Sovereign Metals Limited (LSE:SVM) has reported progress at its Kasiya Critical Minerals Project in Malawi, including a scoping study indicating that rare earth concentrate production could add approximately US$722 million to the project’s pre-tax net present value.
In its quarterly report for the period ended 30 September 2026, the company outlined plans to integrate rare earth recovery into Kasiya’s existing development strategy, alongside efforts to secure offtake agreements and advance financing discussions with US and allied partners.
Kasiya Rare Earths Study Targets 2,626 Tonnes of Annual Production
Sovereign’s scoping study outlined a processing circuit capable of producing approximately 2,626 tonnes of monazite rare earth concentrate annually at steady state, containing 1,485 tonnes of total rare earth oxides.
The proposed operation would recover rare earths from mineral streams already generated by Kasiya’s definitive feasibility study processing flowsheet, without requiring additional mining or front-end processing.
Annual production is projected to include 310 tonnes of neodymium-praseodymium, 36 tonnes of dysprosium-terbium, 193 tonnes of yttrium and 82 tonnes of samarium and gadolinium.
These materials are used in applications including permanent magnets and advanced industrial technologies.
The company also completed an initial monazite Mineral Resource Estimate of 524.4 million tonnes grading 0.0132% monazite, with 74% classified in the Indicated category.
Rare Earths Could Add $84 Million in Annual EBITDA
Under the scoping study’s base case, rare earth recovery could increase Kasiya’s pre-tax net present value, discounted at 8%, by approximately US$722 million.
Incremental capital expenditure to first production is estimated at US$29 million, with a projected pre-tax internal rate of return of 151% and a payback period of approximately 1.5 years.
The study forecasts an operating margin of around 90% and incremental site operating costs of approximately US$0.90 per kilogram of rare earth concentrate.
At steady-state production, the additional operation could generate approximately US$84 million in annual EBITDA.
Sovereign estimates incremental pre-tax, unlevered free cash flow of approximately US$1.8 billion over a potential initial 23-year mine life, bringing Kasiya’s integrated pre-tax net present value to US$2.9 billion.
An alternative Western Supply Case indicates a potential NPV uplift of US$883 million, while a scenario using US government floor prices generates an estimated US$183 million in additional pre-tax NPV and a 43% internal rate of return.
These figures represent study projections rather than established operating results.
Sovereign Advances US-Focused Critical Minerals Strategy
Sovereign continues to position Kasiya as a potential supplier of natural rutile, graphite and rare earths to the United States and allied economies.
The company plans to advance rutile and graphite offtake discussions with Mitsui, Traxys and other prospective partners towards binding agreements.
It will also pursue commercial discussions with Western rare earth processors and government procurement programmes.
Kasiya’s proposed product portfolio includes titanium feedstock, natural graphite and heavy rare earths, all associated with critical mineral supply chains.
Pre-Feasibility Study Targeted for Completion in 2027
Sovereign plans to continue metallurgical variability testing, rare earth concentrate product qualification and customer sample evaluations.
A pre-feasibility study incorporating rare earth recovery into Kasiya’s development plans is targeted for completion in 2027.
Additional work will assess potential extensions to the monazite resource, progress environmental and social impact assessments, and advance project financing discussions.
The company will also continue working with the International Finance Corporation, part of the World Bank Group, on its development financing strategy.
Sovereign said engagement with US government agencies, development finance institutions and export credit agencies will remain a priority as it advances Kasiya towards development.
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