Sovereign Metals: A globally significant natural rutile discovery

Sovereign Metals presented at UK Investor Magazine Metal & Mining Conference providing deep insight into the globally significant natural rutile project in Malawi, Kasiya.

Malawi

The company spent 6 years exploring for graphite in their Malawian licenses and during their metallurgy tests on the graphite, found tailings of titanium. On studies of 125 drill holes in prospect, Sovereign found the presence of high grade titanium rutile.

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Post lab work, the rutile found in Kasiya was established commercially viable. The rutile was of premium quality with low impurities and no critical impurities. 

Why is Rutile important?

Rutile is the purest form of titanium dioxide (TiO2) also known as titania. Titania is used in the manufacturing of titanium, pigmenting, welding and metal work across various industries such as aerospace, medical, paint are major consumers of titanium.

The titanium market is worth $30b where pigment contributes $25b and metal work contributes $5b.

Natural rutile constitutes 95% of titania, whereas, ilmenite has only 50%. Natural rutile has a value of $1350 per tonne where as ilmenite only attracts $200 per tonne.

Due to the scarce nature of rutile, in 2020, 6m tonnes of ilmenite supplied the titanium dioxide market and natural rutile only supplied 0.5m tonnes.

Highlighting the importance of the Kasiya rutile project, the supply of natural rutile is expected to drop 70% from 2017 to 2030.

Over the same period, demand for TiO2 is forecast to increase by 2.8m tonnes.

Carbon Footprint

With increased demand for titanium, alternatives were created by carbon and energy intensive processes for upgrading ilmenite.

However, this process still doesn’t match the TiO2 grade of natural rutile further strengthening the value of Sovereign’s asset in Malawi.

Indeed, 2.8 tonnes of carbon dioxide emissions per tonne is saved when extracting natural rutile instead of upgrading ilmenite.

Kasiya Project

Kasaya is one of the top 2 rutile depositories found in the world, second only to Sierra Rutile. The scale and grade of the Kasiya project makes it the most significant discoveries of natural rutile in 50 years.

Kasiya has an inferred resources of 605m, and there is a strong chance of this being increased as the result of further scoping studies, due to be released in 2022.

If 605m tonnes of ground is mined at 0.98% rutile conversion, the rutile extracted will amount to 6m tonnes and graphite will be 7.5m tonnes.

Scoping Study

Expected mining life of the project is 25 years. Over that duration 12m tonnes of material is expected to extracted annually. Out of which 120k will be rutile and 80k graphite.

The NPV on this project is expected to be $861m with an IRR of 36%, both post tax. The capital cost of the project sums to $332m which is expected to be paid back in 2.5 years.

The revenue generated from this project is expected to be $251m with EBITDA at $161m.

The project is expected to give back to Malawi economy and also generate 480 direct jobs and various indirect jobs.

Geology and Mining

The rutile mineralisation are found 0.5 metres from the surface and extend to the premium material lies in the top 5 metres resulting in easy extraction. The extraction will be conducted by tried and tested, hybrid hydro/ dozer mining as the material is soft and homogenous.

The mining process is quite simple with the machine irrigating the land and creating a slurry. The slurry then goes into the plant where it goes through conventional flow. The results are 95% TiO2 and 96% TGC.

Post the mining process, the slurry minus the minerals are poured back into the ground. This means that disruption to the local environment reduces from decades to months. The land can later be used for farming and other uses.

The material processed can be moved by the Nacala corridor which passes by the Kasiya region all the way to the ports in Mozambique. The port has the facilities to export the expansive material.

Timeline

In the year ahead, the carbon emission assessment will be reassessed to understand the realities of the rutile extraction. The updated study will give us a clearer understanding of the JORC resources and any upgrades to the NPV.

Currently, the Kasiya project is still in the scoping stage and moving forward, they plan to test a larger area of the land.

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