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Sovereign Metals (ASX:SVM) has signed a non-binding memorandum of understanding for offtake from the Kasiya rutile-graphite project in Malawi. The proposed offtake deal is with Traxys, which was just appointed to procure critical minerals for the U.S. government’s bold new “Project Vault” supply chain strategy.
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Sovereign’s managing director, Frank Eagar, today explained the MoU is based on the supply of 40,000 tonnes per annum of graphite concentrate for Kasiya stage one and up to 80K tonnes per annum thereafter.
“Traxys is not only one of the world’s foremost physical commodity traders with annual turnover exceeding US$10 billion, but has just this month been selected as one of only three trading houses to procure critical minerals for the U.S. Government’s landmark US$12 billion Project Vault – the newly established US strategic critical minerals reserve,” Mr Eager told shareholders on Tuesday.
Graphite has been designated as a U.S. critical mineral with the government aiming reduce dependence on Chinese-dominated supply chains.
“Traxys’s direct involvement in Project Vault, combined with its extensive network of industrial customers globally, positions Kasiya’s potential graphite production to serve both strategic government procurement programmes and established commercial markets,” Sovereign’s MD continued.
“This MOU demonstrates growing confidence from major global commodity players in Kasiya’s ability to potentially deliver critical minerals at scale from a globally strategic, genuine tier one project.”
The parties are now moving to the signing of a binding agreement under which Traxys would sell Sovereign’s graphite production on the company’s behalf.
In late January, Sovereign reported a significant rare earth value add had been made at Kasiya. The company successfully recovered a monazite product containing high-value REE from the tailings stream generated in rutile processing. The concentrate was recovered from material that would otherwise be discarded.
Chemical analysis of magnetic concentrates from processed resource drilling samples confirmed the favourable rare earth oxide distributions produced from the monazite concentrate, Sovereign flagged.
SVM is up +1.44% today, to 70.5c. Market cap $449.6M.
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