Kasiya Definitive Feasibility Study Results

NEWS RELEASE I 16 APRIL 2026

     KASIYA DEFINITIVE FEASIBILITY STUDY RESULTS    

DFS Confirms Potential for Sovereign to Redefine Titanium Metal and Graphite Supply Chains

Rio Tinto Technical Expertise | Real-World Pilot Mining Validation

Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX:SVMLF) (Sovereign or the Company) is delighted to announce the results of the Definitive Feasibility Study (DFS or the Study) for its Kasiya Rutile-Graphite Project (Kasiya or the Project) in Malawi. The DFS builds on the outcomes of the Optimised Pre-feasibility Study (OPFS) and on empirical data from the Pilot Mining and Rehabilitation Program (Pilot Mining). The DFS was undertaken in accordance with a scope of work approved by, and with technical input and oversight from, the Sovereign-Rio Tinto Technical Committee and, where applicable, conforms to the World Bank Group's International Finance Corporation (IFC) Performance Standards to enhance bankability of the Project.

TABLE 1: Key DFS Metrics (Steady State)

Note: Steady State is defined as years of operation during which total run-of-mine is at full capacity of 24 Mtpa (i.e., years 5 to 23). All results are presented on a 100% project basis.

DFS CONFIRMS SOVEREIGN TO REDEFINE TITANIUM METAL AND GRAPHITE SUPPLY CHAINS

Kasiya, located in central Malawi, hosts the world's largest natural rutile deposit and the second-largest flake graphite deposit. Both titanium and graphite are officially classified as Critical Minerals by the United States and the European Union. At steady-state, Kasiya is forecast to deliver approximately 222 kt of rutile and 275 kt of graphite annually - positioning Sovereign as potentially the world's largest producer of both natural rutile and natural flake graphite.

Natural Rutile - Addressing Titanium Supply Chain Vulnerability

Natural rutile is the purest and highest-grade form of naturally occurring titanium feedstock, with titanium dioxide (TiO₂) content typically exceeding 95%. It is the preferred feedstock for titanium sponge production and high-specification titanium alloy applications in aerospace, defence and medical industries.

According to the United States Geological Survey (USGS), the United States currently produces zero titanium sponge domestically and is 100% import-reliant, with record imports of 44,000 tonnes in 2025. Japan supplies over 70% of the US's titanium sponge imports, and Japanese producers themselves depend on securing reliable natural rutile feedstock. Meanwhile, Western-qualified titanium sponge production has declined 9% to approximately 81,000 tonnes, while China's share of global sponge production has risen to 70%.

Figure 1: Kasiya contained rutile resource vs. other rutile-bearing titanium deposits (Mt)

(Source: See Appendix 2)

Global primary rutile supply is in structural decline. Rutile reserves at Leonoil Company Limited's Area 1 Mine are expected to be depleted within the next 2-3 years, and Energy Fuels Inc. has recently ceased operations at its Kwale Mine in Kenya. With no other large-scale primary rutile developments at an advanced stage, Sovereign is positioned to become the only large-scale primary producer of natural rutile globally.

Kasiya's natural rutile has demonstrated premium chemical characteristics and suitability across all major end-use applications, with high TiO₂ content, low impurity levels, and favourable particle size distribution - positioning it as a preferred high-purity feedstock within a structurally undersupplied market.

Kasiya's 222ktpa of natural rutile would represent a significant addition to Western-accessible non-pigment rutile supply, directly addressing the structural feedstock deficit facing the US, Japanese and European titanium industries.

Natural Flake Graphite - Lowest-Cost Producer Outside Chinese Control

Graphite is essential to lithium-ion battery anodes, refractories and a range of advanced industrial applications. China currently dominates global natural graphite production and processing, accounting for approximately 77% of worldwide output and an even larger share of battery-grade anode material³. The US has designated graphite as a critical mineral and is actively seeking to diversify supply away from Chinese-controlled sources, including through the US$12 billion Project Vault strategic reserve initiative.

Kasiya's incremental cost of graphite production is estimated at US$216/t. Based on public disclosures by listed graphite developers with studies at or beyond the pre-feasibility stage, this positions Sovereign as the lowest-cost graphite producer globally, including China (see Appendix 3).

Compared with single-commodity hard-rock graphite operations, Kasiya benefits from a soft, free-dig orebody and a simple processing flowsheet. The majority of operating costs are allocated to the primary rutile stream, enabling the production of high-purity, coarse-flake graphite at materially lower costs. Independent testing has confirmed that Kasiya graphite performs exceptionally well as an anode material for lithium-ion batteries, while also meeting specifications for traditional industrial markets such as refractories.

Figure 3: Natural flake graphite C1 cash costs. (Source: See Appendix 3. China cost from Benchmark Minerals Intelligence)

Figure 4: Utility-scale battery energy storage system using graphite anodes - California, USA.

SUMMARY OF KEY DFS WORKSTREAMS

Following input from world-class consultancies, Sovereign's highly experienced owners' team, and subject matter experts from Rio Tinto, the DFS has reconfirmed that Kasiya will be a leading future supplier to two distinct strategic critical minerals supply chains and outside of Chinese control - natural rutile for the titanium industry and natural flake graphite.

The DFS outlines a large-scale, long-life operation that delivers substantial volumes of premium-quality natural rutile and graphite while generating significant returns across a range of price scenarios.

The DFS for Kasiya has been prepared in accordance with the JORC Code (2012), with an estimated accuracy range of ±15% for Capital Expenditure (Capex) and ±10% for Operating Costs (Opex).

Dry Mining Method Confirmed

Using real-world data collected from the Pilot Mining, the DFS confirms a dry mechanical mining method using draglines and 100t rigid dump trucks. The soft, free-dig saprolite orebody requires no drilling, blasting, crushing or milling. A two-bench approach (5m top cut, up to 15m bottom cut) keeps the draglines above the water table, eliminating the need for production equipment below groundwater level. This represents a significant de-risking step from the hydro-mining method originally considered in the original Pre-feasibility Study (PFS).

No Conventional Tailings Storage Facility

A major advancement in the DFS is the elimination of the conventional Tailings Storage Facility (TSF) leading to a significant reduction in the mining footprint and providing a flexible, lower-risk tailings management solution. All tailings will be stored via hydraulic co-disposal backfilling of mined-out pits, designed in compliance with the Global Industry Standard on Tailings Management (GISTM), aiming for zero harm to people and the environment. The 50:50 fines-to-sand backfill ratio closely matches the existing soil profile, supporting progressive rehabilitation. This has also reduced the raw water dam wall height from 23m to 20.7m and storage capacity from 16.4 to 11Mm³.

Hydropower-Sourced Grid Electricity

The DFS is based on connection to Malawi's national hydropower grid via a 132kV overhead line to the Nkhoma substation. Electricity Supply Corporation of Malawi Limited (ESCOM) has confirmed significant grid expansion is underway, including a 400kV Mozambique interconnector (2025) and the 375MW IFC/World Bank-funded Mpatamanga hydropower station (2030). Grid connection delivers substantially lower power costs and a favourable emissions profile.

Processing Flowsheet

Ore will be trucked to the processing plant for scrubbing and screening before entering the Wet Concentration Plant (WCP). The WCP employs a low-energy gravity separation process to produce a Heavy Mineral Concentrate (HMC). The HMC is then fed to the Mineral Separation Plant (MSP), where electrostatic and magnetic separation yield premium-quality rutile (+95% TiO₂), suitable as a direct feedstock for titanium sponge production or use in high-end titanium alloy applications, including aerospace and defence. Graphite-rich concentrate recovered from the spirals is processed in a dedicated flotation plant, producing a high-purity, high-crystallinity, coarse-flake graphite product. Independent testing has confirmed that Kasiya graphite performs exceptionally well as an anode material for lithium-ion batteries and meets specifications for traditional industrial markets such as refractories.

Dual Plant Configuration

The DFS confirms a staged development with two 12Mtpa processing plants - South Plant from Year 1 and North Plant from Year 5 - positioned at the respective resource centres of gravity to minimise haulage distances and costs. The configuration provides operational flexibility and a phased capital profile.

Logistics and Export Infrastructure

Kasiya's products will be railed directly from a purpose-built dry port at the mine site eastward along the Nacala Logistics Corridor to the container terminal at the Port of Nacala on the Indian Ocean. The existing heavy-haul rail line and deep-water port provide a proven, operational export route - a significant infrastructure advantage over comparable undeveloped projects. Product transport cost is estimated at US$117/t product (FOB Nacala).

Rutile and Graphite Pricing

The DFS adopts a life-of-mine weighted-average realised rutile price of US$1,670/t (real, FOB Nacala), based on an independent TZMI market study. Japanese titanium metal producers OSAKA Titanium Technologies Co., Ltd. (Osaka Titanium) and Toho Titanium Co., Ltd. (Toho Titanium) are expected to drive the growth in rutile demand for titanium manufacturing over the next 10 years. Graphite pricing is based on an independent Benchmark Minerals Intelligence (BMI) price forecast, resulting in a life-of-mine average price of approximately US$1,288/t (FOB Nacala) - effectively in line with the OPFS assumption of US$1,290/t. The graphite basket price is derived from FOB China benchmarks, adjusted for an East Africa premium and weighted by Kasiya's concentrate flake size distribution.

IFC Performance Standards Integrated into Design

The DFS has been prepared in alignment with IFC Performance Standards, with a comprehensive Environmental and Social Impact Assessment (ESIA) nearing completion and the full suite of environmental and social specialist studies completed. Sovereign's established on-the-ground social team of 22 core staff and 90-member Community Liaison Team represent a level of social preparedness rarely achieved at DFS stage.

Mining and Rehabilitation Trials - Proven in Practice

Large-scale mining and rehabilitation trials were completed during the DFS period, covering excavation, backfilling, soil remediation and crop establishment. During Pilot Mining, the Company successfully completed dry and hydraulic mining trials, excavating a test pit at Kasiya. The test pit covered the planned area of 120 metres by 110 metres and was excavated to a depth of 20 metres through the weathered ore at Kasiya.

Post mining, the rehabilitated pit has achieved maize yields of 5.2 tonnes per hectare within six months of backfilling - over five times the local community average of approximately 1 tonne per hectare. The Pilot Mining validated the progressive rehabilitation approach and confirmed that mined land can be returned to productive agricultural use within one to two years.

To view this announcement in full, including the Summary Section of the DFS and all images and figures, please refer to: https://api.investi.com.au/api/announcements/svm/b6f76c34-dfa.pdf.

SUMMARY OF MATERIAL ASSUMPTIONS

Material assumptions used in the estimation of the production target and associated financial information are set out in the following table.

TABLE 2: Material assumptions of the Kasiya DFS

¹ Graphite recovery is 71.9% total, which is discounted by 3% in the first two years of operation, 2.5% in year 3, 2.0% in year 4, and 1.5% in year 5 thereafter.

ORE RESERVE STATEMENT

The information that relates to Ore Reserves was compiled by Mr Frikkie Fourie (BEng, Pr. Eng, MSAIMM) of Moletech, who takes overall responsibility for the Ore Reserve as Competent Person (refer to Competent Persons Statement below). Mr Fourie is a Member of The South African Institute of Mining and Metallurgy, also a member of the Engineering Council of South Africa (ECSA) and 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 Competent Person in terms of the JORC Code (2012).

Mr Fourie has been engaged by Sovereign and consulted on the PFS, OPFS, DFS, and trial mining program completed in 2024-2025, including approximately two months spent on site at Kasiya in 2024.

The updated MRE was used as the basis for the DFS Ore Reserve Estimate and was prepared by Sovereign under the guidance and review of Independent Competent Person, Mr Jeremy Witley of MSA Group South Africa. The updated MRE followed additional drilling, which significantly upgraded the Indicated to Measured Mineral Resource Estimate. This new geological model also includes moisture percentages from each respective lithology so that the moisture can be accounted for in the equipment selection to ensure the production target of 12Mtpa of dry ore can be achieved at each of the two plants.

Mineral Resources were converted to Ore Reserves in line with the material classifications which reflect the level of confidence within the resource estimate. The Ore Reserve reflects that portion of the Mineral Resource which can be economically extracted by open pits utilising mechanical mining methodologies.

In accordance with the JORC Code (2012), the Kasiya Proved and Probable Ore Reserve is based on only Measured and Indicated classified Mineral Resources.

The reported MRE is inclusive of the resources converted to Ore Reserves.

The Ore Reserve has no allowance for mining dilution and ore loss on the basis that all material within the shells is classified and extracted as ore.

The open pit geometries developed for the purposes of mine planning, and which define the subsequent Ore Reserve, are based on NPVS pit shells edited to comply with practical mining requirements and identified exclusion zones. Due to the shallow nature of the geometries, and there being no requirements for ramp access to the bottom of the pits, traditional mine designs were not developed. The final geometries were developed on the basis of applying a rutile cut-off grade ranging from 0.7% to 1.5% RUT95. These cut-offs are all considerably higher than the Project breakeven cut-off grade which lies between 0.4% and 0.5% RUT95.

The Ore Reserve estimate comprises 536Mt of Proven and Probable Ore grading at 0.95% RUT95 and 1.56% TGC.

The Ore Reserve estimate is summarised in Table 1 below, along with the associated cut-off grade used to define the shell.

TABLE 1: Kasiya March 2026 Model - Ore Reserve - Rutile (Rut95) + Graphite (TGC)

The Total Ore Reserve is all rutile and graphite mineralisation within an optimised open pit shell using a Rut95 concentrate revenue price of net US$1,286.81/t and a Graphite product price of net US$1,099.51/t; Mine Opex US$1.35/t; Process Opex US$5.44/t; Rutile recovery of 97.6%; Average Graphite recovery of 70.4%.

Pit Optimisation

Open pit optimisation utilising NPVS software was carried out on the Kasiya deposit using Measured and Indicated Mineral Resources only (in accordance with the JORC Code (2012)). The latest parameters available were used to determine the economic extent of the open pit excavation. The process plant production parameters were supplied by Sovereign with an initial rate of 12Mtpa from year 3 to the South MSP and an additional 12Mtpa to the North MSP from year 7 for a total annual processing rate of 24Mtpa.

The intention to dry mining the defined Ore Reserve means that there is the ability to selectively mine, stockpile ore and all material can be selectively trucked to the plant as feed. Therefore, all material within the "shell" will be extracted and fed to the plant as ore and any interstitial waste and/or sub-economic grade material will be likewise treated as diluent material.

For the production schedule on which the Ore Reserve is based all material within the shell was treated as "ore" to ensure the appropriate dilution was captured.

Mineable Pit Geometries

Based on the cut-off grades applied the mining areas were further interrogated to determine the potential recoverable mining inventory. The interrogation process applied the following constraints to determine the bulk mining boundaries:

·    A minimum depth of 2m and a maximum of 20m for the dry mining method.

·    Removal of any small, isolated pits.

·    Pit extents limited to mineable areas and to remain outside of identified exclusion areas wherever reasonably possible. Sovereign identified all local village areas and areas of cultural or environmental significance within the potential mining envelope that should not be disturbed during the mining phase of the Project.

Ore Reserve Notes

The 2026 Ore Reserves for the Kasiya deposits have been reported according to the JORC Code (2012).

The estimation of the Ore Reserves followed a process of pit optimisation, final pit shell selection and production scheduling:

·    The Mineral Resource Estimation model was prepared by Sovereign under guidance and review of Competent Person Jeremy Witley of MSA Group South Africa.

·    Due to the nature of the deposit and all mined material from the pits being sent to the MSP (except for a small portion of material (8.4Mt), that can easily be isolated and removed as waste from the pits), no ore losses or dilution was applicable.

·    For the same reason, no cut-off is applied in the pits, as all material is sent to the MSP. Cut-offs were only used in selecting the appropriate pits for final LOM production scheduling.

·    Using the models and input parameters, pit optimisations were completed in Studio NPVS software (Datamine).

·    Using the final selected pit shells as templates, a monthly LOM production schedule was completed in Deswik IS (Interactive Scheduler) software.

·    The schedule economics was verified through a financial analysis and proved to be economically viable.

The independent Competent Person for the Ore Reserve estimates is Mr Frikkie Fourie (BEng, Pr. Eng, MSAIMM) of Moletech.

DISCLOSURES & DISCLAIMERS

The information in this announcement that relates to Production Targets and Ore Reserves is based on and fairly represents information provided by Mr Frikkie Fourie, a Competent Person, who is an Associate Member of The South African Institute of Mining and Metallurgy and a Registered Professional Engineer with the Engineering Council of South Africa, a Recognised Professional Organisation (RPO), included in a list promulgated by ASX from time to time. Mr Fourie is employed by Moletech Consulting Pty Ltd, an independent consulting company. Mr Fourie has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activities 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 Fourie consents to the inclusion in the Announcement of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to the DFS (including Mine Engineering, mine Scheduling, Processing, Infrastructure, Capital and Operating Costs is based on and fairly represents information compiled or reviewed by Mr James Gemmel, a Competent Person, who is a Registered Professional Engineer with the Engineering Council of South Africa, a RPO included in a list promulgated by ASX from time to time. Mr Gemmel is employed by DRA Limited, an independent consulting company. Mr Gemmel has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activities 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 Gemmel consents to the inclusion in the Announcement of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to Metallurgy - rutile and graphite is extracted from announcements dated 28 September 2023, 8 May 2024, 15 May 2024 and 4 September 2024, which are available to view at 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 original announcement; b) all material assumptions included in the original 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.

The information in this announcement that relates to the Mineral Resource Estimate is extracted from Sovereign's announcement dated 18 March 2026 entitled 'Kasiya Mineral Resource Estimate Significantly Upgraded Ahead of DFS' (original announcement), which is available to view at www.sovereignmetals.com.au, and is based on, and fairly represents information compiled by Mr Jeremy Witley, a Competent Person, who is a member of the South African Council for Natural Scientific Professions (SACNASP Pr. Sci. Nat.), a RPO included in a list promulgated by ASX from time to time. Mr Witley is a principal of MSA Group, an independent consulting company. Sovereign confirms that a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions included in the original 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 original announcement have not been materially changed from the disclosure in the original announcement.

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.

MODIFYING FACTORS

The Modifying Factors included in the JORC Code (2012) have been assessed as part of the Definitive Feasibility Study (DFS), including mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and government factors. The Company has received advice from appropriate experts when assessing each Modifying Factor.

A summary assessment of each relevant Modifying Factor is provided below.

Mining

Refer to Section 5.0 Mining in the Announcement.

The Company engaged independent consultants, Moletech Consulting Pty Ltd to carry out the pit optimisations, mine design, scheduling, mining cost estimation and Ore Reserves for the DFS.

The DFS draws on empirical data collected through a comprehensive pilot mining program covering excavation, backfilling, rehabilitation with mixed crops, and post-harvest assessment.

Metallurgy and Processing

Refer to Section 6.0 Processing and Metallurgy in the Announcement.

Rutile

The Company completed bulk rutile testwork programs at globally recognised Allied Mineral Laboratories (AML) in Perth, Australia. Testwork programs were supervised by Sovereign's Head of Development, Mr Paul Marcos. Mr Marcos is a metallurgist and mineral sands industry veteran. Bulk test-work programs have confirmed that premium-grade rutile can be produced via a simple, conventional process flow sheet.

Process engineering was completed by DRA, who developed the process plant design and associated cost estimates for the OPFS. During the DFS, further metallurgical testwork was performed to complement the testwork completed during the previous studies.  Testwork across all programs has concluded that a product with an average grade specification of 95.3% TiO₂ can be successfully produced with the application of an average 97.6% recovery-to-product factor.

Graphite

The Company has conducted graphite testwork in multiple laboratories, including ALS Laboratory in Perth, SGS Lakefield in Canada, Core Resources Queensland and ProGraphite GmbH in Germany.

Graphite product testwork conducted during the DFS was a continuation and an increase in scale of testwork completed during the PFS and the OPFS. The DFS testwork campaign was overseen by Dr Surinder Ghag, Chief Technology Officer for Sovereign and Mr Oliver Peters, the Competent Person appointed by DRA. The testwork provided sufficient data to address potential variability in graphite quality and product recovery.

Process engineering was completed by DRA who further developed the process plant design in conjunction with Dr Ghag, while DRA were responsible for the associated capital and operating cost estimates. Graphite recovery is 71.9% total, discounted by 3% in the first two years of operation, 2.5% in year 3, 2.0% in year 4, and 1.5% in year 5 thereafter. This has been conservatively adjusted to reflect scale-up from laboratory to plant conditions, with recoveries expected to improve over the first five years as operations are optimised. DFS variability testwork gravity recovery average was 73.8% and flotation plant recovery average 97.4%. The average combined gravity and flotation recovery is 71.9%. Overall concentrate grades average 95.5% TGC with over 62% of the graphite flake product being larger than 180µm.

Rutile & Graphite

It is acknowledged that laboratory scale testwork will not always represent actual results achieved from a production plant in terms of grade, chemistry, sizing and recovery. Further testwork will continue to build confidence in specifications and recoveries that will be achieved at full-scale production.

Overall, the process flowsheet is conventional for both rutile and graphite with no novel features or specialised equipment incorporated.

Infrastructure

Refer to Sections 9.0 Infrastructure and 10.0 Transport and Logistics in the Announcement.

Kasiya is located approximately 40km northwest of Lilongwe, Malawi's capital, and boasts excellent access to services and infrastructure. The proximity to Lilongwe gives the project a number of benefits, including access to a large pool of professionals and skilled tradespeople, as well as industrial services.

Logistics cost estimates, including rail and port infrastructure and handling, were provided by Nacala Logistics and Grindrod based on market data, suppliers' quotations, industry databases, industry contacts and consultants' existing knowledge of southern African transport infrastructure and freight markets. All consultants are independent with substantial experience in the management of transport logistics studies in southern Africa.

Powerline Funding

The Company entered into a non-binding MOU with a European-backed Private Equity Fund (PE fund) that invests in the Southern African Power Pool and power reticulation infrastructure across Sub-Saharan Africa. The MOU is an undertaking to fund the development and construction of a 132kV transmission line connecting Kasiya to the Malawi national grid. The powerline project is estimated to cost approximately US$40.7 million, with the PE fund expected to provide development funding and construction financing of up to ~US$40 million, subject to due diligence and investment committee approvals. The structure contemplates funding at the project special purpose vehicle level, with repayment from project financing at Financial Close, and provides Sovereign with a clear, funded pathway to secure grid power. This materially de-risks a key enabling infrastructure component of the Project, reduces upfront capital burden at the Company level, and aligns with broader ESG objectives through connection to stable grid power rather than standalone generation.

Marketing

Refer to subsections 12.4 and 13.4 Marketing Strategy in the Announcement.

Rutile

During the DFS, the Company engaged TZMI to provide a bespoke marketing report to support the DFS. TZMI is a global, independent consulting and publishing company which specialises in technical, strategic and commercial analyses of the opaque (non-terminal market) mineral, chemical and metal sectors.

TZMI's assessment has confirmed that, based upon their high-level view on global demand and supply forecasts for natural rutile, and with reference to the specific attributes of Kasiya, there is a reasonable expectation that the product will be able to be sold into existing and future rutile markets.

Included in the Investment Agreement between Rio Tinto and Sovereign, Rio Tinto undertook to provide assistance and advice on technical and marketing aspects under the oversight from a Sovereign-Rio Tinto technical committee.

Also, included in the Investment Agreement, Rio Tinto holds the option to become the operator of Kasiya on commercial arm's-length terms.

In the event, Rio Tinto elects to become the operator of Kasiya, and for so long as Rio Tinto remain the operator, Rio Tinto shall have exclusive marketing rights to 40% of the annual production of all products from the Project as identified in this DFS, and on an arm's-length terms.

Rio Tinto's option over operatorship and 40% marketing rights lapse if not exercised by the earlier of (i) 90 days after the announcement of this DFS or 180 days after this announcement if Rio Tinto advises it needs additional time to consider the exercise; or (ii) Rio Tinto ceasing to hold voting power in the Company of at least 10%.

Irrespective of whether Rio Tinto exercises its option to become operator, the Company has engaged in numerous preliminary off-take, financing and strategic discussions over recent months, including executing an MOU with Mitsui & Co as follows:

Mitsui non-binding MOU

In March 2026, Sovereign executed a non-binding offtake MOU with Mitsui & Co. for up to 70,000 tonnes per annum of Kasiya natural rutile concentrate (TiO₂ >95%) over an initial four-year term (with extension potential), supporting Japan's titanium industry amid strengthening US-EU-Japan critical minerals cooperation. The initial 70ktpa offtake equates to over 50% of Phase 1 rutile production.

Prior to Rio Tinto's investment, Sovereign had established several non-binding MOUs with key industry players, including:

·    Mitsui & Co - global trading and investment company headquartered in Japan (30ktpa)

·    The Chemours Company - one of the world's largest producers of high-quality titanium dioxide (20ktpa)

·    Hascor International - global processor and distributor of rutile for the welding industry (25ktpa)

Other than renewing and revising the Mitsui & Co offtake MOU as discussed above, the Company did not progress with definitive offtake agreements due to Rio Tinto's rights under the Investment Agreement.

However, several third parties continue to express interest in entering into offtake agreements in order to secure U.S. and "Western-aligned" titanium supply chains, and the Company remains confident that binding offtake agreements for Kasiya's natural rutile concentrate will be entered into in due course, should Rio Tinto not exercise its rights under the Investment Agreement.  

Graphite

The Company engaged Fastmarkets, a specialist international publisher and information provider for the global steel, non-ferrous and industrial minerals markets, to prepare a marketing report for graphite.

Fastmarkets' assessment has confirmed that based upon their high-level view on global demand and supply forecasts for natural flake graphite, and with reference to the specific attributes of Sovereign's project, there is a reasonable expectation that the product from Sovereign's Kasiya project will be able to be sold into existing and future graphite markets. Given the extremely low-cost profile and high-quality product, it is expected that output from Kasiya will be able to fill new demand or substitute existing lower quality / higher cost supply.

Project considerations taken by Fastmarkets in forming an opinion about the marketability of product include:

·    Low capital costs (incremental)

·    Low operating costs

·    High quality concentrate specifications

Industry participants confirm that the highest value graphite concentrates remain the large, jumbo and super-jumbo flake fractions, primarily used in industrial applications such as refractories, foundries and expandable products. These sectors currently make up the significant majority of total global natural flake graphite market by value.

Fastmarkets have formed their opinion based solely upon project information provided by Sovereign to Fastmarkets and have not conducted any independent analysis or due diligence on the information provided.

As noted above, Sovereign and Rio Tinto have been working together to qualify Kasiya's graphite product with a particular focus on supplying the spherical purified graphite segment of the lithium-ion battery anode market.

In September 2024, Sovereign announced an update on the downstream testwork which demonstrated that Coated Spherical Purified Graphite (CSPG) produced from Kasiya natural flake graphite has performance characteristics comparable to the leading Chinese natural graphite anode materials manufacturers such as BTR New Material Group (BTR). Electrochemical testing of the CSPG samples at a leading German institute achieved first cycle efficiencies (FCE) of 94.2% to 95.8%, with results above 95%, a key specification for highest quality natural graphite anode materials under the Chinese standard.

BTR has a 20-year track record in the production of lithium-ion battery anode materials, is a dominant player in the market and has recently concluded anode material offtake agreements with global automotive companies including Ford. BTR's highest specification CSPG materials, that have low swelling, long cycle life, good processability and outstanding electrochemical performance include their GSN17 and LSG17 products (with D50 of 17.0+/- 1.5μm).

Traxys non-binding MoU

In February 2026, Sovereign executed a non-binding MOU with Traxys North America for the marketing of graphite from the Kasiya Project, targeting 40,000 tonnes per annum during Phase 1 (Years 1-5) and up to 80,000 tonnes per annum thereafter, supporting supply into US critical minerals stockpiling initiatives, with an initial focus on high-value flake graphite for the refractory market.

Other than this graphite offtake MOU, the Company did not progress with definitive graphite offtake agreements due to Rio Tinto's rights under the Investment Agreement. Several U.S. / "Western-aligned" potential offtakers continue to express interest in entering into offtake agreements for Sovereign's graphite product and the Company continues to advance these discussions.  The Company remains confident that binding offtake agreements for Kasiya's natural flake graphite concentrate will be entered into in due course, should Rio Tinto not exercise its rights under the Investment Agreement.

Economic

Also refer to Sections 14.0 Cost Estimations and 15.0 Financial & Economic Analysis in the Announcement.

Capital estimates for the process plant have been prepared by PCC, together with input from the Company and other contributing consultants using combinations of cost estimates from suppliers, historical data, benchmarks and other independent sources. The accuracy of the initial capital cost estimate for the Project is ±15%.

Capital costs include the cost of all services, direct costs, contractor indirects, EPCM expenses, non-process infrastructure, sustaining capital and other facilities used for the mine. Capital costs make provision for mitigation expenses and mine closure and environmental costs.

Working capital requirements (including contingency) for plant commissioning and full ramp-up have been included in the headline capital estimate reported under construction, owner's and start-up costs.

Mining costs have been estimated by DRA, a regional leader in conventional open pit mining and materials handling. Life cycle costs for mining capital and operating cost have been built up from first principles based on equipment, vendor, and contractor quotations, local unit cost rates, and benchmarked costs.

Labor costs have been developed based on a first-principles build-up of staffing requirements with labour rates benchmarked in Malawi and expatriate rates benchmarked for professionals from South Africa and other jurisdictions.

A Government royalty of 5% (applied to revenue) and a vendor profit share of 2% (applied to gross profit) have been included in all project economics. A 0.45% royalty (applied to revenue) has been applied for the community development fund.

Rehabilitation and mine closure costs are included within the reported operating cost and sustaining capital figures.

A detailed financial model and discounted cash flow (DCF) analysis has been built and prepared by an independent specialist advisory firm, Practara Metals and Mining Advisory (Practara), in order to demonstrate the economic viability of the Project. The financial model and DCF were modelled with conservative inputs to provide management with a baseline valuation of the Project.

The DCF analysis demonstrated compelling economics of the prospective Project, with an NPV (ungeared, pre-tax, at an 8% discount rate) of US$2,204 million, and an (ungeared) IRR of 23%.

Sensitivity analysis was performed on all key assumptions used. The robust project economics insulate the Kasiya Project from variations in market pricing, capital expense, or operating expenses.

Sensitivity analysis with both rutile and graphite concentrate prices simultaneously 25% lower than the DFS selected prices, the Project still displays a positive NPV (ungeared, pre-tax, 8% discount rate) of US$913 million and pre-tax IRR of 15.2%.

The Project's payback period is 6.2 years from the start of production. The payback period is based on unlevered, pre-tax free cashflow.

Sovereign estimates the total capital cost to construct the mine to be US$727m (which includes a contingency of US$43 million.

Key parameters are disclosed in the body of the announcement, and include:

·    Life of Mine: 25 years

·    Discount rate: 8%

·    Royalty rate: 5% royalty (Government), 2% of gross profit (Original Project Vendor) and 0.45% Community Development Fund.

·    Pricing: Rutile average price of US$1,670 per tonne and Graphite average basket price of US$1,288 per tonne

There is uncertainty in some respects of the tax law applicable to mining companies in Malawi. Specifically with regard to the calculation of and the application of the RRT. The 2023 Mines Act, further provides for the holder of large-scale mining licenses to enter into a fiscal stability agreement, known as a Mine Development Agreement (MDA) with the Government of Malawi. These MDAs provide the opportunity to agree and clarify the application of taxation. At the date of the DFS announcement, Sovereign has not applied for a large-scale mining license or entered into an MDA. 

In 2024, mining companies Lotus Resources Limited (Lotus) and Mkango Resources Limited (Mkango) each entered into separate MDAs with the Government of Malawi. These MDAs have deviated from the enacted mining taxation laws and, specifically, the levying of the RRT, with no RRT payable as part of the MDAs.  The Government has since proposed an alternative supernormal profits tax (SPT) to replace the current RRT. Profits of up to MWK 10 billion (~US$6 million at the time of writing) are taxed at the standard income tax rate of 30%. Any profits which exceed MWK 10 billion are taxed at a higher rate of 40%. Mkango and Lotus are exempt of SPT under their existing MDAs. As such, and until such time Sovereign has sight of what actual fiscal terms would apply to the Kasiya Project in terms of its own fiscal stability agreement with the Government of Malawi, results for the DFS have been reported on a pre-tax basis only.

Notwithstanding this uncertainty, scenario analysis has been undertaken to indicate a range of potential post-tax outcomes. This analysis considered the impact of key fiscal variables, including RRT, SPT, and capital allowances, on project returns, with the resulting post-tax NPV8% estimated to range between US$1,065 million and US$1,448 million.

The financial model has been built and prepared by Practara using inputs from the various expert consultants and has been reviewed by SP Angel Corporate Finance LLP (SPA), the Company's Nominated Advisor and Corporate Broker as defined by the AIM Rules for Companies set out by the London Stock Exchange, to validate the functionality and accuracy of the model.

The Company considers that, given the nature of the Project, funding is likely to be sourced from specialist investors. Potential funding sources include, but are not limited to, traditional equity and debt, royalty financing, and off-take agreements at either the corporate and/or Project level.

In this regard, the Company has already engaged in numerous preliminary off-take, financing and strategic discussions over recent months. Interested parties are global in nature and include companies from the titanium, graphite, mining, industrial, battery, automotive, government and private equity sectors.

In particular, the Company has entered a non-binding offtake MOU with Mitsui & Co. for up to 70,000 tonnes per annum of Kasiya natural rutile concentrate (TiO₂ >95%) over an initial four-year term (with extension potential), supporting Japan's titanium industry amid strengthening US-EU-Japan critical minerals cooperation.

Further, in February 2026, Sovereign executed a non-binding MOU with Traxys North America for the marketing of graphite from the Kasiya Project, targeting 40,000 tonnes per annum during Stage 1 (Years 1-5) and up to 80,000 tonnes per annum thereafter, supporting supply into US critical minerals stockpiling initiatives, with an initial focus on high-value flake graphite for the refractory market.

The Company intends to negotiate and convert these MOUs into definitive offtake agreements, which will assist in securing future debt facilities to finance the Project.

The Company has also had preliminary financing discussions with a number of other institutional investors, development finance institutions, U.S. and "Western-aligned" government agencies, end-user customers, and other strategic investors, regarding potential equity and/or debt funding at the Company and/or Project level.

Since July 2023, leading global mining company Rio Tinto has made an investment in Sovereign for A$60 million, resulting in a shareholding of 18.5%. The investment proceeds have been used to advance Kasiya, including completion of the Pilot Mining and Rehabilitation Program and DFS. Under the Investment Agreement with Rio Tinto, it was agreed with Rio Tinto that if Sovereign is raising debt finance for the development of the Project, Sovereign and Rio Tinto will negotiate, in good faith, financing arrangements in order to put in place an acceptable mine construction funding package. Further, Rio Tinto has the option to become operator of Kasiya on commercial arm's-length terms. Rio Tinto's option over operatorship lapses if not exercised by the earlier of:

i) 90 days after the announcement of this DFS or 180 days after this announcement if Rio Tinto advises it needs additional time to consider the exercise; or ii) Rio Tinto ceasing to hold voting power in the Company of at least 10%.

Irrespective of whether Rio Tinto exercises its option to become operator, the Company has entered into multiple agreements that may provide alternative sources of financing, as set out below:

·    A Collaboration Agreement with the International Finance Corporation (IFC), a member of the World Bank Group, which provides a clear pathway to international project financing for Kasiya, with a particular focus on debt funding. Through the Collaboration Agreement, IFC holds rights to participate as lender, mandated co-lead arranger and/or investor in the project financing structure, supporting the development of a robust and bankable funding package. As a leading global development finance institution with extensive experience in mining projects in emerging markets, IFC's involvement is expected to enhance lender confidence, support access to competitive long-term debt, and underpin the overall financing strategy for the Project;

·    Further and as discussed above, the Company has entered into a non-binding MOU with a PE fund to fund the development and construction of a 132kV transmission line connecting Kasiya to the Malawi national grid. Refer to discussion above in Infrastructure Modifying Factor; and

·    MOU offtake agreements with Mitsui & Co and Traxys North America as discussed above.

The Company also engaged the services of SPA with regard to project economics. SPA is a financial advisory firm that offers full-service advisory, corporate broking and research, which specialises in the resources sector. SPA is well regarded as a specialist capital markets service provider and has raised funding for companies across a range of commodities including the industrial and speciality minerals sector.

In this regard and after the services provided by SPA, the assessment and advice indicates that financing for industrial mineral companies often involves a broader mix of funding sources than just traditional debt and equity. SPA considers that given the nature of the Project, funding is likely to involve specialist funds, with potential funding sources including, but not limited to, traditional equity and debt, royalty financing and off-take agreements, at either the corporate or project level. It is important to note that no funding arrangements have yet been put in place, as discussions continue with potential funders. The composition of the funding arrangements ultimately put in place may also vary, so it is not possible at this stage to provide any further information about the composition of potential funding arrangements. Following the assessment of a number of key criteria, and after the services provided by SPA which states that, irrespective of whether or not Rio Tinto exercises any of its rights under the Investment Agreement, on the basis that the DFS outcomes are consistent with any future technical study (e.g. a Front-End Engineering Design), all in-country government and regulatory approvals are received, commercial offtake agreements are in place for the majority of Rutile and Graphite production for at least the first five years of mine life, and that there has not been any material adverse change in financial condition, results of operations, business or prospects of the Company/or political and business environment in Malawi and/or financial or capital markets in general, Sovereign believes that it should be able to raise sufficient funding to develop the Project..

SPA, which is authorised and regulated by the Financial Conduct Authority (FCA) in the United Kingdom, is acting exclusively for the Company and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to the customers of SPA or for providing advice in relation to the matters described in this announcement. No liability whatsoever is accepted by SPA for the accuracy of any information or opinions contained in this announcement or for the omission of any material information. The responsibilities of SPA as the Company's Nominated Adviser under the AIM Rules for Companies and the AIM Rules for Nominated Advisers are owed solely to London Stock Exchange plc and are not owed to the Company or to any director or shareholder of the Company or any other person, in respect of its decision to acquire shares in the capital of the Company in reliance on any part of this announcement, or otherwise. SPA will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Project economics or any other matters referred to in this announcement.

Since commencing exploration at Kasiya in November 2019, the Company has completed extensive drilling, sampling, metallurgical test work, and geological modelling, and has defined a Measured and Indicated Mineral Resource Estimate that has been converted to Ore Reserves as part of this DFS. The Company is also in a unique position, having collected real-world data through the Pilot Mining Program, which has significantly validated and de-risked the Project. Over this period, and with these key milestones being achieved, the Company's market capitalisation has increased from approximately A$18m to over A$450m.

The Company has a simple and clean corporate and capital structure, is debt-free, and is in a strong financial position, with approximately A$29.2 million in cash on hand as at 31 March 2026 (unaudited). This financial position means the Company is well funded to continue key post-DFS workstreams, including the permitting and financing activities required to advance the Project to a final investment decision.

The Company's shares are listed on the ASX and AIM which are premier markets for growth companies and provide increased access to capital from institutional and retail investors in Australia and the UK. The Company's shares are also quoted on the OTCQX and Frankfurt Stock Exchange.

Sovereign has a strong track record of successfully raising equity funds for Kasiya plus it has an experienced and high-quality Board and management team comprising highly respected resource executives with extensive technical, financial, commercial and capital markets experience. The directors have previously raised more than A$2.5 billion from capital markets for a number of exploration and development companies.

As discussed above, and taking into account the following additional factors: 1) Recently completed funding arrangements for similar or larger scale development projects; 2) The range of potential funding options available; 3) The favourable key metrics generated by the Kasiya Project; 4) Investor interest to date; 5) The Company owns 100% of Kasiya which is highly attractive to potential financiers; and 6) The DFS demonstrates that the Project is commercially viable and provides justification to progress to the final investment decision and project finance stages, the Board has a high level of confidence that the Project will be able to secure funding in due course.

Environmental, Social, Legal and Governmental

Refer to Section 11.0 Environmental & Social Impact in the Announcement.

Sovereign is committed to conduct its activities in full compliance to the requirements of national regulations, its obligations under international conventions and treaties and giving due consideration to international best practices and policies. The Company has appointed an experienced environmental consultant to manage the ESIA process, and environmental and social baseline studies have commenced with appropriately qualified independent experts. The Company has also completed a high-level risk assessment to identify major environmental and social risks which could affect the development of the Project, along with mitigating strategies to allow identified risks to be addressed early in the project design phase.

The Company has embarked on several community engagement exercises in the area and there is a general positive acceptance of the Project. Social responsibility/RAP costs totalling US$40m have been included in this Study, as well as a 0.45% revenue royalty for the community development fund.

Based on the current assessments and commenced ESIA, the Company believes there are no environmental issues currently identified that cannot be appropriately mitigated in accordance with standard practices adopted for the development of mining projects.

Following the completion of this DFS, Sovereign intends to apply for a Mining Licence (ML) to secure mineral deposits for mining. At this point of Kasiya's development, the Company notes no known issues or impediments obtaining a ML under normal course of business.

Under the 2023 Mines Act, the Government of Malawi has a right to equity ownership for large-scale mining licences (>5Mt mined per annum or >US$250m Capex) with the right a negotiation matter, likely as part of any future MDA. The Mkango and Lotus MDAs included a 10% non-diluting equity interest to the Malawi Government.

Following successful completion of the Pilot Mining program, the test pit mined at Kasiya has been successfully backfilled which has allowed Sovereign to commence with on-site soil remediation and land rehabilitation activities, testing our proposed rehabilitation approach and demonstrating that the mined land can support sustainable farming post-closure.

During the Pilot Mining program, 170,000m³ was mined using a conventional excavator fleet. The fleet was then used to place mined material back into the pit, filling the pit to the original ground level in less than two months and ahead of schedule.

The rehabilitation approach has been based on agronomic principles, including promoting sustainable farming practices and providing various end-land uses. Rehabilitation is underway through a five-step process:

Step 1: Introduce Lime

The land rehabilitation demonstration commenced with the application and incorporation of locally sourced dolomitic lime (calcium and calcium-magnesium-carbonate) to improve naturally low PH levels.

Step 2: Introduce Carbon and Basic Nutrients

Sovereign is augmenting the mined area with organic carbon and basic nutrients to support post-closure farming. The Company is testing the application of biochar (to provide carbon) and fertiliser (in the form of potash (MOP), phosphate (MAP) and a blend of nitrogen, potash, and sulphur (NPK) 15:23:16).

Step 3: Grading, Ripping and Discing

Lime, biochar, and fertiliser are incorporated into the soil through grading, ripping, and discing using graders and locally sourced farming equipment. This ensures the land is level and safe and that essential inputs are incorporated into the soil.

Step 4: Planting of Rehabilitation Crops

Sovereign planted it first round of rehabilitation crops in the 2024/2025 cropping season, and it second round of crops in the 2025/2026 cropping season. Giant bamboo has been introduced in 4 by 8-metre blocks and will act as the primary crop to enhance carbon and bioactivity in the remediated soils. To return the land to farmers, maize and other cover crops have be intercropped between the giant bamboo in formalised farm blocks.

Step 5: Monitoring and Evaluation

Sovereign continues to monitor soil remediation, plant growth and crop yields. As part of stakeholder engagement, the Company has worked with local farmers to improve results through conservation farming, composting operations, testing new seed varieties and establishing an indigenous, fruit and farming nursery. This serves as an active and live demonstration of rehabilitation and timely return of land to pre-mining use.

APPENDIX 1 - 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

Section 4 - Estimation and Reporting of Ore Reserves

JORC Table 1

Estimation and Reporting of Ore Reserves

The following information provided complies with the 2012 JORC Code requirements specified by 'Table-1 Section 4' of the Code. Each item in this table has been summarised as the basis for the assessment of overall Ore Reserves risk in the table below, with each of the risks related to confidence and/or accuracy of the various inputs into the Ore Reserves qualitatively assessed.

APPENDIX 2 - NATURAL RUTILE RESOURCE INFORMATION (Figure 1)

Notes: Does not include any projects where rutile is not reported separately within HMC assemblage.

1. Wimmera

2. Sembehun

3. Moma

4. Goschen

5. Area 1

6. Balranald

7. Eneabba

8. McCalls

9. Euston

10. Toliara

11. Koko Massava

12. Cataby

13. Tajiri

14. Ouyen

Note:

Where not disclosed separately, rutile grades have been calculated as HM% multiplied by rutile % of assemblage.

APPENDIX 3 - FLAKE GRAPHITE RESOURCE INFORMATION (Figure 3)

Notes:

Analysis does not include projects:

-       without at least a PFS-level study complete;

-       owned by unlisted companies or companies in administration (voluntary or otherwise);

-       in care and maintenance;

-       with downstream studies which do not include a breakdown of graphite concentrate C1 costs