Sovereign Metals Significantly Expands Kasiya's Lithium-Ion Battery Graphite Bulk Sampling Program

About Sovereign Metals

Sovereign Metals (ASX: SVM, AIM: SVML) is an Australian mineral exploration company focused on discovering and developing major natural resource projects in Malawi. The company’s flagship project is the Kasiya rutile and graphite deposit, one of the world’s largest known natural rutile and graphite deposits.

Sovereign aims to become a major producer of natural rutile, the highest-grade and purest natural form of titanium dioxide. The company also plans to be a significant producer of natural flake graphite, a key component in lithium-ion batteries for electric vehicles.

Bulk Sampling Program to Produce Over 100 Tonnes of Graphite

Sovereign Metals announced a bulk sampling program at its Kasiya deposit in Malawi to extract 100 tonnes of graphite ore. The bulk sampling aims to produce over 1,000 kg of natural flake graphite concentrate for downstream test work and product qualification targeting the lithium-ion battery sector.

The sampling program is a significant scale up from previous test work and will provide enough natural graphite for extensive qualification and testing by potential offtake partners and customers. Product qualification is a crucial step in securing natural graphite offtake agreements.

The bulk samples will be processed at Sovereign’s metallurgical facility in Malawi using recently installed equipment capable of handling the increased throughput. This includes Kwatani 30-inch single and double-deck vibrating separators for sizing and de-sliming. The sand fraction will then be processed over the new Holman Wilfley 2000 wet shaking table to produce an initial graphite pre-concentrate and a separate heavy mineral concentrate (HMC) containing the rutile.

Further processing to final purified spherical graphite product will be done at commercial facilities in Canada and Australia. The aim is to produce coated spheronised  graphite product (CSPG) with carbon content above 99.95%, suitable for lithium-ion battery anodes.

Previous Test Work Highlights Excellent Quality

Earlier test work showed Kasiya’s natural flake graphite has characteristics that make it highly suitable for lithium-ion battery anodes. Key features include exceptional purity and outstanding crystallinity.

Purification to battery grade can be achieved through an optimized, environmentally-friendly reagent scheme. Spheronization, micronization, coating and other downstream processes will be further optimized using graphite from this bulk sampling campaign.

Kasiya’s Flake Graphite - Unique Advantages for Batteries

Sovereign Metals is focused on supplying natural flake graphite into the extra-large, large and medium flake size ranges. These larger flake sizes are preferred for spherical graphite used in battery anode material (BAM). Larger flakes can be turned into larger spherical graphite particles, which improves battery performance metrics.

Most of the world’s flake graphite projects produce smaller, lower value flakes. Kasiya is unique in having a high ratio of extra-large, large and medium flakes, making up 74% of production. This gives Kasiya a significant competitive edge in targeting the high-growth lithium-ion battery markets.

Kasiya Pre-Feasibility Study Results

A Pre-Feasibility Study on Kasiya released in September 2023 outlines a long-life, high margin operation:

• 25 year initial mine life with average annual production of 244,000 tonnes of graphite and 222,000 tonnes of rutile
• Lowest reported cash operating costs of rutile and graphite at US$404/tonne
• Annual EBITDA of US$415 million and after tax NPV8% of US$1.6 billion
• Payback period of 4.3 years from commencement of production
• Top 10 global natural graphite asset with 23.4Mt of contained graphite, plus 18Mt of rutile.

The impressive economics are driven by Kasiya’s unique attributes of high grades, low impurities and favorable flake size distribution combined with excellent infrastructure.

Strategic Partnership with Rio Tinto

Sovereign Metals has an important strategic partnership with diversified mining giant Rio Tinto to develop Kasiya. Rio Tinto has the option to enter a joint venture on the project pending successful product qualification and a feasibility study.

Rio Tinto is providing technical and commercial support to Sovereign Metals to advance Kasiya. The companies are collaborating on the graphite qualification program with a focus on supplying natural graphite into Rio Tinto’s existing battery materials supply chains.

China’s Dominance of Graphite Supply

Sovereign’s Kasiya graphite project comes at an opportune time, offering a potential new source of supply outside China. The Chinese currently control most aspects of the lithium-ion battery supply chain.

China produces 61% of the world’s flake graphite supply. Chinese companies account for 93% of global production capacity for graphite anode material.

This concentration of production in one country exposes the lithium-ion battery industry to significant supply chain risk. Automakers and other end-users are pushing for increased supply chain diversification and localization.

Under the umbrella of “national security”, China has implemented export restrictions on graphite and other critical minerals. This will likely further tighten availability outside China and increase prices.

Kasiya is exceptionally positioned as a potential long-term supplier of natural graphite to Europe, the UK, US, Japan, South Korea and other markets looking to secure non-Chinese supply.

Conclusion

Sovereign Metals’ upsized graphite sampling and qualification program is a major de-risking step for its Kasiya graphite business. Successful qualification of Kasiya’s graphite products with customers will be a key catalyst for securing offtake agreements and project financing.

With graphite demand booming in the EV and battery storage revolution, new sources of supply are urgently needed. Kasiya offers scale, quality and cost metrics that tick all the boxes for graphite buyers focused on supply chain resilience.

Sovereign Metals is set to emerge as a major player outside China in supplying natural graphite into the burgeoning EV markets. Its strategic partnership with Rio Tinto provides strong technical and commercial backing.

As Kasiya progresses towards a construction decision, investors can expect growing interest and re-rating potential for Sovereign Metals in the global rush to electrification.