International Accounting Standards Board. The accounting policies adopted in the preparation of the half-year financial report are consistent with those applied in the preparation of the Group’s annual financial report for the year ended 30 June 2024, except for new standards, amendments to standards and interpretations effective 1 July 2024. In the current half year, the Group has adopted all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period. The adoption resulted in no material impact.

(c) Issued standards and interpretations not early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Group for the reporting period ended 31 December 2024. Those which may be relevant to the Group are set out in the table below. The impact of these standards are still being assessed.

Standard/Interpretation	Application Date of Standard	Application Date for Group
AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture	1 January 2025	1 July 2025
AASB 18 Presentation and Disclosure in Financial Statements	1 January 2027	1 July 2027

Standard/Interpretation

Application Date of Standard

Application Date for Group

AASB 2014-10 Amendments to Australian Accounting Standards – Sale or

Contribution of Assets between an Investor and its Associate or Joint Venture

1 January 2025

1 July 2025

AASB 18 Presentation and Disclosure in Financial Statements

1 January 2027

1 July 2027

2. SEGMENT INFORMATION

AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Consolidated Entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. The Consolidated Entity has one operating segment, being exploration in Malawi.

3. OTHER EXPENSES

	31 December 2024 $	31 December 2023 $
Foreign exchange (loss)/gain	(1,877)	1,614
Fair value movements in other financial assets	(385,000)	(175,000)
	(386,877)	(173,386)

4. CURRENT ASSETS – OTHER RECEIVABLES

	31 December 2024 $	30 June 2024 $
Accrued interest	140,454	145,913
GST receivable	95,664	81,051
Prepayments	203,559	52,655
Other	66,581	35,978
	506,258	315,597

5. NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT

	Office Furniture and Equipment $	Computer Equipment $	Plant & Equipment $	Right of use $	Assets under construction $	Total $
Carrying amount at 1 July 2024	152,163	68,566	496,953	116,447	315,642	1,149,771
Additions	31,758	30,516	768,298	–	73,062	903,634
Depreciation charge	(15,546)	(17,761)	(64,801)	(21,663)	–	(119,771)
Foreign exchange differences	10,217	3,557	33,604	4,257	24,431	76,066
Carrying amount at 31 December 2024	178,592	84,878	1,234,054	99,041	413,135	2,009,700
At cost	227,879	153,292	1,803,664	134,091	388,704	2,707,630
Accumulated depreciation, amortisation and impairment	(49,287)	(68,414)	(569,610)	(35,050)	24,431	(697,930)

6. EXPLORATION AND EVALUATION ASSETS

	31 December 2024 $
(a) Movement in Exploration and Evaluation Assets
Kasiya Rutile-Graphite Project:
Carrying amount as at 1 July 2024	5,086,129
Carrying amount at 31 December 2024⁽ⁱ⁾	5,086,129

Note:

(i) The ultimate recoupment of costs carried forward for exploration and evaluation is dependent on the successful development and commercial exploitation or sale of the respective areas of interest.

7. OTHER FINANCIAL LIABILITIES

	31 December 2024 $	30 June 2024 $
(a) Current liabilities
Lease Liability⁽ⁱ⁾	41,378	35,288
(b) Non-Current liabilities
Lease Liability⁽ⁱ⁾	67,913	86,430

Note:

(i) The Company has a lease agreement for the rental of a property. Refer to Note 5 for the carrying amount of the right of use asset relating to the lease. The following are amounts recognised in the Statement of Profit and Loss: (i) amortisation expense of right of use asset $21,663 (30 June 2024: $17,454); (ii) interest expense on lease liabilities of $14,311 (30 June 2024: $12,961); and (iii) rent expense of $5,660 (30 June 2024: $7,922).

8. CONTRIBUTED EQUITY

	31 December 2024 $	30 June 2024 $
(a) Issued and Paid Up Capital
599,879,879 (30 June 2024: 563,003,401) fully paid ordinary shares (Note 8(b))	136,965,491	117,835,631

(b) Movements in Ordinary Share Capital were as follows:

Date	Details	Number of Shares	$
1 Jul 24	Opening balance	563,003,401	117,835,631
4 Jul 24	Issue of ordinary shares on exercise of Rio Tinto Options	34,549,598	18,484,035
13 Sep 24	Issue of ordinary shares to Rio Tinto	1,290,392	690,360
13 Sep 24	Issue of advisory fee shares	1,036,488	–
31 Dec 24	Share issue costs	–	(44,535)
31 Dec 24	Closing balance	599,879,879	136,965,491

9. RESERVES

	31 December 2024 $	30 June 2024 $
Share-based Payments Reserve (Note 9(a))	5,510,603	3,605,751
Foreign Currency Translation Reserve – exchange differences	451,281	370,657
Demerger Reserve	(7,336,678)	(7,336,678)
	(1,374,794)	(3,360,270)

(a) Movements in Options and Performance Rights were as follows:

Date	Details	Number of Unlisted Performance Rights	$⁽ⁱ⁾
1 Jul 2024	Opening balance	17,860,000	3,605,751
Various	Issue of performance rights	4,725,000	–
31 Dec 2024	Cancelation of unvested performance rights	(425,000)	(22,754)
31 Dec 2024	Share based payment expense	–	1,927,606
31 Dec 2024	Closing balance	22,160,000	5,510,603

Note

(i) The value of performance rights granted during the period is estimated as at the grant date based on the underlying share price with the expense recognised over the vesting period in accordance with Australian Accounting Standards.

10. COMMITMENTS AND CONTINGENCIES

(a) Commitments

	31 December 2024 $	30 June 2024 $
Exploration Commitments – Kasiya Rutile-Graphite Project:
Within one year	201,477	107,155
After one year but not more than five years	82,043	46,705
	283,520	153,860

As a condition of retaining the current rights to tenure to exploration tenements, the Group is required to pay an annual rental charge and meet minimum expenditure requirements for each tenement. These obligations are not provided for in the financial statements and are at the sole discretion of the Group. The majority of the remaining exploration commitments relate to licences with a term greater than one year. For the purposes of disclosure, the Group has apportioned the remaining commitments on an equal monthly basis over the remaining term of the exploration licences.

(b) Contingencies

At the last annual reporting date, the Consolidated Entity did not have any material contingent liabilities. There has been no material change in contingent assets and liabilities of the Consolidated Entity during the half year.

11. DIVIDENDS PAID OR PROVIDED FOR

No dividend has been paid or provided for during the half year (2023: nil).

12. FAIR VALUE OF FINANCIAL INSTRUMENTS

The net fair value of financial assets and financial liabilities approximates their carrying value.

13. SUBSEQUENT EVENTS AFTER BALANCE DATE

On 22 January 2025, the Company announced the results of an OPFS for Kasiya which reaffirm Kasiya potential to become the largest and lowest-cost producer of natural rutile and natural flake graphite while generating exceptional economics.

Other than the above, there are no matters or circumstances which have arisen since 31 December 2024 that have significantly affected or may significantly affect:

· the operations, in periods subsequent to 31 December 2024, of the Group;

· the results of those operations, in periods subsequent to 31 December 2024, of the Group; or

· the state of affairs, in periods subsequent to 31 December 2024, of the Group.

DIRECTORS’ DECLARATION

In accordance with a resolution of the Directors of Sovereign Metals Limited, I state that:

In the opinion of the Directors:

(a) the financial statements and notes thereto are in accordance with the Corporations Act 2001, including:

(i) complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001; and

(ii) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2024 and of its performance for the half year ended on that date.

(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is signed in accordance with a resolution of the Board of Directors made pursuant to section 303(5) of the Corporations Act 2001.

On behalf of the Board

Frank Eagar

Managing Director and CEO

7 March 2025

Competent Person Statement

The information in this announcement that relates to Production Targets, Ore Reserves, Processing, Infrastructure and Capital and Operating Costs is extracted from an announcement dated 22 January 2025, which is available to view at www.sovereignmetals.com.au. Sovereign confirms that: a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions and technical parameters underpinning the Production Target, and related forecast financial information derived from the Production Target included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this presentation have not been materially modified from the original announcement.

The information in this announcement that relates to the Exploration Results (metallurgy – rutile and graphite) is extracted from announcements dated 8 May 2024, 15 May 2024, 4 September 2024, 21 November 2024, 19 February 2025 and 26 February 2025 which are available to view at www.sovereignmetals.com.au. Sovereign confirms that a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this report have not been materially changed from the announcement.

The information in this announcement that relates to the Mineral Resource Estimate is extracted from Sovereign’s 2024 Annual Report and is based on, and fairly represents information compiled by Mr Richard Stockwell, a Competent Person, who is a fellow of the Australian Institute of Geoscientists (AIG). Mr Stockwell is a principal of Placer Consulting Pty Ltd, an independent consulting company. Sovereign confirms that a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions included in the 2024 Annual Report continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in 2024 Annual Report have not been materially changed from the disclosure in the 2024 Annual Report.

Ore Reserve for the Kasiya Deposit
Classification	Tonnes (Mt)	Rutile Grade (%)	Contained Rutile (Mt)	Graphite Grade (TGC) (%)	Contained Graphite (Mt)	RutEq. Grade* (%)
Proved	–	–	–	–	–	–
Probable	538	1.03%	5.5	1.66%	8.9	2.00%
Total	538	1.03%	5.5	1.66%	8.9	2.00%

* RutEq. Formula: Rutile Grade x Recovery (100%) x Rutile Price (US$1,484/t) + Graphite Grade x Recovery (67.5%) x Graphite Price (US$1,290/t) / Rutile Price (US$1,484/t). All assumptions are from the Kasiya PFS ** Any minor summation inconsistencies are due to rounding

Kasiya Total Indicated + Inferred Mineral Resource Estimate at 0.7% rutile cut-off grade (inclusive of Ore Reserves)
Classification	Resource (Mt)	Rutile Grade (%)	Contained Rutile (Mt)	Graphite Grade (TGC) (%)	Contained Graphite (Mt)
Indicated	1,200	1.0%	12.2	1.5%	18.0
Inferred	609	0.9%	5.7	1.1%	6.5
Total	1,809	1.0%	17.9	1.4%	24.4

Forward Looking Statement

AUDITOR’S INDEPENDENCE DECLARATION

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INDEPENDENT AUDITOR’S REVIEW REPORT

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#SVML Sovereign Metals LTD – Successful Rehabilitation of Kasiya Test Pit

5th March 2025 / Leave a comment

SUCCESSFUL REHABILITATION OF KASIYA TEST PIT

·	Kasiya Rehabilitation Program provides landowners with immediate access to land to start maize crop farming without missing a planting season
·	Site backfill completed; soil improvement and planting of rehabilitation crops commenced in December 2024
·	Sovereign continues to provide support and training to landowners to improve crop yields, including introducing conservation farming techniques, which have already resulted in a tripling of crop yields
·	Significant variety of rehabilitation crops, including giant bamboo, sunhemp, groundnuts and mung beans, are being tested alongside staple maize crops
·	Rehabilitation Program successfully demonstrates how mined land can be quickly and efficiently returned to productive agriculture during future full-scale operations

Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX: SVMLF) (Sovereign or the Company) is pleased to announce that rehabilitation of the land at the test pit site mined during the Pilot Mining and Land Rehabilitation Program (Pilot Phase) at its Kasiya Rutile-Graphite Project (Kasiya or the Project) in Malawi has been substantially progressed. Soils remediation work was concluded in December 2024 with landowners accessing the site between December 2024 and January 2025 to plant and cultivate crops without missing a planting season.

Managing Director and CEO Frank Eagar commented: “The successful return of farmers to their land within such a short time and without missing a single planting season after mining and backfilling 170,000m³ is an excellent outcome. This demonstration of responsible mining and land rehabilitation will build on our positive community relationships. The pilot phase of 90 farmers selected for our Conservation Farming program has been increased to 350 for this season. Early indications are that the second season of this program will exceed the 300% yield increases achieved in the pilot phase. The empirical data collected from these trials will feed directly into our Definitive Feasibility Study designs for mine closure and land rehabilitation.“

A close-up of a field AI-generated content may be incorrect.

Figures 1 & 2: Maize and bamboo intercrop with different levels of maturity (February 2025)

All soil remediation works as well as planting was done by hand with the use of a grader and tractor to prepare the soils. Sovereign appointed the local landowners to work with us in both the soil remediation and planting work, so they were able to directly experience and learn about our rehabilitation work on their land.

Sovereign is working closely with the landowners to ensure that the crops provide a good yield in 2025, while simultaneously testing a variety of rehabilitation crops. This includes the intercropping of giant bamboo with maize, which will be retained by the landowners.

Sovereign is committed to ensuring that all mined-out land is appropriately rehabilitated to support sustainable farming practices after closure. The soil remediation methods aim to revitalise the soils within a two-to-three-year timeframe and to ensure that soils can be sustainably farmed in the long term. The remediation of soil to a depth of 1 metre from surface, will ensure the land can support small-scale or full-commercial farming operations.

A collage of different images of land AI-generated content may be incorrect.

As part of the Pilot Phase, the Company has constructed small rehabilitation demonstration pits that will be used to illustrate multiple and ongoing rehabilitation processes.

Rehabilitation Approach

The rehabilitation approach has been based on agronomic principles, including promoting sustainable farming practices and providing various land uses post mining activities.

Rehabilitation is underway through a five-step process:

Step 1: Introduce Lime (Complete)

The soil remediation commenced with the application and incorporation of locally sourced dolomitic lime (calcium and calcium-magnesium-carbonate) to improve naturally low PH levels.

Step 2: Introduce Carbon and Basic Nutrients (Complete)

Sovereign augmented the mined area with organic carbon and basic nutrients. Tests include the application of biochar (to provide carbon) and fertiliser (in the form of potash (MOP), phosphate (MAP) and a blend of nitrogen, potash and sulphur (NPK) 15:23:16).

Step 3: Grading, Ripping and Discing (Complete)

Lime, biochar, and fertiliser were incorporated into the soil through grading, ripping, and discing using graders and locally sourced farming equipment. This ensured that the land was level along with safe working conditions.

Step 4: Planting of Rehabilitation Crops (In Progress)

Since December 2024, Sovereign has progressively been planting various rehabilitation crops to maximise the benefit of the coming summer rainfall. Giant bamboo has been introduced in 4 by 8-metre blocks, which will act as the primary crop to enhance carbon and bio-activity in the remediated soils. Maize and other cover crops have been intercropped between the giant bamboo within re-organised farm blocks.

Step 5: Monitoring and Evaluation (In Progress)

Sovereign continues to monitor soil remediation, plant growth and crop yields. As part of stakeholder engagement, the Company is working with local farmers to improve results through conservation farming, composting operations, testing new seed varieties and establishing an indigenous, fruit and farming nursery. This is serving as a live demonstration of rehabilitation and timely return of land to a pre-mining state.

Enquires

Frank Eagar, Managing Director & CEO

South Africa / Malawi

+27 21 140 3190

Sapan Ghai, CCO

London

+44 207 478 3900

Nominated Adviser on AIM and Joint Broker
SP Angel Corporate Finance LLP	+44 20 3470 0470
Ewan Leggat Charlie Bouverat

Joint Brokers
Stifel	+44 20 7710 7600
Varun Talwar
Ashton Clanfield

Berenberg	+44 20 3207 7800
Matthew Armitt
Jennifer Lee

Buchanan	+ 44 20 7466 5000

#SVML Sovereign Metals Ltd – Graphite By-Product Strategy Update Presentation

3rd March 2025 / Leave a comment

NEW CORPORATE PRESENTATION

Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX: SVMLF) (Sovereign or the Company) is pleased to announce that a new Corporate Presentation titled “Graphite By-Product Strategy Update” has been published on ASX and the Company’s website.

Investors can view the new presentation via the following link or below:

https://sovereignmetals.com.au/presentations/

Investors can view the presentation from Sovereign’s Chairman, Mr Ben Stoikovich, here: https://youtu.be/X6A30NaccDY.

Enquires

Frank Eagar, Managing Director & CEO

South Africa / Malawi

+27 21 065 1890

Sapan Ghai, CCO

London

+44 207 478 3900

Nominated Adviser on AIM and Joint Broker
SP Angel Corporate Finance LLP	+44 20 3470 0470
Ewan Leggat Charlie Bouverat

Joint Brokers
Stifel	+44 20 7710 7600
Varun Talwar
Ashton Clanfield

Berenberg	+44 20 3207 7800
Matthew Armitt
Jennifer Lee

Buchanan	+ 44 20 7466 5000

#SVML Sovereign Metals – KASIYA’S GRAPHITE SUITABLE FOR EXPANDABLE MARKETS

26th February 2025 / Leave a comment

KASIYA’S GRAPHITE SUITABLE FOR EXPANDABLE/EXPANDED GRAPHITE MARKETS

·	Medium to coarse Kasiya graphite concentrate (>150 microns to >300 microns) has met or exceeded the key specifications required for use as expandable graphite in flame retardants and as expanded graphite in gaskets, seals and brake linings.
·	Demand for natural graphite in the expandable and expanded market is approaching 100,000 tonnes per year and is growing at 6%-8% CAGR.¹
·	According to Benchmark Mineral Intelligence, 94-95% graphite concentrate usable in the expandable and expanded markets was priced at US$1,140/t (FOB) in December 2024.
·	Overall test work to date demonstrates that Kasiya graphite is suitable for use in the three key segments that account for over 94% of the ~1.6Mtpa global demand for natural flake graphite-battery anodes, refractories and expanded/expandables.²
·	Sovereign intends to produce a 96% graphite concentrate at an incremental cost of US$241/t (FOB) per the recently announced Kasiya Optimised Prefeasibility results.
·	Results will be used for customer engagement and potential offtake discussions.

Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX: SVMLF) (Sovereign or the Company) is pleased to announce that further test work completed on graphite from the Company’s Kasiya Rutile-Graphite Project (Kasiya or the Project) has confirmed Kasiya’s graphite has the key characteristics required for use in expandable (fire retardant) and expanded (gaskets, seals, and brake lining) applications. The comprehensive testwork programs were completed by ProGraphite GmbH (ProGraphite) and Dorfner Anzaplan (DorfnerA) in Germany. The tests confirm that Kasiya medium to coarse flake (>150 microns to >300 microns) achieved very high expansion ratios using standard reagents at room temperature and short durations providing a competitive advantage over other current and potential sources of graphite supply.

Managing Director and CEO Frank Eagar commented: “Our continuous graphite downstream application testing has shown that the high-quality Kasiya concentrate is suitable for the three key natural graphite markets: the high-growth anode materials for graphite fines; the stable and large refractory materials market for coarse flake and the growing expandable and expanded graphite markets for medium to coarse flake.

These results along with our industry-low cost position, offers Kasiya the potential to become the world’s dominant natural graphite supplier, whilst remaining a primary rutile project.”

Testwork Complete and Suitability Confirmed (Dark blue)

Figure 1: Natural graphite market per application (Benchmark Minerals Intelligence, 2025).

Uses of Expandable and Expanded Graphite

A key use for expandable graphite is as a flame retardant. Growth for expandable graphite flame retardants, is driven by concerns over halogen-based flame retardants, which include brominated and chlorinated flame retardants. Many of these chemicals are now recognized as global contaminants and are associated with adverse health effects in animals and humans, including endocrine and thyroid disruption, immunotoxicity, reproductive toxicity, and cancer (National Institute of Health).

In this application, the natural graphite is pre-treated with acid and an oxidizer but not expanded via heat treatment. When exposed to a fire, the expandable graphite swells, forming a protective layer that slows down the fire. Expandable graphite represents a low-cost, good flame retardancy and low smoke generation solution, typically as a filler in polyurethane foams. Flame retardant applications for expandable graphite include the construction industry, chemicals and textiles.

Expandable and Expanded Application Test Work Results

Flake graphite concentrate generated from Kasiya ore was tested for expandable/expanded graphite applications at two leading European laboratories (ProGraphite and DorfnerA).

ProGraphite achieved expansion volumes of 320cm³/g and 355cm³/g for >180 microns concentrate and >300 microns concentrate respectively using standard reagents and conditions, above the typical minimum requirements of 250cm³/g and 350cm³/g respectively for these size fractions.

Optimisation testing of >150 microns concentrate at DorfnerA achieved a very high expansion volume of 650cm³/g, using standard reagents and short duration testing at room temperature – Figure 2. The results indicate the potential to tailor expansion volumes to application requirements and the ability to achieve high expansion volumes when required.

The results will be used for customer engagement and advancing offtake discussions for Kasiya’s medium to coarse flake.

Figure 2: Scanning Electron Microscopy (SEM) of optimised expanded graphite, achieving 650cm³/g expansion volume.

Enquires

Frank Eagar, Managing Director & CEO

South Africa / Malawi

+ 27 21 140 3190

Sapan Ghai, CCO

London

+44 207 478 3900

Nominated Adviser on AIM and Joint Broker
SP Angel Corporate Finance LLP	+44 20 3470 0470
Ewan Leggat Charlie Bouverat

Joint Brokers
Stifel	+44 20 7710 7600
Varun Talwar
Ashton Clanfield

Berenberg	+44 20 3207 7800
Matthew Armitt
Jennifer Lee

Buchanan	+ 44 20 7466 5000

Stockbox podcast with Alan Green, Mark Fairbairn and Dan Flynn covers #GMET, #SCGL, #SVML, #KAT & #HVO

23rd February 2025 / Leave a comment

On this week’s Stockbox podcast with Alan Green, Mark Fairbairn and Dan Flynn, we discuss:

Guardian Metal Resources #GMET
Sealand Capital Galaxy #SCGL
Sovereign Metals #SVML
Katoro Gold #KAT
hVIVO #HVO

SCP Equity Research – Kasiya graphite refractory test results are excellent – A$1.65 (83p) price target maintained

20th February 2025 / Leave a comment

Read the full SCO note here: 250219-scp-svm-graphite

#SVML Sovereign Metals LTD – Kasiya’s Graphite Suitable for Refractory Use

19th February 2025 / Leave a comment

KASIYA’S GRAPHITE SUITABLE FOR REFRACTORY USE

·	Kasiya graphite concentrate confirmed to meet or exceed all critical characteristics required for refractory applications
·	Refractories market is the second largest end-user of natural graphite (24%) after batteries sector (52%)
·	Refractories use coarser (larger) flake graphite products, which typically attract a premium over smaller flake-size products used in the batteries sector
·	In Q4 2024, graphite usable in refractories achieved prices up to US$1,193/t versus smaller flake graphite used in the batteries sector, which sold for US$564/t
·	Kasiya’s incremental cost of graphite production per the recently announced Optimised Prefeasibility results is US$241/t (FOB)
·	Leading German laboratories ProGraphite and Dorfner Anzaplan completed a comprehensive testwork program of Kasiya’s graphite concentrate
·	Results will be used for customer engagement and potential offtake discussions
·	Previous testwork has already confirmed that Kasiya’s graphite can produce outstanding battery anode material

Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX: SVMLF) (Sovereign or the Company) is pleased to announce that testwork completed on graphite from the Company’s Kasiya Rutile-Graphite Project (Kasiya or the Project) has confirmed Kasiya’s graphite has the key characteristics required for use in refractory applications. The comprehensive testwork programs were completed by ProGraphite GmbH (ProGraphite) and Dorfner Anzaplan (DA) in Germany and demonstrated that Kasiya graphite concentrate contains very low sulphur levels and the absence of other impurities of concern, providing a competitive advantage over other current and potential sources of graphite supply.

Managing Director and CEO Frank Eagar commented: “The refractories market is the second largest end-user of natural graphite and requires larger, coarser graphite flakes with specific chemical and physical properties. We know that almost 70% of Kasiya’s graphite meets the size requirements for refractory applications. Today’s results confirm that our graphite product also meets or exceeds the key chemical and physical properties required to sell into the refractory market.

Combining these results with the excellent results for anode materials testing highlights the premium quality of Kasiya graphite concentrate and provides a very strong foundation for sales and marketing discussions.”

Kasiya Graphite Testwork Update

Sovereign has now completed testwork programs to confirm the suitability of graphite from Kasiya as a product for the two largest end-use markets for natural flake graphite i.e. refractory applications and anode material for use in lithium-ion batteries. Together, these two sectors account for over three-quarters of global natural graphite demand (see Figure 1).

Graphite products for refractory applications typically require larger flake sizes than the smaller graphite flake products used to produce battery anode materials. Larger flake size graphite products tend to attract significantly higher prices than smaller flake products.

In Q4 2024, Syrah Resources Limited (the world’s largest, publicly listed natural graphite producer outside of China) reported a price for smaller flake graphite concentrate to be used for battery anode production of US$564 per tonne (CIF) based on third-party sales. In December 2024, large flake graphite used in the refractory sector achieved prices of up to US$1,193/t (based on data from Benchmark Mineral Intelligence).

The incremental cost of producing a tonne of graphite from Kasiya under Sovereign’s recently announced Optimised Prefeasibility Study is US$241/t (see ASX announcement “Kasiya – Optimised PFS Results” dated 22 January 2025).

Figure 1: Uses of Graphite (Source: European Advanced Carbon and Graphite Association)

Refractory Application Testwork Results Summary

Flake graphite concentrate generated from Kasiya samples were tested for traditional, refractory applications at two leading European laboratories ProGraphite and DA, with the following findings:

Table 1: Graphite Requirements for Refractory Applications	Kasiya Graphite
High purity graphite concentrate with little impurities
High grade, large flakes within graphite concentrate
High melting temperature for flake ash residue after combusting graphite
High oxidation resistance of graphite concentrate
Low levels of volatiles in concentrate
Low levels of problematic mineral impurities, including sulphur
Low levels of “springback” from compression

Customer Engagement and Offtakes

The global refractory market is an estimated €20 Billion worldwide industry and is the largest traditional market for natural flake graphite. Natural flake graphite is added to refractories to improve performance.

Refractories are used to line furnaces and vessels to support high-temperature processing across a wide range of industries, including iron and steel production, non-ferrous metals, cement and lime, glass, and chemicals.

According to the global leader in refractories, RHI Magnesita NV, steel production is the major consumer of refractories, accounting for 60% of global demand. Each tonne of steel requires approximately 10-15kg of refractories.

Other key companies in the refractories market include Vesuvius plc, Krosakai Harima Corporation, Puyang Refractories Group, Chosun Refractories Co, Imerys SA, Shinagwa Refractories, Saint-Gobain, Morgans Advanced Materials and Calderys.

The successful assessment of Kasiya coarse flake for refractory applications will be used for customer engagement and offtake discussions.

Enquires

Frank Eagar, Managing Director & CEO

South Africa / Malawi

+ 27 21 140 3190

Sapan Ghai, CCO

London

+44 207 478 3900

Nominated Adviser on AIM and Joint Broker
SP Angel Corporate Finance LLP	+44 20 3470 0470
Ewan Leggat Charlie Bouverat

Joint Brokers
Stifel	+44 20 7710 7600
Varun Talwar
Ashton Clanfield

Berenberg	+44 20 3207 7800
Matthew Armitt
Jennifer Lee

Buchanan	+ 44 20 7466 5000

Competent Person Statement

The information in this report that relates to Metallurgical Testwork is based on information compiled by Dr Surinder Ghag, PhD., B. Eng, MBA, M.Sc., who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM). Dr Ghag is engaged as a consultant by Sovereign Metals Limited. Dr Ghag 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 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Ghag consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Exploration Results is based on information compiled by Mr Malcolm Titley, a Competent Person who is a member of The Australasian Institute of Mining and Metallurgy (AusIMM). Mr Titley consults to Sovereign Metals Limited and is a holder of ordinary shares and unlisted performance rights in Sovereign Metals Limited. Mr Titley has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Titley consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to operating costs is extracted from an announcement dated 22 January 2025, which is available to view at www.sovereignmetals.com.au. Sovereign confirms that: a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions and technical parameters underpinning the Production Target, and related forecast financial information derived from the Production Target included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this presentation have not been materially modified from the original announcement.

Forward Looking Statement

Appendix 1: Detailed Refractory Application Testwork Results

High purity graphite concentrate with little impurities

Kasiya concentrate was determined to have high purity (98%) with no observable natural mineral impurities observed (see Figure 2). Talc, which is not an impurity of concern for refractory applications, was determined to be the minor impurity on analysis of the ash remaining from combusting the graphite.

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Figure 2: Kasiya Flake Graphite SEM highlighting clean flakes

High grade, large flakes within graphite concentrate

Natural flake graphite for refractory applications requires high oxidation resistance. Particle size and grade are the two key determinants of oxidation resistance.

There are three different size fractions applicable to refractory graphite products: +300 microns, +180 microns and +150 microns. All three size fractions for Kasiya graphite concentrate demonstrate very high grade, highlighting coarse Kasiya flakes suitability for refractory applications.

Table 2: Size fraction analysis for Loss-on-Ignition (LOI) and Fixed Carbon Grade
Sample	LOI (%)	Fixed Carbon (%)
+300 microns	98.69	98.50
+180 microns	98.83	98.57
+150 microns	98.75	98.49

High melting temperature for flake ash residue

Flake ash is the residue from combusting (burning) graphite. A high flake ash melting temperature is required for refractory applications.

Flake ash from coarse Kasiya flake (>180 microns) has a melting temperature of 1,373°C, above that for flake ash of commercial reference material (>1250°C), and hemisphere temperature of 1,393°C and flow temperature of 1,429°C (Figure 3) i.e. flake ash from coarse Kasiya concentrate exceeds the melting characteristics specification.

A collage of images of a person's body Description automatically generated

Figure 3: Flake ash from Kasiya coarse flake melting testing

High oxidation resistance of graphite concentrate

As reported in the Company’s ASX Announcement dated 21 November 2024, entitled “Positive Initial Test Results For Use Of Kasiya Graphite In Refractories”, and as expected from the high purity of Kasiya coarse fractions (Table 2), Kasiya’s coarse flake has excellent resistance to oxidation. ProGraphite had confirmed Kasiya coarse flake exhibits:

No oxidation below 400°C, only a 6.4% mass loss after four hours at 650°C, and a very low oxidation rate of 1.6% per hour at 650°C.

Comparative testing at DA showed that only a coarse commercial reference material (>300 microns) had a greater resistance than Kasiya coarse flake (>180 microns).

Low levels of volatiles in concentrate

DA measured volatiles content at 0.2%, which is comparable or better than commercial reference materials; ProGraphite measured volatile content at 0.19%-0.26% for various size fractions, significantly lower than what is considered “high volatiles content” at ~0.5% or higher.

High volatiles content can damage the refractory, indicating that Kasiya coarse flake meets this specification.

Low levels of problematic mineral impurities

Sulphur content was measured at 0.03% at DA, noting that Kasiya graphite sulphur levels are low compared to commercial reference material from other sources.

Calcium carbonates (calcite, dolomite) act as a flux, lowering the melting point of other minerals and releasing CO₂ when exposed to high temperatures. Consequently, low levels are required in graphite used for refractory applications. Calcium carbonates were not detected in testing of Kasiya concentrate via a range of methods. Other alkalis (sodium, potassium) which can also be reactive in refractory applications were also at low levels.

Low levels of “springback” from compression

Springback is an assessment of the extent of graphite to increase its volume after compression. A low springback is preferred for shape retention e.g. in producing refractory bricks.

Springback of Kasiya graphite was observed to be low and in line with results from Chinese graphite’s, decreasing with particle size (see Table 3).

Table 3: Springback Analysis of Kasiya Coarse Fractions
Sample	Springback (%)
+300 microns	8.1%
+180 microns	9.2%
+150 microns	11.5%

Conclusion

Testing of the broad range of criteria on the suitability of natural graphite concentrates for refractory applications confirmed that coarse Kasiya concentrate has the characteristics required for refractory applications – it has high purity, high oxidation resistance, high ash melting temperatures, low levels of volatiles, sulphur and calcium carbonates, and low springback.

Appendix 2: JORC CODE, 2012 EDITION – TABLE 1

SECTION 1 – SAMPLING TECHNIQUES AND DATA

Criteria

JORC Code explanation

Commentary

Sampling Techniques

Metallurgical Composite Sample:

The sample was a composite of 24 Hand Auger (HA) and Push Tube (PT) holes drilled in 2021 and 2022 in the Kingfisher pit.

All drilling samples within the pit shell were added to the composite resulting in a sample of 2,498kg.

Specifically, the composite sample consisted of selected rutile mineralised zones from holes, NSHA0009, 0010, 0056, 0060, 0061, 0074, 0119, 0311, 0343, 0344, 0345, 0350 and NSPT 0011, 0013, 0014, 0015, 0017, 0020, 0021, 0023, 0024, 0025, 0026, 0027.

The following workflow was used to generate a pre-concentrate graphite feed at AML:

· Wet screen at 2mm to remove oversize

· Two stage cyclone separation at a cut size of 45µm to remove -45µm material

· Pass +45µm -2mm (sand) fraction through Up Current Classifier (UCC)

· Pass UCC O/F through cyclone at cut point of 45µm

· Pass UCC O/F cyclone U/F (fine) over MG12 Mineral Technologies Spiral

· Pass UCC U/F (coarse) over MG12 Mineral Technologies Spiral

· Spiral cons are combined for further processing.

Fine and coarse gravity tailing samples contain approximately 75%-80% of the graphite present in the feed sample. The majority of the graphite lost is contained in the -45µm fines.

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

Placer Consulting (Placer) Resource Geologists have reviewed Standard Operating Procedures (SOPs) for the collection of HA and PT drill samples and found them to be fit for purpose.

The primary metallurgical composite sample is considered representative for this style of mineralisation.

HA drilling was used to obtain 1-metre samples. The bulk metallurgical sample was a composite of selected samples from routine resource drilling.