IRW-News: Sovereign Metals Limited: Sovereign Metals Limited: MALINGUNDE: Die weltweit größte gemeldete in Saprolith gelagerte Graphitressource

IRW-PRESS: Sovereign Metals Limited: Sovereign Metals Limited: MALINGUNDE: Die weltweit größte gemeldete in Saprolith gelagerte Graphitressource

MALINGUNDE: Die weltweit größte gemeldete in Saprolith gelagerte Graphitressource

Sovereign Metals Limited (das Unternehmen oder Sovereign) freut sich, die erste JORC-konforme Mineralressourcenschätzung für das Projekt Malingunde in Malawi bekannt zu geben.

Die Mineralressourcenschätzung bestätigt die globale Bedeutung der Graphitlagerstätte Malingunde und bietet die Grundlage für einen natürlichen Flockengraphit-Abbaubetrieb mit potenziell geringem Investitions- und sehr geringem Betriebsaufwand, der sich auf den weichen in Saprolith (Tonerde) gelagerten Anteil der Lagerstätte konzentriert.

Saprolith-Mineralressourcenschätzung (angezeigt + abgeleitet):

28,8 Mio t mit 7,1 % TGC (Cutoff-Wert 4,0 % TGC)

einschließlich hochgradiger Anteil:

8,9 Mio. t mit 9,9 % TGC (Cutoff-Wert 7,5 % TGC)

Wichtigste Ergebnisse:

- Malingunde als weltweit größte gemeldete in weichen Saprolith gelagerte Graphitressource1 bestätigt.

- Hochgradiger Anteil im Umfang von 8,9 Mio. t mit 9,9 % TGC (Total Carbon Content; Gesamtkohlenstoffgehalt) wird im Mittelpunkt der anstehenden Rahmenbewertung stehen.

- 80% der gesamten Saprolithressource und 80 % des hochgradigen Anteils als angezeigte Mineralressourcen eingestuft.

- Das gesamte weiche Saprolithmaterial befindet sich innerhalb eines Bereichs von 30 Metern von der Oberfläche und kann durch einfache Grabungen mit sehr geringem Erz-Abraum-Verhältnis abgebaut werden, was deutlich geringere Abbaukosten während der Lebensdauer der Mine (LOM) bedeuten sollte.

- Das Saprolithmaterial muss nicht zerkleinert oder zermahlen werden, woraus sich im Vergleich zu Festgesteinslagerstätte wesentlich niedrigere Verarbeitungskosten ergeben.

- Die weitläufige, 3.788 km2 große Liegenschaft enthält zahlreiche andere Saprolith-Zielgebiete enthält, die zwar abgegrenzt, jedoch noch nicht mittels Bohrungen untersucht wurden, was auf zusätzliches und beträchtliches Explorationspotenzial hinweist.

Dr. Julian Stephens, Managing Director von Sovereign, sagte dazu: Die erste Mineralressourcenschätzung hat unsere Erwartungen bei weitem übertroffen und bestätigt, dass Malingunde eine erstklassige Graphitlagerstätte ist. Der separate hochgradige Anteil der Ressource wird im Mittelpunkt der bevorstehenden Rahmenbewertung des Unternehmens stehen. Angesichts dieser herausragenden Ressourcenbasis kann das Unternehmen nun die Durchführung dieser Rahmenbewertung in Angriff nehmen und dabei die inhärenten Vorteile des Projekts wie etwa sein Potenziel für einen Betrieb mit sehr geringem Betriebs- und niedrigem Investitionsaufwand und Spitzenmargen nutzen.

ANFRAGEN: --

Dr. Julian Stephens - Managing Director-+618 9322 6322

Einführung

In Saprolith gelagerte Graphitlagerstätten sind dank ihres im Vergleich zu in Festgestein gelagerten Graphitproduktionsstätten geringeren Investitionsaufwands und niedrigeren Betriebskosten gefragt.

Sovereign erkundete das Gebiet Malingunde im Jahr 2015 und 2016 und entdeckte dabei die weltweit größte gemeldete in Saprolith gelagerte Graphitressource.

Die Lagerstätte Maligunde weist folgende Vorteile auf:

- Ein hochgradiger Kern mit etwa 10 % TGC, der im Mittelpunkt der bevorstehenden Rahmenbewertung stehen wird;

- Sehr weiches, durch einfache Grabungen abbaubares Material für die gesamte Lebensdauer der Mine mit einem sehr geringen Erz-Abraum-Verhältnis, woraus sich sehr geringe Abbaukosten ergeben;

- Primäre Zerkleinerung und Mahlung nicht notwendig, was deutliche Einsparungen beim Investitionsbedarf und den Betriebskosten bedeutet;

- Nähe zur Hauptstadt Malawis bedeutet Zugang zu bestehender Infrastruktur: Eisenbahn, Wasser, Strom & Arbeitskräfte;

- Mit einem Spitzenkonzentrat (Best in Class) in puncto Flockengröße und Gehalt kann ein Spitzenpreis erzielt werden.

Die obengenannten Vorteile zeigen insgesamt, dass Malingunde ein potenziell erstklassiges Projekt mit geringem Investitionsbedarf, niedrigen Betriebskosten und hohen Einnahmen pro Tonne Konzentrat ist, was voraussichtlich einem margenstarken Betrieb entspricht.

Mineralressourcenschätzung

Die Mineralressourcenschätzung für Malingunde wurde von CSA Global angefertigt und wird gemäß JORC Code (Ausgabe 2012) gemeldet.

Bei Anwendung eines geringeren Cutoff-Werts von 4 % TGC umfasst die Mineralressourcenschätzung (angezeigt + abgeleitet):

- 28,8 Mio. Tonnen Saprolith mit 7,1 % TGC;

- 17,0 Mio. Tonnen verwittertes Grundgestein mit 7,0 % TGC;

- 19,3 Mio. Tonnen frisches Gestein mit 7,0 % TGC.

Die Mineralressource beinhaltet insgesamt 65,1 Millionen Tonnen mit 7,1 % TGC (Saprolith, verwittertes Grundgestein und frisches Gestein; 80 % angezeigt + 20 % abgeleitet).

Bei Anwendung eines höheren Cutoff-Werts von 7,5% TGC umfasst der Saprolith-Anteil der Ressource 8,9 Millionen Tonnen mit 9,9 % TGC (ebenfalls 80 % angezeigt + 20 % abgeleitet).

Der Saprolith-Anteil der Mineralressource befindet sich vollständig innerhalb eines Bereichs von 30 Metern von der natürlichen Erdoberfläche. Das Unternehmen beabsichtigt, den hochgradigen Saprolith-Anteil der Mineralressourcen in den Mittelpunkt der bevorstehenden Rahmenbewertung zu stellen. Die 8,9 Millionen Tonnen hochgradiges Material sollten den Erwartungen zufolge Einsatzmaterial für einen im Zuge der Studie zu bewertenden Minenbetrieb mit einer beachtlichen Lebensdauer liefern.

Der zuständige Sachverständige und das Unternehmen vertreten die Ansicht, dass angemessene Aussichten auf die eventuelle wirtschaftliche Förderung der Mineralressource bestehen. Berücksichtigt wurden unter anderem die relative Nähe der Mineralisierung zur Oberfläche, woraus sich eine Eignung für den Tagebau ergibt, und die bestehende Infrastruktur unweit des Projekts einschließlich Eisenbahn, Strom, Arbeitskräfte und Wasser. Die bisherigen metallurgischen Testarbeiten zur Flockengrößenverteilung und Reinheit sprechen nach Einschätzung des Sachverständigen und des Unternehmens für die Marktfähigkeit eines Konzentrats.

http://www.irw-press.at/prcom/images/messages/2017/39475/170418 Malingunde JORC Resource April 2017_Final_DEprcom.001.png

Tabelle 1. Erste JORC-konforme Mineralressourcenschätzung für Malingunde unter Anwendung von Cutoff-Werten von 4,0 % und 7,5 % TGC

http://www.irw-press.at/prcom/images/messages/2017/39475/170418 Malingunde JORC Resource April 2017_Final_DEprcom.002.png

Abbildung 1. Dreidimensionale Schrägansicht des Blockmodells für die Malingunde-Mineralressourcenschätzung

http://www.irw-press.at/prcom/images/messages/2017/39475/170418 Malingunde JORC Resource April 2017_Final_DEprcom.003.png

Abbildung 2. Querschnitt bei 8,437,000mN, der die bei der Mineralressourcenschätzung verwendeten Blöcke und die TGC-Gehaltsbereiche anzeigt

Die vollständige Pressemeldung finden Sie hier: http://www.asx.com.au/asxpdf/20170418/pdf/43hkny1xxq8mq0.pdf

Die Ausgangssprache (in der Regel Englisch), in der der Originaltext veröffentlicht wird, ist die offizielle, autorisierte und rechtsgültige Version. Diese Übersetzung wird zur besseren Verständigung mitgeliefert. Die deutschsprachige Fassung kann gekürzt oder zusammengefasst sein. Es wird keine Verantwortung oder Haftung: für den Inhalt, für die Richtigkeit, der Angemessenheit oder der Genauigkeit dieser Übersetzung übernommen. Aus Sicht des Übersetzers stellt die Meldung keine Kauf- oder Verkaufsempfehlung dar! Bitte beachten Sie die englische Originalmeldung auf www.sedar.com, www.sec.gov, www.asx.com.au/ oder auf der Firmenwebsite!

Summary of Resource Estimate and Reporting Criteria

The following is a summary of the pertinent information used in the Mineral Resource Estimate (MRE) with full details provided in Table 1 included as Appendix A.

Geology and Geological Interpretation

The Malingunde area is underlain by Neo-Proterozoic to Cambrian semi-pelitic paragneisses of the Mchinji Group. Lithologies include kyanite, biotite, garnet, pyrrhotite and graphite bearing gneisses and schists.

Malingunde flake graphite deposit strikes north-west, dipping between 25° and 50 degrees° to the north- east. It is currently modelled as three zones of mineralisation, with a depth extent of 50 m, a strike length of 4,500 m and a plan width varying between 50 and 230 m.

Malingunde occurs in a topographically flat area west of Malawis capital known as the Lilongwe Plain. Here, a deep tropical weathering profile is preserved. A typical profile from top to base is generally ferruginous pedolith (FERP, 0-4m), mottled zone (MOTT, 4-7m), pallid saprolite (PSAP, 7-9m), saprolite (SAPL, 9-25m), saprock (SAPR, 25-35m) and fresh rock (FRESH >35m). For the purposes of the MRE, all units from saprolite and above are included under the heading saprolite. This is justified because all are soft and free-dig, and all have consistent and similar metallurgical characteristics.

Within the Malingunde deposit itself, high-grade graphite gneisses are interlayered and separated by biotite and locally kyanite bearing gneisses. Two discrete, internal high grade graphite zones exist and appear to be slightly oblique to the overall trend of the mineralisation (Figure 1).

Further high-grade saprolite-hosted graphite mineralisation has been discovered in hand auger drilling along strike over 1km to the south-east of the resource area and is yet to be followed up. Regionally, the Company controls a large, prospective ground package totalling 3,788km2 within which six additional saprolite-hosted prospects have been located.

Drilling and Sampling Techniques

The MRE is based upon data obtained from 13 diamond core (DD) drill holes (432.39 m), 170 aircore (AC) holes (3,352 m) and 212 hand auger (HA) holes (1,499 m) drilled across the three deposits. Five (5) pairs of AC/DD and eight (8) pairs of AC/HA twinned holes are included in the drilling totals.

HA holes are located on east-west transects across the entire strike of the modelled deposit spaced nominally at 200 m x 20 m with infill spaced at 10 m along section. AC holes were generally drilled at 200 m x 20 m along existing HA transects with infill of 100 m x 20 m over the northern and southern portions of the deposit. DD holes were drilled on existing HA transects spaced between 200 m and 400 m north-south along the strike extent of the deposit. All HA holes were drilled vertically whilst the majority of the AC and DD holes were angled, designed to intersect broadly orthogonal to the shallow-moderate east dipping mineralisation.

The majority of HA and all AC/DD drill hole collars were surveyed using a differential global positioning system (DGPS) to centimetre accuracy. All DD holes were down-hole surveyed using a Reflex Ez-Trak multi-shot survey tool at 30m intervals down hole. Owing to their shallow depths (maximum 12 m), HA holes were not downhole surveyed. AC holes were not routinely down-hole surveyed, however 9 holes (5%) were surveyed to verify the amount of downhole deviation.

HA and AC drill samples were geologically logged, recording relevant data to a set template at 1m intervals. DD core was geologically logged based on geological intervals. DD core was also geotechnically logged and digitally photographed.

DD core (PQ3) was quarter cut and sampled according to geological intervals. HA samples were composited on geological intervals (2-3m) in the field, and submitted for Total Graphitic Carbon (TGC) analysis. AC samples were sampled at 1-metre in the SOIL, FERP, MOTT weathering zones and composited nominally at 2-metres in the PSAP, SAPL, SAPR, FRESH weathering zones. Field quality assurance procedures were employed, including the use of analytical standards, coarse blanks and duplicates.

Sample Analysis Method

Samples were shipped to Intertek sample preparation laboratory in Johannesburg or Perth. Upon receipt of the sample, the laboratory prepared ~100g pulp samples for shipment (in the case of Johannesburg) to Intertek Perth where they were analysed. A 0.2g charge is analysed for TGC using an Eltra carbon analyser resistance furnace.

Classification Criteria

Classification of the MRE was carried out taking into account the geological understanding of the deposit, quality of the samples, bulk density data and drill hole spacing, supported by metallurgical test results that indicate general product marketability.

The MRE is classified as a combination of Indicated and Inferred, with geological evidence sufficient to assume geological and grade continuity in the Indicated volumes. All available data was assessed and the Competent Persons relative confidence in the data was used to assist in the classification of the Mineral Resource.

Resource Estimation Methodology

TGC wireframe interpretations were based upon a lower cut-off of 4% TGC, which is equivalent to the graphitic gneiss domain boundary, from geological logging of HA/AC/DD drill holes.

The Mineral Resource block model consists of 3 zones of TGC mineralisation, with 1 major zone and 2 minor zones, with respect to strike extent. Mineralisation domains were encapsulated by means of 3D wireframed envelopes. Domains were extrapolated along strike or down plunge to half a section spacing. Internal waste units were modelled within the graphitic gneiss mineralisation envelopes to define barren domains.

No top cutting was applied to constrain extreme grade values because the TGC grade distribution does not warrant their use.

All drill hole assay samples were composited to 2 m intervals. All assayed HA/AC/DD drill hole intervals were utilised in the grade interpolation.

Grade estimation was by ordinary kriging (OK). A minimum of 8 and maximum of 16 composited samples were used in any one block estimate for all domains. A maximum of 5 composited samples per drill hole were used in any one block estimate. The PSAP, SAPL, SAPR and the top portion of the FRESH domain (pseudo transitional material) were combined into one estimation domain. The FERP and MOTT weathering zones were estimated as a separate single domain.

The grade model was validated by 1) creating slices of the model and comparing to drill hole samples on the same slice; 2) swath plots comparing average block grades with average sample grades on nominated easting, northing and RL slices; 3) mean grades per domain for estimated blocks and flagged drill hole samples; and 4) cross sections with block model and drill hole data colour coded in like manner.

Cut-off Grades

The MRE has been reported using lower cut-off grade of 4.0% and 7.5% TGC, which is consistent with the grade used to report previous MREs for this style of mineralisation.

Mining and Metallurgical Methods and Parameters

No selective mining units were assumed in this resource model. No depletion of the Mineral Resource due to mining activity was required due to no mining having occurred historically.

Sovereign have announced several sets of metallurgical results to the ASX (7th September 2016; 23rd November 2016; 27th February 2017 and 20th March 2017), relating to flake size distribution and purity of graphite concentrate. Metallurgical testwork is ongoing.

Sovereign engaged SGS Canada to conduct an initial bench scale laboratory flotation testwork program on drill samples obtained from the Malingunde flake graphite deposit. The main objective was to investigate the metallurgical response of shallow saprolitic mineralization (PSAP+SAPL) and the testwork was performed on two master composites samples produced from fifteen drill holes of located in the northern and central part of the deposit. The majority of the testwork was performed using two master composite samples described as north composite and southern composite from shallow auger drill samples. The testwork was largely based on the flowsheet previously developed for weathered material from Sovereigns Duwi and graphite deposit, located 40 km to the north-east.

In addition two separate master composites of the mottled zone (MOTT) using intervals from the same HA drill holes were produced and tested using the same flowsheet conditions as the saprolite master composites.

A subsequent variability tetwork program was undertaken on the PQ3 diamond drill core to evaluate the metallurgical response of the FERP, PSAP+SAPL (upper saprolite), SAPL (lower saprolite) and SAPR weathering domains.

The flotation testwork on auger and diamond drill core samples demonstrated that generally between about 50% and 80% of the liberated flakes were larger than 150 µm, and that final overall concentrate grades were in the range of 97% to 99% Carbon.

The flake size distribution and purity are considered to be favourable for product marketability.

Property testing of final concentrates produced from the metallurgical tests were undertaken by a specialty laboratory in Germany indicate that the potential products from Malingunde should be suitable for expandable graphite markets.

Competent Person Statement

The information that relates to Mineral Resources is based on, and fairly represents, information compiled by Mr David Williams, a Competent Person, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Williams is employed by CSA Global Pty Ltd, an independent consulting company. Mr Williams has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Williams consents to the inclusion of the matters based on his information in the form and context in which it appears.

The information that relates to Exploration Results is extracted from announcements on 29 August 2016, 12 October 2016, 26 November 2016, 18 January 2017, 21 February 2017 and 15 March 2017. These announcements are available to view on www.sovereignmetals.com.au. The information in the original announcements that related to Exploration Results were based on, and fairly represents, information compiled by Dr Julian Stephens, a Competent Person who is a member of the Australasian Institute of Geoscientists (AIG). Dr Stephens is the Managing Director of Sovereign Metals Limited and a holder of shares, options and performance rights in Sovereign Metals Limited. Dr Stephens has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements. The Company confirms that the form and context in which the Competent Persons findings are presented have not been materially modified from the original market announcements.

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 Sovereigns 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.

Footnote 1

The Malingunde Mineral Resource is understood by the Company to be the largest known saprolite-hosted flake graphite deposit in the world that has been reported under recognised western Mineral Resource reporting codes (i.e. JORC, NI 43-101, SAMREC).

Appendix 1: JORC Code, 2012 Edition - Table 1

Section 1 Sampling Techniques and Data

Criter JORC Code Commentary

ia explanation

SampliNature and Hand Auger (HA), Air-core (AC) and

ng quality of Diamond core (DD) drilling form the

Techn sampling (e.g. basis of the Mineral Resource

iques cut channels, Estimate (MRE) and are described

random chips, below:

or specific

specialised HA drilling was employed to obtain

industry samples vertically

standard

measurement from surface at nominal 1-metre depth

tools intervals, with

appropriate to

the minerals samples composited on geologically

under determined intervals. Composite

investigation, samples were riffle split on

such as down site.

hole gamma HA drilling was completed as a number

sondes, or of phases during 2015 and 2016. A

handheld XRF total of

instruments,

etc.). These 212 HA holes (1,499 m) were used in

examples should the

not be taken as MRE

limiting the.

broad meaning AC drilling (angled and vertical) was

of employed to obtain bulk drill

sampling. cuttings at nominal 1-metre depth

(downhole) intervals from surface.

All 1-metre samples were collected in

plastic bags directly beneath the

sample cyclone underflow. The entire

individual 1-metre sample was

manually split at the drill site

using conventional riffle splitters.

A total of 170 AC holes (3,352 m)

completed during 2016 were used in

the

MRE

.

DD drilling (angled and vertical) was

designed to obtain representative

large diameter (PQ3) core for

geological, geotechnical and

metallurgical

testwork purposes. Subsequent to

completion of all geological and

geotechnical logging and sampling

(whole core samples removed

laboratory bulk density and strength

testing) drill core was either

manually hand split or sawn using a

circular saw and sampled as ΠPQ3

core. Upon completion of laboratory

bulk density and strength testing of

the whole core intervals the entire

core was submitted to the

laboratory.

A total of 13 DD holes (432.39 m)

completed during 2016 were used in

the

MRE

.

All HA/AC/DD assay sample splits were

submitted to either Intertek

Johannesburg or Intertek Perth for

assay sample preparation. Total

Graphitic Carbon (TGC) analysis of

all assay pulps samples was performed

by Intertek

Perth.

Include All HA/AC/DD drilling and sampling

reference to activities were supervised by a

measures taken suitably qualified Company geologist

to ensure who was present on site during the

sample drilling of holes. All

representivity anHA and AC holes were geologically

d the logged at a nominal 1-metre interval

appropriate by the geologist at the drill site.

calibration of

any measurement DD holes were geologically logged on a

tools or geological intervals basis.

systems Geotechnical logging was completed

used. for each core run interval. All mass

reduction (field and laboratory

splitting) of samples were performed

within

Gys Sampling Nomogram limits relevant

to this style of mineralisation.

Field duplicate splits of HA/AC

samples and quarter DD core were

undertaken nominally every

20

th sample to assess sampling errors.

HA: The auger spiral and rods are

cleaned between each metre of

sampling to avoid

contamination.

AC: The sampling cyclone was routinely

cleaned out between each drill

hole. Sample recovery was

quantitatively assessed throughout

the duration of the drilling program.

A program of field replicate splitting

of selected

(~5%) mineralised intervals was

completed at the conclusion of the

drill program to assess the sampling

repeatability

DD: core recovery was closely

monitored during drilling

particularly through the mineralised

zones. Standard industry drilling mud

mixtures were employed to improve

core recovery especially through the

softer upper clay rich

pedolith and saprolith horizons.

Aspects of the Flake graphite content is visually

determination estimated as volume % for each

of 1-metre HA/AC bulk drill samples and

mineralisation DD core logging interval during

that are geological logging by a Company

Material to the geologist.

Public Report.

In cases where A nominal lower cut-off of 4% TGC

industry assay has been applied to define

standard work zones of

has been done mineralisation

this would be.

relatively

simple (e.g.

reverse

circulation

drilling was

used to obtain

1 m samples

from which 3 kg

was pulverised

to produce a 30

g charge for

fire assay).

In other cases

more

explanation may

be required,

such as where

there is coarse

gold that has

inherent

sampling

problems.

Unusual

commodities or

mineralisation

types (e.g.

submarine

nodules) may

warrant

disclosure of

detailed

information.

DrilliDrill type (e.g. HA: drilling was performed manually by

ng core, reverse Sovereign

Techn circulation, employees

iques openhole using a conventional hand auger employ

hammer, rotary ing a combination of

air blast,

auger, Bangka, 62mm and 50mm diameter spiral auger

sonic, etc.) flight

and details and

(e.g. core 1-metre long steel rods. Each 1m of

diameter, drill advance

triple or

standard tube, is withdrawn and the contents of the

depth of auger flight removed. An additional

diamond tails, 1-metre steel

facesampling

bit or other rods is attached and the open hole is

type, whether re-entered to drill the next metre.

core is This is repeated until the drill

oriented and if holes is terminated or reaches a

so, by what maximum depth of 12m.

method,

etc.). The auger spiral and rods are cleaned

between each metre of sampling to

avoid

contamination.

AC: conventional blade bit aircore dril

ling was employed to obtain all drill

cuttings from surface. Drilling was

completed using a P900 truck mounted

rig with and separate truck mounted

air compressor. Drilling was completed

using standard 3-inch or 4-inch

diameter/3m length drill rods

equipped with inner tubes. Drilling

was performed with standard face

discharge

aircore blade bits. The nominal drill h

ole

diameter for 3-inch and 4-inch holes

is 85mm and 114mm respectively. The

nominal inner tube inside diameter

for 3-inch and 4-inch holes is 37mm

and 45mm respectively.

Drilling of all 3-inch holes employed

a 2-stage compressor rated at

300CFM

:200PSI run continuously on high

stage. All 4-inch holes were drilled

employing a 2-stage compressor rated

at

900CFM

:350PSI with high-stage generally run

below about 15m downhole.

DD: conventional wireline PQ triple

tube

(PQ

3) diamond drilling (DD) was employed

to obtain all drill

core. Drilling was undertaken with an

Atlas Copco Christensen CT14 truck

mounted drilling rig. The nominal

core diameter is 83mm and the nominal

hole diameter is 122mm. Coring was

completed with

appropriate diamond impregnated

tungsten carbide drilling bits. Drill

runs were completed employing either

a

1.5m or 3.0m length PQ3 core barrel. Co

re from all drilling runs was

orientated using a Reflex ACTIII

Electronic Orientation device. The

orientation and marking of the bottom

of

hole (BOH) orientation line along the

core was completed whilst the core

was still within the drilling split.

Core was transferred from the

drilling split into PVC splits which

were then wrapped with plastic

layflat material, securely sealed and

placed into core

trays.

Drill Method of HA: sample recovery was monitored

Sampl recording and visually during removal of the sample

e assessing core from the auger

Recov and chip sample flights.

ery recoveries and

results AC: sample recovery was recorded for

assessed. all holes. The

1-

metre drill samples collected in

plastic bags from directly beneath

the cyclone underflow were

individually weighed and moisture

content (dry/damp/moist

/wet/saturated) recorded prior to

further splitting and sampling. The

outside diameter of the drill bit

cutting face was measured and

recorded by the driller prior to the

commencement of each drill hole. Each

1-metre sample interval was

separately geologically logged using

standard Company project specific

logging codes. Logging of weathering

and lithology along with drill

hole diameter, recovered sample

weight, moisture content and dry bulk

density measurements of PQ diamond

core allow the theoretical sample

recovery to be assessed. Analysis of

the calculated sample recoveries

indicate an average recovery of

greater than 75% for all mineralised

(>=4% TGC)

intervals.

DD: drilling core recovery was

recorded for each drill run by

measuring the total length whilst

still in the drilling splits prior to

being transferred into core

trays

. Downhole depths were validated

against

core blocks and drill plods during

each shift.

Holes MGDD0001, MGDD0004 and MGDD0005

were re-drilled due to core loss

within a number of mineralised

zones.

An overall core recovery of 92% was

achieved for all

sampled core.

Measures taken HA: drill holes were terminated where

to maximise they intersected

sample recovery

and ensure the upper (perched) water table (approx

representative..

nature of the 7-8m)

samples.

AC: drill bit type (face discharge)

used were appropriate for the type of

formation to maximise amount of drill

cutting recovered. Drill bits were

replaced where excessive wearing

of the tungsten cutting teeth had

occurred.

Adequate CFM/PSI of compressed air was

used to maximise the drying of sample

prior to recovering up the drill

string. A

number

of the 2016 PQ diamond core holes

were twinned by

aircore holes to assess the representiv

ity

of AC drill samples. Where the

ingress of water in deeper sections

of holes resulted in wet samples

(usually at the

Saprolite/Saprock interface) the drill

hole was

terminated.

DD: core recovery was closely

monitored during drilling

particularly through the mineralised

zones. Standard industry drilling mud

mixtures were employed to improve

core recovery especially through the

softer upper clay rich material of

the

Pedolith and Saprolith zones. Other

measures such quantity of water,

amount of rotation and drill bit

types that are appropriate to soft

formation drilling were considered

and employed during drilling when

required. At the completion of each

drill run the steel splits containing

the core were pumped out of the

retrieved core tube. Core was then

carefully transferred from the drill

split into plastic sleeves

(

layflat) which were secured in rigid

PVC splits. The

layflat was securely bound and sealed

(to preserve moisture) with tape

prior to transferring PVC splits into

plastic core

trays.

Whether a Twin hole comparison of AC/HA and

relationship AC/DD drill hole

exists between

sample recovery TGC assay grades indicates that no

and grade and sample bias exists. There does not

whether sample appear to be any relationship between

bias may have sample recovery and the visual

occurred due to graphite

preferential content.

loss/gain of

fine/coarse

material.

LogginWhether core and HA/AC/DD: drill holes were geologically

g chip samples logged

have been by a suitably trained Company

geologically geologist using standard Company code

and system. All geological logging was

initially recorded using

geotechnically lo a

gged to a level standard A4 paper template and later

of detail to digitally entered into customised

support Company MS Excel spreadsheets

appropriate utilising functional validation

Mineral tools. Excel files are checked and

Resource loaded to MS Access by the Database

estimation Administrator. Upon loading into the

mining studies Access database further validation is

and performed.

metallurgical

studies. HA/AC: holes were geologically logged

nominally at 1-metre intervals.

Reference samples of each 1-metre

intervals were collected and stored

in plastic chip trays for future

reference.

DD: holes were logged on a geological

interval basis. In addition all holes

were

geotechnically logged by trained

Company geologists to ISRM standards.

DD holes MGDD0008-0013 were

geotechnecnically logged by a

consulting geotechnical engineer. All

drill

core was photographed prior to

sampling and images were digitally

catalogued.

This information is of a sufficient lev

el of detail to support appropriate

Mineral Resource

estimation

, preliminary mining studies and

metallurgical

testwork.

Whether logging Logging is both qualitative and quantit

is qualitative ative

or quantitative. Geological logging includes but is

in nature. Core not limited

(or costean, to

channel, etc.) lithological features, estimated

photography. graphite content

and flake characteristics. The logging

and reporting of visual graphite

percentages

(on a volumetric basis) is

semiquantitative. A reference to

previous logs and assays is used as a

guide. Geotechnical logging of DD core

is both qualitative and

quantitative.

The total length 100% of the HA/AC/DD drill hole sample

and percentage intervals

of the relevant have been geologically logged.

intersection

logged

Sub-saIf core, whether Quarter PQ3 DD core is manually split

mpling cut or sawn and and/or cut using a motorised diamond

techn whether blade core saw and sampled for

iques quarter, half laboratory

or all core analysis.

and taken.

sampl

e

prepa

ration

If non-core, HA: 1-metre samples are composited on

whether geological intervals and then riffle

riffled, tube split at 50:50 using a standard Jones

sampled, rotary riffle splitter. Wet samples are

split, etc. and first air dried and then manually

whether sampled broken up prior to compositing or

wet or splitting.

dry.

AC: Individual 1-metre drill samples we

re

manually split in entirety using

either a 3-tier (87.5:12.5) or single

tier (50:50) riffle splitter or a

combination thereof to facilitate

mass reduction of

the drill sample to produce an assay sp

lit

. Additional compositing of the assay

off-split was controlled by

geological logging. Mineralised (>=3%

visual TGC content) off-splits

obtained from the soil (SOIL),

ferruginous

pedolith (FERP) and mottled zone

(MOTT) weathering horizons were not

composited, whereas mineralised

splits of the underlying pallid

saprolite (PSAP), saprolite (SAPL)

and

saprock (SAPR) weathering units were

composited nominally at 2-metres.

Unmineralised (=<3% visual TGC)

1-metre splits were composited

nominally at 4-metres. All bulk

rejects splits of the original

1-metre intervals were

transported to a secure undercover

storage facility in

Lilongwe

.

All 1-metre wet samples were removed

from the drill site without splitting

and relocated to the Companys

premises in Lilongwe. The wet samples

were transferred into large metal

trays and sun dried. Samples were

subsequently manually broken up and

thoroughly homogenised prior to

splitting 50:50 with a single tier

riffle splitter. One

off-split

was submitted to the laboratory for

assay

. The other off-split (i.e. the

material not sent for assaying) of

each individual 1-metre interval were

returned to original sample bag,

cable tied and placed in storage for

future

reference.

For all sample HA samples: sample preparation is

types, the conducted at Interteks laboratory in

nature, quality Johannesburg. Each entire sample is

and crushed to nominal 100% -3mm in a

appropriateness Boyd crusher then pulverised to 85%

of the sample -75µm in a LM5. Approximately 100g

preparation pulp is collected and sent to

technique. Intertek Perth for TGC

analysis.

AC samples: sample preparation was

conducted at either Intertek in Perth

or Johannesburg. The entire submitted

sample (=< ~3kg) is pulverised to 85%

-75µm in a LM5. Approximately 100g

pulp is collected and sent to

Intertek-

Genalysis Perth for chemical analysis.

DD samples: all sample preparation was

conducted at Intertek Perth. Each

entire sample is crushed to nominal

100% -3mm in a Boyd crusher then

pulverised to 85% -75µm in a LM5.The

entire submitted sample (=< ~3kg) is

pulverised to 85% -75µm in a LM5.

Approximately 100g pulp is collected

and sent to

Intertek-

Genalysis Perth for chemical analysis.

Quality control HA/AC/DD: All sampling was carefully

procedures supervised. Ticket books were used

adopted for all with pre-numbered tickets placed in

sub-sampling the laboratory sample bag and double

stages to checked against the hardcopy sample

maximise register.

representivity of

samples. Field QC procedures involve the use of

certified reference material assay

standards, blanks, duplicates,

replicates for company QC measures,

and laboratory standards, replicate

assaying and barren washes for

laboratory QC measures. The insertion

rate of each of these averaged better

than 1 in

20.

Measures taken All mass reduction (field and

to ensure that laboratory splitting) of samples were

the sampling is performed within

representative

of the in situ Gys Sampling Nomogram limits relevant

material to this style of mineralisation.

collected, Field duplicate splits of HA/AC

including for samples and quarter DD core were

instance undertaken nominally every 20th

results for sample to assess sampling

field errors.

duplicate/second A program of field replicate splitting

-half of selected

sampling. (

~10%) mineralised AC intervals was

completed at the conclusion of the

drill program. In addition, a number

of air core holes were drilled to

twin existing HA and DD holes, to

assess the

representivity of the AC drill

samples. The results of these

programs

indicate

there are no significant sampling

errors.

Whether sample All mass reduction of HA/AC/DD drill

sizes are samples undertaken during field

appropriate to sampling and laboratory sample

the grain size preparation were guided by standard

of the material sampling nomograms and fall within

being

sampled. Gys safety limits for the style of

mineralisation being

sampled.

QualitThe nature, The analytical and laboratory

y of quality and procedures are considered to be

assay appropriateness appropriate for reporting graphite

data of the assaying mineralisation, according to industry

and and laboratory best practice.

labor procedures used

atory and whether the

tests technique is Each entire sample was pulverised to

considered 85% -75µm. Approximately 100g pulp is

partial or col

total. lected for analysis at Intertek Perth.

A sample of 0.2g is removed from the

100 gram pulp, first digested in

HCl to remove carbon attributed to

carbonate, and is then heated to

450°C to remove any organic carbon.

An

Eltra CS-2000 induction furnace

infra-red CS analyser is then used to

determine the remaining carbon which

is reported as Total Graphitic Carbon

(TGC) as a

percentage.

For geophysical No non-laboratory devices were used

tools, for

spectrometers,

handheld XRF chemical analysis.

instruments,

etc., the

parameters used

in determining

the analysis

including

instrument make

and model,

reading times,

calibrations

factors applied

and their

derivation,

etc.

Nature of Field QC procedures involve the use of

quality control certified reference

procedures material

adopted (e.g. (CRM) assay standards, blanks,

standards, duplicates

blanks, and replicates for company QC

duplicate, measures, and laboratory standards,

external rep

laboratory eat assaying and barren washes for

checks) and laboratory QC measures. The insertion

whether rate of each of these averaged better

acceptable than 1 in

levels of 20.

accuracy (i.e. Performance of the primary laboratory

lack of bias) across all assay batches

and precision were

have been within acceptable tolerance levels

established. and that there is no appreciable

bias.

VerifiThe verification Significant mineralisation

cation of significant intersections were verified by

of intersections alternative company

sampl by either personnel.

ing & independent or An independent resource consultant

assay alternative conducted a site visit during

ing company December 2016 during the AC drilling

personnel. program. All drilling and sampling

procedures were observed by the

consultant during the site

visit.

The use of A number of AC holes were drilled to

twinned twin existing

holes.

HA and DD holes as verification of

sampling and

assaying

.

Documentation of All data is initially collected on

primary data, paper logging sheets and codified to

data entry the Company's templates. This data

procedures, was hand entered to spreadsheets and

data validated by Company geologists.

verification, This data was then imported to a

data storage Microsoft Access Database then

(physical and validated

electronic)

protocols. both electronically and manually. Assay

data is provided as.csv files from

the laboratory and loaded into the

project specific drill

hole database. Spot checks are made

against the laboratory

certificates.

Discuss any No adjustments have been made to assay

adjustment to data.

assay data.

LocatiAccuracy and HA/AC/DD

on of quality of All collars have been picked-up by the

data surveys used to Companys consulting

point locate drill

s holes (collar surveyor, using a Leica GPS System

and down-hole 1200 in RTK mode to define the

surveys), drill-hole collar coordinates to

trenches, mine centimetre

workings and accuracy.

other locations

used in Mineral Down-hole surveying of all DD holes

Resource was undertaken on selected holes to

estimation. determine drill

hole deviation. Surveys were carried

out using a Reflex

Ez-Trak multi-shot survey tool at

nominal 30m intervals. Downhole

surveying using the same method was

also completed for selected AC holes.

Results indicate that no significant

deviation occurs over the relatively

short length of the AC holes. HA

holes were drilled to a maximum depth

of 12 and were not downhole

surveyed.

Specification of WGS84 (GRS80) UTM Zone 36 South

the grid system

used.

Quality and The Companys consulting surveyor used

adequacy of a Leica

topographic

control. DGPS System 1200 in RTK mode to

accurately locate the x, y, z of

drill

collars.

Previous checking of Hand Auger holes

with the Shuttle Radar Topographic

Mission (SRTM) 1-arc second digital

elevation data has shown that the

Leica GPS System produces

consistently accurate

results.

Given the low topographic relief of

the area it is believed that this

represents high quality

control.

Data Data spacing for HA: drill holes are located across the

spaci reporting of entire strike and width of the

ng & Exploration modelled deposit with spacing on a

distr Results. nominal 200m x 20m spacing with

ibutio infill of 10m along

n section.

AC: drill holes were generally drilled

at 200m x 20m along existing HA

transects with infill of 100m x 20m

over the northern and southern areas

of the

deposit.

DD: holes were drilled on existing HA

transects spaced between 200 and 400m

along the strike extent of the

deposit between 8,435,400mN to

8,437,200mN.

Whether the data The data spacing is sufficient for the

spacing and estimation of a Mineral Resource (see

distribution is Section 3 of JORC Table

sufficient to 1)

establish the

degree of

geological and

grade

continuity

appropriate for

the Mineral

Resource and

Ore Reserve

estimation

procedure(s)

and

classifications

applied.

Whether sample No sample compositing has occurred.

compositing has

been

applied.

OrientWhether the No bias attributable to orientation of

ation orientation of sampling upgrading of results has

of sampling been

data achieves identified.

in unbiased

relat sampling of

ion possible

to structures and

geolo the extent to

gical which this is

struc known

ture considering the

deposit

type

If the No bias attributable to orientation of

relationship sampling upgrading of results has

between the been

drilling identified.

orientation and Flake graphite mineralisation is

the orientation conformable with the main primary

of key layering of the gneissic and

mineralised schistose host lithology.

structures is

considered to

have introduced

a sampling

bias, this

should be

assessed and

reported if

material.

SampleThe measures Samples are securely stored at the

secur taken to ensure Companys compound in Lilongwe. Chain

ity sample of custody is maintained from time of

security sampling in the field until sample is

dispatched to the

laboratory.

AuditsThe results of It is considered by the Company that

or any audits or industry best practice methods have

revie reviews of been employed at all stages of the

ws sampling exploration.

techniques and

data

Section 2 Reporting of Exploration Results

Criter JORC Code Commentary

ia explanation

MineraType, reference The Company owns 100% of 3 Exclusive

l name/number, Prospecting Licences (EPLs) in

tenem location and Malawi. EPL0355 granted in 2015 for

ent & ownership 2 years, EPL0372 granted in 2016 for

land including 2 years, EPL0413 granted in 2014 for

tenur agreements or 3 years. All EPLs are renewable for

e material issues two additional periods of 2 years

statu with third each upon

s parties such as expiry.

joint ventures, All drilling was located on EPL0372.

partnerships,

overriding

royalties,

native title

interests,

historical

sites,

wilderness or

national park

and environment

settings.

The security of The tenements are in good standing and

the tenure held no known impediments to exploration

at the time of or mining

reporting along exist.

with any known

impediments to

obtaining a

licence to

operate in the

area.

ExplorAcknowledgement No other parties were involved in

ation and appraisal exploration

done of exploration.

by by other

other parties.

parti

es

GeologDeposit type, The graphite mineralisation occurs as

y geological multiple bands of graphite gneisses,

setting and hosted within a broader Proterozoic

style of

mineralisation paragneiss package. In the Malingunde a

nd

Lifidzi areas specifically, a deep

topical weathering profile is

preserved, resulting in significant

vertical thicknesses from near

surface of

saprolite-hosted graphite

mineralisation.

Drill A summary of all No new exploration results are

hole information included in this

infor material to the release.

mation understanding

of the

exploration

results

including a

tab

ulation of the

following

information for

all Material

drill holes:

easting and

northings of

the drill hole

collar;

elevation or RL

(Reduced

Level-elevation

above sea level

in metres of

the drill hole

collar); dip

and azimuth of

the hole; down

hole length

a

nd interception

depth; and hole

length

If the exclusion All drill holes within the resource

of this area have previously been reported in

information is releases to the ASX providing collar

justified on easting, northing, elevation, dip,

the basis that azimut

the information h, length of hole, and mineralised

is not Material intercepts as

and this encountered.

exclusion does

not detract

from the

understanding

of the report,

the Competent

Person should

clearly explain

why this is the

case

Data In reporting No new exploration results are

aggre Exploration included in this release. All drill

gation Results, holes within the resource area have

metho weighting previously been

ds averaging reported.

techniques,

maximum and/or

minimum grade

truncations

(e.g. cutting

of

high-grades) and

cut-off grades

are usually

Material and

should be

stated.

Where aggregate No new exploration results are

intercepts included in this release. All drill

incorporate holes within the resource area have

short lengths previously been

of reported.

high-grade result

s and longer

lengths of low

grade results,

the procedure

used for such

aggregation

should be

stated and some

typical

examples of

such

aggregations

should be shown

in

detail.

The assumptions No metal equivalent values are used in

used for any this

reporting of report.

metal

equivalent

values should

be clearly

stated.

RelatiThese Preliminary interpretation of

onship relationships mineralised zones in

betwe are

en particularly aircore holes supported by DD (2016)

miner important in orientated core measurements suggests

alisat the reporting that mineralised zones are

ion of Exploration shallow-moderate east

width Results. dipping.

s &

inter

cept

lengt

hs

If the geometry Flake graphite mineralisation is

of the conformable with the main primary

mineralisation layering of the gneissic and

with respect to schistose host

the drill litholog

y. AC drill hole inclination of -60

hole angle is degrees are

known, its generally

nature should near orthogonal to the regional dip

be of the host units and dominant

reported. foliation

and hence specific drill hole

intercepts for -60 degree holes may

only approximate true width. The

averaged

st

rike of mineralised zones is

approximately

16

0° grid whereas all -60 inclined aircor

e

holes were orientated at grid east.

If it is not Not Applicable, refer to explanation

known and only directly

the down hole above.

lengths are

reported, there

should be a

clear statement

to this effect

(e.g. 'down

hole length,

true width not

known'.

DiagraAppropriate maps See Figures 1 and 2 within the main

ms and sections text of this

(with scales) report.

and tabulations

of intercepts

should be

included for

any significant

discovery being

reported. These

should include,

but not be

limited to a

plan view of

the drill

collar

locations and

appropriate

sectional

views.

BalancWhere No new exploration results are

ed comprehensive included in this release. All drill

repor reporting of holes within the resource area have

ting all Exploration previously been

Results is not reported.

practicable,

representative

reporting of

both low and high

-grade

s and/or widths

should be

practiced to

avoid

misleading

reporting of

exploration

results.

Other Other No additional meaningful and material

subst exploration exploration data has been excluded

antive data, if from this report that has not

explo meaningful and previously been reported to the

ration material, ASX.

data should be

reported

including (but

not limited to:

geological

observations;

geophysical

survey results;

geochemical

survey results;

bulk samples -

size and method

of treatment;

metallurgical

test results;

bulk density,

groundwater,

geotechnical

and rock

characteristics;

potential

deleterious or

contaminating

substances.

FurtheThe nature and The next phase of exploration is to

r scale of complete additional resource infill,

work planned further extensional and step-out

work (e.g. test

for lateral Aircore/ Reverse Circulation drilling.

extensions or

depth

extensions or

large-scale

step-out

drilling).

Diagrams clearly See Figure 2 within the main text of

highlighting this

the areas of report.

possible

extensions,

including the

main geological

interpretations

and future

drilling areas,

provided this

information is

not

commercially

sensitive.

Section 3 Estimation and Reporting of Mineral Resources

Criteri JORC Code Commentary

a explanation

DatabasMeasures taken Data used in the Mineral Resource

e to ensure that estimate is was sourced from an MS

integr data has not Access database. The database is

ity been corrupted maintained by

by, for Sovereign.

example,

transcription Relevant tables from the database

or keying were exported to csv format, and

errors, then imported into

between its

initial Datamine Studio RM software for use

collection and in the Mineral Resource

its use for estimate.

Mineral

Resource

estimation

purposes.

Data validation Validation of the data import include

procedures checks for overlapping intervals,

used. missing survey data, missing assay

data, missing lithological data, and

missing

collars.

Site Comment on any The Competent Person (Mineral

visits site visits Resources) visited the project in

undertaken by December

the Competent 2016.

Person and the The aircore drilling rig was in

outcome of operation and the Competent Person

those reviewed drilling and

visits. sampling

procedures.

Planned drill sites were examined and

assessed with respect to strike and

dip of the interpreted geological

model. Sample storage facilities

were inspected. Discussions were

held with the Sovereign geological

staff regarding all drilling and

sampling procedures and outcomes.

Selected diamond drill core was

inspected, with all weathering types

pertinent to the Mineral Resource

reviewed. There were no negative

outcomes from any of the above

inspections, and all samples and

geological data were deemed fit for

use in the Mineral Resource

estimate.

If no site Not applicable, site visit was

visits have undertaken.

been

undertaken

indicate why

this is the

case.

GeologiConfidence in There is a reasonably high level of

cal (or confidence in the geological

interp conversely, interpretation, based upon

retatio the lithological logging of diamond

n uncertainty drill core,

of) the

geological aircore chip samples and hand auger

interpretation samples.

of the mineral

deposit. Multi-spectral satellite imagery and

airborne

g

eophysical data provided guidance for

the strike continuity of the

deposit.

Drill hole intercept logging and

assay results

(

aircore, hand auger and diamond

core), structural interpretations

from drill core and geological logs

of

aircore and hand auger drill data

have formed the basis for the

geological interpretation. The

drilling mostly targeted the

SAPL and SAPR weathering horizons,

with limited sampling below the

upper level of the fresh

rock

(FRESH) domain.

Nature of the Assumptions were made on depth and

data used and strike extension of the gneiss,

of any using drill

assumptions

made. hole assays as anchor points at depth

and at intervals along strike.

Geological mapping also supports the

geological

model.

Seven weathering domains were

modelled and support the grade

interpolation and Mineral Resource

classification.

The effect, if No alternative interpretations were

any, of considered because the geophysical

alternative models and diamond core support the

interpretations current

on Mineral interpretation.

Resource

estimation.

The use of Graphitic Graphite mineralisation is

geology in hosted within a graphitic gneiss,

guiding and which is mapped along

controlling

Mineral its strike length within the project

Resource area and within the license area.

estimation. Grade (total graphitic carbon,

TGC%) is assumed to be likewise

continuous with the host rock unit.

Mineralised waste and non-mineralised

waste zones were modelled within the

graphitic

gneiss.

The factors The graphitic gneiss is open along

affecting strike and down

continuity dip.

both of grade

and The interpretation of the

geology. mineralisation domains is based upon

a pre-determined lower cut-off grade

for TGC, which is equivalent to the

graphitic gneiss domain boundary. A

variation to the cut-off grade will

affect the volume and average grade

of the domains, however there are no

geological reasons identified to

date to support higher grade TGC

domains within the graphitic

gneiss.

DimensiThe extent and Malingunde mineralised bodies strikes

ons variability of north west, dipping between 25° and

the Mineral 50 degrees° to the north east. It is

Resource currently modelled as three zones of

expressed as mineralisation, with a depth extent

length (along of 50 m, a strike length of 4,500 m

strike or and a plan width varying between 50

otherwise), m and 230

plan width, m.

and depth

below surface

to the upper

and lower

limits of the

Mineral

Resource.

EstimatThe nature and Datamine Studio RM software was used

ion appropriateness for all geological

and of the

modell estimation modelling, block modelling, grade

ing technique(s) interpolation, Mineral Resource

techni applied and classification and reporting.

ques key

assumptions, GeoAccess Professional and Snowden

including Supervisor (V8.7) were used for

treatment of geostatistical analyses.

extreme grade

values,

All samples were composited to 2 m

domaining, intervals. All drill

interpolation

parameters and hole assay data (diamond, aircore and

maximum hand auger) were utilised in the

distance of grade interpolation.

extrapolation

from data

points. If a A block model with parent cell sizes

computer 25 m (E) x 50 m (N) x 5 m (RL) was

assisted constructed for

estimation

method was Malingunde, compared to typical drill

chosen include spacing of 50 m x 100 m.

a description

of computer

software and Grade estimation was by ordinary

parameters kriging (OK) with inverse distance

used. squared (IDS) estimation run as a

check estimate. A minimum of 8 and

maximum of 16 composited samples

were used in any one block estimate

for all domains. A maximum of 5

composited samples per drill hole

were used in any one block estimate.

Cell discretisation of 3 x 3 x 3 was

used. The pallid

saprolite, saprolite, saprock and top

of fresh rock domain (pseudo

transitional material) were combined

into one estimation

domain.

The Inverse distance squared (IDS)

availability estimation

of check

estimates, was run as a check estimate of the ord

previous inary kriging (OK)

estimates

and/or mine grade estimation. No depletion of the

production Mineral Resource due to mining

records and activity was required due to no

whether the mining having occurred historically.

Mineral This Mineral Resource is the maiden

Resource MR reported for

estimate takes

appropriate Malingunde.

account of

such

data.

The assumptions No by-products were modelled.

made regarding

recovery of

by-products.

Estimation of No estimation of deleterious elements

deleterious or non-grade variables of economic

elements or significance were

other modelled.

non-grade

variables of

economic

significance

(e.g. sulphur

for acid mine

drainage

characterisatio

n).

In the case of Grade estimation was by ordinary

block model kriging (OK) with inverse distance

interpolation, squared (IDS) estimation run as a

the block size check estimate. A minimum of 8 and

in relation to maximum of 16 composited samples

the average were used in any one block estimate

sample spacing for all domains. A maximum of 5

and the search composited samples per drill hole

employed. were used in any one block estimate.

Cell discretisation of 3 x 3 x 3 was

used. The pallid

saprolite, saprolite, saprock and top

of fresh rock domain (pseudo

transitional material) were combined

into one estimation

domain. The ferruginous pedolith (FERP

)

and mottled zone (MOTT) were

combined into a separate estimation

domain.

Any assumptions No selective mining units were

behind assumed in this

modelling of model.

selective

mining

units.

Any assumptions TGC grade was the only variable

about estimated.

correlation

between

variables.

Description of TGC interpretations were based upon a

how the lower cut-off of 4% TGC, which is

geological equivalent to the graphitic gneiss

interpretation domain boundary, from logging of

was used to diamond drill core and

control the

resource aircore chips.

estimates. The Mineral Resource block model

consists of 3 zones of TGC

mineralisation, with 1 major zone

and 2 minor zones, with respect to

strike extent. Mineralisation

domains were encapsulated by means

of 3D

wireframed envelopes. Domains were

extrapolated along strike or down

plunge to half

a section spacing. Waste domains

(total=31) were modelled within the

graphitic gneiss envelopes to excise

barren zones of gneiss.

Discussion of Top cuts were not used to constrain

basis for extreme grade values because the TGC

using or not grade distribution did not warrant

using grade their

cutting or use.

capping.

The process of The grade model was validated by 1)

validation, creating slices of the model and

the checking comparing to drill hole samples on

process used, the same slice; 2) swath plots

the comparison comparing average block grades with

of model data average sample grades on nominated

to drill hole easting, northing and RL slices; 3)

data, and use mean grades per domain for estimated

of blocks and flagged drill hole

reconciliation samples; and 4) cross sections with

data if block model and drill hole data

available. colour coded in like manner. No

reconciliation data exists to test

the model.

MoisturWhether the Tonnages are estimated on a dry basis.

e tonnages are

estimated on a

dry basis or

with natural

moisture, and

the method of

determination

of the

moisture

content.

Cut-offThe basis of Visual analysis of the drill

parame the adopted analytical results demonstrated that

ters cut-off the lower cut-off interpretation of

grade(s) or 4% TGC corresponds to a natural

quality break in the grade population

parameters distribution.

applied.

The lower cut-off of 4% TGC is

approximately equivalent to the

graphitic gneiss domain boundary,

from logging of diamond drill core

and

aircore chips.

Mining Assumptions It is assumed the deposit, if mined,

factor made regarding will be developed using open pit

s or possible mining methods. No assumptions have

assump mining been made to date regarding minimum

tions methods, mining widths or

minimum mining dilution.

dimensions and

internal (or, The largest mineralisation domains in

if applicable, plan

external) view have an apparent width of up to

mining 250 m which may result in less

dilution. It selective mining methods, as opposed

is always to (for example) mining equipment

necessary as that would need to be used to mine

part of the narrow veins in a gold

process of mine.

determining

reasonable

prospects for

eventual

economic

extraction to

consider

potential

mining

methods, but

the

assumptions

made regarding

mining methods

and parameters

when

estimating

Mineral

Resources may

not always be

rigorous.

Where this is

the case, this

should be

reported with

an explanation

of the basis

of the mining

assumptions

made.

MetalluThe basis for Sovereign have announced several

rgical assumptions or sets of metallurgical results to

factor predictions the market (7th September 2016;

s or regarding 23rd November 2016; 27th February

assump metallurgical 2017 and 20th March 2017), relating

tions amenability. to flake size distribution and

It is always purity of graphite concentrate.

necessary as Sovereign are continuing with

part of the further test

process of work.

determining

reasonable Sovereign engaged SGS Canada to

prospects for conduct an initial bench scale

eventual laboratory flotation

economic

extraction to testwork program on drill samples

consider obtained from the

potential

metallurgical Malingunde flake graphite deposit.

methods, but The main objective was to

the investigate the metallurgical

assumptions response of shallow

regarding

metallurgical saprolitic mineralization and the test

work

treatment was performed on composites from

processes and fifteen drill holes of which most

parameters are located in the northern part of

made when the

reporting

Mineral deposit.

Resources may The majority of the testwork was

not always be performed using two master composite

rigorous. samples described as north

Where this is composite and southern composite

the case, this from shallow auger drill samples.

should be The

reported with

an explanation testwork was largely based on the

of the basis flowsheet previously developed for

of the weathered material from Sovereigns

metallurgical

assumptions Duwi graphite deposit.

made. The flotation testwork on auger and

diamond drill core samples

demonstrated that generally between

about 50% and 80% of the liberated

flakes were larger than 150 µm, and

that final overall concentrate

grades were in the range of 97% to

99% Carbon.

The flake size distribution and

purity are considered by the

Competent Person (industrial

minerals) to be favourable for

product marketability.

Property testing conducted at a

specialty

laboratory in Germany indicates that

the potential products from

Malingunde should be suitable for

expandable graphite

markets.

The Competent Person recommends

additional variability flotation

testing to investigate different

geological and weathering domains

and to improve confidence in product

quality across the

deposit.

EnvironAssumptions A large portion of the Mineral

mental made regarding Resource is confined to the

factor possible waste

s or and process saprolitic weathering domains, and

assump residue any

tions disposal

options. It is sulphide minerals have been oxidised i

always n the geological past. Therefore acid

necessary as mine-drainage is not anticipated to

part of the be a significant risk when mining

process of from the

determining

reasonable oxidised domain. Acid-mine drainage

prospects for would be considered if mining of the

eventual fresh-rock domain was to be

economic undertaken in the

extraction to future.

consider the

potential No major water courses run through

environmental the resource area, although a fresh

impacts of the water dam is located at the southern

mining and end of the deposit, which may

processing continue along strike under the

operation. water body. No Mineral Resources are

While at this reported within the dam

stage the limits.

determination

of potential The Malingunde deposit is located

environmental within a farming area and has

impacts, villages located along the strike of

particularly the deposit. Sovereign holds regular

for a discussions with local landholders

and community groups to keep them

greenfields proj well informed of the status and

ect, may not future planned directions of the

always be well project.

advanced, the

status of Malingunde is in a sub-equatorial

early region of Malawi and is subject to

consideration heavy seasonal rainfall, with rapid

of these growth of vegetation in season.

potential

environmental

impacts should

be reported.

Where these

aspects have

not been

considered

this should be

reported with

an explanation

of the

environmental

assumptions

made.

Bulk Whether assumed Density was calculated from 69

densit or determined. billets of core taken from across

y If assumed, the deposit, with density measured

the basis for using wax coated

the

assumptions. immersion method performed by

If determined, Intertek Perth. Density data was

the method loaded into a

used, whether

wet or dry, Datamine drill hole file, which was

the frequency flagged against weathering horizons

of the and mineralisation domains.

measurements,

the nature,

size and

representativen

ess of the

samples.

The bulk All bulk density determinations were

density for completed by the waxed immersion

bulk material method.

must have been

measured by

methods that

adequately

account for

void spaces

(vughs,

porosity,

etc.),

moisture and

differences

between rock

and alteration

zones within

the

deposit.

Discuss An average density value of 1.7 t/m3

assumptions was determined for the soil domain,

for bulk 1.8 t/m3 for the ferruginous

density

estimates used pedolith (FERP) domain, 1.8 t/m3 for

in the the mottled

evaluation

process of the zone (MOTT) domain, 2.0 t/m3 for the

different pallid

materials.

saprolite (PSAP) domain, 2.0 t/m3 for

the

saprolite (SAPL) domain, and 2.2 t/m3

or 2.3 t/m3 for the

saprock (SAPR) rock profile,

dependent upon the depth of the

profile. A value of

2.4 t/m3 or 2.7 t/m3 was assigned to

the transitional / fresh rock

profile, dependent upon the depth of

the profile. A small data population

did not allow for discernible

differences in density between the

waste and mineralisation zones to be

determined.

ClassifThe basis for Classification of the Mineral

ication the Resource estimates was carried out

classification taking into account the geological

of the Mineral understanding of the deposit,

Resources into quality of the samples, density data

varying and drill hole spacing, supported by

confidence metallurgical test results that

categories. indicate general product

marketability.

The Mineral Resource is classified as

a combination of Indicated and

Inferred, with geological evidence

sufficient to assume geological and

grade continuity in the Indicated

volumes.

Whether All available data was assessed and

appropriate the competent persons relative

account has confidence in the data was used to

been taken of assist in the classification of the

all relevant Mineral

factors (i.e. Resource.

relative

confidence in

tonnage/grade

estimations,

reliability of

input data,

confidence in

continuity of

geology and

metal values,

quality,

quantity and

distribution

of the

data).

Whether the The current classification assignment

result appropriately reflects the Competent

appropriately Persons view of the

reflects the deposit.

Competent

Persons view

of the

deposit

Audits The results of No audits or reviews of the current

or any audits or Mineral Resource estimate have been

review reviews of undertaken, apart from internal

s Mineral reviews carried out by CSA Global

Resource and

estimates. Sovereign.

DiscussWhere An inverse distance estimation

ion of appropriate a algorithm was used in parallel with

relati statement of the ordinary

ve the relative

accura accuracy and kriged interpolation, with results

cy/ confidence very

confid level in the similar.

ence Mineral

Resource No other estimation method or

estimate using geostatistical analysis has been

an approach or performed.

procedure

deemed

appropriate by Relevant tonnages and grade above

the Competent nominated cut-off grades for TGC are

Person. For provided in the introduction and

example, the body of this report. Tonnages were

application of calculated by filtering all blocks

statistical or above the cut-off grade and

geostatistical sub-setting the resultant data into

procedures to bins by mineralisation domain. The

quantify the volumes of all the collated blocks

relative were multiplied by the dry density

accuracy of value to derive the tonnages. The

the resource graphite metal values (g) for each

within stated block were calculated by multiplying

confidence the TGC grades (%) by the block

limits, or, if tonnage. The total sum of all metal

such an for the deposit for the filtered

approach is blocks was divided by 100 to derive

not deemed the reportable tonnages of graphite

appropriate, a metal.

qualitative

discussion of

the factors

that could

affect the

relative

accuracy and

confidence of

the

estimate.

The statement The Mineral Resource is a local

should specify estimate, whereby the drill

whether it

relates to hole data was geologically domained ab

global or ove nominated TGC cut-off grades,

local resulting in fewer drill hole

estimates, samples to interpolate the block

and, if local, model than the complete drill hole

state the dataset, which would comprise a

relevant global

tonnages, estimate.

which should

be relevant to

technical and

economic

evaluation.

Documentation

should include

assumptions

made and the

procedures

used.

These No production data is available to

statements of reconcile model

relative results.

accuracy and

confidence of

the estimate

should be

compared with

production

data, where

available.

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