Rio Tinto Increases Investment in Sovereign Metals

Sovereign Metals Limited (ASX: SVM; AIM: SVML) announced that Rio Tinto Mining and Exploration Limited (Rio Tinto) has exercised all of its share options, thereby increasing its ownership stake in Sovereign to 19.76%. This strategic move by Rio Tinto underscores its confidence in Sovereign and its commitment to furthering their partnership in the mining and exploration sectors. The increased shareholding positions Sovereign favorably for future growth and development initiatives, leveraging Rio Tinto's extensive expertise and resources in the global mining industry.

Rio Tinto has utilized 34,549,598 share options to purchase an equivalent number of newly issued fully paid ordinary shares (Shares) in Sovereign at A$0.535 per Share, generating proceeds totaling A$18,484,035.

The additional funds secured from Rio Tinto's strategic investment will be pivotal in advancing Sovereign's Tier 1 Kasiya Rutile-Graphite Project in Malawi. Specifically, these funds will support ongoing efforts to optimize the project, aiming to establish a world-class mining operation capable of meeting the critical mineral demands of industries including titanium pigment, titanium metal, and lithium-ion batteries. This optimization study focuses on enhancing operational efficiency and sustainability, ensuring that Kasiya not only meets but exceeds industry standards. Furthermore, Rio Tinto's continued involvement underlines their commitment to providing technical and marketing support, reinforcing the project's potential to become a cornerstone in global mineral supply chains. The funds from the option exercise are anticipated to be received by 5 July 2024.

Ben Stoikovich, Chairman of Sovereign, expressed confidence in Rio Tinto's additional investment in Sovereign, emphasizing that it underscores Kasiya's status as a leading global critical minerals project. He highlighted Rio Tinto's extensive expertise and stature as one of the largest and most successful mining companies globally, stating that this positions Kasiya favorably to potentially lead in producing low-CO2-footprint natural rutile and graphite. Stoikovich's comments underscored the strategic alignment between Sovereign and Rio Tinto, aimed at advancing sustainable and innovative solutions within the minerals sector.

Frank Eagar, Managing Director of Sovereign, highlighted the substantial advancements achieved in collaboration with Rio Tinto throughout the year, particularly with the successful launch of the pilot phase mining at Kasiya in May. He expressed enthusiasm about Rio Tinto's additional investment in Sovereign, noting that it marks a significant milestone in unlocking a substantial new supply of low-CO2-footprint natural rutile and flake graphite. Eagar's comments underscored the strategic partnership between Sovereign and Rio Tinto, aimed at pioneering sustainable mining practices and contributing to the global supply of critical minerals essential for various industries.