Rio Tinto (ASX: RIO) Increases Investment in Sovereign Metals, Bolstering African Project

2 min read | July 03, 2024 01:20 PM AEST | By Team Kalkine Media

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Rio Tinto (ASX: RIO) Increases Investment in Sovereign Metals, Bolstering African Project — Image source: shutterstock

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Rio Tinto Ltd (ASX: RIO) has significantly increased its stake in Sovereign Metals Ltd (ASX: SVM) this week, signalling strong confidence in the company's African project.

Investment Details

Rio Tinto has exercised all its share options, raising its shareholding in Sovereign Metals to 19.76%. This involved exercising 34,549,598 share options to acquire an equivalent number of new fully paid ordinary shares at AU$0.535 per share. The transaction resulted in proceeds of AU$18.5 million for Sovereign Metals.

Project Focus

The investment is aimed at advancing Sovereign Metals' tier one Kasiya Rutile-Graphite Project in Malawi. Proceeds will be used to progress the current optimization study for Kasiya, focused on developing a world-class mine capable of supplying critical minerals to the titanium pigment, titanium metal, and lithium-ion battery industries.

Following the optimization study, the project will move to a definitive feasibility study.

Rio Tinto's Role

Under the investment agreement, Rio Tinto will continue to provide technical and marketing assistance for Kasiya. This partnership is expected to unlock a major new supply of low-CO2-footprint natural rutile and flake graphite.

Management's Perspective

Ben Stoikovich, Chairman of Sovereign Metals, emphasized that Rio Tinto's further investment reaffirms Kasiya's position as a significant critical minerals project globally. He noted Rio Tinto's extensive experience as crucial for Kasiya's potential to become a market leader in low-CO2-footprint natural rutile and graphite. Frank Eagar, Managing Director of Sovereign Metals, highlighted the progress made in collaboration with Rio Tinto, including the successful launch of the pilot phase mining in May. He expressed excitement about the continued partnership and its role in advancing the Kasiya project.

Project Highlights

Kasiya's mineral resource estimate (MRE) stands at 1.8Bt at 1.0% rutile, translating to 17.9Mt of contained natural rutile and 24.4Mt of contained graphite, making it the largest in the world according to the company.

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