Sovereign Metals Limited · ASX:SVM
Sovereign Metals — Investor Presentation (November 2023)
53 slides from Sovereign Metals's investor presentation, November 2023
Slide 1: Positioning to Become a Global Market Leader in Graphite Supply
POSITIONING TO BECOME A GLOBAL MARKET LEADER IN GRAPHITE SUPPLY ONE PROJECT | TWO CRITICAL MINERALS | TARGETING NET ZERO November 2023 | 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 CEO & Managing Director, 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: Positioning to Become Market Leader in Two Critical Minerals
POSITIONING TO BECOME MARKET LEADER IN TWO CRITICAL MINERALS NATURAL GRAPHITE TITANIUM (Rutile) 244ktpa 222ktpa Ave. Annual Graphite Production Ave. Annual Rutile Production #1 #1 #1 LARGEST PRODUCTION LOWEST COST LOWEST CO2-FOOTPRINT 3
Slide 4: Kasiya – A Once in a Generation Discovery
KASIYA – A ONCE IN A GENERATION DISCOVERY World’s 2nd largest World’s largest flake graphite known rutile resource (Titanium) deposit 24.4 Mt 17.9 Mt Poised to be the World’s Largest and lowest cost producer of 280km2 Graphite Kasiya currently known 25 yrs US$404/t mineralised area Modelled Initial
Slide 5: Operating Kasiya for 25 Years Would Only Mine 30% of Known Mineralisation
OPERATING KASIYA FOR 25 YEARS WOULD ONLY MINE 30% OF THE CURRENTLY KNOWN MINERALISATION 5
Slide 6: Lowest Cost Graphite Producer
LOWEST COST GRAPHITE PRODUCER Graphite cost curve (US$/t FOB) Cumulative Graphite Production: 1,739,702t $800 $700 $600 Weighted Average Cost ~US$552/t $500 $400 $300 US$404/t $200 $100 $0 Graphite One1 Evolution Energy Northern Graphite Volt Resources Black Rock Mining Evion Group Syrah Resources N
Slide 7: Soft, Friable Ore
SOFT, FRIABLE (EASILY CRUMBLED) ORE 280km2 Kasiya currently known mineralised area 7
Slide 8: Significant Cost and Environmental Benefits Compared to Hard Rock Graphite Deposits
SIGNIFICANT COST AND ENVIRONMENTAL BENEFITS COMPARED TO HARD ROCK GRAPHITE DEPOSITS 280km2 Kasiya currently known mineralised area 8
Slide 9: Lowest CO2-Footprint
LOWEST CO2-FOOTPRINT Global Warming Potential of Current and Future Graphite Supply (CO2 equivalent / tonne) 2.2 Source: Minviro Source: Company Disclosures 1.2 0.6 0.5 0.5 0.4 0.2 Kasiya Syrah Northern Graphite - Evolution Energy Other Tanzania China Production Northern Graphite (Malawi) (Mozambiqu
Slide 10: Existing Logistics Infrastructure Connects Kasiya to Key Global Markets
MALAWI KASIYA MOZAMBIQUE NACALA PORT NACALA LOGISTICS CORRIDOR SENA LOGISTICS CORRIDOR Existing logistics infrastructure connects Kasiya to key global markets BEIRA PORT 10 Source: Sovereign Metals
Slide 11: Mining Is Central to Malawi's Economic Development Strategy
MINING IS CENTRAL TO MALAWI’S ECONOMIC DEVELOPMENT STRATEGY Malawi is poised to benefit from a “ package committed by the US towards development projects and programs on the African continent - His Excellency President Lazarus Chakwera at the 2nd US-Africa Leaders’ Summit 2022 The recent discovery i
Slide 12: Sovereign Metals – More Than Just a Mining Company
SOVEREIGN METALS – MORE THAN JUST A “MINING COMPANY” Equal opportunities & diversity Community initiatives Promoting education Advancing local infrastructure 12 Source: Sovereign Metals
Slide 13: Advancing Kasiya Towards Production with Rio Tinto
ADVANCING KASIYA TOWARDS PRODUCTION WITH RIO TINTO US$110Bn 35 Countries US$26.3Bn Market Cap listed in UK, USA and Operations in iron ore, copper, Underlying 2022 EBITDA Australia aluminium, critical minerals etc. 52,000+ 150 yrs+ Employees servicing 2,000 Mining experience and customers across the
Slide 14: Malawi Lab Producing Graphite Concentrate
MALAWI LAB PRODUCING GRAPHITE CONCENTRATE 14
Slide 15: Positioned to Supply the World with Sustainable Graphite and Titanium Feedstock
LARGE RESOURCE LOW-COST LOW CO2- INFRASTRUCTURE EXPERT STRATEGIC & PRODUCTION PRODUCER FOOTPRINT IN PLACE PARTNER Multi-generational Low-emissions Access to global Technical expertise Able to withstand graphite and rutile critical minerals anode and titanium to develop a world- economic cycles suppl
Slide 16: Thank You
THANK YOU ONE PROJECT | TWO CRITICAL MINERALS | TARGETING NET ZERO 16
Slide 17: Appendices
APPENDICES
Slide 18: Key PFS Results
Key PFS Results Exceptional Economic US$1,605M 28% US$415M Returns After Tax NPV8 After Tax IRR Ave. Annual EBITDA Poised to be the World’s 222ktpa 244ktpa 25 yrs Largest Producers of Ave. Annual Rutile Ave. Annual Graphite Modelled Initial Life Rutile and Graphite Production Production Lowest Globa
Slide 19: Natural Rutile
Natural Rutile Highest grade, naturally found titanium feedstock Used in various multi-billion-dollar end-use industries Critical Mineral for the US and EU Demand 60% 30% 10% Pigments Welding Titanium Metal 19 Source: Sovereign Metals; TZMI
Slide 20: Kasiya Rutile LCA Indicates Low Carbon-Footprint
Kasiya rutile LCA indicates low carbon-footprint Scope 1 and 2 Global Warming Potential impact of natural rutile production from Kasiya as a titanium feedstock vs. alternatives (CO2 equivalent / tonne) 4.0 3.3 3.0 2.0 2.0 1.0 0.1 0.0 Kasiya Rutile Titania Slag Synthetic Rutile Source: Sovereign Meta
Slide 21: From Discovery to PFS in Four Years
From discovery to PFS in four years Rio Tinto becomes 15% strategic investor 2023 PFS shows exceptional economics Kasiya now world’s largest rutile deposit 2022 and one of the largest graphite deposits ever Maiden JORC Resource confirms Kasiya as 2021 one of the largest rutile discoveries ever Major
Slide 22: Rio Tinto Strategic Investment in Sovereign Metals
Rio Tinto Strategic Investment in Sovereign Metals Option for Rio Tinto to become Invested A$40.4M for an initial 15%; Operator up to 180 days post Option to acquire additional 4.99% by announcement of a Kasiya DFS end of July 2024 Operator Initial Option Investment If Operator, exclusive rights to
Slide 23: Rio Tinto Activity in Titanium and Battery Minerals
Rio Tinto Activity in Titanium and Battery Minerals Rio Tinto Titanium Battery Minerals World’s Largest Titanium 2021 Battery Minerals Division set up Slag Producer Battery Lab End-to-end battery laboratory to become operational 1,200ktpa in November 2023 to test performance of Rio Tinto’s Titanium
Slide 24: Strong Support from the Government of Malawi
Strong Support from the Government of Malawi We applaud the timely investment by Rio Tinto as it will mark a milestone towards realizing the country’s aspirations of a prosperous Malawi Malawi’s economic development strategy focus on attracting investors to three sectors: Government’s commitment to
Slide 25: Large-scale, Long-life Project
Large-scale, long-life project Rutile and Graphite Production Profile over 25-year initial mine life (ktpa) 600 500 400 300 200 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Rutile Graphite 1,809Mt 538Mt 70% Total Resource Total Reserves Resource remains @ 1.01% rutile @ 1.
Slide 26: Lowest Cost Rutile Producer in Mineral Sands Sector
Lowest cost rutile producer in mineral sands sector Revenue : Cost Ratio for Titanium Feedstock Projects 4.0x Undeveloped project Current operation 3.0x KASIYA 2.0x 1.0x - Ilmenite Rutile Ilmenite Zircon Zircon HMC HMC Rutile Madagascar Malawi Kenya WA WA WA WA Sierra Leone 26 Source: Company Disclo
Slide 27: PFS Rutile and Graphite Prices Deliver US$16Bn LOM Revenue
PFS rutile and graphite prices deliver US$16Bn LOM revenue PFS Rutile Price PFS Graphite Price $2,000 $3,000 Iluka Resources: $2,680 $1,900 Last Reported $2,500 $1,800 $2,000 $1,700 TZMI - Bagged $1,601 (welding) $1,600 $1,500 $1,290 $1,500 Kasiya PFS $1,000 $1,400 TZMI - Bulk $500 $1,300 $1,200 $0
Slide 28: Hydro-mining – Low Cost, Low Carbon-Footprint
Hydro-mining – low cost, low carbon-footprint Hydro-mining concept and layout for Hydro-mining in action Kasiya Semi-autonomous track mounted hydro- mining mining unit 12Mtpa 24Mtpa 4 pits 15m “Stage 1” throughput “Stage 2” throughput Mineable Average pit depth (first 5 years) (steady state) simulta
Slide 29: Premium Products from Conventional Process Flowsheet
Premium products from conventional process flowsheet High purity rutile product 96% 100% TiO2 with premium Recoveries based on specifications bulk testwork Coarse flake graphite product 67.5% 96% Graphite metallurgical Ct product grade recovery 29 Source: Sovereign Metals
Slide 30: Renewable Energy Solution for a Low-Carbon Footprint Operation
Renewable energy solution for a low-carbon footprint operation 60MW Salima Solar Power Plant in Malawi recently constructed and Nkhoma substation equipped to connect the Kasiya commissioned by JCM operation to hydro-sourced grid power network 56MW 100% 96.6% Project requirement Reliable power supply
Slide 31: Excellent Skilled Workforce in Malawi
Excellent skilled workforce in Malawi Sovereign’s female team members at the Company’s laboratory facility in Lilongwe, Malawi 995 1,100 30% Direct workforce Direct workforce at Current workforce is during construction steady state female 31 Source: Sovereign Metals
Slide 32: Natural Rutile Supply to Sharply Decline from 2024
Natural rutile supply to sharply decline from 2024 Global Rutile Supply to 2033 (ktpa) Current Significant Rutile Producers vs Kasiya PFS (ktpa) 600 -52% 65 Base Resources 400 kt (Mine life: 1 yr) 222 Sovereign Metals kt (Mine life: 25 yrs+) 200 136 Sierra Rutile (Mine life: 3 yrs) kt 0 2019 2021 20
Slide 33: Natural Graphite
Natural Graphite Up to 50% of a lithium-ion battery Critical mineral for energy transition per US Inflation Reduction Act Considered Critical for the EU and Japan Mineral content (kg / electric vehicle) Graphite Copper Nickel Manganese Cobalt Lithium, REEs, 53.2Kg 39.9kg 24.5kg 13.3kg Others 66.3kg
Slide 34: Electrification Is Driving Natural Graphite Demand
Electrification is driving natural graphite demand Graphite Demand and Market Deficit 4,000 46% Increase in demand for anodes in 2022 3,000 2,000 230% Increase in EV sales since 1,000 2020 - US$104B 2021 2025E 2020 2024E 2022 2029E 2026E 2027E 2023E 2030E 2028E Graphite investment requirement per Te
Slide 35: Advancing into an Optimisation Phase
Advancing into an optimisation phase Strategic investment by Rio Tinto Completion of the PFS Formal establishment of the Technical Committee with Rio Tinto Optimisation phase prior to moving to the DFS Graphite product development and qualification 35
Slide 36: Strong Cash Position and Growing Share Register
Strong cash position and growing share register Capital Structure $0.60 (as at 24 November 2023) ASX / AIM Ticker SVM / SVML $0.55 Share Price (A$ / P) A$0.43 / 24p $0.50 Shares on Issue 563m $0.45 Undiluted Market Capitalisation (A$ / £ ) A$242m / £135m $0.40 Performance Rights 16.4m $0.35 Rio Tint
Slide 37: Appendix 1: Rio Tinto's Investment Agreement
Appendix 1: Rio Tinto’s Investment Agreement Investment Agreement As part of the investment by Rio Tinto, the Company has agreed to provide Rio Tinto with • (Governance) continued certain rights pursuant to the Investment Agreement between the parties. – (Restricted matters) Until the Investor End D
Slide 38: Appendix 2: Kasiya Resources and Reserves
Appendix 2: Kasiya Resources and Reserves Kasiya Mineral Resource Estimate at 0.7% Rutile Cut-off (inclusive of Ore Reserves) Mineral Resource Material Tonnes Rutile Rutile Tonnes Graphite Tonnes RutEq. Grade* Graphite (TGC%) Category (millions) (%) (millions) (millions) (%) Indicated 1,200 1.0% 12.
Slide 39: Appendix 3: Major Rutile Dominant Resources
Appendix 3: Major Rutile Dominant Resources 39 Source: Sovereign Metals; refer to Appendix 12
Slide 40: Appendix 4: Major Flake Graphite Resources
Appendix 4: Major Flake Graphite Resources 40 Source: Sovereign Metals; refer to Appendix 13
Slide 41: Appendix 5: Kasiya Resource Area and Cross-Sections
Appendix 5: Kasiya Resource Area and Cross-Sections 41 Source: Sovereign Metals
Slide 42: Appendix 6: Kasiya PFS Capex and Opex Breakdowns
Appendix 6: Kasiya PFS Capex and Opex Breakdowns Capital Expenditure Operating Cost Stage 1 Stage 2 US$/t US$/t 12Mtpa Expansion Plant Mined Product Operation to 24Mt Relocation Tonne Mine Gate US$m US$m US$m Mining $2.09 $96 Direct Processing – Rutile $1.90 $88 Mining $13.2 $45.4 $63.4 Processing –
Slide 43: Appendix 7.a: Tailings Strategy Designed to Minimise Impact
Appendix 7.a: Tailings strategy designed to minimise impact Example of a vetiver cover crop at a TSF rehabilitation site in southern Africa Tailing disposal will be a combination of in- pit disposal within the void created by mining, and ex-pit disposal in a standalone Tailing Storage Facility 43
Slide 44: Appendix 7.b: Tailings Strategy Designed to Minimise Impact
Appendix 7.b: Tailings strategy designed to minimise impact In-pit deposition Tailings Storage Facility 44
Slide 45: Appendix 8: Rutile Product Specifications
Appendix 8: Rutile Product Specifications Peer Comparisons Kasiya Rutile Particle Size Distribution Kasiya Sierra Rutile Kwale 20% Constituent (Sierra Rutile (Base (Sovereign Limited) Resources) 18% Metals) TiO2 % 95.7 96.3 96.2 16% ZrO2+HfO2 % 0.18 0.78 0.72 14% SiO2 % 0.70 0.62 0.94 Fe2O3 % 0.98 0
Slide 46: Appendix 9: Graphite Product Specifications and Price Assumptions
Appendix 9: Graphite Product Specifications and Price Assumptions Particle Size Carbon Weight Distribution Flake Category Tyler Mesh Micron (μ) (Ct %) (% w/w) +32 +500 97.1 5.6 Super Jumbo -32 +48 -500 +300 96.4 24.2 Jumbo -48 +80 -300 +180 96.7 27.1 Large -80 +100 -180 +150 97.1 11.6 Medium -100 +1
Slide 47: Appendix 10: Mineral Sands Peer Information
Appendix 10: Mineral Sands Peer Information (Slide 26) Stage of Revenue to Cost Reference Company Project Source Development ratio ASX Announcement: https://wcsecure.weblink.com.au/pdf/BSE/02426235.pdf Ilmenite - Madagascar Base Resources Toliara FS Complete 3.5 ASX Announcement (Quarterly Report):
Slide 48: Appendix 11: Graphite Peers Operating Cost Information
Appendix 11: Graphite Peers Operating Cost Information (Slide 6) Operating Costs Steady State Production Current Production Company Project Stage of Development (FOB) Source Tpa tpa US$/t Company Announcement: Focus Graphite Announces Benchmark Feasibility Study Focus Graphite Lac Knife FS updated 4
Slide 49: Appendix 12: Rutile Mineral Resources Information
Appendix 12: Rutile Mineral Resources Information (Slide 39) Ref Company Project Status Source 1 Sierra Rutile Sierra Rutile Production & Development https://sierra-rutile.com/our-operations-assets/ore-resources-and-mineral-resources/ Iluka Resources Limited Annual Ore Reserve and Resources as at 31
Slide 50: Appendix 13: Graphite Resource Information
Appendix 13: Graphite Resource Information (Slide 40) Ref Company Project Project Status Source 1 Syrah Resources Balama Production https://www.syrahresources.com.au/our-business/reserves-resources 2 Volt Resources Bunyu FS Complete https://voltresources.com/assets/bunyu-graphite-project/ ASX Announ
Slide 51: Appendix 14: Graphite Resource Global Warming Potential
Appendix 14: Graphite Resource Global Warming Potential (Slide 9) 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
Slide 52: Appendix 15: Graphite Peer Pricing Information
Appendix 15: Graphite Peer Pricing Information (Slide 27) Graphite Concentrate Price Company Project Source (US$/t FOB) Technical Report on the Lac-des-Iles Quarry, Quebec Northern Graphite Lac-des-Iles $1,601 Report for Ni 43-101 (22 December 2021) Company Announcement: NextSource Materials Announc
Slide 53: Appendix 16: Rutile vs. Alternatives
Appendix 16: Rutile vs. Alternatives Scope 1 & 2 Scope 3 Natural Rutile 0.1 tonnes CO2e per tonne of titanium feedstock Ilmenite upgraded alternatives Up to 3.3 tonnes CO2e per tonne of titanium feedstock 53 Source: Sovereign Metals; Minviro Ltd
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