Kasiya Project’s OPFS Confirms 27% IRR and US$423/t Operating Cost

• Optimised PFS delivers US$2.3 billion pre-tax NPV and 27% IRR
• Shift to dry mining method enhances operational flexibility and reduces water use
• Kasiya positioned as world’s largest natural rutile and second-largest flake graphite producer
• Low operating costs at US$423/t FOB Nacala, competitive in global markets
• Strong environmental and social governance with progressive rehabilitation plans

Strategic Critical Minerals Project Reaffirmed

Sovereign Metals Limited (ASX:SVM) has announced the results of its Optimised Pre-Feasibility Study (OPFS) for the Kasiya Rutile-Graphite Project in Malawi, a milestone that solidifies the project’s potential as a globally significant supplier of critical minerals. The study, conducted with technical oversight from Rio Tinto, confirms a pre-tax net present value (NPV) of US$2.3 billion and an internal rate of return (IRR) of 27%, underscoring the project’s robust economics and long-life production profile.

Located in central Malawi, Kasiya hosts the world’s largest known natural rutile deposit and the second-largest flake graphite deposit. The OPFS envisages a 25-year mine life producing an average of 222,000 tonnes of natural rutile and 233,000 tonnes of graphite annually, positioning Sovereign as a potential market leader outside China in these strategic minerals.

Operational Optimisations Drive Cost Efficiency

A key advancement in the OPFS is the transition from hydraulic to dry mining methods using draglines and trucking, a change validated by successful large-scale field trials. This shift not only enhances operational flexibility but also significantly reduces water consumption by nearly 40%, allowing for a smaller raw water dam and improved environmental outcomes.

The operating cost is estimated at US$423 per tonne FOB Nacala, making Kasiya one of the lowest-cost producers of natural rutile and graphite globally. Capital expenditure to first production is pegged at US$665 million, with sustaining capital of US$397 million over the life of mine. The project benefits from excellent infrastructure, including proximity to Malawi’s capital Lilongwe, sealed roads, rail connectivity to the deep-water port of Nacala, and access to a hydro-powered grid.

Premium Product Quality and Market Position

Metallurgical testwork confirms Kasiya’s rutile product exceeds 95% TiO2 with low impurities, suitable for high-end titanium metal and pigment applications. The graphite concentrate boasts over 96% total graphitic carbon with large flake sizes ideal for battery anode materials. Independent testing shows coated spherical purified graphite (CSPG) from Kasiya matches the performance of leading Chinese suppliers, a critical factor for lithium-ion battery markets.

Market analyses by TZ Minerals International and Fastmarkets affirm strong demand fundamentals for both rutile and graphite, with supply deficits expected due to closures of existing mines. Sovereign’s strategic partnership with Rio Tinto, which holds a 19.9% stake and provides technical and marketing support, further strengthens Kasiya’s commercial prospects. Rio Tinto also holds an option to operate the mine and market 40% of production.

Environmental and Social Governance at the Forefront

Sovereign has integrated rigorous environmental and social governance (ESG) principles into project planning. The company is advancing an Environmental and Social Impact Assessment with extensive stakeholder engagement involving over 10,000 participants. Rehabilitation trials demonstrate successful backfilling and soil remediation, including innovative use of bamboo planting to sequester carbon and restore agricultural productivity.

Water quality monitoring confirms stable, high-quality surface and groundwater, while community programs focus on education, conservation farming, and local employment. Sovereign’s commitment to social responsibility is reflected in a structured framework addressing land use, cultural heritage, and gender diversity.

Next Steps and Market Implications

With the OPFS complete, Sovereign is poised to advance to a Definitive Feasibility Study (DFS), further de-risking the project and refining development plans. The strong financial metrics and operational improvements position Kasiya as a cornerstone supplier in the critical minerals sector, essential for global clean energy and defense supply chains.

Bottom Line?

Kasiya’s OPFS cements Sovereign Metals’ role in critical minerals supply, but market and regulatory dynamics will shape the next phase.

Questions in the middle?

• Will Rio Tinto exercise its option to operate Kasiya and how will that influence project execution?
• How will evolving global demand for titanium feedstocks and battery-grade graphite impact Kasiya’s pricing and offtake agreements?
• What are the potential fiscal and regulatory changes in Malawi that could affect project economics and timelines?