Just how big could the Kasiya rutile project in Malawi turn out to be?
A maiden resource for Kasiya is due in the next quarter, and right off the bat the numbers are expected to run into the hundreds of millions of tonnes.
But Sovereign’s managing director Dr Julian Stephens says that that will just be the start.
“We believe we’ve found a new rutile province,” he says.
“Rutile mineralisation has been defined by drilling over an area of 66 square kilometres and this is expected to keep growing as more drill results are received. We believe it will be one of the biggest, and eventually potentially the biggest, rutile deposit in the world.”
That’s quite a claim to make, and hasn’t yet been backed up by any hard numbers yet, but two things are worth noting at this stage.
The first is that although the maiden resource is on the way, drilling hasn’t stopped. Indeed, it isn’t going to stop, says Stephens, until the edges of Kasiya are located. And they haven’t been yet.
The other is the quality of the samples that have been returned by the drilling. Highlights from the most recent set of drill results include 13 metres at 1.47% rutile, seven metres at 1.28% rutile and 12 metres at 1.24%. Within these intercepts, in turn, are higher grade sections of up to 2% rutile, and these almost always occur directly at surface.
And it’s not just the grades. Metallurgical work to date has shown word-class results.
“We’ve done a substantial amount of metallurgical work to make sure we can produce a good specification product,” says Stephens.
“We produced a premium product at 96% TiO2 with very high recovery rates.”
So, so far the stars are all aligning very nicely for Sovereign.
The most recent drilling represented the completion of initial drilling in a core 30square kilometre central area, and allowed Sovereign’s official statements to talk boldly of its ambition to delineate a “large rutile resource that could support a long-life, large-scale rutile mining operation.”
In that sense, it’s a simple enough story: a high grade, large-scale, shallow resource that on a first pass looks like it could be mined at significant margin. A scoping study due in the third quarter will give further insight on this.
But there’s more to it than pure economics.
Stephens is keen to point out the quality of rutile itself, over and above other titanium mineral products like ilmenite. Ilmenite, he says, requires substantial upgrading to make it acceptable to the pigment markets into which both rutile and ilmenite get sold. But as well as adding extra cost that upgrading is hugely carbon-intensive.
A rutile deposit of the potential size and scale that Kasiya offers could deliver structural change in the pigment feedstock market as a whole, to the point where Sovereign becomes a significant player.
But Sovereign won’t be the only winner.
It’s significant that the government of Malawi, which doesn’t play host to too many mining companies, has been highly supportive. There’s an understanding in the corridors of power there that a project like Kasiya is likely to deliver significant potential tax revenue as well as employment and wider economic benefits.
For its part, Sovereign is only too well aware of its ESG responsibilities. In certain areas, indeed, there are a number of small villages on top of the Kasiya deposit. But, says Stephens, that’s never likely to become an issue because the overall deposit is so vast, and likely to grow further, so the company can just go around the areas where people live.
“We just won’t need those tonnes,” he says.
What’s more, with a project like this, the after-effects of the mining can be kept to a minimum. The company simply extracts the sands and returns the land to its former state. There’s unlikely to be any toxicity here, as no chemicals are used in the processing – locals will be able to farm on top of previously mined ground, assuming that is they aren’t off using their newly-earned geological or other technical skills on other projects in the wider region.
Which in turn brings us to Sovereign’s second operation in Malawi, the Malingunde graphite project. This has taken something of a backseat, given the breakneck speed with which the company has moved Kasiya forwards, but now that the wheels have been well and set turning towards the scoping study, some attention can be paid to the graphite too.
“We’re starting to re-invigorate the graphite project,” says Stephens.
“We’ve re-started work and are looking at the completion of the environmental and social impact study.”
Some more detailed testwork on the graphite material is also planned in regard to producing spherical graphite products suitable for lithium-ion batteries for the electric sector.
So, all in all, Sovereign Metals looks to be a company on the move. Its primary rutile asset could end up being a world-beater, and it’s being advanced at an extremely rapid rate. No wonder, then, that the shares are trading at roughly four times the level they were at a year ago. But on this showing, there could be plenty more to come.