Mining giant Rio Tinto Mining and Exploration Ltd (ASX:RIO) has increased its shareholding in Sovereign Metals Ltd (ASX:SVM) by 19.76 percent, reflecting its particular interest in supporting the latter’s Kasiya Rutile-Graphite Project in Malawi.
Rio Tinto informed Sovereign that it had exercised 34,549,598 share options to achieve the increase, acquiring the same number of new fully paid ordinary shares priced at A$0.535 each for a total of A$18,484,035.
The funds will be used by Sovereign to advance the Kasiya project, with a particular focus on its current optimisation study, which is seeking the development of a world-class mine to supply critical minerals to the titanium pigment, titanium metal and lithium-ion battery industries.
The two companies have already signed an Investment Agreement, through which Rio Tinto will provide assistance and advice on technical and marketing aspects of Kasiya, which holds a mineral resource estimate (MRE) of 1.8 billion tonnes at 1.01 percent rutile for an overall 18 million tonnes of contained natural rutile.
Sovereign’s Chairman, Ben Stoikovich said the increased investment reflected Rio’s acknowledgement of Kasiya’s worth.
“Rio Tinto’s further investment in Sovereign reaffirms Kasiya’s position as one of the most significant critical minerals projects globally,” he said.
“With Rio Tinto’s wealth of experience as one of the world’s largest and most accomplished global mining companies, Kasiya is well positioned to potentially become a market leader in low-CO2-footprint natural rutile and graphite.”
Sovereign has been trading at 66.5 cents.