TIDMSVML
RNS Number : 0743P
Sovereign Metals Limited
16 June 2022
SOVEREIGN METALS LIMITED
NEWS RELEASE | 16 June 2022
KASIYA EXPANDED SCOPING STUDY RESULTS
EXCEPTIONAL ECONOMICS CONFIRM KASIYA AS AN INDUSTRY-LEADING
SOURCE OF CRITICAL RAW MATERIALS
Sovereign Metals Limited (the Company or Sovereign) is pleased
to announce the results of the Expanded Scoping Study (Scoping
Study or Study) for the Company's Kasiya Rutile Project (Kasiya or
the Project) in Malawi.
In April 2022, Sovereign announced a new JORC Mineral Resource
Estimate (MRE) for Kasiya which confirmed the Project as the
world's largest rutile (titanium dioxide) deposit and one of the
world's largest flake graphite deposits.
The Expanded Scoping Study based on the April 2022 MRE confirms
that Kasiya will be one of the world's largest and lowest cost
producers of natural rutile and natural graphite with a
carbon-footprint substantially lower than current alternatives
while significantly contributing to the social and economic
development of Malawi.
KEY EXPANDED SCOPING STUDY HIGHLIGHTS
-- Significant increase in NPV and EBITDA from the 2021 Initial
Scoping Study with lower operating costs for a relatively small
increase in Capex to first production
US$1,537M 36% US$12,038M
================ ============= ===========
After Tax NPV(8) After Tax IRR LOM Revenue
------------- -----------
( 79%) (No change) ( 92%)
------------- -----------
US$323M US$320/t US$372M
================== ===================== =========================
Ave. Annual EBITDA Operating Cost Capex to 1(st) Production
per tonne of product
--------------------- -------------------------
( 101%) ( 10%) ( 12%)
--------------------- -------------------------
-- Potential to become a major producer in both the natural
rutile and graphite markets with steady state production of 265,000
rutile and 170,000 tonnes of graphite with a 25-year mine life
-- Low capital costs to first production due to exceptional
existing available infrastructure offering significant cost
reductions and providing optionality and scalability
-- Low operating cost and high margins due to deposit size, zero
strip ratio of soft, friable high-grade mineralisation from
surface, amenability to hydro-mining, conventional processing,
deposit location and low transport costs
-- Extremely favourable market fundamentals as rutile (titanium)
and natural graphite deemed critical raw materials for the US and
EU based on economic importance and supply risk
-- Natural rutile market in structural deficit with current
global supply estimated to decline 45% in the next three years with
graphite demand set to soar as electric vehicle production is
forecast to increase 12-fold by 2040
-- Natural ESG benefits for Kasiya:
o Substantially reduced CO(2) emissions for both rutile and
graphite compared to current alternatives, including substantial
Scope 3 emissions reductions for pigment production from rutile
compared to alternative feedstocks
o Significant social and economic benefits for Malawi including
job creation, fiscal returns, training and continued community
social initiatives
-- Study based on conservative commodity price estimates.
Long-term rutile price (real) of US$1,254/t versus current spot
price of +US$2,200/t(1) and long-term natural graphite basket price
(real) of US$1,085/t versus current equivalent spot price of
US$1,223/t(2)
Managing Director, Dr Julian Stephens
"The Expanded Scoping Study demonstrates Kasiya is a Tier 1
minerals project being the largest natural rutile resource and one
of the largest graphite resources in the world. Both minerals are
classified on the Critical Minerals lists of the US and EU and
rutile is in extreme market supply deficit. In light of these
factors, Kasiya is seen as a highly strategic project with the
potential to be a major supplier in both rutile and graphite
markets.
The project benefits from existing high-quality infrastructure
and has inherent ESG advantages. Natural rutile has a far lower
carbon footprint compared to other titanium feedstocks used in the
pigment industry, and natural graphite is a key component in
lithium-ion batteries - crucial to de-carbonising the global
economy. Further, the vast majority of power for the planned Kasiya
mining operation will be supplied by renewable hydro and solar -
giving the mine itself a very low carbon footprint.
The future development of the Kasiya Rutile Project will bring
substantial benefits to Malawi in terms of GDP, royalties, taxes,
employment and training, local business opportunities and community
development."
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
To view the announcement in full including all illustrations and
figures, please refer to the announcement at
http://sovereignmetals.com.au/announcements/.
KASIYA EXPANDED SCOPING STUDY OUTCOMES
Sovereign's Expanded Scoping Study for Kasiya is based on the
updated MRE reported in April 2022, of 1.8Bt containing 18Mt rutile
at 1.01% and 23.4Mt graphite at 1.32%. The Study envisages a
25-year mine life during which time both rutile and graphite are
produced during two stages:
Stage 1 Years 0-5: 12Mt of ore processed per annum to produce
approximately 145,000 tonne of natural rutile and 85,000 tonnes of
flake graphite per annum
Stage 2 Years 5-25: Add 12Mt capacity for total 24Mt of ore
processed per annum to produce approximately 260,000 tonnes of
natural rutile and 170,000 tonnes of flake graphite per annum
Table 1: Key Scoping Study Outcomes
Outcome Unit Kasiya Rutile Project
NPV(8) (real post-tax) US$ $1,537M
==================================================================== ======================= ======================
NPV(10) (real post-tax) US$ $1,185M
==================================================================== ======================= ======================
IRR (post-tax) % 36%
==================================================================== ======================= ======================
Capital Costs to First Production - Stage 1 US$ $372M
==================================================================== ======================= ======================
Expansion Capex - Stage 2 (funded from project cashflows) US$ $311M
==================================================================== ======================= ======================
Operating Costs US$/t mined $5.86
==================================================================== ======================= ======================
Operating Costs US$/t product $320
==================================================================== ======================= ======================
Revenue to Cost Ratio X 3.0
==================================================================== ======================= ======================
NPV(8) / Capital Costs to First Production X 4.1
==================================================================== ======================= ======================
Throughput (LOM) Mtpa 21.6
==================================================================== ======================= ======================
Life of Mine years 25
==================================================================== ======================= ======================
Annual Production - rutile ktpa 242
==================================================================== ======================= ======================
Annual Production - graphite ktpa 155
==================================================================== ======================= ======================
Total Revenue (LOM) US$ $12,038M
==================================================================== ======================= ======================
Annual Revenue (Average LOM) US$ $482M
==================================================================== ======================= ======================
Annual EBITDA (Average LOM) US$/year $323M
==================================================================== ======================= ======================
Payback - from start of production years 2.6 years
==================================================================== ======= =============== ======================
Payback - from start of construction years 3.7 years
==================================================================== ======= =============== ======================
Government Royalties (LOM) US$ $601M
============================================================================= =============== ======================
Corporate Taxes (LOM) US$ $2,138M
============================================================================= =============== ======================
EXPANDED SCOPING STUDY OVERVIEW
Sovereign is aiming to develop an environmentally and socially
sustainable operation to be the largest supplier of highly
sought-after natural rutile to global markets and an important
low-cost natural graphite supplier.
The proposed large-scale operation will process soft, friable
mineralisation from surface. The operation will primarily employ
conventional hydro-mining to produce a slurry that is pumped to a
Wet Concentration Plant (WCP) where the material is sized. A Heavy
Mineral Concentrate (HMC) is produced via processing the sand
fraction through a series of gravity spirals. The HMC is
transferred to the dry Mineral Separation Plant (MSP) where premium
quality rutile is produced via electrostatic and magnetic
separation.
Graphite rich concentrate is collected from the gravity spirals
and processed in a separate graphite flotation plant, producing a
high purity and high value coarse-flake graphite product.
The Project has excellent surrounding infrastructure including
bitumen roads, a high-quality rail line connecting to the
deep-water of Nacala on the Indian Ocean and hydro-sourced grid
power. At full production, rutile and graphite products will be
railed directly from a purpose built rail dry port at the mine site
eastward via the Nacala Logistics Corridor (NLC) to the deep-water
port of Nacala or southward via the Sena Rail Line to the
deep-water port of Beira.
LOW CARBON ADVANTAGE FOR TWO CRITICAL RAW MATERIALS
Natural Rutile - critical to lowering the Titanium industry's
carbon footprint
Like many other industries globally, the titanium dioxide
pigment industry is targeting reduced carbon emissions, reduced
energy consumption and a move toward renewable energy and waste
minimisation. A shift towards a greater percentage of natural
rutile feedstock offers the titanium pigment industry a simple and
short lead-time opportunity to significantly lower its carbon
intensity and total environmental impact.
Sovereign's natural rutile product is expected to have
substantially lower Global Warming Potential (GWP) (Scope 1, 2 and
3 scope emissions) when compared to other titanium feedstock
alternatives produced by upgrading ilmenite (i.e., synthetic rutile
and titania slag). Using natural rutile from Kasiya as titanium
feedstock for the chloride pigment process would significantly
reduce Scope 1, 2 and 3 greenhouse gas emissions.
Titanium feedstock is a key component of various industrial and
consumer products. Therefore, utilising natural rutile such as from
Kasiya, as direct use titanium feedstock could hold the solution to
developing low-carbon footprint products including low carbon
paints.
Natural Graphite - a significant component in lithium-ion
batteries for electric vehicles
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.
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 CO(2) e - 5x lower than producing natural flake graphite
concentrate in the Heilongjiang Province, China and 103x lower than
production of synthetic graphite.
The significantly lower GWP for Kasiya graphite is due to the
fact that it is hosted in soft, friable saprolite material which
will be mined via hydro methods (high pressure water monitors)
powered by renewable energy sources - hydro power from the Malawi
grid and on-site solar power. This is opposed to the production in
Heilongjiang Province, China where hard-rock ore requires drilling,
blasting, excavation, trucking, crushing, and grinding - overall
high CO2e activities.
SUSTAINABLE AND ESG DRIVEN PROJECT DEVELOPMENT STRATEGY
Sustainability is a vital element of Sovereign's strategy for
Kasiya. The Company is committed to making informed choices that
improve our corporate governance, financial strength, operational
efficiency, environmental stewardship, community engagement and
resource management.
The Project aims to meet the requirements of international
guidelines and standards, including the IFC Performance Standards
on Environmental and Social Sustainability (IFC, 2012), the World
Bank Group Environmental, Health and Safety Guidelines (WBG, 2007),
the Equator Principles (Equator Principles Association, 2020) and
the International Council on Mining & Metals (ICMM) principles
for future studies and development phases of the Kasiya
project.
The Kasiya project will be designed considering both the Equator
Principles and Scope 1, 2 and 3 emissions under the Green House Gas
protocol so that the design meets high Environmental, Social and
Governance (ESG) standards from the outset.
-- Access to hydro-generated grid power and a solar power system
to be installed on site will ensure low carbon power supply for the
project and the use of predominantly rail rather than road
transport for rutile and graphite products will further help give
the mine a low carbon footprint.
-- The Scoping Study contemplates that the operation will use a
closed, zero discharge process water circuit and tailings storage
facility designed for chemically benign tailings during operations
which will be rehabilitated and restored progressively.
-- Sovereign continues to undertake several initiatives to
assist in the development of Malawi and its local communities. The
Company aims to become an industry leader in social responsibility
having successfully worked with communities in Malawi over the last
decade who remain highly supportive and are well positioned to
benefit from the development of new mining projects.
LOW-COST OPERATION
Kasiya's low operating costs are achieved through deposit size
and grade, zero strip ratio, location and excellent existing
operational infrastructure. Central Malawi boasts hydropower and an
extensive sealed road network. The Kasiya Rutile Project is
strategically located in close proximity to the capital city of
Lilongwe, providing access to a skilled workforce and industrial
services.
The existing quality logistics routes to the Indian Ocean
deep-water ports of Nacala and Beira for the export of products to
global markets provides significant capital cost savings for Kasiya
compared to many other undeveloped minerals projects.
The soft, friable and high-grade mineralisation occurring from
surface results in no waste stripping requirement and the
amenability to hydro-mining means the mining cost component is kept
relatively low.
One of the highest Revenue : Cost of Sales Ratio in the Mineral
Sands Industry
The revenue-to-cash cost ratio of 3.0x positions Kasiya in the
first quartile compared to other undeveloped mineral sands
operations. The production of high value natural rutile and
graphite provides strong margins with a cash margin of over 67% for
the life of the operation.
The Study has applied conservative pricing assumptions for both
products which still results in a strong position on the revenue to
cost ratio. This supports the robustness of the Kasiya operation
and its strong profitability during different pricing environments
and the revenue stability of two different products with different
demand drivers.
Lowest Cost Flake Graphite Project in the World
Benchmarking the co-product production cost of graphite from
Kasiya based on the Study results against peer flake graphite
projects positions Kasiya as the lowest operating cost graphite
project in the world. Kasiya has an average life-of-mine FOB
(Nacala) operating cost of US$320 per tonne of product (rutile plus
graphite). On an incremental cost basis reflecting graphite
production as a co-product to primary rutile production, the
operating cost is US$140 per tonne of graphite produced (FOB
Nacala).
CRITICAL RAW MATERIALS
Titanium and natural graphite have been classified as critical
raw materials by the US and EU due to a combination of their
scarceness and China-controlled supply chains, and requirement for
the decarbonisation of the global economy as part of the energy
transition.
Current sources of natural rutile are in decline as several
operations' reserves are depleting concurrently with declining ore
grades. These include Iluka Resources' (Iluka) Sierra Rutile and
Base Resources' Kwale operations in Kenya.
Global rutile supply is projected to decline rapidly beyond
2023, following the scheduled closures of Base Resource's Kwale and
Iluka's SRL operations unless mine life extension is approved
(TZMI). There are limited new deposits forecast to come online, and
hence supply of natural rutile is likely to remain in structural
deficit for the long term, even with Kasiya at full production.
DISCLOSURES & DISCLAIMERS
Scoping Study Parameters - Cautionary Statements
The Scoping Study referred to in this announcement has been
undertaken to determine the potential viability of an open pit
mine, rutile and graphite processing plant constructed onsite at
the Kasiya project in Malawi and to reach a decision to proceed
with more definitive studies. The Scoping Study has been prepared
to an accuracy level of +/-30%. The results should not be
considered a profit forecast or production forecast.
The Scoping Study is a preliminary technical and economic study
of the potential viability of the Kasiya project. In accordance
with the ASX Listing Rules, the Company advises it is based on
low-level technical and economic assessments that are not
sufficient to support the estimation of ore reserves. Further
evaluation work including infill drilling and appropriate studies
are required before Sovereign will be able to estimate any ore
reserves or to provide any assurance of an economic development
case.
61% of the total production target is in the Indicated Mineral
Resource category with 39% in the Inferred Mineral Resource
category. 100% of the scheduled throughput over the first eight and
half years of production is in the Indicated Mineral Resource
category, with 0% in the Inferred Mineral Resource category. The
Company has concluded that it has reasonable grounds for disclosing
a production target which includes a modest amount of Inferred
material. However, there is a low level of geological confidence
associated with Inferred mineral resources and there is no
certainty that further exploration work (including infill drilling)
on the Kasiya deposit will result in the determination of
additional Indicated Mineral Resources or that the production
target itself will be realised.
The Scoping Study is based on the material assumptions outlined
elsewhere in this announcement. These include assumptions about the
availability of funding. While Sovereign considers all the material
assumptions to be based on reasonable grounds, there is no
certainty that they will prove to be correct or that the range of
outcomes indicated by the Scoping Study will be achieved.
To achieve the range outcomes indicated in the Scoping Study,
additional funding will likely be required. Investors should note
that there is no certainty that Sovereign will be able to raise
funding when needed. It is also possible that such funding may only
be available on terms that dilute or otherwise affect the value of
the Sovereign's existing shares. It is also possible that Sovereign
could pursue other 'value realisation' strategies such as sale,
partial sale, or joint venture of the Project. If it does, this
could materially reduce Sovereign's proportionate ownership of the
Project.
The Company has concluded it has a reasonable basis for
providing the forward looking statements included in this
announcement and believes that it has a reasonable basis to expect
it will be able to fund the development of the Project. Given the
uncertainties involved, investors should not make any investment
decisions based solely on the results of the Scoping Study.
Competent Person Statements
The information in this announcement that relates to Production
Targets is based on and fairly represents information provided by
Mr Ryan Locke, a Competent Person, who is a Member of The
Australasian Institute of Mining and Metallurgy. Mr Locke is
employed by Orelogy Group Pty Ltd, an independent consulting
company. Mr Locke has sufficient experience, which is relevant to
the style of mineralisation and type of deposit under
consideration, and to the activity he is undertaking, to qualify as
a Competent Person as defined in the 2012 Edition of the
'Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves'. Mr Locke consents to the inclusion in
the Announcement of the matters based on his information in the
form and context in which it appears.
The information in this announcement that relates to Processing,
Infrastructure and Capital and Operating Costs is based on and
fairly represents information compiled or reviewed by Mr Matthew
Langridge, a Competent Person, who is a Fellow Member of The
Australasian Institute of Mining and Metallurgy. Mr Langridge is
employed by DRA Global Ltd, an independent consulting company. Mr
Langridge has sufficient experience that is relevant to the style
of mineralisation and type of deposit under consideration and to
the activities undertaken. Mr Langridge, consents to the inclusion
in the Announcement of the matters based on his information in the
form and context in which it appears.
The information in this announcement that relates to Metallurgy
- rutile is based on and fairly represents information compiled or
reviewed by Mr Paul Marcos, a Competent Person, who is a Fellow
Member of The Australasian Institute of Mining and Metallurgy. Mr
Marcos is an employee of Sovereign and a holder of shares and
performance rights in Sovereign. Mr Marcos has sufficient
experience that is relevant to the style of mineralisation and type
of deposit under consideration and to the activity being
undertaken, to qualify as a Competent Person as defined in the 2012
Edition of the 'Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves'. Mr Marcos consents to
the inclusion in the report of the matters based on his information
in the form and context in which it appears.
The information in this announcement that relates to Metallurgy
- graphite is based on and fairly represents information compiled
or reviewed by Mr Russell Bradford, a Competent Person, who is a
Fellow Member of The Australasian Institute of Mining and
Metallurgy. Mr Bradford is employed by Jem-Met Pty Ltd, an
independent consulting company. Mr Bradford is a holder of shares
and performance rights in Sovereign. Mr Bradford has sufficient
experience that is relevant to the style of mineralisation and type
of deposit under consideration and to the activities undertaken. Mr
Bradford consents to the inclusion in the Announcement of the
matters based on his information in the form and context in which
it appears.
The information in this announcement that relates to the Mineral
Resource Estimate 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.
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.
Further Important Information for this Announcement
This Study has been prepared and reported in accordance with the
requirements of the JORC Code (2012) and relevant ASX Listing
Rules.
The Study has been prepared to an accuracy level of +/-30%. The
primary purpose of the Study is to establish whether or not to
proceed to the next stage of feasibility studies. The Study results
should not be considered a profit forecast or production forecast.
As defined by the JORC Code, a "Scoping Study is an order of
magnitude technical and economic study of the potential viability
of Mineral Resources. It includes appropriate assessments of
realistic assumed Modifying Factors together with any other
relevant operational factors that are necessary to demonstrate at
the time of reporting that progress to a Pre-Feasibility Study can
be justified."
The Modifying Factors included in the JORC Code have been
assessed as part of the Study, including mining, processing,
infrastructure, economic, marketing, legal, environmental, social
and government factors. The Company has received advice from
appropriate experts when assessing each Modifying Factor.
Following an assessment of the results of the Study, the Company
has formed the view that the next stage of feasibility studies is
justified for Kasiya. Feasibility Studies will provide the Company
with far more comprehensive assessment of a range of options for
the technical and economic viability of Kasiya which by
international standards should be sufficient detail for project
development financers to base an investment decision.
The Company has concluded it has a reasonable basis for
providing any of the forward-looking statements included in this
announcement and believes that it has a reasonable basis to expect
that the Company will be able to fund its stated objective of
completing feasibility studies for Kasiya. All material assumptions
on which the forecast financial information is based are set out in
this announcement.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK domestic law by virtue of the European Union (Withdrawal) Act
2018 ('MAR'). Upon the publication of this announcement via
Regulatory Information Service ('RIS'), this inside information is
now considered to be in the public domain.
Qualified Person
Information disclosed in this announcement has been reviewed by
Dr Julian Stephens (B.Sc (Hons), PhD, MAIG), Managing Director, a
Qualified Person for the purposes of the AIM Rules for
Companies.
SUMMARY OF MATERIAL ASSUMPTIONS
Material assumptions used in the estimation of the production
target and associated financial information are set out in the
following table.
Study Assumptions Table
Assumption Input
======================================================== ===========================
Maximum accuracy variation - Capital costs +30%/-30%
======================================================== ===========================
Maximum accuracy variation - Operating costs +/-30%
======================================================== ===========================
Minimum LoM 25 years
======================================================== ===========================
Annual average throughput (tonnes) - Stage 1 12,000,000
======================================================== ===========================
Annual average throughput (tonnes) - Stage 2 24,000,000
======================================================== ===========================
Annual throughput (tonnes) - LoM average 21,600,000
======================================================== ===========================
Head grade - rutile 1.14%
======================================================== ===========================
Recovery - rutile 98%
======================================================== ===========================
Product grade (TiO(2) ) - rutile 95%
======================================================== ===========================
Head grade - graphite 1.52%
======================================================== ===========================
Recovery - graphite 62%
======================================================== ===========================
Product grade (TGC) - graphite 96%
======================================================== ===========================
Annual production (average LoM) - rutile (tonnes) 242,000
======================================================== ===========================
Annual production (average LoM) - graphite (tonnes) 155,000
======================================================== ===========================
USD:AUD 0.73
======================================================== ===========================
USD:MWK 0.0012
======================================================== ===========================
USD:ZAR 0.0690
======================================================== ===========================
Sales Price - rutile (average LoM) US$1,308/t
======================================================== ===========================
Sales Price - graphite (average LoM) US$1,085/t
======================================================== ===========================
Government Royalty 5% of net sales revenue
======================================================== ===========================
Vendor Royalty 2% of gross profit
======================================================== ===========================
Community Development Fund 0.45% of net sales revenue
======================================================== ===========================
Stage 1 Capital US$372m
======================================================== ===========================
Stage 2 Capital US$311m
======================================================== ===========================
Working Capital US$34m
======================================================== ===========================
Sustaining Capital US$239m
======================================================== ===========================
Operating Costs including royalties (LoM) - FOB Nacala US$320/t
======================================================== ===========================
Corporate Tax Rate 30%
======================================================== ===========================
Discount Rate 8%
======================================================== ===========================
MODIFYING FACTORS
The Modifying Factors included in the JORC Code (2012) have been
assessed as part of the Expanded Scoping Study, including mining,
processing, metallurgical, infrastructure, economic, marketing,
legal, environmental, social and government factors. The Company
has received advice from appropriate experts when assessing each
Modifying Factor.
A summary assessment of each relevant Modifying Factor is
provided below.
Mining - refer to section entitled 'Mining' in the Full
Announcement at http://sovereignmetals.com.au/announcements/.
The Company engaged independent consultants Orelogy Mining
Consultants Pty Ltd and Fraser Alexander to carry out the pit
optimisations, mine design, scheduling and mining cost estimation
for the Kasiya Scoping Study. The proposed mining method is hydro
mining with minor dozer assistance. This is considered appropriate
for this style of shallow, saprolite-hosted rutile and graphite
mineralisation. This methodology is used across numerous mineral
sands operations, particularly in Africa, and is well suited for
this style of mineralisation.
61% of the total production target is in the Indicated resource
category with 39% in the Inferred resource category. 100% of the
scheduled throughput over the first eight and a half years of
production is in the Indicated category, with 0% in the Inferred
category- the payback period for the Project is 2.6 years from the
start of operations. The Company has concluded that it has
reasonable grounds for disclosing a production target which
includes a modest amount of Inferred material. However, there is a
low level of geological confidence associated with Inferred mineral
resources and there is no certainty that further exploration work
(including infill drilling) on the Kasiya deposit will result in
the determination of additional Indicated mineral resources or that
the production target itself will be realised.
Metallurgy and Processing - refer to section entitled
'Metallurgy and Process Design' in the Full Announcement at
http://sovereignmetals.com.au/announcements/.
Rutile
The Company completed bulk rutile test-work programs at the
globally recognised Allied Mineral Laboratories (AML) in Perth,
Australia. The latest program was supervised by Sovereign's Head of
Development, Paul Marcos. Mr Marcos is a metallurgist and process
engineer and a mineral sands industry veteran. Bulk test-work
programs have confirmed premium grade rutile can be produced via a
simple and conventional process flow sheet.
Processing engineering was completed by DRA Global who developed
the process plant design and associated cost estimate for the
Scoping Study. An average product grade of 96% TiO2 and average
recovery of 98% for rutile has been applied in the Scoping
Study.
Graphite
The Company engaged veteran graphite metallurgist Oliver Peters,
MSc, P.Eng., MBA (Consulting Metallurgist for SGS and Principal
Metallurgist of Metpro Management Inc.) to complete initial
test-work for graphite recovery. Mr Peters has over 25 years'
experience in metallurgy on graphite and other commodities. He has
operated numerous graphite pilot plants and commissioned a number
of full-scale processing facilities. Mr Peters has developed the
process flowsheet employed for the Malingunde PFS which has been
largely adopted for this Study. DRA's Senior Engineer, Stewart
Calder considers this appropriate based on the similarities of the
material and the early stage of the project.
Processing engineering was completed by DRA Global who developed
the process plant design and associated cost estimates for the
Scoping Study. Overall average graphite recovery applied was 62%
with gravity tails recovery being 74% and flotation plant recovery
being 84%. Overall concentrate grades average 96% C(t) with 60% of
the graphite flake product being larger than 180um.
Rutile & Graphite
It is acknowledged that laboratory scale test-work will not
always represent actual results achieved from a production plant in
terms of grade, chemistry, sizing and recovery. Further test-work
will be required to gain additional confidence of specifications
and recoveries that will be achieved at full-scale production.
Overall, the process flow-sheet is conventional for both rutile
and graphite with no novel features or equipment incorporated.
Infrastructure - refer to section entitled 'Infrastructure' in
the Full Announcement at
http://sovereignmetals.com.au/announcements/.
Kasiya is located approximately 40km north west of Lilongwe,
Malawi's capital, and boasts excellent access to services and
infrastructure. The site is serviced by a dual lane, sealed bitumen
road that links to Lilongwe and the underutilised operational
intermodal rail siding at Kanengo.
The proximity to Lilongwe gives the project a number of
benefits, including access to a large pool of professionals and
skilled tradespeople, as well as industrial services.
The Company appointed JCM Power (JCM) to design a preliminary
Independent Power Producer (IPP) solution for Kasiya. JCM is a
Canada-headquartered IPP which develops, constructs, owns and
operates renewable energy and storage projects in emerging markets
across the globe. JCM provided an estimated, levelized cost of
energy (LOCE) on a Power Purchase Agreement (PPA).
Transport cost estimates were provided by Morgan Sterling
Consultants (MSC) based on market data, suppliers' quotations,
industry databases, industry contacts and MSC's existing knowledge
of southern African transport infrastructure and freight markets.
MSC is an independent consultant with substantial experience in the
management of transport logistics studies in southern Africa.
Marketing - refer to sections entitled 'Marketing Strategy' in
the Full Announcement at
http://sovereignmetals.com.au/announcements/.
Rutile
The Company engaged market leading TZMI to provide a bespoke
marketing report to support the Scoping Study. TZMI is a global,
independent consulting and publishing company which specialises in
technical, strategic and commercial analyses of the opaque
(non-terminal market) mineral, chemical and metal sectors.
TZMI's assessment has confirmed that, based upon their
high-level view on global demand and supply forecasts for natural
rutile, and with reference to the specific attributes of Kasiya,
there is a reasonable expectation that the product will be able to
be sold into existing and future rutile markets.
Given the premium specifications of Kasiya's natural rutile, the
product should be suitable for all major natural end-use markets
including TiO2 pigment feedstock, titanium metal and welding
sectors.
Graphite
The Company engaged Fastmarkets, a specialist international
publisher and information provider for the global steel,
non-ferrous and industrial minerals markets, to prepare a marketing
report for graphite.
Fastmarkets' assessment has confirmed that based upon their
high-level view on global demand and supply forecasts for natural
flake graphite, and with reference to the specific attributes of
Sovereign's projects, there is a reasonable expectation that the
product from Sovereign's projects will be able to be sold into
existing and future graphite markets. Given the extremely low-cost
profile and high-quality product, it is expected that output from
Kasiya will be able to fill new demand or substitute existing lower
quality / higher cost supply.
Project considerations taken by Fastmarkets in forming an
opinion about the marketability of product include:
- Modest production target
- Low capital costs (incremental)
- Low operating costs
- High quality concentrate specifications
Industry participants confirm that the highest value graphite
concentrates remain the large, jumbo and super-jumbo flake
fractions, primarily used in industrial applications such as
refractories, foundries and expandable products. These sectors
currently make up the significant majority of total global natural
flake graphite market by value.
Fastmarkets have formed their opinion based solely upon project
information provided by Sovereign Metals to Fastmarkets and have
not conducted any independent analysis or due diligence on the
information provided.
Economic - also refer to sections entitled 'Cost Estimations'
and 'Financial & Economic Analysis' in the Full
Announcement.
Capital estimates for the procress plant have been prepared by
DRA, together with input from the Company and other contributing
consultants using combinations of cost estimates from suppliers,
historical data, benchmarks and other independent sources. The
intended accuracy of the initial capital cost estimate for the
Project is +/-30%.
Capital costs include the cost of all services, direct costs,
contractor indirects, EPCM expenses, non-process infrastructure,
sustaining capital and other facilities used for the mine. Capital
costs make provision for mitigation expenses and mine closure and
environmental costs.
Working capital requirements of US$34m (including contingency)
for plant commissioning and full ramp-up have been excluded in the
headline capital estimate but included in the financial
modelling.
Mining costs have been estimated by Fraser Alexander, a regional
leader in hydro-mining and materials handling. Mining costs have
been built up from first principles based on equipment, vendor, and
contractor quotations, local unit cost rates, and benchmarked
costs.
Labor costs have been developed based on a first-principles
build-up of staffing requirements with labor rates benchmarked in
Malawi and expatriate rates benchmarked for professionals from
South Africa and other jurisdictions.
A Government royalty of 5% (applied to revenue) and a vendor
profit share of 2% (applied to gross profit) has been included in
all project economics. A 0.45% royalty (applied to revenue) has
been applied for the community development fund.
Rehabilitation and mine closure costs are included within the
reported operating cost and sustaining capital figures.
A detailed financial model and discounted cash flow (DCF)
analysis has been prepared by the Company in order to demonstrate
the economic viability of the Project. The financial model and DCF
were modelled with conservative inputs to provide management with a
baseline valuation of the Project.
The DCF analysis demonstrated compelling economics of the
prospective Project, with an NPV (ungeared, after-tax, at an 8%
discount rate) of US$1,537 million, and an (ungeared) IRR of
36%.
Sensitivity analysis was performed on all key assumptions used.
The robust project economics insulate the Kasiya Project from
variation in market pricing, capital expense, or operating
expenses. With a rutile and graphite concentrate price 30% lower
than the Scoping Study prices the Project still displays a positive
NPV (ungeared, after-tax, at an 8% discount rate) of US$683 million
and IRR of 22%.
Payback period for the Project is 2.6 years from the start of
production. The payback period is based on free-cash flow, after
taxes.
Sovereign estimates the total capital cost to construct the mine
to be US$372m (which includes a contingency of 30% of direct and
indirect costs).
Key parameters are disclosed in the body of the announcement,
and include:
- Life of Mine: 25 years
- Discount rate: 8%
- Tax rate: 30%
- Resource Rent Tax (RRT) of 15% after tax profit is currently
legislated in the Taxation Act. It is understood that it is not
currently being applied to mining projects in Malawi and it is
uncertain if it would apply to Sovereign's projects in the future.
The Company has not applied RRT in any of its financial
analysis.
- Royalty rate: 5% royalty (Government), 2% of gross profit
(Original Project Vendor) and 0.45% Community Development Fund.
- Pricing: Rutile average price of US$1,308 per tonne and
Graphite average basket price of US$1,085 per tonne
The financial model has been prepared internally by the Company
using inputs from the various expert consultants and has been
reviewed by BDO an independent leading accountancy, tax and
advisory services firm to validate the functionality and accuracy
of the model.
The Company engaged the services of advisory firm, Argonaut,
with regards to project economics. Argonaut is a financial advisory
firm which specialises in multiple sectors, including metals and
oil & gas. Argonaut is well regarded as a specialist capital
markets service provider and has raised project development funding
for companies across a range of commodities including the
industrial and speciality minerals sector. Following the assessment
of a number of key criteria, Argonaut has confirmed that, on the
basis that a DFS arrives at a result that is not materially
negatively different than the Scoping Study as noted above, all
in-country government and regulatory approvals are received,
commercial offtake agreements are in place for the majority of
Rutile and Graphite production for at least the first five years of
mine life, and that there has not been any material adverse change
in financial condition, results of operations, business or
prospects of the Company/or political and business environment in
Malawi and/or financial or capital markets in general, Sovereign
should be able to raise sufficient funding to develop the
Project.
An assessment of various funding alternatives available to
Sovereign has been made based on precedent transactions that have
occurred in the mining industry, including an assessment of
alternatives available to companies that operate in industrial and
specialty minerals sector. The assessment and advice from Argonaut
Capital (referred to above) indicates that financing for industrial
mineral companies often involves a broader mix of funding sources
than just traditional debt and equity. Argonaut Capital considers
that given the nature of the Project, funding is likely to involve
specialist funds, with potential funding sources including, but not
limited to, traditional equity and debt, royalty financing and
off-take agreements, at either the corporate or project level. It
is important to note that no funding arrangements have yet been put
in place as these discussions continue to take place. The
composition of the funding arrangements ultimately put in place may
also vary, so it is not possible at this stage to provide any
further information about the composition of potential funding
arrangement.
Since initial exploration of the Kasiya Project in November
2019, the Company has completed extensive drilling, sampling,
metallurgical test-work, geological modelling and defined an
Indicated and Inferred Mineral Resource Estimate. Over this period,
with these key milestones being attained and the Project de-risked,
the Company's market capitalisation has increased from
approximately A$18m to over A$210m. As the Project continues to
achieve key milestones, which can also be significant de-risking
events, the Company's share price could be anticipated to
increase.
The Company is debt free and is in a strong financial position,
with approximately A$20m cash on hand (31 May 2022). The current
financial position means the Company is soundly funded to continue
into a PFS phase to further develop the Project.
The Company's shares are listed on the ASX and AIM which are
premier markets for growth companies and provides increased access
to capital from institutional and retailed investors in Australia
and the UK.
Sovereign has an experienced and high-quality Board and
management team comprising highly respected resource executives
with extensive technical, financial, commercial and capital markets
experience. The directors have previously raised more than A$1.75bn
from capital markets for a number of exploration and development
companies.
As a result, the Board has a high level of confidence that the
Project will be able to secure funding in due course, having
particular regard to:
1. Required capital expenditure;
2. Sovereign's market capitalisation;
3. Recent funding activities by directors in respect of other resource projects;
4. Recently completed funding arrangements for similar or larger scale development projects;
5. The range of potential funding options available;
6. The favourable key metrics generated by the Kasiya Project;
7. Ongoing discussions for potential offtake agreements; and
8. Investor interest to date.
Environmental, Social, Legal and Governmental - refer to section
entitled 'Environmental & Social Impact' in the Full
Announcement at http://sovereignmetals.com.au/announcements/.
Sovereign is committed to conduct its activities in full
compliance to the requirements of national regulations, its
obligations under international conventions and treaties and giving
due consideration to international best practices and policies. The
Company has appointed an experienced environmental consultant to
manage the ESIA process, and environmental and social baseline
studies have commenced with appropriately qualified independent
experts. The Company has also completed a high-level risk
assessment to identify major environmental and social risks which
could affect the development of the Project, along with mitigating
strategies to allow identified risks to be addressed early in the
project design phase.
The Company has embarked on several community engagement
exercises in the area and there is a general positive acceptance of
the Project. Social responsibility costs of US$80m have been
included in this Study, as well as a 0.45% revenue royalty for the
community development fund. This figure will be further assessed as
part of the overall ESIA for the Project as it advances to PFS and
DFS.
Based on the current assessments and commenced ESIA, the Company
believes there are no environmental issues currently identified
that cannot be appropriately mitigated in accordance with standard
practices adopted for the development of mining projects.
Subject to further successful exploration and achieving positive
technical studies, Sovereign endeavours to apply for a ML to secure
mineral deposits for mining. Under the Mines Act there are certain
requirements, milestones and approvals required prior to submission
of a ML application. At this point of Kasiya's development, the
Company notes no known issues or impediments obtaining a ML under
normal coarse of business.
Under the Mines Act, The Government of Malawi shall have the
right, but not the obligation, to acquire, directly or through a
Government nominee, without cost, a free equity ownership interest
of up to ten percent (10%) in any mining project that will be
subject to a large-scale mining licence (>5Mt mined per annum or
>US$250m Capex).
SOURCES
APPIX 1 - MINERAL SANDS PEER INFORMATION
Reference Company Project Stage of Revenue Source
Development to Cost
ratio
Ilmenite Base Toliara FS Complete 3.5 ASX Announcement: https://wcsecure.weblink.com.au/pdf/BSE/02426235.pdf
-Madagascar Resources
============ =========== ============ ============= ======== =============================================================================================
Ilmentie - Strandline Coburn Construction 2.4 Investor Presentation:
Western https://www
Australia .strandline.com.au/irm/PDF/35d74951-750a-4bdf-8234-62e58a2d10a9/InvestorPresentation
============ =========== ============ ============= ======== =============================================================================================
Zircon - Sheffield Thunderbird FS Complete 2.1 ASX Announcement:
Western Resources https://www
Australia .sheffieldresources.com.au/site/PDF/1b39388b-3a10-4733-9976-167a3d4a2333/BFSUpdateMaterially
ImprovesProjectEconomics
============ =========== ============ ============= ======== =============================================================================================
Ilmenite - Bluejay Dundas FS Complete 2.0 Investor Presentation:
Greenland Mining https://bluejaymining.com/wp-content/uploads/2021/09/Jay-Corporate-September-2021-1.pdf
============ =========== ============ ============= ======== =============================================================================================
APPIX 2 - GRAPHITE PEERS INFORMATION
Company Project Stage Operating Steady Current Source
of Development Costs State Production
(FOB) Production tpa
US$/t tpa
ASX Announcement: Updated
DFS Confirms Standout
Walkabout Graphite Project
A Resources Lindi Construction 347 40,000 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)
APPIX 3 - RUTILE MINERAL RESOURCES INFORMATION
Ref Company Project Status Source
==== ================ ============== ========================= ===================================================
1 Iluka Resources Sierra Rutile Production & Development Iluka Resources Limited's 2021 Annual Report
(released on ASX 24/02/2022)
==== ================ ============== ========================= ===================================================
2 Iluka Resources Balranald Development Iluka Resources Limited Annual Ore Reserve and
Resources as at 31 December 2021:
https://iluka.com/CMSPages/GetFile.aspx?guid=21339
6d8-1630-49ff-8d1b-fe4b1ee71e7e
==== ================ ============== ========================= ===================================================
3 Base Resources Kwale Production Updated Kwale North Dune and maiden Bumamani
Mineral Resource Estimate (released on ASX
19/02/2021)
==== ================ ============== ========================= ===================================================
Detailed Mineral Resources by Category
1. Iluka Resources - Sierra Rutile
Mt Rutile Grade* In-situ Rutile
---- -------------- ---------------
Measured 178 1.4% 2.4
---- -------------- ---------------
Indicated 309 1.0% 3.1
---- -------------- ---------------
Inferred 265 1.0% 2.6
---- -------------- ---------------
Total 752 1.1% 8.1
---- -------------- ---------------
2. Iluka Resources - Balranald
---- -------------- ---------------
Mt Rutile Grade* In-situ Rutile
---- -------------- ---------------
Measured 12 3.8% 0.5
---- -------------- ---------------
Indicated 28 4.3% 1.2
---- -------------- ---------------
Inferred 13 3.0% 0.4
---- -------------- ---------------
Total 53 3.7% 2.0
---- -------------- ---------------
3. Base Resources - Kwale
---- -------------- ---------------
Mt Rutile Grade* In-situ Rutile
---- -------------- ---------------
Measured 160 0.3% 0.3
---- -------------- ---------------
Indicated 91 0.2% 0.2
---- -------------- ---------------
Inferred 13 0.2% 0.2
---- -------------- ---------------
Total 254 0.2% 0.7
---- -------------- ---------------
* Rutile grade calculated as HM% times rutile % of
assemblage
APPENDIX 4 - GRAPHITE RESOURCE INFORMATION
Ref Company Project Project Source
Status
1 Syrah Balama Production Syrah Resources Limited's 2021 Annual Report (released on ASX 24/02/2022)
Resources
==== =========== ========== =========== =======================================================================================================================================================
2 Volt Bunyu FS Volt Resources Limited's 2021 Annual Report (released on ASX 29/09/2021)
Resources Complete
==== =========== ========== =========== =======================================================================================================================================================
3 Black Rock Mahenge FS ASX Announcement: Black Rock Mining confirms 25% increase in Measured Mineral Resource, now
Mining Complete the largest in class globally (released 3/02/2022)
==== =========== ========== =========== =======================================================================================================================================================
4 Mason Lac FS Mason Graphite's Corporate Presentation released July 2021
Graphite Gueret Complete
==== =========== ========== =========== =======================================================================================================================================================
5 Magnis Nachu BFS Magnis' Corporate Presentation released February 2022
Energy Complete
==== =========== ========== =========== =======================================================================================================================================================
6 NextSource Molo PEA https://www.nextsourcematerials.com/graphite/molo-graphite-project/
Materials Complete
==== =========== ========== =========== =======================================================================================================================================================
7 Graphite Graphite PEA https://www.graphiteoneinc.com/graphite-one-increases-tonnage-grade-and-contained-graphite-of-measured-and-indicated-and-inferred-resources-in-updated
One One Complete -mineral-resource-estimate/
==== =========== ========== =========== =======================================================================================================================================================
8 Focus Lac Resource https://focusgraphite.com/focus-graphite-reports-major-maiden-mineral-resource-estimate-at-lac-tetepisca-quebec/
Graphite Tetepisca
==== =========== ========== =========== =======================================================================================================================================================
Detailed Mineral Resources by Category
1. Syrah Resources - Balama
Mt TGC (%) In-situ TGC
------ -------- ------------
Measured 23 17.5% 4.0
------ -------- ------------
Indicated 378 11.2% 42.3
------ -------- ------------
Inferred 1,020 9.8% 100.0
------ -------- ------------
Total 1,421 10.3% 146.3
------ -------- ------------
2. Volt Resources - Bunyu
------ -------- ------------
Mt TGC (%) In-situ TGC
------ -------- ------------
Measured 20 5.3% 1.1
------ -------- ------------
Indicated 155 5.0% 7.8
------ -------- ------------
Inferred 286 4.9% 14.0
------ -------- ------------
Total 461 4.9% 22.6
------ -------- ------------
3. Black Rock Mining - Mahenge
------ -------- ------------
Mt TGC (%) In-situ TGC
------ -------- ------------
Measured 32 8.6% 2.7
------ -------- ------------
Indicated 85 7.8% 6.6
------ -------- ------------
Inferred 97 7.4% 7.2
------ -------- ------------
Total 213 7.8% 16.6
------ -------- ------------
4. Mason - Lac Gueret
------ -------- ------------
Mt TGC (%) In-situ TGC
------ -------- ------------
Measured 19.0 17.9% 3.4
------ -------- ------------
Indicated 46.5 16.9% 7.9
------ -------- ------------
Inferred 17.6 17.3% 3.4
------ -------- ------------
Total 83.2 17.6% 14.7
------ -------- ------------
5. Magnis - Nachu
------ -------- ------------
Mt TGC (%) In-situ TGC
------ -------- ------------
Measured 63 4.7% 3.0
------ -------- ------------
Indicated 61 5.7% 3.5
------ -------- ------------
Inferred 50 5.8% 2.9
------ -------- ------------
Total 174 5.4% 9.3
------ -------- ------------
6. NextSource - Molo
------ -------- ------------
Mt TGC (%) In-situ TGC
------ -------- ------------
Measured 160 0.3% 0.3
------ -------- ------------
Indicated 91 0.2% 0.2
------ -------- ------------
Inferred 13 0.2% 0.2
------ -------- ------------
Total 254 0.2% 0.7
------ -------- ------------
7. Graphite One - Graphite One
------ -------- ------------
Mt TGC (%) In-situ TGC
------ -------- ------------
Measured 2 8.0% 0.1
------ -------- ------------
Indicated 9 7.7% 0.7
------ -------- ------------
Inferred 92 8.0% 7.3
------ -------- ------------
Total 103 8.0% 8.2
------ -------- ------------
8. Focus - Lac Tetepisca
------ -------- ------------
Mt TGC (%) In-situ TGC
------ -------- ------------
Measured - -% -
------ -------- ------------
Indicated 59 10.6% 6.3
------ -------- ------------
Inferred 15 11.1% 1.6
------ -------- ------------
Total 74 10.6% 7.9
------ -------- ------------
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