Sovereign Metals Ltd (ASX:SVM, OTCQX:SVMLF, AIM:SVML, FRA:SVM) has confirmed the presence of monazite-hosted heavy rare earths across multiple planned mining pits at its Kasiya Rutile-Graphite Project in Malawi, potentially opening a third revenue stream from material currently destined for tailings.

The company said 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 latest work builds on earlier rare earth results released in January and comes just weeks after Sovereign completed a DFS for Kasiya outlining 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.

Strong heavy rare earth ratios

Sovereign said the average dysprosium-terbium and yttrium oxide ratios within the project’s total rare earth oxide (TREO) basket were about 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 world’s five largest rare earth producers.

Summary results.

Sovereign said 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.

“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,” Sovereign managing director and CEO Frank Eagar said.

“The monazite concentrate contains all four magnetic rare earth elements — neodymium, praseodymium, dysprosium and terbium — plus highly critical yttrium.”

Eagar said the minerals appeared recoverable from the project’s existing DFS flowsheet, with further work under way to assess the potential economic upside.

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

Strategic supply chain focus

The announcement comes amid intensifying Western efforts to secure non-Chinese heavy rare earth supply, particularly for dysprosium, terbium and yttrium, which are used in defence systems, permanent magnets, aerospace technologies and semiconductor manufacturing.

Sovereign cited recent testimony from US Assistant Secretary of War for Industrial Base Policy Michael Cadenazzi Jr., who described heavy rare earth dependence on China as “a clear and present danger to our national security”.

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China introduced export controls on dysprosium, terbium and yttrium in April 2025 and strengthened additional dual-use export restrictions earlier this year.

The company also pointed to recent sector transactions highlighting rising strategic value in 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 contained 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

Potential low-cost by-product stream

Sovereign said 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.

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

According to the company, potential advantages include no changes to the mine plan, no additional mining, no new primary processing circuits and no extra reagent requirements, as the monazite is separated from material that would otherwise report to tailings.

Sovereign said further work would 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.

Independent pricing study highlights upside

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.

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

That compares with an April 2026 Shanghai Metals Market benchmark spot price of about US$6,142/t for comparable monazite concentrate grades.

Project Blue said ex-China pricing premiums for key rare earth oxides including NdPr, terbium, dysprosium and yttrium reflected tightening Western supply chains and the limited pool of non-Chinese suppliers.

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

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