Rio Tinto Ltd (ASX: RIO) has been busy investing funds into an ASX All Ords stock this week.
Based on the mining giant's investment, it seems to see a lot of promise in this company's project in Africa.
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Which ASX All Ords stock?
This morning, Sovereign Metals Ltd (ASX: SVM) revealed that Rio Tinto has exercised all its share options to increase its shareholding in the company to 19.76%.
The miner exercised a total of 34,549,598 share options to acquire the same number of new fully paid ordinary shares at $0.535 per share. This results in proceeds of $18.5 million for the ASX All Ords stock.
What now?
Management believes Rio Tinto's further investment represents another significant step towards unlocking a major new supply of low-CO2-footprint natural rutile and flake graphite.
It will use the proceeds from Rio Tinto's additional strategic investment to continue advancing its tier one Kasiya Rutile-Graphite Project in Malawi.
This includes progressing the current optimisation study for Kasiya, which is focused on the development of a world-class mine that is capable of supplying critical minerals to the titanium pigment, titanium metal, and lithium-ion battery industries. After which, it will move to a definitive feasibility study.
Under the investment agreement between the parties, Rio Tinto continues to provide assistance and advice on technical and marketing aspects of Kasiya.
'One of the most significant critical minerals projects globally'
The ASX All Ords stock's chairman, Ben Stoikovich, was very pleased with the investment. He appears to see it as confirmation of the quality of the Kasiya project. Stoikovich said:
Rio Tinto's further investment in Sovereign reaffirms Kasiya's position as one of the most significant critical minerals projects globally. With Rio Tinto's wealth of experience as one of the world's largest and most accomplished global mining companies, Kasiya is well positioned to potentially become a market leader in low-CO2-footprint natural rutile and graphite.
Sovereign Metals' managing director, Frank Eagar, adds:
In collaboration with Rio Tinto, we have made significant progress in advancing Kasiya over the course of this year, including the successful launch of the pilot phase mining in May. We are excited about Rio Tinto's further investment in Sovereign, which represents another significant step towards unlocking a major new supply of low-CO2-footprint natural rutile and flake graphite.
Kasiya's mineral resource estimate (MRE) is currently 1.8Bt at 1.0% rutile. This results in 17.9Mt tonnes of contained natural rutile and 24.4Mt of contained graphite. This makes it the largest in the world according to the company.
