- Sovereign Metals (SVM) inks a $40.4 million investment from Rio Tinto to advance its Kasiya Rutile-Graphite project in Malawi and to commence a DFS
- Rio receives a 15 per cent shareholding in SVR and will supply technical and marketing advice, with a primary focus on spherical purified graphite for the lithium battery market
- SVR issues 83 million new shares to Rio for 48.6 cents apiece, representing a 10 per cent premium to the 45-day volume weighted average price on the ASX
- The subscription also involves options to acquire an additional 34.5 million shares in
SVR within 12 months of the initial subscription, resulting in a 19.99 per cent stake in Rio - SVR shares last traded at 49.5 cents
Sovereign Metals (SVM) has inked a $40.4 million investment from Rio Tinto (RIO) to advance its Kasiya Rutile-Graphite project in Malawi.
Rio will receive a 15 per cent shareholding in SVR and will supply technical and marketing advice for the company’s graphite co-product, with a primary focus on spherical purified graphite for the lithium-ion battery anode market.
The company intends to issue more than 83 million new shares to Rio for 48.6 cents apiece, representing a 10 per cent premium to the 45-day volume weighted average price on the ASX.
The subscription also involves options to acquire an additional 34.5 million shares in
SVR within 12 months of the initial subscription, which could result in Rio’s shareholding increasing to 19.99 per cent.
SVR reports the investment represents a significant step towards unlocking a new
supply of low-CO2-footprint natural rutile and flake graphite at Kasiya.
“This landmark agreement with Rio Tinto, one of the world’s largest and most accomplished global mining companies is confirmation of Kasiya’s place as one of the most significant critical mineral discoveries in recent times,” SVR Chairman Ben Stoikovich said.
“The experience and expertise that Rio Tinto brings will truly set Kasiya apart as a potentially globally significant supply of two critical minerals and take us all a step closer to supply chain decarbonisation and achieving net zero.”
As part of the agreement, Rio has the option to become the operator of the project, inking the right to receive 40 per cent of marketing rights.
Rio also has the ability to reject any future capital raisings that are not pro rata entitlement offers if it receives up to a 19.99 per cent shareholding.
SVR plans to use the proceeds from Rio’s strategic investment to fund a Definitive Feasibility Study (DFS) focused on developing a world-class, low-CO2-footprint mine.
SVR shares last traded at 49.5 cents.