Sovereign Metals (ASX:SVM) signed a non-binding memorandum of understanding (MOU) with Mitsui for the sale and purchase of natural rutile from its Kasiya project in Malawi, according to a Thursday filing with the Australian bourse.

The companies aim to negotiate a definitive agreement involving the supply of up to 70,000 tonnes per year of Kasiya natural rutile concentrate over an initial four-year term from first production, with a potential five-year extension, the filing said.

Sovereign Metals shares fell nearly 6% in morning trade Thursday.