Sovereign Metals Limited · ASX:SVM
Sovereign Metals — Investor Presentation (February 2024)
32 slides from Sovereign Metals's investor presentation, February 2024
Slide 1: February 2024 Investor Presentation
FEBRUARY 2024 INVESTOR PRESENTATION TARGETING TO BECOME THE WORLD’S LARGEST, LOWEST COST AND LOWEST-EMISSIONS PRODUCER OF TWO CRITICAL MINERALS: RUTILE (TITANIUM) AND NATURAL GRAPHITE ASX: SVM | AIM: SVML | ABN: 71 120 833 427
Slide 2: Disclaimers & Disclosures
DISCLAIMERS & DISCLOSURES AUTHORISATION STATEMENT This presentation has been approved and authorised for release by the Company’s Managing Director & CEO, Mr Frank Eagar. DISCLAIMER NOTICE This presentation has been prepared as a summary only and does not contain all information Sovereign Metals Lim
Slide 3: Sovereign Metals Investment Highlights
Sovereign Metals Investment Highlights KASIYA: Largest known rutile (titanium) deposit and second largest flake graphite resource globally Tier One critical minerals deposit for two commodities where China currently dominates supply Rio Tinto is 15% strategic investor – one of the world’s largest in
Slide 4: Kasiya Rutile-Graphite Project Overview
Kasiya Rutile-Graphite Project Overview Positioned to become the largest, lowest-cost and lowest carbon-footprint producer of two critical minerals Genuine greenfields discovery • Sovereign discovered Kasiya in 2019 • First rutile-dominant deposit found in over 70 years • One-of-a-kind project hosti
Slide 5: Kasiya PFS – Key Outcomes
Kasiya PFS – Key Outcomes Initial 25 years of production mines only 30% of the known resource Key Economic Outcomes Production Profile (ktpa) Post-tax NPV8 US$1.6Bn Rutile Graphite Post-tax IRR 28% 600 Average Annual EBITDA US$415m 500 EBITDA Margin 64% Capex to First Production US$597m 400 NPV / Ca
Slide 6: Rio Tinto Strategic Equity Investment Highlights
Rio Tinto Strategic Equity Investment Highlights Rio Tinto invested in Sovereign Metals in July 2023 to advance the Definitive Feasibility Study (DFS) Initial Investment Option to 19.99% Investor End Date Invested A$40.4M for an initial Option to acquire additional Option to be Operator and other 15
Slide 7: Rio Tinto: Titanium Feedstock and Battery Minerals Snapshot
Rio Tinto: Titanium Feedstock and Battery Minerals Snapshot One of the world’s largest mining companies with 150+ years mining experience World’s largest titanium Existing Operations RIO TINTO slag producer RBM (74%) – South Africa US$110Bn Market Cap. TITANIUM 1,200ktpa titanium dioxide QIT (80%) –
Slide 8: Titanium is Essential for Various Industries
Titanium is Essential for Various Industries A critical mineral for the US, EU and Japan in which China dominates supply High strength, low weight Corrosion resistant Temperature resistant 2x stronger than aluminium No noticeable corrosion even in Better performing than other metals 45% lighter than
Slide 9: Rutile is the Highest Purity Titanium Mineral
Rutile is the Highest Purity Titanium Mineral Titanium is commercially mined in two mineral forms: ilmenite and rutile Ilmenite: Common, Low purity (FeTiO3) Rutile: Rare, high purity (TiO2) 30 - 60% TiO2 Grade >95% US$277 / t Current Price1 US$2,180/t 2023f 8.0Mt 0.5Mt Production Processing High Non
Slide 10: Rutile will play a Critical role in Decarbonising Titanium Supply Chains
Rutile will play a Critical role in Decarbonising Titanium Supply Chains Natural rutile has Scope 1 & 2 emissions orders of magnitude lower than ilmenite-derived alternatives Ilmenite ~30-60% TiO2 Rutile >95% TiO2 Scope 1 & 2 Emissions Mining and (tonnes of CO2e per tonne of titanium feedstock) Bene
Slide 11: Rutile - Reduced Emissions and Waste for Downstream Users
Rutile - Reduced Emissions and Waste for Downstream Users Rutile provides substantially lower Scope 3 emissions – reducing emissions of Titanium downstream industry Scope 3 Emissions (tonnes of CO2e per tonne of TiO2 pigment) 48% CO2 Reduction 35% CO2 Reduction Synthetic Rutile Titania Slag Natural
Slide 12: The Price of Carbon Emissions – EU Climate Law
The Price of Carbon Emissions – EU Climate Law EU climate policy and regulation will impact international trade 2005 – EU Emissions Trading Scheme (ETS) • Requires more than 10,000 manufacturers, power generators and airlines to pay for their carbon emissions using carbon permits • Shipping will be
Slide 13: Decarbonisation – A Licence to Operate for Global Businesses
Decarbonisation – A Licence to Operate for Global Businesses Regulation is driving industry to lower supply chain carbon-footprints BOEING APPLE ROLLS ROYCE COLGATE-PALMOLIVE “We are committed to working “The company is prioritizing clean “Along our value chain, our teams “We are working to mitigate
Slide 14: Natural Rutile – An Extreme Supply Crisis
Natural Rutile – An Extreme Supply Crisis Rutile supply has been suffering from depleting reserves and lowering grades of current producing mines Titanium Feedstock Demand 800 Rutile Supply (kt TiO2 units) (kt TiO2 units) 700 12,000 CAGR ↑2.7% 600 10,000 500 8,000 ↓ 52% 400 6,000 Sierra Rutile1 300
Slide 15: Graphite is a Critical Mineral for the Energy Transition
Graphite is a Critical Mineral for the Energy Transition Critical mineral for the US, EU, and Japan Up to 50% of a China dominates supply of graphite for battery anodes lithium-ion battery (% mass NMC1 battery) Natural Graphite Extracted from mining (natural graphitization occurred over time) and pu
Slide 16: Chinese Dominance Threatens Electric Vehicle Ambitions
Chinese Dominance Threatens Electric Vehicle Ambitions Kasiya natural graphite would have a significantly lower carbon-footprint than Chinese supply Graphite - major contributor to EV battery Global Warming Impact carbon-footprint (tonnes CO2 equivalent emissions per tonne of graphite (CO2 equivalen
Slide 17: Kasiya – Lowest Emissions Natural Graphite Globally
Kasiya – Lowest Emissions Natural Graphite Globally Sovereign is poised to have the lowest carbon-footprint of all graphite producers Global Warming Potential of Current and Future Graphite Supply (tonnes of CO2 equivalent emissions per tonne of graphite produced) 2.2 Source: Minviro Source: Company
Slide 18: Graphite Mining Industry Production & Cost Curve
Graphite Mining Industry Production & Cost Curve Sovereign is set to be the largest and lowest cost producer of natural graphite outside of China Graphite Production Cost Curve (US$/t FOB) Cumulative Graphite Production: 1,739,702t $800 $700 $600 Weighted Average Cost ~US$552/t $500 $400 $300 US$404
Slide 19: Kasiya – Low Risk, Large Scale, Responsible and Sustainable Operation
Kasiya – Low Risk, Large Scale, Responsible and Sustainable Operation Positioned for effective environmental and social outcomes Proven Sustainable Infrastructure in Simple Mining Beneficiation Operations Place High grade rutile Existing rail corridor and Simple conventional Predominantly solar and
Slide 20: Sovereign Malawi Facility Demonstrates Simple Beneficiation
Sovereign Malawi Facility Demonstrates Simple Beneficiation Micro-scale version of process flowsheet demonstrates simple liberation of rutile and graphite product High purity rutile 96% TiO2 100% recoveries Coarse flake graphite 96% product grade 67.5% recoveries 20
Slide 21: Exceptional Existing Rail Infrastructure
Exceptional Existing Rail Infrastructure Kasiya is connected to key global markets Nacala Logistics Corridor (Currently Active) MALAWI Runs through Kasiya project area to deep-water Indian KASIYA Ocean port of Nacala MOZAMBIQUE Sena Logistics Corridor (Currently Active) NACALA PORT Secondary existin
Slide 22: Progressive Rehabilitation
Progressive Rehabilitation Socially responsible and sustainable mining practices adopted to • Progressive return of land to communities • In-pit disposal minimizes disturbance • Efficient closure at end of mine life Example: Progressive Rehabilitation of a Mineral Sands Mine in Australia 22 Source:
Slide 23: Established ESG Framework Advancing Social Initiatives in Malawi
Established ESG Framework Advancing Social Initiatives in Malawi Community and Stakeholder Employment And Training of a Engagement Promoting Education Diverse Workforce Sovereign has ensured it has maintained Sovereign understands the importance of Sovereign currently employs over 80 individuals in
Slide 24: Strong Support from the Government of Malawi
Strong Support from the Government of Malawi MEMBER OF THE COMMONWEALTH English is legal language, legal system mainly based on English common law ATTRACTING FOREIGN DIRECT INVESTMENT Rio Tinto investment in Sovereign applauded as a milestone towards realising Malawi’s aspirations AGRICULTURE – TOUR
Slide 25: Sovereign Corporate Overview
Sovereign Corporate Overview World-class, highly experienced key management team focused on delivering shareholder value Capital Structure (as at 31 Jan 2024) Ben Stoikovich (Chairman) • Experienced mining executive, corporate finance professional and co-discoverer of Kasiya ASX / AIM Ticker SVM / S
Slide 26: Climate Smart Mining of Two Critical Minerals
Climate Smart Mining of Two Critical Minerals THINK CRITICAL | THINK CLIMATE | THINK SOVEREIGN LOWEST-COST SUSTAINABLE, LOW- STRONG LOCAL AND IDEAL STRATEGIC MULTI-GENERATIONAL PRODUCER CARBON FOOTPRINT GOVERNMENT PARTNER WITH RUTILE AND CONFIRMS ABILITY TO PRODUCTS ASSISTING SUPPORT WITH TECHNICAL
Slide 27: Appendices
APPENDICES
Slide 28: Appendix 1: Kasiya Resources and Reserves
Appendix 1: Kasiya Resources and Reserves Kasiya Mineral Resource Estimate at 0.7% Rutile Cut-off (inclusive of Ore Reserves) Mineral Resource Material Tonnes Rutile Graphite Tonnes RutEq. Grade* Rutile Tonnes (millions) Graphite (TGC%) Category (millions) (%) (millions) (%) Indicated 1,200 1.0% 12.
Slide 29: Appendix 2: Rio Tinto's Investment Agreement
Appendix 2: Rio Tinto’s Investment Agreement Investment Agreement As part of the investment by Rio Tinto, the Company has agreed to provide Rio Tinto with certain • (Governance) continued rights pursuant to the Investment Agreement between the parties. – (Restricted matters) Until the Investor End D
Slide 30: Appendix 3: Graphite Resource Global Warming Potential
Appendix 3: Graphite Resource Global Warming Potential Ref Company Project Project Status GWP (CO2e) LCA Boundary Source ASX Announcement: Syrah approves Balama solar 1 Syrah Resources Balama Production 0.42 FOB Nacala and battery system final investment decision (released 6 Apr 2022) TSX Announceme
Slide 31: Appendix 4: Graphite Peers Operating Cost Information
Appendix 4: Graphite Peers Operating Cost Information Operating Costs Steady State Production Current Production Company Project Stage of Development (FOB) Source Tpa tpa US$/t Company Announcement: Focus Graphite Announces Benchmark Feasibility Study Focus Graphite Lac Knife FS updated 415 47,781 n
Slide 32: Appendix 5: Kasiya PFS Capex and Opex Breakdowns
Appendix 5: Kasiya PFS Capex and Opex Breakdowns Capital Expenditure Operating Cost Stage 1 Stage 2 US$/t US$/t 12Mtpa Expansion to Plant Mined Tonne Product Operation 24Mt Relocation Mine Gate US$m US$m US$m Mining $2.09 $96 Direct Processing – Rutile $1.90 $88 Mining $13.2 $45.4 $63.4 Processing –
Sovereign Metals — Investor Presentation (February 2024) on 6ix