Frank Eagar

FRANK Eagar’s Sovereign Metals has the rights to mine Kasiya, which it describes as the world’s highest-grade rutile (titanium metals) deposit. Kasiya, situated in Malawi, is also the second-largest flake graphite deposit. These twin benefits were clearly factors in attracting Rio Tinto to Sovereign. Rio announced last year it would buy about 35.4 million share options in Sovereign for A$18.5m (equal to 54 Australian cents a share) increasing its shareholding to 19.76% from the 15% beachhead it acquired in Sovereign for A$40.4m in 2023. 

Kasiya is scoped to produce about 222,000 tons of rutile and 244,000t of graphite annually, but it will require $597m in pre-production capital expenditure. Hence the involvement of Rio Tinto, which seems to prefer farm-in agreements to the market-busting M&A of its rival BHP. The rewards Sovereign offers are potentially massive, however. Eagar says graphite production is forecast to ramp up at Kasiya to more than 500,000t a year during the 25-year life of mine. In terms of the farm-in agreement, Rio Tinto has the option to become the operator of Kasiya once a definitive feasibility study is completed by the joint team. 

In November, mining trials were concluded at Kasiya proving the deposit to have soft, friable orebody. This means it can be mined at depth using excavators and trucks which, in turn, points to relatively low cash costs. Of the two metals, graphite is causing a bit of a stir at the moment as the mineral market in the electric vehicle (the anode) least likely to be disrupted.