Key infrastructure boosts Sovereign Malawi rutile play

Multi-commodity developer, Sovereign Metals, could significantly lower capital and operating costs for its projects located in Malawi by accessing a newly upgraded rail network corridor to a deep-water port in Nacala, Mozambique, about 750km to the east.

The company is developing its exciting rutile and graphite projects within a huge land-holding in Malawi and access to the Nacala Logistics Corridor, or “NLC”, opens up export opportunities for the sought-after mineral commodities.

Sovereign has an existing memorandum of understanding in place with Central East African Railways for rail freight, port access and port handling services for concentrates from its Malingunde graphite project in Malawi, with a binding agreement currently in the works.

And why not, with the total containerised freight capacity of the NLC at about 4 million tonnes per annum and only 15% of this volume currently being utilised at Nacala port.

The company now has one eye on potentially moving its newly defined Wofiira rutile prospect ores along the same corridor for export, if the project economics ultimately stack up.

Sovereign is presently completing a definitive feasibility study on its Malingunde graphite deposit but is also actively assessing the potential for commercial rutile operations in the same region, which are hosted in the same soft, free-diggable, clayey saprolite materials.

The company is yet to quantify the mineral resources of its titanium dioxide, or “rutile”, mineralisation in Malawi, but recent metallurgical test work demonstrated that a high-quality concentrate could be recovered from the Wofiira prospect ores.

Last November, a pre-feasibility study for Malingunde delivered a robust, low-cost, high margin, coarse graphite flake project from a deposit that contains a defined ore reserve of 9.5 million tonnes grading 9.5% total graphitic carbon.

Discussing the potential access to the NLC, Sovereign Managing Director Dr Julian Stephens said: “The exceptional established infrastructure in Malawi (will) potentially result in significantly reduced up-front capital and operating costs and also provides additional operational and development advantages.”

“The … geographic position of Sovereign’s large ground holding allows the company to fully utilise this infrastructure. Having a cost-effective solution to be able to export products to global markets presents an excellent opportunity to truly unlock the rutile potential in Malawi.”

Prior studies by the company and recent quotes from NLC logistics operators outline an all-in transportation cost of less than USD$66 per tonne from the mine-gate in Malawi to freight-on-board at Nacala.

Sovereign added that access to the NLC transport corridor would have a materially positive impact on its capital costs for Malawi project developments.

Importantly, the NLC railway line includes a branch northward to Malawi’s capital Lilongwe and fortuitously passes right through the company’s leases.

Sovereign discovered large areas of the rutile mineralisation from re-assaying of historical auger drill holes in January and June’s metallurgical test results showed that the material is a potentially premium, high-value product, with low levels of penalty elements.

A rutile product containing 96% titanium dioxide was produced using conventional mineral sands processing methods at a recovered rutile grade of 1.16%.

For comparison, Iluka Resources controls the world’s largest and currently highest-grade primary rutile mine in Sierra Leone - in West Africa – that contains 714 million tonnes grading 1.1% rutile.

The preliminary results from Wofiira potentially show that a very high-quality rutile product, meeting or exceeding typical market specifications can be processed from Sovereign’s Malawi ores.

Management stated that initial indications are that the company’s current 4,253 square kilometre tenement holdings in Malawi, may contain a significant rutile province.

Natural rutile is a highly sought after, high-grade titanium feed source, which currently sells for about USD$1,100 per tonne, with longer-term pricing likely to be higher and closer to USD$1,250 per tonne.

The major uses for rutile are in the manufacture of refractory ceramics, as a pigment and for the production of titanium metal.

Finely powdered rutile is a brilliant white pigment and utilised in paints, plastics, paper, foods and other applications that call for a bright white colour.

Sovereign has identified extensive rutile mineralisation straight from the surface at Wofiira.

With two high sought-after mineral commodities within the confines of its extensive tenement package in Malawi and a potential low-cost capital solution to export its products from the port of Nacala, a cashed-up Sovereign appears to be making all the right moves in Africa.