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#SVML Sovereign Metals LTD – Successful Rehabilitation of Kasiya Test Pit
SUCCESSFUL REHABILITATION OF KASIYA TEST PIT
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Kasiya Rehabilitation Program provides landowners with immediate access to land to start maize crop farming without missing a planting season |
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Site backfill completed; soil improvement and planting of rehabilitation crops commenced in December 2024 |
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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 |
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Significant variety of rehabilitation crops, including giant bamboo, sunhemp, groundnuts and mung beans, are being tested alongside staple maize crops |
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Rehabilitation Program successfully demonstrates how mined land can be quickly and efficiently returned to productive agriculture during future full-scale operations |
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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.“
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.
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.
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Enquires |
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Frank Eagar, Managing Director & CEO South Africa / Malawi +27 21 140 3190
Sapan Ghai, CCO 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 |
#BRES Blencowe Resources PLC – Conversion of 600 tonnes bulk sample to Graphite Concentrate
Blencowe Resources is pleased to report it has completed a critical step in commercial scale testing, by converting 600 tonnes of in situ raw material into 30 tonnes of graphite concentrate. The 600 tonnes bulk sample conversion was undertaken by Jilin New Technology Graphite Co. (“Jilin”), a market leader in graphite processing, with results reconfirming the attractive qualities of Orom-Cross graphite.
Highlights:
· Commercial Scale delivery of concentrate: 600 tonnes of raw material shipped to China several months ago has now been successfully upgraded to 30 tonnes of 96% concentrate.
· Maintaining High Quality: testing indicates that the Orom-Cross concentrate delivered in this sample size maintains the same high quality as previous smaller scale tests.
· Bulk concentrate available: Blencowe now has substantial quantity of both large and small flake concentrate products to apply further testing for potential offtakers.
· Final Stage testing on Small Flakes: Leading SPG producer Qindao Taida Carbon Co Ltd (“Taida”) to beneficiate 20 tonnes of small flake concentrate into 10 tonnes of 99.95% uncoated SPG (spheronised purified graphite) over the next one month as the final step in the qualification process.
· Ongoing Tier-One Discussions: The bulk sample testing and qualification process is going to plan, with the end goal ultimately being offtake agreements with several tier one partners.
· Hurdle achieved for further DFC grant funds: The completion of this stage of the test work is one of the milestones for another tranche of DFC grant funding to be released shortly.
Jilin Concentrate
Jilin, who successfully completed a 100 tonne bulk sample for Blencowe in 2023, has now completed a 600t bulk sample to concentrates. Approximately 30 tonnes of concentrate has been produced, which represents a substantial sample size for the Company to use for ongoing trials at various offtakers, for both large and small flake products.
Test results indicate a very high quality 96% concentrate for small flake products and 96-97% concentrate for large flake products (+100mesh, +80mesh and +50mesh). The concentrate mix is 55/45 as small/large flakes.
Jilin has already highlighted its support for the larger flake Orom-Cross concentrate product by signing an MOU for 15,000tpa, which was announced to the market in May 2024.
Next Step: SPG Production
Work has now begun at one of the most experienced graphite beneficiation companies in the world, Qingdao Taida Carbon Co Ltd, to deliver 10 tonnes of high quality uncoated SPG product from the small flake concentrate. This has been successfully completed previously via smaller scale testing but this will be the first commercial scale delivery of SPG from Orom-Cross to provide necessary samples for high profile tier one offtakers to test in their own facilities. Once the OEM testing is completed by end of the June quarter Orom-Cross will effectively be qualified and have the ability to move to offtake agreements for all end products used in batteries.
Taida has been producing uncoated SPG for over two decades and has one of the most advanced facilities in China, and is generally regarded as one of the leading experts in anode-ready graphite products worldwide. Having Taida expertise manage Orom-Cross concentrate through to SPG is a key advantage as this company has the skill and prowess to deliver the best end results.
Blencowe is developing a broader graphite strategy to incorporate downstream processing in Uganda to deliver 99.95% SPG made in-country, and will be looking to include leading experts such as Taida within that strategy. This proposed facility would be the first commercial scale SPG operation outside of China and Blencowe would produce a valuable downstream product that other graphite mining peers cannot easily replicate. The Company will continue to provide updates as this strategy evolves.
Offtake Agreements
The process to complete all necessary metallurgical test work, including bulk sample testing, is a pre-requisite for all graphite miners that want to sell their end products into battery markets. End users are particularly discerning and will not consider offtake agreements until this work is adequately completed and qualification is therefore attained. Blencowe has been guided through this process by parties who have successfully completed this qualification previously, and using experts who understand the nuances of all the products, and how to get the best out of what Orom-Cross has to offer.
The end target is offtake agreements for 100% of the products that Blencowe will mine and process from Orom-Cross, and to achieve the highest quality that builds strong tier one relationships and delivers the highest prices. The Company is moving swiftly towards qualification and with that the potential for offtake partnerships with some of the leading brand names in this business.
Funding
The completion of the conversion of raw material into concentrate represents one of the milestones to allow for further DFC (Development Finance Corporation) grant funds to be released shortly.
Executive Chairman Cameron Pearce commented:
“We have highlighted this bulk sample test requirement as a key component of the Definitive Feasibility Study and we have undergone this process using some of the most experienced graphite producers in the world, and in doing so we have opened some interesting doors for additional value-add strategy. We will continue to press forward to get to our goal of having tier one offtake agreements in place as soon as possible for all of our end products, which will underline the unique status of Blencowe Resources as a standout graphite producer for the future.”
For further information please contact:
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Blencowe Resources Plc Sam Quinn |
www.blencoweresourcesplc.com Tel: +44 (0)1624 681 250 |
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Investor Relations Sasha Sethi |
Tel: +44 (0) 7891 677 441 |
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Tavira Financial Jonathan Evans |
Tel: +44 (0)20 3192 1733 |
Twitter https://twitter.com/BlencoweRes
LinkedIn https://www.linkedin.com/company/72382491/admin/
Background
Orom-Cross Graphite Project
Orom-Cross is a potential world class graphite project both by size and end-product quality, with a high component of more valuable larger flakes within the deposit.
A 21-year Mining Licence for the project was issued by the Ugandan Government in 2019 following extensive historical work on the deposit and Blencowe is now within the Definitive Feasibility Study phase as it drives towards first production.
Orom-Cross presents as a large, shallow open-pitable deposit, with a maiden JORC Indicated & Inferred Mineral Resource deposit of 24.5Mt @ 6.0% Total Graphite Content. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.
#SVML Sovereign Metals – Kasiya’s Graphite Warming Potential Amongst Lowest
SOVEREIGN METALS LIMITED
NEWS RELEASE I 15 MARCH 2023
KASIYA’S GRAPHITE GLOBAL WARMING POTENTIAL TO BE AMONGST LOWEST IN THE WORLD
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Independent benchmarking indicates Sovereign’s graphite co-product from Kasiya should have significantly lower global warming potential versus current and developing natural graphite projects |
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Global warming potential (GWP) of producing one tonne of flake graphite concentrate at Kasiya estimated to be 0.2 tonnes of CO2 equivalent emissions (CO2e) |
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Kasiya has the lowest GWP compared with currently known and planned future natural graphite projects: |
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Up to 60% lower than currently reported GWP of graphite producers and developers, including suppliers to Tesla Inc. |
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3x less polluting than proposed Tanzanian natural graphite production from hard rock sources |
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6x less polluting than current Chinese natural graphite production which accounts for up to 80% of current global graphite supply |
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In 2022, the lithium-ion battery market became the biggest end-market for natural flake graphite |
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Despite graphite being only a co-product to future potential rutile production, Kasiya is still one of the largest and potentially lowest production cost flake graphite resources in the world as it is hosted in soft and friable saprolite material instead of hard rock |
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Mining is planned to be via hydro-methods (high-powered water monitors) with the operation powered almost 100% by renewable sources (hydro-generated grid and on-site solar power) |
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Previously, Sovereign had announced that its primary product of natural rutile is expected to have a GWP of only 0.1 tonnes CO2e – up to 97% lower than alternative titanium feedstocks produced by upgrading ilmenite |
Sovereign Metals Limited (ASX: SVM, AIM: SVML) (the Company or Sovereign) is pleased to announce the combined results of internal company analysis, supplemented with an independent benchmarking study by UK-based consultancy Minviro Ltd (Minviro) which compared the global warming potential (GWP) of producing natural flake graphite from the Kasiya Project (Kasiya or the Project) against relevant current and future natural graphite projects.
The cradle-to-gate life cycle assessment (LCA) was carried out by Minviro comparing current natural graphite production from China which produces almost 80% of the world’s natural graphite, and proposed near-term production from Tanzania, which offers a regional benchmark against Kasiya in Malawi. The LCA study followed ISO 14067:2008 guidelines and was critically reviewed by a panel of three independent experts.
A number of graphite producers and explorers/developers have conducted their own LCAs, with conclusions of a select number being made public. Kasiya’s graphite product currently has the lowest GWP of publicly reported current and future potential graphite production.
The benchmarking study found that the total GWP of 0.2 tonnes CO2e per tonne of natural flake graphite concentrate produced at Kasiya is significantly lower than the total GWP per tonne produced in Heilongjiang Province, China (1.2 tonnes CO2e) and the total GWP per tonne produced in Tanzania (0.6 tonnes CO2e).
Sovereign’s Managing Director, Dr Julian Stephens, commented: “It is remarkable that our graphite co-product from planned rutile production at Kasiya will not only be potentially one of the lowest cost flake graphite projects in the world but now can also be considered to have one of the lowest global warming potentials of current and future graphite mines. Producers and users of lithium-ion batteries are already taking note of the carbon footprint associated with the raw materials that feed into battery technology – so to be developing Kasiya at this time is truly exciting.”
Minviro’s LCA has already previously shown the potential for Sovereign’s primary product of natural rutile to significantly reduce the carbon footprint of the titanium pigment industry.
Each tonne of natural rutile produced at Kasiya is expected to have a Global Warming Potential of only 0.1 tonnes CO2 eq., which equates to a 95% to 97% reduction in total greenhouse gas emissions (20 to 33 times less) compared to production of titania slag and synthetic rutile respectively – both of which are alternative titanium feedstocks produced by upgrading ilmenite via energy and carbon intensive processes.
ENQUIRIES
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Dr Julian Stephens (Perth) +61(8) 9322 6322 |
Sam Cordin (Perth) |
Sapan Ghai (London)
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Nominated Adviser on AIM |
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RFC Ambrian |
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Bhavesh Patel / Andrew Thomson |
+44 20 3440 6800 |
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Joint Brokers |
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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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Optiva Securities |
+44 20 3137 1902 |
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Daniel Ingram |
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Mariela Jaho |
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Christian Dennis |
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Why is Kasiya’s Graphite able to achieve such a low carbon-footprint?
The GWP for Kasiya’s flake graphite product was based on information in the Kasiya Scoping Study from December 2021. This was followed up with an Expanded Scoping Study in June 2022 (see announcement here: http://www.investi.com.au/api/announcements/svm/c6f18bca-8aa.pdf). The significantly lower GWP for Kasiya graphite is due to the fact that it is hosted in soft, friable saprolite material which will be mined via hydro methods (high pressure water monitors) powered by renewable energy sources – hydro power from the Malawi grid and on-site solar power. This is opposed to the production in Heilongjiang Province, China where hard-rock ore requires drilling, blasting, excavation, trucking, crushing, and grinding – overall high CO2e activities.
About Kasiya’s Graphite
The Kasiya discovery in central Malawi is the largest natural rutile deposit and one of the largest flake graphite deposits in the world.
The lithium-ion battery sector is the main emerging market for flake graphite. Greater capacity batteries, such as those required for electric vehicles, are expected to drive significant demand for graphite over the coming years. It is forecast the battery sector will become the largest graphite market segment by 2028.
Kasiya will be a simple and conventional operation using traditional and well-developed processes used across the globe on numerous mineral sands and graphite operations.
The proposed large-scale operation will process soft, friable mineralisation that occurs from surface in an area with excellent access and water availability. The Project has high quality surrounding infrastructure including hydro-sourced grid power, bitumen roads and recently upgraded rail lines connecting to the deep water of ports of Nacala and Beira on the Indian Ocean.
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.
Competent Persons Statement
The information in this announcement that relates to the Mineral Resource Estimate is extracted from the announcement dated 5 April 2022. The announcement is available to view on 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 announcement; b) all material assumptions included in the 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 Production Targets, Processing, Infrastructure and Capital and Operating Costs, is extracted from the announcement dated 16 December 2021 entitled ‘Kasiya Scoping Study Confirms Globally Significant Natural Rutile Project’ (Announcement). Sovereign confirms that: a) it is not aware of any new information or data that materially affects the information included in the 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 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 Announcement.
The information in this announcement that relates to Metallurgy is extracted from the announcement dated 7 December 2021. The announcement is available to view on 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 announcement; b) all material assumptions included in the 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.
To view this announcement in full, including all figures and illustrations, please refer to http://www.investi.com.au/api/announcements/svm/61a82ede-fa0.pdf.
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Table 1: Kasiya Mineral Resource Estimate at 0.7% Rutile Cut-off |
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Mineral Resource Category |
Material Tonnes (millions) |
Rutile |
Rutile Tonnes (millions) |
Total Contained Graphite (TGC) |
TGC Tonnes (millions) |
RutEq. Grade* |
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Indicated |
662 |
1.05% |
6.9 |
1.43% |
9.5 |
1.76% |
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Inferred |
1,113 |
0.99% |
11.0 |
1.26% |
14.0 |
1.61% |
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Total |
1,775 |
1.01% |
18.0 |
1.32% |
23.4 |
1.67% |
* RutEq. Formula: Rutile Grade x Recovery (98%) x Rutile Price (US$1,308/t) + Graphite Grade x Recovery (62%) x Graphite Price (US$1,085/t) / Rutile Price (US$1,308/t). All assumptions are taken from this Study ** Any minor summation inconsistencies are due to rounding.
#SVML Sovereign Metals – Kasiya Expanded Scoping Study Results
Sovereign Metals Limited (the Company or Sovereign) is pleased to announce the results of the Expanded Scoping Study (Scoping Study or Study) for the Company’s Kasiya Rutile Project (Kasiya or the Project) in Malawi.
In April 2022, Sovereign announced a new JORC Mineral Resource Estimate (MRE) for Kasiya which confirmed the Project as the world’s largest rutile (titanium dioxide) deposit and one of the world’s largest flake graphite deposits.
The Expanded Scoping Study based on the April 2022 MRE confirms that Kasiya will be one of the world’s largest and lowest cost producers of natural rutile and natural graphite with a carbon-footprint substantially lower than current alternatives while significantly contributing to the social and economic development of Malawi.
KEY EXPANDED SCOPING STUDY HIGHLIGHTS
· Significant increase in NPV and EBITDA from the 2021 Initial Scoping Study with lower operating costs for a relatively small increase in Capex to first production
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US$1,537M |
36% |
US$12,038M |
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After Tax NPV8 |
After Tax IRR |
LOM Revenue |
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(↑79%) |
(No change) |
(↑92%) |
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US$323M |
US$320/t |
US$372M |
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Ave. Annual EBITDA |
Operating Cost |
Capex to 1st Production |
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(↑101%) |
(↓10%) |
(↑12%) |
· Potential to become a major producer in both the natural rutile and graphite markets with steady state production of 265,000 rutile and 170,000 tonnes of graphite with a 25-year mine life
· Low capital costs to first production due to exceptional existing available infrastructure offering significant cost reductions and providing optionality and scalability
· Low operating cost and high margins due to deposit size, zero strip ratio of soft, friable high-grade mineralisation from surface, amenability to hydro-mining, conventional processing, deposit location and low transport costs
· Extremely favourable market fundamentals as rutile (titanium) and natural graphite deemed critical raw materials for the US and EU based on economic importance and supply risk
· Natural rutile market in structural deficit with current global supply estimated to decline 45% in the next three years with graphite demand set to soar as electric vehicle production is forecast to increase 12-fold by 2040
· Natural ESG benefits for Kasiya:
o Substantially reduced CO2 emissions for both rutile and graphite compared to current alternatives, including substantial Scope 3 emissions reductions for pigment production from rutile compared to alternative feedstocks
o Significant social and economic benefits for Malawi including job creation, fiscal returns, training and continued community social initiatives
· Study based on conservative commodity price estimates. Long-term rutile price (real) of US$1,254/t versus current spot price of +US$2,200/t1 and long-term natural graphite basket price (real) of US$1,085/t versus current equivalent spot price of US$1,223/t2
Managing Director, Dr Julian Stephens commented
“The Expanded Scoping Study demonstrates Kasiya is a Tier 1 minerals project being the largest natural rutile resource and one of the largest graphite resources in the world. Both minerals are classified on the Critical Minerals lists of the US and EU and rutile is in extreme market supply deficit. In light of these factors, Kasiya is seen as a highly strategic project with the potential to be a major supplier in both rutile and graphite markets.
The project benefits from existing high-quality infrastructure and has inherent ESG advantages. Natural rutile has a far lower carbon footprint compared to other titanium feedstocks used in the pigment industry, and natural graphite is a key component in lithium-ion batteries – crucial to de-carbonising the global economy. Further, the vast majority of power for the planned Kasiya mining operation will be supplied by renewable hydro and solar – giving the mine itself a very low carbon footprint.
The future development of the Kasiya Rutile Project will bring substantial benefits to Malawi in terms of GDP, royalties, taxes, employment and training, local business opportunities and community development.”
ENQUIRIES
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Dr Julian Stephens (Perth) +61(8) 9322 6322 |
Sam Cordin (Perth) |
Sapan Ghai (London)
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Nominated Adviser on AIM |
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RFC Ambrian |
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Bhavesh Patel / Andrew Thomson |
+44 20 3440 6800 |
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Joint Brokers |
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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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Varun Talwar |
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Optiva Securities |
+44 20 3137 1902 |
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Daniel Ingrams |
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Mariela Jaho |
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Christian Dennis |
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To view the announcement in full including all illustrations and figures, please refer to the announcement at http://sovereignmetals.com.au/announcements/.
#ANA Ananda Developments – Shareholders Update
Ananda’s ambition is to be a leading UK grower and provider of consistent, high quality, carbon neutral medical cannabis for the UK and international markets.
The Directors of Ananda provide the following update to shareholders, which comprises Ananda’s responses to questions recently received from shareholders and other interested parties.
Melissa Sturgess, Ananda’s Chief Executive Officer, commented “We welcome these questions from shareholders and other interested parties. We believe that the medical cannabis industry is not particularly well understood at the moment, and we appreciate the time taken to frame these questions and send them to the Company”.
Q1: 40 Hectares of Land were identified by JE Piccaver & Co (Gedney Marsh) Limited (“JEPCO”) for commercial growing. Is this already owned and is it the intention to use the whole area for the first growing season?
A: JEPCO* originally delineated a 40Ha area for the use of DJT Plants Limited (“DJT Plants”). To comply with the Home Office’s desire for remote and secure locations to grow medical cannabis, a superior location was identified by JEPCO prior to DJT Plants submitting its application to the Home Office in October 2019. The location and significant acreage around it is leased by JEPCO. A sublease agreement between DJT Plants and JEPCO forms part of the acquisition package of the 50% of DJT Plants that is not already owned by Ananda. The initial area DJT Plants will be subletting covers 10Ha of land which also includes some infrastructure in the form of large storage sheds. The research facility is being built inside the storage sheds. Also included within the sublease agreement is the option to sublet more land from JEPCO as demand for product grows (subject to commercial licencing from the Home Office). The earmarked land is currently being utilised for crops, including potatoes and wheat and will be made available to DJT Plants when it is required. There is no reason for DJT Plants to tie up further land now for which it would have to pay rent. It is conceivable that the total area for cannabis growing could be bigger than 40ha but that will depend on success and demand.
In summary, Ananda is able to tailor the size of its growing area to the demand for product. To provide context, currently the UK market has around 10,000 patients who consume approximately 1 gram per day of cannabis. A reasonable assumption for yield would be 300-400g per square metre (3 – 4 million grams per hectare).
In line with other markets for medical cannabis, such as Israel and Germany, the Directors expect that the growth of the UK market will accelerate over the coming years. Ananda’s intention is to build capacity in line with market demand. Ananda believes that the best result for patients is to deliver high quality, consistent medical cannabis products and the best result for shareholders is to focus on building a profitable business for the long term rather than building large production capacity in the first year.
Note:
* DJT Plants is the holder of the Home Office licence to grow >0.2% THC cannabis for research purposes. DJT Plants is 100% owned by DJT Group Limited, which in turn is 50% owned by Ananda and 50% owned by Anglia Salads Limited. Anglia Salads Limited is owned as to 68% by JEPCO and Stuart Piccaver, JEPCO’s principal shareholder. Shareholders of Ananda will shortly be asked to approve the acquisition of the 50% of DJT Group Limited that Ananda does not own. Anglia Salads Limited will become a significant shareholder of Ananda.
Q2: What stage is Ananda at with identifying potential customers and establishing relationships with them?
A: Ananda’s initial focus is the UK and we have commenced engagement with patient groups, prescribing groups and associated health care workers. The Company has also commenced an initiative with the launch of the Medical Cannabis Research Roundup newsletters which comprise a regular summary of new scientific research in the medical cannabis space. These summaries are collated into a regular newsletter which the Company sends to interested parties. The Medical Cannabis Clinicians Society is to use Ananda’s updates to enhance its clinicians’ information database and will acknowledge Ananda’s contribution. If you would like to receive copies of the newsletters, please go to the Company’s website at www.anandadevelopments.com and sign up for the Medical Cannabis Research Roundup.
Q3: Is Ananda going down the same path as GW Pharmaceuticals Plc (“GW”) and becoming a pharmaceutical company?
A: No, Ananda is not a pharmaceutical company. The key difference between Ananda and GW is that GW formulates licensed medicines and Ananda is focused on unlicensed medicines, at least in the initial stages. Medical cannabis flower and oil (apart from the two GW products) currently prescribed in the UK are unlicensed. These unlicensed medicines are prescribed to patients by specialist clinicians.
Q4: When does Ananda anticipate starting and finishing the test growing phase?
A: The genetic stabilisation and field trial program, is expected to take around 18 months, provided there are no delays. It will commence when the research facility construction is complete. There are two parts to the first phase. The first is to create stable genetics by ‘self-crossing’ for a number of generations (pollinating with a plant of the same genetics). Genetic stability is most easily explained by thinking about the similarity of the plants you grow when you buy a bag of tomato seeds. It is currently difficult to obtain truly stable cannabis genetics without creating them yourself, and it is the Directors’ view that this is one of the causes of inconsistency of much medical cannabis flower. Inconsistent flower gives patients a different therapeutic experience from batch to batch, which is not ideal for the patient and does not generate confidence in the medicine for prescribing clinicians. The second part of the first phase is to take the best stable plants and grow them in the multi-chappelle greenhouses we have constructed at our research facility. This is crucial, as all genetics respond differently in different conditions and some or many might not grow at all well. We will take stable plants with the most ‘useful’ properties (combination of THC, CBD etc) and then find out which of those respond best to our growing conditions.
The Directors believe this will provide the best platform for the start of commercial growing (subject to licence) and enable the creation of a library of strains which will be proprietary to DJT Plants.
Q5: When will Ananda start its first production growing and first harvest?
A: It is not possible for the Directors to provide a time for this, because it depends on many factors, including Ananda’s ability to secure a number of licences and approvals, including a commercial growing licence from the Home Office, a manufacturing licence from the MHRA (including GMP certification of our manufacturing facility) and a few other minor licenses. Ananda is obviously focused on becoming a profitable company as quickly as possible and commercial growing is key to this.
Q6: What does Ananda intend to do to educate the medical profession regarding medical cannabis?
A: We have commenced the Medical Cannabis Research Roundup initiative as described above. In addition to our work, there are specialised groups focused on education, such as the Medical Cannabis Clinicians Society (www.ukmccs.org). That Society is currently training specialists in medical cannabis and providing education to other health care groups. Stuart Piccaver, Chief Executive Officer of JEPCO, and Melissa Sturgess presented to over 100 members of the Medical Cannabis Clinicians Society on 8 September 2021
Claims as to efficacy and healing properties cannot be made about unlicensed medicines. This is the case for all manufacturers of medical cannabis and all unlicenced medicines in the UK. We can only provide specialists with factual information, known as ‘detailing’. If the Company is able to commence commercial production, we intend to provide, amongst other things, certificates showing the CBD, THC, terpene etc content of the flower being prescribed and to show the full supply chain, so that prescribers can get comfort about UK quality and provenance.
Q7: There are reports that vegetable growers are struggling to obtain and retain resources for vegetable production. Is the growing of cannabis plant resource intensive, and does the Company envisage any issues in attracting the right resources to be able to grow the target volume of plants?
A: One of the reasons Ananda partnered with JEPCO is that they deal with human resourcing every year for their salad leaf business. To provide perspective, they have around 70 full time employees and we are able to draw on skills from that pool, on an as needs basis, as per the Service Agreement between DJT Plants and JEPCO. Stuart Piccaver has been dealing with the requirements for seasonal labour for many years and has developed a focus on automation where possible, in order to reduce labour requirements and human handling of high care plant material. One of the reasons for a managed expansion of the cannabis growing business, rather than immediate large scale, is to ensure we are able to manage labour requirements effectively and securely. All labour will have to be trained in cannabis growing, harvesting etc. We must also consider issues such as site security and numbers of people moving around high care areas.
Q8: How far down the supply chain is Ananda looking to serve or is the target to be a vertically integrated company?
We are focused on the UK initially, and this requires us to grow medical cannabis to GACP (Good Agricultural Collection Practices), manufacture it under MHRA certified GMP (Good Manufacturing Processes) and distribute under GDP (Good Distribution Practices). Initially, we propose producing flower-based products and will add extract products as the business grows. We do not want to take on aspects of the supply chain that we feel are not part of our remit (for example it is unlikely we will buy a specials pharmacy (pharmacy that handles unlicensed medicines)). We want to remain focused on growing and providing high quality medical cannabis to UK patients and build the business from that base.
-Ends-
The Directors of the Company accept responsibility for the contents of this announcement.
| ANANDA DEVELOPMENTS PLC Chief Executive Officer Melissa Sturgess Investor Relations |
+44 (0)7463 686 497 ir@anandadevelopments.com |
| PETERHOUSE CAPITAL LIMITED Corporate Finance Mark Anwyl Corporate Broking |
+44 (0)20 7469 0930 |