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Sovereign Metals makes further progress at Kasiya project
By Josh White
Date: Wednesday 29 Apr 2026
(Sharecast News) - Sovereign Metals said on Wednesday that it had made further progress at its Kasiya rutile-graphite project in Malawi during the March quarter, including the completion of a definitive feasibility study, an upgraded mineral resource estimate and new offtake memoranda of understanding.
The AIM-traded company said the Kasiya definitive feasibility study delivered a pre-tax net present value, discounted at 8%, of $2.2bn, based on capital expenditure to first production of $727m.
That implied a net present value to capital expenditure ratio of 3.0 times.
Sovereign said the project was expected to generate steady-state annual EBITDA of $476m and pre-tax, unlevered free cash flow of $452m.
The initial 25-year mine life was forecast to generate total revenue of $16.2bn, with potential for multi-generational extensions.
Operating costs were estimated at $450 per tonne of product, free on board Nacala.
Sovereign said Kasiya was positioned to become the world's largest producer of both natural rutile, at 222,000 tonnes per year, and natural flake graphite, at 275,000 tonnes per year, both of which are designated as critical minerals by the United States and the European Union.
The company said the DFS was completed under the oversight of the Sovereign-Rio Tinto technical committee, with workstreams aligned with IFC Performance Standards.
A collaboration agreement is also in place with the World Bank's International Finance Corporation, as potential co-lead mandated lead arranger for project financing.
Data from the pilot mining programme, completed with technical input from Rio Tinto, provided real-world inputs and validation across key DFS workstreams.
Sovereign said potential heavy rare earth production was not included in the DFS, with evaluation of a monazite by-product from the rutile tailings stream now under way.
The company also reported a significant upgrade to Kasiya's mineral resource estimate. Total rutile resources increased to 2.1bn tonnes at 0.96% rutile, containing 20.3m tonnes of rutile, with 0.95% total graphitic carbon for 20.0m tonnes of contained graphite.
Measured and indicated contained rutile increased 32% to 16.1m tonnes, based on 1.65bn tonnes at 0.98% rutile.
Sovereign also declared a first measured resource for Kasiya, covering at least the first six years of planned operations and providing the classification standard required for a bankable DFS.
The company signed a non-binding memorandum of understanding with Mitsui for up to 70,000 tonnes per year of Kasiya natural rutile concentrate, with titanium dioxide content above 95%, over an initial four-year supply period from first production, with a potential five-year extension.
Sovereign said that represented more than 50% of phase one rutile production.
It also signed a non-binding MOU with Traxys North America for about 40,000 tonnes per year of Kasiya graphite in phase one, rising to as much as 80,000 tonnes per year as the project expands.
The agreement would initially focus on the high-value refractory market, with scope to include flake graphite for battery anode supply chains.
Sovereign said Japan, where Mitsui is based, was the world's second-largest producer of titanium sponge after China and supplied more than 70% of US titanium sponge imports in the first half of 2025.
It said Traxys North America was one of three trading houses selected to procure critical minerals for the US Government's $12bn Project Vault strategic reserve.
The company also recovered monazite concentrate containing elevated levels of heavy rare earth elements from the rutile tailings stream at its Lilongwe laboratory.
Preliminary analysis showed an average dysprosium-terbium ratio of 2.9%, 11.9% yttrium and light rare earth content including a 21.8% neodymium-praseodymium ratio.
Sovereign said the heavy rare earth ratio was about seven times higher for both dysprosium-terbium and yttrium than the five largest global rare earth producing mines, suggesting potential for Kasiya to produce a high-value rare earth product.
It said monazite was recovered from material that would otherwise be discarded, creating potential for a third revenue stream at near-zero incremental cost and without requiring a parallel rare earth processing circuit.
The company noted that dysprosium, terbium and yttrium were subject to Chinese export controls introduced in April 2025 and tightened against Japan in January 2026.
It said the elements were used in permanent magnets for defence systems, aerospace thermal barrier coatings, radar and laser systems.
Over the June quarter and beyond, Sovereign said it would advance post-DFS workstreams, including finalising the environmental and social impact assessment.
It also planned to progress offtake talks towards binding agreements with Mitsui, Traxys and other strategic counterparties.
Further work would be carried out to characterise monazite mineralisation at Kasiya, including detailed mineralogical analysis, assessment of heavy rare earth recovery rates through the proposed flowsheet, and evaluation of the potential scale and economics of rare earth production as a by-product.
The firm said it would also continue its community and social development programmes in Malawi.
At 1215 BST, shares in Sovereign Metals were up 0.27% at 37.6p.
Reporting by Josh White for Sharecast.com.
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