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The Times – Rio Tinto digs deep for African mine, exercising another £9.7m in investment options in Sovereign Metals
Sovereign Metals #SVML featured by Emma Powell in The Times
Rio Tinto digs deep for African mine, exercising another £9.7m in investment options in Sovereign Metals.
Rio has the option to become the operator of the #Kasiya project on arm’s length terms & to gain marketing rights to 40% of products
Sovereign Metals #SVML – Rio Tinto To Invest Additional A$18.5m via Option Exercise
Sovereign Metals Limited (ASX: SVM; AIM: SVML) (Sovereign or the Company) is pleased to announce that Rio Tinto Mining and Exploration Limited (Rio Tinto) has notified the Company that it has exercised all its share options to increase its shareholding in Sovereign to 19.76%.
Highlights:
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Rio Tinto to invest A$18.5 million via the exercise of options, to increase its shareholding in Sovereign to 19.76% |
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Investment proceeds to be used to continue advancing the Kasiya Rutile-Graphite Project in Malawi |
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Rio Tinto’s further investment represents another significant step towards unlocking a major new supply of low-CO2-footprint natural rutile and flake graphite |
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Under the Investment Agreement between Sovereign and Rio Tinto, Rio Tinto continues to provide assistance and advice on technical and marketing aspects of Kasiya |
Rio Tinto has exercised 34,549,598 share options to acquire the same number of new fully paid ordinary shares (Shares) in Sovereign at A$0.535 per Share for proceeds of A$18,484,035.
The Company will use the proceeds from Rio Tinto’s additional strategic investment to continue advancing Sovereign’s Tier 1 Kasiya Rutile-Graphite Project (Kasiya or the Project) in Malawi. This includes progressing the current optimisation study for Kasiya which is focused on the development of a world-class mine capable of supplying critical minerals to the titanium pigment, titanium metal and lithium-ion battery industries. Under the Investment Agreement between Sovereign and Rio Tinto, Rio Tinto continues to provide assistance and advice on technical and marketing aspects of Kasiya.
Funds from the option exercise are expected to be received by Friday, 5 July 2024.
Sovereign’s Chairman, Ben Stoikovich, commented: “Rio Tinto’s further investment in Sovereign reaffirms Kasiya’s position as one of the most significant critical minerals projects globally. With Rio Tinto’s wealth of experience as one of the world’s largest and most accomplished global mining companies, Kasiya is well-positioned to potentially become a market leader in low-CO2-footprint natural rutile and graphite.”
Sovereign’s Managing Director, Frank Eagar, commented: “In collaboration with Rio Tinto, we have made significant progress in advancing Kasiya over the course of this year, including the successful launch of the pilot phase mining in May. We are excited about Rio Tinto’s further investment in Sovereign, which represents another significant step towards unlocking a major new supply of low-CO2-footprint natural rutile and flake graphite.”
BACKGROUND TO RIO TINTO’S STRATEGIC INVESTMENT
In July 2023, Rio Tinto agreed to initially subscribe for and purchase 83,095,592 Shares in Sovereign at a price of A$0.486 per Share for aggregate proceeds of A$40.4 million. Rio Tinto’s initial subscription price reflected a 10% premium to the 45-day volume weighted average price on the ASX as at close on 14 July 2023 and resulted in Rio Tinto holding approximately 15% of the ordinary shares of the Company.
The subscription also involved Rio Tinto being granted options to acquire 34,549,598 further Shares in Sovereign within 12 months of the initial subscription.
Sovereign and Rio Tinto also entered into an Investment Agreement pursuant to which a joint technical committee has been established between Sovereign and Rio Tinto to advance the development of Kasiya. Please refer to the Company’s announcement on 17 July 2023 for further details.
For acting as financial advisor and subject to receipt of exercise funds, an advisory fee of 3% is payable to SCP Resource Finance (SCP) on the amount of Rio Tinto’s exercise of options investment and, subject to shareholder approval, can be paid by way of the issue of ordinary shares to SCP, with 1,036,488 shares being issuable to SCP. A notice of meeting (and explanatory statement) will be sent out to shareholders in the coming weeks.
ENQUIRIES
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Frank Eagar (South Africa/Malawi) +61(8) 9322 6322 |
Sam Cordin (Perth) +61(8) 9322 6322 |
Sapan Ghai (London) +44 207 478 3900
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Nominated Adviser on AIM and Joint Broker |
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SP Angel Corporate Finance LLP |
+44 20 3470 0470 |
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Ewan Leggat Charlie Bouverat |
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Joint Brokers |
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Stifel |
+44 20 7710 7600 |
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Varun Talwar |
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Ashton Clanfield |
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Berenberg |
+44 20 3207 7800 |
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Matthew Armitt |
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Jennifer Lee |
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Buchanan |
+ 44 20 7466 5000 |
The information contained within this announcement is deemed by Sovereign to constitute inside information as stipulated under the Regulation 2014/596/EU which is part of domestic law pursuant to the Market Abuse (Amendment) (EU Exit) Regulations (SI 2019/310) (“UK MAR”). By the publication of this announcement via a Regulatory Information Service, this inside information (as defined in UK MAR) is now considered to be in the public domain. The person responsible for arranging for the release of this announcement on behalf of Sovereign is Mr Dylan Browne (Company Secretary).
Admission
Subject to receipt of exercise funds, an application to AIM will be made for the 34,549,598 Shares to be admitted to trading on AIM (the AIM Admission). It is expected that AIM Admission will take place and dealings will commence on AIM on or around 8.00 a.m. on 12 July 2024.
Total Voting Rights
Immediately following the AIM Admission, the Company’s issued share capital will be 597,552,999 Shares, with each share carrying the right to one vote. The Company does not hold any Ordinary Shares in treasury. The total voting rights figure immediately following the AIM Admission of 597,552,999 may be used by shareholders (and others with notification obligations) as the denominator for the calculations by which they will determine whether they are required to notify their interest in, or a change to their interest in, the Company under the Disclosure Guidance and Transparency Rules.
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.
#SVML Sovereign Metals LTD – International Development Organisation Partnership
SOVEREIGN PARTNERS WITH INTERNATIONAL DEVELOPMENT ORGANISATION IN MALAWI
· Sovereign has entered into an MoU with The Palladium Group – a US-based international development entity operating in Malawi.
· Palladium implements several development projects, including the Feed the Future Malawi Growth Poles Project, which invests in local rural communities to advance sustainable, climate-smart, and inclusive wealth creation.
· Sovereign and Palladium will collaborate around Sovereign’s Kasiya Project to provide key agricultural inputs, training, technologies, and financing to develop and integrate smallholder farmers into the emerging high growth agriculture value chains.
· A central pillar of the MoU and partnership is Sovereign’s existing Conservation Farming Program, which aims to promote tried and tested improved small-scale agricultural practices, and the creation of community support and mentorship networks.
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Sovereign Metals Limited (ASX: SVM; AIM: SVML) (Sovereign) has signed a Memorandum of Understanding (MoU) with The Palladium Group (Palladium) – a US-based development entity implementing several development projects in Malawi including the Feed the Future Malawi Growth Poles Project (Growth Poles). Growth Poles is a US$50 million project that will run from 2023 to 2028.
Palladium is a global impact firm that works to link social progress and commercial growth. For nearly six decades, Palladium has been working with corporations, governments, investors, communities, and civil society to formulate strategies, build partnerships, mobilise capital, and implement programs that have a lasting social and financial impact. With a workforce of over 2,500 global leaders, Palladium has positively impacted the lives and livelihoods of more than 76 million people across 90 countries; broadening access to health, water, power, and infrastructure; building enduring, sustainable, and transformative institutions and market systems to address global challenges; and conserving the natural world.
Sovereign has launched several social development initiatives focused on improved health (provision of clean water), education (scholarships and school support), and conservation farming practices in communities located near and within Sovereign’s Kasiya Rutile-Graphite Project (Kasiya or Project) area.
The MoU identifies Sovereign as a potential anchor firm in Malawi and Kasiya as an anchor client or “Partner Growth Pole”. The MoU sets out a long-term vision for multi-partner investment and co-development aimed at supporting community engagement activities and scaling up the availability of commercial agriculture across Malawi, in particular in environmentally and economically vulnerable groups and households, to improve livelihoods for communities around the Kasiya Project.
A central pillar of the MoU and partnership is Sovereign’s existing Conservation Farming Program (refer to Company ASX announcements dated 26 February 2024 and 15 April 2024), which aims to promote tried and tested improved small-scale agricultural practices, and the creation of community support and mentorship networks. The Conservation Farming Program’s objective is to substantially improve crop yields of the farming communities within and around the Project area, thus improving food security and economic growth.
Sovereign and Palladium are already collaborating to provide Purdue Improved Crop Storage (PICS) bags to beneficiaries of Sovereign’s Conservation Farming Program. PICS are non-chemical, hermetically sealable bags that reduce post-harvest losses by 20-30% caused by poor storage of grains.
The MoU also establishes the foundation for the potential long-term development of partnerships with multiple private sector firms and development agencies, with the aim of catalysing diverse and inclusive development across a wide area, through mechanisms such as input financing, extension support, offtake arrangements, and complementary investments in value chain infrastructure. The MoU expires on 18 April 2028 and can be extended by mutual agreement.
Sovereign and Palladium Staff Standing Together with Sovereign’s Conservation Farming Beneficiaries
Sovereign’s Kasiya project is one of only 11 Tier 1[i] mineral deposits discovered in the last decade. It is the world’s largest Rutile resource and second largest flake Graphite resource, and has the potential to be the world’s largest, lowest cost, and lowest carbon producer of both minerals.
Sovereign recognises that the Kasiya Project presents an opportunity to assist Malawi in realising its stated Sustainable Development Goals and can directly benefit local communities. The positive impact of the Kasiya project will be further enabled through the development of partnerships with the Government of Malawi, international development organizations, and the private sector.
ENQUIRIES
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Frank Eagar (South Africa/Malawi) +61(8) 9322 6322 |
Sam Cordin (Perth) +61(8) 9322 6322 |
Sapan Ghai (London) +44 207 478 3900
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Nominated Adviser on AIM and Joint Broker |
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SP Angel Corporate Finance LLP |
+44 20 3470 0470 |
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Ewan Leggat Charlie Bouverat |
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Joint Brokers |
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Stifel |
+44 20 7710 7600 |
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Varun Talwar |
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Ashton Clanfield |
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Berenberg |
+44 20 3207 7800 |
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Matthew Armitt |
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Jennifer Lee |
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Buchanan |
+ 44 20 7466 5000 |
#SVML Sovereign Metals LTD – Malawi Rail Upgrades Underway
Malawi Rail Upgrades Underway
· Upgrading of the 399km Nkaya-Mchinji section of railway currently underway as part of Government of Malawi’s “Rail Strategy and Growth Plan”
· Railway runs across Sovereign’s Kasiya Rutile-Graphite tenements from Mchinji at the Malawi-Zambia border to Nkaya Junction, where it connects to the Nacala Logistics Corridor providing an export route through the deep-water port of Nacala
· Refurbishment of the railway will improve efficiency and capacity, and is being undertaken by Central and Eastern African Railway Company (CEAR) with completion expected by end of 2024
· Upgrade works include refurbishing rail bridges and reballasting along the section through Kasiya to increase maximum axle load from 15 tonnes to 18 tonnes
· Upgrade of the line section through the Kasiya Project area is near complete, running from Lilongwe District southward to the Nacala Logistics Corridor
· Nacala Logistics Corridor is the preferred logistics route for exporting Sovereign’s rutile and graphite products to global customers, with the Sena Rail Line to the Port of Beira offering a secondary route
Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) is pleased to report that upgrading of the 399km Nkaya-Mchinji Section Railway (Railway) connecting the Malawi-Zambia border to the Nacala Logistics Corridor (NLC) and which runs across the Company’s Kasiya Rutile-Graphite Project (Kasiya or Project) tenements, is underway. Refurbishment of that part of the Railway mainline which connects the Kanengo junction in the Lilongwe District, where Kasiya is located, to the NLC junction at Nkaya is near completion.
Figure 1: CEAR undertaking upgrade works on a railway bridge connecting Kasiya to the NLC
Rehabilitation of the Railway is an initiative by Malawi’s Ministry of Transport and Public Works and forms part of the Government of Malawi’s Rail Strategy and Growth Plan, which has the stated mission “to facilitate the provision of a safe, efficient, and sustainable rail transport system” to “promote socio-economic development.”
Upgrade works will increase efficiency and capacity of the Railway and are being undertaken by CEAR. Completion is planned for the end of 2024. Works include refurbishing railway bridges and reballasting to handle increased load-bearing capacity from a current maximum axle load of 15 tonnes to 18 tonnes.
Managing Director Frank Eagar commented: “Kasiya already benefits from exceptional existing infrastructure in central Malawi. This refurbishment project re-affirms Kasiya’s logistics solution with sufficient rail capacity, enhanced reliability and a direct connection to the deep-water export Port of Nacala. The infrastructure investment by CEAR and Nacala Logistics along with approvals from the Malawi Government is a demonstration of the country’s commitment to achieving its major economic development goals which include developing the mining industry and increasing Malawi’s export market.”
Figure 2: Upgrade works at a railway bridge on the Nkaya-Mchinji Section Railway
Kasiya benefits from two options for transporting its rutile and graphite products from the mine operations to seaports, being the Nacala Logistics Corridor to the Port of Nacala and the Sena Rail Line to the Port of Beira (Beira Corridor). The current upgrades to the Nkaya junction improve access to the NLC and will ultimately also improve access to the Beira Corridor.
The NLC offers the preferred logistics route to the deep-water Indian Ocean port of Nacala to export to global markets. This established and operation-ready logistics infrastructure provides significant capital and operating cost savings to Kasiya. To access the NLC, Sovereign plans to construct a 6km rail spur to connect directly with the processing plant, increasing efficiencies in handling inbound and outbound freight compared to any road alternative.
The Beira Corridor, comprised of the Sena Rail Line and the Port of Beira, provides Sovereign with a second route to export markets and is currently undergoing its own upgrade works. Last year, the Beira Development Corridor Agreement was approved, with the objective of connecting the Democratic Republic of Congo, Zambia, Zimbabwe, and Malawi to the Mozambican Port of Beira through road and rail networks. As Mozambique’s second largest port, the Port of Beira is a significant driver of the region’s economy and an important gateway for global trade, handling a wide variety of containerised and bulk cargo. The Beira Development Corridor Agreement project aims to eliminate logistical bottlenecks for international and intra-African trade. The African Development Bank (AfDB) is a major financier of the project.
Figure 3: Nacala Logistics Corridor with section currently being upgraded in orange
Figure 4: Port of Nacala, Mozambique
Figure 5: Port of Beira, Mozambique (Source: Cornelder de Moçambique)
Figure 6: A Nacala Logistics Corridor train
ENQUIRIES
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Frank Eagar (South Africa/Malawi) +61(8) 9322 6322 |
Sam Cordin (Perth) |
Sapan Ghai (London)
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Nominated Adviser on AIM and Joint Broker |
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SP Angel Corporate Finance LLP |
+44 20 3470 0470 |
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Ewan Leggat Charlie Bouverat |
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Joint Brokers |
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Stifel |
+44 20 7710 7600 |
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Varun Talwar |
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Ashton Clanfield |
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Berenberg |
+44 20 3207 7800 |
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Matthew Armitt |
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Jennifer Lee |
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Buchanan |
+ 44 20 7466 5000 |
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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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END
#SVML Sovereign Metals LTD – Pilot Phase Site Construction on Schedule
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Kasiya’s pilot mining and land rehabilitation program is progressing with site establishment on schedule |
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Mobile fleet is currently constructing the test pit, water storage pond and ore stockpile |
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Free-dig nature of soft saprolite ore confirms the ease of mining with no drilling or blasting required |
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Eight boreholes have been commissioned and are ready to supply the water storage pond |
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Key contractors and consultants across major disciplines have now been appointed |
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Empirical data generated from the Pilot Phase will assist in determining optimal project excavation, material handling, processing, backfilling and rehabilitation approaches |
Classification 2.2: This announcement includes Inside Information
Figure 1: Pilot Phase site June 2024
Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) is pleased to announce that pilot site construction for the ongoing Pilot Mining and Land Rehabilitation Program (Pilot Phase) at the Kasiya Rutile-Graphite Project (Kasiya or Project) in Malawi is on schedule with groundworks underway.
Managing Director Frank Eagar commented: “This Pilot Phase is a step-change for Kasiya and demonstrates our ability to execute in Malawi. The early works are progressing as planned: on schedule and within budget. We are very pleased with the progress and specifically how the mobile fleet is performing in the soft saprolite ore, confirming our understanding of how simple mining, with no drilling or blasting required, will contribute to low operating costs.”
The construction fleet is on-site with groundwork to excavate the water storage pond and construct the test areas currently underway. Site equipment is currently moving 5,000 cubic metres of earth daily. The fleet consists of four excavators, 20 trucks and a support fleet, including two bulldozers and a motor grader.
Figure 2: Dry mining stockpile area under construction
A perimeter fence around the 9.9-hectare pilot site has been erected to maintain the necessary health and safety standards. Sovereign’s strategic investor, Rio Tinto, is assisting with establishing health and safety protocols and implementation on a day-to-day basis.
Eight water extraction boreholes have been commissioned and are delivering water to the site, with the filling of the water storage pond to follow. The temporary water storage pond is currently being excavated and will be sealed using natural clay from excavated material. This will minimise the use of conventional plastic lining at the pilot site in accordance with Sovereign’s objectives for a sustainable operation at Kasiya.
Figure 3: Pilot Phase fleet and equipment excavating the water storage pond
Key contractors and consultants have been appointed across all major disciplines essential for the Pilot Phase.
· Multinational engineering and construction company Mota Engil Group has been appointed to perform all excavation required for site establishment, the water storage pond, the test pit, seven rehabilitation pits as per Figure 4, site closure and general rehabilitation of the site. Mota Engil Group operates in 21 countries with 54,000 employees and is ranked among the world’s largest construction companies.
· South Africa-based consultancy Fraser Alexander (Pty) Ltd has been contracted to complete the hydraulic mining phase.
· Backfill, storage and tailings management will be assessed by South African residue management solutions consultancy Epoch Resources (Pty) Ltd, which has a 25-year track record, including working for Randgold Resources Plc, Xstrata Plc and Anglo American Platinum Limited.
· International engineering company DRA Global Limited has been appointed to oversee and provide engineering and design services required during the Pilot Phase.
The Pilot Phase is being undertaken on a 9.9-hectare site and will include the following activities:
1. Test Pit: A test pit of 120m by 110m will be excavated to a depth of 20m, allowing optimisation of hydraulic and dry mining excavation methods.
2. Stockpiles: The excavated material will be temporarily stored in 4 stockpiles, namely all dry mining material, wet slimes (in a pond) and two sizes of sand fractions from the hydraulic mining.
3. Backfilling and Grading: The material will be placed back into the pit, and all areas will be graded.
4. Rehabilitation Demonstration: Sovereign will construct eight small rehabilitation demonstration pits covering a combined area of 100m by 130m. These will be used for water storage, excavated material storage, and demonstration of multiple rehabilitation approaches.
5. Temporary Laydown Areas: Four areas will be used as temporary laydown areas, offices, and associated infrastructure.
6. Communication: The Pilot Phase will be an educational opportunity for Project stakeholders. Sovereign will undertake a series of stakeholder visits and consultations for this purpose.
Sovereign’s objective is to restore land after mining to conditions that achieve the same or better agricultural yields than existing land uses and crop yields. The Pilot Phase will demonstrate to local communities the successful rehabilitation of land for agricultural use post-mining; land rehabilitation will form an integral component of the ongoing optimisation study. Results will also allow Sovereign to determine optimal excavation and backfill approaches, providing critical information for the upcoming Definitive Feasibility Study.
Kasiya is the world’s largest natural rutile deposit and the second-largest flake graphite deposit. Sovereign aims to develop a low-CO2 footprint and sustainable operation to supply highly sought-after natural rutile and natural graphite to the global markets.
Figure 4: Planned site layout
ENQUIRIES
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Frank Eagar (South Africa/Malawi) +61(8) 9322 6322 |
Sam Cordin (Perth) |
Sapan Ghai (London) |
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Nominated Adviser on AIM and Joint Broker |
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SP Angel Corporate Finance LLP |
+44 20 3470 0470 |
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Ewan Leggat Charlie Bouverat |
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Joint Brokers |
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Stifel |
+44 20 7710 7600 |
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Varun Talwar |
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Ashton Clanfield |
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Berenberg |
+44 20 3207 7800 |
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Matthew Armitt |
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Jennifer Lee |
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Buchanan |
+ 44 20 7466 5000 |
#SVML Sovereign Metals LTD – ASX Price Query
Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) advises that the below response was provided to the Australian Securities Exchange (ASX) following the receipt of a query from ASX regarding an increase in Sovereign’s share price and in the volume of trading securities.
To view the announcement in full, please refer to:
https://www.investi.com.au/api/announcements/svm/84faf4e8-a54.pdf.
3 June 2024
Sam Dorland
Australia Securities Exchange
Central Park, 152-158 St Georges terrace
Perth WA 6000
By email: sam.dorland@asx.com.au
Dear Sam,
Response to Price Query
In response to your correspondence dated 3 June 2024 regarding an increase in the Sovereign Metals Limited’s (Company or Sovereign) share price and in the volume of trading securities, the Company’s response is as follows:
1. No, the Company is not aware of any information that has not been announced which, if known, could be an explanation for recent trading in the securities of the Company.
2. Not applicable.
3. Sovereign notes recent Company announcements regarding developments at the Kasiya Rutile Project in Malawi (Kasiya) including:
(a) Commencement of pilot mining and land rehabilitation program at Kasiya as part of the ongoing optimisation study (refer to ASX announcement dated 22 May 2024);
(b) Downstream testwork at Kasiya has demonstrated high quality graphite for lithium-ion batteries (refer to ASX announcement dated 15 May 2024);
(c) Graphite circuit feed prepared at the Company’s Lilongwe laboratory facility produced high quality graphite concentrates for us in pilot-scale flotation and cleaning (refer to ASX announcement dated 8 May 2024); and
(d) The increase of graphite bulk sample scale for Kasiya with the installation of an industrial scale spiral concentrator at the Company’s Lilongwe laboratory facility (refer to ASX announcement dated 1 May 2024).
4. The Company confirms that it is in compliance with the listing rules, in particular, Listing Rule 3.1.
5. The Company confirms that its responses to the questions above have been authorised and approved in accordance with its published continuous disclosure policy or otherwise by its board or an officer of the Company with delegated authority from the board to respond to ASX on disclosure matters.
Classification 3.1 Additional regulated information required to be disclosed under the laws of a Member State
Alan Green covers Zenova Group #ZED, Sovereign Metals #SVML & Metals One #MET1 on this week’s Stockbox Research Talks
Alan Green covers Zenova Group #ZED, Sovereign Metals #SVML & Metals One #MET1 on this week’s Stockbox Research Talks
#SVML Sovereign Metals Ltd – Kasiya Optimisation Advances to Pilot Phase
Sovereign Metals #SVML – KASIYA OPTIMISATION ADVANCES TO PILOT PHASE
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Sovereign to immediately commence a pilot mining and land rehabilitation program (“Pilot Phase”) at Kasiya as part of the ongoing Optimisation Study |
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Empirical data generated from the Pilot Phase will assist towards determining optimal excavation, material handling, processing, backfilling and rehabilitation approaches |
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Sovereign will excavate approximately 150,000 bench cubic metres of ore from a test pit over a three-month period using a combination of dry and hydraulic mining techniques |
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Excavated material will be processed on-site and at Sovereign’s laboratory in Malawi and will also provide additional bulk samples for graphite product qualification |
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The test pit will be backfilled, and multiple rehabilitation strategies will be implemented to demonstrate successful restoration of agricultural land |
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Demonstrates strong support for mining projects in Malawi with all required approvals and community permissions for the Pilot Phase obtained within three months |
Figure 1: Natural concentration of heavy minerals at surface at Kasiya (Source: C12 Consultants)
Managing Director Frank Eagar commented: “Advancing to a Pilot Phase is an important milestone for Kasiya. This covers the full spectrum of engineering and design, logistics, materials handling, water and environmental approvals, stakeholder engagement, livelihood restoration, tailings management and land rehabilitation. The successful permitting is a testament to the strong owner’s team we have assembled. We are progressing Kasiya into a totally new phase of development. The scale and results from this phase will significantly enhance our knowledge base from the previous laboratory-based studies. I want to thank the Malawi Government for an efficient approvals process, demonstrating just how important Kasiya is to all stakeholders.”
Classification 2.2: This announcement includes Inside Information
Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) is pleased to announce that the Company has initiated a Pilot Mining and Land Rehabilitation Program at its Kasiya Rutile-Graphite Project (Kasiya or Project) in Malawi.
The results will allow Sovereign to determine optimal excavation, backfill and land rehabilitation approaches. The Pilot Phase will be a demonstration to local communities of the successful rehabilitation of land for agricultural use post-mining. Results will also provide critical information for the upcoming Definitive Feasibility Study (DFS) and once commenced, it will shorten the time to its completion.
The objectives of the Pilot Phase include:
· Optimisation of mining methods by construction of a pilot-scale open pit close to the maximum depth of the current reserves at 20m;
· Scale-up of existing in-country processing capability by installation of commercial scale spirals to produce additional bulk samples for graphite product qualification;
· Optimising the tailings management and storage designs; and
· Optimising land rehabilitation, soil restoration and selection of revegetation species.
The commencement of the Pilot Phase follows the receipt within three months of all relevant approvals and permissions from the Malawi Environment Protection Authority (MEPA), National Water Resources Authority (NWRA), the Ministry of Mines, and the local community.
The Pilot Phase will be undertaken on a 9.9-hectare site and will include the following activities:
1. Test Pit: A test pit of 120m by 110m will be excavated to a depth of 20m, allowing optimisation of hydraulic and dry mining excavation methods.
2. Stockpiles: The excavated material will be temporarily stored in 4 stockpiles, namely all dry mining material, wet slimes (in a pond) and two sizes of sand fractions from the hydraulic mining.
3. Backfilling and Grading: The material will be placed back into the pit, and all areas will be graded.
4. Rehabilitation Demonstration: Sovereign will construct eight small rehabilitation demonstration pits covering a combined area of 100m by 130m. These will be used for water storage, excavated material storage, and demonstration of multiple rehabilitation approaches.
5. Temporary Laydown Areas: Four areas will be used as temporary laydown areas, offices, and associated infrastructure.
6. Communication: The Pilot Phase will be an educational opportunity for Project stakeholders. Sovereign will undertake a series of stakeholder visits and consultations for this purpose.
Kasiya is the world’s largest natural rutile deposit and the second-largest flake graphite deposit. Sovereign aims to develop a low-CO2 and sustainable operation to supply highly sought-after natural rutile and graphite to global markets.
Results of the PFS, released in late 2023, demonstrated Kasiya’s potential to become the world’s largest rutile producer at 222kt per annum and one of the world’s largest natural graphite producers (ex-China) at 244kt per annum.
The PFS delivered compelling economics with a post-tax NPV8 of US$1.6 Billion and a post-tax IRR of 28%. This long-life, multi-generational operation generates over US$16 Billion of revenue based on an initial 25-year life-of-mine and delivers an average annual EBITDA of US$415 Million per annum.
Pilot Phase Program Design
Activities have been designed to establish a 9.9-hectare site over the current Ore Reserve defined in the Kasiya PFS, covering a mineralised zone with soil conditions deemed representative of the overall Mineral Resource Estimate (MRE). Over approximately three months, Sovereign will excavate several test pits and collect geological and geotechnical samples. The main pit will be backfilled with dry material, while material from hydraulic mining will be used to fill the remaining pits as part of the rehabilitation phase.
Land rehabilitation will form an integral component of the DFS. Sovereign’s objective is to restore land after mining to conditions that achieve the same or better agricultural yields than existing land uses and crop yields. For this reason, the Company will undertake field-based demonstrations of rehabilitation showcasing drying times, soil recoveries, soil nutrients, growth variants, and including different soil inputs and revegetation methods.
Site Construction
Prior to the establishment of site infrastructure, eight boreholes have been permitted and drilled using a locally appointed drilling contractor. These boreholes will supply water to the site, which will be stored in a temporary water storage pond.
A perimeter fence will be erected around the site to maintain the necessary health and safety standards. Existing roads will be used for access to the site and, if required, improved through grading.
Temporary buildings such as offices and stores will be brought to the site on flatbed lorries and erected. To support pilot mining, two 1MW mobile diesel-powered electricity generators will be installed to provide the electricity required for high-pressure water monitors.
Pilot Mining
The main pit will be excavated using conventional load and haul to 20m depth to develop a sump to test hydraulic mining to the full depth of the current Ore Reserves. The excavated material will be temporarily stored in stockpiles.
On-Site Processing Facility
Material mined from the test pit will be processed on-site and at the Company’s laboratory facility in Lilongwe. As previously announced (Please refer to announcement dated 1 May 2024 entitled “Sovereign to Increase Bulk Sample Preparation Capacity”), as part of the Pilot Phase, a commercial-scale spiral plant will be installed at site in Malawi.
Rutile and graphite concentrate samples generated from the Pilot Phase will be shared with potential off-takers and end-users, and used for further testwork as part of the Company’s graphite commercialisation strategy.
Rehabilitation Phase
This phase will consist of establishing a strong soils baseline, backfilling of the test pit with different soil compositions, rehabilitation tests, revegetation with plants, and the improvement of soil conditions post-mining.
Regular monitoring and evaluation of the rehabilitation activities will be undertaken to assess the progress of vegetation growth and soil stabilisation. Following the conclusion of the rehabilitation, the proposed project site will be returned to farmland.
Figure 2: Site layout
Permitting
Permissions for the Pilot Phase were received following the successful submission of an Environmental and Social Management Plan to MEPA. Sovereign is committed to the responsible development of Kasiya. The Pilot Phase will be undertaken in accordance with Malawian Law and IFC Performance Standards, which will include protecting local communities and the natural environment.
ENQUIRIES
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Frank Eagar (South Africa/Malawi) +61(8) 9322 6322 |
Sam Cordin (Perth) |
Sapan Ghai (London)
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Nominated Adviser on AIM and Joint Broker |
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SP Angel Corporate Finance LLP |
+44 20 3470 0470 |
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Ewan Leggat Charlie Bouverat |
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Joint Brokers |
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Stifel |
+44 20 7710 7600 |
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Varun Talwar |
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Ashton Clanfield |
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Berenberg |
+44 20 3207 7800 |
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Matthew Armitt |
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Jennifer Lee |
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Buchanan |
+ 44 20 7466 5000 |
#SVML Sovereign Metals LTD – Downstream Testwork Shows High Quality Graphite
DOWNSTREAM TESTWORK DEMONSTRATES HIGH QUALITY GRAPHITE FOR LITHIUM-ION BATTERIES
· Spherical Purified Graphite (SPG) with world-leading specifications successfully produced from Kasiya
· Kasiya’s spherical graphite purification demonstrated exceptionally low levels of residual impurities achieving a 99.99% loss-on-ignition (LOI)
· Kasiya SPG demonstrated all required parameters within industry standards with spheronisation yields of up to 68% with further scope to optimise in future testwork
· Testwork was undertaken as part of the Company’s graphite strategy to qualify and commercialise graphite concentrate for use in the lithium-ion battery sector
Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) is pleased to announce the results of downstream testwork conducted at leading, independent consultancy ProGraphite GmbH (ProGraphite) in Germany.
Sovereign provided Kasiya graphite concentrate to ProGraphite to produce and characterise coated spherical purified graphite (CSPG) active anode material for lithium-ion batteries. The overall program includes shaping and purification to produce SPG, coating of the material to produce CSPG and evaluation of the electrochemical performance of Kasiya CSPG in a battery. The initial steps of shaping and purification to produce SPG have now been completed with the results showing Kasiya SPG has world-leading specifications.
This SPG material is now undergoing coating and electrochemical testing to characterise CSPG active anode material for lithium-ion batteries.
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Table 1: Spherical Graphite Purification Results |
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SVM Spherical graphite <180 µm concentrate |
SVM Spherical graphite >180 µm concentrate |
Chinese |
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LOI Purity (%) |
99.99% |
99.99% |
>99.95% |
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Fe |
4.4 ppm |
3.3 ppm |
<30 ppm |
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Na |
<1.0 ppm |
<1.1 ppm |
<10 ppm |
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Cr |
1.1 ppm |
0.4 ppm |
<10 ppm |
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Cu |
0.7 ppm |
0.2 ppm |
<10 ppm |
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Ni |
<0.3 ppm |
<0.4 ppm |
<10 ppm |
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Al |
6.6 ppm |
8.8 ppm |
<10 ppm |
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Mo |
<0.3 ppm |
<0.3 ppm |
<10 ppm |
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Si |
7 ppm |
10 ppm |
<30 ppm |
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Ca |
4.3 ppm |
8.4 ppm |
<10 ppm |
1. National Standard of China – Spherical Graphite (GB/T 38887-2020)
The micronisation and spheronisation of Kasiya graphite concentrates achieved excellent yields to spherical graphite for the coarse concentrate and typical yields to spherical graphite for the fines concentrate, with room for further optimisation. The spherical graphite from the fine graphite concentrate in particular exhibited a narrow particle size distribution (D90/D10) ratio and both spherical graphite have reasonable Tap Density and typical BET for uncoated graphite. Coating of the graphite is expected to improve (increase) the tap density and improve (lower) the BET specific surface area.
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Table 2: Concentrate Shaping into Spherical Graphite Results |
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Kasiya Concentrate |
Kasiya Concentrate |
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D50 (microns) |
16.53 |
17.74 |
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D90/D10 Ratio |
2.29 |
2.96 |
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Yield to Spherical Graphite |
40% |
68% |
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Tap Density (g/cm3) |
0.93 |
0.93 |
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BET Specific Surface Area (m2/g) |
7.73 |
6.72 |
The spherical graphite products were purified with commercially proven acids purification and achieved excellent results with an exceptionally high LOI purity of 99.99%. Assays on key trace elements (Fe, Na, Cr, Cu, Al, Mo) show very low levels.
Further, the low Si and Ca results highlight that high quality Kasiya graphite is well-suited to single stage acids purification. Aggressive dosing in acids purification can result in elevated Ca levels due to precipitation of CaF2, necessitating multiple stages of purification to reduce both Si and Ca impurities. These initial purification results indicate that a single purification stage is sufficient for Kasiya graphite concentrate.
The SPG samples will undergo coating and electrochemical tests to provide baseline data for offtake discussions. The results of these tests are expected in the coming weeks.
Managing Director Frank Eagar commented: “These results clearly demonstrate that Kasiya has the potential to disrupt the China dominated graphite supply chain as a long term, secure source of high quality graphite ex-China. We believe Kasiya graphite will have industry low operating costs and is also one of the largest graphite resources globally holding a significant advantage over its graphite peers. We are very pleased to achieve these outstanding results at this stage of the program and will continue fast tracking our graphite product development and qualification campaign.”
Classification 2.2: This announcement includes Inside Information
ENQUIRIES
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Frank Eagar (South Africa/Malawi) +61(8) 9322 6322 |
Sam Cordin (Perth) |
Sapan Ghai (London)
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Nominated Adviser on AIM and Joint Broker |
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SP Angel Corporate Finance LLP |
+44 20 3470 0470 |
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Ewan Leggat Charlie Bouverat |
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Joint Brokers |
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Stifel |
+44 20 7710 7600 |
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Varun Talwar |
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Ashton Clanfield |
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Berenberg |
+44 20 3207 7800 |
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Matthew Armitt |
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Jennifer Lee |
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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 Samuel Moyle, a Competent Person who is a member of The Australasian Institute of Mining and Metallurgy (AusIMM). Mr Moyle is the Exploration Manager of Sovereign Metals Limited and a holder of ordinary shares and unlisted performance rights in Sovereign Metals Limited. Mr Moyle 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 Moyle consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
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.