NEWS RELEASE
I 22 MAY
2024
KASIYA OPTIMISATION ADVANCES TO
PILOT PHASE
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Sovereign to immediately commence a pilot mining and land
rehabilitation program ("Pilot Phase") at Kasiya as part of the
ongoing Optimisation Study
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Empirical data generated from the Pilot Phase will assist
towards determining optimal excavation, material handling,
processing, backfilling and rehabilitation
approaches
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Sovereign will excavate approximately 150,000 bench cubic
metres of ore from a test pit over a three-month period using a
combination of dry and hydraulic mining
techniques
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Excavated material will be processed on-site and at
Sovereign's laboratory in Malawi and will also provide additional
bulk samples for graphite product qualification
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The
test pit will be backfilled, and multiple rehabilitation strategies
will be implemented to demonstrate successful restoration of
agricultural land
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Demonstrates strong support for mining projects in Malawi with
all required approvals and community permissions for the Pilot
Phase obtained within three months
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Figure 1: Natural
concentration of heavy minerals at surface at Kasiya
(Source: C12
Consultants)
Managing Director Frank Eagar commented:
"Advancing to a
Pilot Phase is an important milestone for Kasiya. This covers the
full spectrum of engineering and design, logistics, materials
handling, water and environmental approvals, stakeholder
engagement, livelihood restoration, tailings management and land
rehabilitation. The successful permitting is a testament to the
strong owner's team we have assembled. We are progressing Kasiya
into a totally new phase of development. The scale and results from
this phase will significantly enhance our knowledge base from the
previous laboratory-based studies. I want to thank the Malawi
Government for an efficient approvals process, demonstrating just
how important Kasiya is to all stakeholders."
Classification 2.2: This
announcement includes Inside Information
Sovereign Metals Limited (ASX:SVM;
AIM:SVML) (the Company or
Sovereign) is pleased to
announce that the Company has initiated a Pilot Mining and Land
Rehabilitation Program at its Kasiya Rutile-Graphite Project
(Kasiya or Project) in Malawi.
The results will allow Sovereign to
determine optimal excavation, backfill and land rehabilitation
approaches. The Pilot Phase will be a demonstration to local
communities of the successful rehabilitation of land for
agricultural use post-mining. Results will also provide critical
information for the upcoming Definitive Feasibility Study
(DFS) and once commenced,
it will shorten the time to its completion.
The objectives of the Pilot Phase
include:
· Optimisation
of mining methods by construction of a pilot-scale open pit close
to the maximum depth of the current reserves at 20m;
· Scale-up of
existing in-country processing capability by installation of
commercial scale spirals to produce additional bulk samples for
graphite product qualification;
· Optimising the tailings management and storage designs;
and
· Optimising land rehabilitation, soil restoration and selection
of revegetation species.
The commencement of the Pilot Phase
follows the receipt within three months of all relevant approvals
and permissions from the Malawi Environment Protection Authority
(MEPA), National Water
Resources Authority (NWRA),
the Ministry of Mines, and the local community.
The Pilot Phase will be undertaken
on a 9.9-hectare site and will include the following
activities:
1. Test Pit: A test pit of 120m by 110m
will be excavated to a depth of 20m, allowing optimisation of
hydraulic and dry mining excavation methods.
2. Stockpiles: The excavated material will
be temporarily stored in 4 stockpiles, namely all dry mining
material, wet slimes (in a pond) and two sizes of sand fractions
from the hydraulic mining.
3. Backfilling and Grading: The material
will be placed back into the pit, and all areas will be
graded.
4. Rehabilitation Demonstration: Sovereign
will construct eight small rehabilitation demonstration pits
covering a combined area of 100m by 130m. These will be used for
water storage, excavated material storage, and demonstration of
multiple rehabilitation approaches.
5. Temporary Laydown Areas: Four areas
will be used as temporary laydown areas, offices, and associated
infrastructure.
6. Communication: The Pilot Phase will be
an educational opportunity for Project stakeholders. Sovereign will
undertake a series of stakeholder visits and consultations for this
purpose.
Kasiya is the world's largest
natural rutile deposit and the second-largest flake graphite
deposit. Sovereign aims to develop a low-CO2 and
sustainable operation to supply highly sought-after natural rutile
and graphite to global markets.
Results of the PFS, released in late
2023, demonstrated Kasiya's potential to become the world's largest
rutile producer at 222kt per annum and one of the world's largest
natural graphite producers (ex-China) at 244kt per
annum.
The PFS delivered compelling
economics with a post-tax NPV8 of US$1.6 Billion and a
post-tax IRR of 28%. This long-life, multi-generational operation
generates over US$16 Billion of revenue based on an initial 25-year
life-of-mine and delivers an average annual EBITDA of US$415
Million per annum.
Pilot Phase Program Design
Activities have been designed to
establish a 9.9-hectare site over the current Ore Reserve defined
in the Kasiya PFS, covering a mineralised zone with soil conditions
deemed representative of the overall Mineral Resource Estimate
(MRE). Over approximately
three months, Sovereign will excavate several test pits and collect
geological and geotechnical samples. The main pit will be
backfilled with dry material, while material from hydraulic mining
will be used to fill the remaining pits as part of the
rehabilitation phase.
Land rehabilitation will form an
integral component of the DFS. Sovereign's objective is to restore
land after mining to conditions that achieve the same or better
agricultural yields than existing land uses and crop yields. For
this reason, the Company will undertake field-based demonstrations
of rehabilitation showcasing drying times, soil recoveries, soil
nutrients, growth variants, and including different soil inputs and
revegetation methods.
Site Construction
Prior to the establishment of site
infrastructure, eight boreholes have been permitted and drilled
using a locally appointed drilling contractor. These boreholes will
supply water to the site, which will be stored in a temporary water
storage pond.
A perimeter fence will be erected
around the site to maintain the necessary health and safety
standards. Existing roads will be used for access to the site and,
if required, improved through grading.
Temporary buildings such as offices
and stores will be brought to the site on flatbed lorries and
erected. To support pilot mining, two 1MW mobile diesel-powered
electricity generators will be installed to provide the electricity
required for high-pressure water monitors.
Pilot Mining
The main pit will be excavated using
conventional load and haul to 20m depth to develop a sump to test
hydraulic mining to the full depth of the current Ore Reserves. The
excavated material will be temporarily stored in
stockpiles.
On-Site Processing Facility
Material mined from the test pit
will be processed on-site and at the Company's laboratory facility
in Lilongwe. As previously announced (Please refer to announcement
dated 1 May 2024 entitled "Sovereign to Increase Bulk Sample
Preparation Capacity"), as part of the Pilot Phase, a
commercial-scale spiral plant will be installed at site in
Malawi.
Rutile and graphite concentrate
samples generated from the Pilot Phase will be shared with
potential off-takers and end-users, and used for further testwork
as part of the Company's graphite commercialisation
strategy.
Rehabilitation
Phase
This phase will consist of
establishing a strong soils baseline, backfilling of the test pit
with different soil compositions, rehabilitation tests,
revegetation with plants, and the improvement of soil conditions
post-mining.
Regular monitoring and evaluation of
the rehabilitation activities will be undertaken to assess the
progress of vegetation growth and soil stabilisation.
Following the conclusion of the rehabilitation,
the proposed project site will be returned to farmland.
Figure 2: Site
layout
Permitting
Permissions for the Pilot Phase were
received following the successful submission of an Environmental
and Social Management Plan to MEPA. Sovereign is committed to the
responsible development of Kasiya. The Pilot Phase will be
undertaken in accordance with Malawian Law and IFC Performance
Standards, which will include protecting local communities and the
natural environment.
ENQUIRIES
Frank Eagar (South
Africa/Malawi)
Managing Director
+61(8) 9322 6322
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Sam Cordin (Perth)
+61(8) 9322 6322
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Sapan Ghai (London)
+44 207 478 3900
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Nominated Adviser on AIM and
Joint Broker
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SP Angel Corporate Finance
LLP
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+44 20 3470 0470
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Ewan Leggat
Charlie Bouverat
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Joint
Brokers
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Stifel
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+44 20 7710 7600
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Varun Talwar
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Ashton Clanfield
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Berenberg
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+44 20 3207 7800
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Matthew Armitt
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Jennifer Lee
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Buchanan
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+ 44 20 7466 5000
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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.
The information in this announcement that relates to the
Exploration Results is extracted from an announcement dated 1
February 2024 entitled 'Extensions to Rutile & Graphite
Mineralisation at Kasiya' 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 included in the
original announcement continue to apply and have not materially
changed; and c) the form and context in which the relevant
Competent Persons' findings are presented in this report have not
been materially changed from the announcement.
Ore
Reserve for the Kasiya Deposit
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Classification
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Tonnes
(Mt)
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Rutile Grade
(%)
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Contained Rutile
(Mt)
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Graphite Grade (TGC)
(%)
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Contained Graphite
(Mt)
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RutEq. Grade*
(%)
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Proved
|
-
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-
|
-
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-
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-
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-
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Probable
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538
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1.03%
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5.5
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1.66%
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8.9
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2.00%
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Total
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538
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1.03%
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5.5
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1.66%
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8.9
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2.00%
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|
|
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|
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* RutEq. Formula: Rutile Grade x
Recovery (100%) x Rutile Price (US$1,484/t) + Graphite Grade x
Recovery (67.5%) x Graphite Price (US$1,290/t) / Rutile Price
(US$1,484/t). All assumptions are from the Kasiya PFS ** Any minor
summation inconsistencies are due to rounding
Kasiya Total Indicated +
Inferred Mineral Resource Estimate at 0.7% rutile cut-off
grade
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Classification
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Resource
(Mt)
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Rutile Grade
(%)
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Contained Rutile
(Mt)
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Graphite Grade (TGC)
(%)
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Contained Graphite
(Mt)
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Indicated
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1,200
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1.0%
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12.2
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1.5%
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18.0
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Inferred
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609
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0.9%
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5.7
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1.1%
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6.5
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Total
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1,809
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1.0%
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17.9
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1.4%
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24.4
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Forward Looking Statement
This release may include forward-looking statements, which may
be identified by words such as "expects", "anticipates",
"believes", "projects", "plans", and similar expressions. These
forward-looking statements are based on Sovereign's expectations
and beliefs concerning future events. Forward looking statements
are necessarily subject to risks, uncertainties and other factors,
many of which are outside the control of Sovereign, which could
cause actual results to differ materially from such statements.
There can be no assurance that forward-looking statements will
prove to be correct. Sovereign makes no undertaking to subsequently
update or revise the forward-looking statements made in this
release, to reflect the circumstances or events after the date of
that release.
The information contained within this announcement is deemed
by the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK domestic law by virtue of the European Union (Withdrawal) Act
2018 ('MAR'). Upon the publication of this announcement via
Regulatory Information Service ('RIS'), this inside information is
now considered to be in the public domain.