Sovereign Metals Ltd (ASX:SVM, OTCQX:SVMLF, AIM:SVML, FRA:SVM) said adding rare earth recovery to its Kasiya project in Malawi could generate an incremental US$722 million pre-tax NPV, for around US$29 million of capital to first production.
A scoping study estimated a 151% pre-tax internal rate of return and payback of about 1.5 years, with the proposed circuit recovering monazite from mineral streams already generated by the rutile and graphite processing flowsheet.
At steady state, Sovereign expects the operation could produce around 2,626 tonnes a year of rare earth concentrate containing 1,485 tonnes of total rare earth oxides. This includes around 310 tonnes of neodymium-praseodymium oxides, 36 tonnes of dysprosium and terbium and 193 tonnes of yttrium.
Incremental steady-state EBITDA is estimated at around US$84 million a year, while site operating costs are put at roughly US$0.90 per kilogram of concentrate, giving an estimated operating margin of around 90%.
The study remains preliminary, with an accuracy range of ±30% and does not establish additional Ore Reserves or provide assurance of an economic development case. Sovereign will now undertake variability testwork, product qualification and marketing work, including potential offtake discussions, ahead of a rare earths pre-feasibility study targeted for 2027.
