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 NPV₈ 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 (TiO₂ >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

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