Sovereign Metals (SVM) H2 2024 earnings summary

Executive summary

• Focused on developing the Kasiya rutile-graphite project in Malawi, the world's largest rutile deposit and second largest flake graphite deposit, with a 1.8Bt resource and 538Mt maiden Ore Reserve declared.

• Rio Tinto invested ~$60M since July 2023, becoming a 19.9% strategic shareholder, supporting project advancement and strengthening financial position.

• Pilot mining and land rehabilitation program completed dry mining trial, confirming efficient mining with standard equipment and low carbon footprint.

• Upgraded to OTCQX Market in July 2024, expanding access to U.S. investors.

• Strong ESG initiatives, including conservation farming and community development partnerships in Malawi.

Financial highlights

• Net loss for FY24 was $18.6M, compared to $5.8M in FY23, mainly due to increased exploration and evaluation expenses and share-based payments.

• Cash and cash equivalents at 30 June 2024 were $31.6M, up from $5.6M at 30 June 2023, with no debt.

• Net assets increased to $34.4M at 30 June 2024 from $9.7M a year earlier, driven by Rio Tinto's investment.

• Interest income rose to $1.8M (FY23: $0.3M); exploration and evaluation expenses increased to $14.8M (FY23: $10.6M).

• No dividends declared or paid for FY24.

Outlook and guidance

• Priorities include completing the Kasiya Pilot Phase and PFS Optimisation Study, infill drilling to upgrade resources, and advancing offtake discussions for graphite.

• Ongoing testwork and pilot-scale production to support graphite qualification for battery anode materials.

• Further capital will be required for development; strong cash position post-Rio Tinto investment supports near-term activities.