REG - Sovereign Metals Ltd - Hydraulic Mining Trial Commences

Sovereign MetalsAnnouncement

28/08/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240828:nRSb9170Ba&default-theme=true

RNS Number : 9170B  Sovereign Metals Limited  28 August 2024

NEWS RELEASE I 28 AUGUST 2024

HYDRAULIC MINING TRIAL COMMENCES

·     Hydraulic mining trial has now commenced at Kasiya Pilot Site as
part of ongoing Optimisation Study

·   Trial is being conducted by Fraser Alexander, a global industry leader
in hydraulic mining, following successful completion of dry mining trial in
July 2024

·    Hydraulic mining trial is expected to take approximately three
months to complete and includes backfilling of main trial pit, deposition and
rehabilitation testwork

·     Previous testwork suggests soft, friable nature of Kasiya orebody
should be suitable for hydraulic mining

·     Pilot Phase continues to progress with oversight from Sovereign-Rio
Tinto Technical Committee

·   Rio Tinto has elected to increase its shareholding to 19.9% via an
additional investment of A$0.7 million in Sovereign

 

Figure 1: Hydraulic mined material (slurry) flows freely to the collection
point in the bottom of the sump.

Sovereign Metals Limited (ASX: SVM; AIM: SVML; OTCQX: SVMLF) (Sovereign or the
Company) is pleased to announce the commencement of a hydraulic mining trial
at its Kasiya Rutile-Graphite Project (Kasiya or Project) in Malawi as part of
the ongoing Pilot Mining and Land Rehabilitation Program (Pilot Phase). The
hydraulic mining trial aims to further develop previous testwork as part of
the Kasiya Optimisation Study.

Managing Director and CEO, Frank Eagar commented: "With valuable insights
gained from the dry-mining approach at Kasiya, we are now entering the next
phase, which includes the commencement of the hydraulic mining tests,
processing and backfilling material, and progressing towards the
rehabilitation phase, which we expect to take three months to complete.
Results from the Pilot Phase, in particular the analysis of dry-mining versus
hydraulic mining, will be fundamental for the ongoing Optimisation Study."

Classification 2.2: This announcement includes Inside Information

RIO TINTO TO INCREASE ITS SHARHOLDING TO 19.9%

On 17 July 2023, the Company announced that Rio Tinto Mining and Exploration
Limited (Rio Tinto) had made an investment of $40.4 million in the Company
through the issue of 83,095,592 fully paid ordinary shares (Shares) and
34,549,598 unlisted Options (Rio Tinto Options).

On 3 July 2024, the Company announced that Rio Tinto had exercised the Rio
Tinto Options and the Company subsequently issued 34,549,598 Shares to Rio
Tinto to raise an additional $18.5 million (before costs).

Rio Tinto has advised the Company that it has elected to make an additional
investment of A$690,360 in Sovereign through the issue of 1,290,392 Shares
(Additional Shares) to Rio Tinto pursuant to Rio Tinto's first right of
refusal on equity issues in accordance with the Investment Agreement between
Rio Tinto and the Company dated 16 July 2023. Subject to the issue of
Additional Shares, Rio Tinto will increase its shareholding in Sovereign to
19.9%.

HYDRAULIC MINING TRIAL

The saprolite-hosted mineralisation at Kasiya is predominantly homogenous,
with consistent physical properties across the 1.8 billion tonne Mineral
Resource Estimate. Pilot Phase data from the dry-mining trial has confirmed
that no drilling, blasting, crushing, grinding, or milling is needed before
stockpiling material for processing into rutile and graphite products.

The temporary water storage pond, constructed and sealed with natural clay
from excavated material, has been filled with six million litres of ground
water, predominantly from eight water boreholes on site. This water will be
used during the hydraulic mining trial and continuously recycled from the
constructed holding cells where sand and fines fractions will be stored
respectively prior to the planned deposition and rehabilitation testwork.

Figure 2: Overview of the hydraulic mining trial.

All hydraulic mining equipment is skid-mounted for ease of operation and
mobility. A barge-mounted pump, transports the slurry from the sump to a
vibrating screen.

Figure 3: A pump, mounted to a barge, pumps the slurry to a vibrating screen.

Screen underflow is collected in a screen underpan and pumped through a
stacker cyclone. The cyclone generates a -45 micron slurry on the overflow and
a +45 micron sand on the underflow. This process is designed to replicate
plant conditions where these fractions are produced as tailings, and will be
used in subsequent in-pit deposition test work.

The overflow slurry is transferred to a settling pond, where it will settle,
allowing for the recovery of approximately 34% of the water, which will be
returned to the water storage pond. The concentrated slurry, along with the
sand discharge from the cyclone underflow, will be used for the next set of
tests in the in-pit deposition phase.

Land rehabilitation will be a key part of the ongoing Optimisation Study.
Sovereign's objective is to restore land post mining to conditions that match
or surpass existing agricultural yields. The Pilot Phase will showcase to
local communities the successful rehabilitation of land for agriculture
post-mining. These efforts will also help Sovereign refine excavation and
backfill techniques.

Blending test work will commence after the completion of the hydraulic mining
tests. This phase will involve backfilling the seven individual test pits
using various ratios of fines and sand to be followed by soil remediation and
rehabilitation testwork.

Figure 4: The train of high-pressure pumps used to drive the water monitor are
skid-mounted.

 

Figure 5: +2mm oversize is screened out using a vibrating screen.

 

ENQUIRIES

 Frank Eagar (South Africa/Malawi)  Sam Cordin (Perth)                  Sapan Ghai (London)

Managing Director
Business Development
CCO

 +27 21 065 1890                    +61(8) 9322 6322                    +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 Brokers
 Stifel                                                    +44 20 7710 7600
 Varun Talwar
 Ashton Clanfield

 Berenberg                                                 +44 20 3207 7800
 Matthew Armitt
 Jennifer Lee

 Buchanan                                                  + 44 20 7466 5000

Competent Person Statement

The information in this announcement that relates to the Mineral Resource
Estimate is extracted from an announcement dated 5 April 2023 entitled 'Kasiya
Indicated Resource Increased by over 80%' which is available to view at
www.sovereignmetals.com.au (http://www.sovereignmetals.com.au) and 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. 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 announcement have not been materially changed from the
original announcement.

 Kasiya Total Indicated + Inferred Mineral Resource Estimate at 0.7% rutile
 cut-off grade
 Classification  Resource  Rutile Grade  Contained Rutile  Graphite Grade (TGC) (%)  Contained Graphite

(Mt)
(%)
(Mt)
(Mt)
 Indicated        1,200    1.0%          12.2              1.5%                      18.0
 Inferred         609      0.9%          5.7               1.1%                      6.5
 Total            1,809    1.0%          17.9              1.4%                      24.4

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.

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this
announcement via Regulatory Information Service ('RIS'), this inside
information is now considered to be in the public domain.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  DRLSEESSAELSEIA