REG - Sovereign Metals Ltd - Lithium-Ion Battery Graphite Program Upscaled

Sovereign MetalsAnnouncement

02/11/2023 07:16

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RNS Number : 1330S  Sovereign Metals Limited  02 November 2023

SOVEREIGN METALS LIMITED

 

NEWS RELEASE I 2 NOVEMBER 2023

 

KASIYA LITHIUM-ION BATTERY GRAPHITE PROGRAM SIGNIFICANTLY UPSCALED

 

·       Bulk sampling program underway at Kasiya to extract 100 tonnes of
ore to produce over 1,000kg of natural graphite for lithium-ion battery anode
testwork and product qualification

·    The upscaled graphite qualification program will support upcoming
project studies with our strategic partner, Rio Tinto

·       Sovereign and Rio Tinto have agreed to collaborate to qualify
graphite from Kasiya, with a particular focus on supplying the spherical
purified graphite (SPG) segment of the lithium-ion battery anode market

·       Previous testwork confirmed Kasiya's graphite to have near
perfect crystallinity and high purity - both key attributes for suitability in
lithium-ion battery feedstock

·      Kasiya's recent Pre-Feasibility Study (PFS) confirmed it could be
one of the world's largest natural graphite producers at 244kt per annum with
the lowest cash operating costs globally at US$404/t and the lowest
CO(2)-footprint

·        As one of the largest known natural graphite deposits
globally, close to existing infrastructure connecting it to global markets,
Kasiya is set to become a strategic source of long term, secure supply outside
of China

·        This graphite qualification program coincides with news of
China's curbs on exports of natural graphite, a critical mineral for the US,
EU, Japan and Australia

Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) is
pleased to announce that a bulk sampling program to extract over 100 tonnes of
ore from Kasiya is underway. The bulk sampling program is part of the
Company's graphite bulk sample program for qualification, downstream testwork
and product development. A major component to graphite sales agreements is
customer qualification with graphite produced from this program to be shared
with prospective end-users in addition to being used for upscaled downstream
test-work.

The Company's upscaled graphite program comes as China implements curbs on
exports of natural graphite under "national security" concerns. Kasiya is one
of the world's largest natural graphite deposits outside of China and has the
potential to become a key source of strategic supply to the US, UK, EU, Japan
and South Korea. According to industry experts Benchmark Mineral Intelligence,
China currently produces 61% of all flake graphite used in the production of
lithium-ion battery anodes and accounts for 93% of all graphite anode
production globally.

Classification: 3.1 Additional regulated information required to be disclosed
under the laws of a Member State

 

ENQUIRIES

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

Managing Director
+61(8) 9322 6322
+44 207 478 3900

 +61(8) 9322 6322

 

 Nominated Adviser on AIM and Joint Broker
 SP Angel Corporate Finance LLP             +44 20 3470 0470
 Ewan Leggat

 Charlie Bouverat

 Harry Davies-Ball

 Joint Brokers
 Berenberg                                  +44 20 3207 7800
 Matthew Armitt
 Jennifer Lee

 Tavistock PR                               +44 20 7920 3150

The recently released PFS confirmed Kasiya as a potential major critical
minerals project with an extremely low CO(2)-footprint delivering significant
long-term volumes of natural rutile (the highest-grade, purest, natural
titanium feedstock) and graphite (a key component of an electric vehicle
battery) while generating significant economic returns. Both titanium and
natural graphite are critical to several of the world's economies as well as
crucial to decarbonisation solutions required to meet "Net-Zero" and other
targets set by policymakers.

BULK SAMPLING PROGRAM

The mechanised drill program will use a custom-made 300mm diameter spiral
auger to extract over 100 tonnes of material from across Kasiya's planned
future pits with sampling to a maximum 20m depth (Figure 1).

The sampling program forms part of the Company's program for graphite
qualification, downstream testwork and product development, and is designed to
produce over 1,000kg each of flake graphite and natural rutile products.

The bulk sample will be processed at the Company's laboratory in Lilongwe,
Malawi. This will be achieved with the newly installed Kwatani 30-inch single
and double-deck vibrating separators for sizing and de-sliming (Figure 2). The
sand fraction will then be processed over the new Holman Wilfley 2000 wet
shaking table to produce a graphite pre-concentrate and a separate heavy
mineral concentrate (HMC) containing the rutile (Figure 3). The graphite
pre-concentrate is expected to grade 4-5% C(t) whilst the HMC is expected to
grade ~30% contained rutile.

 

Figure 1. Mechanised drill with custom-made 300mm diameter spiral auger

 

Figure 2. Installation of the new Kwatani 30-inch single-deck and double-deck
vibrating separators for sizing and de-sliming bulk samples at the Company's
Malawi laboratory and metallurgical facility

Figure 3: Holman-Wilfley 2000 Series shaking table to be installed at
Sovereign's Lilongwe laboratory in Malawi.

Final processing will then be completed at commercial metallurgical
laboratories in Canada and Australia. The graphite pre-concentrate will
undergo traditional flotation and polishing processes to target >96% C(t)
product for lithium-ion battery anode feedstock. The HMC will undergo gravity
spiral cleaner stages followed by electrostatic and magnetic separation stages
to produce a +95% TiO(2) natural rutile products.

PLANNED DOWNSTREAM TESTWORK

The 1,000kg of flake graphite product produced will be used for downstream
test-work and initial product qualification targeting the battery anode
sector. Previously reported initial characterisation testwork on Kasiya's
graphite has indicated excellent suitability for use in lithium-ion batteries
with very high purity and very high crystallinity being the key features.

Downstream test-work and qualification on the 1,000kg flake graphite product
produced will involve the following stages to be completed at recognised
international battery sector laboratories;

-      Purification via an optimised HF-free reagent scheme to >99.95%
Ct

-      Micronisation

-      Spheronisation

-      Carbon coating

-      Anode production

-      Electrochemical characterisation

Raw flake graphite products plus final CSPG (coated spheronised graphite
product) will be provided to potential offtakers for assessment and
pre-qualification. Through Sovereign's well-established experience in
graphite, the Company has built a strong understanding of the product's market
and developed relationships with well-established offtakers and customers.

A major component to graphite sales agreements is customer qualification, and
this is a key reason for initiating the graphite bulk sample program and
scaling up in-country facilities in order to continuously produce bulk
samples. The graphite produced from this program will be shared with
prospective end-users and is an important next step for Sovereign to qualify
the Kasiya graphite product.

Sovereign's recent initial graphite characterisation testwork conducted by an
independent German industrial minerals specialist demonstrated superior
qualities and excellent suitability for its use in lithium-ion batteries.
Further downstream testwork is planned that will use the graphite concentrate
produced from this current bulk sampling program.

Figures 4 & 5: SEM micrograph of Kasiya graphite flotation concentrate
from previous testwork

INDUSTRY DEVELOPMENTS

On 20 October 2023, Reuters reported, effective 1 December 2023, that China
would require export permits for some graphite products including natural
graphite and natural graphite products critical to EV production. China is the
world's top graphite producer
(https://www.reuters.com/markets/commodities/china-curbs-graphite-exports-latest-critical-minerals-squeeze-2023-10-20/)
and exporter and also refines more than 90% of the world's graphite into the
material that is used in virtually all EV battery anodes.

China's commerce ministry said the move on graphite was "conducive to ensuring
the security and stability of the global supply chain and industrial chain,
and conducive to better safeguarding national security and interests".

Competent Person Statement

The information in this announcement that relates to Production Targets, Ore
Reserves, Processing, Infrastructure and Capital Operating Costs, Metallurgy
(rutile and graphite) is extracted from an announcement dated 28 September
2023 entitled 'Kasiya Pre-Feasibility Study Results' which is 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 and technical parameters underpinning the
Production Target, and related forecast financial information derived from the
Production Target 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 presentation have not been
materially modified from the Announcement.

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.

 

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