SOVEREIGN METALS LTD. //Graphite S T O R M C R O Wstatic.squarespace.com/static/535e7e2de4b088f0b623c597/t... · These deposits are rare and ... 2014, with the initial ... Sovereign

ASX STRONG BUY

SVM Target | A$0.80

SOVEREIGN METALS LTD.

//Graphite

INITIATION REPORT

Toe-to-Toe with China in Graphite

Sovereign has something of an anomalous deposit on its hands. Most flake graphite deposits have either larger flake sizes but low grade, or smaller flake sizes and higher grade. Larger flakes are more valuable, but lower grade consumes margin due to relatively higher mining and processing costs. Sovereign has reported both high grade and large flake. We believe that this makes Sovereign one of the most attractive development-stage graphite projects in the world.

Sovereign may also have the recipe to bring down mining costs even further. While the company has reported strong results from hard rock drill holes, it has also recently announced excellent metallurgical results from graphite-bearing saprolites on its property. Having graphite in soft clay essentially means that Sovereign can mine using earth movers and sluices, should have very low crushing and milling costs and very good large flake recovery.

Saudi Arabia dominates oil production due to resource size and low production cost. It is quite possible that East Africa may well find itself in the same dominant position with respect to graphite, owing to finds by companies such as Syrah Resources (SYR-ASX) and Triton Minerals (TON-ASX) in Mozambique, and Sovereign Metals (SVM-ASX) in Malawi.

Our conversations with graphite end-users and traders convince us that it is precisely miners such as Sovereign, with potential low costs (both operating and capital), large flakes and large deposits, that will play key roles in filling what we see as a future serious shortfall of supply for larger flake graphite. For the same end-users and traders, we believe that Sovereign may well represent a strong strategic partner capable of providing a long-term supply. We are initiating coverage on Sovereign with a STRONG BUY recommendation, and AUS$0.80 target price.

1 includes performance shares

Jon Hykawy, PhD President

[email protected]

Tom Chudnovsky Managing Partner

[email protected]

Vid Thayalan, M.Sc.. Partner

[email protected]

S T O R M C R O W

New

Old

Rating Strong Buy N/A

Target A$0.80 N/A

Shares O/S1 ~111.8M

Recent Price AUS$0.35

Market Cap AUS$39.0M

Net Cash ~AUS$3.0M

See the end of report for important disclosures

mailto:[email protected]



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SOVEREIGN METALS LTD. (SVM | ASX)

STORMCROW.CA | PAGE 2

Graphite – Shiny Future, at Least in Larger Sizes

Graphite is a darling of the mining sector at present, especially so in its’ poorly understood wunderkind form of graphene. Yet graphite is a very old material. Most of us first saw it in the form of pencil “lead”, and it is fitting that one of the lower value uses of graphite is probably the one that everyone can recognize. Perhaps that will help at least some investors to maintain perspective in the face of all the hype surrounding batteries and conjectural exotic applications involving graphene.

Natural graphite comes in a few key forms. Lump, or hydrothermal or vein or Sri Lankan, graphite is an anomalous form created, it is thought, by some organic flow that filled a structure in the Earth and was then converted to very pure sections of graphite over geological time spans. These deposits are rare and typically require expensive mining techniques to recover, but they are useful in filling the need for a small portion of graphite consumers. Amorphous, or more accurately, microcrystalline, graphite comes primarily from China, and its key benefit is that it is inexpensive. Flake graphite comes in various size ranges, and has some interesting properties.

However, most of the graphite sector is dominated by synthetic graphite, with its high chemical purity and tailored physical characteristics that depend both on raw material feedstock and processing techniques. Synthetic graphite is the only choice, at present, for making carbon fibers and high-power graphite electrodes, and is still the first choice for battery anodes. All this in spite of the high cost associated with a very energy intensive manufacturing process.

Our recent graphite industry report and pricing “torture test” painted a somewhat different picture than the one promoted by a few. Yes, there are applications that will dramatically increase the demand for jumbo (+35 mesh, or flakes larger than 500 µm) and large (-35+48 mesh, or flakes between 297 µm and 500 µm), but in order to satisfy this demand and reap the rewards of their pricing, producers are likely to dramatically overproduce graphite of -50 mesh, or 297 µm and smaller, making it difficult for a large number of new producers to economically survive entry into the market.

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Exhibit 1 – Sovereign Graphite in Saprolite (friable, large flakes, high grade)

Source: Stormcrow

One of the producers that we included in our list of hypothetical new suppliers to the flake graphite market was Sovereign. The reason was simple. Our visit to Sovereign’s project in Malawi has convinced us that the claims belonging to the company likely contain a very large amount of high grade, high value graphite flake. This graphite appears to be hosted in both hard rock, with higher grade but associated higher processing costs, and in saprolite, with potentially very low mining and processing costs. Given the likely very low cost and ease of processing of high grade graphite in saprolites, along with the flake distribution reported to date, Sovereign appears to us to be not only a survivor, but a leading company that can likely thrive in the graphite markets to come.

Sovereign – A Prophetic Name in the Graphite Industry?

It is still early days in the development of the Sovereign project in Malawi to be making any statements about dominance in a space. Nevertheless, Sovereign so far appears to have several key factors in its favour.

The Central Malawi graphite trend being explored by Sovereign was purchased from McCourt Mining Pty Ltd. nearly two years ago, in August of 2012. Sovereign purchased 100% control of the claims for:

• AUS$1,000,000 in cash;

• 12.5 million common shares;

• 2% net mine gate royalty on products produced and sold from the claims;

• 8.75 million unlisted convertible shares, to be converted if Sovereign generates a JORC-compliant resource of at least 25 million tonnes at 7.5% total graphitic carbon, or higher, using a cut-off of 5% by August 2015;

A large sample of Dedza sap rock. All the gray coloration is graphite. The material crumbles when handled roughly, and yields very large flake.

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• 8.75 million unlisted convertible shares, to be converted if Sovereign announces a positive scoping study by August 2016.

Sovereign has established a number of finds. The two most promising are the Duwi hard-rock deposit, and the Dedza saprolite deposit. To date, the averages of grades reported from Dedza’s saprolite has been 10%, while the hard-rock from Duwi is averaging 8%. Both deposits have shown flake size distributions tending towards the best seen in any exploration project, along with high in situ grades. The Duwi deposit is showing current results of 64% of flake being jumbo, large or medium (+100 mesh), while Dedza is currently showing more than 68% +100 mesh.

Exhibit 2 – Location of Sovereign Claims in Region

Source: Company reports

Given the above, there is little doubt that mining costs are tractable. This is especially true when one considers saprolites and sap rock. Since saprolite is a friable clay, the “mining” would likely consist of earth-moving equipment pushing clay into sluices, and using water to wash the clay and graphite into a

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processing plant. We would expect very little crushing or milling to be required, and few stages of flotation necessary to generate a high-value concentrate.

Exhibit 3 – Average Results to Date

Deposit Material In Situ Grade Jumbo Large Medium Small Fine

Dedza Saprolite 10% 5.7% 11.6% 41.1% 26.9% 14.8%

Duwi Hard rock 8% 19.7% 17.1% 27.4% 15.7% 20.1%

Source: Company reports, adjusted to fit flake categories

Exhibit 4 – Duwi Trend

Source: Company reports

Compared to other hard-rock projects, such as those belonging to Valence industries (VXL-ASX) and Energizer Resources (EGZ-TSXV), we would expect lower operating costs for Duwi than quoted by either of the other projects. For example, the NI 43-101 PEA from Energizer outlines the use of initial grinding to 100% passing 150 μm mesh, a four-minute rougher stage, followed by three cleaning stages with two regrinds. Acid treatment involving HF improves the final product to 98%, according to process development work completed by Mintek.

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This process is estimated to have a cost per tonne of $530 per tonne, including environmental and transport costs using trucks for a 60 km haul to port. Our estimate on operating costs for Duwi would be roughly $450 per tonne, due to roughly equivalent grades compared to Valence and Energizer and similar environmental costs, but superior flake size distributions, less required grinding and better transportation costs.

The current exploration scale of Duwi is already impressive. Rock chips had previously suggested a large-scale deposit. Both trenching and drilling to date has defined an outcropping graphitic gneiss deposit over a trend stretching more than 1.5 km. Widths have ranged from 50-100 meters, and the deposit remains open at depths of approximately 150 meters, with very little reason at present to explore to greater depths given the availability of ore for an open pit operation. We are anticipating an initial JORC resource on the deposit in October 2014, with the initial objective being the first share conversion threshold of the project vendors, that being 33 million tonnes at an average grade of at least 7.5% total graphitic carbon.

For Dedza, there are very few comparable saprolitic deposits from which to extrapolate costs. We assume a mining cost of only $2 per tonne of clay (due to the use of sluice mining), total recovery of only 66%, and in situ grade of 10%, then mining costs are roughly $30 per tonne of final graphite concentrate. If we assume $10 per tonne roughing and cleaning costs, which should be very conservative, then processing will cost roughly $150 per tonne of final concentrate. The floated material must be graded, but the cost of this stage of processing is small, we estimate roughly $20 per tonne of final product. A final cost of roughly $200 per tonne of blended product is widely assumed to be the cost for which Chinese graphite is produced. It would seem possible that Sovereign might be one of the few firms producing graphite outside of China at a cost competitive with Chinese costs. A minimum 5 million tonne ore resource at grades comparable to those currently seen, would support at least a 10 year, 500 ktpa mining operation.

The low cost of production at Dedza is coupled to the large average flake size. Normally, larger flake natural graphite is less likely to contain contaminants that require costly regrinding and multiple flotation stages to remove. If the graphite flakes contained contaminants, then they would likely have broken into smaller flakes. Below we show the size distribution of flake for several graphite companies, along with in situ grade, compared to the same figures for Sovereign.

Both Duwi and Dedza appear to have large scale, high grades low costs and large

flake sizes in their favour.

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Exhibit 5 – Projects Compared

Company Grade Size

Range

Average (µm)

+35 -35+48 -50+100 -

100+200 -200

Northern 2.2% 19.1% 33.0% 28.5% 10.5% 8.9% 327

Focus 15.8% 5.0% 11.2% 27.9% 24.6% 31.4% 183

Flinders 10.7% 0.0% 18.4% 27.4% 28.3% 31.9% 185

Energizer 6.4% 0.0% 0.0% 33.3% 36.1% 30.6% 132

Sovereign – Duwi 8.0% 19.7% 17.1% 27.4% 15.7% 20.1% 277

Sovereign – Dedza 10.0% 5.7% 11.6% 41.1% 26.9% 14.8% 211

Syrah 10.2% 3.3% 12.9% 25.0% 33.4% 25.6% 179

Eagle 1.3% 8.0% 42.0% 15.0% 20.0% 15.0% 280

Mason 16.2% 0.0% 18.6% 14.1% 13.1% 54.2% 153

Valence 7.1% 6.0% 15.0% 30.0% 25.0% 24.0% 205

Source: Company reports, Stormcrow

Given that revenues rise with graphite purity and flake size, the highest revenues per tonne of graphite should be generated by Northern Graphite, Eagle Graphite, Sovereign Metals and Valence Resources, but only Valence and Sovereign benefit from higher in situ grades, as well.

Prospective Financial Results – Early Days, but Promising

We will assume a cost per tonne of product from Dedza of $200 per tonne of graphite and from Duwi of $450 per tonne, as per our argument above. Our previously published graphite price deck was intended to be a torture-test for most companies, a fairly pessimistic assessment of where prices for various sizes of natural flake graphite were headed. We will be using a price deck that is pushed closer to historical prices. Specifically, we use a 2-year trailing average of flake graphite prices (using data from Industrial Minerals) averaged with our “torture test” graphite price projections. Our base-case price deck is thus:

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Exhibit 6 – Base-Case Price Deck, US$/tonne

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Jumbo 3365 2135 1577 1753 1832 1728 1667 2188 2677 3977

Large 2514 1595 1178 1238 1130 1140 984 1048 1116 1225

Medium 2138 1514 1025 1060 1045 998 825 815 819 824

Small 1375 1089 855 898 865 853 700 702 705 708

Very Fine 930 689 505 542 535 527 452 454 457 460

Source: Industrial Minerals, Stormcrow

It seems possible to compare the entire range of graphite exploration projects, using a simple rule-of-thumb. We believe the simplest comparison metric is value of contained graphite per tonne of ore. Due to timing of production, we believe that 2018 prices should be used, and we assume 100% recovery just to keep this comparison simple. Naturally, this type of comparison does not incorporate issues of metallurgy, such as processing difficulty or contamination, but we believe that it provides significant indication of potential value. It also does not address the risk regarding the potential future difficulty of selling substantially all of the more common and lower value small and fine flake graphite, which we believe will be in oversupply in years to come.

Exhibit 7 – Comparison of Projects, Contained Value of Graphite (per tonne ore)

Northern $24.43

Focus $121.58

Flinders $81.29

Energizer $42.48

Sovereign - Duwi $82.81

Sovereign - Dedza $83.73

Syrah $77.72

Eagle $12.30

Mason $104.94

Valence $58.04

Source: Company reports, Stormcrow

Our torture-testing price deck is too aggressively conservative. We have established a base-case deck which is averaged back to historical norms. However, Sovereign thrives even under the conservative deck.

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Companies with flake size profiles like that of Sovereign are the likely beneficiaries of the future graphite market. Under our assumptions, which resemble those used by a large portion of the current major suppliers and users in the graphite industry, producers of larger and purer flake see their price per tonne of concentrate rise disproportionately. Indeed, by 2020, a tonne of final graphite from Sovereign may have a market price some 66% higher than a tonne of graphite from Syrah, for example.

We will assume that Duwi is brought into production in 2016, with annual throughput of 500,000 tpa and concentrate production of 33,000 tonnes. Capital cost for this production is estimated to be $50 million. Dedza will be brought into production 18 months later, with the same 500,000 tpa throughput and 33,000 tpa production level, but a capital cost of only $35 million due to reduced need for crushing and milling and even flotation. Capital expenditures are further constrained by the available infrastructure.

The Duwi and Dedza deposits are both very short drives from Malawi’s capital city, Lilongwe. We have rarely, if ever, seen a deposit of any industrial mineral this good, as close to a major population center. There is a rail spur and container handling station less than 20 km from the potential mine site. Major upgrades on the rail lines through Malawi that connect Zambia to the Nacala port in Mozambique are underway. The company has already received quotes on rail transportation costs for containers to port. Very few potential mines of any kind have the sort of available infrastructure, including power, water and nearby transportation, that come with having a major city nearby. Not even Syrah’s Balama project will have the low transportation costs that pertain to Sovereign’s Central Malawi graphite trend. This is a major advantage for Sovereign, and makes the Duwi and Dedza projects fairly unique in this regard.

The company benefits from proximity to the Nacala rail corridor. Capacity will grow to 18 Mtpa, with roughly 5 Mtpa reserved for Malawian

cargo.

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Exhibit 8 – Sovereign’s Positional Advantage

Source: Sovereign Metals

On the above basis, a simple valuation model for the company, assuming a 2016 commencement in 2016 to an eventual production of 66,000 tpa by 2019, and using a 13% discount rate to account for exploration, development, financial and geopolitical risk, is:

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Exhibit 9 – Simple Cash Flow Model, all figures expressed in USD

Source: Stormcrow

Our model incorporates the 30 million shares payable to the previous owner of these deposits, announced in 2012, as well as the 2% net royalty. The model yields a US$0.78 asset value. However, assuming that within the next twelve months the company can demonstrate sufficient quantities of high-grade graphite at both Duwi and Dedza, the discount rate can be reduced significantly. If we assume the more typical 8% long-term discount rate used in 43-101 and JORC studies then NAV would rise to US$1.20. Having visited the deposits in Malawi, we believe that the probability of finding sufficient graphite on the Sovereign claims to justify a significant reduction in discount rate is high.

Discount rate is very high at 13%. Increasing JORC resources will help to drive down the discount rate.

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Management – Solid and Experienced

The management team behind Sovereign are no strangers to Africa or to successfully moving a project from exploration to production and/or divestiture. They are rapidly learning the intricacies of the graphite market, but have already mastered the most important lesson, which is simply that if the graphite can’t be produced inexpensively, it shouldn’t be produced.

Ian Middlemas – Non-Executive Chairman

Mr. Middlemas is a Chartered Accountant, a member of the Financial Services Institute of Australasia and holds a Bachelor of Commerce degree. He worked for a large international chartered accounting firm before joining the Normandy Mining Group where he was a senior group executive for approximately 10 years. He has had extensive corporate and management experience, and is currently a director with a number of publicly listed companies in the resources sector. Mr. Middlemas was appointed a Director and Chairman of Sovereign Metals on 20 July 2006, and is currently a director of, among several other companies, Papillon Resources Limited (PIR-ASX, since May 2011), currently being acquired by B2Gold (BTO-TSX).

Matthew Syme – Managing Director

Mr. Syme is a Chartered Accountant and an accomplished mining executive with over 26 years of experience in senior management roles, both in Australia and overseas. He was previously the Managing Director of Philippines-oriented copper/gold developer Sierra Mining Limited, which successfully merged with RTG Mining Inc. in early June 2014. During his involvement with Sierra, the company grew from a market capitalization of approximately AUS$5 million to more than AUS$90 million. He was previously Managing Director of Berkeley Resources Ltd., developer of the Salamanca Uranium Project in Spain. Berkeley grew in value from an AUS$4 million listed shell to over AUS$200 million after acquiring the Salamanca Project and completing a scoping study under Mr. Syme’s management. Mr. Syme was appointed a director of Sovereign Metals on 5 June 2014. He holds a B.Comm. degree.

Peter Woodman – Technical Director

Mr. Woodman is a Geologist with over 20 years of experience in exploration, development and operations in the resources sector. He is a graduate of the Australian National University, and is a corporate member of the Australasian Institute of Mining and Metallurgy. Mr. Woodman has worked for a number of mining companies during his career in the resources sector, most recently having held the position of CEO of Wedgetail Mining Limited, where he oversaw the

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successful completion of a financing and bankable feasibility study for the Nullagine Gold Project. Prior to his role with Wedgetail Mining, he held positions with Samantha Gold NL, Ranger Minerals NL, Hellman & Schofield Pty Ltd, Centamin Egypt Ltd and Kingsgate Consolidated Ltd. His background is in management, exploration planning and execution, resource development and mining operations, in Australia and overseas. Mr. Woodman was appointed a Director of Sovereign Metals Limited on 10 May 2007.

Julian Stephens - Chief Geologist

Dr. Stephens is a geologist with over 20 years’ experience in the exploration and mining sectors and economic-structural geology research fields. He is a graduate of James Cook University, Queensland and is a member of both the Australian Institute of Geoscientists (MAIG), and the Society of Economic Geologists. Dr Stephens has worked as a mine and exploration geologist for numerous international exploration and mining companies and has extensive experience in Africa, including eight years of work on projects in Malawi.

Mark Pearce – Non-Executive Director

Mr. Pearce is a Chartered Accountant and is currently a director of several listed companies that operate in the resource sector. He has had considerable experience in the formation and development of listed resource companies, and has worked for several large international chartered accounting firms. Mr. Pearce is also a Fellow of the Institute of Chartered Secretaries and a member of the Financial Services Institute of Australasia. He was appointed a director of Sovereign Metals on 20 July 2006, and is also currently a director of Prairie Downs Metals Limited (since August 2011), Equatorial Resources Limited (since November 2009), WCP Resources Limited (since September 2009), and was previously a founding director of Mantra Resources Limited (September 2005 – February 2010).

Clint McGhie – Company Secretary

Mr. McGhie is a Chartered Accountant and Chartered Secretary. He commenced his career at a large international chartered accounting firm, and has since worked in the corporate office of a number of public listed companies in the resource sector. He was appointed Company Secretary of Sovereign Metals on 20 July 2006.

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Conclusions – High Grade, Large Flakes, Great Prospects

The best position to take in any commodity resource market is to be the lowest cost producer. This allows the maximum flexibility, and leaves the company in the position of being the likely “last man standing”. Given that China has traditionally taken on the role of lowest cost supplier, it is interesting to see the dynamic changing, as Chinese production decreases in grade and quality. We believe that Sovereign has a clear opportunity to become the lowest-cost provider of flake graphite outside of China, and perhaps in the world. With high grade in clay, the mining and processing costs associated with this deposit should be among the very best anywhere.

And with the flake distribution seen in both its hard rock and clay, the company will also have one of the best revenue potentials per tonne of processed product. Our base-case price deck remains conservative, but we see no alternative, even with fewer suppliers than our model conjectured, to the prices of smaller flake graphite remaining depressed while the prices of larger flake rise. This is simply a function of the distribution of flake size found in most deposits. Sovereign has the flake distribution to thrive in this environment.

Our discussions with major end-users of graphite, including battery and trading companies, indicate that, without question, more and more natural flake graphite will be used. Demand is going to grow most strongly, in their estimation and ours, for larger and purer flake. Large and pure flake is the only choice for batteries (where purity is a concern) and graphite foils (where larger flake and expandability is a concern). It is clear, at least to us, that Sovereign is seeking to establish itself in the graphite industry at entirely the correct time.

Sovereign can easily weather the storm of lower small flake graphite prices, given a deposit that tends toward larger flake sizes. We also believe that the deposit can be shown to have the potential for a very long-lived mine, as well, with costs low enough to go toe-to-toe not only with the Chinese, but also with any of the best graphite deposits anywhere in the world. We are initiating coverage with a STRONG BUY recommendation and an AUS$0.80 target price.

In this environment, Sovereign is well suited to success. We are initiating coverage with a BUY recommendation and AUS$0.80 target.

Sovereign appears to have high grade, large flake and

low costs.

Keywords

Important Disclosures

Stormcrow Capital Ltd. (“Stormcrow”) is a financial and technical/scientific consulting firm that provides its clients with some or all of the following services: (i) an assessment of the client’s industry, business plans and operations, market positioning, economic situation and prospects; (ii) certain technical and scientific commentary, analysis and advice that is within the expertise of Stormcrow’s staff; (iii) advice regarding optimization strategies for the client’s business and capital structure; and (iv) opinions regarding the future expected value of the client’s equity securities so as to allow the client to then make capital market, capital budgeting and capital structure plans. Stormcrow does not provide securities trading services, equity sales or distribution services, securities underwriting services, or investment banking services. Stormcrow does publish research reports for general and regular circulation. With the consent of Stormcrow’s client, the client and/or its industry sector may be the subject of an investment or financial research report, newsletter, bulletin or other publication by Stormcrow where such publication is made publicly available at www.stormcrow.ca or elsewhere or is otherwise distributed by Stormcrow. Any such publication is limited to generic, non-tailored advice or opinions and should not be construed as investment advice that is suitable for the reader or recipient. Stormcrow does not offer personalized or tailored investment advice to anyone and its research reports should not be relied upon in making any investment decisions. Rather, investors should speak with their personal financial advisor(s).

Sovereign Metals Ltd. (“Sovereign”, the “Company”) is a client of Stormcrow, and as such, Stormcrow has agreed to provide the Company with a variety of consulting services. The fixed rate fee that the Company pays to Stormcrow is not contingent on the content or conclusions of any of Stormcrow’s research reports and is not contingent on the price, or price movement, of any securities.

None of Stormcrow’s officers, directors, or significant shareholders own, directly or indirectly, shares in the Company. It is a policy of Stormcrow and its employees to refrain from trading in a manner that is contrary to, or inconsistent with, Stormcrow’s most recent published recommendations or ratings, except in circumstances of unanticipated extreme financial hardship.

Stormcrow intends to provide regular market updates on the affairs of the Company (at Stormcrow’s discretion) and make these updates publicly available at www.stormcrow.ca. Readers who wish to receive notice when such updates become available, should email to [email protected] with the subject heading “Get Update Notifications”.

All information used in the publication of this report has been compiled from publicly available sources that Stormcrow believes to be reliable. Stormcrow does not guarantee the accuracy or completeness of the information found in this report and Stormcrow may not have undertaken any independent investigation to confirm or verify such information. Opinions contained in this report represent the true opinion of Stormcrow and the author(s) at the time of publication.

The securities described in this research report may not be eligible for sale in all jurisdictions or to certain categories of investors. This report and the content herein should not be construed by anyone as a solicitation to effect, or attempt

Industry Graphite, Critical Materials, Critical Metals, Mining, Industrial Minerals

Relevant

Companies

SYRAH RESOURCES — ASX:SYR NORTHERN GRAPHITE — TSXV:NGC ZENYATTA RESOURCES — TSXV:ZEN FOCUS GRAPHITE — TSXV:FMS FLINDERS RESOURCES — TSXV:FDR ENERGIZER RESOURCES — TSXV:EGZ GRAPHITE ONE — TSXV:GPH STANDARD GRAPHITE — TSXV:SGH

ONTARIO GRAPHITE— TSXV:OGC MASON GRAPHITE — TSXV:LLG VALENCE INDUSTRIES — ASX:VXL ST. JEAN CARBON — TSXV:SJL LOMIKO METALS — TSXV:LMR SOVEREIGN METALS— ASX:SVM EAGLE GRAPHITE— PRIVATE LAMBOO RESOURCES – ASX:LMB

Why do we use keywords?

We feel people who could stand to benefit from the contents of this report, are not solely ones who already follow the specific company or sector discussed herein. As such, we hope to provide this free service to as wide an audience as possible—and keywords help to this end.

http://www.stormcrow.ca/




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Sovereign Metals Inc. (SVM | ASX)

to effect, any transaction in a security. This document was prepared and was made available for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned herein. The securities referred to herein should be considered speculative in nature and should be considered to involve a high amount of financial risk where investors may lose all of their investment.

Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. No representation is being made that any investment or security will or is likely to achieve the return or performance estimated herein. There can be sharp differences between expected performance results and the actual results.

Dissemination of Research

Since Stormcrow does not rely on earning commission fees from institutional agency trading services, or investment banking revenues, this research report is widely available to the public via its website: www.stormcrow.ca

Investment Rating Criteria

STRONG BUY—The security represents extremely compelling value and is expected to appreciate significantly from the current price over the next 12-18 month time horizon.

BUY—The security represents attractive value and is expected to appreciate significantly from the current price over the next 12-18 month time horizon.

SPECULATIVE BUY—The security is considered a BUY but in the analyst’s opinion possesses certain operational and/or financial risks that may be higher than average.

HOLD—The security represents fair value and no material appreciation is expected over the next 12-18 month time horizon.

SELL—The security represents poor value and is expected to depreciate over the next 12-18 month time horizon.


Documents

SOVEREIGN METALS LTD. //Graphite S T O R M C R O Wstatic.squarespace.com/static/535e7e2de4b088f0b623c597/t... · These deposits are rare and ... 2014, with the initial ... Sovereign