Sovereign Metals Drills for Growth at Kasiya, World’s Largest Rutile Deposit

Sovereign Metals Limited (ASX: SVM, AIM: SVML) is accelerating exploration at its flagship Kasiya Rutile-Graphite Project in Malawi, attracting the attention of mining giant Rio Tinto.

In July 2023, Rio Tinto invested A$40 million for a 15% stake, recognizing Kasiya’s potential.

Kasiya boasts the world’s largest natural rutile deposit and the second-largest flake graphite deposit. The massive size of the project offers significant room for future growth.

Sovereign Targets Resource Expansion

Sovereign launched a new 400-metre spaced drilling program to define the northern limits of the current resource, estimated at 1.8 billion tonnes grading 1.0% rutile and 1.4% graphite.

This vast resource features broad zones of high-grade rutile and graphite spread across an impressive 201 square kilometers.

The unique aspect? The mineralization is near-surface, blanket-style, hosted in soft, easily processed saprolite, not hard rock.

Sovereign’s Ambitious Goal: Top Rutile and Graphite Producer

Sovereign has set a bold goal: becoming the world’s leading producer of both rutile and graphite (excluding China). This ambition stems from the growing demand for titanium, a critical mineral used in various industries.

Titanium is primarily sourced from two minerals: ilmenite and rutile. Rutile, with over 95% titanium dioxide, is the preferred choice due to its high purity.

However, rutile is much rarer than ilmenite (30-60% titanium dioxide), presenting a significant supply challenge. Sovereign’s massive, high-grade rutile deposit positions them perfectly to address this growing gap.

Strategic Drilling Program

The current drilling program utilizes over 70 hand-auger holes targeting areas identified in previous regional drilling. These zones lie up to 20 kilometres north of the current resource boundary.

Positive drilling results could significantly expand this world-class resource. Recent exploration success further bolsters this potential.

Last month, hand-auger drilling south of the resource identified significant extensions of mineralisation over 8 kilometres across multiple zones, ranging from 400 metres to 2 kilometres wide.

While limited by drilling depth, these zones are expected to continue at depth. Additionally, all identified zones remain open laterally, suggesting potential for further expansion in both north and south directions.

Promising Pre-Feasibility Study Outcomes

While the full extent of Kasiya is yet to be determined, the Pre-Feasibility Study (PFS) in 2023 revealed impressive economic potential.

Even with an initial mine life of 25 years targeting only 30% of the known resource.

PFS highlights:

  • Post-tax Net Present Value (NPV) of US$1.6 billion
  • Internal Rate of Return (IRR) of 28%
  • Average annual Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of US$415 million
  • High EBITDA margin of 64%
  • Capital Expenditure (Capex) to the first production of US$597 million
  • Attractive NPV to Capex ratio of 2.7x

Sovereign Metals is actively unlocking the potential of Kasiya with a low-CO2 and sustainable operation, a game-changer in the rutile and graphite markets.

Their strategic exploration and impressive pre-feasibility study results position them for significant future growth.

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