Sovereign Metals Ltd (ASX:SVM, OTCQX:SVMLF, AIM:SVML, FRA:SVM) has outlined the potential to add US$722 million in pre-tax net present value to its Kasiya Critical Minerals Project in Malawi by recovering a rare earth-rich monazite concentrate as a by-product.
A new scoping study estimates the rare earth circuit would require incremental capital of around US$29 million and could deliver a pre-tax internal rate of return of 151%, with payback in approximately 18 months.
The study lifts the total integrated pre-tax NPV of Kasiya to about US$2.9 billion, building on the economics established in the April 2026 definitive feasibility study (DFS) for rutile and graphite.
Low-cost third product stream
Sovereign expects the proposed circuit could produce around 2,626 tonnes per annum of monazite rare earth concentrate at steady state, containing 1,485 tonnes of total rare earth oxides.
This includes an estimated 310 tonnes per annum of neodymium-praseodymium oxide, 36 tonnes of dysprosium-terbium oxide and 193 tonnes of yttrium oxide.
The concentrate would be recovered from mineral streams already generated by the DFS flowsheet, meaning no additional mining or front-end processing would be required.
Incremental site operating costs are estimated at around US$0.90 per kilogram of concentrate, supporting an operating margin of approximately 90%.
The base case forecasts annual steady-state EBITDA of about US$84 million and pre-tax, unlevered free cash flow of US$1.8 billion over the potential 23-year study life.
Maiden monazite resource
The study is underpinned by a maiden monazite mineral resource estimate of 524.4 million tonnes at 0.0132% monazite, containing an estimated 69,000 tonnes.
Around 74% of the resource is in the indicated category, and 26% is inferred. It is contained within the open pits already designed for the Kasiya DFS.
The addition of rare earths does not change the DFS production assumptions of a 25-year initial mine life, annual ore throughput of 24 million tonnes, 222,000 tonnes of natural rutile and 275,000 tonnes of natural flake graphite.
Managing director and CEO Frank Eagar said: “This study shows the same resource can potentially deliver rare earths and deliver them cheaply.
“For around US$29 million of initial capital, using infrastructure the DFS has already designed and costed, we can potentially add around US$722 million of pre-tax value at a roughly 151% rate of return.”
Next steps
Sovereign will begin discussions with potential marketing and offtake partners while undertaking variability test work on the rare earth composition of the proposed concentrate.
A prefeasibility study is scheduled for completion in 2027, with the company aiming to incorporate rare earth recovery into Kasiya’s definitive development case.
The Kasiya Project has also been renamed the Kasiya Critical Minerals Project to reflect its proposed rutile, graphite and rare earth product suite.
The scoping study carries an accuracy range of plus or minus 30% and remains subject to further technical and commercial evaluation.
