TIDMSVML
RNS Number : 4142O
Sovereign Metals Limited
10 June 2022
SOVEREIGN METALS LIMITED
NEWS RELEASE I 10 JUNE 2022
LEADING GLOBAL MARKET POSITION BECKONS FOR KASIYA'S LOW COST
FLAKE GRAPHITE CO-PRODUCT
-- Graphite planned to be produced as a co-product from the Kasiya
rutile operation is estimated to sit at the lowest end of the global
flake graphite cost curve
-- As one of the world's largest flake graphite deposits, Kasiya
has potential for a dominant market position due to production
scale of a coarse flake, high purity and highly crystalline product
which should be suitable for lithium-ion batteries and wider traditional
industrial uses
-- Kasiya's graphite flake size distribution compares favourably
to industry peers suggesting potential to achieve a high graphite
basket price
-- Independent Life Cycle Assessment Study demonstrates Kasiya's
high quality natural graphite concentrate should have a significantly
lower carbon footprint than Chinese-produced natural graphite
o China currently produces over 75% of the world's natural graphite,
almost 80% of the world's synthetic graphite and 100% of the world's
natural graphite anodes used in lithium-ion batteries
o Each tonne of graphite produced from Kasiya is expected to have
a Global Warming Potential of only 0.2 tonnes CO(2) e which represents
5x less greenhouse gas emissions compared to natural graphite produced
in the Heilongjiang Province, China
-- Recent independent studies published in the Journal of Industrial
Ecology estimates global warming potential of synthetic graphite
to be 20.6 t CO2e i.e., 103x that estimated for Kasiya's natural
graphite
-- Updated Scoping Study for Kasiya on track and due for completion
shortly
Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or
Sovereign) is pleased to report recent analysis of Kasiya Rutile
Project's (Kasiya) graphite co-product, one of the critical raw
materials contained with the Kasiya deposit.
Natural graphite concentrate would be produced as a co-product
from Kasiya, the world's largest rutile deposit. Benchmarking of
characteristics of Kasiya's natural graphite demonstrate that it
can be produced in line with the 2021 Scoping Study with:
-- one of the lowest potential production costs globally
-- extremely low carbon footprint versus hard-rock operations or synthetic graphite production
-- favourable flake size distribution suitable for a wide range
of end uses including feedstock for the lithium-ion battery sector
- technology crucial to tackling global climate change.
Sovereign's Managing Director, Dr Julian Stephens commented :
"Not only is Kasiya the world's largest rutile deposit and one of
the largest flake-graphite resources, but our latest graphite
industry benchmarking also demonstrates the potential for Kasiya to
be a globally dominant supplier and low-cost flake graphite
producer at scale. Importantly, the very low graphite production
costs at Kasiya should allow Sovereign to compete aggressively on
price point across global graphite markets. "
ENQUIRIES
Dr Julian Stephens (Perth) Sam Cordin (Perth) Sapan Ghai (London)
Managing Director +61(8) 9322 6322 +44 207 478 3900
+61(8) 9322 6322
Nominated Adviser on AIM
RFC Ambrian
Bhavesh Patel / Andrew Thomson +44 20 3440 6800
Joint Brokers
Berenberg +44 20 3207 7800
Matthew Armitt
Jennifer Lee
Varun Talwar
Optiva Securities +44 20 3137 1902
Daniel Ingrams
Mariela Jaho
Christian Dennis
In April 2022, the Company announced its updated Mineral
Resource Estimate (MRE) for Kasiya which confirmed it as a Tier 1
natural rutile deposit and a potential major source of low CO(2)
footprint critical minerals natural rutile and flake graphite.
The updated MRE positions Kasiya as the largest rutile deposit
in the world with more than double the contained rutile as its
nearest rutile peer, Sierra Rutile. Additionally, the graphite
co-product MRE at Kasiya places it as one of the largest flake
graphite deposits in the world.
ONE OF THE LOWEST POSITIONS ON THE GLOBAL COST CURVE
Sovereign undertook a benchmarking exercise comparing the
co-product production cost of graphite from Kasiya based on the
December 2021 Scoping Study results to peer flake graphite
projects. Kasiya has an average LOM FOB (Nacala) operating cost of
$US352/t tonne of product produced (rutile + graphite).
If flake graphite production is considered incremental to
primary rutile production then the operating cost is US$155/t of
graphite produced (FOB Nacala: December 2021 Scoping Study).
Such low flake graphite production costs at Kasiya can be
attributed to several factors including:
-- The uniqueness of Kasiya in that flake graphite will be
produced as a co-product, whereas typically natural graphite mines
produce graphite as the primary product with little or no co- or
by-products.
-- Proposed large-scale operation that will process soft,
friable saprolite-hosted mineralisation mined from surface using
low-cost hydro-mining methods. The significant cost savings,
compared to hard-rock graphite peers are realised by Kasiya having
no requirement for drilling, blasting, digging, trucking or primary
crushing or grinding in the processing plant.
-- The project being project is located just 40km from Lilongwe,
the capital of Malawi, which brings with it access to important
infrastructure including bitumen roads, a high-quality rail line
running through the deposit connecting to the deep-water of Nacala
on the Indian Ocean and hydro-sourced grid power.
FAVOURABLE FLAKE-SIZE DISTRIBUTION
Initial graphite metallurgical testwork at Kasiya demonstrates
potential to produce a coarse-flake and high-purity natural
graphite product at 96% TGC. This product has a favourable
flake-size distribution (FSD) with over 60% in the large to
super-jumbo fractions (+180<MU>m) (Table 1) and overall
graphite recovery from the raw sample to product of 62%.
This FSD compares favourably to global flake graphite peers with
Kasiya ranking in the top half of global projects in terms of large
to super-jumbo fractions as a proportion of overall graphite
production.
Table 1: Graphite Specifications
Particle Size Carbon Weight Distribution Flake Category
---------------
Tyler Mesh Micron (<MU>) (%) (% w/w)
----------- -------------- ------- -------------------- ---------------
+32 +500 96.0 5.4 Super Jumbo
=========== ============== ======= ==================== ===============
-32 +48 -500 +300 96.6 25.1 Jumbo
=========== ============== ======= ==================== ===============
-48 +80 -300 +180 96.7 30.9 Large
=========== ============== ======= ==================== ===============
-80 +100 -180 +150 96.8 10.9 Medium
=========== ============== ======= ==================== ===============
-100 +150 -150 +106 96.1 14.4 Small/Medium
=========== ============== ======= ==================== ===============
-150 +200 -106 +75 95.8 7.5 Small
=========== ============== ======= ==================== ===============
-200 -75 93.8 5.8 Amorphous
=========== ============== ======= ==================== ===============
Total 96.3 100
=========================== ======= ==================== ===============
KASIYA'S GRAPHITE CO-PRODUCT CHARACTERISATION DEMONSTRATES
SUITABILITY FOR WIDE RANGE OF USES
Initial metallurgical and characterisation work on graphite from
Kasiya shows a very high-quality product with premium chemical
characteristics and high crystallinity indicating the product
should be suitable for lithium-ion battery uses and traditional
industrial applications - subject to further downstream testwork
and analysis.
Sovereign has commenced a comprehensive bulk scale metallurgy
and downstream test work program to build on these initial results
and confirm the commercial potential of the graphite by-product
from Kasiya.
The very low incremental graphite production costs at Kasiya
suggest it will be highly competitive in a growing graphite market.
Graphite rich mineral concentrate will be produced from the light
fraction of the gravity spiral tails and processed in a separate
graphite flotation plant to produce a high-quality graphite
co-product.
High graphite purity and crystallinity are important features
required use in lithium-ion battery anodes. The high crystallinity
means that the graphite will have high electrical conductivity - a
key requirement. High purity means the material will be easier to
upgrade to 99.95% TGC, the minimum requirement for lithium-ion
battery anodes.
BENCHMARKING KASIYA NATURAL GRAPHITE GWP
The Life Cycle Assessment Study (LCA) benchmarked the Global
Warming Potential (GWP) of Sovereign's natural flake graphite
product versus natural flake graphite concentrate produced in the
Heilongjiang Province, China. This benchmark was chosen as a
comparison point as it is one of the largest global production
centres for natural flake graphite.
The Study made efforts to ensure maximum comparability for the
benchmarking exercise meaning that the Study focused on graphite
produced at site and does not include transportation. The Study
concluded that Sovereign's natural flake graphite concentrate has
significantly lower greenhouse gas emissions than the Chinese
produced natural flake graphite concentrate from the Heilongjiang
Province.
Each tonne of Sovereign's natural graphite is estimated to have
a GWP of 0.2 tonnes CO2e (carbon dioxide equivalent) - 5x lower
than producing natural flake graphite concentrate in the
Heilongjiang Province, China which is estimated to have a GWP of
1.1 tonnes CO2e for each tonne produced.
In addition to the results of the LCA, the Company's research
noted a report published in the Journal of Industrial Ecology
estimating the GWP of synthetic graphite. Synthetic graphite is
manufactured by high-temperature treatment of by-products of
hydrocarbon refining such as petroleum coke and coal tar pitch.
Currently, the highest purity synthetic graphite is produced from
petroleum needle coke which is a complex, emission and energy
intensive process.
LOW CARBON-FOOTPRINT NATURAL GRAPHITE - CRUCIAL FOR
SUSTAINABILITY
The lithium-ion battery sector is the main emerging market for
flake graphite. Greater capacity batteries, such as those required
for electric vehicles, are expected to drive significant demand for
graphite over the coming years. It is forecast the battery sector
will drive the largest demand for graphite by 2028, with graphite
making up to 50% of the composition of a lithium-ion battery.
Currently, China is the world's largest supplier of natural
flake graphite. In 2020, leading data provider and market
intelligence publisher Benchmark Mineral Intelligence reported that
China produced 86% of all lithium-ion battery anodes from natural
and synthetic graphite and 100% of all the world's natural graphite
anodes.
Industry's interaction with supply chain participants indicates
the progression towards higher proportions of natural graphite used
in battery anodes will be supported by its lower cost and superior
environmental credentials. Environmental footprint of electric
vehicles will become increasingly important as electric vehicle
penetration of the overall automobile market accelerates.
Forward Looking Statement
This release may include forward-looking statements, which may
be identified by words such as "expects", "anticipates",
"believes", "projects", "plans", and similar expressions. These
forward-looking statements are based on Sovereign's expectations
and beliefs concerning future events. Forward looking statements
are necessarily subject to risks, uncertainties and other factors,
many of which are outside the control of Sovereign, which could
cause actual results to differ materially from such statements.
There can be no assurance that forward-looking statements will
prove to be correct. Sovereign makes no undertaking to subsequently
update or revise the forward-looking statements made in this
release, to reflect the circumstances or events after the date of
that release.
Competent Persons Statement
The information in this announcement that relates to the MRE is
extracted from the announcement dated 5 April 2022. The
announcement is available to view on www.sovereignmetals.com.au .
Sovereign confirms that a) it is not aware of any new information
or data that materially affects the information included in the
announcement; b) all material assumptions included in the
announcement continue to apply and have not materially changed; and
c) the form and context in which the relevant Competent Persons'
findings are presented in this report have not been materially
changed from the announcement.
The information in this announcement that relates to Production
Targets, Processing, Infrastructure and Capital and Operating
Costs, is extracted from the announcement dated 16 December 2021
entitled 'Kasiya Scoping Study Confirms Globally Significant
Natural Rutile Project' (Announcement). Sovereign confirms that: a)
it is not aware of any new information or data that materially
affects the information included in the announcement; b) all
material assumptions and technical parameters underpinning the
Production Target, and related forecast financial information
derived from the Production Target included in the Announcement
continue to apply and have not materially changed; and c) the form
and context in which the relevant Competent Persons' findings are
presented in this presentation have not been materially modified
from the Announcement.
The information in this announcement that relates to the
Metallurgy is extracted from the announcement dated 7 December
2021. The announcement is available to view on
www.sovereignmetals.com.au . Sovereign confirms that a) it is not
aware of any new information or data that materially affects the
information included in the announcement; b) all material
assumptions included in the announcement continue to apply and have
not materially changed; and c) the form and context in which the
relevant Competent Persons' findings are presented in this report
have not been materially changed from the announcement.
To view this announcement in full, including all illustrations
and figures, please refer to www.sovereignmetals.com.au .
APPIX 1 - MINERAL RESOURCE ESTIMATE
Kasiya Mineral Resource Estimate at 0.7% Rutile Cut-off
Mineral Resource Material Tonnes Rutile Rutile Tonnes TGC TGC Tonnes RutEq. Grade*
Category (millions) (%) (millions) (%) (millions) (%)
-------------------- ------------------- ------- -------------------- ------ -------------------- --------------
Indicated 662 1.05% 6.9 1.43% 9.5 1.73%
==================== =================== ======= ==================== ====== ==================== ==============
Inferred 1,113 0.99% 11.0 1.26% 14.0 1.59%
==================== =================== ======= ==================== ====== ==================== ==============
Total 1,775 1.01% 18.0 1.32% 23.4 1.64%
==================== =================== ======= ==================== ====== ==================== ==============
APPIX 2 - OPERATING COST BREAK-DOWN
Description US$/t US$/t US$ US$/t US$/t
Mined Tonne(1) Product(2) Annual(3) Product(4) Product(5)
(rutile & graphite) (rutile & graphite) (rutile) (graphite)
Mining $1.77 $104 $21,240,000 $174 $0
======================= ================ ====================== ====================== ============ =============
Processing - Rutile $2.00 $119 $24,000,000 $197 $0
======================= ================ ====================== ====================== ============ =============
Processing - Graphite $0.69 $40 $8,280,000 $0 $104
======================= ================ ====================== ====================== ============ =============
General &
Administration $0.64 $38 $7,680,000 $63 $0
======================= ================ ====================== ====================== ============ =============
Total Mine Gate $5.10 $301 $61,200,000 $434 $104
======================= ================ ====================== ====================== ============ =============
Logistics $0.86 $51 $10,320,000 $51 $51
======================= ================ ====================== ====================== ============ =============
Total Operating Costs $5.96 $352 $71,520,000 $485 $155
======================= ================ ====================== ====================== ============ =============
Notes:
1. Life of Mine (LoM) cost per mined tonne as per December 2021 Scoping Study
2. LoM cost per product (rutile and graphite) as per December 2021 Scoping Study
3. Annualised operating cost based on a 12Mtpa throughput
4. Incremental cost per tonne of rutile produced
5. Incremental cost per tonne of graphite produced
APPIX 3 - GRAPHITE PEERS INFORMATION
Company Project Stage Operating Steady Current Source
of Development Costs State Production
(FOB) Production
US$/t tpa tpa
--------------- ----------- ---------------- --------- ----------- ----------- -----------------------------
ASX Announcement: Updated
DFS Confirms Standout
Walkabout Graphite Project
A Resources Lindi Construction 347 40 n/a (7 Mar 2019)
=============== =========== ================ ========= =========== =========== =============================
ASX Announcement: Siviour
Definitive Feasibility
Study
B Renascor Siviour DFS Complete 355 105,000 n/a (11 Nov 2019)
=============== =========== ================ ========= =========== =========== =============================
SEDAR FILING: NI 43-101
Technical Report: Feasibility
Study Update of the Lac
Mason Gueret Graphite Project
C Graphite(1) Lac Gueret FS Complete 370 51,865 n/a (12 Dec 2018)
=============== =========== ================ ========= =========== =========== =============================
SEDAR FILING: NI 43-101
Technical Feasibility
Study Report for the
Matawinie
Nouveau Graphite Project
D Monde(1) Matawinie Construction 382 100,000 n/a (10 Dec 2018)
=============== =========== ================ ========= =========== =========== =============================
ASX Announcement: Q1 2022
Syrah Quarterly Activities Report
E Resources(2) Balama Production 464 184,000 46,000 (27 Apr 2022)
=============== =========== ================ ========= =========== =========== =============================
(Molo
NextSource Phase Press Release: MD&A March
F Materials 2) PEA Complete 496 150,000 n/a 2022
(16 May 2022)
=============================================== ========= =========== =========== =============================
ASX Announcement: Positive
Response to Proposed US$60m
Epanko Debt Financing
G Ecograf Epanko BFS Complete 500 60,000 n/a (10 Mar 2019)
=============== =========== ================ ========= =========== =========== =============================
SEDAR FILING: Lola Graphite
Project NI 43-101 Technical
Report - Feasibility Study
H SRG Mining Lola FS Complete 508 55,000 n/a (16 Aug 2019)
=============== =========== ================ ========= =========== =========== =============================
ASX Announcement: Nachu
Bankable Feasibility Study
Magnis Finalised
I Energy Nachu BFS Complete 559 220,000 n/a (31 Mar 2016)
=============== =========== ================ ========= =========== =========== =============================
(Molo SEDAR Filing: 2021 Annual
NextSource Phase Information Form
J Materials 1) Construction 566 17,000 n/a (28 Sep 2021)
=============== =========== ================ ========= =========== =========== =============================
COMPANY PRESENTATION:
Developing the World Class
Triton Ancuabe Graphite Project
K Minerals Ancuabe DFS Complete 634 60,000 n/a (16 Feb 2022)
=============== =========== ================ ========= =========== =========== =============================
COMPANY PRESENTATION:
Building the leading public
Northern Bisset graphite company
L Graphite(3) Creek FS & PEA 660 44,000 n/a (May 2022)
=============== =========== ================ ========= =========== =========== =============================
ASX Announcement: Positive
Stage 1 Feasibility Study
Bunyu For Bunyu Graphite Project,
(Stage Tanzania
M Volt Resources 1) FS Complete 664 23,700 n/a (30 Jul 2018)
=============== =========== ================ ========= =========== =========== =============================
NI 43-101 Preliminary
Economic Analysis On the
Graphite Graphite Graphite One Project
N One One PEA Complete 960 60,000 n/a (30 Jun 2017)
=============== =========== ================ ========= =========== =========== =============================
1. Canadian dollar (CAD) costs converted to US$ at CAD1.307 /
US$
2. Operating costs shown are actual C1 cash costs for Q1 2022;
Steady State Production is last quarter natural graphite production
annualised
3. Includes Phase 1 (Feasibility Study Stage) and Phase 2 (PEA
Stage)
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCLBLBFLQLLBBK
(END) Dow Jones Newswires
June 10, 2022 02:01 ET (06:01 GMT)
Sovereign Metals (LSE:SVML)
Historical Stock Chart
From Jun 2024 to Jul 2024
Sovereign Metals (LSE:SVML)
Historical Stock Chart
From Jul 2023 to Jul 2024
