Sovereign Metals Produces High Purity Graphite for Lithium-Ion Batteries, Positioned to Disrupt China's Graphite Dominance

• Sovereign Metals successfully produces spherical purified graphite (SPG) with world-leading 99.99% purity from its Kasiya deposit
• Testwork confirms Kasiya's spherical graphite meets all required industry standards for lithium-ion battery anode material
• Low levels of impurities indicate Kasiya graphite is well-suited to cost-effective single-stage purification
• Strong potential for Sovereign to emerge as a major ex-China supplier of high-quality graphite to the fast-growing battery sector
• Sovereign is the largest graphite resource holder globally with expectations of industry-low operating costs

About Sovereign Metals

Sovereign Metals Limited (ASX:SVM) is an exploration and development company focused on its large, high-grade Kasiya rutile and graphite deposit in Malawi. The Company holds a dominant position in both the natural rutile and graphite markets, with Kasiya being one of the largest deposits globally for each commodity. Sovereign is actively progressing development of Kasiya with the aim of establishing itself as a major low-cost, long-term supplier of critical raw materials to the titanium pigment and lithium-ion battery markets.

Breakthrough Downstream Testwork Results

On May 15, 2024, Sovereign announced a significant milestone in its graphite development strategy. Independent testwork conducted by ProGraphite in Germany demonstrated that Sovereign can produce SPG from Kasiya at world-leading purities of 99.99%. Notably, this was achieved using proven commercial purification methods, highlighting the high quality of Sovereign's graphite.

The SPG produced had exceptionally low levels of impurities, meeting or exceeding typical industry specifications across all tested parameters. Importantly, the low silicon and calcium levels indicate that Kasiya graphite is ideally suited to cost-effective single-stage purification, potentially providing a significant cost advantage over graphite from other sources that require multi-stage processing.

In addition to its exceptional purity, Kasiya SPG also achieved high yields of up to 68% during the spheronization process. Tap density and BET surface area, both key parameters for battery performance, were within typical ranges with further optimization potential. The SPG samples are now undergoing downstream coating and electrochemical testing to provide a full picture of performance in lithium-ion battery anodes.

Potential Game-Changer for Graphite Supply

The results from Sovereign's downstream testwork program could have far-reaching implications for global graphite supply dynamics. Currently, China dominates the spherical graphite market, accounting for nearly all production. Battery and auto manufacturers outside China are actively seeking to diversify their supply chains and reduce reliance on China.

Kasiya's ability to produce high-purity, battery-grade SPG at scale positions Sovereign as a leading contender to fill this supply gap. With a vast resource base and expectations for bottom-quartile operating costs, Sovereign could potentially emerge as one of the largest and lowest-cost suppliers of graphite ex-China.

By 2030, demand for natural graphite from the lithium-ion battery sector is forecast to increase by over 500%. Kasiya is favorably positioned to capture a significant portion of this growth while helping to derisk global supply chains.

Advancing on Multiple Fronts

In parallel with its graphite testwork programs, Sovereign continues to make strong progress on developing the world-class Kasiya rutile deposit. A scoping study completed in 2020 confirmed the potential for a large-scale, low-cost natural rutile operation. Discussions are advancing with multiple Tier 1 offtake partners in the titanium sector.

Sovereign is now focused on expanding and upgrading the Kasiya resource while conducting extensional drilling to fully define the deposit's upside potential. Metallurgical optimization and process design work for the rutile operation is well-advanced.

The Company is also progressing key environmental and social baseline studies to support future permitting and approvals processes. Sovereign is committed to sustainable development and maximizing benefits to local stakeholders.

Next Steps

With the latest round of successful downstream testwork now complete, Sovereign plans to accelerate its graphite qualification and market development programs. Further optimization of the purification and spheronization processes will be undertaken with the goal of locking in offtake agreements with leading battery and auto OEMs.

In the near-term, key upcoming milestones for Sovereign include

• Release of an updated Mineral Resource Estimate for Kasiya covering both the rutile and graphite components
• Completion of a Pre-Feasibility Study for the Kasiya rutile project
• Pilot-scale processing trials for Kasiya rutile and graphite
• Commencement of a Definitive Feasibility Study for the Kasiya rutile project
• Delivery of coated purified spherical graphite samples to potential offtake partners

Sovereign is well-funded to advance these workstreams with A$11.5M in cash as of 31 March 2024. The Company also has a supportive institutional shareholder base including global majors such as JP Morgan Asset Management and Sprott Asset Management.

Conclusion

The latest metallurgical testwork results serve as a strong proof-of-concept for Sovereign's graphite business and reaffirms Kasiya as a potential game-changer for ex-China battery material supply. Flagship projects that can produce essential battery raw materials at world-class specifications and costs are set to be highly strategic as the electric vehicle revolution accelerates.

With a large, high-quality resource base and simple mineralogy amenable to conventional processing, Sovereign is strongly positioned to become a major supplier of both natural rutile and graphite. The Company's assets have the potential to deliver robust economics while maintaining leading sustainability credentials.

As Sovereign continues to systematically unlock the value of its world-class Kasiya deposit, the Company offers a unique investment exposure to two of the fastest-growing critical mineral markets. Sovereign's experienced leadership team, strong institutional backing, and first-mover advantage in an underexplored jurisdiction provide a solid platform for growth. As milestones continue to be achieved, Sovereign appears well on track to join the ranks of globally significant producers of battery and industrial minerals.