Sovereign Metals PFS Delivers Low-Cost Graphite Project

THE BOURSE WHISPERER: Sovereign Metals (ASX: SVM) announced results of a Pre-Feasibility Study (PFS) for the company’s Malingunde saprolite-hosted graphite project in Malawi.

Sovereign Metals declared the PFS to demonstrate the project’s low capital and very low operating costs are at the bottom of the graphite supply cost-curve at a scale appropriate for the current market.

The PFS delivered the following outcomes:

Maiden Ore Reserve declared, including a high-grade Reserve with 32 per cent in the Proven and 68 per cent in the Probable categories. The PFS was based 100 per cent on Reserves;

Extremely low operating costs due to the advantages of the soft saprolite-hosted deposit:
− US$323 per tonne concentrate (FOB) LoM average, moving to as low as US$284 per tonne after year 7; and
− Mine gate LoM average US$257 per tonne moving to as low as US$218 per tonne after year 7.

Low technical risk: free-dig mining, low strip ratio with simple, proven process flowsheet;

High-quality concentrates: sales targeted to traditional industrial sector (refractories, foundries, expandables) as well as the emerging Li-ion battery sector; and

Substantial upside: huge scalability and expansion opportunities.

“We believe Malingunde is the world’s best flake graphite project,” Sovereign Metals managing director Dr Julian Stephens said in the company’s announcement to the Australian Securities Exchange.

“The high-grade, soft, free-dig saprolite-hosted ore, requiring no primary crush or grind combined with a simple and proven flowsheet results in low capital intensity and extremely low operating costs.

“Malingunde is an unparalleled, low technical risk, high margin project that provides significant cashflows with substantial upside scalability into a growing graphite market.”