Rio Tinto to Invest $40.4 Million in Sovereign, Becoming a 15% Strategic Investor
Rio Tinto has announced a significant investment of A$40. 4 million in Sovereign, resulting in an initial 15% shareholding in the company. The investment will be used to advance the Kasiya Rutile-Graphite Project in Malawi.
This investment is a significant step towards unlocking a new supply of low-CO2-footprint natural rutile and flake graphite. Rio Tinto will also provide assistance and advice on technical and marketing aspects of Kasiya, including Sovereign's graphite co-product, with a primary focus on spherical purified graphite for the lithium-ion battery anode market.
Under the Investment Agreement, Rio Tinto will issue 83,095,592 new shares of Sovereign at a price of A$0. 486 per share, representing a 10% premium to the 45-day volume weighted average price on the ASX as at close 14th July 2023.
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Rio Tinto will also receive 34,549,598 options to increase its shareholding by an additional 4. 99% to potentially 19. 99% of Sovereign within 12 months. These options have an exercise price of A$0. 535 per share, representing a 21% premium to the 45-day volume weighted average price on the ASX as at close 14th July 2023, for additional proceeds of up to $18. 5 million if all options are exercised.
Sovereign's Chairman Ben Stoikovich has welcomed Rio Tinto's investment, commenting that it is a landmark agreement with one of the world's largest and most accomplished global mining companies. The experience and expertise that Rio Tinto brings will truly set Kasiya apart as a potentially globally significant supply of two critical minerals and take us all a step closer to achieving net-zero. Furthermore, this investment is yet another step towards unlocking significant benefits from development of the Kasiya project for Malawi.
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