REG - Sovereign Metals Ltd - March 2026 Quarterly Report
29/04/2026 07:00
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RNS Number : 3234C Sovereign Metals Limited 29 April 2026
NEWS RELEASE I 29 April 2026
MARCH 2026 QUARTERLY REPORT
Sovereign Metals Limited (ASX:SVM, AIM:SVML, OTCQX:SVMLF) (Sovereign or the
Company) is pleased to provide its quarterly report for the period ended 31
March 2026 including advances made at its Kasiya Rutile-Graphite Project
(Kasiya or the Project) in Malawi.
HIGHLIGHTS DURING AND SUBSEQUENT TO THE QUARTER
Kasiya Definitive Feasibility Study Delivers Outstanding Results
• Pre-tax NPV(8) of US$2.2 billion on capital expenditure to first
production of US$727 million - an NPV to capex ratio of 3.0x
• Steady state annual EBITDA of US$476 million and pre-tax, unlevered
free cash flow of US$452 million; total revenue of US$16.2 billion initial
25-year mine life with potential for multi-generational mine life extensions
• Operating cost of just US$450/t product (FOB Nacala) - underpinning
strong margin resilience across commodity cycles
• Positioned to become the world's largest producer of both natural
rutile (222ktpa) and natural flake graphite (275ktpa) - two commodities
designated as Critical Minerals by the United States and the European Union
• DFS completed under the oversight of the Sovereign-Rio Tinto Technical
Committee, with workstreams aligned with IFC Performance Standards; World
Bank/IFC Collaboration Agreement in place as potential co-lead mandated lead
arranger for project financing
• Data obtained from Pilot Mining Program, completed with technical
input from Rio Tinto, provided real-world inputs and validation across key DFS
workstreams
• Heavy rare earth potential not included in DFS - evaluation of
monazite by-product from rutile tailings stream now underway
Mineral Resource Estimate Significantly Upgraded
• Total Rutile Mineral Resource increased to 2.1 billion tonnes at 0.96%
rutile for 20.3Mt contained rutile, with 0.95% TGC for 20.0Mt contained
graphite (Measured, Indicated & Inferred)
• Measured and Indicated contained rutile surged 32% to 16.1Mt (1.65
billion tonnes at 0.98% rutile) - a material increase in resource confidence
• First-ever Measured Resource declared - the highest confidence JORC Code
category - covering at least the first six years of planned operations
• Resource upgrade delivered the classification standard required for a
bankable DFS and a critical milestone on the path to project financing
Offtake Momentum: Mitsui (Rutile) and Traxys (Graphite) MOUs Signed
• Non-binding MOU signed with Mitsui for up to 70,000 tonnes per annum of
Kasiya natural rutile concentrate (TiO(2) >95%) over an initial four-year
supply period from first production, with potential five-year extension -
equates to over 50% of Phase 1 rutile production
• Japan is the world's second-largest producer of titanium sponge after
China and supplied over 70% of US titanium sponge imports in H1 2025,
underscoring the strategic importance of securing reliable natural rutile
feedstock
• Non-binding MOU signed with Traxys North America LLC - one of only three
trading houses selected to procure critical minerals for the U.S. Government's
US$12 billion Project Vault strategic reserve - for approximately 40,000
tonnes per annum of Kasiya graphite in Phase 1, increasing to up to 80,000
tonnes per annum as the Project expands
• Traxys MOU contemplates an initial focus on the high-value refractory
market, with potential to include flake graphite to serve battery anode supply
chains
Strategic Heavy Rare Earths Recovered at Kasiya
• Monazite concentrate containing exceptionally elevated levels of heavy
rare earth elements recovered from the rutile tailings stream at Sovereign's
Lilongwe laboratory
• Preliminary analysis confirmed significant valuable heavy rare earth
content with an average DyTb ratio of 2.9% and 11.9% Yttrium, and valuable
light rare earth content, including 21.8% NdPr ratio - heavy rare earth ratio
approximately 7x higher for both DyTb and Yttrium than the five largest global
rare earth producing mines, suggesting potential for Kasiya to produce a very
high value rare earth product
• Monazite recovered from material that would otherwise be discarded -
potential third revenue stream at near-zero incremental cost, with no parallel
rare-earth processing circuit required
• DyTb and Yttrium are all subject to Chinese export controls introduced
in April 2025 and further tightened against Japan in January 2026 - the
elements underpin permanent magnets for defence systems, aerospace thermal
barrier coatings, radar and laser systems
Next Steps
Over the quarter ending June 2026 and beyond, Sovereign will:
• Advance post-DFS workstreams, including finalisation of the
Environmental and Social Impact Assessment
• Advance offtake discussions and progress towards binding definitive
agreements with Mitsui, Traxys and other strategic counterparties
• Undertake further work to characterise the monazite mineralisation at
Kasiya, including detailed mineralogical characterisation, assessment of heavy
rare earth concentrate recovery rates through the proposed Kasiya flowsheet,
and evaluation of potential scale and economics of rare earth production as a
by-product
• Continue the Company's community and social development programs in
Malawi
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
KASIYA DEFINITIVE FEASIBILITY STUDY RESULTS
Subsequent to the end of the quarter, the Company announced the results of the
Definitive Feasibility Study (DFS or the Study) for Kasiya. The DFS built on
the outcomes of the Optimised Pre-feasibility Study announced in January 2025
and on empirical data from the Pilot Mining and Rehabilitation Program (Pilot
Mining) completed in 2024. The DFS was undertaken in accordance with a scope
of work approved by, and with technical input and oversight from, the
Sovereign-Rio Tinto Technical Committee and, where applicable, conforms to the
World Bank Group's International Finance Corporation (IFC) Performance
Standards to enhance bankability of the Project.
Following input from world-class consultancies, Sovereign's highly experienced
owners' team, and subject matter experts from Rio Tinto, the DFS has
reconfirmed that Kasiya will be a leading future supplier to two distinct
strategic critical minerals supply chains and outside of Chinese control -
natural rutile for the titanium industry and natural flake graphite.
Outstanding Financial Returns
The key financial metrics from the DFS (steady state, all on a 100% project
basis) are set out below:
TABLE 1: Key DFS Metrics (Steady State)
OPERATING METRICS Units Results
Initial Life of Mine (LOM) Yrs 25
Total Ore Mined Mt 536
Phase 1 Plant Throughput (Yrs 1-4) Mtpa 12
Phase 2 Plant Throughput (Yrs 5-25) Mtpa 24
Annual Rutile Production (95%+ TiO(2)) ktpa 222
Annual Graphite Production (96% TGC) ktpa 275
FINANCIAL PERFORMANCE
Total Revenue US$M 16,210
Annual Revenue US$M 728
Annual EBITDA US$M 476
Annual Free Cash Flow (pre-tax, unlevered) US$M 452
NPV(8) (real, pre-tax) US$M 2,204
IRR (pre-tax) % 23%
OPERATING AND CAPITAL EXPENDITURE
Capex to First Production US$M 727
Total LOM Development Capex US$M 1,239
Total LOM Sustaining Capex US$M 431
Operating Costs (FOB Nacala) US$/t product 450
Note: Steady State is defined as years of operation during which total
run-of-mine is at full capacity of 24 Mtpa (i.e., years 5 to 23). All results
are presented on a 100% project basis.
Summary of Key DFS Workstreams
Dry Mining Method Confirmed
Using real-world data collected from the Pilot Mining, the DFS confirms a dry mechanical mining method using draglines and 100t rigid dump trucks. The soft, free-dig saprolite orebody requires no drilling, blasting, crushing or milling. A two-bench approach (5m top cut, up to 15m bottom cut) keeps the draglines above the water table, eliminating the need for production equipment below groundwater level. This represents a significant de-risking step from the hydro-mining method originally considered in the original Pre-feasibility Study.
No Conventional Tailings Storage Facility
A major advancement in the DFS is the elimination of the conventional Tailings
Storage Facility, leading to a significant reduction in the mining footprint
and providing a flexible, lower-risk tailings management solution. All
tailings will be stored via hydraulic co-disposal backfilling of mined-out
pits, designed in compliance with the Global Industry Standard on Tailings
Management. The 50:50 fines-to-sand backfill ratio closely matches the
existing soil profile, supporting progressive rehabilitation.
Hydropower-Sourced Grid Electricity
The DFS is based on connection to Malawi's national hydropower grid via a
132kV overhead line to the Nkhoma substation. Electricity Supply Corporation
of Malawi Limited has confirmed significant grid expansion is underway,
including a 400kV Mozambique interconnector and the 375MW IFC/World
Bank-funded Mpatamanga hydropower station. Grid connection delivers
substantially lower power costs and a favourable emissions profile.
Dual Plant Configuration and Processing Flowsheet
The DFS confirms a staged development with two 12Mtpa processing plants -
South Plant from Year 1 and North Plant from Year 5 - positioned at the
respective resource centres of gravity to minimise haulage distances and
costs. The Wet Concentration Plant employs a low-energy gravity separation
process to produce a Heavy Mineral Concentrate, which is then fed to the
Mineral Separation Plant for electrostatic and magnetic separation to yield
premium-quality rutile (+95% TiO₂). Graphite-rich concentrate recovered from
the spirals is processed in a dedicated flotation plant, producing a
high-purity, high-crystallinity, coarse-flake graphite product.
Logistics and Export Infrastructure
Kasiya's products will be railed directly from a purpose-built dry port at the
mine site eastward along the Nacala Logistics Corridor to the container
terminal at the Port of Nacala on the Indian Ocean. The existing heavy-haul
rail line and deep-water port provide a proven, operational export route - a
significant infrastructure advantage over comparable undeveloped projects.
Product transport cost is estimated at US$117/t product (FOB Nacala).
IFC Performance Standards Integrated into Design
The DFS has been prepared in alignment with IFC Performance Standards, with a
comprehensive Environmental and Social Impact Assessment nearing completion
and the full suite of environmental and social specialist studies completed.
Sovereign's established on-the-ground social team of 22 core staff and
90-member Community Liaison Team represent a level of social preparedness
rarely achieved at DFS stage.
MINERAL RESOURCE ESTIMATE UPDATE
In March 2026, ahead of the publication of the DFS, the Company announced an
updated Mineral Resource Estimate (MRE) for Kasiya. The updated MRE served as
the resource base for the DFS mine schedule, replacing the previous April 2023
MRE.
Combined Measured and Indicated (M&I) rutile Resources grew 38% to
1,652Mt, representing 77% of the total Resource base. This material
improvement in Resource confidence reflects the extensive infill drilling
programs completed and provides a robust foundation for the DFS. Kasiya
achieved a Measured Resource for the first time, covering at least the first
six years of planned operations.
TABLE 2: Updated Rutile MRE
Class Tonnes (Mt) Rutile Grade (%) Rutile (Mt) TGC (%) TGC (Mt) Rutile Eq. (%)
Measured 107 1.05 1.12 1.56 1.67 1.94
Indicated 1,545 0.97 14.99 1.05 16.26 1.57
Total M&I 1,652 0.98 16.12 1.09 17.93 1.60
Inferred 452 0.91 4.12 0.45 2.02 1.17
Total Rutile MRE 2,105 0.96 20.24 0.95 19.95 1.51
Note: Rutile Mineral Resource defined from a pit shell with mineralisation
defined as ≥0.75% Rut95 for the pit shell optimisation run. A rutile
concentrate net price of US$1,400 was used to determine economic value. The
Rutile MRE is reported based on all rutile mineralisation ≥0.4% Rut95 within
the optimised pit shell. Any apparent differences in totals are due to
rounding.
Table 3: MRE Comparison - Previous vs. Updated
Metric Previous MRE Updated MRE Change
Total Resource Tonnes (Mt) 1,809 2,105 +16%
Measured & Indicated Tonnes (Mt) 1,200 1,652 +38%
M&I Contained Rutile (Mt) 12.2 16.1 +32%
Total Contained Rutile (Mt) 17.9 20.2 +13%
The step-up in Measured and Indicated resource confidence provided the
critical input for the DFS, enabling the Company to present a resource base
with the classification level required for bankable project financing and
offtake discussions. The Kasiya MRE has been prepared by Sovereign under
guidance by MSA Group and is reported in accordance with the JORC Code (2012)
(JORC Code).
OFFTAKE MOUs: MITSUI AND TRAXYS
Mitsui & Co. Rutile Offtake MOU
In March 2026, the Company announced the signing of a non-binding memorandum
of understanding (MOU) with Mitsui & Co., Ltd. for the sale and purchase
of natural rutile concentrate from Kasiya. The MOU provides an offtake
framework for up to 70,000 tonnes per year of natural rutile concentrate
(TiO(2) >95%) over an initial four-year supply period from first
production, concurrent with Phase 1 of the Project (12Mtpa plant throughput),
with the potential for a five-year extension concurrent with Phase 2 (24Mtpa
plant throughput).
Mitsui is a global trading and investment company with a presence in more than
60 countries and a diverse business portfolio covering a wide range of
industries. After China, Japan is the world's second-largest producer of
titanium sponge and is recognised globally for producing the highest-quality
titanium alloys for aerospace, defence, medical, and advanced manufacturing
applications. Japan is home to leading titanium metal manufacturers including
Toho Titanium Co., Ltd. and OSAKA Titanium technologies Co., Ltd., which
together account for over 60% of aerospace and defence-grade titanium metal
production outside of China and Russia.
According to the U.S. Geological Survey, the U.S. sourced over 70% of its
titanium sponge imports from Japan during the first half of 2025, underscoring
Japan's critical role in Western titanium supply chains and the strategic
importance of securing reliable, high-quality rutile feedstock for the
Japanese titanium industry.
The signing of the MOU coincided with the inaugural US Critical Minerals
Ministerial in February 2026, hosted by U.S. Secretary of State Marco Rubio in
Washington, D.C., bringing together delegations from over 50 nations,
including Japan, to advance collective efforts to strengthen and diversify
critical minerals supply chains. Separately, the United States, European
Union, and Japan announced their intention to develop Action Plans for
critical minerals supply chain resilience, including coordinated trade
policies and border-adjusted price floors.
The MOU records the mutual intention of the parties to negotiate in good faith
towards a formal sales and offtake agreement and is non-exclusive and
non-binding except for certain standard clauses. The negotiation and entry
into any definitive agreement with Mitsui remains subject to the rights of Rio
Tinto pursuant to the Investment Agreement dated 16 July 2023 and acknowledges
the Company's Collaboration Agreement with the IFC dated 15 December 2025.
Traxys North America Graphite Marketing MOU
In February 2026, the Company announced the execution of a non-binding MOU
with Traxys North America LLC (Traxys), a leading global physical commodity
trader and merchant, for the marketing and sale of graphite products from
Kasiya. Under the MOU, the parties have agreed to negotiate in good faith
towards a binding Marketing Agreement under which Traxys would sell
Sovereign's graphite production on the Company's behalf. The MOU contemplates
approximately 40,000 tonnes per annum in Phase 1, increasing to up to 80,000
tonnes per annum as the Project expands, with a contemplated supply period of
5-10 years. Initial focus is the high-value refractory graphite market (flake
sizes of +100 mesh or larger), with potential to also serve battery anode
customers.
Traxys is a leading physical commodity trader and merchant headquartered in
Luxembourg, with over 400 employees across more than 20 offices worldwide and
annual turnover in excess of US$10 billion. On 2 February 2026, the US
Administration launched Project Vault, a first-of-its-kind US$12 billion
public-private partnership to establish a US Strategic Critical Minerals
Reserve, backed by a US$10 billion loan from the US Export-Import Bank and
approximately US$2 billion in private capital. Traxys North America was
selected as one of only three commodity trading houses to procure critical
minerals for the US Strategic Reserve.
The MOU is non-exclusive and non-binding (other than confidentiality,
compliance, reputation, governing law and anti-bribery provisions). The
negotiation and entry into any binding Marketing Agreement remains subject to
the respective boards' approvals and the rights of Rio Tinto under its
Investment Agreement with Sovereign.
STRATEGIC HEAVY RARE EARTHS RECOVERED AT KASIYA
In January 2026, the Company announced the successful recovery of a monazite
product containing high-value heavy rare earth elements (REE) from the
tailings stream generated during rutile processing at its upgraded Lilongwe
laboratory facilities. The concentrate was recovered from material that would
otherwise be discarded - the non-conductor tailings stream from electrostatic
separation of a heavy mineral gravity concentrate of Kasiya ore.
Preliminary analysis confirmed that the monazite concentrate contains
exceptional heavy rare earth content averaging 2.9% (and up to 3.9%) combined
Dysprosium-Terbium (DyTb) and averaging 11.9% (and up to 17.3%) Yttrium, and
light rare earth content including 21.8% Neodymium-Praseodymium (NdPr).
Chemical analysis was conducted by Scientific Services South Africa.
Comparison with Major Global Producers
Global rare earth production is concentrated in five major operations that
together supply over 70% of the world's rare earth production: three in China
(Bayan Obo, Weishan, Maoniuping), one in Australia operated by Lynas Rare
Earths Ltd. (Mt Weld), and one in the United States operated by MP Materials
Corp. (Mountain Pass). All five are dominated by light rare earths -
principally lanthanum and cerium, which are abundant and low-value, and the
magnet rare earths Neodymium and Praseodymium.
Table 4: Kasiya vs five largest REE producers
Project Location NdPr DyTb Yttrium
Mt Weld Australia 23.3% 0.4% 0.8%
Mountain Pass USA 16.4% 0.0% 0.0%
Bayan Obo China 21.7% 0.0% 0.4%
Weishan China 14.9% 0.1% 0.8%
Maoniuping China 21.0% 1.3% 6.3%
Top Five Producer Average 19.4% 0.4% 1.7%
KASIYA Malawi 21.8% 2.9% 11.9%
Source: See Appendix 4
Kasiya's heavy rare earth content is approximately 7x higher for both DyTb and
Yttrium than found in the five largest rare earth producing mines. Notably,
Mountain Pass - America's only rare earth mine - contains no measurable DyTb
or Yttrium. Preliminary analysis of Kasiya's monazite REE content also
demonstrates one of the highest combined heavy rare earth profiles among
comparable REE development projects globally, while maintaining NdPr levels
comparable to many REE development projects that have received government
backing.
Strategic Importance of DyTb and Yttrium
DyTb and yttrium are heavy magnet rare earths essential for high-temperature
permanent magnets used in advanced technology, including defence systems and
precision weapons. Yttrium is a high-impact rare earth element critical for
aerospace, thermal barrier coatings, radar and laser systems, alloy
strengthening and semiconductor manufacturing.
China's April 2025 export controls on dysprosium, terbium, and yttrium have
created acute supply shortages for Western manufacturers. On 6 January 2026,
China announced strengthened export controls on dual-use items to Japan,
effective immediately. Despite 15 years of diversification efforts, Japan
remains approximately 60% dependent on Chinese rare earth imports, and for
heavy rare earths, Japan's dependence on China approaches 100%. The US is 100%
reliant on imports for its yttrium requirements.
By-Product from Existing Process
The monazite concentrate was recovered from the non-conductor tailings stream
of the standard Kasiya flowsheet. Gravity concentrates were subjected to
electrostatic separation, with the non-conductor stream then subjected to
further gravity separation, followed by magnetic separation to produce a
magnetic monazite concentrate. Duplicate analyses confirmed excellent
repeatability.
Critically, no additional complex processing was required, which means capital
requirements would not include a parallel full rare-earth processing circuit,
as required by primary REE miners. This represents potential by-product
economics at near-zero incremental cost - rare earth recovery as an addition
to existing rutile and graphite processing infrastructure. This workstream was
not included in the DFS and an evaluation program is continuing during the
current quarter.
SUCCESSFUL REHABILITATION TRIALS AND COMMUNITY PARTNERSHIPS
In April 2026, the Company announced that its second year of rehabilitation
trials, as part of the Pilot Mining at Kasiya was nearing completion for the
upcoming harvest season in Malawi.
The rehabilitation trials provide practical, multi-year evidence demonstrating
Sovereign's alignment with international rehabilitation, environmental, and
community good-practice standards. Empirical data from the trials were used to
prepare the Mine Closure and Mine Rehabilitation Plans, which are now
integrated into the mining, backfilling and post-mining closure planning -
critical components for project bankability and alignment with the standards
required by development finance institutions.
The rehabilitation programme has also contributed to a significant community
development outcome. After two years of close collaboration, the 28 local
farmers involved in the trials have formally requested that Sovereign remains
at the trial site and support them in establishing a farming co-operative.
This represents a strong community endorsement of the program's value and is a
central pillar of Kasiya's post-closure social transition strategy -
demonstrating that the Project can deliver lasting economic benefits to local
communities well beyond the mine life.
The outcomes directly complement the collaboration with the IFC, which is
supporting integration of IFC Performance Standards into the Project's
Environmental and Social Impact Assessment, and strengthening Kasiya's pathway
to bankable development and international project financing.
Proven Rehabilitation Results
The second year of trials builds on the success of the first year, which
delivered maize yields of 5.2 tonnes per hectare versus the regional average
of 1 tonne per hectare - a fivefold increase that confirmed post-mining land
can achieve superior agricultural productivity compared to pre-mining land,
which loses crop carrying capacity at 3 to 4% per annum.
Sovereign's rehabilitation approach is designed to use agricultural inputs
while maximising long-term agricultural sustainability. Lime, fertiliser and
biochar were applied during the first year of rehabilitation, with only
targeted supplementation in the second year where specific deficiencies in
basic nutrients were identified. Rehabilitation activities are conducted under
a no-tillage, minimal soil disturbance principle. No heavy machinery is
permitted on rehabilitated soils; all activities are undertaken by hand to
preserve soil structure and the effectiveness of applied ameliorants. This
simple, replicable approach is specifically designed to be adopted and
maintained by local farming communities beyond mine closure.
Diversified Cropping System
The second year of trials has expanded the rehabilitation approach into a
diversified multi-cropping system, combining maize with bamboo (Giant Bamboo -
Dendrocalamus asper), winter beans, grass fodder and groundnuts. First-year
results confirmed that bamboo and maize co-exist with minimal competition,
functioning in a symbiotic manner that supports long-term land productivity.
Through the intercropping approach, local farmers were able to exceed their
usual crop yields, while, in parallel, the Bamboo has been allowed to mature
as a long-term carbon and soil remediation solution. The multi-cropping
approach provides participating communities with a wider range of food, cash
and fodder crops - supporting year-round agricultural viability and the
transformation from subsistence to commercial farming on rehabilitated land.
Second-year crop yields are expected to reach the first-year benchmark of 5.2
tonnes per hectare when harvested in mid-2026.
Figures 1 & 2: Bamboo and maize intercropping system & Sovereign's
rehabilitation showing maize intercropped with bamboo (February 2026).
Community Partnerships
Farmer engagement and participation are central to the long-term success of
Kasiya's rehabilitation strategy. The rehabilitation approach uses simple
agronomic methods carried out largely by hand, ensuring that local communities
can sustain and build on the improved farming practices beyond mine closure.
Sovereign has worked closely with local farmers over the past two years, who
have been integral to the success of the rehabilitation program. This
deepening partnership has resulted in participating farmers formally
requesting that Sovereign remains involved at the trial site and provide
support in establishing a farming co-operative - a strong endorsement of the
program's value to the local communities.
The development of community-led farming co-operatives forms a central pillar
of Sovereign's post-closure social transition strategy. The Company plans to
continue working with local farmers throughout 2026, with a view to
establishing a replicable model that can be scaled across the broader Kasiya
project area as mining progresses.
Figure 3: Rehabilitation site farmers with agreements on setting up a farming
co-operative.
Figures 4-6: Images showing the progression of mining, backfilling and
rehabilitation at
Sovereign's Rehabilitation Trail Site.
Competent Person Statement
The information in this announcement that relates to the DFS (including Mine
Engineering, Mine Scheduling, Processing, Infrastructure, Capital and
Operating Costs, Production Target and Ore Reserves) is extracted from an
announcement dated 16 April 2026, which is available to view at
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 announcement have not been materially changed from the
original announcement.
The information in this announcement that relates to the Mineral Resource
Estimate is extracted from Sovereign's announcement dated 18 March 2026
entitled 'Kasiya Mineral Resource Estimate Significantly Upgraded Ahead of
DFS' (Original Announcement), which is available to view at
www.sovereignmetals.com.au, and is based on, and fairly represents information
compiled by Mr Jeremy Witley, a Competent Person, who is a member of the South
African Council for Natural Scientific Professions (SACNASP Pr. Sci. Nat.),
a Recognised Professional Organisation (RPO) included in a list promulgated by
ASX from time to time. Mr Witley is a principal of MSA Group, 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 Original Announcement have not been materially changed from the
disclosure in the Original Announcement.
The information in this announcement that relates to the exploration results
(metallurgy) is extracted from announcements dated 28 September 2023, 8 May
2024, 15 May 2024, 4 September 2024 and 21 January 2026, which is available to
view at 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 announcement have not been materially changed from the
original announcement.
This announcement has been approved and authorised for release by the
Company's Managing Director & CEO, Frank Eagar.
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.
APPENDIX 1: SUMMARY OF MINING TENEMENTS
As at 31 March 2026, the Company had an interest in the following tenements:
Licence Holding Entity Interest Type Licence Renewal Date Expiry Term Date(1) Licence Area (km(2)) Status
EL0609 MML 100% Exploration 25/09/2026 25/09/2028 219.5 Granted
EL0582 SSL 100% Exploration 15/09/2025(2) 15/09/2028 69.8 Granted
EL0561 SSL 100% Exploration 15/09/2025(2) 15/09/2028 30.7 Granted
EL0657 SSL 100% Exploration 3/10/2028 3/10/2031 2.3 Granted
EL0710 SSL 100% Exploration 1/02/2027 1/02/2031 38.4 Granted
RTL0035-RTL0045 SSL 100% Retention N/A 26/06/2026 285.2 Granted
EL0528 SSL 100% Exploration N/A 27/11/2025(3) 16.2 Granted
EL0545 SSL 100% Exploration N/A 12/05/2026(3) 24.2 Granted
Notes:
SSL: Sovereign Services Limited, MML: McCourt Mining Limited
(1) An exploration licence (EL) covering a preliminary period in accordance
with the Mines and Minerals Act (2023) (2023 Mines Act) is granted an initial
period of five (5) years with the ability to extend by three (3) years on two
occasions (a total term of 11 years). ELs that have come to the end of their
term can be converted by the EL holder into a retention licence (RL) for a
term not exceeding five (5) years subject to meeting certain criteria or any
conditions imposed on the RL.
(2) The Company has submitted two EL applications, APL0739 (16.2km(2)) and
APL0740 (71.5km(2)), which remain pending as at 31 March 2026.
(3) Licence surrender letters submitted for non-core ELs.
APPENDIX 2: RELATED PARTY PAYMENTS
During the quarter ended 31 March 2026, the Company made payments of A$294,000
to related parties and their associates. These payments relate to existing
remuneration arrangements (executive salaries, director fees, superannuation
and bonuses (A$196,000)) and for the provision of administrative, secretarial
and corporate services (A$98,000).
APPENDIX 3: MINING EXPLORATION EXPENDITURES
During the quarter, the Company made the following payments in relation to
mining exploration activities:
Activity A$'000
Feasibility Studies (DFS & Pilot Mining (including rehabilitation 3,129
trials))
Project Operations (site office, personnel, field supplies, equipment, 1,250
vehicles and travel
Assaying and Metallurgical Test-work 231
ESG related (including community and social development programs) 558
Drilling related 58
Return of VAT (1,293)
Total as reported in Appendix 5B 3,933
There were no mining or production activities and expenses incurred during the
quarter ended 31 March 2026.
APPENDIX 4: COMPANY SPECIFIC SOURCES
Project Company Status Source Data Link
Balranald Iluka Resources Limited Development Company Presentation: "Macquarie Conference" https://www.iluka.com/media/d5gjznmn/iluka-resources-macquarie-australia-conference-may-2025.pdf
(7-May-25)
Bayan Obo China Northern Rare Earth (Group) High-Tech CO. Ltd Producing Rare Earth Exchanges rareearthexchanges.com/project/bayan-obo/
(8-Feb-25)
Enneaba Iluka Resources Limited Development Company Presentation: "Macquarie Conference" https://www.iluka.com/media/d5gjznmn/iluka-resources-macquarie-australia-conference-may-2025.pdf
(7-May-25)
Kangankunde Lindian Resources Ltd. Development Company Announcement: "Kangankunde Project Stage 1 Outstanding Feasibility https://static1.squarespace.com/static/58a516a859cc689ad6303dc4/t/6681df545eee2944615f3358/1719787358011/Outstanding+Kangankunde+Stage+1+Feasibility+Study+Results+2741301.pdf
Study Results"
(1-Jul-24)
Longonjo Pensana Plc Development Company Announcement: "Longonjo Mineral Resource estimate upgraded" https://pensana.co.uk/wp-content/uploads/2020/09/longonjo-mineral-resource-estimate-upgraded-14-Sept-2020.pdf
(14-Sept-20)
Maoniuping China Rare Earth Group Producing Rare Earth Exchanges https://rareearthexchanges.com/project/maoniuping/
(8-Feb-25)
Mt Weld Lynas Rare Earths Ltd. Producing Vara Mada Feasibility Study https://www.energyfuels.com/wp-content/uploads/2026/01/FS-Vara-Mada-Project-Report-NI43-101-FINAL-01.07.2026.pdf
NI43-101 & S-K 1300 Technical Summary
(7-Jan-26)
Mountain Pass MP Materials Corp. Producing SEC FILING: 10-K - Mineral Resource Estimate https://d18rn0p25nwr6d.cloudfront.net/CIK-0001801368/37126578-26fe-49e0-b0d2-12c6053a5a1b.pdf
(28-Feb-25)
Nolans Arafura Rare Earths Ltd Development Company Announcement: "Nolans DFS Delivers Robust Project Economics" https://wcsecure.weblink.com.au/pdf/ARU/02073274.pdf
(7-Feb-19)
Phalaborwa Rainbow Rare Earths Limited Development Company Presentation: "Decision to use SX as the optimal separation route https://www.rainbowrareearths.com/wp-content/uploads/2025/11/Corporate-Presentation-November-2025-FINAL.pdf
for Phalaborwa"
(25-Nov-25)
Songwe Hill Mkango Resources Ltd Development SEDAR FILING"NI43-101 Technical Report on the Songwe Hill Rare Earth Element https://www.sedarplus.ca/csa-party/records/document.html?id=ac89e479364d84c1649c942630b03245c0bf337b2e0f902e6c0267058f330cb6
Project in Malawi"
(18-Aug-22)
Vara Mada Energy Fuels Inc. Development Vara Mada Feasibility Study https://www.energyfuels.com/wp-content/uploads/2026/01/FS-Vara-Mada-Project-Report-NI43-101-FINAL-01.07.2026.pdf
NI43-101 & S-K 1300 Technical Summary
(7-Jan-26)
Weishan China Rare Earth Group Producing Rare Earth Exchanges rareearthexchanges.com/project/weishan/
(8-Feb-25)
Wimmera Iluka Resources Limited Development Company Presentation: "Macquarie Conference" https://www.iluka.com/media/d5gjznmn/iluka-resources-macquarie-australia-conference-may-2025.pdf
(7-May-25)
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
Sovereign Metals Limited
ABN Quarter ended ("current quarter")
71 120 833 427 31 March 2026
Consolidated statement of cash flows Current quarter Year to date
$A'000
(9 months)
$A'000
1. Cash flows from operating activities - -
1.1 Receipts from customers
1.2 Payments for (3,933) (23,299)
(a) exploration & evaluation
(b) development - -
(c) production - -
(d) staff costs (311) (1,251)
(e) administration and corporate costs (318) (1,049)
1.3 Dividends received (see note 3) - -
1.4 Interest received 197 1,521
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Government grants and tax incentives - -
1.8 Other - Business Development (248) (1,040)
1.9 Net cash from / (used in) operating activities (4,613) (25,118)
2. Cash flows from investing activities - -
2.1 Payments to acquire or for:
(a) entities
(b) tenements - -
(c) property, plant and equipment (44) (133)
(d) exploration & evaluation - -
(e) investments - -
(f) other non-current assets - -
2.2 Proceeds from the disposal of: - -
(a) entities
(b) tenements - -
(c) property, plant and equipment - -
(d) investments - -
(e) other non-current assets - -
2.3 Cash flows from loans to other entities - -
2.4 Dividends received (see note 3) - -
2.5 Other (provide details if material) - -
2.6 Net cash from / (used in) investing activities (44) (133)
3. Cash flows from financing activities - -
3.1 Proceeds from issues of equity securities (excluding convertible debt
securities)
3.2 Proceeds from issue of convertible debt securities - -
3.3 Proceeds from exercise of options - -
3.4 Transaction costs related to issues of equity securities or convertible debt - -
securities
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings - -
3.7 Transaction costs related to loans and borrowings - -
3.8 Dividends paid - -
3.9 Other (provide details if material) - -
3.10 Net cash from / (used in) financing activities - -
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 33,937 54,538
4.2 Net cash from / (used in) operating activities (item 1.9 above) (4,613) (25,118)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (44) (133)
4.4 Net cash from / (used in) financing activities (item 3.10 above) - -
4.5 Effect of movement in exchange rates on cash held (9) (16)
4.6 Cash and cash equivalents at end of period 29,271 29,271
5. Reconciliation of cash and cash equivalents Current quarter Previous quarter
at the end of the quarter (as shown in the consolidated statement of cash
$A'000
$A'000
flows) to the related items in the accounts
5.1 Bank balances 5,751 20,937
5.2 Call deposits 23,520 13,000
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 29,271 33,937
6. Payments to related parties of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to related parties and their associates included (294)
in item 1
6.2 Aggregate amount of payments to related parties and their associates included -
in item 2
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity
report must include a description of, and an explanation for, such payments.
7. Financing facilities Total facility amount at quarter end Amount drawn at quarter end
Note: the term "facility' includes all forms of financing arrangements
$A'000
$A'000
available to the entity.
Add notes as necessary for an understanding of the sources of finance
available to the entity.
7.1 Loan facilities - -
7.2 Credit standby arrangements - -
7.3 Other (please specify) - -
7.4 Total financing facilities - -
7.5 Unused financing facilities available at quarter end -
7.6 Include in the box below a description of each facility above, including the
lender, interest rate, maturity date and whether it is secured or unsecured.
If any additional financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing details of
those facilities as well.
8. Estimated cash available for future operating activities $A'000
8.1 Net cash from / (used in) operating activities (item 1.9) (4,613)
8.2 (Payments for exploration & evaluation classified as investing activities) -
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) (4,613)
8.4 Cash and cash equivalents at quarter end (item 4.6) 29,271
8.5 Unused finance facilities available at quarter end (item 7.5) -
8.6 Total available funding (item 8.4 + item 8.5) 29,271
8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) 6.3
No
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8.
7.
8.8 If item 8.7 is less than 2 quarters, please provide answers to the following
questions:
8.8.1 Does the entity expect that it will continue to have the current
level of net operating cash flows for the time being and, if not, why not?
Answer: Not applicable
8.8.2 Has the entity taken any steps, or does it propose to take any
steps, to raise further cash to fund its operations and, if so, what are those
steps and how likely does it believe that they will be successful?
Answer: Not applicable
8.8.3 Does the entity expect to be able to continue its operations and
to meet its business objectives and, if so, on what basis?
Answer: Not applicable
Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2
and 8.8.3 above must be answered.
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters
disclosed.
Date: 29 April 2026
Authorised by: Company Secretary
(Name of body or officer authorising release - see note 4)
Notes
1. This quarterly cash flow report and the accompanying
activity report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and the effect
this has had on its cash position. An entity that wishes to disclose
additional information over and above the minimum required under the Listing
Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, the definitions in, and
provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and
AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash
flow report has been prepared in accordance with other accounting standards
agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities, depending
on the accounting policy of the entity.
4. If this report has been authorised for release to the
market by your board of directors, you can insert here: "By the board". If it
has been authorised for release to the market by a committee of your board of
directors, you can insert here: "By the [name of board committee - eg Audit
and Risk Committee]". If it has been authorised for release to the market by a
disclosure committee, you can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the
market by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance Council's
Corporate Governance Principles and Recommendations, the board should have
received a declaration from its CEO and CFO that, in their opinion, the
financial records of the entity have been properly maintained, that this
report complies with the appropriate accounting standards and gives a true and
fair view of the cash flows of the entity, and that their opinion has been
formed on the basis of a sound system of risk management and internal control
which is operating effectively.
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