Sovereign to Demerge Standalone Graphite Projects
- Sovereign to demerge standalone Graphite Projects (being the Nanzeka, Malingunde, Duwi and Mabuwa Projects) into a wholly owned subsidiary, NGX Limited
- The Demerger seeks to unlock the value of the Graphite Projects for Sovereign shareholders and separate its Kasiya Rutile Project and its standalone Graphite Projects into two distinct companies
- The demerger of the Graphite Projects will be subject to shareholder approval and will involve an in-specie distribution to Sovereign shareholders on the basis of one (1) NGX Share for every eleven (11) Sovereign Shares
- NGX is proposing to pursue an ASX listing through an initial public offering of NGX Shares (IPO) pursuant to a prospectus following the completion of the Demerger
- Sovereign shareholders to retain further exposure to the value and upside of the Graphite Projects as the NGX IPO is expected to comprise a priority offer to existing shareholders on the basis of one (1) new NGX Share for every one (1) NGX Share received pursuant to the Demerger to raise approximately $8,600,000 and a general offer of $1,000,000 to assist with satisfying ASX spread requirements. This will ensure there is no cash outflow from Sovereign to NGX as part of the Demerger, other than applicable Sovereign expenses to affect the Demerger. However, terms of the NGX IPO are yet to be finalised
- A Notice of Meeting for the Demerger and Distribution will be sent to shareholders with the meeting planned to take place early in 2023
- The Demerger allows Sovereign and the existing management team to focus on its flagship Kasiya Rutile Project, the largest natural rutile deposit in the world
- Sovereign will retain all graphite co-product from the Kasiya Rutile Project
- Kasiya Pre-Feasibility Study currently advancing and on track for completion in H1 2023
December 7, 2022 – Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) is pleased to announce that it intends to undertake a demerger (Demerger) whereby Sovereign’s Malawian graphite projects being the Nanzeka Project, Malingunde Project, Duwi Project and Mabuwa Project (Graphite Projects) are to be demerged through NGX Limited (NGX), a wholly owned subsidiary of the Company, allowing Sovereign to focus on the development of the Kasiya Rutile Project (Kasiya) while unlocking value in its Graphite Projects for shareholders.
Sovereign proposes, subject to shareholder approval, to demerge the Graphite Projects via a spin-out of NGX and in-specie distribution of NGX fully paid ordinary shares (NGX Shares) to Sovereign shareholders by issuing one (1) NGX Share for every eleven (11) Sovereign shares (SVM Shares) held (Distribution), allowing Sovereign shareholders to retain exposure to the value and upside of the Graphite Projects.
Upon completion of the Demerger, NGX intends to seek admission to the official list of the ASX. NGX will undertake a capital raising to satisfy the ASX admission requirements.
NGX will be the offeror of the NGX Shares under the IPO. A prospectus will be issued by NGX for the IPO capital raising which will be made available when the NGX Shares are offered. Anyone wishing to acquire NGX Shares as part of the IPO offer will need to complete the application form that will accompany the prospectus.
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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
Sovereign Metals Limited | ASX:SVM | AIM:SVML
T: +61 8 9322 6322 | F: +61 8 9322 6558
E: [email protected] | www.sovereignmetals.com.au
Level 9, 28 The Esplanade, PERTH WA 6000 | ABN: 71 120 833 427
Figure 1: Proposed Sovereign and NGX tenement holding post Demerger
Map A: Mabuwa Project tenement application located approximately 250km south of Lilongwe
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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.
Competent Persons Statement
The information in this announcement that relates to the Mineral Resource Estimate is extracted from the announcement dated 30 September 2022. 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.
This ASX Announcement has been approved and authorised for release by the Company’s Board of Directors.
