Sovereign Metals undertakes aggressive drilling programs at Kasiya, one of the world’s largest natural rutile deposits

Sovereign Metals Ltd (ASX:SVM) (FRA:SVM) is embarking on an aggressive drilling program to enable future resource upgrades and extensions at its flagship Kasiya project in Malawi, which has one of the world’s largest natural rutile deposits.  A scoping study is well underway and is targeted for completion in late 2021 aimed at unlocking the large-scale natural rutile project with a focus on environmental, social and governance (ESG) and sustainability.  Substantial additional resource growth is expected with the maiden mineral resource estimate (MRE) covering 49 square kilometres or just 43% of the total 114 square kilometres (Kasiya 89 square kilometres + Nsaru 25 square kilometres) drill-defined rutile-mineralised footprint.  The rutile market is in a supply deficit, with prices rising steadily over the last 12 months.  Kasiya could significantly impact the titanium industry with the potential to displace carbon, energy and waste-intensive alternatives (synthetic rutile and titania slag).  Global significance Sovereign Metals managing director Dr Julian Stephens said: “It is a remarkable result to achieve the maiden JORC mineral resource estimate of this scale, grade and global significance in under 18 months since discovery. “We believe this maiden resource is just the beginning and expect to upgrade and expand the resource over the coming quarters. “The company is surging forward with the Kasiya scoping study which will target a large-scale natural rutile operation to help address the supply deficit and reduce the titanium industry’s environmental footprint.” Growth potential In June 2021, the company established a maiden rutile mineral resource estimate for the Kasiya prospect in Malawi of 644 million tonnes at 1.01% rutile, including a high-grade component of 137 million tonnes at 1.41% rutile. Sovereign has a total of around 114 square kilometres of drilled, high-grade rutile mineralisation and the area covered by the Kasiya MRE is just 43% of the 114 square kilometres of the drilled mineralised footprint. The opportunity to significantly expand on the maiden MRE in the near to medium term is, therefore, substantial. Peripheral zones at Kasiya with nominal 800 metres x 800 metres drill spacing will be infilled to allow this material to be included in a future MRE. The Nsaru deposit also requires further infill and extensional drilling before it can be brought into the MRE. Step-out drilling at Kasiya and Nsaru is continuing with multiple field drilling teams deployed. Additional rutile mineralisation delineated should result in further future additions to the MRE. At Kasiya, a two-rig, around 150-hole infill core drilling program started in June to bring the central high-grade zone into the Indicated resource category so that it can form the basis of the scoping study. Potential to displace synthetic rutile and titania slag Natural rutile is the purest, highest-grade natural form of titanium dioxide (TiO2) and is the preferred feedstock in manufacturing titanium pigment and producing titanium metal. Titanium pigments are used in paints, coatings and plastics. Titanium also has specialty uses including in welding, aerospace and military applications. The global titanium feedstock market is over 7.4 million tonnes of titanium dioxide with the majority of this being consumed by the pigment industry. Natural rutile’s high purity classifies it as a high-grade titanium feedstock. The lack of supply of natural rutile, due to its genuine scarcity, prompted the titanium industry to develop energy and carbon-intensive processes to upgrade ilmenite (low-grade titanium mineral) to high-grade titanium feedstock products that can be used as substitutes for natural rutile (i.e. synthetic rutile and titania slag). Lower carbon footprint Natural rutile requires no upgrading for direct use as titanium pigment feedstock, eliminating the upgrading step required for ilmenite, resulting in zero additional carbon dioxide emissions. Up to 2.8 tonnes carbon dioxide equivalent. for each tonne of natural rutile utilised could be saved compared to the upgrading/beneficiation of ilmenite, via smelting and chemical processes, to high-grade titanium feedstocks like titania slag and synthetic rutile. The downstream processes (ie pigment production) rely heavily on the use of upgraded titanium feedstocks such as synthetic rutile and titania slag, each having an associated substantial environmental impact. Impact titanium supply chain Sovereign Metals’ natural rutile product is well-positioned to impact the titanium supply chain with the ability to potentially displace and reduce the use of carbon and waste-intensive upgraded alternative titanium feedstocks. The rutile market fundamentals continue to be robust with current and forecast pricing remaining very strong. In 2021, the market rebounded strongly with pigment plant utilisation rates returning to pre-pandemic levels. Major producers have noted that very strong demand in the welding market is outstripping supply. High-grade titanium feedstock supply is tight with limited new projects coming online in the short to medium term. Iluka Resources Ltd (ASX:ILU) (FRA:ILZ) has recently announced the potential suspension of its Sierra Rutile operations, the largest global producer of natural rutile, currently contributing over 20% of the total natural rutile market with production of about 150,000 tonnes per annum. A resurgence in demand for titanium pigment and from the welding sector combined with concurrent supply shortages has led the CIF China spot prices sharply upwards toward US$1,800 per tonne. In the quarter ended 31 March 2021, Iluka achieved rutile prices of US$1,199 per tonne with the majority of Iluka’s sales under take-or-pay contracts. Malawi – ‘Warm Heart of Africa’ Located in a stable, transparent jurisdiction known as 'the Warm Heart of Africa', Kasiya is in close proximity to the capital city of Lilongwe, providing access to a skilled workforce and mining and industrial services. It also has access to the operating Nacala Rail Corridor linking to the Indian Ocean deepwater port of Nacala in Mozambique, providing a low-cost transport solution and access to major international markets. Next steps The company’s objective is to develop a large-scale, long-life rutile operation. Sovereign is rapidly continuing its work programs with the following near and medium-term targets and developments: ➢ Appointment of key members of the scoping study owner’s team, including a lead study Mmnager and a highly experienced African mineral sands technical manager. ➢ Aggressive drilling programs are planned and already underway with expansion, extensional and infill drilling continuing to enable future resource upgrades and extensions, which are targeted for the fourth quarter of 2021, including: Two core drilling rigs mobilised with a planned +150 hole core program with the aim of upgrading the central, high-grade parts of Kasiya to JORC Indicated category; and Continued step-out hand-auger drilling at Kasiya and Nsaru to expand the overall JORC resource with multiple drill teams mobilised across the company’s +2,600 square kilometres ground package. ➢ Kasiya’s scoping study is targeted for completion in late 2021 with multiple components well underway, including: Mining method and pit optimisation studies, which now incorporate the outcomes of the MRE; Tailings disposal design and methodology studies; Continued metallurgical test-work now focused on variability; Investigation of a potential graphite by-product; and - Commencement of the environmental and social impact studies