Rio Tinto Increases Stake in Sovereign Metals to Nearly 20%

Rio Tinto has become the largest shareholder in Perth-based Sovereign Metals, increasing its stake to 19.76%. The mining giant invested $18.48 million in Sovereign Metals, a company focused on projects in Malawi, by exercising approximately 34.54 million share options. This investment secures Rio Tinto the same number of new fully paid ordinary shares in Sovereign Metals at an issue price of 53.5 cents per share.

Sovereign Metals plans to use the proceeds from this investment, available from Friday, to advance its flagship Kasiya rutile-graphite project in Malawi, which holds the world's largest natural rutile deposit. Sovereign Metals' CEO Frank Eagar highlighted the progress made in collaboration with Rio Tinto, including the launch of the pilot phase mining in May.

"We are excited about Rio Tinto's further investment in Sovereign, which represents another significant step towards unlocking a major new supply of low-CO2-footprint natural rutile and flake graphite," Eagar stated.

Additionally, Sovereign Metals reported that a 399 km rail upgrade, supported by the Malawi government, is progressing well, with the section running through Kasiya nearing completion. The construction of the pilot phase site for Kasiya’s mining and land rehabilitation management program is also on track, both within budget and schedule.

Sovereign Metals shares last traded at 66 cents.