Sovereign Metals, backed by Rio Tinto, has released an updated pre-feasibility study (PFS) for its Kasiya graphite and rutile project in Malawi. The new study, conducted with the help of 'world-class consultancies' and Rio Tinto experts, reveals slightly higher capital expenditure and marginally lower graphite production compared to the 2023 PFS. However, the overall project economics remain strong.
Rio Tinto -backed graphite and rutile developer Sovereign Metals has released updated figures for its promising Kasiya asset in Malawi . The company conducted an optimized 2023 pre-feasibility study with the assistance of 'world-class consultancies' and experts from the global mining giant, Rio Tinto . This new study reveals a slightly more expensive operation producing marginally less graphite compared to the 2023 release.
However, the core differences between the optimized study and the 2023 version are minimal.Sovereign Metals now anticipates capital expenditure to reach first production at US$665 million, up from the $597 million estimated in 2023. Total life-of-mine development capital expenditure has slightly decreased to $1.12 billion from $1.25 billion. Kasiya is projected to produce 222,000 tonnes per annum of rutile, aligning with the 2023 PFS, and 233,000tpa of graphite, down from the previously estimated 244,000tpa. The operational lifespan remains consistent at 25 years.The updated PFS estimates total project revenue at $16.4 billion, comparable to the $16 billion previously projected. Operating costs are estimated at $423/t, compared to the previous estimate of $404/t. Based on a net present value calculation, the new study projects a pre-tax NPV of $2.3 billion. However, the company acknowledges 'uncertainty in the tax law applicable to mining companies in Malawi,' and therefore refrained from estimating a post-tax value. The company states that 'applying a 30% corporate income tax rate and a range of resource rent tax (RRT) from 15% to 0% would result in a post-tax NPV at an 8% discount rate of $1.28 billion to $1.56 billion.' Its 2023 study assumed a 30% corporate tax rate and RRT equivalent to 15% of post-tax profits, resulting in a $1.6 billion post-tax NPV assigned to the asset. Shares in Sovereign Metals fell 0.7% to A74c on Wednesday, valuing the stock at $438 million. Its trading range over the past year has been between 42c and 84c
Sovereign Metals Kasiya Graphite Rutile Malawi Rio Tinto Pre-Feasibility Study PFS Capital Expenditure Operating Costs Net Present Value
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