Ann: Sovereign to Demerge Standalone Graphite Projects, page-3

I'm not a SH, but think this is in the best interests of all SHs.

I wasn't particularly interested in the graphite projects, but i have been keeping an eye on Kasiya & the rutile. Keeping the graphite credits from Kasiya within SVM bodes well if NGX are able to develop.

Completely agree with the rationale for demerger below. Very sensible management group. Showing that they're wanting to develop Kasiya, within their area of expertise, and not waste SH money on exploration & defining a difficult commodity. Would be interested to hear @cartex's opinion - greatly value their insight re graphite.

I suspect you may see a SP drop as SH who wanted exposure to the graphite narrative may exit. If that's the case, I will definitely become a holder. Even if there is an uptick, I will probably still buy this - I like the direction.

Rationale for Demerger
 The Demerger allows the Company to better focus its efforts and resources on Kasiya and other
primary rutile discoveries.
 The Demerger will provide shareholders with an interest in two companies – Sovereign and NGX. The
Board believes a separate entity with a separate management team focused on the Graphite Projects
presents a better prospect of delivering value to Sovereign shareholders.
 Shareholders may elect to retain exposure to either one or both companies as dictated by their
investment preferences and objectives:
 Shareholders will retain an interest in NGX through the Distribution and thereby have an
opportunity to benefit from the potential development of the Graphite Projects; and
 all Shareholders will retain their interest in the capital of Sovereign and exposure to Kasiya.
 The Board sees considerable potential in the Graphite Projects that is not recognised by the market
and, therefore, a dedicated, separately funded vehicle may realise appropriate value for shareholders.
 Future capital raisings are expected to be more readily achieved by each individual entity as the focus
of the funding will be on their specific projects. In addition, it is expected to provide greater flexibility
to both Sovereign and NGX to attract strategic investors.
 NGX will have a dedicated board and management team to focus on the development of the Graphite
Projects.
 After a full and proper assessment of all available information, the Directors believe that the
Demerger is in the best interests of Sovereign shareholders.