Sovereign Metals - Malawi Rail Upgrades Boost Kasiya Project's Path to Production

• Upgrade of the 399km Nkaya-Mchinji rail section across Sovereign's Kasiya Rutile-Graphite Project is underway, improving access to export routes
• Malawi government initiative as part of its "Rail Strategy and Growth Plan" to facilitate safe, efficient, sustainable rail transport and promote socio-economic development
• Upgrades by Central and Eastern African Railway Company to be completed by end of 2024, increasing load capacity from 15 to 18 tonnes per axle
• Upgraded rail connects to Nacala Logistics Corridor, the preferred export route to the deep-water Port of Nacala, with the Sena Rail Line to Beira Port as a secondary route
• Infrastructure upgrades affirm Kasiya's logistics advantages and reflect Malawi's commitment to mining sector development and increasing exports

About Sovereign Metals

Sovereign Metals Limited (ASX:SVM; AIM:SVML) is an emerging producer of critical minerals, focused on developing its flagship Kasiya Rutile-Graphite Project in central Malawi. The company aims to become a major supplier of natural rutile and graphite to global markets. Sovereign's Kasiya project hosts a large, high-grade resource with low costs, supported by excellent regional infrastructure including existing rail and power networks. The Kasiya project is rapidly advancing toward development, with Sovereign targeting first production in 2025.

Kasiya Infrastructure Advantages

The Kasiya Rutile-Graphite Project benefits from an exceptional infrastructure endowment in the Lilongwe District of central Malawi. The project is located along the existing Nkaya-Mchinji rail line that connects to two key transport corridors - the Nacala Logistics Corridor and the Sena Rail Line. These provide Sovereign with efficient rail access to the Indian Ocean ports of Nacala and Beira in Mozambique for export of its rutile and graphite products to global markets.

The rail line is currently undergoing significant upgrades as part of the Malawi government's Rail Strategy and Growth Plan, aimed at facilitating safe, efficient and sustainable rail transport to drive socio-economic development in the country. The rehabilitation works are being carried out by Central and Eastern African Railway Company (CEAR) and are expected to be completed by the end of 2024.

Rail Upgrade Details

The rail refurbishment initiative covers the 399km section from Nkaya junction to Mchinji at the Malawi-Zambia border. Importantly for Sovereign, the portion connecting Kanengo junction in Lilongwe District, where Kasiya is situated, to the Nacala Logistics Corridor at Nkaya is nearly complete.

Upgrades include refurbishing rail bridges and reballasting of the track to increase the load-bearing capacity from the current 15 tonnes per axle to 18 tonnes. This will improve the efficiency and capacity of the rail line running across Sovereign's mining tenements.To fully capitalize on this rail access, Sovereign plans to construct a 6km rail spur connecting the Kasiya processing plant directly to the main line. This will provide significant efficiencies for inbound and outbound logistics compared to road transport alternatives.

Nacala Logistics Corridor

The Nacala Logistics Corridor is Sovereign's preferred route for exporting Kasiya's rutile and graphite products. The rail corridor connects to the deep-water Port of Nacala on the Indian Ocean, providing an established, operation-ready export pathway for the company.

Utilizing this existing infrastructure is expected to deliver significant capital and operating cost savings for the Kasiya project. The completion of the current rail upgrades will further enhance the capacity, efficiency and reliability of this key logistics route.

Beira Corridor

While Nacala is the primary export route, Sovereign also has a second option in the Sena Rail Line which connects to the Port of Beira in Mozambique (the Beira Corridor). The Beira Corridor is also undergoing extensive upgrade works following the approval of the Beira Development Corridor Agreement last year.

This regional infrastructure initiative aims to connect the Democratic Republic of Congo, Zambia, Zimbabwe, and Malawi to the Port of Beira through improved integrated rail and road networks. The objective is to eliminate bottlenecks and facilitate efficient trade flows. The African Development Bank is a major financier of the Beira Corridor project.

As Mozambique's second largest port, Beira is an important trade gateway and a significant economic engine for the region, handling a wide variety of cargo. The ongoing Beira Corridor upgrades will further expand the port's capacity and efficiency, benefiting the wider regional economy.

Government Support

The government's Ministry of Transport and Public Works is driving the rail upgrades in Malawi as part of its wider Rail Strategy and Growth Plan. The Plan's mission is to facilitate a safe, efficient, and sustainable rail transport system that promotes socio-economic development in the country.

This infrastructure investment, supported by the Malawi government and being implemented by CEAR and Nacala Logistics, demonstrates the country's strong commitment to two key economic goals - developing a thriving mining industry and boosting exports.

As Sovereign Metals' Managing Director Frank Eagar highlighted, the company is positioned to benefit from this proactive national infrastructure drive and the government's clear focus on the mining sector as a growth engine.

The Opportunity for Investors

Sovereign Metals presents a compelling opportunity for investors seeking exposure to the fast-growing critical minerals space. The company's flagship Kasiya project in Malawi is one of the world's largest natural rutile and graphite resources, key inputs in the manufacture of titanium dioxide pigments, refractory materials, and lithium-ion batteries.

The Kasiya project's potential is underpinned by its high-grade, at-surface mineralisation, which can be mined and processed using low-cost conventional methods. The recently completed Scoping Study confirmed the project's outstanding economics, including low capital intensity, high operating margins and rapid payback.

Sovereign's investment thesis is strengthened by Kasiya's access to existing high-quality rail and power infrastructure. The rail upgrades currently underway with strong backing from the Malawi government will further enhance the project's logistics chain, providing efficient and cost-effective links to export markets via the Nacala and Beira Corridors. This infrastructure advantage positions Kasiya competitively against global peers.

With the project rapidly advancing towards development and first production targeted for 2025, Sovereign is on track to become a major new supplier of critical minerals into an increasingly scarce global market facing exponential demand growth from the energy transition and decarbonisation megatrends.

As the company delivers on key milestones including completion of a full feasibility study, finalisation of offtake agreements, and securing of development funding, there is potential for significant value uplift for Sovereign shareholders. The strong support from the Malawi government and its infrastructure initiatives provide an added layer of investment confidence.

In conclusion, Sovereign Metals offers investors a rare combination of a Tier 1 critical minerals project, robust economics, existing regional infrastructure, and a highly supportive operating jurisdiction. As global critical minerals supply chains come under increasing pressure, Sovereign is well placed to capitalise on the opportunity and deliver substantial returns for shareholders. The ongoing rail upgrades in Malawi further enhance the Kasiya project's competitive strengths and provide a clear path to market for Sovereign's premium rutile and graphite products. With a proven management team, strong institutional support, and a clear pathway to production, Sovereign Metals is emerging as a significant new player in the global critical minerals supply chain.