Mining giant Rio Tinto (ASX:RIO) has increased its shareholding in Sovereign Metals (ASX:SVM) to 19.9% following the exercise of its unlisted options in July.
On 13 September 2024 Rio Tinto Mining and Exploration made an additional investment of $690,360 in Sovereign with the acquisition of an additional 1.29 million shares pursuant to its first right of refusal on equity issues.
Rio Tinto invested $18.5 million in Sovereign on 3 July 2024 via the exercise of about 34.54 million share options, which raised its shareholding to 19.76% at that time.
Chairman Ben Stoikovich says Rio Tinto’s newest investment in Sovereign reaffirms the Kasiya Rutile-Graphite Project’s position as one of the most “significant” critical minerals projects globally.
“With Rio Tinto’s wealth of experience as one of the world’s largest and most accomplished global mining companies, Kasiya is well-positioned to potentially become a market leader in low-CO2– footprint natural rutile and graphite,” Stoikovich says.
Sovereign Metals, which has a market capitalisation of $349.56 million, will use the proceeds from the strategic investment to continue advancing its tier one Kasiya Rutile-Graphite Project in Malawi.
Managing Director Frank Eagar says that in collaboration with Rio Tinto, the company has “made significant progress in advancing Kasiya over the course of this year, including the successful launch of the pilot-phase mining in May.”
In July 2023, Rio Tinto initially agreed to subscribe for and purchase 83.09 million shares at $0.486 per share for an aggregate value of $40.4 million.
The subscription also involved Rio Tinto being granted options to acquire 34.54 million shares in Sovereign within 12 months of the initial subscription.
The company aims to develop a large-scale, long-life rutile-graphite operation, focusing on developing an environmentally responsible, sustainable, and socially uplifting operation.
Sovereign Metals controls a globally strategic rutile province across its landholding in Malawi, via its flagship project which is considered among the world’s largest natural rutile deposits.
Write to Aaliyah Rogan at Mining.com.au
Images: Sovereign Metals
