Scoping Study Confirms Kasiya’s Potential as a Globally Significant and Strategic Source of Critical Rare Earths

Simple, capital-efficient circuit to recover highly sought-after critical rare earths with significant valuable Nd+Pr+Dy+Tb+Y content as a potential monazite by-product — enhancing the exceptional economics of the Kasiya Rutile-Graphite DFS

September 9, 2026 – Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX: SVMLF) (Sovereign or the Company) is pleased to announce the results of the Scoping Study (Scoping Study or Study) for recovery of a monazite concentrate with significantly elevated heavy rare earths content as a by-product from its Kasiya Project in Malawi. Concurrent with the Study, the Project has been renamed the Kasiya Critical Minerals Project (Kasiya or the Project), reflecting its combined rutile (titanium), graphite, and rare earth product suite.

CAUTIONARY STATEMENTS

The Scoping Study referred to in this announcement assesses the potential incremental recovery of monazite from mineral streams that potentially may be generated by the Kasiya Project as included in the April 2026 Definitive Feasibility Study (DFS). The Scoping Study is based on low-level technical and economic assessments, supported by project-specific metallurgical testwork and the existing DFS production schedule. Consistent with the preliminary nature of a Scoping Study, it is not sufficient to support the estimation of Ore Reserves for the additional products or to provide assurance of an economic development case for those products at this stage. Further evaluation and appropriate studies are required before the additional products can be assessed as to whether they can be estimated as Ore Reserves and be incorporated into a definitive development case. The Scoping Study has been prepared to an accuracy level of ±30%. The results should not be considered a profit forecast or production forecast.

The production profile for the production target and forecast financial information of this Study is supported by the existing April 2026 DFS production schedule (excluding years with >50% of plant feed in Inferred category of Mineral Resources). Approximately 99% of the scheduled throughput (production target) of this Scoping Study for the first twelve and half years of estimated production is in the Indicated Mineral Resource category with only 1% in the Inferred Mineral Resource category. For the life of mine of this Scoping Study, approximately 72% of life of mine production target is in the Indicated Mineral Resource category and 28% is in the Inferred Mineral Resource category. The Company has concluded that it has reasonable grounds for disclosing a production target which includes a modest amount of Inferred material and over the life of the mine the amount of Inferred Resources is not the determining factor in project viability. However, there is a low level of geological confidence associated with Inferred mineral resources and there is no certainty that further exploration work on the Kasiya deposit will result in the determination of additional Indicated Mineral Resources or that the production target (or financial forecasts) itself will be realised.

The Scoping Study is based on the material assumptions outlined elsewhere in this announcement. These include assumptions about the availability of funding. It also relies on Scoping Study-level assumptions regarding metallurgical recoveries, product yields and quality, costs, prices, payability and logistics. The assessment is incremental to, and integrated with, the underlying Kasiya DFS project and therefore assumes that the DFS project is funded, developed and operated broadly as scheduled (refer to announcement dated 16 April 2026). While the Company considers the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Scoping Study will be achieved. As a Scoping Study, the estimates and outcomes remain subject to the accuracy range, qualifications and risks disclosed in this announcement and to refinement through further technical and commercial work.

To achieve the range outcomes indicated in the Scoping Study, additional funding will likely be required. Investors should note that there is no certainty that Sovereign will be able to raise funding when needed. It is also possible that such funding may only be available on terms that dilute or otherwise affect the value of the Sovereign’s existing shares. It is also possible that Sovereign could pursue other ‘value realisation’ strategies such as sale, partial sale, or joint venture of the Project. If it does, this could materially reduce Sovereign’s proportionate ownership of the Project.

The Company has concluded it has a reasonable basis for providing the forward looking statements included in this announcement and believes that it has a reasonable basis to expect it will be able to fund the development of the Project. Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the Scoping Study.

POTENTIAL SCOPING STUDY OUTCOMES

SOVEREIGN TO POTENTIALLY DELIVER MONAZITE RARE EARTHS CONCENTRATE (REC) AS A BY-PRODUCT

Accuracy range above of ±30%

Managing Director and CEO, Mr Frank Eagar, commented:

“The Kasiya DFS already defines one of the world's largest natural rutile and flake graphite developments. This Study shows the same resource can potentially deliver rare earths and deliver them cheaply. For ~US$29 million of initial capital, using infrastructure the DFS has already designed and costed, we can potentially add ~US$722 million of pre-tax value at a ~151% rate of return, with payback in around 18 months.

Mineral-reliant industries in the United States are worth over US$4 trillion a year - more than an eighth of the entire U.S. economy - and rare earths sit at the centre of them. Last year the U.S. doubled its rare earth production to almost 9,000 tonnes - and still imported 67% of what it consumed. For heavy rare earths like dysprosium, terbium and yttrium, the U.S. produces none at commercial scale and remains completely dependent on imports. That is why Washington is putting stockpiles, price floors and offtake vehicles in place.

Kasiya can potentially provide the supply this effort requires: five of the seven rare earths under Chinese export controls, for at least 23 years, from a project already at the definitive feasibility stage. And because rutile and graphite carry the cost base, our rare earths do not need high rare earth prices or floor prices to be viable.

We will now take these results into our discussions with potential partners and progress the integration of rare earths into Kasiya's definitive development case.”

STRATEGIC IMPORTANCE TO THE WEST

WHAT REC DELIVERS FOR THE U.S. AND U.S.-ALLIED COMPLEX

HIGHLIGHTS

Kasiya – A Rare Earths Project With No Mine Of Its Own To Build

-          2,626tpa of monazite rare earth concentrate (REC) containing 1,485tpa of total rare earth oxides (TREO) at steady state run of mine

Commercially Significant Levels Of China’s Export-Controlled Rare Earths

-          Scarce dysprosium (Dy), terbium (Tb), yttrium (Y), samarium (Sm) and gadolinium (Gd) oxides in elevated levels – all under Chinese export controls since April 2025

-          Neodymium-praseodymium (NdPr), the primary input to Neodymium-Iron-Boron (NdFeB) permanent magnets, also present in levels similar to other Western rare earths mines

-          310tpa of NdPr and 36tpa DyTb — sufficient for the magnets in ~7 million humanoid robots over LOM; DyTb alone equivalent to ~18% of nameplate feed of America's first DyTb separation plant

-          193tpa Y — military radar and jet-engine thermal-barrier coatings; equivalent to ~35% of average annual U.S. consumption, which is 100% import-reliant

-          82tpa Sm + Gd — samarium used to steer Patriot, Tomahawk and AMRAAM missiles depleted to 2–3-year supply; gadolinium equivalent to 70% of the world's annual MRI supply. U.S. defence demand for both: classified

Recovered from mineral streams already generated by the DFS flowsheet

-          No additional mining, no additional front-end processing, and none of the development risk of a standalone rare earths project

-          Mining, processing, tailings, infrastructure, and environmental and social disciplines already assessed at DFS level with overview by Rio Tinto and Sovereign Technical Committee

operating margin provideS compelling economics

-          Base Case ~US$722M Pre-Tax NPV8 uplift to Kasiya from incremental capital to first production of ~US$29M with potential upside NPV8 of US$883M

-          Incremental Base Case Pre-Tax  IRR of ~151% and payback of approximately 1.5 years

-          ~90% operating margin with incremental site operating costs of ~US$0.90/kg REC

-          ~US$84M incremental steady state annual EBITDA lifts Kasiya profitability and cash flow generation

-          Pre-tax, unlevered free cash flow of ~US$1.8B over potential 23-year initial life of mine (LOM)

-          Total Integrated Kasiya Pre-Tax NPV of US$2.9Bn

Maiden monazite mineral resource estimate (MRE) COMPLETED

-          524.4Mt @ 0.0132% monazite by-product underpins the Scoping Study production profile

STRONG RESULTS PROVIDE Clear path forward

-          Variability testwork on TREO distribution within REC product with REC marketing and offtake discussions commencing immediately

-          PFS completion in 2027

SUMMARY OF STUDY RESULTS

TABLE 1: REC SCOPING STUDY SUMMARY

1. LOM in this Study differs from the 25-year DFS life of mine because Years 24 and 25 have been excluded, as they would otherwise be based solely on Inferred Resources (for which there is a low level of geological confidence), so no financial forecasts or production targets are estimated for those years and they have been excluded from the LOM for the Scoping Study. Steady state = years when run-of-mine is at nameplate capacity of 24Mtpa; all results on a 100% basis; ±30% accuracy.

2. Base Case represents Argus Media group (Argus) rare earths price forecasts with payability of 50%; Western Supply Case represents Argus rare earths price forecasts and payability of 60% representing value attributable to ex-China monazite concentrate supply.

TABLE 2: SIDE-BY-SIDE KASIYA RESULTS

The addition of the rare earth circuit leaves the Kasiya DFS physicals unchanged: a 25-year initial mine life, 24Mtpa ore throughput, 222ktpa of natural rutile and 275ktpa of natural flake graphite.

SOVEREIGN ADDS RARE EARTHS TO RUTILE (TITANIUM) AND GRAPHITE PRODUCT SUITE

Sovereign has completed this Scoping Study to assess the operational, commercial and economic viability of adding a third product stream to the Kasiya Project. The Study shows that ~2,626tpa of monazite REC can be recovered from the rutile tailings stream. Together with the results of the Kasiya DFS, which was completed with input from Rio Tinto, Sovereign is potentially positioned to be a multi-decade supplier of a critical minerals products suite essential to the U.S. and U.S.-allied defence and aerospace, AI infrastructure, robotics, energy and other vital industries.

KASIYA - ONE PROJECT TO FEED THE WEST'S CRITICAL SUPPLY COMPLEX

Figure 1: Kasiya Circuit Schematic and Product Suite

Figure 2: Kasiya’s life of mine production in end-use equivalents. Sources: see Appendix 4

MONAZITE BY-PRODUCT CONFIRMED WITH MAIDEN MINERAL RESOURCE ESTIMATE

Monazite mineralisation occurs within the same deeply weathered, near-surface residual heavy-mineral system that hosts the Kasiya rutile and graphite Mineral Resource as per the DFS.

To support a by-product MRE for monazite, Sovereign completed a comprehensive programme covering the April 2026 DFS mine plan: 3,250 magnetic heavy-mineral composites, representing 1,012 boreholes within the DFS pit areas, were submitted for XRF analysis, with selected composites also analysed for the full rare earth element suite by ICP to assess variations in rare earth composition across the deposit and through the weathering profile.

The maiden by-product MRE, constrained to the DFS open pits, is 69kt monazite contained in 524.4Mt at 0.0132% monazite and classified 74% Indicated and 26% Inferred. The grade reflects monazite's status as a by-product. Since the monazite MRE sits within pits the DFS has already designed, no additional mining is required to access it.

Figure 3: Monazite contained within the Kasiya 2026 MRE

PREMIUM RARE EARTHS PRODUCT CONTAINING GENUINELY RARE ELEMENTS

In January 2026, Sovereign announced that it had successfully recovered a monazite product containing high-value heavy rare earth elements (REE) alongside common light REEs from the tailings stream generated during rutile processing at its Lilongwe laboratory facilities in Malawi. The concentrate was recovered from material that would otherwise be discarded, i.e. the non-conductor tailings stream from electrostatic separation of a heavy mineral gravity concentrate of Kasiya ore. Independent preliminary chemical analysis of magnetic concentrates from processed resource drilling samples confirmed the favourable rare earth oxide distributions within the monazite concentrate.

Figure 4: TREO basket composition (Source: see Appendix 5; price data as per average REO prices during LOM)

NEAR-ZERO INCREMENTAL OPERATING COSTS

Kasiya's REC will be recovered from mineral streams the DFS flowsheet already produces. Upstream steps including free-dig mining, ore transport to the plant, the scrubber, wet concentration and electrostatic separation have been defined and costed in the DFS and accordingly attributed to rutile and graphite production. The only incremental processing is the added monazite concentrate circuit which involves spiral gravity separation and flotation treating the non-conductor stream from the Mineral Separation Plant, together with product packaging and storage. There is no additional mining, no early-stage processing and no change to the DFS mining method, wet concentration or graphite recovery strategy.

Incremental operating costs are accordingly low. The incremental site operating cost is ~US$0.90/kg REC at the mine gate. Including transport and port charges, the cost is ~US$1.39/kg REC free-on-board FOB Dar es Salaam. Including ocean freight and insurance, the total cost is ~US$3.68/kg REC delivered CIF Houston, Texas.  The Study deliberately costs Kasiya’s REC delivered into the United States. On that basis, the operating margin is approximately 90%. Due to its by-product nature, this cost structure holds across rare earth price cycles. Including all other regulatory fees, Sovereign can land REC in America for US$3.85/kg in any market.

Figure 5: Kasiya’s circuit to produce REC is added onto the DFS operation

PROFITABLE EVEN AT U.S. GOVERNMENT FLOOR PRICES

Since Sovereign’s REC may be a by-product of the titanium and graphite operation defined in the DFS, Kasiya REC supply does not depend on rare earth prices to remain in production. This is reflected in the Study's two main price cases: the Base Case (using Argus Media price forecasts) delivers the potential for an incremental pre-tax NPV₈ of US$722 million at a 151% IRR, and the Western Supply Case (reflecting higher demand for ex-China supply of monazite concentrate) US$883 million at 172%.

Figure 6: Kasiya pre-tax NPV and IRR in various market and geopolitical scenarios

A third case tests the bottom of the market as the U.S. Government itself has defined it. Since July 2025, guaranteed minimum prices have become a standard feature of U.S. rare earth supply arrangements:

-          a US$110/kg floor for NdPr established with MP Materials and repeated with Lynas; and

-          the first Western floor prices for heavy rare earths, at US$575/kg for Dy and US$2,050/kg for Tb

The U.S. Floor Price Case applies these floors, with 2025 average prices for yttrium, samarium and gadolinium which do not currently have floor prices but are deemed critical. Even in this scenario, the circuit generates US$183 million of incremental pre-tax NPV₈ and a 43% IRR. These floor prices arise under U.S. Government arrangements with third parties and are applied as a downside assumption only; Kasiya is not party to any such arrangement.

Figure 7: Effect of China’s heavy rare earths export controls on Tb and Dy prices in US$/kg (vs. floor price and long-term forecast prices per Study)

A SOLUTION TO CHINA EXPORT CONTROLS AND SUPPLY DOMINANCE

In April 2025, China introduced export controls over seven medium and heavy rare earths – including dysprosium, terbium, yttrium, samarium and gadolinium, each present in Kasiya's concentrate – citing their dual-use applications. Dysprosium, terbium and yttrium together comprise approximately 15% of Sovereign’s TREO basket. In October 2025, China added five more REEs – holmium, erbium, thulium, europium and ytterbium.

Figure 8: Geopolitical importance of Kasiya’s REC vs. current non-Chinese REE producers

(Source: Appendix 5)

China accounts for most global mined production of these elements and effectively all commercial separation capacity. The United States is 100% net import-reliant on yttrium, with nearly all supply derived from concentrates processed in China (Source: USGS Mineral Commodity Summaries, 2026). The U.S. defence industry is estimated to hold a two-to-three-year inventory of samarium with potential replenishment of munitions expended in the 2025 Iran conflict adding to demand.

FEEDSTOCK FOR RARE EARTH REFINING CAPACITY FUNDED BY THE U.S. AND ALLIES

The Western rare earth supply chain comprises four stages: primary mining and concentrate production; separation into individual rare earth oxides; conversion to metals and alloys; and magnet manufacturing. Western governments and industry are investing across all four. Availability of heavy rare earth feedstock is a key choke point determining whether the downstream links can operate at capacity.

Western primary production is dominated by light rare earth deposits, with only trace quantities of dysprosium, terbium and yttrium. New separation capacity is being financed, commissioned and constructed specifically to process heavy rare earths:

-          the United States (e.g. MP Materials Corp. with funding from the Department of War (DOW));

-          Australia (e.g. Iluka Resources Limited with funding from Export Finance Australia (EFA); Tronox Holdings plc with funding from Export-Import Bank of the United States (EXIM) and EFA); and

-          Malaysia (Lynas Rare Earths Limited with funding from the DOW)

This new capacity requires a qualified, scalable supply of heavy rare earth feed. Downstream, metal and alloy producers and magnet manufacturers depend on separated dysprosium and terbium for the high-temperature NdFeB magnets used in defence, aerospace, electric vehicle and robotics applications.

Kasiya’s REC product contains approximately 1,485tpa of TREO over an initial 23-year mine life and carries five of the seven rare earths placed under Chinese export controls in April 2025.

The REC is uncommitted, at a time when Western governments have established price floors, government-backed offtake vehicles and bilateral supply frameworks specifically to secure heavy rare earth feed from allied jurisdictions. Kasiya is positioned to supply that feed into Western separation capacity for the duration of its mine life.

Figure 9: Kasiya’s role in the Western rare earth supply chain

CRITICAL ELEMENTS FOR CRITICAL PLATFORMS

Production of heavy rare earths outside China remains negligible yet various critical platforms of the West depend on at least one rare earth Kasiya’s REC will contain.

This dependence occurs throughout defence, energy, technology and medical systems. NdFeB permanent magnets - built on NdPr, with dysprosium and terbium added wherever they must perform at high temperature - sit in the actuators, motors and generators of fighter aircraft, guided missiles, submarines, drones, electric vehicles and humanoid robots. Yttrium hardens jet engines and semiconductor plasma-etch chambers and enables military radar and solid-state lasers; samarium-cobalt magnets guide missiles; gadolinium serves naval propulsion, turbine coatings and the world's MRI machines. Publicly reported estimates indicate approximately 410kg of rare earth materials in each F-35-class airframe, approximately 4.2 tonnes in each Virginia-class submarine, and 1–4kg in each electric vehicle or humanoid robot.

Every platform shown in Figure 10 depends on at least one rare earth contained within Kasiya’s REC product.

Figure 10: Importance of Heavy Rare Earths to the West

NEXT STEPS

-          Variability testwork: confirm monazite recoveries and concentrate quality across the DFS mine schedule

-          Product qualification: REC samples from Sovereign's Lilongwe facilities to prospective customers for evaluation

-          Marketing: offtake discussions with Western processors and government procurement programmes

-          Pre-Feasibility Study: rare earths integrated into Kasiya's definitive development case; completion targeted 2027

-          Resource development: Assessment of whether there can be Inferred conversion and extension of the monazite MRE beyond the 25-year DFS pits

Enquiries

Frank Eagar, Managing Director & CEO

South Africa / Malawi

+27 21 140 3190

Sapan Ghai, CCO

London

+44 207 478 3900

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