REG - Sovereign Metals Ltd - Malawi Rail Upgrades Underway

Sovereign MetalsAnnouncement

20/06/2024 07:00

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RNS Number : 1387T  Sovereign Metals Limited  20 June 2024

NEWS RELEASE I 20 JUNE 2024

Malawi Rail Upgrades Underway

·   Upgrading of the 399km Nkaya-Mchinji section of railway currently
underway as part of Government of Malawi's "Rail Strategy and Growth Plan"

·   Railway runs across Sovereign's Kasiya Rutile-Graphite tenements from
Mchinji at the Malawi-Zambia border to Nkaya Junction, where it connects to
the Nacala Logistics Corridor providing an export route through the deep-water
port of Nacala

·   Refurbishment of the railway will improve efficiency and capacity, and
is being undertaken by Central and Eastern African Railway Company (CEAR) with
completion expected by end of 2024

·   Upgrade works include refurbishing rail bridges and reballasting along
the section through Kasiya to increase maximum axle load from 15 tonnes to 18
tonnes

·    Upgrade of the line section through the Kasiya Project area is near
complete, running from Lilongwe District southward to the Nacala Logistics
Corridor

·   Nacala Logistics Corridor is the preferred logistics route for
exporting Sovereign's rutile and graphite products to global customers, with
the Sena Rail Line to the Port of Beira offering a secondary route

 

Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) is
pleased to report that upgrading of the 399km Nkaya-Mchinji Section Railway
(Railway) connecting the Malawi-Zambia border to the Nacala Logistics Corridor
(NLC) and which runs across the Company's Kasiya Rutile-Graphite Project
(Kasiya or Project) tenements, is underway. Refurbishment of that part of the
Railway mainline which connects the Kanengo junction in the Lilongwe District,
where Kasiya is located, to the NLC junction at Nkaya is near completion.

Figure 1: CEAR undertaking upgrade works on a railway bridge connecting Kasiya
to the NLC

Rehabilitation of the Railway is an initiative by Malawi's Ministry of
Transport and Public Works and forms part of the Government of Malawi's Rail
Strategy and Growth Plan, which has the stated mission "to facilitate the
provision of a safe, efficient, and sustainable rail transport system" to
"promote socio-economic development."

Upgrade works will increase efficiency and capacity of the Railway and are
being undertaken by CEAR. Completion is planned for the end of 2024. Works
include refurbishing railway bridges and reballasting to handle increased
load-bearing capacity from a current maximum axle load of 15 tonnes to 18
tonnes.

Managing Director Frank Eagar commented: "Kasiya already benefits from
exceptional existing infrastructure in central Malawi. This refurbishment
project re-affirms Kasiya's logistics solution with sufficient rail capacity,
enhanced reliability and a direct connection to the deep-water export Port of
Nacala. The infrastructure investment by CEAR and Nacala Logistics along with
approvals from the Malawi Government is a demonstration of the country's
commitment to achieving its major economic development goals which include
developing the mining industry and increasing Malawi's export market."

Figure 2: Upgrade works at a railway bridge on the Nkaya-Mchinji Section
Railway

Kasiya benefits from two options for transporting its rutile and graphite
products from the mine operations to seaports, being the Nacala Logistics
Corridor to the Port of Nacala and the Sena Rail Line to the Port of Beira
(Beira Corridor). The current upgrades to the Nkaya junction improve access to
the NLC and will ultimately also improve access to the Beira Corridor.

The NLC offers the preferred logistics route to the deep-water Indian Ocean
port of Nacala to export to global markets. This established and
operation-ready logistics infrastructure provides significant capital and
operating cost savings to Kasiya. To access the NLC, Sovereign plans to
construct a 6km rail spur to connect directly with the processing plant,
increasing efficiencies in handling inbound and outbound freight compared to
any road alternative.

The Beira Corridor, comprised of the Sena Rail Line and the Port of Beira,
provides Sovereign with a second route to export markets and is currently
undergoing its own upgrade works. Last year, the Beira Development Corridor
Agreement was approved, with the objective of connecting the Democratic
Republic of Congo, Zambia, Zimbabwe, and Malawi to the Mozambican Port of
Beira through road and rail networks. As Mozambique's second largest port, the
Port of Beira is a significant driver of the region's economy and an important
gateway for global trade, handling a wide variety of containerised and bulk
cargo. The Beira Development Corridor Agreement project aims to eliminate
logistical bottlenecks for international and intra-African trade. The African
Development Bank (AfDB) is a major financier of the project.

Figure 3: Nacala Logistics Corridor with section currently being upgraded in
orange

Figure 4: Port of Nacala, Mozambique

Figure 5: Port of Beira, Mozambique (Source: Cornelder de Moçambique)

Figure 6: A Nacala Logistics Corridor train

 

ENQUIRIES

 Frank Eagar (South Africa/Malawi)  Sam Cordin (Perth)  Sapan Ghai (London)

Managing Director
+61(8) 9322 6322
+44 207 478 3900

 +61(8) 9322 6322

 

 Nominated Adviser on AIM and Joint Broker
 SP Angel Corporate Finance LLP             +44 20 3470 0470
 Ewan Leggat

 Charlie Bouverat

 Joint Brokers
 Stifel                                     +44 20 7710 7600
 Varun Talwar
 Ashton Clanfield

 Berenberg                                  +44 20 3207 7800
 Matthew Armitt
 Jennifer Lee

 Buchanan                                   + 44 20 7466 5000

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.

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