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#SVML Sovereign Metals LTD – Appointment of Experienced ESG Officer

Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) is pleased to announce the appointment of highly experienced environmental and social specialist Mr Marco Da Cunha, as its new Lead Environmental, Social and Governance (ESG) Officer.

Mr Da Cunha has almost 20 years of experience in the field of environmental and social management, including over a decade preparing Environmental and Social Impact Assessments (ESIAs), and Environmental Management Plans, for mining projects. In addition, Mr Da Cunha has specialist experience in Social Impact Assessments, and Management Plans, for large scale mining, oil & gas, and infrastructure projects, throughout Sub-Saharan Africa.

Recently, Mr Da Cunha was part of Rio Tinto’s Simandou iron ore project team in Guinea. Simandou is the world’s largest undeveloped high-grade iron ore deposit, and its development will be the largest greenfield integrated mine and infrastructure investment in Africa. Mr Da Cunha’s role at Simandou involved functioning as international support to the Simandou Mine Communities and Social Performance Manager in Guinea, and the support and development of the social management strategy.

Kasiya’s ESIA will now advance following the appointment of Mr Da Cunha. Sovereign has previously completed site surveys by specialist environmental and social consultants in August 2021, May 2022, and October 2023. These surveys provide a solid basis from which to advance the ESIA.

Kasiya’s ESIA will be undertaken in compliance with relevant Malawian legislation, regulations, and standards; in particular, the Environmental Management Act (No. 19 of 2017) and Guidelines of Environmental Impact Assessment (DEA, 1997). The project also aims to meet international guidelines and standards, including the IFC Performance Standards on Environmental and Social Sustainability (IFC, 2012), the World Bank Group Environmental, Health and Safety Guidelines (WBG, 2007), and the Equator Principles (Equator Principles Association, 2020).

Upon Mr Da Cunha’s appointment, Managing Director, Frank Eagar commented: Our ambition, with the development of Kasiya, is to set the global standard in Climate Smart Mining by bringing our low carbon footprint rutile and graphite products to market, while realising real-world community and environmental benefits. In order to achieve this, we have attracted the best talent and experience in the ESG field. Marco’s appointment has bolstered our Owners Team’s ESG capability bringing exemplary experience in environmental and social management for large-scale African mine development projects aligning and consolidating on the recent appointment of SocialEssence.”

 

ENQUIRIES

Frank Eagar (South Africa/Malawi)
Managing Director

+61(8) 9322 6322

Sam Cordin (Perth)
+61(8) 9322 6322

Sapan Ghai (London)
+44 207 478 3900

 

 

Nominated Adviser on AIM and Joint Broker

 

SP Angel Corporate Finance LLP

+44 20 3470 0470

Ewan Leggat

Charlie Bouverat

Harry Davies-Ball

 

 

Joint Brokers

 

Berenberg

+44 20 3207 7800

Matthew Armitt

 

Jennifer Lee

 

 

 

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.

#SVML Sovereign Metals – INVESTOR PRESENTATION

Sovereign Metals Limited (Sovereign or the Company) (ASX:SVM, AIM:SVML) is pleased to advise that an updated investor presentation is available to download from the Company’s website at:

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

ENQUIRIES

Frank Eagar (South Africa/Malawi)
Managing Director

+61(8) 9322 6322

Sam Cordin (Perth)
+61(8) 9322 6322

Sapan Ghai (London)
+44 207 478 3900

Alan Green covers Sovereign Metals #SVML, Premier African Minerals #PREM and Voyager Life #VOY on this week’s Stockbox Research Talks

Alan Green covers Sovereign Metals #SVML, Premier African Minerals #PREM and Voyager Life #VOY on this week’s Stockbox Research Talks

Sovereign Metals #SVML outlines ambitious goals and significant achievements at Proactive presentation

In a recent presentation at the Proactive One2One Investor Conference, Sapan Ghai Chief Commercial Officer of Sovereign Metals Limited, outlined the company’s ambitious goals and significant achievements. Sovereign Metals, dual-listed on the ASX and AIM, aims to become the world’s largest and lowest-cost producer of two critical minerals, titanium (in the form of rutile) and natural graphite, with minimal emissions.

The company’s Kasiya project in Malawi boasts the world’s largest rutile deposit and the second largest flake graphite resource globally. A significant milestone was the acquisition of a 15% stake by Rio Tinto in July 2023 for $14 million, aiding in advancing the definitive feasibility study of Kasiya. The pre-feasibility study completed in September 2023 revealed Sovereign’s potential to be the top producer of rutile and graphite at the lowest cost, projecting an average annual EBITDA of $415 million over an initial 25-year mine life, utilising only 30% of the known resource. The Kasiya project, unique for hosting both rutile and graphite, is notable for its saprolite hosted mineralisation, allowing easy extraction without extensive drilling or blasting.

The company enjoys strong government and community support in Malawi, along with excellent infrastructure. The Rio Tinto investment, besides financial support, offers operational and market access advantages, particularly in qualifying graphite for lithium-ion batteries. Sapan highlighted the importance of rutile, a high-purity and scarce form of titanium, in various industries including defense, medical, and technology. The global titanium market, worth $25 billion, heavily relies on ilmenite; however, rutile’s scarcity is increasing, with major suppliers nearing the end of their resources. Sovereign Metals, with its significant rutile and graphite deposits, stands to capitalise on this growing market gap. The company’s stock price, currently around 23p, is perceived as undervalued given its potential and the scale of its resources

#SVML Sovereign Metals LTD – Extensions To Rutile & Graphite Mineralisation

EXTENSIONS TO RUTILE & GRAPHITE MINERALISATION AT KASIYA

·       Wide-spaced regional reconnaissance drilling, outside the current JORC (2012) compliant Mineral Resource Estimate (MRE) area, identifies a 8km extension of mineralisation to the south which remains open along strike and at depth

·       Results are testament to the world-class scale of the Kasiya deposit and demonstrate potential for a future increase of the Kasiya’s MRE, which is already the largest natural rutile deposit and second largest flake graphite deposit in the world

·       Kasiya’s current MRE of 1.8 Billion tonnes at 1.0% rutile and 1.4% graphite comprises broad and contiguous zones of high-grade rutile and graphite that occur across an area of over 201km2

·       Current focus at Kasiya remains the ongoing Optimisation Study alongside strategic investor Rio Tinto and permitting work streams working with the Malawian Interministerial Committee

 

Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) is pleased to report southern extensions to the mineralised area at Kasiya. Hand-auger drilling has identified a number of zones ranging from ~400m to 2km wide over a strike length of approximately 8km. These results indicate potential to expand the already significant, high-grade rutile and graphite Mineral Resource Estimate at Kasiya.

Results of the Pre Feasibility Study (PFS) released in late 2023 demonstrated Kasiya’s potential to become the world’s largest rutile producer at an average of 222kt per annum and one of the world’s largest natural graphite producers outside of China at an average of 244kt per annum based on an initial 25 year life-of-mine (LOM). 

The Kasiya PFS delivered compelling economics with a post-tax NPV8 of US$1.6 Billion and post-tax IRR of 28%. This long-life, multi-generational operation was modelled to initially generate over US$16 Billion of revenue and provide an average annual EBITDA of US$415 Million per annum. 

The PFS modelling was limited to only 25 years with an initial Probable Ore Reserves declared of 538Mt, only representing 30% of the total Mineral Resource Estimate.

Managing Director, Frank Eagar commented: “These drilling results re-confirm the significant scale of the Kasiya deposit with the strike now stretching over 37km long. Sovereign continues to test the extent of regional mineralisation via low-cost hand-auger drilling, which has the potential to increase the already very large Kasiya Resource.”

 

 

Classification 2.2: This announcement includes Inside Information

ENQUIRIES

 

 

Frank Eagar (South Africa/Malawi)
Managing Director

+61(8) 9322 6322

Sam Cordin (Perth)
+61(8) 9322 6322

Sapan Ghai (London)
+44 207 478 3900

 

Nominated Adviser on AIM and Joint Broker

 

SP Angel Corporate Finance LLP

+44 20 3470 0470

Ewan Leggat

Charlie Bouverat

Harry Davies-Ball

 

 

Joint Brokers

 

Berenberg

+44 20 3207 7800

Matthew Armitt

 

Jennifer Lee

 

 

 

Buchanan

+ +44 20 7466 5000

 

REGIONAL DRILLING PROGRAM

Regional hand-auger drilling south of the Kasiya MRE footprint has identified significant strike extensions of approximately 8km across a number of parallel mineralised zones ranging from 400m to 2km in width.

All newly defined mineralisation remains open at depth, due to the limitations of the hand-auger drilling method but are expected to continue to the saprock boundary normally between 20 and 30m vertical metres from surface. The multiple mineralised zones identified remain open along strike both to the north and south.

Down Arrow: OPEN

Figure 1: Southern newly defined mineralised extensions at Kasiya

 

Highlight drill results include;

·    14m @ 1.03% incl. 2m @ 1.35% rutile from surface

·    17m @ 1.01% incl. 2m @ 1.42% rutile from surface

·    9m @ 0.93% incl. 2m @1.58% rutile from surface

·    12m @ 1.31% incl. 3m @ 1.97% rutile from surface

·    13m @ 1.02% incl. 3m @ 1.16% rutile from surface

·     12m @ 1.02% rutile & 4.5% graphite incl. 2m @ 1.41% rutile from surface

Competent Person Statement

The information in this announcement that relates to the Mineral Resource Estimate is extracted from an announcement dated 5 April 2023 entitled ‘Kasiya Indicated Resource Increased by over 80%’ which is available to view at www.sovereignmetals.com.au and is based on, and fairly represents information compiled by Mr Richard Stockwell, a Competent Person, who is a fellow of the Australian Institute of Geoscientists (AIG). Mr Stockwell is a principal of Placer Consulting Pty Ltd, an independent consulting company. The original 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 original announcement; b) all material assumptions included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this announcement have not been materially changed from the original announcement.

The information in this announcement that relates to Production Targets, Ore Reserves, Processing, Infrastructure and Capital Operating Costs, Metallurgy (rutile and graphite) is extracted from an announcement dated 28 September 2023 entitled ‘Kasiya Pre-Feasibility Study Results’ which is available to view at www.sovereignmetals.com.au. Sovereign confirms that: a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions and technical parameters underpinning the Production Target, and related forecast financial information derived from the Production Target included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this presentation have not been materially modified from the Announcement.

Ore Reserve for the Kasiya Deposit

 

Classification

Tonnes
(Mt)

Rutile Grade
(%)

Contained Rutile
(Mt)

Graphite Grade (TGC) (%)

Contained Graphite
(Mt)

RutEq. Grade*
(%)

Proved

Probable

 538

1.03%

5.5

1.66%

8.9

2.00%

Total

 538

1.03%

5.5

1.66%

8.9

2.00%

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

Kasiya Total Indicated + Inferred Mineral Resource Estimate at 0.7% rutile cut-off grade

Classification

Resource
(Mt)

Rutile Grade
(%)

Contained Rutile
(Mt)

Graphite Grade (TGC) (%)

Contained Graphite
(Mt)

Indicated

 1,200

1.0%

12.2

1.5%

18.0

Inferred

 609

0.9%

5.7

1.1%

6.5

Total

 1,809

1.0%

17.9

1.4%

24.4

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.

Forward Looking Statement

Rutile and graphite drilling results from Kasiya are shown below in Table 2.

Hole ID

Interval Thickness

Rutile %

TGC %

From (m) Downhole

Hole Type

KYHA1273

8.0

1.52

0.7

9.0

HA

incl

5.0

2.08

0.3

12.0

KYHA1274

9.0

0.93

2.0

0.0

HA

incl

2.0

1.58

0.5

0.0

 

KYHA1275

3.0

0.96

1.0

0.0

HA

KYHA1276

6.0

0.83

0.9

0.0

HA

incl

2.0

1.25

0.3

0.0

KYHA1277

10.0

0.74

2.0

0.0

HA

incl

2.0

1.32

0.3

0.0

KYHA1278

2.0

0.95

0.3

0.0

HA

KYHA1279

7.0

0.78

0.8

0.0

HA

incl

3.0

1.02

0.3

0.0

KYHA1280

12.0

0.85

0.8

0.0

HA

incl

3.0

1.27

0.2

0.0

KYHA1281

3.0

0.78

0.2

0.0

HA

KYHA1282

14.0

1.03

1.6

0.0

HA

incl

2.0

1.35

0.3

0.0

 

KYHA1283

5.0

0.80

0.3

0.0

HA

incl

2.0

1.26

0.3

0.0

KYHA1284

2.5

0.65

4.8

7.0

HA

incl

2.0

1.09

0.8

0.0

KYHA1285

2.0

1.03

0.3

0.0

HA

KYHA1286

7.0

0.73

0.3

0.0

HA

incl

2.0

1.21

0.4

0.0

KYHA1287

10.0

0.91

3.2

0.0

HA

incl

2.0

1.54

0.5

0.0

KYHA1288

2.0

1.30

0.4

0.0

HA

KYHA1289

2.0

0.67

0.2

0.0

HA

KYHA1290

3.0

0.59

0.0

0.0

HA

KYHA1291

2.0

0.70

0.2

0.0

HA

KYHA1292

5.0

0.91

0.4

0.0

HA

incl

2.0

1.28

0.3

0.0

KYHA1293

11.0

0.71

3.3

0.0

HA

incl

2.0

1.18

0.3

0.0

KYHA1294

7.0

0.74

0.4

0.0

HA

incl

3.0

1.01

0.4

0.0

KYHA1295

3.0

0.71

0.1

0.0

HA

KYHA1296

13.0

0.76

2.7

0.0

HA

KYHA1297

NSR

HA

KYHA1298

4.0

0.84

0.2

0.0

HA

incl

2.0

1.11

0.2

0.0

KYHA1299

4.0

0.85

0.4

0.0

HA

incl

2.0

1.15

0.4

0.0

KYHA1300

14.0

0.78

4.2

0.0

HA

incl

2.0

1.00

0.4

0.0

KYHA1301

6.0

0.74

0.3

0.0

HA

KYHA1302

4.0

0.99

0.2

0.0

HA

incl

2.0

1.30

0.1

0.0

KYHA1303

13.0

1.02

2.4

0.0

HA

incl

3.0

1.16

0.3

0.0

 

incl

2.0

1.22

4.1

8.0

 

KYHA1304

4.0

0.84

0.3

0.0

HA

incl

2.0

1.13

0.3

0.0

KYHA1305

17.0

1.01

1.3

0.0

HA

incl

2.0

1.42

0.3

0.0

 

incl

4.0

1.43

3.2

13.0

KYHA1306

6.0

0.79

0.3

0.0

HA

incl

3.0

1.08

0.3

0.0

KYHA1307

11.0

0.77

2.7

0.0

HA

incl

2.0

1.31

0.4

0.0

KYHA1308

12.0

0.81

0.9

0.0

HA

incl

3.0

1.27

0.2

0.0

KYHA1309

2.0

0.56

0.0

0.0

HA

KYHA1310

8.0

0.86

2.0

0.0

HA

incl

2.0

1.35

0.3

0.0

KYHA1311

3.0

1.07

0.3

0.0

HA

incl

3.0

1.07

0.3

0.0

KYHA1312

NSR

HA

KYHA1313

6.0

0.77

0.5

0.0

HA

incl

2.0

1.19

0.2

0.0

KYHA1314

12.0

1.02

4.5

0.0

HA

incl

2.0

1.41

0.5

0.0

 

incl

3.0

1.05

6.9

6.0

 

KYHA1315

12.0

1.31

1.6

0.0

HA

incl

3.0

1.97

0.4

0.0

 

incl

6.0

1.14

2.3

6.0

 

KYHA1316

6.0

1.16

1.5

0.0

HA

incl

2.0

1.49

0.3

0.0

incl

2.0

1.12

3.6

4.0

KYHA1317

10.0

0.75

3.2

0.0

HA

incl

2.0

1.02

0.5

0.0

KYHA1318

10.0

0.90

0.9

0.0

HA

incl

2.0

1.75

0.2

0.0

KYHA1319

NSR

HA

KYHA1320

6.0

0.94

4.2

3.0

HA

incl

3.0

1.15

5.6

6.0

KYHA1321

2.0

0.68

0.1

0.0

HA

KYHA1322

15.0

0.66

2.0

0.0

HA

KYHA1323

2.0

0.66

0.6

3.0

HA

KYHA1324

6.0

0.92

1.1

0.0

HA

incl

2.0

1.35

0.6

0.0

KYHA1324

4.0

0.76

3.7

8.0

HA

KYHA1325

5.0

0.81

0.4

0.0

HA

incl

5.0

1.32

0.4

12.0

 

APPENDIX II: DRILL HOLE COLLAR DATA – TABLE 3

Hole ID

Easting

Northing

RL

Depth

 

Hole ID

Easting

Northing

RL

Depth

KYHA1273

548398

8452800

1209

17.0

KYHA1300

549400

8457202

1207

14.0

KYHA1274

548397

8452407

1205

9.0

KYHA1301

541997

8463199

1151

10.0

KYHA1275

548798

8452405

1207

12.0

KYHA1302

542401

8463198

1158

11.0

KYHA1276

548796

8453205

1209

13.0

KYHA1303

542819

8463208

1159

13.0

KYHA1277

548799

8452800

1208

10.0

KYHA1304

548999

8457201

1210

19.0

KYHA1278

548399

8453201

1209

13.0

KYHA1305

548598

8457197

1207

17.0

KYHA1279

541598

8465602

1156

12.0

KYHA1306

548198

8457199

1198

6.0

KYHA1280

542001

8465598

1151

12.0

KYHA1307

542000

8462801

1151

11.0

KYHA1281

542402

8465601

1146

12.0

KYHA1308

542401

8462800

1158

12.0

KYHA1282

548800

8454400

1215

15.0

KYHA1309

542806

8462792

1158

10.0

KYHA1283

549201

8454401

1225

11.0

KYHA1310

542003

8462400

1149

8.0

KYHA1284

549603

8454397

1218

9.5

KYHA1311

542402

8462400

1153

8.0

KYHA1285

550004

8454400

1205

12.0

KYHA1312

542800

8462401

1154

7.0

KYHA1286

550000

8454801

1209

15.0

KYHA1313

546399

8463199

1182

14.0

KYHA1287

549597

8454801

1219

10.0

KYHA1314

546000

8462801

1183

12.0

KYHA1288

549198

8454801

1219

17.0

KYHA1315

546398

8462803

1184

12.0

KYHA1289

548799

8454801

1211

13.0

KYHA1316

546002

8463201

1183

13.0

KYHA1290

548800

8455196

1208

13.0

KYHA1317

545999

8462402

1182

10.0

KYHA1291

549199

8455199

1212

16.0

KYHA1318

546399

8462403

1185

10.0

KYHA1292

549601

8455199

1214

16.0

KYHA1319

543198

8462401

1156

10.0

KYHA1293

550005

8455196

1208

15.0

KYHA1320

543198

8462803

1155

9.0

KYHA1294

548200

8456800

1204

14.0

KYHA1321

543201

8463199

1154

6.0

KYHA1295

548600

8456801

1213

12.0

KYHA1322

542800

8465593

1141

15.0

KYHA1296

549003

8456803

1217

13.0

KYHA1323

543198

8465598

1138

5.0

KYHA1297

549399

8456797

1209

14.0

KYHA1324

541193

8465601

1160

12.0

KYHA1298

549800

8456801

1200

12.0

KYHA1325

548398

8452801

1209

17.0

KYHA1299

549800

8457199

1199

11.0

 

 

 

Appendix III: JORC Code, 2012 Edition – Table 1

SECTION 1 – SAMPLING TECHNIQUES AND DATA

Criteria

JORC Code explanation

Commentary

Sampling Techniques

Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

 

A total of 53 hand-auger holes for 639m were drilled at the Kasiya Project to obtain samples for quantitative mineralogical determination. 

 

Hand-Auger samples are composited based on regolith boundaries and sample chemistry, generated by hand-held XRF analysis.

Each 1m of sample is dried and riffle-split to generate a total sample weight of 3kg for analysis, generally at 1m-4m intervals. This primary sample is then split again to provide a 1.5kg sample for both rutile and graphite analyses.

 

 

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

 

Drilling and sampling activities are supervised by a suitably qualified Company geologist who is present at all times. All drill samples are geologically logged by the geologist at the drill site/core yard.

 

Each sample is sun dried and homogenised. Sub-samples are carefully

riffle split to ensure representivity. The 1.5kg composite samples are then processed.

 

An equivalent mass is taken from each sample to make up the composite. A calibration schedule is in place for laboratory scales, sieves and field XRF equipment.

 

Placer Consulting Pty Ltd (Placer) Resource Geologists have reviewed Standard Operating Procedures (SOPs) for the collection and processing of drill samples and found them to be fit for purpose. The primary composite sample is considered representative for this style of rutile mineralisation.

 

 

Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.

 

 

Logged mineralogy percentages and lithology information is used to determine compositing intervals. Care is taken to ensure that only samples with similar geological characteristics are composited together.

Drilling Techniques

Drill type (e.g. core, reverse circulation, openhole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, facesampling bit or other type, whether core is oriented and if so, by what method, etc).

 

A total of 53 hand-auger holes for 639m were drilled at the Kasiya Project to obtain samples for quantitative determination of recoverable rutile and Total Graphitic Carbon (TGC).

 

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

 

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

 

 

Drill Sample Recovery

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

 

Samples are assessed visually for recoveries. The configuration of drilling and nature of materials encountered results in negligible sample loss or contamination.

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

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

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

 

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

Hand-auger drilling samples are retrieved and placed into large plastic bags. The bags are clearly labelled and delivered back to the laydown at the end of shift for processing.

 

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

 

No relationship is believed to exist between grade and sample recovery. The high percentage of silt and absence of hydraulic inflow from groundwater at this deposit results in a sample size that is well within the expected size range.

 

No bias related to preferential loss or gain of different materials is observed.

 

Logging

Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation mining studies and metallurgical studies.

 

Geologically, data is collected in detail, sufficient to aid in Mineral Resource estimation.

 

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

data to a set log-chief template using company codes. A small representative sample is collected for each 1-metre interval and placed in appropriately labelled chip trays for future reference.

 

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

 

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

 

The total length and percentage of the relevant intersection logged

 

 

100% of samples are geologically logged.

Sub-sampling techniques and sample preparation

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

 

 

N/A

 

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

Hand-auger samples from the 53 holes drilled are dried, riffle split and composited. Samples are collected and homogenised prior to splitting to ensure sample representivity. ~1.5kg composite samples are processed.

 

An equivalent mass is taken from each primary sample to make up the composite.

 

The primary composite sample is considered representative for this style of mineralisation and is consistent with industry standard practice.

 

 

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

 

Techniques for sample preparation are detailed on SOP documents verified by Placer Resource Geologists.

 

Sample preparation is recorded on a standard flow sheet and detailed QA/QC is undertaken on all samples. Sample preparation techniques and QA/QC protocols are appropriate for mineral determination.

 

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

 

The sampling equipment is cleaned after each sub-sample is taken.

 

Field duplicate, laboratory replicate and standard sample geostatistical analysis is employed to manage sample precision and analysis accuracy.

 

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

 

Sample size analysis is completed to verify sampling accuracy. Field duplicates are collected for precision analysis of riffle splitting. SOPs consider sample representivity. Results indicate a sufficient level of precision for the resource classification.

 

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

 

 

The sample size is considered appropriate for the material sampled.

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

Rutile

The Malawi onsite laboratory sample preparation methods are considered quantitative to the point where a non-magnetic mineral concentrate (NM) is generated.

 

Final results generated are for recovered rutile i.e. the % mass of the sample that is rutile that can be recovered to the non-magnetic component of a HMC.

 

The HMC is prepared via wet-table, gravity separation at the Lilongwe Laboratory which provides an ideal sample for subsequent magnetic separation and XRF.

 

All samples (incl. QA) included in this announcement received the following workflow undertaken on-site in Malawi;

·      Dry sample in oven for 1 hour at 105

·      Soak in water and lightly agitate

·      Wet screen at 5mm, 600µm and 45µm to remove oversize and slimes material

·      Dry +45µm -600mm (sand fraction) in oven for 1 hour at 105

·      Pass +45µm -600mm (sand fraction) across wet table to generate a heavy mineral concentrate (HMC)

·      Pan HMC to remove retained light minerals

·      Dry HMC in oven for 30 minutes at 105

·      Magnetic separation of the HMC by Carpco magnet @ 16,800G (2.9Amps) into a magnetic (M) and non-magnetic (NM) fraction.

 

Bag NM fraction and send to Perth, Australia for quantitative chemical and mineralogical determination.

·      The NM fractions were sent to ALS Metallurgy Perth for quantitative XRF analysis. Samples received XRF_MS.

 

Graphite

All samples are initially checked in and processed to pulp at Intertek-Genalysis Johannesburg.

The pulp samples are then dispatched to Intertek-Genalysis Perth where they undergo TGC assay via method C72/CSA.

A portion of each test sample is dissolved in dilute hydrochloric acid to liberate carbonate carbon. The solution is filtered using a filter paper and the collected residue is the dried to 425°C in a muffle oven to drive off organic carbon. The dried sample is then combusted in a Carbon/ Sulphur analyser to yield total graphitic or elemental carbon (TGC).

The graphitic carbon content is determined by eliminating other carbon forms from the total carbon content. The addition of acid to the sample liberates carbon dioxide thus removing carbonate carbon. Soluble organic carbon will also be removed. Insoluble organic carbon is removed by heating the samples at 425°C in an oxidising environment. The “dried” carbon-bearing sample that is analysed in the resistance furnace is considered to contain only graphitic carbon. 

An Eltra CS-800 induction furnace infra-red CS analyser is then used to determine the remaining carbon which is reported as Total Graphitic Carbon (TGC) as a percentage.

 

For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

 

 

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

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

 

Sovereign uses internal and externally sourced wet screening reference material inserted into samples batches at a rate of 1 in 20. The externally sourced, certified standard reference material for HM and Slimes assessment is provided by Placer Consulting.

 

Accuracy monitoring is achieved through submission of certified reference materials (CRM’s).

ALS and Intertek both use internal CRMs and duplicates on XRF analyses.

Sovereign also inserts CRMs into the sample batches at a rate of 1 in 20.

 

 

Analysis of sample duplicates is undertaken by standard geostatistical methodologies (Scatter, Pair Difference and QQ Plots) to test for bias and to ensure that sample splitting is representative.  Standards determine assay accuracy performance, monitored on control charts, where failure (beyond 3SD from the mean) may trigger re-assay of the affected batch.

 

Examination of the QA/QC sample data indicates satisfactory performance of field sampling protocols and assay laboratories providing acceptable levels of precision and accuracy.

 

Acceptable levels of accuracy and precision are displayed in geostatistical analyses.

 

Verification of sampling & assaying

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

 

Results are reviewed in cross-section using Micromine software and any spurious results are investigated.  The deposit type and consistency of mineralisation leaves little room for unexplained variance. Extreme high grades are not encountered.

 

The use of twinned holes.

Twinned holes are not reported here.

 

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

All geological field logging data is collected in LogChief logging software. This data is then imported to Datashed5 and validated automatically and then manually.

 

Sovereigns’ laboratory data is captured onto paper templates or excel and transferred manually to the database.

 

 

Discuss any adjustment to assay data.

 

QEMSCAN of the NM fraction shows dominantly clean and liberated rutile grains and confirms rutile is the only titanium species in the NM fraction.

 

Recovered rutile is therefore defined and reported here as: TiO2 recovered in the +45 to -600um range to the NM concentrate fraction as a % of the total primary, dry, raw sample mass divided by 95% (to represent an approximation of final product specifications). i.e. recoverable rutile within the whole sample.

 

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

 

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

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

 

 

Specification of the grid system used.

WGS84 UTM Zone 36 South.

 

Quality and adequacy of topographic control.

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

 

 

Data spacing & distribution

Data spacing for reporting of Exploration Results.

The hand-auger holes are spaced on a on a regular grid which is deemed to adequately define the mineralisation under investigation.

 

 

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

The drill spacing and distribution is considered to be sufficient to establish a degree of geological and grade continuity appropriate for further future Mineral Resource estimation.  

 

Whether sample compositing has been applied.

Individual 1m intervals have been composited, based on lithology for the 53 hand-auger holes.

 

 

Orientation of data in relation to geological structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known considering the deposit type

 

Sample orientation is vertical and approximately perpendicular to the orientation of the mineralisation, which results in true thickness estimates, limited by the sampling interval as applied. Drilling and sampling are carried out on a regular square grid. There is no apparent bias arising from the orientation of the drill holes with respect to the orientation of the deposit.

 

 

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

 

 

There is no apparent bias arising from the orientation of the drill holes with respect to the orientation of the deposit.

Sample security

The measures taken to ensure sample security

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

 

A reputable international transport company with shipment tracking enables a chain of custody to be maintained while the samples move from Malawi to Australia or Malawi to Johannesburg. Samples are again securely stored once they arrive and are processed at Australian laboratories. A reputable domestic courier company manages the movement of samples within Perth, Australia.

 

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

 

Audits or reviews

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

 

Richard Stockwell (resource CP) has reviewed and advised on all stages of data collection, sample processing, QA protocol and mineral resource estimation. Methods employed are considered industry best-practice.

 

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

 

 

 

SECTION 2 – REPORTING OF EXPLORATION RESULTS

Criteria

Explanation

Commentary

Mineral tenement & land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environment settings.

The Company owns 100% of the following Exploration Licences (ELs) and Retention Licence (RL) under the Mines and Minerals Act (No 8. of 2019), held in the Company’s wholly-owned, Malawi-registered subsidiaries: EL0609,  EL0582, EL0492, EL0528, EL0545, EL0561, and EL0657.

A 5% royalty is payable to the government upon mining and a 2% of net profit royalty is payable to the original project vendor.

No significant native vegetation or reserves exist in the area. The region is intensively cultivated for agricultural crops.

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The tenements are in good standing and no known impediments to exploration or mining exist.

Exploration done by other parties

 

Acknowledgement and appraisal of exploration by other parties.

Sovereign Metals Ltd is a first-mover in the discovery and definition of residual rutile and graphite resources in Malawi. No other parties are involved in exploration.

Geology

Deposit type, geological setting and style of mineralisation

The rutile deposit type is considered a residual placer formed by the intense weathering of rutile-rich basement paragneisses and variable enrichment by eluvial processes.

Rutile occurs in a mostly topographically flat area west of Malawi’s capital, known as the Lilongwe Plain, where a deep tropical weathering profile is preserved. A typical profile from top to base is generally soil (“SOIL” 0-1m) ferruginous pedolith (“FERP”, 1-4m), mottled zone (“MOTT”, 4-7m), pallid saprolite (“PSAP”, 7-9m), saprolite (“SAPL”, 9-25m), saprock (“SAPR”, 25-35m) and fresh rock (“FRESH” >35m).

The low-grade graphite mineralisation occurs as multiple bands of graphite gneisses, hosted within a broader Proterozoic paragneiss package. In the Kasiya areas specifically, the preserved weathering profile hosts significant vertical thicknesses from near surface of graphite mineralisation.

Drill hole information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: easting and northings of the drill hole collar; elevation or RL (Reduced Level-elevation above sea level in metres of the drill hole collar); dip and azimuth of the hole; down hole length and interception depth; and hole length

All collar and composite data are provided in the body and appendices of this report.

 

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case

No information has been excluded.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high-grades) and cut-off grades are usually Material and should be stated.

All results reported are of a length-weighted average of in-situ grades. The results reported in the body of the report are on a nominal lower cut-off of 0.5% Rutile and exclude bottom of hole samples where saprock has been geologically logged.

 

Where aggregate intercepts incorporate short lengths of high-grade results and longer lengths of low-grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

No data aggregation was required.

The assumptions used for any reporting of metal equivalent values should be clearly stated.

No metal equivalent values are used in this report.

Relationship between mineralisation widths & intercept lengths

These relationships are particularly important in the reporting of Exploration Results.

The mineralisation has been released by weathering of the underlying, layered gneissic bedrock that broadly trends NE-SW. It lies in a laterally extensive superficial blanket with high-grade zones reflecting the broad bedrock strike orientation of ~045°.

If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

The mineralisation is laterally extensive where the entire weathering profile is preserved and not significantly eroded. Minor removal of the mineralised profile has occurred in alluvial channels. These areas are adequately defined by the drilling pattern and topographical control.

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’.

Downhole widths approximate true widths limited to the sample intervals applied. Graphite results are approximate true width as defined by the sample interval and typically increase with depth.

Diagrams

Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported. These should include, but not be limited to a plan view of the drill collar locations and appropriate sectional views.

Refer to figures in the body of this report.

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high-grades and/or widths should be practiced to avoid misleading reporting of exploration results.

All results are included in this report.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to: geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

Rutile has been determined, by QEMSCAN, to be the major TiO2-bearing mineral at and around several rutile prospects within Sovereign’s ground package. The Company continues to examine areas within the large tenement package for rutile and graphite by-product mineralisation.

Further work

The nature and scale of planned further work (e.g. test for lateral extensions or depth extensions or large-scale step-out drilling).

No further exploration is planned at this stage. 

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Refer to diagrams in the body of this report.

 

 

#SVML Sovereign Metals LTD – December 2023 Quarterly Report

Project Optimisation

·        During the quarter, Sovereign advanced optimisation test work and technical studies for the Kasiya rutile-graphite project (Kasiya or the Project) with the Company’s strategic investor, Rio Tinto

·        Significant field activities and a number of test work programs have commenced in order to provide data for the Project optimisation phase

·        The Company aims to become the world’s largest, lowest cost and lowest-emissions producer of two critical minerals – titanium (rutile) and graphite

Key Management Appointments to Drive Project Optimisation and Development at Kasiya

·        Appointment of experienced Africa-based mining executive, Mr Frank Eagar, as the new Managing Director and CEO

·        Previous Managing Director Dr Julian Stephens has transitioned to Non-Executive Director

·        Key technical appointments of experienced African engineering, social and environmental teams to work on advancing the Kasiya project

Lithium-Ion battery graphite program upscaled

·        Over 60 tonnes of ore was extracted targeting production of an initial 600kg of natural graphite for lithium-ion battery anode test work and product qualification

·        The upscaled graphite qualification program will support ongoing Project studies

·        Sovereign and Rio Tinto have agreed to collaborate to qualify graphite from Kasiya, with a particular focus on supplying the spherical purified graphite (SPG) segment of the lithium-ion battery anode market

·        This graphite qualification program coincides with China’s announced curbs on exports of natural graphite, a critical mineral for the US, EU, Japan and Australia

Highly-experienced social specialist appointed

·        Africa-based social specialist consultancy, SocialEssence were appointed to lead social and community development programs for Sovereign in Malawi

·        SocialEssence joins Sovereign’s Owners Team and will design, implement, and manage several social and community initiatives which will feed into Project studies and permitting

·        SocialEssence has a strong and successful track record of implementing social responsibility programs across southern Africa, including at First Quantum Minerals’ Zambian project

 

Classification 2.2: This announcement includes Inside Information

ENQUIRIES

Mr Frank Eagar (South Africa/Malawi)
Managing Director and CEO

+27 76 753 5377

Sam Cordin (Perth)
+61 (0)422 799 087

Sapan Ghai (London)
+44 207 478 3900

 

 

Nominated Adviser on AIM and Joint Broker

SP Angel Corporate Finance LLP

Joint Brokers

Berenberg

Buchanan

+44 20 7466 5000

 

KASIYA PROJECT OPTIMISATION

The Pre-Feasibility Study (PFS) confirmed Kasiya as a potential major critical minerals project with an extremely low CO2-footprint delivering substantial volumes of natural rutile and graphite to global markets while generating significant economic returns.  

At the completion of the PFS, the Company commenced an optimisation study phase prior to advancing to the Definitive Feasibility Study (DFS). During the quarter, significant field activities and test work commenced.

The optimisation phase will be conducted in collaboration with the Company’s strategic partner, Rio Tinto, following their investment into the Company in July 2023.

KEY MANAGEMENT APPOINTMENTS TO DRIVE PROJECT OPTIMISATION

Effective from 20 October 2023, the Company appointed Mr Frank Eagar as Managing Director and Chief Executive Officer (CEO). Dr Julian Stephens, transitioned to a Non-Executive Director of Sovereign, remaining as a consultant assisting and supporting the incoming technical and management team.

Mr Eagar has over 20 years’ experience in the financing, permitting, development and operation of mining projects with a strong focus in southern Africa.

Mr Eagar is a Chartered Accountant who has gained extensive corporate, commercial and technical experience in the mining sector throughout his career. Mr Eagar has previously held a number of senior executive positions in the resources sector, more recently with African mining focused private equity firm AMED Funds, which included acting as Chief Financial Officer (CFO) for AMED’s controlled company, Central Copper Resources PLC (Central Copper).

Prior to Central Copper, Mr Eagar was the CEO (and prior to that the CFO) of Baobab Steel Limited (Baobab) another AMED controlled company, where he managed the completion of a DFS and a joint venture with the World Bank’s IFC to procure strategic investors and raise project finance for Baobab’s US$1 Billion, fully permitted, integrated 500ktpa Steel and Vanadium Project in Mozambique.

Mr Eagar joined Sovereign in December 2022 as General Manager in Malawi, where he has already expanded the team with a focus on Malawian nationals, developed strong relationships with Government and developed a clear understanding of the Kasiya Project and its development landscape.

Sovereign has also made several key technical appointments as the Company transitions into project optimisation and development of the Kasiya Project and is poised to become a significant supplier of natural rutile and graphite. These key appointments bring a strong track record of successful large-scale project development and operations management, as well as extensive experience in southern Africa.

These management changes come at an important time for the Company as it transitions from the PFS into the next study phases including optimisation, community and stakeholder engagements and project permitting.

LITHIUM-ION BATTERY GRAPHITE PROGRAM UPSCALED

During the quarter, Sovereign completed the extraction of a 60 tonne bulk sample of ore from Kasiya to produce an initial 600kg of natural flake graphite. This sampling program is part of the Company’s graphite qualification, product development and downstream battery anode test work phase. A major component to graphite sales agreements is customer qualification with graphite produced from this program to be shared with prospective end-users in addition to being used for upscaled downstream test work.

The mechanised drill program used a bespoke 300mm diameter spiral auger to extract the material from across Kasiya’s planned future pits with sampling to a maximum 20m depth.

A group of men wearing hard hats and blue overalls Description automatically generated

Figures 1 & 2: Bulk sample mechanised spiral drilling and sampling at Kasiya in November 2023

The bulk sample is undergoing pre-processing at the Company’s laboratory in Lilongwe, Malawi. The sample is being processed utilising the newly installed Kwatani 30-inch single and double-deck vibrating separators for sizing and de-sliming (Figure 3). The sand fraction is then processed over the new Holman Wilfley 2000 wet shaking table to produce a graphite pre-concentrate and a separate heavy mineral concentrate (HMC) containing the rutile (Figure 4). The graphite pre-concentrate is expected to grade 4-5% Ct.

A group of people in blue uniforms Description automatically generated A circular object with a round surface Description automatically generated with medium confidence

Figure 3. Installation of the new Kwatani 30-inch single-deck and double-deck vibrating separators for sizing and de-sliming bulk samples at the Company’s Malawi laboratory and metallurgical facility

Figure 4: Holman-Wilfley 2000 Series shaking table operating at Sovereign’s Lilongwe laboratory in Malawi.

 

Final processing will then be completed at international commercial laboratories. The graphite pre-concentrate will undergo traditional flotation and polishing processes to target >96% Ct product suitable as a lithium-ion battery anode feedstock.

Downstream Test work

The initial ~600kg of flake graphite product produced will be used for downstream test-work and product qualification targeting the battery anode sector. Previously reported initial characterisation test work on Kasiya’s graphite has indicated excellent suitability for use in lithium-ion batteries with very high purity and very high crystallinity being the key features (refer to ASX Announcement dated 8 June 2023).

Downstream test-work and qualification on the flake graphite product will involve the following stages to be completed at recognised international battery sector laboratories;

–    Purification to >99.95% Ct

–    Micronisation

–    Spheronisation

–    Carbon coating

–    Anode production

–    Electrochemical characterisation

Raw flake graphite products plus final CSPG (coated spheronised graphite product) will be provided to potential offtakers for assessment and pre-qualification. Through Sovereign’s long-term experience in graphite, the Company has built a strong understanding of the graphite market and developed well-established relationships with offtakers and customers.

A close-up of a microscope Description automatically generated

Figures 5 & 6: SEM micrograph of Kasiya graphite flotation concentrate from previous test work

Industry Developments

The upscaled graphite program comes as China implements curbs on exports of natural graphite under “national security” concerns. Effective 1 December 2023, China requires export permits for some graphite products including natural graphite and natural graphite products critical to EV production. China is the world’s top graphite producer and exporter and also refines more than 90% of the world’s graphite into the material that is used in virtually all EV battery anodes.

China’s commerce ministry said the move on graphite was “conducive to ensuring the security and stability of the global supply chain and industrial chain, and conducive to better safeguarding national security and interests”.

Since the restrictions, total exports of flake graphite dropped by 94% on a monthly basis in December, while exports of spherical graphite slumped by 92% (China customs data). Exports to major destinations also slowed notably in December. Flake graphite volumes to Japan fell from 6,138 tonnes in November to zero in December, while exports to the United States fell from 511 tonnes in November to zero in December (Fastmarkets). It was reported by Japan News, that, Japan, which depends on China for 90% of its graphite imports, likely needs to urgently diversify its procurement sources.

Kasiya is one of the world’s largest natural flake graphite deposits and has the potential to become a key source of long term strategic supply to the US, UK, EU, Japan and South Korea.

HIGHLY-EXPERIENCED SOCIAL SPECIALIST APPOINTED

Subsequent to the quarter, Sovereign appointed SocialEssence (Pty) Ltd (SocialEssence), an Africa-based specialist social performance consultancy, who will assist in the continued development of the Company’s stakeholder relations, social performance objectives and its Community and Social Responsibility (CSR) framework. 

Sovereign has engaged SocialEssence to design and execute social performance activities during the DFS phase. Founder, Mr Garth Lappeman, has over 16 years of on the ground social performance planning and implementation experience in accordance with IFC Performance Standards and World Bank Environmental, Health and Safety Guidelines. SocialEssence has been active in a number of countries working on projects in Angola, Botswana, Democratic Republic of Congo, Kenya, Kyrgyzstan, Liberia, Malawi, Mozambique, Namibia, Panama, Uganda, Sierra Leone, South Africa, Northern Sudan, Tanzania, Uzbekistan, and Zambia.

Most notably, in Zambia, SocialEssence’s Director was involved from early exploration through to steady state production of First Quantum Minerals Ltd’s (First Quantum Minerals) Trident operations, which includes the Sentinel Copper Mine which is of similar scale to Sovereign’s Kasiya project. Mr Lappeman was responsible for implementing and managing social and community initiatives for First Quantum Minerals as it established its large-scale commercial operations

SocialEssence will:

·      prepare Kasiya’s Social Impact Assessment and Management Plan for the DFS and permitting;

·      design, implement and manage social performance activities including stakeholder engagement, development of key relationships;

·      prove the feasibility of critical social performance measures (including early local content, and piloting of livelihood restoration programs, and piloting of rehabilitation activities to restore land for agricultural use); and

·      align with the Company’s ESG Framework.

NEXT STEPS

Sovereign is currently conducting an optimisation study prior to advancing to the DFS. The Company aims to become the world’s largest, lowest cost and lowest-emissions producer of two critical minerals – titanium (rutile) and graphite. The Company plans to update the market on the progress of the following in coming months:

·     Further appointments to owner’s team to build on the Company’s execution capabilities;

·     Results of graphite product development, downstream and qualification test work;

·     Regional hand-auger drilling on mineralisation extensions;

·     Progress on the optimisation work streams alongside Rio Tinto via the project Technical Committee; and

·     Community and social engagements across Malawi and the Kasiya area.

Competent Person Statement

The information in this announcement that relates to the Mineral Resource Estimate is extracted from an announcement dated 5 April 2023 entitled ‘Kasiya Indicated Resource Increased by over 80%’ which is available to view at www.sovereignmetals.com.au and is based on, and fairly represents information compiled by Mr Richard Stockwell, a Competent Person, who is a fellow of the Australian Institute of Geoscientists (AIG). Mr Stockwell is a principal of Placer Consulting Pty Ltd, an independent consulting company. Sovereign confirms that a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this announcement have not been materially changed from the original announcement.

The information in this announcement that relates to Production Targets, Ore Reserves, Processing, Infrastructure and Capital Operating Costs, Metallurgy (rutile and graphite) is extracted from an announcement dated 28 September 2023 entitled ‘Kasiya Pre-Feasibility Study Results’ which is available to view at www.sovereignmetals.com.au. Sovereign confirms that: a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions and technical parameters underpinning the Production Target, and related forecast financial information derived from the Production Target included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this presentation have not been materially modified from the Announcement.

Ore Reserve for the Kasiya Deposit

 

Classification

Tonnes
(Mt)

Rutile Grade
(%)

Contained Rutile
(Mt)

Graphite Grade (TGC) (%)

Contained Graphite
(Mt)

RutEq. Grade*
(%)

Proved

Probable

 538

1.03%

5.5

1.66%

8.9

2.00%

Total

 538

1.03%

5.5

1.66%

8.9

2.00%

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

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.

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.

APPENDIX 1: RELATED PARTY PAYMENTS

During the quarter ended 31 December 2023, the Company made payments of $461,000 to related parties and their associates. These payments relate to existing remuneration arrangements (executive salaries, director fees, superannuation and bonuses ($273,000)), business development services ($35,000) and provision of serviced office facilities, company secretarial services and administration services ($153,000).

APPENDIX 2: SUMMARY OF MINING TENEMENTS

As at 31 December 2023, the Company had an interest in the following tenements:

Licence

Holding Entity

Interest

Type

Licence Renewal Date

Expiry Term Date1

Licence Area (km2)

Status

EL0609

MML

100%

Exploration

25/09/2024

25/09/2028

440.5

Granted

EL0582

SSL

100%

Exploration

15/09/20232

15/09/2027

285.0

Granted

EL0492

SSL

100%

Exploration

29/01/2025

29/01/2025

935.4

Granted

EL0528

SSL

100%

Exploration

27/11/2023

27/11/2025

16.2

Granted

EL0545

SSL

100%

Exploration

12/05/2024

12/05/2026

53.2

Granted

EL0561

SSL

100%

Exploration

15/09/20232

15/09/2027

124.0

Granted

EL0657

SSL

100%

Exploration

3/10/2025

3/10/2029

2.3

Granted

Notes:

SSL: Sovereign Services Limited, MML &McCourt Mining Limited

1  An exploration licence (EL) covering a preliminary period in accordance with the Malawi Mines and Minerals Act (No 8. Of 2019) (Mines Act) is granted for a period not exceeding three (3) years. Thereafter two successive periods of renewal may be granted, but each must not exceed two (2) years. This means that an EL has a potential life span of seven (7) years. ELs that have come to the end of their term can be converted by the EL holder into a retention licence (RL) for a term of up to 5 years subject to meeting certain criteria.

2  The Company submitted an extension application for EL0582 and EL0561 prior to the renewal date in accordance with the Mines Act .

APPENDIX 3: MINING EXPLORATION EXPENDITURES

During the quarter, the Company made the following payments in relation to mining exploration activities:

Activity

A$’000

 Drilling

(291)

 Assaying and Metallurgical Test-work

(162)

 Studies, Reserve/Resource Estimation, Programs

(986)

 Malawi Operations – Site Office, Personnel, Field Supplies, Equipment, Vehicles and Travel

(984)

 Total as reported in Appendix 5B

(2,423)

There were no mining or production activities and expenses incurred during the quarter ended 31 December 2023.

 

Appendix 5B

Mining exploration entity or oil and gas exploration entity
quarterly cash flow report

Name of entity

Sovereign Metals Limited

ABN

Quarter ended (“current quarter”)

71 120 833 427

31 December 2023

 

Consolidated statement of cash flows

Current quarter
$A’000

Year to date
(6 months)
$A’000

1.

Cash flows from operating activities

1.1

Receipts from customers

1.2

Payments for

(2,423)

(4,296)

(a)   exploration & evaluation

(b)   development

(c)   production

(d)   staff costs

(780)

(1,107)

(e)   administration and corporate costs

(414)

(928)

1.3

Dividends received (see note 3)

1.4

Interest received

673

745

1.5

Interest and other costs of finance paid

1.6

Income taxes paid

1.7

Government grants and tax incentives

1.8.1

Other – Demerger Costs

(41)

(67)

1.8

Other – Business Development

(325)

(595)

1.9

Net cash from / (used in) operating activities

(3,310)

(6,248)

2.

Cash flows from investing activities

2.1

Payments to acquire or for:

(a)   entities

(b)   tenements

(c)   property, plant and equipment

(243)

(243)

(d)   exploration & evaluation

(e)   investments

(f)    other non-current assets

2.2

Proceeds from the disposal of:

(a)   entities

(b)   tenements

(c)   property, plant and equipment

(d)   investments

(e)   other non-current assets

2.3

Cash flows from loans to other entities

34

2.4

Dividends received (see note 3)

2.5

Other (provide details if material)

2.6

Net cash from / (used in) investing activities

(243)

(209)

3.

Cash flows from financing activities

40,598

3.1

Proceeds from issues of equity securities (excluding convertible debt securities)

3.2

Proceeds from issue of convertible debt securities

3.3

Proceeds from exercise of options

3.4

Transaction costs related to issues of equity securities or convertible debt securities

(13)

(252)

3.5

Proceeds from borrowings

3.6

Repayment of borrowings

3.7

Transaction costs related to loans and borrowings

3.8

Dividends paid

3.9

Other (provide details if material)

3.10

Net cash from / (used in) financing activities

(13)

40,346

4.

Net increase / (decrease) in cash and cash equivalents for the period

4.1

Cash and cash equivalents at beginning of period

43,021

5,564

4.2

Net cash from / (used in) operating activities (item 1.9 above)

(3,310)

(6,248)

4.3

Net cash from / (used in) investing activities (item 2.6 above)

(243)

(209)

4.4

Net cash from / (used in) financing activities (item 3.10 above)

(13)

40,346

4.5

Effect of movement in exchange rates on cash held

(18)

(16)

4.6

Cash and cash equivalents at end of period

39,437

39,437

 

5.

Reconciliation of cash and cash equivalents
at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts

Current quarter
$A’000

Previous quarter
$A’000

5.1

Bank balances

129

189

5.2

Call deposits

39,308

42,832

5.3

Bank overdrafts

5.4

Other (provide details)

5.5

Cash and cash equivalents at end of quarter (should equal item 4.6 above)

39,437

43,021

 

6.

Payments to related parties of the entity and their associates

Current quarter
$A’000

6.1

Aggregate amount of payments to related parties and their associates included in item 1

461

6.2

Aggregate amount of payments to related parties and their associates included in item 2

Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.

 

7.

Financing facilities
Note: the term “facility’ includes all forms of financing arrangements available to the entity.

Add notes as necessary for an understanding of the sources of finance available to the entity.

Total facility amount at quarter end
$A’000

Amount drawn at quarter end
$A’000

7.1

Loan facilities

7.2

Credit standby arrangements

7.3

Other (please specify)

7.4

Total financing facilities

 

7.5

Unused financing facilities available at quarter end

7.6

Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.

 

 

 

 

8.

Estimated cash available for future operating activities

$A’000

8.1

Net cash from / (used in) operating activities (item 1.9)

(3,310)

8.2

(Payments for exploration & evaluation classified as investing activities) (item 2.1(d))

8.3

Total relevant outgoings (item 8.1 + item 8.2)

(3,310)

8.4

Cash and cash equivalents at quarter end (item 4.6)

39,437

8.5

Unused finance facilities available at quarter end (item 7.5)

8.6

Total available funding (item 8.4 + item 8.5)

39,437

8.7

Estimated quarters of funding available (item 8.6 divided by item 8.3)

12

Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7.

8.8

If item 8.7 is less than 2 quarters, please provide answers to the following questions:

8.8.1     Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?

Answer: Not applicable

8.8.2     Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?

Answer: Not applicable

8.8.3     Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

Answer: Not applicable

Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.

 

Compliance statement

1        This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

2        This statement gives a true and fair view of the matters disclosed.

 

 

Date:                31 January 2024

 

Authorised by:  Company Secretary

(Name of body or officer authorising release – see note 4)

 

Notes

1.          This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2.          If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3.          Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4.          If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [name of board committee – eg Audit and Risk Committee]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.

5.          If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

 

 

#SVML Sovereign Metals – HIGHLY EXPERIENCED SOCIAL SPECIALIST FIRM APPOINTED TO ASSIST IN ADVANCING KASIYA

·     African-based social specialist consultancy, SocialEssence has been appointed to lead social and community development programs for Sovereign in Malawi

·    SocialEssence joins Sovereign’s Owners Team and will design, implement, and manage several social and community initiatives which will feed into the DFS and permitting requirements

·    SocialEssence will build upon existing relationships cultivated over the last decade, between Sovereign and highly supportive local communities at Kasiya

·   SocialEssence has a strong and successful track record of implementing social responsibility programs across southern Africa, including at First Quantum Minerals’ Zambian operations Trident and Kansanshi, where over 7,000 farmers participate in a conservation farming program, which was initiated and led by SocialEssence’s current Livelihood Specialist.

·   The appointment aligns with the Company’s objective to develop a socially responsible and sustainable operation which will provide significant long term and sustainable benefits to local communities.

 

Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) is pleased to announce the appointment of SocialEssence (Pty) Ltd (SocialEssence), a specialist social performance consultancy, who will assist in the continued development of the Company’s stakeholder relations, social performance objectives and its Community and Social Responsibility (CSR) framework.  

Sovereign has engaged SocialEssence to design and execute social performance activities during the Definitive Feasibility Study (DFS) phase. Founder, Mr Garth Lappeman, has over 16 years of on the ground social performance planning and implementation experience in accordance with IFC Performance Standards and World Bank Environmental, Health and Safety Guidelines. SocialEssence has been active in a number of countries working on projects in Angola, Botswana, Democratic Republic of Congo, Kenya, Kyrgyzstan, Liberia, Malawi, Mozambique, Namibia, Panama, Uganda, Sierra Leone, South Africa, Northern Sudan, Tanzania, Uzbekistan, and Zambia.

Most notably, in Zambia, SocialEssence’s Director was involved from early exploration through to steady state production of First Quantum Minerals Ltd’s (First Quantum Minerals) Trident operations, which includes the Sentinel Copper Mine which is of similar scale to Sovereign’s Kasiya project. Mr Lappeman was responsible for implementing and managing social and community initiatives for First Quantum Minerals as it established its large-scale commercial operations.

Managing Director and CEO, Mr Frank Eagar commented: “The SocialEssence exemplary track record and implementation experience aligns with our objectives of establishing long lasting and sustainable community relationships well ahead of project implementation. The conservation farming program implemented by SocialEssence’s leaders in Zambia has stood the test of time and has over 7,000 participating farmers. We will continue to build out our owner’s team and capabilities while we work through Kasiya’s optimisation with Rio Tinto.”

SocialEssence will:

·      prepare Kasiya’s Social Impact Assessment and Management Plan for the DFS and permitting;

·  design, implement and manage social performance activities including stakeholder engagement, development of key relationships;

·     prove the feasibility of critical social performance measures (including early local content, and piloting of livelihood restoration programs, and piloting of rehabilitation activities to restore land for agricultural use); and

·      align with the Company’s ESG Framework.

 

ENQUIRIES

Frank Eagar (South Africa/Malawi)
Managing Director

+61(8) 9322 6322

Sam Cordin (Perth)
+61(8) 9322 6322

Sapan Ghai (London)
+44 207 478 3900

 

StockBox Research Talks – Alan Green and Mark Fairbairn Stock Picks for 2024

StockBox Research Talks – Alan Green and Mark Fairbairn Stock Picks for 2024 including #ARK, #AYM, #BRES, #ECR, #FCM, #KDNC, #MARU, #NEO, #PALM, #POLB, #PREM, #ONDO #REE, #SVML

Stockbox interview with Sovereign Metals #SVML CCO Sapan Ghai

Stockbox Media speaks to Sovereign Metals #SVML CCO Sapan Ghai in regard to the flagship Kasiya Rutile-Graphite project and 15% investment by Rio Tinto.

  • Sovereign Metals has discovered the largest rutile (titanium dioxide) deposit ever found globally. This discovery is significant as it is the first rutile-dominant deposit found in the last 70 years, with only one other rutile producer currently in operation.
  • Rio Tinto has acquired a 15% stake in Sovereign Metals and has the option to increase its stake to 19.99%. This partnership brings expertise, value chains, and market access to Sovereign Metals, especially in the titanium feedstock market, where Rio Tinto is a significant player.
  • The Preliminary Feasibility Study (PFS) indicates a robust project with an estimated NPV (Net Present Value) of $1.6 billion and a life of mine of 25 years. The project also has the potential to generate over $400 million in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).

#SVML Sovereign Metals – Company Presentation

Sovereign Metals Limited (Sovereign or the Company) (ASX:SVM, AIM:SVML) is pleased to advise that an updated Company presentation is available to download from the Company’s website at:https://www.investi.com.au/api/announcements/svm/22095baf-388.pdf.

ENQUIRIES

Frank Eagar (South Africa/Malawi)
Managing Director

+61(8) 9322 6322

Sam Cordin (Perth)
+61(8) 9322 6322

Sapan Ghai (London)
+44 207 478 3900

 

Nominated Adviser on AIM and Joint Broker

 

SP Angel Corporate Finance LLP

+44 20 3470 0470

Ewan Leggat

Charlie Bouverat

Harry Davies-Ball

 

 

Joint Brokers

 

Berenberg

+44 20 3207 7800

Matthew Armitt

 

Jennifer Lee

 

 

 

Tavistock PR

+44 20 7920 3150

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