Sovereign Metals loss narrows as Kasiya development advances

Sovereign Metals Ltd on Friday reported a narrowed annual loss, highlighting progress at its Kasiya critical minerals project in Malawi.

The Malawi-focused mining company recorded a pretax loss for the financial year ended June 30 of AUD25.6 million, around £13.6 million, narrowed 36% from AUD40.4 million the previous year.

The company explained loss was primarily driven by exploration and evaluation expenses of AUD23.4 million, down 31% from AUD33.9 million with its Kasiya mine not yet producing.

Diluted loss per share narrowed 40% to 3.95 Australian cents from 6.62 cents.

Sovereign Metals declared no interim dividend, unchanged from last year.

At Kasiya, a definitive feasibility study completed during the year estimated annual revenue of USD728 million at steady state, with a pre-tax net present value of USD2.20 billion and a pre-tax internal rate of return of 23%.

The study estimates Kasiya could produce 222,000 tonnes of natural rutile and 275,000 tonnes of natural graphite per year at steady state, with an initial 25-year mine life.

Sovereign said it has also identified potential to recover a heavy rare earth concentrate as a by-product from Kasiya's rutile tailings. A scoping study estimated that this could add around USD722 million to the project's pre-tax net present value, with the company targeting integration of the rare earths opportunity into a pre-feasibility study in 2027.

The company said it is advancing existing rutile and graphite offtake arrangements with Mitsui & Co Ltd and Traxys North America LLC towards binding agreements, subject to negotiations.

Sovereign said it is also continuing discussions with potential offtake partners and US government stakeholders over the heavy rare earth opportunity.

Shares in Sovereign Metals were down 2.9% at 25.49 pence per share on Friday afternoon in London.

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