Sovereign Metals Ltd (ASX:SVM, OTCQX:SVMLF, AIM:SVML, FRA:SVM) traded at 27.70p, up 4%, on Wednesday as a scoping study indicated the potential for $84 million in additional annual EBITDA at Kasiya.
The scoping study estimates a $722 million increase in Kasiya’s pre-tax net present value, discounted at 8%, from $29 million of additional initial capital.
Under the plan, the Malawi developer could potentially recover monazite concentrate from processing waste, using infrastructure designed for Kasiya’s proposed rutile and graphite operation.
With rutile and graphite carrying the mining and primary processing costs, the study estimates an approximately 90% operating margin for the additional rare earth circuit.
For the rare earth circuit’s proposed 23-year life, the study models steady-state annual output of 2,626 tonnes of concentrate containing 1,485 tonnes of rare earth oxides.
On pricing, the base case uses Argus forecasts and assumes buyers pay 50% of contained rare earth value, supporting an estimated 18-month capital payback.
Against those potential returns, the preliminary estimates carry a 30% accuracy range in either direction and depend on funding and developing the main project.
For context, the rutile and graphite plan requires $727 million before production, while Sovereign says it will likely need additional funding, potentially diluting shareholders.
Next, Sovereign plans product qualification and discussions with potential partners, Western processors and government agencies, targeting completion of a rare earth pre-feasibility study in 2027.
