Sovereign Metals Ltd has released an optimised pre-feasibility study (PFS) with oversight from the joint Sovereign-Rio Tinto technical committee, confirming the potential of the Kasiya Rutile-Graphite Project in Malawi to be a low-cost strategic critical minerals producer.
Read: Sovereign Metals up as Rio Tinto raises stake
“The level of accuracy and confidence in the economic and technical fundamentals of Kasiya have taken a massive step forward,” Sovereign Metals managing director and CEO Frank Eagar said.
“The successful completion of large-scale field trials, in particular for dry mining, the high degree of technical rigour by our enhanced owner’s team and Rio Tinto’s technical support have all contributed to confirming Kasiya’s potential to become a long-life, low-cost, secure source of two genuine critical and globally strategic minerals.”
Potential for US$16.4 billion in revenue
The optimised PFS (OPFS) presents updated economic metrics for Kasiya, adjusted to inflation and with a higher degree of accuracy.
The OPFS proposes a large-scale, long-life (25-year) operation to deliver “substantial volumes of natural rutile and graphite while generating significant returns”.
New numbers include a net present value (NPV) of US$2.3 billion, total revenue of US$16.4 billion, an internal rate of return (IRR) of 27% and average annual earnings before indexation, taxation, depreciation or amortisation (EBITDA) of US$409 million.
The project will likely require operating costs of about US$423 per tonne of critical minerals produced, with a capital expenditure of US$665 million expected to reach first production.
A new mine plan involves an open-pit dry mining operation using draglines and trucking of material to processing plants, maintaining flexibility by developing an owner-operated mine with leased equipment.
The OPFS also proposes a process plant front end consisting of two scrubbers and two oversize screens per 12-million-tonne plant, with an initial 12-million-tonne per annum plant to be built at South Kasiya and another at North Kasiya after a five-year period.
SVM expects Kasiya to reach its full production volumes in the fifth year, at which point it will jump from 12 million tonnes per year to 24 million tonnes.
Overall, the company expects to produce 222,000 tonnes of rutile and 233,000 tonnes of graphite per year with a mine life of 25 years, potentially positioning Sovereign to be one of the largest producers of natural rutile and natural flake graphite globally.