Sovereign Metals (ASX:SVM) said a scoping study for recovery of a monazite concentrate as a by-product from its Kasiya Project in Malawi has returned a base case pre-tax net present value (NPV) uplift of about $722 million, according to a Wednesday Australian bourse filing.
The study showed an incremental capital to first production of about $29 million and potential upside NPV of $883 million, the filing added.
The company said the study targets steady-state production of 2,626 tonnes per year of monazite rare earth concentrate containing 1,485 tonnes per year of total rare earth oxides, with an incremental base case pre-tax internal rate of return of about 151% and payback of about 1.5 years.
The study also showed a maiden monazite mineral resource estimate of 524.4 million tonnes at 0.01% monazite, with life-of-mine revenue of $2.1 billion over an initial 23-year mine life and steady-state incremental earnings before interest, taxes, depreciation and amortization of $48 million, the filing added.
The company's shares rose 2% in recent Wednesday trade.