1.8Bt MRE Confirmed as the Largest Rutile Deposit

SOVEREIGN METALS LIMITED

NEWS RELEASE | 5 APRIL 2022

1.8 BILLION TONNE JORC RESOURCE CONFIRMS KASIYA AS THE LARGEST RUTILE DEPOSIT EVER DISCOVERED

JORC MINERAL RESOURCE ESTIMATE UPDATE 

Sovereign's Managing Director Dr Julian Stephens commented: It is a really remarkable achievement by our team to have made the largest natural rutile discovery ever in just two years since initial identification. The JORC MRE of this scale and grade is clearly highly strategic, Tier 1 and of global significance in a market where natural rutile is in extreme supply deficit.

The step-change in scale will now allow us to examine potentially higher-grade throughput, increased production levels and a longer mine life in the upcoming Scoping Study update. The Company is targeting a large-scale, low carbon-footprint and environmentally sustainable natural rutile and graphite operation which will also positively impact the environmental footprint of titanium pigment and other industries, and provide a significant contribution to the economy of Malawi."

ENQUIRIES

*Formula: Rutile Grade x Recovery (97%) x Rutile Price (US$1,346/t) + Graphite Grade x Recovery (62%) x Graphite Price (US$1,085/t) / Rutile Price (US$1,346/t). All assumptions taken from the Company's 2021 Scoping Study released 16 December 2021

To view the announcement in full including all illustrations and figures, please refer to the full announcement at http://sovereignmetals.com.au/announcements/.

KASIYA - THE LARGEST RUTILE DEPOSIT IN THE WORLD 

Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) is pleased to announce its updated Mineral Resource Estimate (MRE) for Kasiya confirming it as a Tier 1 natural rutile deposit and a potential major source of low CO₂ footprint critical minerals natural rutile and graphite.

The updated MRE now places Kasiya as the largest rutile deposit in the world with more than double the contained rutile as its nearest rutile peer, Sierra Rutile (Tables 1, 2 & 3). Additionally, the graphite by-product MRE at Kasiya places it as the second largest flake graphite deposit in the world.

The MRE has broad zones of very high-grade rutile which occurs contiguously across a very large area of over 180km². Rutile mineralisation lies in laterally extensive, near surface, flat "blanket" style bodies in areas where the weathering profile is preserved and not significantly eroded.

Overall, the new MRE shows a number of new large, but generally discrete high grade rutile zones, particularly in the southern parts and eastern parts of the resource area. The discovery and delineation of these new high grade mineralised zones has been the dominant factor in the tripling of the resource base.

A Total of 662 Mt (37%) of the total MRE reports to the Indicated category @ 1.05% rutile and 1.43% TGC, with a recovered grade of 1.73% RutEq.

The deposit is expansive with high-grade rutile mineralisation commonly grading 1.2% to 2.0% in the top 3-5m from surface. Moderate grade mineralisation generally grading 0.5% to 1.2% rutile commonly extends from 5m to end of hole where it remains open at depths >10m in numerous drill-defined, N to NE-striking zones.

Graphite is generally depleted near surface in the top 3-5m with grades commonly in the 0.1% to 0.5% total graphitic carbon (TGC) range. Graphite grades generally increase with depth to about 8m, then remain constant ranging from 1% to 8% TGC. A number of higher-grade graphite zones at depth have been identified which are generally associated with higher grade rutile at surface. Some of these zones have graphite grades at depth >8m in the 4% to 8% TGC range and represent very significant coarse flake graphite tonnages.

The highlighted cut-off of 0.70% presents 1.8 billion tonnes at a rutile grade of 1.01% with high-grade components providing over 352 Mt at a rutile grade of 1.44% at a 1.20% cut-off (Table 2). The overall recovered rutile equivalent grade for the MRE at the global 0.7% cut-off is 1.64% RutEq. (Table 1).

GLOBAL SIGNIFICANCE - RUTILE

Natural rutile is a genuinely scarce commodity, with no other known large rutile dominant deposits being discovered in over half a century. Kasiya is now shown to be the largest single rutile deposit in the world (Table 3), with central Malawi now hosting the largest known rutile province in the world.

Current sources of natural rutile are in decline as several operations' reserves are depleting concurrently with declining ore grades. These include Iluka Resources' (Iluka) Sierra Rutile and Base Resources' Kwale operations in Sierra Leone and Kenya respectively. Additionally, there are limited new deposits forecast to come online, meaning supplies of natural rutile are likely to remain in extreme structural deficit.

Sources: Refer to Appendix 1

Notes:

1.    Projects selected with rutile contributing over 30% of the in-situ value

2.    The Balranald Project is being investigated for underground mining by Iluka

As demonstrated in the December 2021 initial Scoping Study, the Kasiya operation will primarily employ conventional hydro-mining to produce a slurry that is pumped to a Wet Concentration Plant (WCP) where the material is sized. A Heavy Mineral Concentrate (HMC) is produced via processing the sand fraction through a series of gravity spirals. The HMC is transferred to the dry Mineral Separation Plant (MSP) where premium quality rutile is produced via electrostatic and magnetic separation. Test work has been very successful and has resulted in conventional flowsheets proving highly efficient for producing premium quality rutile and graphite products.

World-class rutile product chemical specifications are reported at 95.0% to 97.2% TiO₂ with low impurities and stand-out metallurgical recoveries ranging from 94% to 100%. For the Scoping Study and rutile equivalent (RutEq.) grade calculation, a product grade of 96% TiO₂ and recovery of 97% are assumed for rutile.

GRAPHITE - A VALUABLE BY-PRODUCT

The 23.4 Mt of contained graphite in the Kasiya MRE now places it as the second largest flake graphite deposit in the world (Table 4).

Sources: Refer to Appendix 1

Graphite rich mineral pre-concentrate will be produced from the light fraction of the gravity spiral tails and processed in a separate graphite flotation plant to produce a high-quality flake graphite by-product. Because graphite will be a by-product from rutile production, it will have a very low production cost compared to graphite-only projects, as shown in the initial Kasiya Scoping Study.

A very coarse-flake and high-grade graphite product at 96% TGC can be produced via this simple flowsheet. This product has over 60% in the large to super-jumbo fractions (+180μm) with overall graphite recovery from the raw sample to product of 62%.

As well as being very coarse flake, the Kasiya graphite is also highly crystalline and of high purity. These are both important features required for use in lithium-ion battery anodes. The high crystallinity means that the graphite will have high electrical conductivity - a key requirement. High purity means the material will be easier to upgrade to 99.95% TGC, the minimum requirement for lithium-ion battery anodes.

NEXT STEPS

The updated MRE confirms Kasiya as a Tier 1 mineral project, being the largest deposit of natural rutile in the world and the second largest flake graphite deposit in the world. The strong economics of the project were confirmed in the initial Scoping Study based on the previous resource estimate which was released in December 2021.

Sovereign is rapidly continuing its work programs with the following near and medium-term targets and developments:

·      An updated Scoping Study is targeted for completion Q2 2022 to build on the 2021 Scoping Study. This will be driven by the significant increase in the MRE, providing the opportunity to assess higher grade throughput, increased production rates and longer mine life.

·      Initial Pre-feasibility Study (PFS) activities are commencing and include metallurgical programs and hydrogeological studies. Other study elements will commence shortly with major technical consultant site visits commencing in April. The PFS is targeted for completion in early 2023.

·       Drilling programs are planned to continue, testing depth and lateral extensions at Kasiya. These include:

-     An air-core drilling rig is set to be mobilise to Kasiya in mid-May, with a planned 300 hole/10,000m program with the aim of deepening the better high-grade areas in order to add to the next MRE upgrade

-      Continued infill and step-out hand-auger drilling expand the overall mineralised footprint with drill teams to mobilise in April

·     The Company continues to work with potential offtakers and strategic partners in the pigment, welding and titanium metal industries to secure further agreements regarding future offtakes.

·      Continued strong focus on ESG and sustainability - initial ESIA activities to commence shortly including environmental and community baseline surveys, which will inform the upcoming PFS, with continued focus on developing low carbon-footprint operations taking advantage of renewable power supply and soft-friable saprolite mineralisation to produce natural rutile and graphite with far lower Global Warming Potential than alternative products.

KASIYA MRE TECHNICAL DETAILS

The Kasiya MRE has been prepared by independent consultants, Placer Consulting Pty Ltd (Placer) and is reported in accordance with the JORC Code (2012 Edition).

Rutile mineralisation lies in laterally extensive, near surface, flat "blanket" style bodies in areas where the weathering profile is preserved and not significantly eroded. The high-grade zones appear to be geologically continuous with limited variability along and across strike.

SUMMARY OF RESOURCE ESTIMATE REPORTING CRITERA

As per ASX Listing Rule 5.8 and the 2012 JORC reporting guidelines, a summary of the material information used to estimate the MRE is detailed below.

Geology

Regional Geology

The greater part of Malawi is underlain by crystalline Precambrian to lower Paleozoic rocks referred to as the Malawi Basement Complex. In some parts these rocks have been overlain unconformably by sedimentary and volcanic rocks ranging in age from Permo-triassic to Quaternary. The Basement complex has undergone a prolonged structural and metamorphic history dominated by uplift and faulting resulting in the formation of the Malawi Rift Valley.

Kasiya is located on the Lilongwe Plain which is underlain by the Basement Complex paragneisses and orthogneisses which are part of the Mozambique Belt. The bulk of the gneisses are semi-pelitic but there are bands of psammitic and calcareous rocks that have been metamorphosed under high pressure and temperature conditions to granulite facies. Interspersed within the paragneiss units are lesser orthogneisses, often cropping-out as conspicuous tors, as well as amphibolites, pegmatites and minor mafic to ultramafic intrusions.  Foliation and banding in the gneisses have a broad north-south strike over the general area. Thick residual soils and pedolith with some alluvium overlie the gneisses and include sandy, lateritic and dambo types.

Project Geology

Sovereign's tenure covers 1,892km² over an area to the north, west and south of Malawi's capital city covering the Lilongwe Plain. The topography is generally flat to gently undulating and the underlying geology is dominated by paragneiss with pelitic, psammitic and calcareous units.

A particular paragneiss unit is rich in rutile and graphite and is the primary source of both of these minerals in the area. This area was deeply weathered during the Tertiary and rutile concentrated in the upper part of the weathering profile forming residual placers, such as the Kasiya Deposit. Once this material is incised and eroded, it is transported and deposited into wide, regional braided river systems forming alluvial heavy mineral placers such as the Bua Channel.

Kasiya Deposit Geology

The high-grade rutile deposit at Kasiya is best described as a residual placer, or otherwise known as eluvial heavy mineral deposit. It is formed by weathering of the primary host rock and concentration in place of heavy minerals, as opposed to the high-energy transport and concentration of heavy minerals in a traditional placer.

The presence of abundant kyanite and graphite in the host material suggest a meta-sedimentary protolith. The protolith likely started with a 0.5-1.5Ga basin that also experienced consistent influx of titanium minerals.

These sedimentary rocks were subject to granulite facies metamorphism under reduced conditions in the Pan-African Orogeny at circa 0.5-0.6Ga. The reduced environment, relatively high titanium content and low iron content, resulted in rutile being the most stable titanium mineral under these conditions. Slow exhumation and cooling then resulted in crystallisation of paragneisses containing coarse rutile and graphite.

The final and most important stage of enrichment came as tropical weathering during the Tertiary depleted the top ~10m of physically and chemically mobile minerals. This caused significant volume loss and concurrent concentration of heavy resistate minerals including rutile and kyanite.

Rutile mineralisation lies in laterally extensive, near surface, flat "blanket" style bodies in areas where the weathering profile is preserved. The Kasiya deposit continues to confirm widespread, high-grade mineralisation commonly grading 1.2% to 2.0% rutile in the top 3-5m from surface. Moderate grade mineralisation generally grading 0.5% to 1.2% rutile commonly extends from 5m to end of hole where it remains open at depths >10m in numerous drill-defined, NE and N striking zones.

Graphite generally occurs in broad association with rutile. However, it is depleted in the top 3-5m and therefore can often show an inverse grade relationship with rutile in the near-surface zones. At depths generally greater than 5m, graphite is not depleted, and rutile is not particularly enriched, so a more consistent grade relationship exists.

Metallurgical results show that a very coarse-flake graphite by-product can be recovered from rutile gravity-separation tails.

Drilling Techniques

Spiral hand-auger (HA) drilling and Push-tube core (PT) drilling has been used extensively at the Kasiya Deposit by Sovereign to define mineralisation and to obtain quantitative rutile and graphite (TGC) assay information.

A total of 1,205 HA holes for 11,360m were drilled at the Kasiya Rutile Deposit to obtain samples for quantitative determination of recoverable rutile and TGC.

An initial 30 PT core holes, for 359.4m, were drilled at the Kasiya Rutile Deposit to obtain samples for validation of hand auger drilling results and for bulk density test work.

The subsequent infill drilling programme, designed to support the resource estimate update, was completed by push tube coring. A total of 234 core holes for 2,368.5m are included in the updated MRE.

The drilling programs to date show a mineralised envelope, defined nominally by >0.5% rutile, of approximately 187km² with numerous areas of high-grade rutile defined.

HA drilling was executed by Sovereign field teams using a manually operated enclosed-flight Spiral Auger (SP / SOS) system produced by Dormer Engineering in Queensland, Australia. The HA bits are 62mm and 75mm in diameter with 1m long steel rods. Each 1m of drill advance is withdrawn and the contents of the auger flight removed into bags and set aside. An additional 1m steel rod is attached and the open hole is re-entered to drill the next metre. This is repeated until the drill hole is terminated often due to the water table being reached, and more rarely due to bit refusal (2% of the resource HA drill database). The auger bits and flights are cleaned between each metre of sampling to avoid contamination. 

PT drilling is undertaken using a drop hammer Dando Terrier MK1 and a drop hammer DL650. The drilling generated 1m runs of 83mm PQ core in the first 2m and then transitioned to 72mm core for the remainder of the hole. Core drilling is oriented vertically by spirit level.

The HA collars are spaced at nominally 400m along the 400m spaced drill-lines with the push-tube holes similarly spaced at an offset, infill grid. The resultant 200m by 200m drill spacing (to the strike orientation of the deposit) is deemed to adequately define the mineralisation in the MRE.

There is no apparent bias arising from the orientation of the drill holes, with respect to the orientation of the deposit.

The PT twin and density sample holes are selectively placed throughout the deposit to ensure a broad geographical and lithological coverage for the analysis. 

Placer has reviewed SOPs for HA and PT drilling and found them to be fit for purpose and support the resource classifications as applied to the MRE.

Sampling Techniques

HA samples are obtained at 1m intervals generating on average approximately 2.5kg of drill sample. HA samples are manually removed from the auger bit and sample recovery is visually assessed in the field. As samples become wet at the water table and recovery per metre declines, the drill hole is terminated.

HA samples are collected in 1m increments. Each 1m sample is sun dried, logged, weighed and pXRF analysed. HA samples are composited based on regolith boundaries and sample chemistry, generated by hand-held XRF analysis. Each 1m of sample is dried and riffle-split to generate a total sample weight of 3kg for analysis, generally at 2 - 5m intervals (average 2.8m for the total resource drill database). This primary sample is then split again to provide a 1.5kg sample for both rutile and graphite analyses.

PT samples are predominantly HQ. Half core 1m samples are sun dried, logged, weighed and pXRF analysed. Samples are then composited over 2m intervals. An equal mass is taken from each contributing metre to generate a 1.5kg composite sample.  Individual recoveries of core samples are recorded on a quantitative basis. Core recovery is >95%.  

This sampling and compositing method is considered appropriate and reliable based on accepted industry practice.    

Sample analysis methodology

Rutile

Heavy mineral concentrates (HMC) are generated onsite via wet-tabling. Heavy Liquid Separation (HLS) was trialled at Diamantina Laboratories in Perth but was superseded by wet table separation on account of substantial near-density, gangue material reporting to the HM sink.

The Malawi onsite laboratory sample preparation methods are considered quantitative to the point where a wet-tabled HMC is generated.

The HMC is then subject to magnetic separation at Allied Mineral Laboratories Perth (AML) in Perth by Carpco magnet @ 16,800G (2.9Amps) into a magnetic (M) and non-magnetic (NM) fraction.

The NM fractions are sent to either ALS Perth or Intertek Perth for quantitative XRF analysis. Intertek samples received the standard mineral sands suite FB1/XRF72. ALS Samples received XRF_MS.

QEMSCAN of the NM fraction shows dominantly clean and liberated rutile grains and confirms rutile is the only titanium species in the NM fraction. Recovered rutile is therefore defined and reported here as: TiO2 recovered in the +45 to -600um range to the NM concentrate fraction as a % of the total primary, dry, raw sample mass divided by 95% (to represent an approximation of final product specifications). i.e recoverable rutile within the whole sample.

Graphite

A split of each raw sample is dissolved in dilute hydrochloric acid to liberate carbonate carbon. The solution is filtered using a filter paper and the collected residue is then dried to 425°C in a muffle oven to drive off organic carbon. The dried sample is then combusted in an Eltra CS-800 induction furnace infra-red CS analyser to yield total graphitic or elemental carbon (TGC).

QAQC

Accuracy monitoring is achieved through submission of certified reference materials (CRM's). Sovereign uses internal and externally sourced wet screening reference material inserted into samples batches at a rate of 1 in 20. The externally sourced, certified standard reference material for HM and Slimes assessment is provided by Placer Consulting.

ALS and Intertek both use internal CRMs and duplicates on XRF and TGC analyses. Sovereign also inserts CRMs into all sample batches at a rate of 1 in 20.

An external laboratory raw sample check duplicate is sent to laboratories in Perth, Australia as an external check of the full workflow. These duplicates are produced at a rate of 1 in 20. 

Analysis of sample duplicates is undertaken by standard geostatistical methodologies (Scatter, Pair Difference and QQ Plots) to test for bias and to ensure that sample splitting is representative. Standards determine assay accuracy performance, monitored on control charts, where failure (beyond 3SD from the mean) may trigger re-assay of the affected batch.

Precision and accuracy assessment has been completed on all alternate workflow methodologies and a consistent method has been decided, in consultation with Placer Resource Geologists. Examination of the QA/QC sample data indicates satisfactory performance of field sampling protocols and assay laboratories providing acceptable levels of precision and accuracy. Rutile determination by alternate methods showed no observable bias.

Acceptable levels of accuracy and precision are displayed in geostatistical analyses to support the resource classifications as applied to the estimate.

Classification

The HA collars are spaced at nominally 400m along the 400m spaced drill-lines with the PT holes similarly spaced at an offset, infill grid. The resultant 200m by 200m drill spacing (to the strike orientation of the deposit) is deemed to adequately define the mineralisation in the MRE.

The PT twin and density sample holes are selectively placed throughout the deposit to ensure a broad geographical and lithological spread for the analysis. 

Variography and kriging neighbourhood analysis completed using Supervisor software informs the optimal drill and sample spacing for the MRE. Based on these results and the experience of the Competent Person, the data spacing and distribution is considered adequate for the definition of mineralisation and adequate for the MRE.

For the latest MRE, a regional trend analysis was performed for all drilling across Kasiya, designed to supplement and extend previous variography analysis completed using Datamine Supervisor software. The trend analysis involved the following key steps:

1.   Generating intercepts files (no bottom cut applied) as follows:

a)   SOIL+FERP (~upper domain)

b)   MOTT+PSAP+SAPL (~lower domain)

2.   Gridding RUT95 intercept XY collar points for both zones using Micromine with multiple interpolation methods.

3.   Variogram Mapping (using Micromine) to investigate interpreted trend orientations against semi-variance.

Drilling methods applied to define the Kasiya Deposit (HA and PT) are not able to retrieve reliable samples below the water table. Mineralisation remains open and a substantial resource is anticipated beneath current drill depths.

High grade sample results are constrained tightly by the search and estimation parameters applied to the interpolation. High grades are expected to be contiguous upon application of closer-spaced drilling.

Regolith stratigraphy is uniform and rutile and graphite mineralisation is broadly consistent across the Kasiya Deposit. Open-hole drilling and infill core drilling techniques have been expertly applied and data collection procedures, density assessments, QA protocols and interpretations conform to industry best practice.

Assay, mineralogical determinations and metallurgical test work conform to industry best practice and demonstrate a rigorous assessment of product and procedure. These and the development of a conventional processing flowsheet and marketability studies support the classification of the Kasiya Resource.

Estimation Methodology

Datamine Studio RM, Micromine and Supervisor software are used for the data analysis, variography, geological interpretation and resource estimation with key fields being interpolated into the volume model using the Inverse Distance weighting (power 2) method. Dynamic Anisotropy search ellipses, informed by variography, kriging neighbourhood analysis and gridding of rutile abundance, were used to search for data during the interpolation. Suitable limitations on the number of samples and the impact of those samples, was maintained.

Interpolation was constrained by hard boundaries (domains) that result from the geological interpretation. The construction of an upper (Soil/Ferp) domain reduces the dilution of resource grade from the underlying, less mineralised (Mott/Sap) domain. A Topsoil horizon has been defined at 0.3m thickness throughout the Indicated Resource area to support anticipated ore reserve calculation and mining studies. Topsoil is disclosed separately but remains in the MRE in recognition of advanced investigations by SVM on synthetic topsoil generation for rehabilitation.

The average parent cell size used is equivalent to the average drill hole spacing within the Indicated Resource (200m*200m).  Cell size in the Z-axis was established to cater for the composite sample spacing and definition of the Topsoil domain. This resulted in a parent cell size of 200m x 200m x 3m for the volume model with 5 sub-cell splits available in the X and Y axes and 10 in the Z axis to smooth topographical and lithological transitions.

Both parent and sub-cell interpolations were completed and reconciled spatially against each other. The parent cell and sub cell interpolations produced near identical global tonnages and grades. The sub-cell interpolation was seen to provide a better graduation of informing drill hole data through intermediate model cells and to conform more sympathetically to the geological interpretation. In this instance, the sub-cell interpolation was applied to the MRE. 

The resource model has been volumetrically constrained generally as a buffer of one parent cell dimension. That is: A 200m buffered model boundary around drilling in the XY plan. Vertically the model is constrained by both the topography DTM and a 'basement' wireframe that seeks to buffer 'effective depth' drilling depths by 2.7m (a little less than the average sample interval for the drill database). This 'basement' surface does not represent the base of mineralisation, which is anticipated to be deeper within the weathered profile, at the saprolite/saprock horizon.

Extreme grade values were not identified by statistical analysis, nor were they anticipated in this style of deposit. No top cut is applied to the resource estimation.

Validation of grade interpolations was done visually in Datamine by loading model and drill hole files and annotating, colouring and using filtering to check for the appropriateness of interpolations.

Statistical distributions were prepared for model zones from both drill holes and the model to compare the effectiveness of the interpolation. Model-drilling reconciliation was performed by generating swath plots to measure drilling support against interpolation performance in all three primary orientations. The resource model has effectively averaged informing drill hole data and is considered suitable to support the resource classifications as applied to the estimate.

Density is calculated by the measurements of wet and dry weights using core from geographically and lithologically diverse sample sites throughout the project. This methodology delivers an accurate density result that is interpolated in the MRE for each host material type.

Density data are interpolated into the resource estimate by geological domain. An average density of 1.39 t/m³ for the soil (SOIL) domain, 1.60 t/m³ for the ferruginous pedolith (FERP) domain, 1.65 t/m³ for the mottled (MOTT) domain, 1.68 t/m³ for the pallid saprolite (PSAP) domain, 1.63 t/m³ for the saprolite (SAPL) domain, and 1.93 t/m³ for the laterite (LAT) domain were calculated. Density data are interpolated into the resource estimate by the nearest neighbour method.

Cut-off Grades

All results reported are of a length-weighted average of in-situ grades. The resource is reported at a range of bottom cut-off grades in recognition that optimisation and financial assessment is outstanding.

A nominal bottom cut of 0.7% rutile is offered, based on preliminary assessment of resource product value and anticipated cost of operations. No graphite top or bottom cuts are applied.

Mining and Metallurgy Factors

Hydro-mining has been determined as the optimal method of mining for the Kasiya Rutile deposit. The material is loose, soft, fine and friable with no cemented sand or dense clay layers rendering it amenable to hydro-mining. It is considered that the strip ratio would be zero or near zero.

Dilution is considered to be minimal as mineralisation commonly occurs from surface and mineralisation is generally gradational with few sharp boundaries.

Recovery parameters have not been factored into the estimate. However, the valuable minerals are readily separable due to their SG differential and are expected to have a high recovery through the proposed conventional wet concentration plant, as demonstrated by metallurgical test work.

Sovereign have announced three sets of metallurgical results to the market (24 June 2019, 9 September 2020 and 7 December 2021), relating to the Company's ability to produce a high-grade rutile product with a high recovery via simple conventional processing methods. Sovereign engaged AML to conduct the metallurgical test work and develop a flowsheet for plant design considerations. The work has shown a premium quality rutile product ranging from 95.0% to 97.2% TiO₂ with low impurities could be produced with recoveries of about 94% to 100% and with favourable product sizing at d50 of 118µm (97.2% product).

Gravity separation was effective at concentrating graphite to a "light mineral pre-concentrate" due to its low specific gravity (~2.2 t/m³) at circa 6.3% TGC.

A program at SGS Lakefield in Canada was undertaken in order to confirm that the graphite gravity pre-concentrate can be upgraded into a coarse flake graphite by-product via a conventional graphite flotation flowsheet.

The test-work was extremely successful, and a very coarse-flake graphite concentrate at 96.3% TGC was produced. Greater than 60% of the graphite concentrate is in the large to super-jumbo fractions, suggesting a high combined basket value. The overall graphite recovery from the raw sample to product was 62%.

MRE TABLES

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.

Competent Persons Statement

The information in this announcement that relates to Mineral Resources is based on, and fairly represents, information compiled by Mr Richard Stockwell, a Competent Person, who is a fellow of the Australian Institute of Geoscientists (AIG). Mr Stockwell is a principal of Placer Consulting Pty Ltd, an independent consulting company. Mr Stockwell has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Stockwell consents to the inclusion of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to Exploration Results is based on information, and fairly represents, compiled by Mr Samuel Moyle, a Competent Person who is a member of The Australasian Institute of Mining and Metallurgy (AusIMM). Mr Moyle is the Exploration Manager of Sovereign Metals Limited and a holder of ordinary shares, unlisted options and performance rights in Sovereign. Mr Moyle has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Moyle consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to Metallurgical test-work Results - Rutile & Graphite is extracted from the announcement dated 24 June 2019, 9 September 2020 and 7 December 2021. The announcement is available to view on 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 announcement; b) all material assumptions included in the 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 report have not been materially changed from the announcement.

Qualified Person

Information disclosed in this announcement has been reviewed by Dr Julian Stephens (B.Sc (Hons), PhD, MAIG), Managing Director, a Qualified Person for the purposes of the AIM Rules for Companies.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

APPENDIX 1 - PEER SOURCE INFORMATION

Figure 1 & Table 3

Figure 2 & Table 4

APPENDIX 2 - JORC CODE, 2012 EDITION - TABLE 1

SECTION 1 - SAMPLING TECHNIQUES AND DATA

SECTION 2 - REPORTING OF EXPLORATION RESULTS

SECTION 3 - ESTIMATION AND REPORTING OF MINERAL RESOURCES

Glossary