Fortuna Metals (ASX:FUN) has the Mkanda and Kampini rutile and graphite projects. These cover 658km² in Malawi, directly adjacent to Sovereign Metals’ (ASX: SVM) Kasiya deposit, which hosts the world’s largest undeveloped natural rutile resource and was valued at US$2.2bn in its April 2026 Definitive Feasibility Study. Fortuna’s thesis rests on geological continuity with Kasiya, a supply deficit in natural rutile that is structural not cyclical, and the ability to replicate the discovery trajectory that has taken Sovereign Metals to a market capitalisation exceeding A$450m.

2026 has been a major year

In the three months since we initiated coverage, Fortuna has executed with notable speed. The company has released additional hand-auger drilling results confirming widespread high-grade rutile at Mkanda, materially de-risked Malawi’s regulatory environment, commenced bulk sampling and metallurgical testwork, appointed two of the most experienced mineral sands technical specialists in the region appointed a marketing consultant with +20 years offtake experience and announced its intention to publish a maiden JORC-compliant Inferred Resource Estimate in the June/July 2026.

Each of these steps is consistent with the development trajectory we outlined at initiation, and collectively they move Fortuna from a reconnaissance-stage explorer toward a genuine resource definition story.

Rutile market fundamentals are strong

Rutile market fundamentals remain compelling. Global supply is projected to decline by around 52% by 2033, driven by the wind-down of Sierra Rutile in Sierra Leone and Base Resources’ Kwale closure in 2024 in Kenya. Meanwhile, demand continues to accelerate across titanium pigment, aerospace, defence, and an emerging robotics/humanoid sector where titanium’s strength-to-weight properties make it the preferred structural alloy.

There are currently no near-term large-scale rutile projects capable of filling the emerging gap. Fortuna, if it defines a resource of meaningful scale, is one of the very few assets positioned to do so.

There’s meaningful opportunity for upside

While it is too early to ascribe a specific valuation to Fortuna in the absence of a Resource, we see potential for upside if the company executes on the promised milestones over the next 6-12 months, particularly its maiden JORC Resource.

Once Fortuna has a PFS released, the company could trade at a mid-teens percentage of the study’s NPV as Sovereign Metals currently is. We also see upside if momentum in rutile prices continues. Please see page 15 for the key risks.