Kasiya Pre-Feasibility Study Results
28 September 2023
PFS CONFIRMS KASIYA AS A MAJOR CRITICAL MINERALS PROJECT DELIVERING INDUSTRY-LEADING ECONOMIC RETURNS AND SUSTAINABILITY METRICS
ECONOMIC HIGHLIGHTS
US$1,605M |
|
28% |
|
US$415M |
After Tax NPV8 |
|
After Tax IRR |
|
Ave. Annual EBITDA |
|
|
|
|
|
US$16Bn |
|
US$404/t |
|
US$597M |
|
Total Revenue (initial modelled 25 years LOM) |
|
Operating Cost (FOB Nacala per tonne of product) |
|
Capex to 1st Production |
PFS HIGHLIGHTS
- “Market Leader” Position in Two Critical Minerals:
- Positioned to become the world’s largest rutile producer at 222kt per annum for an initial 25 year life-of-mine (LOM)
- Potentially one of the world’s largest natural graphite producers outside of China at 244kt per annum
- Natural rutile facing significant global supply deficit forecast to widen further considerably in the next 5 years1
- Natural graphite market moving into deficit as demand rapidly grows in the lithium-ion battery and electric vehicle (EV) sectors
- Initial Probable Ore Reserves declared of 538Mt, representing conversion of only 30% of the total Mineral Resource
- Substantial production rate and mine life upside exists as the PFS modelling was limited to only 25 years
- Highly Compelling Cost Profile:
- Cash operating costs of US$404/t of product will position Kasiya as the lowest cost producer of rutile and graphite globally
- Increased capital to first production from the Expanded Scoping Study, is primarily due to bringing forward capital items previously planned for Stage 2 including a rail spur, full-scale water dam, integrated power and optimised graphite production, as well as generally enhanced engineering and global cost inflation
- Industry-Redefining Environmental and Social Advantages:
- Extremely low CO2-footprint operation incorporating climate-smart attributes including hydro-mining with renewables power solution
- CO2 emissions expected to be lowest in class versus existing and planned operations and versus alternative synthetic products
- Low-impact operation with mineralisation at surface, zero-strip ratio, low reagent usage, simple process flowsheet and progressive land rehabilitation
- Strong Support from the Government of Malawi:
- Government of Malawi has applauded the timely investment by Rio Tinto and marked it as a milestone towards realising the country’s aspirations of growing the mining sector as a priority industry
- PFS demonstrates Kasiya’s potential to provide significant socio-economic benefits for Malawi including fiscal returns, job creation, skills transfer and sustainable community development initiatives
- With mining being one of the key pillars for growth under Malawi’s economic development strategy (Agriculture, Tourism, Mining - ATM Policy) and the potential for Kasiya to be a project of national significance, the Government has constituted an Inter-ministerial Project Development Committee to work alongside the Company to assist in the permitting processes
- Optimisation with Strategic Investor Rio Tinto to Commence:
- Advancing into an optimisation phase prior to moving to the Definitive Feasibility Study (DFS) with support from the Company’s strategic investor, Rio Tinto
- Formal establishment of the Technical Committee with Rio Tinto
Managing Director, Dr Julian Stephens commented: “The release of the Kasiya PFS marks another important step towards unlocking a major source of two critical minerals required needed to decarbonise global supply chains and to achieve Net-Zero.
The Project benefits from existing high-quality infrastructure and 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.
The high-quality of work completed and the results of the PFS demonstrates that Kasiya is a globally significant project that has the potential to deliver a valuable long-term source of low-CO2 products and generate substantial economic returns with a forecast average EBITDA of US$415 Million per annum for the initial 25 years modelled. The Project is well positioned to be a large scale, multi-generational asset with significant opportunity for further upside as only 30% of the current mineral resource (MRE) is utilised in the PFS model.
Kasiya’s compelling economics demonstrate the potential for industry-leading returns, even against the backdrop of global cost inflation.
The Company is looking forward to conducting an optimisation review in collaboration with new strategic investor, Rio Tinto and progressing to the Definitive Feasibility Study.”
ENQUIRIES
Dr Julian Stephens (Perth)
Managing Director
+61(8) 9322 6322
Sam Cordin (Perth)
+61(8) 9322 6322
Sapan Ghai (London)
+44 207 478 3900
Source:
1. TZ Minerals International Pty Ltd (TZMI)
KASIYA PFS OUTCOMES
Sovereign Metals Limited (the Company or Sovereign) is pleased to announce the results of the Pre-Feasibility Study (PFS or Study) for the Company’s Kasiya Rutile-Graphite Project (Kasiya or the Project) in Malawi.
The PFS confirmed Kasiya as potentially a major critical minerals project with an extremely low CO2-footprint delivering major volumes of natural rutile and graphite while generating significant economic returns.
The PFS is an Association for the Advancement of Cost Engineering International (AACEI) Class 3 estimate with an accuracy of -20% and +25%.
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