TIDMSVML
RNS Number : 2789D
Sovereign Metals Limited
20 June 2023
SOVEREIGN METALS LIMITED
NEWS RELEASE | 20 JUNE 2023
GRAPHITE BULK SAMPLE OPERATIONS COMMENCED
-- Bulk sample program commenced to produce larger volumes of natural
graphite from Kasiya. Samples to be used for downstream testwork
and product qualification for the lithium-ion battery sector
-- Initial four tonnes of flake graphite pre-concentrate produced
at the Company's laboratory in Malawi ready for despatch to world
leading laboratory SGS Lakefield
-- Significant laboratory upgrade underway to enable continuous production
of bulk sample going forward
-- Initial characterisation testwork on Kasiya's graphite has already
indicated excellent suitability for use in lithium-ion batteries
-- Bulk sample program in line with Sovereign's graphite marketing
strategy to establish Kasiya as a major supplier of two critical
minerals - natural flake graphite and natural rutile
-- Active marketing of Kasiya's graphite to end users to follow; Sovereign
has already secured rutile offtake MOUs with major blue chip partners
including Japan's Mitsui and US-listed Chemours
-- Multiple government initiatives across the G7 and other world economies
recently announced focusing on securing graphite supply alongside
other critical minerals
Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or
Sovereign) is pleased to announce the commencement of a graphite
bulk sample program for qualification, downstream testwork and
product development. The Company is upgrading in-country facilities
to enable continuous production of bulk samples for marketing.
The Company's Kasiya Project (Kasiya) in Malawi has the
potential to be the one of the world's lowest cost and lowest
global warming potential (GWP) sources of natural rutile and
graphite. Kasiya is the largest natural rutile deposit and one of
the largest flake graphite deposits in the world. Both minerals are
critical to several of the world's economies as well as crucial to
decarbonisation solutions required to meet "Net-Zero" and other
targets set by policymakers.
Sovereign's product marketing strategy is to align itself with
high-quality partners and brands during the technical study and
development phases to completely qualify Kasiya's future products
for end-markets, including the lithium-ion battery anode market
which has now become the largest end-market for natural flake
graphite. Demand for high quality flake graphite continues to grow
due to global decarbonisation requirements. The demand for anodes
grew by 46% in 2022 compared to only 14% growth in natural flake
graphite supply.
Sovereign's Managing Director Dr Julian Stephens commented :
"Kasiya will potentially be one of the lowest cost flake
graphite projects in the world and is also estimated to have one of
the lowest global warming potentials of any current and future
graphite projects. Sovereign wants to be at the forefront of these
critical mineral supply chains and today's announcement is another
important step towards achieving that.
"The world's economies need surety of supply for high-quality,
low-carbon-footprint graphite suitable for use in lithium-ion
batteries. Without graphite there is no electric vehicle
revolution. The US, Japan and the EU see it as a critical mineral
and have allocated many billions of dollars towards securing
graphite supply."
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
Andrew Thomson +61 8 9480 2500
Joint Brokers
Berenberg +44 20 3207 7800
Matthew Armitt
Jennifer Lee
Optiva Securities +44 20 3137 1902
Daniel Ingram
Mariela Jaho
Christian Dennis
Tavistock PR +44 20 7920 3150
BULK SAMPLE PROGRAM COMMENCED
Currently, material from the planned mining pits is sourced from
remaining samples from the 2022 Kasiya resource drill program. The
samples are blended to create a bulk sample which is prepared for
processing at the Company's facility in Malawi where it is, sized
and deslimed - processes replicating the planned operation.
Post removal of the coarse and fine fractions, the remaining
clean sand fraction (45um to 2mm) containing the graphite and
rutile is processed over a wet shaking table to isolate two gravity
concentrates. A graphite pre-concentrate (light mineral
concentrate) with a target grade of 3-5% graphite (up from 1.5% in
the raw ore) and a heavy mineral concentrate (HMC) containing the
rutile.
The graphite pre-concentrate is planned to be sent to SGS
Lakefield for flotation and final processing into a final graphite
product. This initial representative graphite product will provide
samples for:
-- Downstream testwork focussed on Coated Spherical Purified
Graphite (CSPG) anode material via purification, spheronisation,
coating and battery cell cycling tests.
-- Assessment and qualification for traditional industrial
graphite markets, including the refractory, foundry, and expandable
graphite segments.
-- Future production of CSPG to be provided to anode / battery
manufacturers for assessment and qualification.
GRAPHITE PRODUCT MARKETING STRATEGY
Through Sovereign's long-established expertise in graphite, the
Company has built a strong understanding of the product's market
and developed a number of relationships with well-established
offtakers and customers.
A major component to graphite sales agreements is customer
qualification, and this is a key reason for initiating the graphite
bulk sample program and scaling up in-country facilities in order
to continuously produce bulk sample over the coming months. The
graphite produced from this program will be shared with prospective
end-users and is an important next step for Sovereign to qualify
the Kasiya graphite product.
Sovereign's recent initial graphite characterisation testwork
conducted by an independent German industrial minerals specialist
demonstrated superior qualities and excellent suitability for its
use in lithium-ion batteries. Further downstream testwork is
planned that will use the graphite concentrate produced.
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 (EVs) will become increasingly important market
consideration as EV penetration accelerates, noting that synthetic
graphite has a carbon footprint orders of magnitude higher than
flake graphite because it is made from by-products of coke and oil
refining via energy intensive processes.
Leading EV producer Tesla Inc.'s (Tesla) "Master Plan 3"
outlines its proposed path to reach a sustainable global energy
economy through end-use electrification and sustainable electricity
generation and storage. In the plan, Tesla suggests that the world
would need to produce 10.5Mt of graphite per year and estimates
US$104 Billion of new graphite mining investment is required to
achieve its target.(1)
Sovereign has already shared samples of rutile product from
Kasiya with major end-users globally, all of which have confirmed
its premium chemical and physical specifications will be suitable
for use in their titanium metal and pigment processes.
This has resulted in the Company entering initially non-binding
Memorandums of Understanding (MoU) with three major partners in the
natural rutile sector: Mitsui, Chemours and Hascor. The Company has
already over 50% of Stage 1 production under MoU (based on the
Company's Expanded Scoping Study released June 2022). Sovereign's
next objective is to secure offtake MOUs for the Kasiya flake
graphite co-product.
MALAWI LABORATORY UPGRADE UNDERWAY
Sovereign has constructed a bespoke laboratory in Lilongwe,
Malawi in order to process exploration drill samples for rutile and
graphite determination. The Lilongwe laboratory has allowed the
Company to efficiently process large numbers of exploration samples
at a fraction of the cost and time versus sending raw samples
directly to commercial laboratories in South Africa or
Australia.
To date, the Company has processed over 16,000 samples from the
Kasiya rutile-graphite deposit at the Lilongwe facility. This has
resulted in the Company reporting the largest natural rutile and
second largest flake graphite deposit in the world delineated in
just a three-year period.
LABORATORY UPGRADES & UPSCALING
The Company has recently commenced an upscale and upgrade
program of the Lilongwe laboratory to allow processing of about 500
tonnes of raw ore feed per annum (subject to Malawi Government
regulatory approvals) resulting in continuous production flake
graphite and natural rutile bulk samples.
Raw ore samples will be provided from processing remaining
Kasiya resource drill-hole samples in storage and further planned
bulk spiral auger drilling at Kasiya. A newly acquired 300mm
diameter bulk sampling spiral bit will allow approximately 2 to 2.5
tonnes of representative sample to be acquired per 20m hole.
Key upgrades planned, completed or underway at the laboratory to
enable bulk scale production of graphite pre-concentrate and HMC
containing rutile include;
Sizing and desliming
Acquisition of two Kwatani 30 inch shaking screens including one
single deck and one double deck model with associated sumps, pumps,
piping, and electrical components. This will increase the sizing
and desliming capacity throughput to approximately 2 tonnes of raw
sample per day or around 300kg per hour. This should produce
approximately 150kg per hour of clean sand containing rutile and
graphite to feed the wet shaking table.
Shaking table
A Holman-Wilfley 2000 Series shaking table has been ordered and
is currently under fabrication. The table is rated to process up to
450kg per hour and will produce a bulk graphite concentrate with a
targeted grade of 3-5% graphite, upgrading the original ore from
approximately 1.5% contained graphite. The table also will produce
a bulk rougher heavy mineral concentrate containing the rutile
product which would be expected to grade between 25% and 40%
rutile.
Water recycling system
Installation of a water system for settling fines and recovering
water for re-use in the process flowsheet is now complete -
reducing the water usage and waste disposal requirements.
GLOBAL CRITICAL MINERALS INITIATIVES
In June 2022, the United States and its G7 partners launched the
Partnership for Global Infrastructure and Investment to build clean
energy supply chains. They also signed the Minerals Security
Partnership to produce, process, and recycle critical minerals,
including graphite.(2)
In August 2022, the US Senate's passage of the Inflation
Reduction Act provided tax incentives and other financial support
to develop critical minerals whilst providing US$369 billion for
climate and clean energy programs. Graphite was named in the list
of critical minerals.(3)
Subsequently at Davos, in January 2023, European Commission
President Ursula von der Leyen announced that a key pillar of the
EU's new industrial strategy will be global partnerships to access
inputs needed for industry.(4) This builds on existing EU
initiatives, such as the European Battery Alliance and the Critical
Raw Materials Act, which both aim to onshore and secure supply
chains.
On 28 March 2023, in an effort to support their partnership as
allies in the race to strengthen their critical mineral supply
chains for electric vehicle batteries, the US and Japan Governments
entered into an agreement on Strengthening Critical Minerals Supply
Chains.(5) It is noteworthy that the definition of "critical
minerals" under the Trade Agreement includes a list of only five
minerals- graphite, cobalt, lithium, manganese, and nickel.
In April 2023, Japan's Ministry of Economy, Trade and Industry
announced that it will subsidize up to half the cost of mine
development and smelting projects for Japanese companies to secure
critical minerals.(6) Graphite, lithium, manganese, nickel, cobalt,
and rare earths are reportedly the main targets for this financial
support.
In the same month, the G7 pledged US$7 billion to secure a
stable supply of critical minerals such as graphite. The funds are
to be used for mine development and other projects.
- END -
REFERENCES
1. Tesla Master Plan 3 - https://www.tesla.com/ns_videos/Tesla-Master-Plan-Part-3.pdf
2.
https://carnegieendowment.org/2023/05/03/friendshoring-critical-minerals-what-could-u.s.-and-its-partners-produce-pub-89659
3.
https://www.mining-journal.com/energy-minerals-news/news/1437372/us-senate-passes-act-with-incentives-for-critical-minerals
4. https://ec.europa.eu/commission/presscorner/detail/en/speech_23_232
5.
https://ustr.gov/about-us/policy-offices/press-office/press-releases/2023/march/united-states-and-japan-sign-critical-minerals-agreement
6.
https://www.mining.com/japan-to-subsidize-half-the-costs-of-lithium-critical-minerals-projects-report/
Competent Person Statement
The information in this announcement that relates to the Mineral
Resource Estimate is extracted from the announcement dated 5 April
2023. 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 June 2022
entitled 'Kasiya Expanded Scoping Study Results'. 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.
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.
To view this announcement in full, including all figures and
illustrations, please refer to:
http://www.investi.com.au/api/announcements/svm/6944f8b6-791.pdf
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