REG - Capital Metals PLC - Drilling Update: Approval Granted

Capital MetalsAnnouncement

10/07/2024 07:00

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RNS Number : 7421V  Capital Metals PLC  10 July 2024

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INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

10 July 2024

 

Capital Metals PLC

 

("Capital Metals" or the "Company")

 

Drilling Update: Approval Granted

 

Work programme targeting substantial near-term resource tonnage and grade
upside

 

Capital Metals (AIM: CMET), a mineral sands company approaching mine
development stage at the high-grade Eastern Minerals Project in Sri Lanka (the
"Project"), is pleased to announce it has now received all necessary consents
to commence the drilling programme, focusing on increasing the resource as
well as obtaining greater certainty in the proposed initial mining area. The
drilling programme will commence shortly.

 

Key objectives

·    Resource extension through deeper aircore drilling down to the
alluvial basement and laterally to the west, outside the current Mineral
Resource Estimate ("MRE"), targeting the identified palaeo-beach and dune
formations on the coastal plain

·    Resource/reserve confirmation for final mine design and production
scheduling - initially targeting the first 12 months of production

·    The minimum objective of the Company is to progressively increase the
resource to twice its current volume. The prospects of material increases are
likely to be evident in the short-term through visual and laboratory analysis
of samples

The current Project MRE of 17.2Mt at 17.6% Total Heavy Minerals ("THM")
already places the Project's deposit among the highest grades globally. The
MRE was estimated on pre-2016, hand auger drilling of 1,643 holes for 2,621
metres. Drilling was limited to the beach and foredune formations and, due to
the hand augur drilling method, terminated at the groundwater table at an
average depth of 1.6 metres. Mineralisation remains open below the groundwater
table and potential for additional resources also exists west of the foredune
formation across the Project.

Hand auger drilling is ineffective below the groundwater table and, as such,
drilling to date has not penetrated to the basement which is anticipated at
approximately an average of 10 metres depth. The resource drilling also
excluded marine sands in the coastal plain behind the foredune formation.

Deep sonic drilling in 2018 in the back-beach and foredunes at Komari, some of
which was west (outside) of the existing resource, returned results including
14 metres at 26.3% THM and 8 metres at 26.6% THM. This, together with
contemporary analysis of other trailing continental margins, suggests that a
substantial additional resource has been excluded at depth and laterally in
parallel palaeo-beach formations on the immediate coastal plain. Accordingly,
a substantial resource increase is anticipated from this drilling programme.

Drilling will include a comprehensive Quality Assurance sampling programme. To
expedite the analysis stage, all routine and Quality Assurance samples will be
delivered in batches to laboratories in Johannesburg for heavy liquid
separation and mineralogical assessment using a mix of XRF, XRD and QEMScan.
The Company expects to be able to report initial results starting next
quarter, although visual results are expected to be reportable in the current
quarter.

The Company has also commenced work on a detailed submission on the
feasibility of mining below the groundwater table, which is permissible in
most beach mineral sands projects globally and has already taken place
elsewhere in Sri Lanka. Discussions are advancing with the relevant
authorities in Sri Lanka in this regard.

 

Greg Martyr, Executive Chairman of Capital Metals, commented:

"We've glimpsed the upside potential from 2018 and 2021 drilling which
produced grades above our current MRE. Multiples of the current MRE are
possible when drilling to the alluvial basement with an average anticipated
depth of 10 metres compared to the current average of 1.6 metres for the MRE.
Material resource extension is also likely from drilling the whole marine sand
package, inland of the beach and foredunes.

The Project economics estimated in the 2022 Preliminary Economic Assessment
have already demonstrated a high margin operation. We are very excited to
finally be in a position to test the upside with a view to expanding the
Project's current 10-year mine life and throughput, with the subsequent result
of materially enhancing the NPV of the Project.

I look forward to updating the market on these drill results and a subsequent
resource upgrade."

 For further information, please visit www.capitalmetals.com
(http://www.capitalmetals.com) or contact:

 Capital Metals plc                           Via Vigo Consulting

 Greg Martyr (Executive Chairman)
 Vigo Consulting (Investor Relations)         +44 (0)20 7390 0234

 Ben Simons / Peter Jacob                     capitalmetals@vigoconsulting.com (mailto:capitalmetals@vigoconsulting.com)
 SPARK Advisory Partners (Nominated Adviser)  +44 (0)20 3368 3550

 Neil Baldwin / James Keeshan / Adam Dawes
 Tavira Financial                             +44 (0)20 7100 5100

 Jonathan Evans / Oliver Stansfield

 

About Capital Metals

 

Capital Metals is a UK company listed on the London Stock Exchange (AIM:
CMET). We are developing the Eastern Minerals Project in Sri Lanka,
approximately 220km east of Colombo, containing industrial minerals including
ilmenite, rutile, zircon, and garnet. The Project is one of the highest-grade
mineral sands projects globally, with potential for further grade and resource
expansion. In 2022, a third-party Preliminary Economic Assessment provided a
Project NPV of US$155-235m based on existing resources, with further
identified optimisation potential. We are committed to applying modern mining
practices and bringing significant positive benefits to Sri Lanka and the
local community. We expect over 300 direct new jobs to be created and over
US$130m in direct government royalties and taxes to be paid.

 

Visit our website:

www.capitalmetals.com (http://www.capitalmetals.com)

 

Follow us on social media:

 

X (formerly Twitter): @MetalsCapital (https://twitter.com/MetalsCapital)

LinkedIn: @Capital Metals plc (https://uk.linkedin.com/company/capitalmetals)

 

Glossary

 

 QEMScan  Quantitative Evaluation of Minerals by Scanning Electron Microscopy - a fully
          automated micro-analysis system that enables quantitative chemical analysis of
          materials and generation of high-resolution mineral maps and images as well as
          porosity structure.
 XRD      X-ray diffraction, or x-ray powder diffraction - utilises x-ray radiation on
          crystalline organic and inorganic samples. The rays are diffracted in a
          pattern determined by the position, arrangement, and size of the constituents
          of the crystal.
 XRF      X-ray fluorescence - involves using x-rays to excite matter at the atomic
          level for determining approximate chemical compositions.

 

 

 

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