Sovereign Metals identifies heavy rare earths across Kasiya pits, unlocking potential third revenue stream

Sovereign Metals Ltd (ASX:SVM, OTCQX:SVMLF, AIM:SVML, FRA:SVM) has confirmed the presence of monazite-hosted heavy rare earth elements across several planned mining pits at its Kasiya Rutile-Graphite Project in Malawi, opening the door to a third revenue stream from material that would otherwise be discarded as tailings.

Metallurgical test work recovered monazite concentrates containing dysprosium (Dy), terbium (Tb) and yttrium from four pits within the Kasiya definitive feasibility study (DFS) mine plan, including areas scheduled for first-year production, the company reported.

The latest results build on earlier rare earth findings released in January, and come just weeks after Sovereign completed a DFS for Kasiya that outlined a pre-tax net present value of US$2.2 billion, positioning the project as a potential major global supplier of natural rutile and graphite.

Sovereign noted that the average ratios of dysprosium-terbium and yttrium oxide within the project's total rare earth oxide (TREO) basket were roughly seven times higher than those reported by the world's five largest rare earth producers. Across the four pits tested — Babbler, Kingfisher, Sparrow and Mousebird — the project averaged 2.5% DyTb and 11.8% yttrium, compared with averages of 0.4% and 1.7% respectively for the top five global producers.

Summary results.

Heavy rare earth concentrations were strongest near surface, with material from the upper 0–6 metres returning dysprosium-terbium ratios of up to 3.1% and yttrium ratios as high as 17.2% within the TREO basket, the company said.

“These results confirm that the monazite-hosted rare earth content first reported in January 2026 is present in pits scheduled for the early years of production at Kasiya,” said Managing Director and CEO Frank Eagar. “The monazite concentrate contains all four magnetic rare earth elements — neodymium, praseodymium, dysprosium and terbium — plus highly critical yttrium.”

Eagar added that the minerals appear recoverable using the project's existing DFS flowsheet, with further work underway to assess the potential economic upside.

High-level DFS process flowsheet and additional potential steps required for a monazite by-product.

The announcement lands amid intensifying Western efforts to secure non-Chinese heavy rare earth supply, particularly for dysprosium, terbium and yttrium — elements critical in defence systems, permanent magnets, aerospace technologies and semiconductor manufacturing. Sovereign highlighted recent testimony from U.S. Assistant Secretary of War for Industrial Base Policy Michael Cadenazzi Jr., who described dependence on China for heavy rare earths as “a clear and present danger to our national security.”

China introduced export controls on dysprosium, terbium and yttrium in April 2025 and strengthened additional dual-use export restrictions earlier this year, further tightening global supply. The company also pointed to sector transactions underscoring the rising strategic value of non-Chinese rare earth supply chains, including USA Rare Earth's proposed US$2.8 billion acquisition of Brazil's Serra Verde Group and Energy Fuels' US$299 million acquisition of Australian Strategic Materials.

Sovereign said Kasiya’s monazite concentrate contains all four magnetic rare earth elements as well as yttrium, with concentrations comparable to or exceeding benchmark operations.

Combined DyTb and Yttrium content in the TREO basket of Kasiya monazite concentrate (four-pit weighted average) vs the rare earth assemblages reported by the five largest global rare earth producers.

The monazite concentrates were recovered from the non-conductor tailings stream already included in the Kasiya DFS flowsheet, potentially allowing the rare earth opportunity to be developed without additional mining or major new primary processing infrastructure. According to the company, key advantages include no changes to the mine plan, no additional mining, no new primary processing circuits and no extra reagent requirements, since the monazite is separated from material that would otherwise report to tailings.

Monazite-rich HMC clearly observable from gravity separation of non-conductor tailings.

Sovereign said further work will focus on downstream processing pathways, monazite recoveries, marketable product volumes and the potential economic uplift from incorporating the rare earth opportunity into the existing DFS.

Critical minerals consultancy Project Blue prepared an independent pricing forecast for a monazite concentrate containing 60% TREO, estimating a 2026 base-case price of US$16,000 per tonne and a high-case scenario of US$19,000/t. That compares with an April 2026 Shanghai Metals Market benchmark spot price of about US$6,142 per tonne for comparable monazite concentrate grades. Project Blue noted that ex-China pricing premiums for key rare earth oxides including NdPr, terbium, dysprosium and yttrium reflect tightening Western supply chains and the limited pool of non-Chinese suppliers.

Project Blue 2026 price estimates for a monazite concentrate with TREO distribution in line with that observed in Sovereign’s monazite testwork to date.

Sovereign noted that no offtake agreements or sales arrangements for monazite concentrate have yet been signed, with realised pricing dependent on future negotiations, product specifications and market conditions.