Sovereign Metals constructs Community Centre for Malingunde community
ASX-listed Sovereign Metals, which is busy with a Feasibility Study on the Malingunde Graphite Project in Lilongwe district, is constructing a community centre in the project area as part of its corporate social responsibility (CSR) programme.
The Malingunde community have hailed the firm for building the facility which is projected to be completed next month.
Chairperson for Malingunde Action Group Lawrence Dickson told Mining & Trade Review in an interview during a visit to the construction site that the local community is thankful to the company for responding to their request to construct the facility despite the fact that the Malingunde Graphite Project has not yet entered a mining phase with the Feasibility Study yet to be finalised.
“The Company asked us to submit to them a list of development projects that we need as a community and among the priority projects we listed is the community centre. We initially thought they were just trying to hoodwink us to win community support but their fulfilment of this promise has eroded any of such fears,” said Dickson.
He said now that the promise is taking shape on the ground, the community is very grateful to Sovereign Metals.
The community allocated land for the construction of the facility and the investor is bearing all the costs of the project.
Dickson said: “As community, we are very happy because we were not expecting to receive such a big development by the company in our area.”
“We were lacking a place where we can be holding our community meetings or any public functions especially during sunny or rainy seasons when it is not possible to hold meetings at open grounds.”
He said it has not been feasible for the community to use school blocks to hold meetings as it disturbs students learning in classes.
Dickson also said the community will adequately benefit from the facility as it will host social events such as weddings at a fee with the proceeds to be used for maintenance of the building and to cater for other community needs.
He hailed Sovereign Metals for requiring that the appointed construction company recruits members of the Malingunde community as labourers for the project. He indicated that apart from the foreman and carpenter, the construction works are being done by the locals.
“The project has provided employment to members of the community as the Company has recruited workers including the builders, concrete mixers and women who are supplying water,” said Dickson.
The construction of the Community Centre started in December 2020 and is expected to have a capacity for over 100 people once completed.
The cost for completing the Community Centre is US$44, 000, approximately MK35-million, and includes installing solar power system, a perimeter fence, water borehole and procurement of furniture. The borehole was drilled and pump installed when construction started in 2020.
Future of Malingunde graphite project
Commenting on the status of the Malingunde Graphite Project, Sovereign’s Country Manager, Dries Kruger, said the company will look at more CSR projects for the Malingunde community as part of a mining phase. The Feasibility Study will be completed once the crucial marketing studies have been successfully completed and end-users of the graphite products have committed to sales agreements. The viability of the project is also dependant on prices of flake graphite on the international market.
Kruger said: “The market of graphite is showing signs of stabilising after a slump as prices recover. Lower prices were due to a lower demand because of global economic challenges. Increased pricing will have a positive impact on the feasibility outcome of the project and once the project enters a mining phase the company is committed to do much more for the community.”
“Graphite prices are recovering after having declined and the challenge we currently face is to find end users which will commit to purchasing the Malingunde products. The company is actively working on the marketing of the products.”
Kruger said the company has in the past also undertaken smaller CSR initiatives in their project areas. The most significant of these was the drilling and installing of three boreholes while the Environmental and Social Impact Assessment (ESIA) was being undertaken.
When operational, the Malingunde Graphite Mine is projected to pay a total of US$200-million to the Malawi Government in form of taxes and royalties over a 15-years life span.
The estimated tax payable over the life of the mine is pegged at US$150-million with additional US$50-million in royalties.
The project will generate revenues during the operational phase in the form of taxation (30%) and royalties (5% of net sales revenue).
The overall level of revenue generated by the project is expected to create a noticeable increase to total government revenues. Increased business activity around the project will also provide increased tax revenue to the government.
Impact of Covid-19
Asked how the global novel coronavirus (Covid-19) pandemic has affected the Feasibility Studies, Kruger stressed that the pandemic has had a negative impact on the global economy which further negatively affected graphite prices and markets. To illustrate this further, Kruger indicated that Syrah’s large Balama graphite mine in Mozambique has been on care and maintenance for the last year after halting production in 2020 but indications are that it will resume production soon. The pandemic has however not had a major impact on the ongoing desktop studies and reporting which are being finalised.
“It did impact the Feasibility Study in that the global graphite market has been negatively affected. Before the pandemic, there was already a slump in the graphite price, a trend that the pandemic has further worsened. The prices and graphite market are however recovering. We have delivered samples of the potential graphite products to end-users for assessment and are working toward potential offtake sales arrangements,” he said.
Exciting rutile discoveries
In addition to the Malingunde graphite project, Sovereign is busy exploring for rutile in its large ground holding area in Central Region which continues to produce exciting discoveries.
The Central Malawi Rutile Exploration Project features two confirmed, discrete rutile mineralization styles hosted in saprolite (soft, friable weathered material) and sand.
The exploration project includes Sovereign’s flagship Kasiya Rutile deposit whose Phase 8 drilling results released recently have unveiled a significant expansion of very high-grade rutile area.
During the Phase, Sovereign drilled 70 hand auger holes located within the extensive 66km2 mineralized footprint, giving a green light to extend and define the very high-grade zones.
Sovereign’s MD Julian Stephens said the results show well defined, very-high-grade rutile mineralized zones from surface with the majority occurring within a ~2.5km radius from a central point, having been defined by nominally 400m x 400m drilling.
Stephens said the high-grade areas will be targeted for additional infill drilling and metallurgical variability test-work in order to form the basis of a scoping study, planned for later this year.
He said: “These areas will be targeted for further, near-future infill drilling and metallurgical variability test-work in order to support our maiden Mineral Resource Estimate and Scoping Study.”
“Kasiya is shaping up to be a very large, high-grade rutile deposit that may well become one of the largest primary rutile deposits in the world.”
The significant rutile enrichment occurs in the top ~8 metres from surface with very-high grades, generally greater than 1.5% rutile occurring in the top 3-5m from surface.
Stephens explained that in most cases, drill depth was restricted by the hand-auger drilling equipment capacity and it is assumed that free-dig rutile mineralization should continue vertically to the base of the saprolite estimated at approximately 25m depth from surface.
The Company’s objective is to delineate a large rutile resource that could support a long-life, large-scale rutile mining operation at Kasiya.
Sovereign has also identified other numerous saprolite hosted rutile prospects and targets within the Bua Channel, which is the Company’s high-grade, rutile dominant, sand-hosted placer prospect along a 50km length of a fluvial channel system.
Drilling in 2020 over the southern part of the Bua Channel over ~8km confirmed excellent rutile grades with accessory ilmenite.
Sovereign Central Malawi Rutile Exploration project is strategically located in close proximity to the capital city, Lilongwe, providing access to a skilled workforce and mining and industrial services.
In addition, the location provides access to the operating Nacala Rail Corridor linking to the Indian Ocean port of Nacala in Mozambique, providing a low-cost transport solution and access to major international markets.
Sovereign has successfully set up its own heavy mineral laboratory in Lilongwe which has been operational since the end of 2019. Exploration samples from soil sampling and hand auger drilling programs are processed at the Lilongwe laboratory. This has lowered analysis cost dramatically and also greatly increasing turnaround time on sample results and decision making on exploration strategy and targeting. Only quality control samples are exported to laboratories outside of Malawi.
The Company has trained 10 local people from the Malingunde area as full-time laboratory technicians.
