Sovereign Metals Ships Milestone Bulk Sample, Advancing World-Class Kasiya Rutile-Graphite Project in Partnership with Rio Tinto

• Sovereign Metals has shipped a 30-tonne bulk ore sample from its Kasiya Rutile-Graphite Project in Malawi to engineering consultant Paterson & Cooke in South Africa
• The representative sample will be used for advanced material handling tests to optimize the pre-feasibility study (PFS)
• The testing program was designed in collaboration with strategic investor Rio Tinto through the established Technical Committee
• Paterson & Cooke has over 30 years of experience in slurry pipeline systems, tailings handling, mine backfill and mineral processing
• The sample shipment marks a significant step in project development and demonstrates the value of Rio Tinto's technical involvement

About Sovereign Metals

Sovereign Metals Limited (ASX: SVM; AIM: SVML) is an emerging producer of critical minerals rutile and graphite from its tier one Kasiya Rutile-Graphite Project in Malawi. The company is focused on becoming a major global supplier to help meet the rapidly growing demand for these minerals driven by the transition to clean energy technologies and energy storage. Sovereign's world-class Kasiya deposit boasts the largest rutile resource ever discovered with a current JORC 2012-compliant mineral resource estimate of 1.8 billion tonnes at 1.01% rutile and 1.32% total graphitic carbon (TGC). The project is favorably located in Malawi with access to rail and port infrastructure for exports.

Bulk Sample Shipment

On March 20, 2024, Sovereign announced it had extracted, dispatched and delivered an initial 30-tonne bulk ore sample from Kasiya to leading engineering consultant Paterson & Cooke's laboratory in Cape Town, South Africa. The representative sample was sourced from areas expected to be mined during the first decade of production using a spiral drilling program.

The bulk sample will be utilized for advanced, larger-scale laboratory test work aimed at optimizing technical aspects of the previously released pre-feasibility study. Key areas of focus include pumping, tailings characteristics and dewatering. Managing Director Frank Eagar commended the geology and logistics teams for successfully extracting and shipping the large sample in a short timeframe, marking a significant milestone in ongoing project development.

Strategic Collaboration with Rio Tinto

The sampling program and test work was designed in close collaboration with Sovereign's strategic investor Rio Tinto, which acquired a 15% stake through an A$40.4 million investment. Rio Tinto's technical representatives work alongside the Sovereign team on the established Technical Committee to provide expertise and recommendations on project development.

The committee, comprised of three members each from Sovereign and Rio Tinto including MD Frank Eagar and Rio Tinto's Kasiya GM, was responsible for designing and approving the test work program. This demonstrates the benefits and effectiveness of Rio Tinto's hands-on technical involvement in assisting with project optimization and advancement.

World-Class Consultant

The bulk sample will be analyzed at the Cape Town laboratory of Paterson & Cooke, a world leader in mining and mineral processing engineering. P&C brings over three decades of industry experience and expertise to the project, with specialized knowledge in slurry pipeline systems, tailings and mine waste management, backfill, and mineral processing.

The company's pipe loop facility will be employed to test key parameters related to the mining, transport and handling of the Kasiya ore. By working with such a highly qualified and respected firm, Sovereign ensures the test work will be conducted to the highest standards to generate valuable data for optimizing the PFS and project design.

Project Significance

Shipping the 30-tonne bulk sample to South Africa represents a major step forward in the ongoing development of the tier one Kasiya Rutile-Graphite Project. It will enable detailed, large-scale metallurgical and material handling test work essential for optimizing and de-risking the PFS as Sovereign progresses the world-class asset towards production.

Importantly, it also clearly demonstrates the value of Rio Tinto's strategic involvement and technical collaboration following its major investment in 2023. By leveraging Rio Tinto's vast development experience and expertise through the Technical Committee, Sovereign gains key insights and recommendations to enhance the project.

The shipment also highlights Sovereign's ability to efficiently extract and transport large, representative samples from the remote project location in Malawi to state-of-the-art laboratory facilities abroad. This bodes well for the company's capacity to develop and operate the project to global standards.

With the current sample, Sovereign will gain critical data on the mining and processing characteristics of Kasiya's ore to refine key aspects like pumping, tailings management and water handling. The results will help determine optimal equipment sizing, design parameters and operating procedures for the PFS. This type of detailed test work is crucial for ensuring operations are safe, efficient and economical.

Investment Thesis for Sovereign Metals

For investors, the bulk sample shipping milestone offers compelling evidence that Sovereign Metals is effectively advancing its world-class Kasiya project towards production in partnership with global mining leader Rio Tinto. It demonstrates the asset quality, ability to develop the project to the highest standards, and value of the strategic collaboration.

The announcement also provides concrete progress that substantially de-risks the PFS and instills confidence in Sovereign's capacity to become a major global supplier of two critical minerals - natural rutile and graphite. Both minerals are poised for significant demand growth as the world transitions to clean energy and requires their unique properties for applications like batteries, solar panels, wind turbines, and energy-efficient lighting.

Natural rutile in particular is a highly strategic mineral with limited supply that is critical for producing titanium metal and pigments. As the owner of the world's largest natural rutile resource at Kasiya, Sovereign is ideally positioned to fill the projected rutile supply deficit and reap the benefits of higher prices. The deposit also contains a significant graphite co-product that diversifies the company's commodity exposure.

Beyond its tier one mineral resource, Sovereign holds key advantages including a highly experienced management team, strong ESG credentials, infrastructure access, and long-term investment and technical support from Rio Tinto. The company maintains a strong social license to operate in Malawi and is actively engaged in sustainable community development.With the PFS on track for completion in mid-2024 and the DFS already launched, Sovereign offers investors a unique opportunity to gain exposure to looming rutile and graphite shortages at an attractive valuation. The impressive size and quality of the Kasiya resource and deposit geometry are amenable to a multi-decade, low-cost operation with scale to supply a meaningful portion of global demand.

As Sovereign delivers on key de-risking milestones like the bulk sample test work with a proven development approach, the company is well positioned for a significant re-rate to better reflect the strategic value of this scarce tier one critical minerals asset.

Conclusion

The 30-tonne bulk sample shipment marks a significant milestone for Sovereign Metals in advancing the world-class Kasiya Rutile-Graphite Project. It enables crucial large-scale test work with an industry-leading consultant to optimize the PFS and instills confidence in the company's technical abilities and strategic partnership with Rio Tinto.

For investors, Sovereign's Kasiya project offers a rare opportunity to gain exposure to impending rutile and graphite supply deficits with a massive tier one resource, low-cost operation, and backed by an experienced team and major partner. As the company continues to deliver impressive news flow on project development, the investment thesis continues to strengthen.

With the PFS progressing to plan and the DFS already launched, Sovereign Metals appears to be on a clear path to production and cash flow at Kasiya. Given the outstanding project fundamentals, strategic commodity exposure, and track record of execution, Sovereign's stock looks poised for a significant re-rating as the project is further de-risked. The company stands out as a unique and attractive investment in the critical minerals space.