Sovereign Metals (AIM:SVML) said a scoping study has confirmed its Kasiya Project in Malawi can produce a monazite rare earth by-product alongside its planned rutile and graphite output.
The ASX and AIM-listed company, which completed a definitive feasibility study (DFS) for Kasiya's rutile and graphite operation in April, has renamed the project the Kasiya Critical Minerals Project to reflect the expanded product suite.
The study estimates steady-state production of 2,626 tonnes per year of monazite rare earth concentrate containing 1,485 tonnes of total rare earth oxides, including neodymium, praseodymium, dysprosium, terbium and yttrium.
Because the rare earths would be recovered from tailings streams the DFS flowsheet already generates, Sovereign estimates incremental capital of approximately $29 million to first production, against a potential pre-tax net present value uplift of $722 million and an internal rate of return of around 151%, with payback in approximately 18 months.
The company also reported a maiden monazite mineral resource of 69,000 tonnes contained within 524.4 million tonnes at 0.0132% monazite, entirely within the pits already designed under the DFS.
"For approximately $29 million of initial capital, using infrastructure the DFS has already designed and costed, we can potentially add approximately $722 million of pre-tax value at a roughly 151% rate of return, with payback in around 18 months", said managing director and CEO Frank Eagar.
Sovereign said it is beginning offtake and marketing discussions immediately, with a pre-feasibility study on the rare earth circuit targeted for completion in 2027.
News Intelligence what this means for the company
Sovereign Metals' scoping study confirms its Kasiya project can extract monazite rare earth concentrate from existing tailings streams at low incremental cost—$29 million capex against a $722 million pre-tax NPV uplift and 151% IRR with 18-month payback. This materially expands the project's value proposition without requiring new mining infrastructure, since the rare earths come from waste streams the rutile-graphite DFS already designed.
The rare-earth by-product transforms Kasiya from a two-commodity play into a three-commodity operation with outsized returns on marginal capital, contingent on offtake agreements and completion of a pre-feasibility study by 2027. The $722 million uplift is material relative to the project's existing economics and substantially improves risk-adjusted returns if executed.
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