Sovereign Metals Ltd (ASX: SVM) says its Kasiya mining project in Malawi could turn out to be the world's largest producer of two critical minerals following the completion of a positive definitive feasibility study (DFS).
The company said in a statement to the ASX on Thursday that the Kasiya project, once in production, would be the world's largest producer of both natural rutile and flake graphite.
The DFS indicates the project could run for at least 25 years, producing 222,000 tonnes of rutile per year and 275,000 tonnes of graphite.
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Strong cash flow
This would generate US$476 million in EBITDA per year and total revenue over the life of the mine of US$16.5 billion, the company said.
The project would cost US$727 million to bring into production, the company said, and would be the lowest-cost graphite producer globally, even when compared to Chinese producers.
Sovereign said it had already signed non-binding memoranda of understanding for offtake agreements covering more than 50% of the rutile produced during stage one of the mine and more than 35% of the graphite.
The potential for heavy rare earths extraction as part of the rutile production was not included in the DFS, but was being evaluated, the company said.
This could provide a third income stream, producing dysprosium, terbium, and yttrium, which were all subject to Chinese export controls, at minimal incremental cost.
Sovereign Managing Director Frank Eager said regarding the DFS:
The completion of this DFS marks a defining milestone for Kasiya and for the global titanium and graphite supply chains. To deliver a DFS of this quality, depth and confidence, rarely achieved by a pre-production company, reflects the calibre of partnerships that Sovereign has assembled around this project: Rio Tinto's technical expertise, alignment with IFC Performance Standards under our Collaboration Agreement, and offtake interest driven by U.S. and Japanese supply chain security priorities. The successful completion of large-scale field trials, combined with the expertise of our experienced owner's team and the technical support provided by Rio Tinto, reinforces Kasiya's potential to be a long-life, low-cost, and reliable source of two critical and globally strategic minerals. Kasiya is not simply a mining project – it is a globally strategic asset.
Titanium in short supply
Sovereign said that rutile is the purest and highest-grade form of naturally-occurring titanium feedstock, and was the preferred feedstock "for titanium sponge production and high-specification titanium alloy applications in aerospace, defence and medical industries''.
The US is currently 100% reliant on imports for its titanium sponge needs, the company said, and added that primary global rutile supply was in structural decline.
The company added that "Kasiya's natural rutile has demonstrated premium chemical characteristics and suitability across all major end-use applications, with high titanium dioxide content, low impurity levels, and favourable particle size distribution – positioning it as a preferred high-purity feedstock within a structurally undersupplied market''.
Sovereign Metals shares were 0.7% higher in early trade at 72 cents. The company was valued at $463 million.
