Sovereign Metals Limited · ASX:SVM
Sovereign Metals — Investor Presentation (April 2022)
31 slides from Sovereign Metals's investor presentation, April 2022
Slide 1: April 2022 Company Presentation
APRIL 2022 | AIM: SVML | ASX: SVM | 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, Dr Julian Stephens. DISCLAIMER NOTICE This presentation has been prepared as a summary only and does not contain all information Sovereign Metals Limit
Slide 3: Rutile – the world's purest natural source of titanium
Rutile – the world’s purest natural source of titanium Pigment (58%) Welding (31%) Titanium Metal (11%) Titanium – designated a CRITICAL RAW MATERIAL by the US and EU based on “supply risk” and “economic importance” Note: Percentages relate to uses of rutile as a titanium feedstock 3
Slide 4: Natural Rutile – the purest natural form of titanium
Natural Rutile – the purest natural form of titanium ~95% TiO2 +US$1,350/t 0.5Mt Spot over US$2,200/t* Supply 20201 Natural Rutile ~50% TiO2 +$200/t 6.2Mt Spot over US$400/t* Supply 20201 Ilmenite 1.Titanium feedstock supply. Ilmenite includes sulphate slag production and chloride slag production; l
Slide 5: Natural Rutile – genuinely scarce
Natural Rutile – genuinely scarce EXPECTED GLOBAL RUTILE SUPPLY TO 2030 1,000 70% 900 Natural Rutile Expected decrease in entered supply global rutile supply from 800 deficit in 2017 2017 to 2030 (~515kt) 700 600 2.8Mt TiO2 UNITS 500 Expected increase in 400 global TiO2 demand from 2017 to 2030 300
Slide 6: Kasiya updated Mineral Resource Estimate – 1.8 Billion Tonnes
Kasiya updated Mineral Resource Estimate – 1.8 Billion Tonnes Kasiya Mineral Resource Estimate at 0.7% Rutile Cut-off Mineral Material Rutile Rutile TGC TGC RutEq. Resource Tonnes Grade Tonnes Tonnes (%) Grade1 Category (millions) (%) (millions) (millions) Indicated 662 1.05% 6.9 1.43% 9.5 1.73% Inf
Slide 7: Kasiya – the largest rutile deposit ever discovered
Kasiya – the largest rutile deposit ever discovered • Kasiya contains more than double the rutile resource as its nearest rutile peer, Sierra Rutile • New MRE shows a number of new large, but generally discrete high grade rutile zones • Discovery and delineation of these new high grade mineralised z
Slide 8: Kasiya – one of the largest flake graphite resource in the world
Kasiya – one of the largest flake graphite resource in the world • Graphite by-product from potential rutile production to have a very low production cost compared to graphite-only projects • Kasiya graphite is highly crystalline and of high purity – important features required for use in lithium-io
Slide 9: Natural rutile makes up a small percentage of high-grade pigment feedstock
Natural rutile makes up a small percentage of the total high-grade titanium pigment feedstock market but has a much lower carbon footprint HIGH GRADE CHLORIDE PIGMENT FEEDSTOCK (+80% TiO2) SUPPLY BY TYPE ~2.1Mt TiO2 Market Size (2020) Direct use Rutile TiO2 material 14% Natural Rutile UGS 9% Upgrade
Slide 10: Natural rutile – a lower carbon footprint alternative
Natural rutile – a lower carbon footprint alternative Scope 1 & 2 Scope 3 SAVING UP TO 2.8 TONNES CO2 eq. per tonne Source: Minviro Ltd; Sovereign Metals 10
Slide 11: Life Cycle Assessment shows carbon emissions reduction potential
Life Cycle Assessment shows carbon emissions reduction potential Scope 1 & 2 Per Tonne Of Titanium Feedstock Type Produced Scope 3 Emissions Per Tonne Of Titanium Dioxide Pigment Produced 3.3t CO2e 35-53% 7.7t CO2e lower Scope 3 global warming 20 -33x potential 6.2t CO2e lower Scope 1&2 global warmi
Slide 12: Lower carbon footprint product demand is consumer driven
Lower carbon footprint product demand is consumer driven but also has value-in-use for manufacturers Industrial plants in the EU must pay for carbon emissions under the EU's Emissions Trading System Cost of EU Carbon Permits 120 100 80 EUR/t 60 40 20 0 2016 2017 2018 2019 2020 2021 2022 12
Slide 13: Not one, but two raw materials critical for a sustainable future
Not one, but two raw materials critical for a sustainable future Graphite is the major active material in lithium-ion batteries by volume 100% 0% NMC (111) NMC NMC LCO NCA LFP (622) (811) Graphite Lithium Cobalt Nickel Our battery should be Manganese Aluminium Iron Phosphate called Nickel-Graphite E
Slide 14: Chinese graphite dominance threatens electric vehicle ambitions
Chinese graphite dominance threatens electric vehicle ambitions Synthetic Graphite Produced from needle coke via graphitization process. Global Warming Potential of Producing One Tonne of Graphite Processing location 103x 20.6 t CO2e lower global warming potential than synthetic China Japan graphite
Slide 15: Initial Scoping Study based on only 30% of total drill-defined mineralisation
Initial Scoping Study based on only 30% of total-drill defined mineralisation December 2021 April 2022 Source: Sovereign Metals 15
Slide 16: Initial Scoping Study results: rutile and by-product graphite
Initial Scoping Study results: rutile and by-product graphite NPV8 IRR Payback (real post-tax) (after-tax) Mine life 25 years US$861m 36% 2.5 years Annual throughput 12,000,000 tonnes Total Revenue Revenue EBITDA (LoM) (annual average LoM) (annual average LoM) $6,266m US$251m US$161m Annual producti
Slide 17: Simple geology
Simple geology High grade rutile mineralisation from surface • Rutile mineralisation lies in laterally extensive flat “blanket” style bodies • All mineralisation occurs in a single, large, and coherent deposit with much of the high-grade material occurring within the top ~5 metres from surface • Sev
Slide 18: Simple mining
Simple mining Hydro-mining a proven mining technique • Long history of successful hydro-mining of heavy mineral deposits across southern Africa • Numerous African heavy minerals operations use hybrid hydro / dozer mining methods that provide significant operational flexibility Homogenous, soft, fria
Slide 19: Simple processing
Simple processing Premium-grade rutile produced via conventional flowsheet • Robust metallurgy now confirmed from two distinct bulk test work programs 94%-100% Stand-out Rutile Metallurgical Recoveries • Significant interest from Tier 1 rutile off-takers ‒ First rutile offtake MoU signed with US-bas
Slide 20: Simple progressive rehabilitation
Simple progressive rehabilitation Socially responsible and sustainable Example of progressive rehabilitation of a mineral sands mine • In-pit disposal minimises disturbance • Progressive returning of land to communities • Efficient closure campaign at end of mine life Source: Images from Minerals Co
Slide 21: Low-risk and low carbon-footprint operation
Low-risk and low carbon-footprint operation Simple Mining Simple Processing Progressive Rehabilitation High-grade rutile Simple, conventional Positioned for effective ESG mineralisation from surface flowsheet Positioned for effective ESG outcomes outcomes Soft, friable material suitable Single heavy
Slide 22: Malawi
Malawi Stable, Transparent Jurisdiction Member country of the Commonwealth Attracting significant investment Demonstrable aspiration for mining Excellent operating infrastructure 2020 Country of the Year Source: Sovereign Metals 22
Slide 23: Operation-ready infrastructure
Operation-ready infrastructure Source: Sovereign Metals 23
Slide 24: Upcoming news flow and capital structure
CAPITAL STRUCTURE Upcoming news flow 441,089,255 10,875,000 Shares on Issue1 Unlisted Options1 ($0.14 to $0.18) Updated Scoping Study based on new resource – H1 2022 12,440,000 A$322m / £175m Performance Rights Un-Diluted Market (milestone vesting Capitalisation conditions) @A$0.73 / 39.80p1,2 ~A$6.
Slide 25: Unlocking the next major source of natural rutile and natural graphite
Unlocking the next major source of natural rutile and natural graphite • Largest natural rutile deposit in the world • One of the largest graphite resources in the world • Two commodities with low carbon footprint compared to current alternatives • Critical minerals for the US and EU based on supply
Slide 26: Thank you
SOVEREIGN METALS LIMITED Thank you 26
Slide 27: Appendix I: Graphite forecasted to be in extreme deficit
Appendix I: Graphite forecasted to be in extreme deficit FORECASTED GRAPHITE MARKET BALANCE 400,000 12,500,000 -300,000 -1,000,000 10,000,000 -1,700,000 -2,400,000 -3,100,000 7,500,000 -3,800,000 -4,500,000 5,000,000 -5,200,000 -5,900,000 -6,600,000 2,500,000 -7,300,000 -8,000,000 0 2040 2038 2024 2
Slide 28: Appendix II: Kasiya Mineral Resource Estimate at various rutile cut-offs
Appendix II: Kasiya Total Indicated + Inferred Mineral Resource Estimate at various rutile cut-offs Kasiya Total Indicated + Inferred Mineral Resource Estimate at various rutile cut-offs Contained Contained Cut-off Resource Rutile Grade Graphite Rutile Graphite (rutile) (Mt) (%) Grade (%) (Mt) (Mt)
Slide 29: Appendix III: Premium product specifications
Appendix III: Premium product specifications Kasiya Products Peer Comparisons Base Carbon Weight 100% Recovery 94% Recovery Sierra Rutile Particle Size Distribution Constituent Product Product (Iluka) Resources Flake (Kwale) Tyler Mesh Micron (μ) (%) (% w/w) Category TiO2 % 95.0 97.2 96.3 96.2 ZrO2+
Slide 30: Appendix IV: Commodity price deck
Appendix IV: Commodity price deck Rutile Price Assumption Sales 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Long- term Mix TZMI Forecast Price –Base (real) $1,336 $1,334 $1,314 $1,336 $1,328 $1,311 $1,287 $1,255 $1,221 $1,180 $1,180 Bulk sales (pigment inducement price) 60% $1,336 $1,334 $1,31
Slide 31: Appendix V: One of the world's best undeveloped mineral sands projects
Appendix V: One of the world’s best undeveloped mineral sands projects REVENUE TO COST RATIO UNDEVELOPED PROJECTS UNDEVELOPED MINERAL SANDS PROJECT PIPELINE ANNUAL AVERAGE REVENUE TO CAPEX KASIYA 4 KASIYA 0.80 AVERAGE REVENUE TO INITIAL CAPITAL RATIO 3.5 0.70 KASIYA FIRST KASIYA QUARTI REVENUE TO CO
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