Sovereign Metals Reports Promising Graphite Test Results, Strengthening Kasiya Project's Potential Amid China Export Restrictions

• Sovereign Metals' Kasiya graphite demonstrates high oxidation resistance, a crucial property for graphite used in the refractory materials sector, which accounts for 24% of global graphite demand. This key attribute positions Kasiya's graphite as a promising material for refractory applications.
• Independent tests conducted by ProGraphite GmbH revealed that Kasiya's coarse flake graphite showed no oxidation below 400°C and exhibited a very low oxidation rate of 1.6% per hour at 650°C making it well-suited for high-temperature refractory applications.
• China, the world's top graphite producer and exporter, plans to implement further export restrictions on graphite and titanium alloys starting in December 2024. These potential restrictions underscore the strategic importance of Sovereign Metals' Kasiya project as a secure, alternative source of high-quality graphite.
• Kasiya's graphite resource features a diverse flake size distribution, allowing Sovereign Metals to target various applications, such as refractories, batteries, and specialty products.
• With its vast, high-quality graphite resource, industry-low operating costs, and low greenhouse gas emissions, Sovereign Metals is well-positioned to meet the growing demand for graphite in traditional markets like refractories and emerging sectors such as electric vehicle batteries

Sovereign Metals Limited (ASX:SVM) is a mining company focused on developing its flagship Kasiya Rutile-Graphite Project in Malawi. The Kasiya project boasts one of the world's largest graphite resources, along with industry-low operating costs and greenhouse gas emissions. Sovereign Metals aims to become a leading supplier of both natural rutile, a high-grade titanium feedstock, and flake graphite.

Positive Graphite Test Results

Sovereign Metals recently announced promising initial test results confirming the suitability of Kasiya's graphite for traditional applications, particularly in the refractory materials sector. Independent tests conducted by ProGraphite GmbH in Germany revealed that Kasiya's coarse flake (>180-micron) graphite concentrate exhibits high oxidation resistance, a crucial characteristic for refractory applications.

The thermogravimetric analysis (TGA) showed no oxidation below 400°C and only a 6.4% mass loss after 4 hours at 650°C, equating to a very low oxidation rate of 1.6% per hour. Additionally, Kasiya's coarse flake graphite has very low levels of sulphur impurities (<0.02%), another advantageous attribute for refractory use.

These positive results highlight the premium quality of Kasiya's graphite and open up multiple marketing options for Sovereign Metals. The company plans to continue evaluating its coarse flake graphite for traditional and expandable applications, complementing the ongoing optimization work for fine (<180 micron) graphite in battery anode materials.

"High resistance to oxidation and low levels of sulphur are two key attributes required to produce a premium graphite product for traditional refractory and foundry applications. Combining these attributes with the > 50% large flakes of the Kasiya resource provides Sovereign with multiple marketing options." - Frank Eagar, Managing Director and CEO of Sovereign Metals

Strategic Importance Amid China Export Restrictions

The promising test results coincide with reports of China's plans to tighten export controls on key dual-use technologies and items, including graphite and titanium alloys, starting December 2024. As the world's top graphite producer and exporter, China currently supplies 75% of the world's flake graphite and 96% of spherical graphite used in battery anodes.

These potential export restrictions underscore the strategic importance of Sovereign Metals' Kasiya project on a global scale. With its vast graphite resources and ability to produce high-quality flake graphite, Kasiya is well-positioned to help meet the growing demand for graphite in both traditional and emerging markets, such as the electric vehicle (EV) industry.

Optionality in Graphite Applications

Kasiya's graphite flake size distribution provides Sovereign Metals with optionality over offtake discussions and future supply chains to maximize revenues. Large flake graphite is typically used in refractory applications, while smaller flakes are used in battery applications. Very small flakes have limited usefulness, mainly for lubricants.

Based on Kasiya's current graphite Mineral Reserve, the project could potentially supply graphite for several applications:

• Super-Jumbo (>500 µm) and Jumbo (300-500 µm) flakes for aerospace, nuclear, crucibles, and foundry uses
• Large (180-300 µm) and Medium (105-180 µm) flakes for refractories and batteries
• Small (75-105 µm) flakes for batteries and niche products

This versatility allows Sovereign Metals to adapt to market demands and optimize its graphite sales to generate maximum revenue from Kasiya's graphite co-product.

Graphite's Role in Refractory Materials

Graphite is a key additive in producing refractory materials for high-temperature environments due to its resistance to oxidation, chemical inertness, and good thermal conductivity. In refractory applications, graphite:

• Increases thermal conductivity for efficient heat transfer
• Decreases thermal gradient to reduce expansion
• Increases resistance to thermal shock
• Lowers thermal expansion to reduce structural damage risks
• Repels molten slag
• Reduces wettability to molten metals
• Increases the working life of the refractory product

With the refractory materials sector accounting for 24% of global graphite demand, Kasiya's high-quality graphite is well-suited to capitalize on this significant market opportunity.

Conclusion for Investors

Sovereign Metals' Kasiya Rutile-Graphite Project continues to demonstrate its immense potential, with recent test results confirming the premium quality of its graphite for traditional applications like refractories. As China considers tightening export controls on graphite, Kasiya's strategic importance grows, positioning Sovereign Metals to become a key player in the global graphite market.

Investors should consider Sovereign Metals for its:

• World-class graphite resource with industry-low costs and emissions
• High-quality graphite suitable for both traditional and emerging applications
• Ability to capitalize on the growing demand for graphite driven by the steel industry, EVs, and other sectors
• Strategic position to fill potential supply gaps caused by China's export restrictions
• Optionality in targeting various graphite applications to maximize revenues

As SVM Managing Director and CEO Frank Eagar commented:

We are very pleased that our testwork program continues highlighting Kasiya's graphite's premium quality. Keeping in mind that graphite is a co-product for Kasiya, when combining these excellent results with one of the largest graphite resources globally, industry-low operating costs and lowest industry comparable greenhouse gas emissions, Kasiya presents significant advantages over its graphite peers as a long-term secure source of supply."

With its strong fundamentals, promising test results, and strategic advantages, Sovereign Metals presents a compelling investment opportunity in the rapidly evolving graphite market.