KASIYA GRAPHITE SHOWS EXCELLENT SUITABILITY FOR USE IN LITHIUM ION BATTERIES

·    Downstream testwork on Kasiya’s graphite co-product demonstrated it to have superior qualities showing excellent suitability for use in lithium-ion batteries

·       Key outcomes were:

o  Near perfect crystallinity – an indicator of battery anode performance

o  Above benchmark >99.95% carbon purity achieved

o  No critical impurities or deleterious elements commonly found in other natural graphite sources

·       Further testwork underway to optimise concentrate grade and confirm optimal purification process

·      In 2022, the lithium-ion battery anode market became the biggest end-market for natural flake graphite. Demand for anodes grew by 46% in 2022 compared to only 14% growth in natural flake graphite supply

Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) is pleased to report recent outcomes of downstream testwork on Kasiya’s graphite co-product.

The Kasiya Project (Kasiya) has the potential to be the one of the world’s lowest cost and lowest global warming potential (GWP) sources of natural graphite. The Kasiya project is the largest natural rutile deposit and one of the largest flake graphite deposits in the world. Both minerals are critical to several of the world’s economies and decarbonisation targets.

Kasiya has a geological benefit with both natural graphite and rutile hosted in soft, friable saprolite material at surface that can be mined, beneficiated, and purified with a considerably lower carbon footprint than hard-rock operations or synthetic graphite production.

The results of the recent initial downstream testwork conducted by an independent German industrial mineral specialist demonstrated superior qualities and excellent suitability as feedstock for use in lithium-ion batteries.

In 2022, the lithium-ion battery anode market became the biggest end-market for natural flake graphite. Greater capacity batteries, such as those required for electric vehicles, are expected to drive significant demand for graphite over the coming years.

Sovereign’s Managing Director Dr Julian Stephens commented:

“The latest graphite downstream testwork confirms the superior crystallinity and purity of Kasiya’s natural graphite. Kasiya will potentially be one of the lowest cost flake graphite projects in the world and is also estimated to have one of the lowest global warming potentials of any current and future graphite projects. Producers and end users of lithium-ion batteries are already closely monitoring the carbon footprint associated with the raw materials that feed into battery technology.

“These results bolster Kasiya’s competitive advantage, indicating that not only does the project have the potential to be a dominant rutile supplier, but also a dominant supplier of graphite suitable for the lithium-ion battery industry. Kasiya’s PFS is progressing well with the Company looking forward to releasing the outcomes of the study in coming months.”

Classification: 2.2 This announcement contains Inside Information

ENQUIRIES

Downstream testwork was conducted by an independent German industrial mineral specialist across crystallinity and purity – two key attributes of natural graphite used for anode feedstock in lithium-ion battery anodes.

Crystallinity

Crystallinity is an indicator of electrical conductivity which affects battery performance. This result is critical to the usability in the lithium-ion battery sector as the higher the crystallinity i.e. the more “perfect” the flakes/crystals, the better the electrical conductivity and battery performance.

The testwork shows that Kasiya graphite is classed as near perfect, fully ordered graphite, confirming it should possess the best electrical conductivity attributes.

Purity

Purity denotes the product’s total carbon content and the amount of residual key impurities including sulphur and iron which are important in anodes. Purification is achieved via either leaching or heat treatment.

Testwork achieved >99.95% purity which is above the benchmark required for graphite in lithium-ion batteries. The results also demonstrated very low sulphur content in this material due to the graphite being hosted in soft saprolite – a key differential from graphite purified from hard-rock deposits.

Graphitic carbon exhibits a large range of structures and chemical compositions, from amorphous-like compounds through to crystalline graphite in high-grade metamorphic belts. Broadly, these reflect the geological setting and conditions under which the graphite formed. Flake graphite is associated mostly with high grade metamorphic rocks where original organic carbon deposited within sediment was transformed into graphite by pressures typically exceeding 5 kbar and temperatures above 650 °C.

The widely varying structure and chemistry of graphitic carbon controls the remarkably diverse range in its physical properties. Natural graphite is a key component in high-performance refractory linings for steel manufacture, high-charge capacity anodes for lithium-ion batteries, and a feedstock for graphene.

Crystallinity

The original paragneiss host rocks at Kasiya have experienced high grade metamorphism having been heated to above 650°C and subject to very high pressures above 13kbar. The rocks experienced very slow cooling which has resulted in growth of coarsely crystalline graphite and rutile.

In graphite, the degree of crystallinity is exhibited by the interlayer distance between individual graphite layers – denoted d002 when measured in Raman spectroscopy. Values of d002 of near 3.35 Å are considered fully ordered or highly crystalline graphite. Kasiya graphite has a measured d002 of 3.348, classifying it as near perfect, fully ordered graphite.

Fully ordered graphite, mostly free of natural defects, such as that from Kasiya has the best electrical conductivity attributes of all natural graphite types and thus shows excellent suitability as feedstock for lithium-ion battery anodes. The other obvious and more easily observed attribute of fully ordered graphite is the shape, where hexagonal flakes indicate perfect or near-perfect crystallinity – another attribute of the Kasiya graphite products.

Purity

Purification of graphite concentrates grading 95-98% C^(t) can be performed by either heat treatment or reagent leaching. It is desirable to have very low levels of critical impurities including sulphur and metal ions – specifically iron in the final product which should also grade +99.95% C^(t). Heat treatment purification tests on Kasiya graphite have been successful in achieving high levels of purification up to “four 9s” i.e. 99.995%+ purity, with very low levels of critical impurities.

For purifying via reagent leaching, hydrofluoric acid (HF) has traditionally been used as a key reagent. Due to HF’s high reactivity and dangerous nature current leaching test work in the battery anode sector is focusing on reagent regimes containing no HF. Sovereign has trialled some of these regimes and had success with caustic bake and sulphuric acid leach stages achieving 99.92% C^(t) – very close to the 99.95% required for commercial products. Further optimisation of this reagent regime is planned in order to achieve commercial purity for lithium-ion battery anode feedstock.

The GWP of producing one tonne of flake graphite concentrate at Kasiya estimated to be 0.2 tonnes of CO2 equivalent emissions (CO2e). Kasiya has the lowest GWP compared with currently known and planned future natural graphite projects:

·       Up to 60% lower than currently reported GWP of graphite producers and developers, including suppliers to Tesla Inc.

·       3x less polluting than proposed Tanzanian natural graphite production from hard rock sources.

·       6x less polluting than current Chinese natural graphite production which accounts for up to 80% of current global graphite supply.

The cradle-to-gate life cycle assessment (LCA) was carried out by Minviro comparing current natural graphite production from China which produces almost 80% of the world’s natural graphite, and proposed near-term production from Tanzania, which offers a regional benchmark against Kasiya in Malawi. The LCA study followed ISO 14067:2008 guidelines and was critically reviewed by a panel of three independent experts.

A number of graphite producers and explorers/developers have conducted their own LCAs, with conclusions of a select number being made public. Kasiya’s graphite product currently has the lowest GWP of publicly reported current and future potential graphite production.

The benchmarking study found that the total GWP of 0.2 tonnes CO₂e per tonne of natural flake graphite concentrate produced at Kasiya is significantly lower than the total GWP per tonne produced in Heilongjiang Province, China (1.2 tonnes CO₂e) and the total GWP per tonne produced in Tanzania (0.6 tonnes CO₂e).

Why is Kasiya’s Graphite able to achieve such a low carbon-footprint?

The GWP for Kasiya’s flake graphite product was based on the ESS. The significantly lower GWP for Kasiya graphite is due to the fact that it is hosted in soft, friable saprolite material which will be mined via hydro methods (high pressure water monitors) powered by predominantly renewable energy sources – hydro power from the Malawi grid and on-site solar power. This is opposed to the production in Heilongjiang Province, China where hard-rock ore requires drilling, blasting, excavation, trucking, crushing, and grinding – overall high CO₂e activities.

Sovereign has further testwork underway as the Company continues to qualify the graphite product for possible markets. Key activities include:

·           Optimisation of process flowsheet to increase the concentrate grade

·          Analysis of purification process to optimise parameters focusing on achieving the most sustainable outcome

·           Micronisation, spheronisation and coating testwork

·           Bulk sample generation program

Competent Persons’ Statements

The information in this report that relates to Exploration Results is based on information compiled by Mr Samuel Moyle, a Competent Person who is a member of The Australasian Institute of Mining and Metallurgy (AusIMM). Mr Moyle is the Exploration Manager of Sovereign Metals Limited and a holder of ordinary shares and unlisted performance rights in Sovereign Metals Limited. Mr Moyle has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Moyle consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Metallurgical Results is based on information compiled by Mr Paul Marcos, a Competent Person who is a member of the AusIMM. Mr Marcos is an employee of Sovereign Metals Limited and a holder of ordinary shares and unlisted performance rights in Sovereign Metals Limited. Mr Marcos has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Marcos consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Forward Looking Statement

This release may include forward-looking statements, which may be identified by words such as “expects”, “anticipates”, “believes”, “projects”, “plans”, and similar expressions. These forward-looking statements are based on Sovereign’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Sovereign, which could cause actual results to differ materially from such statements. There can be no assurance that forward-looking statements will prove to be correct. Sovereign makes no undertaking to subsequently update or revise the forward-looking statements made in this release, to reflect the circumstances or events after the date of that release.

This ASX Announcement has been approved and authorised for release by the Company’s Managing Director, Dr Julian Stephens.

To view this announcement in full, including all illustrations and figures, please refer to http://www.investi.com.au/api/announcements/svm/fe3830af-843.pdf.

Kasiya Graphite for use in Lithium ion Batteries – 07:00:07 08 Jun 2023 – SVML News article | London Stock Exchange