June 2025 Quarterly Report

Sovereign Metals Limited (ASX:SVM, AIM:SVML, OTCQX:SVMLF) (Sovereign or the Company) is pleased to provide its quarterly report for the period ended 30 June 2025 including advances made at its Kasiya Rutile-Graphite Project (Kasiya or the Project) in Malawi.

HIGHLIGHTS DURING AND SUBSEQUENT TO THE QUARTER

DFS Progresses with Completion of Geotechnical Program and Power Supply MOU Signed

• In April 2025, the Company announced that several geotechnical drilling programs were underway at all critical project infrastructure locations across Kasiya.
• Geotechnical investigations were successfully completed subsequent to the quarter end, with preliminary findings confirming favourable subsurface conditions for infrastructure construction.
• In May 2025, Sovereign and Electricity Supply Corporation of Malawi (ESCOM) entered into a non-binding Memorandum of Understanding (MOU) to ensure the long-term supply of electricity to Kasiya, establishing a framework for negotiating future definitive agreements.
• In May 2025, the World Bank approved a US$350m grant to support Malawi's Mpatamanga Hydropower Storage Project to significantly increase Malawi's installed capacity by 2030.

Japan's Toho Titanium Confirms Kasiya Rutile's Suitability for Producing High-Performance Products

• During the quarter, one of Japan's premier titanium metal producers, Toho Titanium Company Limited (Toho Titanium), confirmed that natural rutile from Kasiya is suitable for manufacturing its high-specification titanium products critical to aerospace and industrial applications.
• Toho Titanium is a cornerstone supplier in the global titanium value chain, serving the world's most demanding aerospace and industrial manufacturers.

New Graphite Tariff Environment Underscores Kasiya's Global Significance

• In July 2025, the U.S. Commerce Department announced 93.5% preliminary anti-dumping duties on Chinese graphite imports, fundamentally altering the economics for battery manufacturers seeking secure, cost-competitive supply chains.
• The new tariff environment highlights Kasiya's potential as the world's largest and lowest-cost non-Chinese graphite producer with industry-leading US$241/t incremental cost of production.
• Latest coating optimisation testwork achieved successful coated spherical purified graphite (CSPG) production characteristics with superior performance metrics to support advancing offtake discussions.

Expanded Conservation Farming Program Increases Crop Yields Fourfold

• Sovereign's 2025 Conservation Farming Program increased crop yields for participating farmers by four times (4x), with the top farmer achieving a 10x yield versus traditional farming techniques.
• Sovereign has adopted Conservation Farming as one of the cornerstones of its livelihood improvement initiatives for the Kasiya Project.

Next Steps

Over the quarter ending September 2025, Sovereign will:

• continue to advance the Kasiya Definitive Feasibility Study (DFS), including finalising mining fleet design, process plant configuration, and mine gate-to-vessel logistics solutions;
• advancing rutile and graphite offtake discussions; and
• further the Company's community and social development programs in Malawi.

In April 2025, the Company announced that several geotechnical drilling programs were underway at Kasiya as part of the DFS. Subsequent to the quarter, the programs were successfully completed.

The extensive programs, conducted by ARQ Geotech (Pty) Ltd and with oversight from the Sovereign-Rio Tinto Technical Committee, represent a critical milestone in the Project's ongoing DFS. The continued progress demonstrates momentum towards advancing this Tier-1 project.

The geotechnical investigations provide essential subsurface data that will inform detailed engineering design and infrastructure planning across major Project components. The comprehensive scope covered critical infrastructure areas, including mining operations, process plants, tailings storage facility (TSF), and raw water storage dam - representing the foundational elements required for the Project's development.

Understanding subsurface conditions is crucial for predicting interactions between in-situ geological strata and the overlying infrastructure. The geotechnical data will inform the design of foundations, earthworks, slope stability measures, and material suitability; ultimately contributing to safe, efficient, and cost-effective development.

Preliminary Findings

Initial results indicate highly favourable subsurface conditions that correlate well with the expected regional geology. The material profiles encountered across all infrastructure sites show generally consistent stratigraphy. Consistent stratigraphy and suitable subsurface conditions enable more standardised foundation designs and construction approaches across infrastructure areas, potentially reducing engineering complexity and construction costs. The findings will be integrated into detailed engineering design work to optimise infrastructure placement, foundation design, and construction methodologies.

Figures 1-4 Clockwise from Top Left: Geotechnical diamond drilling, auger drilling, seismic geophysics testing using multi-channel analysis of surface waves (MASW), Cone Penetration Test with pore pressure measurements (CPTu) rig.

POWER SUPPLY MOU SIGNED AS WORLD BANK APPROVES MALAWI HYDROPOWER PROJECT

In May 2025, Sovereign announced that it had entered into a non-binding MOU with ESCOM (Malawi's national electricity utility) to ensure the long-term supply of electricity to the Kasiya Project. The MOU establishes the framework for negotiating the following future definitive agreements:

• Project Implementation Agreement, including construction and installation of a new 132kV overhead power line, and
• Power Supply Agreement, for the provision of bulk power supply from Malawi's national grid.

The MOU follows discussions with ESCOM regarding the provision of electricity to the Kasiya Project in preparation for construction and operation. The total installed capacity in Malawi is currently 549MW, with approximately 73% of this capacity coming from hydropower.

During Stage 1, Kasiya's power demand will amount to 30MW, increasing to 60MW at steady-state production in Year 6 of operation. To supply power from the hydro-based grid network, a 132kV overhead transmission line will be constructed to connect the Kasiya site to the Nkhoma substation, approximately 97km away. Nkhoma has been identified as the most suitable connection point based on power reliability, technical feasibility, and environmental and social considerations. This line will supply the 132/33kV Kasiya bulk intake substation.

The purpose of the MOU with ESCOM is to record the mutual understanding for negotiation in good faith of a Project Implementation Agreement and a Power Supply Agreement (Definitive Agreements). The MOU is non-exclusive and non-binding and remains subject to negotiation and execution of the Definitive Agreements. The MOU will expire upon execution of the Definitive Agreements or on 30 June 2026, whichever is the earliest, but it can be mutually extended by 12 months.

Figure 5: Nkhoma substation has capacity for connection to the Kasiya operation.

(Source: Millenium Challenge Corporation, USA)

Mpatamanga Hydropower Storage Project

On 15 May 2025, the World Bank approved a US$350m grant to support Malawi's Mpatamanga Hydropower Storage Project (MHSP), a large infrastructure operation aiming to "transform the country's energy landscape and its economic development trajectory." (Source: World Bank)

In September 2022, the Malawian Government selected a consortium of strategic sponsors, which currently owns the MHSP, and consists of Electricité de France (EDF) and SN Malawi BV, which in turn is owned by the UK Government's development finance institution, British International Investment plc, the Norwegian Parliament's development finance institution, Norfund, and global energy company TotalEnergies SE. Once complete, the US$1.5 billion MHSP will deliver 358MW of additional generation capacity to the Malawi electricity grid.

MHSP is one of several large energy projects in Malawi supported by the World Bank Group, reflecting the institution's strong commitment to supporting this sector as an essential enabler of economic growth and development.

In a World Bank press release, Nathan Belete, World Bank Division Director for Malawi, Tanzania, Zambia and Zimbabwe commented: "This new hydropower project is a game-changer for Malawi, capable of catalyzing transformative change in productive economic sectors such as mining, agri-business and tourism. As the country works on driving its economic development agenda, this new source of clean and reliable energy will help drive business growth, create jobs, and improve the lives of millions of Malawians."

TOHO TITANIUM VALIDATES KASIYA RUTILE FOR HIGH-SPECIFICATION TITANIUM PRODUCTS

In June 2025, the Company announced that one of Japan's premier titanium metal (sponge and ingot) producers, Toho Titanium, confirmed the suitability of natural rutile from Sovereign's Kasiya Project for manufacturing high-specification titanium products critical to aerospace and industrial applications.

Toho Titanium's analysis of a sample of rutile from Kasiya concluded that "it is of a quality that can be used without any issues". Kasiya's rutile surpassed the requirements for TiO2 grade (>95%), low or no deleterious elements, low radiation value, and suitable particle size distribution and density.

Toho Titanium represents a cornerstone supplier in the global titanium value chain, with combined decades of expertise serving the world's most demanding aerospace and industrial manufacturers. Toho Titanium, together with Japan's other major titanium metal producer, Osaka Titanium Technologies Co., Ltd., account for over 15% of global titanium production capacity and over 60% of non-sanctioned, aerospace-grade titanium metal production (i.e. excluding China, which is not qualified to produce aerospace-grade titanium, and Russia).

Toho Titanium occupies a critical position in titanium supply chains, supporting the aerospace industry across the United States, Europe, and the Indo-Pacific region. Recent geopolitical developments have intensified focus on secure titanium supply chains, creating unprecedented strategic opportunities and strengthening the strategic nature of Kasiya as a future supplier of high-grade titanium feedstock.

Figure 6: 2024 Global Titanium Sponge Production Capacity by Non-Sanctioned Countries Qualified to Produce Aerospace-Grade Titanium Products.

(Source: US Geological Survey; "Other" includes USA and India)

Kasiya Rutile Suitable for all Major End-Use Markets

Bulk scale metallurgical test work conducted by Allied Mineral Laboratories in Australia has previously confirmed that a premium-grade rutile product can be produced via a simple, conventional process flowsheet with no requirements for flotation or acid leaching.

World-class specification rutile products were reported ranging from 95.0% to 97.2% TiO2 with low impurities and exceptional metallurgical recoveries of up to 100% (Refer to ASX Announcement: "Outstanding Metallurgical Results at Kasiya" dated 7 December 2021).

The premium chemical parameters and particle sizing (d50 126μm, 8.6% <75μm) of Kasiya's rutile indicate that the product is suitable for all major end-use markets. Specifically, Kasiya's rutile product specification makes it a suitable feedstock for superior, high-performance titanium metal products. Confirmation that Kasiya's rutile can be used by Toho Titanium establishes Sovereign Metals as a credible future supplier to the global titanium industry's most discerning customers. This technical endorsement, combined with Kasiya's unmatched scale and strategic location, positions Sovereign as a potential market leader in the titanium supply chain.

NEW GRAPHITE TARIFF ENVIRONMENT UNDERSCORES KASIYA'S GLOBAL SIGNIFICANCE

Subsequent to the quarter end, the Company announced that the latest testwork on graphite from Kasiya has delivered highly successful results. The testwork focused on optimising the coating process for conversion of Kasiya-derived spherical purified graphite (SPG) coated spherical CSPG while maintaining premium performance.

The results will assist with ongoing offtake discussions with anode manufacturers. Sovereign is developing Kasiya to potentially become the world's largest and lowest-cost natural graphite producer outside of China with an incremental cost of graphite production of US$241/t.

Figure 7: Natural Flake Graphite Industry Cost Curve for Projects at Prefeasibility Stage or Later.

(Sources: See Appendix 4)

The global graphite supply chain is experiencing fundamental realignment following the U.S. Commerce Department's 17 July 2025 announcement of 93.5% preliminary anti-dumping duties on Chinese graphite imports. Combined with existing tariffs, this creates an effective 160% barrier on Chinese graphite, fundamentally altering the economics for battery manufacturers seeking secure, cost-competitive supply chains. China currently controls approximately 75% of global graphite production and 97% of anode material processing, creating critical supply chain vulnerabilities that major battery manufacturers are now actively addressing.

Latest Testwork Validates Kasiya Graphite's World-Class Quality to Anode Manufacturers

Key achievements from the process include:

Table 1: Electrochemical Half-Cell Testing Results

EXPANDED CONSERVATION FARMING PROGRAM INCREASES CROP YIELDS FOURFOLD

During the quarter, Sovereign announced the results of its 2025 Conservation Farming Program harvest season at Kasiya.

As part of Sovereign's commitment to improving livelihoods and local communities near the Kasiya Project, the Company launched a Program in 2024 to support the development of successful smallholder farmers. Local farmers received training to increase maize crop yield, protect soil from erosion and degradation and ultimately improve long-term food security.

During the 2024 harvest season, the Program delivered strong results, with visibly improved crop growth with the 90 participating farmers reporting harvest yields three-times (3x) higher than previous years despite an El Niño-driven drought.

In 2025, 350 farmers, of which 50% are female, have participated in the Program with yield surveys of all farmers who have harvested their crops demonstrating four times (4x) higher than typical yields from conventional farming.

The top farmer this season, harvested 12.8 tonnes/ha i.e. a ten-times (10x) increase in crops, compared to last season's top farmer who achieved 6 tonnes/ha and a five-times (5x) higher crop yield. Top-performing farmers have not only managed to meet their household food requirements, but have also sold surplus crop with proceeds being used to upgrade their houses and invest in trading businesses.

Figure 8: Conservation farming vs. conventional farming methods.

NEXT STEPS

The Company plans to update the market on the following progress in the coming months:

• Finalisation of mine fleet design and plant configuration,
• DFS-level mine gate to vessel logistics solution,
• Progress in discussions with future potential end-users and offtakers of rutile and graphite,
• Updates on community and social development programs, including DFS-level rehabilitation strategy,
• MRE update to be published in conjunction with the DFS following completion of further infill drilling, and
• Progress of the DFS, which is targeted for completion by Q4, 2025.

APPENDIX 1: SUMMARY OF MINING TENEMENTS

As at 30 June 2025, the Company had an interest in the following tenements:

Notes:

SSL: Sovereign Services Limited, MML: McCourt Mining Limited

1 An exploration licence (EL) covering a preliminary period in accordance with the Malawi Mines and Minerals Act (No 8. Of 2019) (2019 Mines Act) is granted for a period not exceeding three (3) years. Thereafter two successive periods of renewal may be granted, but each must not exceed two (2) years. This means that an EL has a potential life span of seven (7) years under the 2019 Mines Act. ELs that have come to the end of their term can be converted by the EL holder into a retention licence (RL) for a term of up to 5 years subject to meeting certain criteria. All of Sovereign's ELs were originally granted under the 2019 Mines Act. On 28 June 2024, the Mines and Minerals Act (2023) (2023 Mines Act) was gazetted and came into force. As previously disclosed, the New Act introduces amendments to improve transparency and governance of the mining industry in Malawi. Sovereign notes the following updates in the New Act which may affect the Company going forward: (i) ELs granted under the 2023 Mines Act will be granted for an initial period of 5 years with the ability to extend by 3 years on two occasions (total 11 years); (ii) the Malawian Government maintains a right to free equity ownership for large-scale mining licences but the New Act has removed the automatic free government equity ownership with the right to be a negotiation matter; and (iii) A new Mining and Regulatory Authority will be responsible for implementing the objectives of the New Act.

2 During and subsequent to the quarter, SSL submitted EL extension applications prior to their renewal dates in accordance with the 2023 Mines Act.

3 Subsequent to the quarter, RLs in relation to EL0492 were granted for a period of 12 months in accordance with the 2023 Mines Act.

APPENDIX 2: RELATED PARTY PAYMENTS

During the quarter ended 30 June 2025, the Company made payments of A$533,000 to related parties and their associates. These payments relate to existing remuneration arrangements (executive salaries, director fees, superannuation and bonuses (A$435,000)) and provision of serviced office facilities, company secretarial services and administration services (A$98,000).

APPENDIX 3: MINING EXPLORATION EXPENDITURES

APPENDIX 4: FLAKE GRAPHITE OPERATING COST INFORMATION

• China weighted average C1 cash cost source: Benchmark Mineral Intelligence
• Cumulative Demand & China graphite production source: S&P Global Market Intelligence
• Company specific disclosure sources as follows:

Notes:

• Blencowe Resources C1 cash costs calculated as US$499/t operating costs (FOB) less US$17/t royalties as disclosed in the source above
• Magnis not included while shares are suspended by the ASX in December 2023
• Leading Edge Materials Woxna Graphite not included as it is currently under care and maintenance
• Northern Graphite's Lac des Iles not included due to recent maintenance
• Talga Group not shown as latest technical study based on integrated anode plant strategy
• Tirupati Graphite not included due to lack of relevant disclosure

Appendix 5B

Mining exploration entity or oil and gas exploration entity

quarterly cash flow report

Name of entity

Sovereign Metals Limited

Answer: Not applicable

Answer: Not applicable

Answer: Not applicable

Compliance statement

2 This statement gives a true and fair view of the matters disclosed.

Date: 31 July 2025

Authorised by: Company Secretary

(Name of body or officer authorising release - see note 4)

Notes