REG - Capital Metals PLC - Grant of Industrial Mining Licences

Capital MetalsAnnouncement

10/08/2022 10:15

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RNS Number : 5593V  Capital Metals PLC  10 August 2022

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VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED.  ON
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INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

10 August 2022

Capital Metals plc

("Capital Metals" or the "Company")

Grant of Industrial Mining Licences

Capital Metals (AIM: CMET) is pleased to announce the grant by the Geological
Survey and Mines Bureau of the Government of Sri Lanka ("GSMB") of the first
two Industrial Mining Licences ("IMLs") for the Eastern Minerals heavy mineral
sands project (the "Project"), one of the highest-grade mineral sands projects
globally. The IMLs enable the commencement of mining activities in accordance
with the development plan outlined in the Preliminary Economic Assessment
("PEA") completed in May 2022.

Highlights:

·    IMLs granted for an initial 10-year period

·    IMLs are a culmination of a rigorous approval process including the
Project and Environmental Impact Assessment ("EIA") approvals received in
November 2021

·    IMLs are among the first to be issued in Sri Lanka in recent times to
a non-Government entity for the purposes of mineral sands mining utilising
modern mining methods, as part of the Government's commitment to attracting
foreign direct investment

·    Important milestone to facilitate the conclusion of discussions with
offtakers, debt providers and other strategic funding parties to enable the
development of the Project

The IMLs have been issued to the Company's local and wholly owned subsidiary,
Damsila Exports Pvt Ltd, covering 16 hectares (160,000 square metres) of land
within the Initial Mining Area. The IMLs were granted for an initial period of
10 years. The IMLs include some of the Project's highest-grade resources with
grades up to 25% Total Heavy Minerals, and cover areas of the Project which
have already been approved by the Coast Conservation and Coastal Resources
Management Department in Sri Lanka following completion of the EIA process in
November 2021.

The grant of the IMLs is an important milestone in ongoing discussions with
offtakers and potential funding partners to develop the Project. Given the
grant of these IMLs has now been successfully completed, the Board is
confident in the timely issue of any further IMLs as they are submitted for
approval.

Michael Frayne, Chief Executive Officer, commented:

"The grant of the IMLs is a key milestone in enabling the commencement of
mining activities and the advancement of ongoing discussions with offtakers,
debt providers and other strategic funding parties.

We are grateful to the Sri Lankan authorities for their cooperation,
especially given the current economic and political situation, and believe
this represents a strong endorsement of the Project and its future benefits to
Sri Lanka. These IMLs are the culmination of a rigorous approval process and
importantly provide a basis for the granting of further Industrial Mining
Licences. I would like to congratulate our management team in Sri Lanka and
thank those stakeholders working in the Sri Lankan government departments for
their continued assistance.

The strong current and forecast prices for our minerals, coupled with the
clear potential for further expansion of our high-grade resource, suggests
further upside to our compelling base case NPV of US$155 million and IRR of
56% is achievable(1). We look forward to keeping shareholders updated with
further progress as we work with all stakeholders to bring the Project into
production in a timely manner."

(1
(https://ir.q4europe.com/Tools/newsArticleHTML.aspx?solutionID=2182&customerKey=capitalmetals&storyID=15423815&language=en)
)Results of Development Study and Project Economics RNS 12 May 2022
(https://ir.q4europe.com/Tools/newsArticleHTML.aspx?solutionID=2182&customerKey=capitalmetals&storyID=15423815&language=en)

 

For further information, please visit www.capitalmetals.com or contact:

 Capital Metals plc                           Via Vigo Consulting

 Michael Frayne (CEO)

 James Mahony (CFO)
 Vigo Consulting (Investor Relations)         +44 (0)20 7390 0234

 Ben Simons / Tara Benniman                   capitalmetals@vigoconsulting.com
 SPARK Advisory Partners (Nominated Adviser)  +44 (0)20 3368 3554

 Neil Baldwin / James Keeshan
 WH Ireland Limited (Joint Broker)            +44 (0)20 7220 1666

 Harry Ansell / Katy Mitchell
 Tavira Securities Limited (Joint Broker)     +44 (0)20 7100 5100

 Jonathan Evans / Oliver Stansfield

 

About Capital Metals

Capital Metals is developing the Eastern Minerals Project in Sri Lanka,
approximately 220km east of Colombo. The Project is one of the highest-grade
mineral sands projects globally, with a current JORC Resource of 17.2Mt with
an average grade of 17.6% Total Heavy Minerals, and potential for significant
resource extension. In May 2022, a third-party Preliminary Economic Assessment
("PEA") provided an NPV for the Project of US$155-235M based on existing
resources, with further identified optimisation potential. The PEA outlined an
attractive low funding requirement of US$37.3M, with expansions funded through
cashflows from the Project, which is forecast to deliver US$645M of revenue
and net operating cashflows of US$391M.

 

CMET's goal is to become a high margin producer of mineral sands for the
international market, with a commitment to applying best-in-class 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$100m in direct government royalties and taxes to be paid.

 

For more information, visit our website www.capitalmetals.com
(http://www.capitalmetals.com) and follow us on social media:

LinkedIn: https://www.linkedin.com/company/capitalmetals/
(https://www.linkedin.com/company/capitalmetals/)

Twitter: https://twitter.com/MetalsCapital (https://twitter.com/MetalsCapital)

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