Communicators

13 July 2020 – Sovereign Metals Limited (“the Company” or “Sovereign”) is pleased to report its highest-grade rutile drilling results achieved to date from Kasiya, the Company’s flagship, large-scale, high-grade rutile deposit in Malawi.

Extensional drilling results continue to grow the mineralised footprint toward the south-west and show increasing areas of high-grade rutile from surface. The first infill drilling results demonstrate continuity of high-grade rutile in the central zone and provide greater definition of mineralisation as the Company moves toward a maiden Mineral Resource Estimate.

 HIGHLIGHTS

-         Phase 5 drilling completed with results including the highest-grade rutile ever drilled at the flagship Kasiya deposit extending known mineralisation to the south west.

-         The strike length of high-grade mineralisation has increased by about 1km to a total of ~6.5km with widths of the mineralised envelope ranging up to ~3km.

-         Mineralisation continues to remain open along strike to the north, south west, south east and laterally to the east.

-         Key Phase 5 extensional drilling results from surface along the south west area include;

-          10m @ 1.53% rutile inc. 6m @ 1.77% rutile inc. 3m @ 2.31% rutile

-          10m @ 1.01% rutile inc. 5m @ 1.05% rutile

-            8m @ 1.01% rutile inc. 4m @ 1.50% rutile

-         Infill drilling in the central zone of Kasiya also continues to produce high-grade results from surface and provides further definition on the mineralised envelope. Key infill results include;

-          12m @ 1.26% rutile inc. 8m @ 1.50% rutile

-          11m @ 1.01% rutile inc. 4m @ 1.32% rutile

-          11m @ 1.13% rutile inc. 2m @ 1.76% rutile

-          11m @ 1.07% rutile inc. 5m @ 1.34% rutile

-            8m @ 1.05% rutile inc. 4m @ 1.27% rutile

-          11m @ 0.98% rutile inc. 4m @ 1.61% rutile

-            7m @ 1.16% rutile inc. 3m @ 1.56% rutile

-          11m @ 0.98% rutile inc. 4m @ 1.54% rutile

-            7m @ 1.28% rutile inc. 3m @ 1.37% rutile

Sovereign’s Managing Director Dr Julian Stephens commented:

“We have intersected our highest rutile grades to date at Kasiya in new extensional drilling to the south west. Additionally, our first infill holes at the central zone have also returned high-grades and thick intercepts, as expected. Kasiya is continuing to expand and the Company is looking forward to releasing the maiden JORC resource estimate toward the end of the quarter.”

Figure 1. Kasiya drill plan showing extents of rutile mineralisation with the new extended areas defined by the Phase 5 extensional and infill drill-holes. Pending holes are also shown.

KASIYA EXTENSIONAL & INFILL DRILL PROGRAM – PHASE 5

Phase 5 drilling comprised a further 30 (17 extensional and 13 infill) hand-auger holes for 271m total. This brings the total number of holes reported to 109 (Phases 1 through 5 combined).

Phase 5 drilling shows the highest-grade rutile results received from Kasiya to date extending the area of the deposit to the south west. These results show the strike length of high-grade mineralisation has increased by about 1km to a total ~6.5km with widths of the mineralised envelope ranging up to ~3km. Mineralisation continues to remain open along strike to the north, south-west, south-east and open laterally to the east.

The mineralisation style at Kasiya can be described as eluvial, or otherwise known as a residual placer. This style of mineralisation occurs as flat “blankets” draped across expansive, elevated plateaus that have not experienced any significant erosion. In this way, the mineralisation style has many similarities to bauxite (aluminium ore) having been formed by the same general weathering and volume reduction processes to leave behind the valuable, physically and chemically immobile minerals. The significant difference being that the residual rutile placer mineralisation at Kasiya is naturally unconsolidated, liberated and free-dig, unlike bauxite which generally requires blasting.

The current geological interpretation is that high-grade, free-dig rutile mineralisation is likely to continue vertically to the base of saprolite in the areas where holes terminated in mineralisation. The depth of mineralised saprolite can be reasonably assumed from existing geological knowledge to be around 25m from surface. Deeper drilling techniques such as air-core, diamond-core or sonic will need to be employed to confirm this at Kasiya.

Key Phase 5 extensional drilling results from surface along in the south west area include;

-          10m @ 1.53% rutile inc. 6m @ 1.77% rutile inc. 3m @ 2.31% rutile

-          10m @ 1.01% rutile inc. 5m @ 1.05% rutile

-            8m @ 1.01% rutile inc. 4m @ 1.50% rutile

Phase 5 infill drilling in the central zone continues to produce high-grade results from surface as expected and provides further definition on the mineralised envelope. Key infill results include;

-          12m @ 1.26% rutile inc. 8m @ 1.50% rutile

-          11m @ 1.01% rutile inc. 4m @ 1.32% rutile

-          11m @ 1.13% rutile inc. 2m @ 1.76% rutile

-          11m @ 1.07% rutile inc. 5m @ 1.34% rutile

-            8m @ 1.05% rutile inc. 4m @ 1.27% rutile

-          11m @ 0.98% rutile inc. 4m @ 1.61% rutile

-            7m @ 1.16% rutile inc. 3m @ 1.56% rutile

-          11m @ 0.98% rutile inc. 4m @ 1.54% rutile

-            7m @ 1.28% rutile inc. 3m @ 1.37% rutile

Figure 2. Cross section 8479200 showing the broad, high-grade mineralisation at surface and a number of holes terminating in high-grade mineralisation at depth.

A NEW RUTILE PROVINCE

Additional to the flagship Kasiya rutile deposit, numerous other prospects and targets have been identified by the Company. Sovereign believes it has now discovered a potentially globally significant, strategic rutile province across its large Malawi ground holding.

The Malawi Rutile Province features two confirmed, discrete rutile mineralisation styles hosted respectively in sand and saprolite (soft, friable weathered material) which are both amenable to conventional processing. Rutile mineralisation identified to date has generally not been spatially constrained by drilling at either of the two main prospects, Kasiya (saprolite) and the Bua Channel (sand). The Company is targeting large resources that could support long-life, large-scale rutile production.

Figure 3. Map of the broader Kasiya and Bua Channel area showing the multiple rutile deposits, prospects and targets and proximity to the Nacala Rail Corridor.

COVID-19 UPDATE

Sovereign is maintaining operations in Malawi on a reduced and safe basis. The Company continues to actively evaluate the situation for all risks to employees, communities and general operational safety and will make any required adjustments as the situation evolves, or as required by the Government of Malawi.

Link to the original release: https://www.asx.com.au/asxpdf/20200713/pdf/44kgm0g07qzwh1.pdf

FORWARD PLAN

The ongoing rutile work programs for Kasiya and the Company’s other prospects within the Malawi Rutile Province include;

-         Continued analyses and reporting of drill samples over the next four to six weeks ahead of the maiden Mineral Resource Estimate for Kasiya which is on target for late Q3 2020;

-         Step-out and regional drilling at Kasiya and the broader surrounding area to identify extensions and satellite mineralised zones;

-         Bulk-scale metallurgical test-work is well underway on a 1 tonne sample from Kasiya;

-         Push-tube drilling at Kasiya to twin hand-auger holes and to obtain cored samples for specific gravity (SG) determination and initial geotechnical analysis;

-         Mining and tailings studies are ongoing which will feed into a future Scoping Study; and

-         A regional desktop targeting exercise using all available knowledge and datasets is continuing with the goal of discovering more high-grade, Kasiya-like rutile mineralisation further afield.

Figure 4. Drill plan showing completed Phases 1-5 of reported and pending shallow hand-auger holes at Kasiya.

DRILL RESULTS

Shallow drilling results from Phase 5 at Kasiya are shown below in Table 1.

Competent Person’s Statement

The information in this report that relates to Exploration Results are based on information compiled by Dr Julian Stephens, a Competent Person who is a member of the Australian Institute of Geoscientists (AIG). Dr Stephens is the Managing Director of Sovereign Metals Limited and a holder of ordinary shares and unlisted options in Sovereign Metals Limited. Dr Stephens 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'. Dr Stephens 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, Julian Stephens.

Link to the original release: https://www.asx.com.au/asxpdf/20200713/pdf/44kgm0g07qzwh1.pdf

APPENDIX 1: DRILL HOLE DATA

* All holes were vertical.