Sovereign Metals Strengthens Position as Leading Critical Minerals Developer in Q3 2024

• Rio Tinto increases investment in Sovereign Metals to 19.9%, demonstrating confidence in the Kasiya rutile-graphite project and providing additional funding for advancement.
• Sovereign Metals presents alongside Rio Tinto CEO at inaugural Minerals Security Partnership event during UN General Assembly, highlighting the strategic importance of Kasiya.
• Successful dry and hydraulic mining trials at Kasiya confirm efficient mining methods and a homogenous, weathered ore body that requires no drilling, blasting, or crushing.
• High-quality coated spherical purified graphite (CSPG) anode material produced from Kasiya graphite demonstrates performance comparable to market-leading products.
• With approximately A$41 million cash and no debt, Sovereign Metals remains in a robust financial position to progress Kasiya through pre-feasibility optimization towards development.

Q3 2024 Operational & Financial Results

Sovereign Metals Limited (ASX:SVM) is a leading natural rutile and graphite developer, focused on its flagship Kasiya project in Malawi. As the world's largest rutile deposit and second-largest flake graphite deposit, Kasiya is positioned to become a globally significant source of critical minerals for the titanium pigment, titanium metal, and lithium-ion battery industries. In the September 2024 quarter, Sovereign made substantial progress in advancing Kasiya, supported by a strategic investment from Rio Tinto and successful technical milestones.

Rio Tinto Increases Strategic Investment

Rio Tinto, a global mining giant, demonstrated its confidence in Kasiya and Sovereign's management team by increasing its shareholding to 19.9% through an additional A$19 million investment. This funding will support the ongoing pre-feasibility study (PFS) optimization and definitive feasibility study (DFS) work at Kasiya. Rio Tinto's technical and marketing expertise, accessible through the project Technical Committee, will be invaluable as Sovereign progresses Kasiya towards development.

The strategic importance of Kasiya was underscored by Sovereign's participation in the inaugural Minerals Security Partnership (MSP) Finance Meeting during the UN General Assembly in New York. Sovereign Chair Ben Stoikovich presented alongside Rio Tinto CEO Jakob Stausholm, discussing factors that attract major mining investment and how initiatives like the MSP can support responsible critical minerals supply chain development in countries like Malawi.

Successful Mining Trials Confirm Efficient Methods

During the quarter, Sovereign completed successful dry and hydraulic mining trials at Kasiya as part of the ongoing Pilot Mining and Land Rehabilitation program. The dry mining trial confirmed that the weathered ore can be efficiently mined using conventional excavators and trucks, with no need for drilling, blasting, or crushing. The hydraulic mining trial demonstrated the potential for even lower-cost mining methods. These results highlight the unique advantages of Kasiya's homogenous, near-surface, saprolite-hosted mineralization, which is expected to support lower operating costs and a reduced carbon footprint compared to hard rock graphite and titanium deposits.

High-Quality Anode Material Produced

A significant milestone was achieved with the production of high-quality CSPG anode material from Kasiya graphite concentrate. Testwork at leading German independent consultancy ProGraphite demonstrated that Kasiya CSPG has performance characteristics comparable to market-leading products from top Chinese anode material producers. Key specifications achieved include:

• First cycle efficiency (FCE) of 94.2% to 95.8%, with >95% considered a key threshold for the highest quality material
• Initial capacities of 362-366 mAh/g, exceeding the 360 mAh/g benchmark for top-tier products
• Tap densities of 1.11-1.18 g/cm3 and low specific surface area of 1.4-2.0 m2/g, on par with industry leading materials

These outstanding results will accelerate offtake discussions with major battery and automotive manufacturers as Sovereign advances its downstream graphite strategy.

Infill Drilling Program to Upgrade Resource

Post quarter-end, Sovereign completed an infill drilling program focused on the mining areas expected to provide ore feed during the first eight years of production at Kasiya. Results from this program, which comprised aircore, auger, and diamond drilling, will support the conversion of resources to the Measured category and ore reserves from Probable to Proven under the JORC Code. With 66% of the current 1.8 billion tonne resource already in the Indicated category, Kasiya is well-positioned for conversion to reserves as the project advances.

Corporate & Financial Strength

Sovereign's move to the OTCQX market in the United States during the quarter will enhance the company's visibility and accessibility to a broader base of international investors. With approximately A$41 million in cash and no debt at quarter-end, Sovereign maintains a strong financial position to advance Kasiya through the PFS optimization, DFS, and beyond.

Conclusion

Sovereign Metals is poised for an exciting period ahead as it progresses the world-class Kasiya rutile-graphite project towards development. With a focus on responsible, low-cost, and low-carbon production of critical minerals, Sovereign is aligned with the growing global imperative for sustainable supply chains. Anticipated upcoming milestones include:

• Results from the resource upgrade and ore reserve conversion
• Completion of the full Pilot Mining and Land Rehabilitation program
• Further graphite offtake discussions and downstream testwork results
• PFS optimization and DFS progression with Rio Tinto's support

For investors, Sovereign Metals presents a compelling opportunity to gain exposure to the booming critical minerals sector, underpinned by a world-class, long-life asset and supported by a top-tier partner in Rio Tinto. With a proven management team, strong financial position, and clear path forward, Sovereign is well-placed to deliver significant value for shareholders as it advances Kasiya towards production.