Sovereign Metals (ASX:SVM) said a Definitive Feasibility Study (DFS) for its Kasiya rutile-graphite project in Malawi confirms steady-state annual earnings before interest, tax, depreciation, and amortization of $476 million and free cash flow of $452 million, according to a Thursday Australian bourse filing.
The company said the study found total revenue of $16.2 billion over an initial 25-year mine life, with a pre-tax net present value (NPV) of $2.2 billion, an NPV to capital expenditure ratio of 3.0 times, and capital expenditure to first production of $727 million.
Sovereign Metals said operating costs of $450 per tonne of product on a free-on-board basis at Nacala underpin margin resilience across commodity cycles.
The company said monazite concentrate recovered from the rutile processing circuit contains elevated levels of the heavy rare earths dysprosium, terbium, and yttrium, representing a potential third revenue stream at minimal incremental cost, with all three elements currently subject to Chinese export restrictions.
Sovereign Metals said the heavy rare earth potential of the project was not included in the DFS, with evaluation currently underway.