Kasiya scoping study confirms globally significant rutile deposit

ASX-listed resources group Sovereign Metals, which is conducting a rutile exploration project at Kasiya in Lilongwe, says an initial scoping study has confirmed Kasiya as a globally significant natural rutile project.


The initial Scoping Study on Kasiya develops the concept for a multi-decade mine providing a stable supply of highly sought-after rutile (TiO2) and graphite whilst contributing significantly to the economy of Malawi.


Sovereign’s Managing Director Julian Stephens says: “To have achieved this fantastic Scoping Study milestone for the Kasiya Rutile Project within just 20 months of the initial discovery is a huge result for Sovereign and a testament to the dedication and hard work of our Malawi and Australia-based team.”


“The Kasiya Rutile Project is the largest undeveloped natural rutile resource in the world and is therefore highly strategic in an environment of severe global supply deficit.”


“We believe that Kasiya is also just the beginning of the story in the new Central Malawi Rutile Province. We will expand our resource significantly early next year with the addition of the Nsaru Rutile Deposit and potentially other regional prospects.”


“The project benefits from world-class existing infrastructure and natural Environmental, Social and Governance (ESG) advantages. Natural rutile has a far lower carbon footprint compared to other titanium feedstocks used in the pigment industry, and the vast majority of power will be supplied by renewable hydro and solar. Furthermore, natural graphite is a significant component in lithium-ion batteries and is an important mineral underpinning the energy transition.”


“The future development of the Kasiya Rutile Project will bring substantial benefits to Malawi in terms of gross domestic product (GDP), royalties, taxes, employment and training, local business opportunities and community development.”

The Scoping Study demonstrates Kasiya as a globally significant natural rutile project with exceptional economics, including low capital and operating costs, resulting in a high margin operation.


It pegs the net present value of the project after tax at US$861-million, the capital cost at US$332-million, producing 12-million tonnes per annum over a 25-year mine life.

Sovereign is aiming to develop an environmentally and socially sustainable operation to supply highly sought-after natural rutile and graphite to global markets.


The proposed large-scale operation will process soft, friable mineralisation mined from surface.
The operation will primarily employ conventional hydro-mining to produce a slurry that is pumped to a Wet Concentration Plant (WCP) where the material is sized. A Heavy Mineral Concentrate (HMC) is produced via processing the sand fraction through a series of gravity spirals. The HMC is transferred to the dry Mineral Separation Plant (MSP) where premium quality rutile is produced via electrostatic and magnetic separation. Graphite rich concentrate is collected from the gravity spirals and processed in a separate graphite flotation plant, producing a coarse-flake graphite product.


The rutile and graphite products will be trucked a short distance via existing bitumen roads to the Kanengo rail terminal from where they will be railed via the Nacala Logistics Corridor (NLC) to the deep-water port of Nacala on the eastern seaboard of Mozambique.


LOW-COST OPERATION
Stephens explains that Kasiya’s low costs are achieved through deposit size and grade, location and infrastructure.


He says: “Central Malawi boasts excellent existing infrastructure including hydropower and an extensive sealed road network. The Kasiya Rutile Project is strategically located in close proximity to the capital city of Lilongwe, providing access to a skilled workforce and industrial services.”

“The existing quality logistics route to the Indian Ocean deep-water port of Nacala, via the NLC, for the export of products to global markets provides significant capital cost savings compared to many other undeveloped projects.”


“The soft, friable and high-grade mineralisation occurring from surface results in no waste stripping requirement and the amenability to hydro-mining means the mining cost component is kept relatively low.”


“The revenue-to-cash cost ratio of 2.8x and the average annual revenue to capital cost ratio positions Kasiya in the first quartile compared to other undeveloped mineral sands operations.”


KASIYA POSITIONED FOR GROWTH
The current mining inventory for the Scoping Study covers only 49km2 or 38% of the total drill-defined area of highgrade rutile mineralisation of 129km2.


Stephens says the Company expects to be able to materially increase the overall Mineral Resource Estimate (MRE) tonnage in early 2022 which will enable the Study options to be reviewed in terms of potential for scale ups or mine life extensions beyond the current 25 years.


“The objective of this Study was to provide an initial technically validated concept that will be scalable in future.

Through the Study process, a number of opportunities and options were identified to enable potential increases in production rates via additional mining units, plant modifications or modular additions,” he says.

SUSTAINABLE AND ESG DRIVEN
Stephens says sustainability is a vital element of Sovereign’s strategy for Kasiya as the Company is committed to making informed choices that improve its corporate governance, financial strength, operational efficiency, environmental stewardship, community engagement and resource management.

He says: “The Project aims to meet the requirements of international guidelines and standards, including the IFC Performance Standards on Environmental and Social Sustainability (IFC, 2012), the World Bank Group Environmental, Health and Safety Guidelines (WBG, 2007), the Equator Principles (Equator Principles Association, 2020) and the International Council on Mining & Metals (ICMM) principles for future studies and development phases of the Kasiya project.”


“The Kasiya project will be designed considering both the Equator Principles and Scope 1, 2 and 3 emissions under the Green House Gas protocol so that the design meets high standards for ESG from the outset. Access to hydro-generated grid power and a solar power system to be installed on site will ensure low carbon power supply for the project and the use of predominantly rail rather than road transport for rutile and graphite products will further help give the mine a low carbon footprint.”


The Scoping Study contemplates that the operation will use a closed circuit zero discharge process water circuit and a tailings storage facility designed to store chemically benign tailings during operations which will be rehabilitated and restored progressively.


CRITICAL MINERAL IN SUPPLY DEFICIT
Natural rutile is a genuinely scarce commodity with no other large rutile dominant deposits having been discovered in the last half century.


Current sources of natural rutile are in decline as several operations’ reserves are depleting concurrently with declining ore grades. These include Iluka Resources’ (Iluka) Sierra Rutile and Base Resources’ Kwale operations in Kenya.
Recent announcements by Iluka advising of the potential suspension of operations at Sierra Rutile may cause significant additional product to be removed from the market in the near to medium term. Additionally, there are limited new deposits forecast to come online, and hence supply of natural rutile is likely to remain in structural deficit.
LOW CARBON ADVANTAGE
The scoping study report says like many other industries globally, the titanium dioxide pigment industry is targeting reduced carbon emissions, reduced energy consumption and a move toward renewable energy and waste minimisation.
It reads: “Natural rutile (+95% TiO2) is the cleanest, purest natural form of titanium dioxide. However, due to natural rutile’s scarcity, the principal source mineral for titanium has been ilmenite (~50% TiO2). Ilmenite requires energy and carbon intensive upgrading for use as titanium pigment feedstock. Conversely, natural rutile requires no upgrading once mined and processed, resulting in zero additional CO2 emissions. For each tonne of natural rutile utilised, up to 2.8 tonnes CO2 eq. 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.”
“A shift towards a greater percentage of natural rutile feedstock offers the titanium pigment industry a simple and short lead-time opportunity to significantly lower its carbon intensity and total environmental impact.”
STRONG RELATIONSHIPS WITH KEY STAKEHOLDERS
Stephens says key to successful development of Kasiya will be the continuity of the Company’s 10+ year strong relationships with key stakeholders including the Government of Malawi and local communities.

He says: “The Government of Malawi (GoM) actively encourages foreign investment into its mining industry and provides a stable climate for investors. The GoM, through The Honourable Minister of Mining Mr. Rashid Gaffar, has stated its full support for the Company’s efforts to develop the Kasiya Rutile Project.”

“Malawi has taken significant action to provide an attractive environment for investors in its mining industry, recently joining the Extractive Industries Transparency Initiative (EITI). The EITI is a global standard for the good governance of oil, gas and mineral resources and provides accountability and transparency around mining and petroleum revenues.”


COMMUNITIES AND EMPLOYMENT
Sovereign conducts significant and regular community engagement activities with a number of initiatives completed and underway.


Stephens says development of Kasiya will have a positive impact on local communities by providing approximately 480 jobs during operations, training, and support for locally-owned businesses.

He says: “The Company has successfully worked with communities in Malawi over the last decade and will work with the communities at Kasiya on infrastructure, local business support, water provision, healthcare, education and training. Sovereign is an equal opportunity employer with a gender diverse workforce.”


“Currently, 60% of Sovereign’s professional Malawian staff and at least 50% of our regular interns are women.”


NEXT STEPS
Stephens says the Company is targeting a number of significant milestones over the next two quarters which include;
Updated MRE with substantial growth of the Indicated and Inferred JORC MRE base expected including addition of the Nsaru deposit.

Revised Life Cycle Assessment (LCA) based on the Scoping Study results to quantify the environmental impacts with a specific focus on carbon footprint.

Scoping Study update based on the expected new resource base planned for mid-2022.
Continued product marketing and potential execution of Memorandum of Understandings (MoU(s)) with future rutile off-takers.

Commencement of ESIA field data collection and commencement of community engagement activities.
“Following the completion of the above, Sovereign will commence a pre-feasibility study (PFS) on Kasiya-Nsaru to realise the true potential of this very large rutile project,” says Stephens.

He explains that in parallel to the technical study developments on the Company’s projects, significant exploration will continue, with programs including: Infill drilling at Kasiya-Nsaru to increase MRE confidence and upgrade MRE categories, deeper air-core drilling at Kasiya-Nsaru targeting the NE-striking, higher-grade zones to depths of ~25m below surface, air-core drilling targeting an initial MRE for the Bua Channel – a traditional placer deposit just 10km north east of Kasiya and regional reconnaissance drilling targeting additional Kasiya-like saprolite-hosted rutile mineralisation.

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