REG - Sovereign Metals Ltd - 2025 Annual Report
26/09/2025 07:00
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RNS Number : 9442A Sovereign Metals Limited 26 September 2025
NEWS RELEASE I 26 SEPTEMBER 2025
2025 annual report
Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX:SVMLF) (Sovereign or the
Company) advises its 2025 Annual Report has been published today at
https://api.investi.com.au/api/announcements/svm/b196b272-dfe.pdf
(https://api.investi.com.au/api/announcements/svm/b196b272-dfe.pdf) with the
results provided below.
The Company has also published an Appendix 4G (Key to Disclosures: Corporate
Governance Council Principles and Recommendations) and its 2025 Corporate
Governance Statement today which are available at
https://api.investi.com.au/api/announcements/svm/14fedf11-82b.pdf
(https://api.investi.com.au/api/announcements/svm/14fedf11-82b.pdf) .
Enquiries
Frank Eagar, Managing Director & CEO
South Africa / Malawi
+27 21 140 3190
Sapan Ghai, CCO
London
+44 207 478 3900
Nominated Adviser on AIM and Joint Broker
SP Angel Corporate Finance LLP +44 20 3470 0470
Ewan Leggat
Charlie Bouverat
Joint Broker
Stifel +44 20 7710 7600
Varun Talwar
Ashton Clanfield
DIRECTORS' REPORT
The Directors of Sovereign Metals Limited present their report on the Group
consisting of Sovereign Metals Limited (the Company or Sovereign or Parent)
and the entities it controlled at the end of, or during, the year ended 30
June 2025 (Group).
OPERATING AND FINANCIAL REVIEW
KASIYA RUTILE-GRAPHITE PROJECT
Sovereign is focused on the development of its Kasiya rutile-graphite project
(Kasiya or the Project) in Malawi to become a leading global supplier to the
titanium and graphite industries. Kasiya is the world's largest natural rutile
deposit - the purest, highest-grade naturally occurring titanium feedstock -
and the world's second-largest flake graphite deposit - a battery mineral
essential for the Energy Transition.
Figure 1: Kasiya Regional Project Location
Sovereign discovered Kasiya in 2019 after identifying the potential of a new
rutile province in Malawi. Today, Kasiya stands out as the world's largest
known natural rutile deposit and second largest known flake graphite deposit
and holds the accolade of one of only 11 Tier 1 mining projects discovered in
the last decade (source MinEx Consulting, "Exploration: Australia vs The
World, October 2023).
The Optimised Pre-Feasibility Study (OPFS), completed during the year with
oversight from the Sovereign-Rio Tinto Technical Committee, reaffirmed
Kasiya's potential to become a large, low-cost producer of strategic minerals.
Sovereign is now advancing the Definitive Feasibility Study (DFS).
HIGHLIGHTS DURING AND SUBSEQUENT TO YEAR END
Mining Method and Fleet Design Finalised for DFS
· Mining Fleet specifically engineered for large-scale
dry mining operations following the results of the successful Pilot Mining and
Land Rehabilitation (Pilot Phase).
· No drilling, blasting, crushing or milling required at
Kasiya resulting in low capital outlays and operating costs.
· Equipment selection and supplier identification
completed for all operational requirements across the proposed initial 25-year
mine life.
DFS Progresses with Completion of Geotechnical Program and Power Supply MOU
Signed
· In April 2025, the Company announced that several
geotechnical drilling programs were underway at all critical project
infrastructure locations across Kasiya.
· Geotechnical investigations were successfully completed
subsequent to the year end, with preliminary findings confirming favourable
subsurface conditions for infrastructure construction.
· In May 2025, Sovereign and Electricity Supply
Corporation of Malawi (ESCOM) entered into a non-binding Memorandum of
Understanding (MOU) to ensure the long-term supply of electricity to Kasiya,
establishing a framework for negotiating future definitive agreements.
· In May 2025, the World Bank approved a US$350m grant to
support Malawi's Mpatamanga Hydropower Storage Project to significantly
increase Malawi's installed capacity by 2030.
Japan's Toho Titanium Confirms Kasiya Rutile's Suitability for Producing
High-Performance Products
· During the year, one of Japan's premier titanium metal
producers, Toho Titanium Company Limited (Toho Titanium), confirmed that
natural rutile from Kasiya is suitable for manufacturing its
high-specification titanium products critical to aerospace and industrial
applications.
· Toho Titanium is a cornerstone supplier in the global
titanium value chain, serving the world's most demanding aerospace and
industrial manufacturers.
Japan Government launches new Nacala Logistics Corridor development initiative
· Japan commits US$7 billion in development funding -
$5.5 billion through joint program with African Development Bank, plus $1.5
billion in public-private impact investment through Japan's development
agency.
· Initiative focuses on capacity expansion,
refurbishment, and resilience upgrades to increase throughput, enhance
reliability, and reduce bottlenecks directly benefiting projects such as
Kasiya positioning the Project as a key beneficiary of Japan's mineral
security strategy.
· Nacala Corridor is Kasiya's preferred transport route -
providing lowest-cost pathway from Kasiya to international markets via a
deep-water port.
New Graphite Tariff Environment Underscores Kasiya's Global Significance
· In July 2025, the U.S. Commerce Department announced
93.5% preliminary anti-dumping duties on Chinese graphite imports,
fundamentally altering the economics for battery manufacturers seeking secure,
cost-competitive supply chains.
· The new tariff environment highlights Kasiya's
potential as the world's largest and lowest-cost non-Chinese graphite producer
with an industry-leading US$241/t incremental cost of production.
· Latest coating optimisation testwork achieved
successful coated spherical purified graphite (CSPG) production
characteristics with superior performance metrics to support advancing offtake
discussions.
Successful Rehabilitation Results Further De-Risk DFS
· Rehabilitation of the land at the test pit site mined
during the Pilot Phase was completed during the year.
· Exceptional first-year results from its rehabilitation
trials at the Kasiya, delivering critical data that will inform the
progressive rehabilitation strategy for the ongoing DFS.
· Rehabilitation trials achieved 5x crop yield
improvement - demonstrating superior post-mining land productivity versus
traditional farming.
Optimised PFS Results Reaffirm Kasiya's Globally Strategic Significance
· OPFS was completed during the year with oversight from
the Sovereign-Rio Tinto Technical Committee. Results of the OPFS reaffirmed
Kasiya's potential to become one of the largest and lowest-cost producers of
natural rutile and natural flake graphite while generating exceptional
economics.
· Various optimisations have led to superior project
delivery, operational flexibility, environmental and social outcomes compared
to the 2023 Prefeasibility Study (2023 PFS).
Kasiya Graphite Suitable for >94% of End-Use Markets
· Test work completed during the quarter has demonstrated
that Kasiya graphite is suitable for use in the three key segments that
account for over 94% of the ~1.6Mtpa global demand for natural flake
graphite-battery anodes, refractories and expanded/expandables.
· Sovereign intends to produce a 96% graphite concentrate
at an incremental cost of US$241/t (FOB).
OPERATIONS
MINING METHOD AND FLEET DESIGN FINALISED FOR DFS
Subsequent to the end of the year, The Company has finalised the selection of
mining equipment specifically designed for large-scale dry mining operations
at Kasiya. Following the successful 2024 Pilot Phase that confirmed Kasiya ore
can be efficiently mined using conventional dry mining techniques, the
comprehensive fleet design encompasses both primary mining operations and
support activities across the Project's proposed initial 25-year life of mine.
The dry mining approach, detailed in the OPFS, will deliver superior project
delivery, operational flexibility, and environmental outcomes. The fleet
deployment follows a strategic phased approach, with a total of ~200+
equipment units to be purchased over the mine life, including replacements.
The Company has conducted a comprehensive market analysis and identified
leading global equipment manufacturers as potential suppliers, including
Caterpillar Inc. (CAT), Komatsu Ltd. (Komatsu), Liebherr Group (Liebherr),
Hitachi, Ltd. (Hitachi), and Volvo Group (Volvo).
Figure 2: Example of a dragline excavator in action (Source: Liebherr)
DFS GEOTECHNICAL PROGRAMS COMPLETE
In April 2025, the Company announced that several geotechnical drilling
programs were underway at Kasiya as part of the DFS. Subsequent to the year
end, the programs were successfully completed.
The extensive programs, conducted by ARQ Geotech (Pty) Ltd and with oversight
from the Sovereign-Rio Tinto Technical Committee, represent a critical
milestone in the Project's ongoing DFS. The continued progress demonstrates
momentum towards advancing this Tier-1 project.
The geotechnical investigations provide essential subsurface data that will
inform detailed engineering design and infrastructure planning across major
Project components. The comprehensive scope covered critical infrastructure
areas, including mining operations, process plants, tailings storage facility
(TSF), and raw water storage dam - representing the foundational elements
required for the Project's development.
Understanding subsurface conditions is crucial for predicting interactions
between in-situ geological strata and the overlying infrastructure. The
geotechnical data will inform the design of foundations, earthworks, slope
stability measures, and material suitability; ultimately contributing to safe,
efficient, and cost-effective development.
The fieldwork programs employed a sophisticated combination of near-surface
and deep investigation techniques across the project site, with over 400
individual tests conducted to characterise soil and rock profiles
comprehensively.
Preliminary Findings
Initial results indicate highly favourable subsurface conditions that
correlate well with the expected regional geology. The material profiles
encountered across all infrastructure sites show generally consistent
stratigraphy. Consistent stratigraphy and suitable subsurface conditions
enable more standardised foundation designs and construction approaches across
infrastructure areas, potentially reducing engineering complexity and
construction costs. The findings will be integrated into detailed engineering
design work to optimise infrastructure placement, foundation design, and
construction methodologies.
Figures 3-6 Clockwise from Top Left: Geotechnical diamond drilling, auger
drilling, seismic geophysics testing using multi-channel analysis of surface
waves (MASW), Cone Penetration Test with pore pressure measurements (CPTu)
rig.
POWER SUPPLY MOU SIGNED AS WORLD BANK APPROVES MALAWI HYDROPOWER PROJECT
In May 2025, Sovereign announced that it had entered into a non-binding MOU
with ESCOM (Malawi's national electricity utility) to ensure the long-term
supply of electricity to the Kasiya Project. The MOU establishes the framework
for negotiating the following future definitive agreements:
· Project Implementation Agreement, including
construction and installation of a new 132kV overhead power line, and
· Power Supply Agreement, for the provision of bulk power
supply from Malawi's national grid.
The MOU follows discussions with ESCOM regarding the provision of electricity
to the Kasiya Project in preparation for construction and operation. The total
installed capacity in Malawi is currently 549MW, with approximately 73% of
this capacity coming from hydropower.
During Stage 1, Kasiya's power demand will amount to 30MW, increasing to 60MW
at steady-state production in Year 6 of operation. To supply power from the
hydro-based grid network, a 132kV overhead transmission line will be
constructed to connect the Kasiya site to the Nkhoma substation, approximately
97km away. Nkhoma has been identified as the most suitable connection point
based on power reliability, technical feasibility, and environmental and
social considerations. This line will supply the 132/33kV Kasiya bulk intake
substation.
The purpose of the MOU with ESCOM is to record the mutual understanding for
negotiation in good faith of a Project Implementation Agreement and a Power
Supply Agreement (Definitive Agreements). The MOU is non-exclusive and
non-binding and remains subject to negotiation and execution of the Definitive
Agreements. The MOU will expire upon execution of the Definitive Agreements or
on 30 June 2026, whichever is the earliest, but it can be mutually extended by
12 months.
Figure 7: Nkhoma substation has capacity for connection to the Kasiya
operation.
(Source: Millenium Challenge Corporation, USA)
Mpatamanga Hydropower Storage Project
On 15 May 2025, the World Bank approved a US$350m grant to support Malawi's
Mpatamanga Hydropower Storage Project (MHSP), a large infrastructure operation
aiming to "transform the country's energy landscape and its economic
development trajectory." (Source: World Bank)
In September 2022, the Malawian Government selected a consortium of strategic
sponsors, which currently owns the MHSP, and consists of Electricité de
France (EDF) and SN Malawi BV, which in turn is owned by the UK Government's
development finance institution, British International Investment plc, the
Norwegian Parliament's development finance institution, Norfund, and global
energy company TotalEnergies SE. Once complete, the US$1.5 billion MHSP will
deliver 358MW of additional generation capacity to the Malawi electricity
grid.
MHSP is one of several large energy projects in Malawi supported by the World
Bank Group, reflecting the institution's strong commitment to supporting this
sector as an essential enabler of economic growth and development.
TOHO TITANIUM VALIDATES KASIYA RUTILE FOR HIGH-SPECIFICATION TITANIUM PRODUCTS
In June 2025, the Company announced that one of Japan's premier titanium metal
(sponge and ingot) producers, Toho Titanium, confirmed the suitability of
natural rutile from Sovereign's Kasiya Project for manufacturing
high-specification titanium products critical to aerospace and industrial
applications.
Toho Titanium's analysis of a sample of rutile from Kasiya concluded that "it
is of a quality that can be used without any issues". Kasiya's rutile
surpassed the requirements for TiO2 grade (>95%), low or no deleterious
elements, low radiation value, and suitable particle size distribution and
density.
Toho Titanium represents a cornerstone supplier in the global titanium value
chain, with combined decades of expertise serving the world's most demanding
aerospace and industrial manufacturers. Toho Titanium, together with Japan's
other major titanium metal producer, Osaka Titanium Technologies Co., Ltd.,
account for over 15% of global titanium production capacity and over 60% of
non-sanctioned, aerospace-grade titanium metal production (i.e. excluding
China, which is not qualified to produce aerospace-grade titanium, and
Russia).
Toho Titanium occupies a critical position in titanium supply chains,
supporting the aerospace industry across the United States, Europe, and the
Indo-Pacific region. Recent geopolitical developments have intensified focus
on secure titanium supply chains, creating unprecedented strategic
opportunities and strengthening the strategic nature of Kasiya as a future
supplier of high-grade titanium feedstock.
Figure 8: 2024 Global Titanium Sponge Production Capacity by Non-Sanctioned
Countries Qualified to Produce Aerospace-Grade Titanium Products.
(Source: US Geological Survey; "Other" includes USA and India)
Kasiya Rutile Suitable for all Major End-Use Markets
Bulk scale metallurgical test work conducted by Allied Mineral Laboratories in
Australia has previously confirmed that a premium-grade rutile product can be
produced via a simple, conventional process flowsheet with no requirements for
flotation or acid leaching.
World-class specification rutile products were reported ranging from 95.0% to
97.2% TiO2 with low impurities and exceptional metallurgical recoveries of up
to 100% (Refer to ASX Announcement: "Outstanding Metallurgical Results at
Kasiya" dated 7 December 2021).
The premium chemical parameters and particle sizing (d50 126μm, 8.6%
<75μm) of Kasiya's rutile indicate that the product is suitable for all
major end-use markets. Specifically, Kasiya's rutile product specification
makes it a suitable feedstock for superior, high-performance titanium metal
products. Confirmation that Kasiya's rutile can be used by Toho Titanium
establishes Sovereign Metals as a credible future supplier to the global
titanium industry's most discerning customers. This technical endorsement,
combined with Kasiya's unmatched scale and strategic location, positions
Sovereign as a potential market leader in the titanium supply chain.
JAPAN TARGETS KASIYA TRANSPORT CORRIDOR IN NEW STRATEGIC MINERALS INITIATIVE
Subsequent to the end of the year, the Government of Japan launched a
dedicated investment initiative targeting the Nacala Corridor infrastructure,
significantly strengthening the strategic positioning of the Kasiya Project.
As discussed above Toho Titanium confirmed that natural rutile from Kasiya
meets specifications for high-performance titanium metal production.
The initiative aims to improve transportation infrastructure and promote
industrial development in the Nacala Corridor region, including Malawi, to
increase its value as a transportation route for mineral resources and
ultimately strengthen Japan's global supply chains related to critical
minerals.
Japan's US$7 billion commitment includes US$5.5 billion through the Enhanced
Private Sector Assistance for Africa program, which provides development
funding to African countries through the African Development Bank.
Additionally, US$1.5 billion will be mobilised through Japan's development
agency for direct investment in private sector projects, including mining and
infrastructure developments.
The initiative creates multiple strategic advantages for Kasiya, positioning
the Project as a key beneficiary of Japan's mineral security strategy.
The Nacala Corridor serves as the preferred transportation route for
Sovereign's forthcoming Definitive Feasibility Study, providing a direct route
to the deep-water port of Nacala and offering Kasiya a low-cost pathway to
global markets with significant capital and operating savings.
Japan's initiative focuses on capacity expansion, refurbishment, and
resilience upgrades to increase throughput, enhance reliability, and reduce
bottlenecks, directly benefiting projects such as Kasiya.
To access the Nacala Corridor, Sovereign plans to construct a six-kilometre
rail spur linking the proposed plant to the Nacala Corridor, ensuring
efficient freight handling. The Company is in discussions with leading
regional logistics providers on rail and port solutions to ensure reliable and
cost-efficient transport of rutile and graphite to international markets.
Figure 9: Bulk cargo trains operating on Nacala Corridor
Figure 10: Nacala Port is the deepest water port in Southern Africa
NEW GRAPHITE TARIFF ENVIRONMENT UNDERSCORES KASIYA'S GLOBAL SIGNIFICANCE
Subsequent to the year end, the Company announced that the latest testwork on
graphite from Kasiya has delivered highly successful results. The testwork
focused on optimising the coating process for conversion of Kasiya-derived
spherical purified graphite (SPG) coated spherical CSPG while maintaining
premium performance.
The results will assist with ongoing offtake discussions with anode
manufacturers. Sovereign is developing Kasiya to potentially become the
world's largest and lowest-cost natural graphite producer outside of China
with an incremental cost of graphite production of US$241/t.
Figure 11: Natural Flake Graphite Industry Cost Curve for Projects at
Prefeasibility Stage or Later.
The global graphite supply chain is experiencing fundamental realignment
following the U.S. Commerce Department's 17 July 2025 announcement of 93.5%
preliminary anti-dumping duties on Chinese graphite imports. Combined with
existing tariffs, this creates an effective 160% barrier on Chinese graphite,
fundamentally altering the economics for battery manufacturers seeking secure,
cost-competitive supply chains. China currently controls approximately 75% of
global graphite production and 97% of anode material processing, creating
critical supply chain vulnerabilities that major battery manufacturers are now
actively addressing.
Tesla, Inc. (Tesla) and Panasonic were among companies that opposed the new US
tariffs, with Tesla's submission to the U.S. Government stating that U.S.
graphite producers have yet to demonstrate the "technical ability to produce
commercial quantities" of graphite at the quality and purity required by Tesla
and other battery cell manufacturers.
Once developed, Kasiya has the potential to become the world's largest and
lowest-cost natural flake graphite producer, offering battery manufacturers a
strategic alternative to Chinese supply chains for anode material feedstock.
The latest successful coating testwork is a further demonstration of Kasiya's
increasing strategic importance.
Latest Testwork Validates Kasiya Graphite's World-Class Quality to Anode
Manufacturers
Optimisation testwork conducted by Prographite GmbH (Prographite) has once
again demonstrated the exceptional characteristics of Kasiya graphite for CSPG
production. The optimisation process successfully achieved target coating
specifications and optimised inputs into the coating process while maintaining
the premium performance metrics that position Kasiya graphite among the
highest-quality sources globally (refer to Announcement "Outstanding Battery
Anode Material Produced From Kasiya Graphite" dated 4 September 2024 for
previously announced premium performance metrics).
Pitch coating is a standard refinement process where carbon-rich pitch
material is applied to spherical graphite particles to create protective
layers that enhance battery performance and longevity, turning SPG into CSPG.
The latest testwork systematically evaluated pitch content to achieve optimal
performance parameters.
Key achievements from the process include:
· Process Efficiency Demonstrated: Coating requirements
optimised while maintaining superior CSPG characteristics
· Premium Performance Maintained: All target
specifications achieved for discharge capacity (>360mAh/g) and first cycle
efficiency (>94%)
· Physical Properties Achieved: Specific surface area
(<4m²/g) and tap density (>1.0 g/cm³) specifications met
The electrochemical test results demonstrate the consistently high quality of
CSPG produced from Kasiya graphite:
Table 1: Electrochemical Half-Cell Testing Results
Pitch Coating Level Initial Charge (mAh/g) Initial Discharge (mAh/g) First Cycle Efficiency (%)
Baseline (100%) 390 369 94.64
Optimised (60%) 388 366 94.36
The data confirms that Kasiya graphite consistently delivers discharge
capacity well above the critical 360mAh/g threshold while achieving first
cycle efficiency above 94% - both key specifications for premium-quality
natural graphite anode materials.
SUCCESSFUL REHABILITATION RESULTS FURTHER DE-RISK DFS
Subsequent to the end of the year, Sovereign announced exceptional first-year
results from its rehabilitation trials at Kasiya, delivering empirical data
that will inform the progressive rehabilitation strategy for the DFS.
The successful rehabilitation trials address a key component of Kasiya's
development pathway, demonstrating that post-mining land can achieve superior
agricultural productivity compared to pre-mining conditions. With maize yields
of 5.2 tonnes per hectare versus the regional average of 1 tonne per hectare,
the trials validate Sovereign's progressive mining, back-filling and
rehabilitation approach that will be integrated into the DFS.
The 10-hectare pilot program achieved a 5x crop yield improvement through soil
remediation, engaging 28 local farmers as partners and proving the
rehabilitation process to be effective for a scaled-up implementation.
Sovereign followed a systematic six-step rehabilitation process that
successfully restored the disturbed land back to productive agricultural use:
1. Land preparation with complete backfill and grading to original
contours.
2. Soil nutrient enhancement via application of locally sourced lime,
biochar and fertilisers.
3. Mechanical integration using community-sourced equipment.
4. Strategic planting of bamboo blocks with intercropped maize and
legumes.
5. Harvest success delivering 5.2 tonnes/hectare average yield.
6. Year-round productivity enabled by drip irrigation for winter
farming programs.
The rehabilitation approach combines proven agronomic practices with
innovative techniques, including biochar application, precision nutrient
management, and intercropping with Giant Bamboo - creating a replicable model
for the broader Kasiya development. These rehabilitation results will be
integrated into Sovereign's progressive rehabilitation strategy within the
DFS, supporting:
· Project-specific closure provisioning through demonstrated
restoration success.
· Enhanced community value proposition via improved post-mining
land productivity.
· Proven environmental stewardship.
· Strengthened ESG positioning.
Figure 12: Test pit site during the mining trials (September 2024)
Figure 13: Rehabilitation site with mature crop (May 2025)
OPTIMISED PFS RESULTS REAFFIRM KASIYA'S GLOBALLY STRATEGIC SIGNIFICANCE
During the year, the Company announced the results of an OPFS at Kasiya.
Following input from various organisations, including internationally
recognised, independent consultancies, the Company's owner's team, and subject
matter experts from Rio Tinto, the OPFS has reconfirmed Kasiya as a leading
global future supplier of strategic critical minerals outside of China.
Summary of Optimisations
The OPFS optimises seven key areas compared to the 2023 PFS, as summarised
below.
Mining Method
The 2023 PFS proposed a 25-year initial life of mine (LOM) based on a
hydraulic mining process where slurry material would be screened and pumped
overland to the processing plants.
Based on findings from the mining trials undertaken as part of the Pilot
Phase, the OPFS proposes a large-scale open-pit dry mining operation using
draglines and trucking of material to the processing plants. The change in
mining method has not changed the initial mine life of 25 years.
Operating Model
The 2023 PFS envisaged mining would take place on a contractor basis.
During the OPFS, Sovereign undertook a trade-off analysis between the
following operating options:
· Fully owner-operated mine with draglines and trucks purchased by
the owner
· Owner-operated mine with draglines and trucks leased by the owner
· Mining contractor operation using excavators and trucks
Due to the preference for draglines and benefit of flexibility, an
owner-operated mine with leased equipment is selected as the preferred
operating model.
Plant Configuration
Dry mining Kasiya means the material received at the plant is not pre-wet and
pre-scrubbed. Therefore, the OPFS proposes a process plant front end
consisting of two scrubbers and two oversize screens per 12Mt plant. No
further changes are proposed to the processing plant flowsheet.
Plant Location
Per the 2023 PFS, mining would commence in the southern area of the Kasiya
deposit, ramping up to 12Mt per annum (Mtpa) and then scaling up to 24Mtpa in
Year 5 by constructing a second plant module in the same area, reaching
nameplate capacity by the end of that year.
In Year 10 of production, another new 12Mtpa plant module would be built and
commissioned in the northern area of Kasiya, supported by the relocation to
the north of one of the southern plants to maintain a steady state of 24Mtpa.
However, the OPFS has determined the most efficient plant locations to be an
initial 12Mtpa South Kasiya plant followed by the construction of another
12Mtpa North Kasiya plant in year 5 of production, negating any relocation
requirements in later years.
The OPFS maintains the ROM schedule with operations commencing with 12Mtpa of
throughput during the first four years of production (Stage 1) and expanding
to 24Mtpa in year 5, with full capacity reached by end of year 5 (Stage 2).
Tailings Management
Per the 2023 PFS, a conventional process would be used to produce rutile and
graphite concentrate with tailings in separate sand and fines streams being
pumped to a conventional TSF. Mined out pit areas would be backfilled as part
of a rehabilitation process.
The OPFS proposes maximising backfilling of pits as undertaken during the
Pilot Phase and the introduction of mud farming on the TSF to accelerate
dewatering. This approach has reduced tailings volumes in the TSF by 44% from
187 Mm³ to 105 Mm³.
Mud farming is a technique used by Rio Tinto at operations such as its
100%-owned Weipa bauxite operations in Queensland, Australia, which has been
in production since 1963 and produced 35.1Mt of bauxite in 2023.
Water Management
The 2023 PFS proposed that the primary water supply for the Kasiya mining
complex would be created by building a water storage dam and collecting
run-off water from the greater catchment area. Following the introduction of
dry mining and mud farming, the size of the water storage dam proposed in the
2023 PFS has been significantly reduced, with less process water required and
more process water recovered.
The OPFS mining trials and material deposition tests indicated a water demand
of 10.2 Mm³ per annum, almost a 40% decrease in water requirement from the
2023 PFS (16.7 Mm³). The effect on the water storage dam wall could be a
reduction in volume from 0.79 Mm³ to 0.57 Mm³ and a reduction in dam wall
height from 20 metres to 17 metres.
Power
The 2023 PFS envisaged a hybrid hydro-generated grid power plus solar power
system solution.
The Malawi grid reliability has improved since completion of the 2023 PFS and
is expected to further improve considerably with the commissioning of the
country's first HV transmission interconnector to Mozambique in Q2 2025.
This will provide the Project with sufficient power and therefore the OPFS
proposes to connect the Project's power system to the hydro-sourced grid
network only. This mitigates any risks associated with commissioning a new
solar power project and reducing the overall power tariff by eliminating the
need for an Independent Power Producer as per the 2023 PFS.
DFS PROGRESSION
The completion of mining fleet design represents a critical component of the
DFS work program, building on previous milestones including geotechnical
investigations, continued product testwork, and signing of the MOU regarding
power supply with ESCOM.
The DFS continues to progress including:
· process plant design optimisation;
· infrastructure and logistics planning;
· environmental and social impact assessments; and
· Mineral Resource update to be announced in the coming
weeks.
ESG FRAMEWORK ADVANCES SOCIAL INITIATIVES IN MALAWI
Sovereign has established an Environmental, Social and Governance (ESG)
framework to advance Sovereign's Corporate Social Responsibility in Malawi
which continues to undertake several initiatives to assist in the development
of its project affected local communities, including:
· An ongoing successful conservation farming program that
includes increased participation each year;
· Promoting education through a Schools Upgrade Program
and creation of a Scholarship Program for high school learners;
· Advancing local community infrastructure commissioning
of water bores across the Company's licence area to provide local communities
with drinking water;
· Establishing international standard mining industry
facilities with the construction of an extensive rutile sample laboratory in
Lilongwe;
· Employment of a diverse workforce and developing key
exploration and mining-applicable skills through training programs; and
· Continuing engagement with key stakeholders from local
communities through to Government level.
RESULTS OF OPERATIONS
The net loss of the Group for the year ended 30 June 2025 was $40,440,339
(2024: $18,600,894). Significant items included in the year end loss are the
following:
(i) Interest income of $2,043,809 (2024: $1,821,876) earned on
term deposits held by the Group;
(ii) Exploration and evaluation expenses of $33,897,375 (2024:
$14,831,671) in relation to the Kasiya project. This is attributable to the
Group's accounting policy of expensing exploration and evaluation expenditure
incurred by the Group subsequent to acquisition of the rights to explore and
up to the completion of feasibility studies;
(iii) Non-cash share-based payments expenses totalling $4,309,932
(2024: $2,303,201) relating to performance rights on issue. The fair value of
rights are measured at grant date and recognised over the period during which
the rights holders become unconditionally entitled to the incentive
securities; and
(iv) Business development expenses of $2,247,815 (2024:
$2,340,819) which includes the Group's investor and shareholder relations
activities including but not limited to public relations costs, marketing and
digital marketing, broker and advisor fees, business development consultant
fees and costs of the Group's ASX and AIM listings.
FINANCIAL POSITION
As at 30 June 2025, the Group had cash and cash equivalents of $54,538,435
(2024: $31,564,130) and no debt (2024: nil). The Group had net assets of
$55,387,701 at 30 June 2025 (2024: $34,358,774), an increase of $21,028,927 or
approximately 38% compared with the previous year. This is largely
attributable to the increase in cash reserves following the additional
investment made by Rio Tinto and completion of the placement in the year
offset by exploration and evaluation spend on the Project to complete the
Pilot Phase and OPFS, and the progression to the DFS.
Business Strategies and Prospects for Future Financial Years
The objective of the Group is to create long-term shareholder value through
the development of a technically and economically viable mineral deposits at
Kasiya.
To date, the Group has not commenced production of any minerals at Kasiya. To
achieve its objective, the Group intends, over the medium term to conduct
further development activities at Kasiya including, the progression and
completion of the DFS and to continue with ongoing discussions with potential
offtake partners.
These activities are inherently risky and the Board is unable to provide
certainty that any or all of these developments will be achieved. The material
business risks faced by the Group that are likely to have an effect on the
Group's future prospects, and how the Group manages these risks, include:
· Development Risk - The exploration for, and development
of, mineral deposits involves a high degree of risk. Few properties which are
explored are ultimately developed into producing mines. To mitigate this risk,
the Group will undertake systematic and staged exploration and testing
programs on its mineral properties and, subject to the results of these
exploration programs, the Group will then progressively undertake a number of
technical and economic studies with respect to its projects prior to making a
decision to mine. This includes the completion of the DFS which the Company is
currently undertaking. However, there can be no guarantee that any other
studies, including the DFS, will confirm the technical and economic viability
of the Group's mineral properties or that the properties will be successfully
brought into production;
· Operational Risk - The potential commissioning, ramp-up
and production at Kasiya are subject to operating risks that could impact the
amount and quality of rutile and graphite produced or increase the cost of
production. Further, following the publication of a DFS, Rio Tinto has the
option, pursuant to an investment agreement with the Company, to be appointed
as operator of the Project on arm's length terms. If Rio Tinto elects to
become operator, it will be granted the exclusive right to 40% of the annual
production of all products produced from the Project. If Rio does not exercise
its option to operate the Project, the Company will be required to operate the
project itself or seek alternative arrangements. This could lead to delays in
the proposed development of the Project or hinder the Company's ability to
obtain financing in the future, which may have a material adverse effect on
the Company's operations, financial performance and value of its shares.
Further, the Company would also be required to seek alternative offtake
agreements and there can be no assurance that suitable counterparties will be
identified, or that binding offtake agreements for all products from the
Project will be concluded on commercially favourable terms;
· Capital and Funding Risk - The ongoing development of
the Group's mineral properties will require substantial additional financing.
Failure to obtain sufficient financing may result in delaying or indefinite
postponement of further development of the Group's mineral properties or even
a loss of property interest. There can be no assurance that additional capital
or other types of financing will be available if needed or that, if available,
the terms of such financing will be favourable to the Group;
· Sovereign Risk - The Group's operations in the Republic
of Malawi are exposed to various levels of political, economic and other risks
and uncertainties. The Republic of Malawi is a developing country and
economy which does not have an established mining industry. There can be no
assurances that the future political developments in Malawi will not directly
impact the Group's operations;
· Commodity Price and Foreign Exchange Risks - The price
of rutile, graphite and other commodities fluctuates widely and is affected by
numerous factors beyond the control of the Group. Future production, if any,
from the Group's mineral properties will be dependent upon the price of rutile
and graphite and other commodities being adequate to make these properties
economic.
Current and planned development activities are predominantly denominated in US
dollars and the Group's ability to fund these activities may be adversely
affected if the Australian dollar continues to fall against the US Dollar. The
Group currently does not engage in any hedging or derivative transactions to
manage commodity price or foreign exchange risk. As the Group's operations
change, this policy will be reviewed periodically; and
· Global Financial Conditions Risk - Many industries,
including the mineral resource industry, are impacted by these market
conditions. Some of the key impacts include contraction in credit markets
resulting in a widening of credit risk, devaluations and high volatility in
global equity, commodity, foreign exchange and precious metal markets, and a
lack of market liquidity. Due to the current nature of the Group's activities,
a slowdown in the financial markets or other economic conditions may adversely
affect the Group's growth and ability to finance its activities.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
(i) On 3 July 2024, the Company announced that Rio Tinto had
exercised unlisted options and the Company subsequently issued 34.5 million
Shares to Rio Tinto to raise an additional $18.5 million (before costs);
(ii) On 22 January 2025, the Company announced the results of an
OPFS for Kasiya which reaffirmed Kasiya's potential to become the largest and
lowest-cost producer of natural rutile and natural flake graphite while
generating exceptional economics; and
(iii) On 3 April 2025, the Company completed a placement to raise
gross proceeds of approximately $40.0 million from new and existing investors.
There are no significant changes in the state of affairs of the Group during
the year not otherwise disclosed in this report.
SIGNIFICANT POST BALANCE DATE EVENTS
At the date of this report, there are no other matters or circumstances which
have arisen since 30 June 2025 that have significantly affected or may
significantly affect:
· the operations, in financial years subsequent to 30
June 2025 of the Group;
· the results of those operations, in financial years
subsequent to 30 June 2025 of the Group; or
· the state of affairs, in financial years subsequent to
30 June 2025 of the Group.
PRINCIPAL ACTIVITIES
The principal activities of the Group during the year consisted of the
development of Kasiya. No significant change in the nature of these activities
occurred during the year.
DIVIDENDS
No dividends have been declared, provided for or paid in respect of the
financial year ended 30 June 2025 (30 June 2024: nil).
LOSS PER SHARE
2025 2024
Cents
Cents
Basic and diluted loss per share (6.62) (3.34)
DIRECTORS
The names of Directors in office at any time during or since the end of the
financial year are:
Current Directors
Mr Benjamin Stoikovich Chair
Mr Frank Eagar Managing Director and CEO
Mr Ian Middlemas Non-Executive Director
Dr Julian Stephens Non-Executive Director
Mr Mark Pearce Non-Executive Director
Mr Nigel Jones Non-Executive Director
Unless otherwise disclosed, Directors held their office from 1 July 2024 until
the date of this report.
CURRENT DIRECTORS AND OFFICERS
Benjamin Stoikovich
Chair (Committee: ESG Member)
Qualifications - B.Eng, M.Eng, M.Sc, CEng, CEnv
Mr Stoikovich is an experienced mining executive and corporate finance
professional residing in London. Mr Stoikovich is currently the Chief
Executive Officer of GreenX Metals Limited (ASX: GRX) and was formerly a
Director of the Mining and Metals Corporate Finance Division of Standard
Chartered Bank in London, with extensive experience in financing the
development of African mining projects and exposure to the mineral sands
sector.
Mr Stoikovich started his career as a mining engineer with BHP Billiton in
Australia, gaining broad experience across mine operations management and
qualifying as a mine manager. He holds a post graduate degree in Environmental
Engineering and UK professional designation as a Chartered Environmentalist
(CEnv) with wide ranging experience of managing the environmental, social and
sustainability aspects of mining projects across the life-cycle and the ESG
requirements of the investment community. Mr Stoikovich was appointed a
Director of the Company on 13 October 2020. During the three year period
to the end of the financial year, Mr Stoikovich held a directorship in
GreenX Metals Limited (June 2013 - present).
Frank Eagar
Managing Director and CEO (Committee: ESG Member)
Qualifications - B.Com, CA
Mr Eagar has over 20 years' experience in the financing, permitting,
development and operation of mining projects with a strong focus in southern
Africa.
Mr Eagar is a Chartered Accountant who has gained extensive corporate,
commercial and technical experience in the mining sector throughout his
career. Mr Eagar has previously held a number of senior executive positions in
the resources sector, more recently with African mining focused private equity
firm AMED Funds which included acting as Chief Financial Officer (CFO) for
AMED's controlled company, Central Copper Resources PLC (Central Copper).
Prior to Central Copper, Mr Eagar was the CEO (and prior to that the CFO) of
Baobab Steel Limited (Baobab) another AMED controlled company, where he
managed the completion of a DFS and a joint venture with the World Bank's IFC
to procure strategic investors and raise project finance for Baobab's US$1
Billion, fully permitted, integrated 500ktpa Steel and Vanadium Project in
Mozambique.
Mr Eagar joined Sovereign in December 2022 as General Manager in Malawi, where
he has already expanded the team with a focus on Malawian nationals, developed
strong relationships with Government and demonstrated a clear understanding of
the Kasiya Project and its development landscape. Mr Eagar was appointed as
Managing Director and CEO of Sovereign Metals Limited on 20 October 2023.
During the three year period to the end of the financial year, Mr Eagar did
not hold any other directorships in publicly listed companies.
Ian Middlemas
Non-Executive Director (Committee: Audit Member)
Qualifications - B.Com, CA
Mr Middlemas is a Chartered Accountant and holds a Bachelor of Commerce
degree. He worked for a large international Chartered Accounting firm before
joining the Normandy Mining Group where he was a senior group executive for
approximately 10 years. He has had extensive corporate and management
experience, and is currently a director of a number of publicly listed
companies in the resources sector.
Mr Middlemas was appointed a Director of Sovereign Metals Limited on 20 July
2006. During the three year period to the end of the financial year, Mr
Middlemas has held directorships in GBM Resources Limited (June 2025 -
present), NGX Limited (April 2021 - present), Constellation Resources Limited
(November 2017 - present), Apollo Minerals Limited (July 2016 - present),
Terra Metals Limited (October 2013 - present), Berkeley Energia Limited (April
2012 - present), GreenX Metals Limited (August 2011 - present), Salt Lake
Potash Limited (Receivers and Managers Appointed) (January 2010 - present),
Equatorial Resources Limited (November 2009 - present) and Odyssey Gold
Limited (September 2005 - present).
Julian Stephens
Non-Executive Director
Qualifications - B.Sc (Hons), PhD, MAIG
Dr Stephens originally identified and secured the Malawi properties acquired
by Sovereign in 2012. He has since been closely involved with the subsequent
exploration and development of these projects, including the discovery of the
Kasiya rutile deposit.
Dr Stephens has extensive experience in the resources sector having spent in
excess of 25 years in board, executive management, senior operational and
economic geology research roles for a number of companies. He has spent over a
decade working on African projects, particularly projects in Malawi. Dr
Stephens holds a PhD from James Cook University, Queensland and is a member of
the Australian Institute of Geoscientists.
Dr Stephens was appointed a Director of Sovereign Metals Limited on 22 January
2016. On 27 June 2016 Dr Stephens was appointed Managing Director of the
Company and on 20 October 2023 he was appointed as a Non-Executive Director.
During the three year period to the end of the financial year, Dr Stephens
held a directorship in Viking Mines Limited (March 2025 - present).
Mark Pearce
Non-Executive Director (Committee: Audit Chair)
Qualifications - B.Bus, CA, FCIS, FFin
Mr Pearce is a Chartered Accountant and is currently a director of several
listed companies that operate in the resources sector. He has had
considerable experience in the formation and development of listed resource
companies. Mr Pearce is also a Fellow of the Institute of Chartered
Secretaries and a member of the Financial Services Institute of Australasia.
Mr Pearce was appointed a Director of Sovereign Metals Limited on 20 July
2006. During the three year period to the end of the financial year, Mr Pearce
has held directorships in Terra Metals Limited (Alternate Director) (June 2022
- present), NGX Limited (April 2021 - present), Constellation Resources
Limited (July 2016 - present), GreenX Metals Limited (August 2011 - present)
and Equatorial Resources Limited (November 2009 - present).
Nigel Jones
Non-Executive Director (Committees: ESG Chair, Audit Member)
Qualifications - MA
Mr Jones has over 30 years of mining industry experience with 22 years in a
number of senior roles at Rio Tinto Group, where most recently, Mr Jones was
Managing Director of Rio Tinto's Simandou iron ore project, one of the world's
largest proposed mining developments.
In this role, he was accountable for all aspects of the project's development,
including its complex ESG strategy. Such aspects included impacts on natural
ecosystems, biodiversity, and community and government relations.
Mr Jones was also a member of the senior leadership team of the Energy and
Minerals product group, which incorporated Rio Tinto's titanium dioxide
feedstock businesses in Canada and southern Africa. Prior roles in Rio Tinto
included Head of Business Development, Head of Business Evaluation and
Managing Director of the group's Marine operations.
Mr Jones was appointed a Director of Sovereign Metals Limited on 10 February
2022. During the three year period to the end of the financial year, Mr Jones
did not hold any other directorships in publicly listed companies.
Mr Dylan Browne
Chief Financial Officer) and Company Secretary
Qualifications - B.Com, CA, AGIA ACG
Mr Browne is a Chartered Accountant and Associate Member of the Governance
Institute of Australia (Chartered Secretary) who is currently Company
Secretary for a number of ASX and European listed companies that operate in
the resources sector. He commenced his career at a large international
accounting firm and has since been involved with a number of exploration and
development companies operating in the resources sector, based in London and
Perth, including Berkeley Energia Limited, Apollo Minerals Limited, GreenX
Metals Limited and Papillon Resources Limited. Mr Browne successfully listed
Prairie Mining Limited (renamed GreenX Metals Limited) on the Main Board of
the London Stock Exchange (LSE) and the Warsaw Stock Exchange and oversaw
Berkeley's listings on the Main Board LSE and the Spanish Stock Exchanges. Mr
Browne was appointed Company Secretary of the Company on 29 April 2021.
INFORMATION ON DIRECTORS' INTERESTS IN SECURITIES OF SOVEREIGN
As at the date of this report, the Directors' interests in the securities of
the Company are as follows:
Interest in Securities at the Date of this Report
Current Directors Ordinary Shares((1)) Performance Rights((2))
Benjamin Stoikovich 4,190,000 2,450,000
Frank Eagar 500,000 3,200,000
Ian Middlemas 16,500,000 -
Julian Stephens 13,557,518 1,200,000
Mark Pearce 4,161,151 950,000
Nigel Jones 225,000 550,000
Notes:
((1) ) "Ordinary Shares" means fully paid ordinary
shares in the capital of the Company; and
((2) ) "Performance Rights -means an unlisted
performance right that converts to one Share in the capital of the Company
upon satisfaction of the relevant milestone.
CONVERTIBLE SECURITIES
At the date of this report the following convertible securities have been
issued by the Company over unissued capital:
· 10,977,500 Performance Rights subject to the Definitive
Feasibility Study Milestone that expire on 31 October 2025;
· 4,992,500 Performance Rights subject to the Mining
Licence Milestone that expire on 31 March 2026; and
· 6,190,000 Performance Rights subject to the Final
Investment Decision Milestone that expire on 30 June 2026.
During the year ended 30 June 2025 and up to the date of this report, no
ordinary shares were issued as a result of the exercise of unlisted options
and no ordinary shares have been issued as a result of the conversion of
performance rights. During the year ended 30 June 2024 and up to the date of
this report, 34,549,598 ordinary shares were issued as a result of the
exercise of unlisted options and 6,100,000 ordinary shares have been issued as
a result of the conversion of performance rights.
MEETINGS OF DIRECTORS
The following table sets out the number of meetings of the Company's Directors
held during the year ended 30 June 2025, and the number of meetings attended
by each Director.
Board Meetings ESG Committee Audit Committee
Current Directors Eligible to Attend Number Eligible to Attend Number Eligible to Attend Number
Attended
Attended
Attended
Benjamin Stoikovich 2 2 1 1 - -
Frank Eagar 2 2 1 1 - -
Ian Middlemas 2 2 - - 2 2
Julian Stephens 2 2 - - - -
Mark Pearce 2 2 - - 2 2
Nigel Jones 2 2 1 1 2 2
The Board as a whole currently performs the functions of a Risk Committee,
Nomination Committee and Remuneration Committee. However this will be reviewed
should the size and nature of the Company's activities change.
COMMITTEE MEMBERSHIPS
As at the date of this report, the Company has an Audit Committee and an ESG
Committee of the board of directors.
An Audit Committee has been established to oversee the Company's financial
reporting and quality of the audit conducted by the external auditors.
The ESG Committee was established to support the Company's ongoing commitment
to environmental, health and safety, corporate social responsibility,
corporate governance, sustainability and other public policy matters relevant
to the Company.
REMUNERATION REPORT (AUDITED)
This Remuneration Report, which forms part of the Directors' Report, sets out
information about the remuneration of Key Management Personnel (KMP) of the
Group.
Details of KMP
The KMP of the Group during or since the end of the financial year is as
follows:
Executives
Mr Benjamin Stoikovich Chair
Mr Frank Eagar Managing Director and CEO
Mr Robert Slater Chief Operating Officer
Mr Sapan Ghai Chief Commercial Officer
Mr Dylan Browne CFO and Company Secretary
Mr Paul Marcos Head of Project Development
Mr Sam Cordin Business Development Manager
(ceased 31 August 2024)
Directors
Mr Ian Middlemas Non-Executive Director
Dr Julian Stephens Non-Executive Director
Mr Mark Pearce Non-Executive Director
Mr Nigel Jones Non-Executive Director
Unless otherwise disclosed, the KMP held their position from 1 July 2024 until
the date of this report.
Remuneration Policy
The Group's remuneration policy for its KMP has been developed by the Board
taking into account the size of the Group, the size of the management team for
the Group, the nature and stage of development of the Group's current
operations, and market conditions and comparable salary levels for companies
of a similar size and operating in similar sectors.
In addition to considering the above general factors, the Board has also
placed emphasis on the following specific issues in determining the
remuneration policy for KMP: (a) the Group is currently focused on undertaking
development and exploration activities at Kasiya; (b) risks associated with
small cap resource companies whilst in the development and exploration phase;
(c) other than profit which may be generated from asset sales, the Company
does not expect to be undertaking profitable operations until sometime after
the commencement of commercial production at Kasiya.
The objective of the Group's remuneration structure reward framework is to
ensure that reward for performance is competitive and appropriate for the
results delivered. The remuneration framework provides a mix of fixed and
variable remuneration, which incorporates a blend of short and long-term
incentives. There is a deliberate emphasis on lower fixed base and higher
variable results-based remuneration to ensure that management focus is aligned
with that of shareholders. This has been achieved by ensuring that a
significant proportion of executive's remuneration is 'at risk'. Long-term
incentives are based on Company milestones linked to long term value
drivers.
Executive Remuneration
The Group's remuneration policy is to provide a fixed remuneration component
and a performance-based component (short-term incentive and long-term
incentive). The Board believes that this remuneration policy is appropriate
given the considerations discussed in the section above and is appropriate in
aligning executives' objectives with shareholder and business objectives.
Fixed Remuneration
Fixed remuneration consists of base salaries, as well as employer
contributions to superannuation funds and other non-cash benefits. Fixed
remuneration is reviewed annually by the Board. The process consists of a
review of company and individual performance, relevant comparative
remuneration externally and internally and, where appropriate, external advice
on policies and practices.
Performance Based Remuneration - Short Term Incentive
Some executives are entitled to an annual cash bonus upon achieving various
key performance indicators (KPI's), as set by the Board. Having regard to the
current size, nature and opportunities of the Company, the Board has
determined that these KPI's will include measures such as the successful
completion of development activities (e.g. completion of feasibility studies),
environmental and social activities (e.g. sustainability and conservation),
exploration and technical activities (e.g. completion of exploration programs
within budgeted timeframes and costs), corporate activities (e.g. recruitment
of key personnel) and business development activities (e.g. project
acquisition and capital raisings). The Board assesses performance against
these criteria annually.
During the 2025 financial year, a total bonus sum of $575,925 (2024:
$334,514), representing 100% of KMP entitlement was paid and accrued to
executives after achievement of KPIs set by the Board. For the 2025 year, the
KPI areas of focus included: (a) completion of the OPFS; (b) commencement and
completion of the Pilot Phase, on time and on budget; (c) completion of the
infill drilling program; (d) successful installation of the spiral plant; (e)
completion of various graphite met test work programs; and (f) completion of
the sustainable farming program. Specific KPIs are set for each KMP and are
designed to drive successful business outcomes. No cash bonuses were forfeited
during the financial year.
Performance Based Remuneration - Long Term Incentive
The Group has a long-term equity incentive plan (LTIP) comprising the
"Sovereign Employee Equity Incentive Plan" (Incentive Plan) to reward KMP and
other key employees and contractors for long-term performance of the Group.
The Incentive Plan provides for the issuance of unlisted performance rights
(Performance Rights) and unlisted incentive options (Incentive Options) to
eligible employees and contractors as part of their remuneration and incentive
arrangements in order to attract and retain their services and to provide an
incentive linked to the performance of the Group.
To achieve its corporate objectives, the Group needs to attract, incentivise,
and retain its KMP and other key employees and contractors. The Board believes
that grants made to eligible participants under the Incentive Plan is a useful
tool to underpin the Group's employment and engagement strategy, and enables
the group to: (a) recruit, incentivise and retain KMP and other key employees
and contractors needed to achieve the Group's business objectives; (b) link
the reward of key staff with the achievement of strategic goals and the
long-term performance of the Group; (c) align the financial interest of
participants of the Plan with those of Shareholders; and (d) provide
incentives to participants of the Incentive Plan to focus on superior
performance that creates Shareholder value.
(i) Performance Rights
The Incentive Plan provides for the issuance of Performance Rights to eligible
participants which, upon satisfaction of the relevant performance conditions
attached to the Performance Rights, will result in the issue of an Ordinary
Share for each Performance Right. Performance Rights are issued for no
consideration and no amount is payable upon conversion thereof.
Performance Rights granted under the Incentive Plan to eligible participants
will be linked to the achievement by the Group of certain performance
conditions as determined by the Board from time to time. These performance
conditions must be satisfied in order for the Performance Rights to vest. Upon
Performance Rights vesting, Ordinary Shares are automatically issued for no
consideration. If a performance condition of a Performance Right is not
achieved by the expiry date then the Performance Right will lapse.
During the financial year, 3,500,000 (2024: 5,350,000) Performance Rights were
granted to KMP. No (2024: 4,070,000) Performance Rights held by KMP vested and
converted in Ordinary Shares during the year. No (2024: nil) Performance
Rights held by KMP lapsed during the financial year. The Performance Rights
granted to KMP during the year included the following:
· 1,087,500 Performance Rights subject to the Definitive
Feasibility Study Milestone that expire on 31 October 2025;
· 1,087,500 Performance Rights subject to the Mining
Licence Milestone that expire on 31 March 2026; and
· 1,450,000 Performance Rights subject to the Final
investment Decision Milestone that expire on 30 June 2026.
(ii) Incentive Options
The Incentive Plan also provides for the issuance of Incentive Options to
eligible participants. The Board's policy is to grant Incentive Options to KMP
with exercise prices at or above market share price (at the time of
agreement). As such, the Incentive Options granted to KMP are generally only
of benefit if the KMP performs to the level whereby the value of the Group
increases sufficiently to warrant exercising the Incentive Options granted.
Other than service-based vesting conditions (if any) and the exercise price
required to exercise the Incentive Options, there are generally no additional
performance criteria on the Incentive Options granted to KMP, as given the
speculative nature of the Group's activities and the small management team
responsible for its running, it is considered that the performance of the KMP
and the performance and value of the Group are closely related. The Group
prohibits executives from entering into arrangements to limit their exposure
to Incentive Options granted as part of their remuneration package.
During the financial year, no (2024: nil) Incentive Options were granted,
exercised or lapsed to KMP.
Non-Executive Director Remuneration
The Board policy is to remunerate Non-Executive Directors at market rates for
comparable companies for time, commitment and responsibilities. Given the
current size, nature and risks of the Company, Performance Rights Incentive
Options have been used to attract and retain Non-Executive Directors, where
deemed appropriate. The Board determines payments to the Non-Executive
Directors and reviews their remuneration annually, based on market practice,
duties and accountability. Independent external advice is sought when
required.
The maximum aggregate amount of fees that can be paid to Non-Executive
Directors is subject to approval by shareholders at a General Meeting and is
currently $500,000. Director's fees paid to Non-Executive Directors accrue on
a daily basis. Fees for Non-Executive Directors are not linked to the
performance of the Group. However, to align Directors' interests with
shareholder interests, the Directors are encouraged to hold shares in the
Company and Non-Executive Directors have received Performance Rights and
Incentive Options in order to secure their services and as a key component of
their remuneration. The Company prohibits Non-Executive Directors from
entering into arrangements to limit their exposure to convertible securities
granted as part of their remuneration package.
Fees for the Chair are presently £50,000 ($95,000) per annum (2024: £50,000
($95,000)) and fees for Non-Executive Directors' are $50,000 to £40,000
($82,000) per annum (2024: $50,000 to £40,000 ($76,000) per annum).
Non-Executive Directors may receive additional remuneration for other services
provided to the Company, including but not limited to, membership of
committees including the Audit and ESG Committee. The Chair of the ESG
Committee currently receives £10,000 ($20,000) (2024: £10,000 ($19,000)) for
chairing the ESG Committee.
Relationship between Remuneration of KMP and Shareholder Wealth
During the Company's exploration and development phases of its business, the
Board anticipates that the Company will retain earnings (if any) and other
cash resources for the ongoing development and exploration and of the Kasiya
project. Accordingly the Company does not currently have a policy with respect
to the payment of dividends and returns of capital. Therefore there was no
relationship between the Board's policy for determining, or in relation to,
the nature and amount of remuneration of KMP and dividends paid and returns of
capital by the Company during the current and previous four financial years.
The Board did not determine, and in relation to, the nature and amount of
remuneration of the KMP by reference to changes in the price at which shares
in the Company traded between the beginning and end of the current and the
previous four financial years. Discretionary annual cash bonuses are based
upon achieving various non-financial KPI's that are not based on share price
or earnings, as discussed above. However, as noted above, a number of KMP have
received Performance Rights and/or Incentive Options which generally will be
of greater value to KMP if the value of the Group's shares increases (subject
to vesting conditions being met).
Relationship between Remuneration of KMP and Earnings
As discussed above, the Company is currently undertaking development and
exploration activities and does not expect to be undertaking profitable
operations (other than by way of material asset sales, none of which is
currently planned) until sometime after the successful commercialisation,
production and sales of commodities from one or more of its projects.
Accordingly the Board does not consider earnings during the current and
previous four financial years when determining, and in relation to, the nature
and amount of remuneration of KMP.
Remuneration of KMP
Details of the nature and amount of each element of the remuneration of each
KMP of the Company for the year ended 30 June 2025 and 30 June 2024 are as
follows:
2025 Short-Term Benefits Post Employ-ment Super-annuation Non-Cash Share-based payments Other Total Percentage Performance Related
$
$
(Rights) -Cash Benefits %
$
$
Salary & Fees Cash Bonus
$
$
Executives
Benjamin Stoikovich((1)) 246,079 - - 567,628 - 813,707 70
Frank Eagar((2)) 458,308 195,993 - 731,594 - 1,385,895 67
Robert Slater((3)) 614,089 261,854 - 435,597 - 1,311,540 53
Sapan Ghai(((4)) 354,834 59,745 - 338,091 - 752,670 53
Dylan Browne((5)) - 54,428 - 287,783 - 342,211 100
Paul Marcos 300,000 50,000 27,125 141,311 - 518,436 37
Sam Cordin((6)) 15,000 8,333 2,683 8,770 18,888 53,674 32
Non-Executive Directors
Ian Middlemas 50,000 - 5,750 - - 55,750 -
Julian Stephens((7)) 50,000 - 5,750 87,551 - 143,301 61
Mark Pearce 50,000 - 5,750 149,343 - 205,093 73
Nigel Jones 104,611 - - 78,586 - 183,197 43
2,242,921 630,353 47,058 2,826,254 18,888 5,765,474
2024 Short-Term Benefits Post Employ-ment Super-annuation Non-Cash Share-based payments Other Total Percentage Performance Related
$
$
(Rights) Non-Cash Benefits %
$
$
Salary & Fees Cash Bonus
$
$
Executives
Benjamin Stoikovich((1)) 246,750 - - 151,773 - 398,523 38
Frank Eagar((2)) 432,057 116,045 - 282,196 - 830,298 48
Robert Slater((3)) 425,175 - - 108,300 - 533,475 20
Sapan Ghai((4)) 140,116 48,468 - 121,640 - 310,224 55
Dylan Browne((5)) - - - 166,159 - 166,159 100
Paul Marcos 277,500 45,000 29,800 94,506 - 446,806 31
Sam Cordin((6)) 166,667 45,000 23,508 52,332 - 287,507 34
Non-Executive Directors
Ian Middlemas 45,336 - 4,987 - - 50,323 -
Julian Stephens((7)) 141,218 80,000 27,500 87,791 - 336,509 50
Mark Pearce 40,000 - 4,400 119,344 - 163,744 73
Nigel Jones 95,925 - - 67,088 - 163,013 41
2,010,744 334,513 90,195 1,251,129 - 3,686,581
Notes:
((1) )In addition to Directors fees, Selwyn Capital Limited
(Selwyn), an company of which Mr Stoikovich is a director and beneficial
shareholder, was paid, or is payable, A$144,846 (2024: A$150,506) for
additional services provided in respect of corporate and business development
activities which is included in Mr Stoikovich's salary and fee amount.
((2) )Mr Eagar was appointed as the Company's Managing
Director and CEO on 20 October 2023.
((3) )Mr Slater was appointed as Chief Operating Officer
from 16 October 2023.
((4) )Mr Ghai commenced being KMP from 1 November 2023.
((5) )Mr Browne commenced being KMP from 1 November 2023. Mr
Browne provided services through a services agreement with Apollo Group Pty
Ltd (Apollo Group) a company of which Mr Mark Pearce is a Director and
beneficial shareholder of. Mr Browne is an employee of Apollo Group. During
the year, Apollo Group was paid or is payable A$390,000 (2024: A$432,000) for
the provision of serviced office facilities and administrative, accounting,
company secretarial and transaction services to the Group.
((6) )Mr Cordin ceased as Business Development Manager on 31
August 2024.
((7) )Dr Stephens was previously Managing Director and was
appointed as a Non-Executive Director as at 20 October 2023. Cash bonus was
paid to Dr Stephen's in his role as Managing Director.
Loans with KMP
No loans were provided to or received from KMP during the year ended 30 June
2025 (2024: Nil).
Other Transactions with KMP
Selwyn, a company of which Mr Stoikovich is a director and beneficial
shareholder, is engaged under an agreement to provide consulting services to
the Company, on a rolling 12-month term that either party may terminate with
one month written notice. Selwyn receives a daily rate of £1,000 under the
consulting agreement. These services provided during the financial year
amounted to $144,846 (2024: $150,506).
Apollo Group, a company of which Mr Mark Pearce is a director and beneficial
shareholder, was paid, or is payable, $390,000 (2024: $432,000) for the
provision of serviced office facilities, administration services and
additional transaction services provided during the year. This item has been
recognised as an expense in profit and loss. The amount is based on a current
monthly retainer of $32,500 (2024: $31,000) due and payable in advance, with
no fixed term, and is able to be terminated by either party with one month's
notice.
Performance Rights Granted to KMP
Details of the value of Performance rights granted, vested, converted or
lapsed for each KMP of the Group during the 2025 financial year are as
follows:
Value of rights granted during the year((1)) Value of rights converted during the year((2)) Value of
$ $ rights
included in remuneration for the year
$
2025 No. of No. of rights vested
#
rights granted No. of
#
rights lapsed
#
Executives
Benjamin Stoikovich 1,000,000 - - 710,000 - 567,628
Frank Eagar 1,000,000 - - 710,000 - 731,594
Robert Slater 750,000 - - 532,500 - 435,597
Sapan Ghai 500,000 - - 355,000 - 338,091
Dylan Browne 250,000 - - 177,500 - 287,783
Paul Marcos 125,000 - - 88,750 - 141,311
Sam Cordin - - - - - 8,770
Non-Executive Directors
Julian Stephens - - - - - 87,551
Mark Pearce - - - - - 149,343
Nigel Jones - - - - - 78,586
Notes:
((1) ) Determined at the time of grant per AASB 2.
((2) ) Determined at the time of conversion at the
intrinsic value.
Details of Performance Rights granted by the Company to each KMP of the Group
during the 2025 financial year are as follows:
Grant Expiry Exercise Price Grant Date Fair Value((1)) No. Granted
Date
Date
$
$
Executives
Benjamin Stoikovich 27 Sep 24 31 Oct 25 - 0.710 300,000
27 Sep 24 31 Mar 26 - 0.710 300,000
27 Sep 24 30 Jun 26 - 0.710 400,000
Frank Eagar 27 Sep 24 31 Oct 25 - 0.710 300,000
27 Sep 24 31 Mar 26 - 0.710 300,000
27 Sep 24 30 Jun 26 - 0.710 400,000
Robert Slater 27 Sep 24 31 Oct 25 - 0.710 225,000
27 Sep 24 31 Mar 26 - 0.710 225,000
27 Sep 24 30 Jun 26 - 0.710 300,000
Sapan Ghai 27 Sep 24 31 Oct 25 - 0.710 150,000
27 Sep 24 31 Mar 26 - 0.710 150,000
27 Sep 24 30 Jun 26 - 0.710 200,000
Dylan Browne 27 Sep 24 31 Oct 25 - 0.710 75,000
27 Sep 24 31 Mar 26 - 0.710 75,000
27 Sep 24 30 Jun 26 - 0.710 100,000
Paul Marcos 27 Sep 24 31 Oct 25 - 0.710 37,500
27 Sep 24 31 Mar 26 - 0.710 37,500
27 Sep 24 30 Jun 26 - 0.710 50,000
Notes:
((1) ) For details on the valuation of Unlisted
Options and Performance Rights, including models and assumptions used, please
refer to Note 17 of the financial statements.
2025 Held at 1 July 2024 Granted as remuneration Rights Converted Net Change Other Held at Vested and exercisable at 30 June 2025
(#)
(#)
(#)
(#)
30 June 2025
(#)
(#)
Executives
Benjamin Stoikovich 1,450,000 1,000,000 - - 2,450,000 -
Frank Eagar 2,200,000 1,000,000 - - 3,200,000 -
Robert Slater 900,000 750,000 - - 1,650,000 -
Sapan Ghai 1,080,000 500,000 - - 1,580,000 -
Dylan Browne 1,200,000 250,000 - - 1,450,000 -
Paul Marcos 750,000 125,000 - - 875,000 -
Sam Cordin 600,000 - - - 600,000((1)) -
Non-Executive
Directors
Julian Stephens 1,200,000 - - - 1,200,000 -
Mark Pearce 950,000 - - - 950,000 -
Nigel Jones 550,000 - - - 550,000 -
Note:
((1) ) As at date of ceasing to be KMP.
Shareholdings of KMP
2025 Held at 1 July 2024 Granted as remuneration Conversion of rights Net Other Change Held at 30 June 2025
(#)
(#)
(#)
(#)
(#)
Executives
Benjamin Stoikovich 4,190,000 - - - 4,190,000
Frank Eagar 500,000 - - - 500,000
Robert Slater - - - - -
Sapan Ghai 1,714,000 - - - 1,714,000
Dylan Browne 952,000 - - - 952,000
Paul Marcos 750,000 - - - 750,000
Sam Cordin 4,225,000 - - - 4,225,000((1))
Non-Executive
Directors
Ian Middlemas 16,100,000 - - 400,000 16,500,000
Julian Stephens 13,557,518 - - - 13,557,518
Mark Pearce 4,520,842 - - - 4,520,842
Nigel Jones 225,000 - - - 225,000
Note:
((1) ) As at date of ceasing to be KMP.
Employment Contracts with KMP
Mr Frank Eagar, Managing Director and CEO, has a letter of employment with the
Group which may be terminated by either party upon giving six months' advance
notice, or payment of lieu thereof. Mr Eagar receives a fixed remuneration
component of US$296,000 per annum and a discretionary annual bonus of up to
US$74,000 to be paid upon successful completion of KPIs as determined by the
Board.
Mr Robert Slater, Chief Commercial Officer, has a consulting agreement with
the Group which may be terminated by either party upon giving six months'
advance notice. Mr Slater receives a fixed remuneration component of US$33,000
per month and a discretionary annual bonus of up to 25% of the annul fixed
remuneration component, to be paid upon successful completion of KPIs as
determined by the Board.
Mr Sapan Ghai, Chief Commercial Officer, has a consulting agreement with the
Group which may be terminated by either party upon giving one month advance
notice. Mr Ghai receives a fixed remuneration component of £18,750 (2024;
£10,417) per month.
Mr Paul Marcos, Head of Project Development, has a letter of employment with
the Group which may be terminated by either party by giving three months'
advance notice. Mr Marcos receives a fixed remuneration component of $300,000
per annum plus superannuation with an annual bonus of up to $50,000 payable
upon successful completion of KPIs as determined by the Board.
All Directors have a letter of appointment confirming the terms and conditions
of their appointment as a Director.
End of Remuneration Report
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the
Company or intervene in any proceedings to which the Company is a part for the
purpose of taking responsibility on behalf of the Company for all or any part
of those proceedings. The Company was not a party to any such proceedings
during the year.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group's operations are subject to various environmental laws and
regulations under the relevant government's legislation. Full compliance with
these laws and regulations is regarded as a minimum standard for all
operations to achieve. Instances of environmental non-compliance by an
operation are identified either by external compliance audits or inspections
by relevant government authorities. There have been no significant known
breaches by the Group during the financial year.
INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS
The Company has entered into Deeds of Indemnity with the Directors
indemnifying them against certain liabilities and costs to the extent
permitted by law.
The Group has paid, or agreed to pay, a premium in respect of Directors' and
Officers' Liability Insurance and Company Reimbursement policies for the 12
months ended 30 June 2025 and 2024, which cover all Directors and officers of
the Group against liabilities to the extent permitted by the Corporations Act
2001. The policy conditions preclude the Group from any detailed disclosures
including the premium amount paid.
To the extent permitted by law, the Company has agreed to indemnify its
auditors, Ernst & Young, as part of the terms of its audit engagement
agreement against claims by third parties arising from the audit (for an
unspecified amount). No payment has been made to indemnify Ernst & Young
during or since the financial year.
NON-AUDIT SERVICES
During the financial year, the Company's current auditor, Ernst & Young
(or by another person or firm on the auditor's behalf) provided non-audit
services relating to income tax preparation and advice, totalling $11,500
(2024: $13,000).
The Directors are satisfied that the provision of non-audit services is
compatible with the general standard of independence for auditors imposed by
the Corporations Act. The nature and scope of the non-audit services provided
means that auditor independence was not compromised.
AUDITOR'S INDEPENDENCE DECLARATION
The lead auditor's independence declaration for the year ended 30 June 2025
has been received and can be found on page 31 of the Directors' Report in the
full version of the 2025 Annul Report.
This report is made in accordance with a resolution of the Directors made
pursuant to section 298(2) of the Corporations Act 2001.
For and on behalf of the Directors
Frank Eagar
Managing Director and CEO
25 September 2025
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2025
2025 2024
$
$
Continuing Operations
Interest Income 2,043,809 1,821,876
Other (expenses)/income (479,574) 141,614
Exploration and evaluation expenses (33,897,375) (14,831,671)
Corporate and administrative expenses (1,549,452) (1,088,693)
Share-based payment expenses (4,309,932) (2,303,201)
Business development expenses (2,247,815) (2,340,819)
Loss before income tax (40,440,339) (18,600,894)
Income tax expense - -
Loss for the year (40,440,339) (18,600,894)
Loss attributable to members of the parent (40,440,339) (18,600,894)
Other Comprehensive income, net of income tax:
Items that may be reclassified subsequently to profit or loss
Exchange differences on foreign entities 194,119 510,155
Other comprehensive income for the year, net of income tax 194,119 510,155
Total comprehensive loss for the year (40,246,220) (18,090,739)
Total comprehensive loss attributable to members of Sovereign Metals Limited (40,246,220) (18,090,739)
Basic and diluted loss per share from continuing operations (cents per share) (6.62) (3.34)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2025
2025 2024
$
$
Current Assets
Cash and cash equivalents 54,538,435 31,564,130
Other receivables 1,771,002 315,597
Other financial assets 105,000 560,000
Total Current Assets 56,414,437 32,439,727
Non-current Assets
Property, plant and equipment 1,852,383 1,149,771
Exploration and evaluation assets 5,086,129 5,086,129
Total Non-current Assets 6,938,512 6,235,900
TOTAL ASSETS 63,352,949 38,675,627
Current Liabilities
Trade and other payables 7,749,922 4,138,353
Provisions 125,582 56,782
Other financial liabilities 46,621 35,288
Total Current Liabilities 7,922,125 4,230,423
Non-Current Liabilities
Other financial liabilities 43,123 86,430
Total Non-Current Liabilities 43,123 86,430
TOTAL LIABILITIES 7,965,248 4,316,853
NET ASSETS 55,387,701 34,358,774
EQUITY
Contributed equity 174,800,846 117,835,631
Reserves 1,143,781 (3,360,270)
Accumulated losses (120,556,926) (80,116,587)
TOTAL EQUITY 55,387,701 34,358,774
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2025
2025 2024
$
$
Cash flows from operating activities
Interest received 1,715,164 1,676,348
Payments to suppliers and employees - exploration and evaluation (30,042,677) (12,632,736)
Payments to suppliers and employees - other (4,551,699) (2,576,443)
Net cash used in operating activities (32,879,212) (13,532,831)
Cash flows from investing activities
Payments for purchase of plant and equipment (1,023,642) (836,348)
Repayment of loan receivable from NGX Limited - 34,434
Net cash used in investing activities (1,023,642) (801,914)
Cash flows from financing activities
Proceeds from issue of shares 59,174,395 40,598,258
Share issue costs (2,209,180) (248,778)
Payments for finance lease (63,482) (16,595)
Net cash from financing activities 56,901,733 40,332,885
Net increase in cash and cash equivalents 22,998,879 25,998,140
Net foreign exchange differences (24,574) 1,614
Cash and cash equivalents at the beginning of the financial year 31,564,130 5,564,376
Cash and cash equivalents at the end of the financial year 54,538,435 31,564,130
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2025
Issued Capital Share-based Payments Reserve Demerger Reserve Foreign Currency Translation Reserve Accumulated Losses Total Equity
$ $ $ $ $ $
Balance at 1 July 2024 117,835,631 3,605,751 (7,336,678) 370,657 (80,116,587) 34,358,774
Net loss for the year - - - - (40,440,339) (40,440,339)
Other comprehensive income
Foreign currency translation - - - 194,119 - 194,119
Total comprehensive loss for the year - - - 194,119 (40,440,339) (40,246,220)
Transactions with owners recorded directly in equity
Issue of placement shares 59,174,395 - - - - 59,174,395
Share issue costs (2,209,180) - - - - (2,209,180)
Share-based payments expense - 4,309,932 - - - 4,309,932
Balance at 30 June 2025 174,800,846 7,915,683 (7,336,678) 564,776 (120,556,926) 55,387,701
Balance at 1 July 2023 74,508,488 4,155,950 (7,336,678) (139,498) (61,515,693) 9,672,569
Net loss for the year - - - - (18,600,894) (18,600,894)
Other comprehensive income
Foreign currency translation - - - 510,155 - 510,155
Total comprehensive loss for the year - - - 510,155 (18,600,894) (18,090,739)
Transactions with owners recorded directly in equity
Issue of placement shares 40,598,258 - - - - 40,598,258
Transfer from SBP reserve on conversion of performance rights 2,853,400 (2,853,400) - - - -
Share issue costs (124,515) - - - - (124,515)
Share-based payments expense - 2,303,201 - - - 2,303,201
Balance at 30 June 2024 117,835,631 3,605,751 (7,336,678) 370,657 (80,116,587) 34,358,774
To view the full version of the 2025 Annual Report including the notes to the
financial statements, please refer to
https://api.investi.com.au/api/announcements/svm/b196b272-dfe.pdf
(https://api.investi.com.au/api/announcements/svm/b196b272-dfe.pdf)
Forward Looking Statement
This release may include forward-looking statements, which may be identified
by words such as "expects", "anticipates", "believes", "projects", "plans",
and similar expressions. These forward-looking statements are based on
Sovereign's expectations and beliefs concerning future events. Forward looking
statements are necessarily subject to risks, uncertainties and other factors,
many of which are outside the control of Sovereign, which could cause actual
results to differ materially from such statements. There can be no assurance
that forward-looking statements will prove to be correct. Sovereign makes no
undertaking to subsequently update or revise the forward-looking statements
made in this release, to reflect the circumstances or events after the date of
that release.
Competent Persons Statemement
The information in this Report that relates to Mineral Resources (Rutile and
Graphite - Kasiya) is based on, and fairly represents, information compiled by
Mr Richard Stockwell, a Competent Person, who is a fellow of the Australian
Institute of Geoscientists (AIG). Mr Stockwell is a principal of Placer
Consulting Pty Ltd, an independent consulting company. Mr Stockwell has
sufficient experience, which is relevant to the style of mineralisation and
type of deposit under consideration, and to the activity he is undertaking, to
qualify as a Competent Person as defined in the 2012 Edition of the
'Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves'. Mr Stockwell consents to the inclusion in the report of the
matters based on his information in the form and context in which it appears.
Mr Stockwell has approved the Mineral Resources Statement as a whole and
consents to its inclusion in the form and context in which it appears.
The information in this announcement that relates to Ore Reserves is based on
and fairly represents information provided by Mr Frikkie Fourie, a Competent
Person, who is an Associate Member of The South African Institute of Mining
and Metallurgy and a Registered Professional Engineer with the Engineering
Council of South Africa, a Recognised Professional Organisation' (RPO)
included in a list promulgated by ASX from time to time. Mr Fourie is employed
by Moletech SA (Pty) Ltd, an independent consulting company. Mr Fourie has
sufficient experience, which is relevant to the style of mineralisation and
type of deposit under consideration, and to the activity he is undertaking, to
qualify as a Competent Person as defined in the 2012 Edition of the
'Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves'. Mr Fourie consents to the inclusion in the Announcement of the
matters based on his information in the form and context in which it appears.
The information in this announcement that relates to the Exploration Results
is extracted from announcements dated 7 December 2021, 16 December 2021, 28
September 2023, 8 May 2024, 15 May 2024, 4 September 2024, 21 November 2024,
19 February 2025, 26 February 2025 and 10 March 2025, which are available to
view at www.sovereignmetals.com.au (http://www.sovereignmetals.com.au) .
Sovereign confirms that a) it is not aware of any new information or data that
materially affects the information included in the original announcement; b)
all material assumptions included in the original announcement continue to
apply and have not materially changed; and c) the form and context in which
the relevant Competent Persons' findings are presented in this report have not
been materially changed from the announcement.
The information contained within this announcement is deemed by Sovereign to
constitute inside information as stipulated under the Regulation 2014/596/EU
which is part of domestic law pursuant to the Market Abuse (Amendment) (EU
Exit) Regulations (SI 2019/310) ("UK MAR"). By the publication of this
announcement via a Regulatory Information Service, this inside information (as
defined in UK MAR) is now considered to be in the public domain.
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