Strategic Heavy Rare Earths Recovered at Kasiya

• Preliminary analysis confirms Kasiya monazite to contain exceptionally elevated levels of heavy rare earth elements Dysprosium - Terbium (DyTb) and Yttrium, materially exceeding those of the five largest producers globally, which account for 70% of the world's rare earth production
• DyTb and Yttrium are of paramount importance to nations seeking to secure and protect rare earth supply chains

o DyTb: heavy magnet rare earths essential for high-temperature permanent magnets used in advanced technology, including defence systems and precision weapons

§ Q4 2025 prices in Europe: US$850,000/t for Dy and $3,600,000/t for Tb

o Yttrium: high-impact rare earth element critical for aerospace, thermal barrier coatings, radar and laser systems, alloy strengthening and semiconductor manufacturing

§ Q4 2025 price: $270,000/t; up 4,000% from Q1 2025, with the US importing 100% from China

• Monazite by-product has potential to add third revenue stream to Kasiya for near-zero incremental cost

o Basic monazite concentrate currently sells for over US$8,500/t delivered to China

• Kasiya's growing strategic importance emphasised by recent US State Department visit to its Malawi operations and China's recent restriction of heavy rare earth exports to Japan

Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX:SVMLF) (Sovereign or the Company) is pleased to announce a significant and strategic rare earth value addition to its Kasiya Rutile-Graphite Project (Kasiya or the Project) in Malawi.

The Company has successfully recovered a monazite product containing high-value heavy rare earth elements (REE) from the tailings stream generated during rutile processing at its upgraded Lilongwe laboratory facilities. The concentrate was recovered from material that would otherwise be discarded, i.e. the non-conductor tailings stream from electrostatic separation of a heavy mineral gravity concentrate of Kasiya ore. Producing a monazite concentrate would therefore require no additional complex processing. Chemical analysis of magnetic concentrates from processed resource drilling samples performed by Scientific Services South Africa confirmed the favourable rare earth oxide distributions produced from the monazite concentrate.

Preliminary analysis has confirmed the monazite concentrate contains exceptional heavy rare earth content averaging 2.9% (and up to 3.9%) combined DyTb and averaging 11.9% (and up to 17.3%) yttrium, and light rare earth content including 21.8% neodymium-praseodymium (NdPr).

This composition sets Kasiya apart from all major global rare earth producers. The five largest operations - which together account for over 70% of global production - are dominated by light rare earth elements. Strategically critical heavy rare earths urgently required by US, Japan and EU advanced technology, defence, and industrial supply chains are present only in trace amounts, or absent entirely, in these deposits.

Managing Director and CEO Frank Eagar commented: "This is an exceptional development that has the potential to fundamentally enhance Kasiya's strategic significance. With simple processing, our upgraded laboratory has recovered a valuable monazite concentrate product from the rutile tailings stream, with heavy rare earth content that the world's major producers simply cannot match.

These are precisely the elements that matter most to nations seeking to protect and grow their critical mineral supply chains. Dysprosium and terbium enable permanent magnets to function in advanced technologies, including robotics, fighter jets, guided missiles, and naval propulsion systems. Yttrium protects jet engines and hypersonic vehicles from extreme temperatures. China imposed export controls on all three in April 2025, and Western supply chains are now acutely exposed.

What makes this value addition particularly significant is that this product was recovered from our rutile processing tailings stream. We are not currently contemplating a complex, standalone rare earth operation. We have recovered critically strategic rare earths from what would otherwise be discarded - a by-product of the processing route we will use for rutile and graphite production.

Kasiya's rutile will feed aerospace-grade titanium production. Our graphite is essential for battery anodes and traditional industrial applications. And now Kasiya has the potential to also deliver critical heavy rare earths. We have an exciting workstream ahead of us as the potential of the heavy rare earth minerals is delineated. The recent visit by the US State Department to our Malawi operations, combined with our Collaboration Agreement with IFC, reflects the strategic importance that governments and institutions are beginning to attach to Kasiya."

PRELIMINARY ANALYSIS VS MAJOR GLOBAL PRODUCERS

Global rare earth production is concentrated in five major operations: three in China (Bayan Obo, Weishan, Maoniuping), one in Australia operated by Lynas Rare Earths Ltd (Mt Weld), and one in the United States operated by MP Materials Corp (Mountain Pass). Together, these mines supply over 70% of the world's rare earth production.

Figure 1: Strategic Rare Earth Composition - Kasiya vs Major Global Producers

(See Appendix 2 for breakdown and sources)

Table 1: Kasiya vs five largest REE producers

Source: See Appendices 1 & 2

All five are dominated by light rare earths - principally lanthanum and cerium, which are abundant and low-value, and the magnet rare earths Neodymium and Praseodymium (NdPr). The strategically critical heavy rare earths - dysprosium, terbium, and yttrium - that underpin high-performance advanced technology, defence, industrial and renewable energy applications are present in much smaller amounts. Kasiya's heavy rare earth content is approximately 7x higher for both DyTb and yttrium than found in the five largest rare earth producing mines. Mountain Pass - America's only rare earth mine - contains no measurable DyTb or yttrium.

Figure 2: Current Prices of Rare Earth Oxides delivered to Europe

(Sources: Dy, Tb, NdPr: Energy Fuels Inc. January 2026 Company Presentation: "Building a Globally Significant Critical Mineral Company in the US"; Yttrium: Reuters news article "A new rare earth crisis is brewing as yttrium shortages spread" dated 17 November 2025)

PRELIMINARY ANALYSIS VS REE DEVELOPMENT PROJECTS

Table 2: Kasiya vs select REE development projects

• Government involvement includes financial, political, or commercial assistance from any government-related entity; Lindian's partner, Iluka's refinery, is being supported by the Australian Government; Vara Mada is included for comparability as a significant titanium-feedstock and monazite project.

Source: See Appendices 1 & 2.

China's April 2025 export controls on dysprosium, terbium, and yttrium have created acute supply shortages for Western manufacturers. On 6 January 2026, China announced strengthened export controls on dual-use items to Japan, effective immediately. Despite 15 years of diversification efforts, Japan remains approximately 60% dependent on Chinese rare earth imports. For heavy rare earths, Japan's dependence on China approaches 100%. Meanwhile, the US is 100% reliant on imports for its yttrium requirements.

Preliminary analysis of Kasiya's monazite REE content demonstrates one of the highest combined heavy rare earth profiles while maintaining NdPr levels comparable to many REE development projects that have received government backing.

The US State Department visited Sovereign's operations in Malawi in late 2025 as part of a broader engagement with strategically significant critical minerals projects in Africa.

RARE EARTHS BY-PRODUCT FROM EXISTING PROCESS

Total rare earth oxide was analysed for in magnetic heavy mineral concentrates produced from aircore drilling samples during laboratory analysis for rutile. The magnetic concentrates were composited by depth interval (0-6m and 6-20m) to assess variation in mineralogy with depth associated with weathering units.

Separately, monazite concentrates were produced from bulk samples processed through the standard Kasiya flowsheet. Gravity concentrates were subjected to electrostatic separation, with the non-conductor stream then subjected to further gravity separation, followed by magnetic separation to produce a magnetic monazite concentrate. Duplicate analyses confirmed excellent repeatability. See Appendix 1 for details. Chemical analysis to determine the distribution of rare earth oxides was conducted by the Scientific Services South Africa laboratory.

No additional complex processing was required, so capital requirements will not include a parallel full rare-earth processing circuit, as required by primary REE miners. This represents potential by-product economics at near-zero incremental cost - rare earth recovery as an addition to existing rutile and graphite processing infrastructure.

Figure 3: Sample of Kasiya's monazite concentrate containing high-value heavy rare earths

Refer to Appendix 1 below for disclosure of the laboratory metallurgical results from samples of Kasiya's monazite concentrate

NEXT STEPS

Sovereign will now undertake further work to characterise the monazite mineralisation at Kasiya, including:

• Detailed mineralogical characterisation of monazite occurrence and distribution within the Kasiya orebody;
• Assessment of heavy rare earth concentrate recovery rates through the proposed Kasiya processing flowsheet; and
• Evaluation of potential scale of rare earth production as a by-product and associated economics.