Institutional Placement to Raise $15m

This announcement is not for release to US wire services or distribution in the United States

SOVEREIGN METALS LIMITED

NEWS RELEASE I 3 MAY 2022

INSTITUTIONAL PLACEMENT TO RAISE $15M

Sovereign Metals Limited (Sovereign or the Company) (ASX:SVM, AIM:SVML) is pleased to announce it has secured commitments for A$15 million (gross proceeds) from UK, European and North American institutional investors to subscribe for 22,210,268 new ordinary shares of the Company at an issue price of A$0.67 plus a one-for-two unlisted option with an exercise price of A$0.80 and 12 month expiry (Placement).

Thematica Future Mobility UCITS Fund, a Luxembourg-based green energy fund with a strong emphasis on Critical Raw Materials and ESG, were the cornerstone participant in the well-supported Placement which will fund exploration and development activities at the Company's flagship Kasiya Project (Kasiya).

Kasiya is the world's largest natural rutile deposit and one of the largest natural graphite deposits globally underpinning its potential to be a major source of sustainable critical raw materials to contribute to decarbonisation and the energy transition. An enhanced Scoping Study for Kasiya is advancing and is expected to be completed by mid-2022.

Sovereign's Managing Director, Dr Julian Stephens commented: "We are extremely pleased that prominent green energy investors such as Thematica see the enormous potential of Kasiya, not only to be a major world supplier of low carbon footprint natural rutile, but also a supplier of low carbon footprint flake graphite which is a vital component in lithium-ion batteries used in electric vehicles. ESG and green energy are now prominent investment themes, particularly in Europe and North America. Thematica's investment represents a significant endorsement of Sovereign's ESG credentials and the potential for Kasiya to deliver critical raw materials vital for the world's energy transformation. Our focus will now turn to the updated Scoping Study which is targeted for completion in the coming months and will incorporate the significant Kasiya resource increase announced in April."

Total Voting Rights

Sprott Capital Partners LP acted as financial advisor in connection with the Placement. The Company's joint corporate broker, Joh. Berenberg, Gossler & Co. KG. provided financial advice in Europe. A fee of 6% is payable on amounts placed by the financial advisors.

The Company will issue the shares and options under Listing Rule 7.1. 

ENQUIRIES

Share Issue, Settlement and Dealings

The Company will issue 22,210,268 Ordinary Shares of no par value at a price of A$0.67 per Ordinary Share (Placing Shares) at completion of the Placement. Additionally, the Company will issue plus a one-for-two unlisted option with an exercise price of A$0.80 and 12 month expiry.  

Application will be made for the Placing Shares to be admitted to trading on AIM (Admission) and it is expected that Admission will become effective on or around 19 May 2022. The Placing Shares will rank pari passu with the Company's existing issued Ordinary Shares.

Total Voting Rights

For the purposes of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules (DTRs), following Admission of the Placing Shares, Sovereign will have 463,281,023 Ordinary Shares in issue with voting rights attached. The figure of 463,281,023 may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company, under the ASX Listing Rules or the DTRs.

Not for release to US wire services or distribution in the United States

This announcement has been prepared for publication in Australia and may not be released in the United States. This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction. Any securities described in this announcement have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, the registration of the US Securities Act and applicable US state securities laws.

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.

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.