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(Sharecast News) - Sovereign Metals said on Thursday that its Kasiya critical minerals project in Malawi delivered a pre-tax NPV of $2.2bn in its definitive feasibility study, based on $727m of capital expenditure to first production.
The AIM-traded firm said the project is expected to generate steady-state annual EBITDA of $476m and pre-tax unlevered free cash flow of $452m, with $16.2bn of revenue over an initial 25-year mine life.
Kasiya is positioned to become the world's largest producer of natural rutile and natural flake graphite, producing 222,000 tonnes and 275,000 tonnes a year respectively.
The company said it was advancing a US-focused critical minerals strategy following completion of the study, including progressing offtake discussions with Mitsui, Traxys and other potential partners.
Testing has also confirmed monazite containing dysprosium, terbium and yttrium across four planned mining pits, creating the potential for a third revenue stream that was not included in the feasibility study economics.
Sovereign's next steps include completing a technical-economic study and mineral resource estimate for the heavy rare earth opportunity and advancing offtake negotiations towards binding agreements.
At 1619 BST, shares in Sovereign Metals were down 2.48% at 27.5p.
Reporting by Josh White for Sharecast.com.
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