REG - Capital Metals PLC - Project Development Updates

Capital MetalsAnnouncement

21/03/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240321:nRSU7581Ha&default-theme=true

RNS Number : 7581H  Capital Metals PLC  21 March 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
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
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

21 March 2024

 

Capital Metals PLC

 

("Capital Metals" or the "Company")

 

Project Development Updates

 

Capital Metals (AIM: CMET), a mineral sands company approaching mine
development stage at the high-grade Eastern Minerals Project in Sri Lanka (the
"Project"), provides the following updates on Project development activities.

 

Outstanding IML Applications

Following a period of constructive engagement with the Geological Survey and
Mines Bureau ("GSMB"), further to the reinstatement of the two granted
Industrial Mining Licences ("IMLs") in December 2023, the Company has now
received a formal letter confirming the GSMB's intention to process the
Company's seven outstanding IML applications, which is expected to facilitate
the granting of further IMLs to underpin the mine plan for the resource in the
entire 47km(2) EL168 licence area.

Additional CCD Mine Permit

The Company is also in advanced discussions with the Coast Conservation
Department ("CCD") to obtain a permit to mine covering all the CCD managed
land in the EL168 area. The CCD has already granted a permit to mine in the
two granted IML areas. The additional permit will provide flexibility to
expand mining activities as soon as the GSMB grants IMLs pursuant to the
outstanding IML applications.

Board of Investment

The GSMB has also provided a "No Objection" letter to the Company's
application to have a Board of Investment ("BOI") registered company
controlling its Project interests in Sri Lanka. Approval by the BOI is
anticipated in the very near future and will enhance the Company's investment
in Damsila Exports (Pvt) Limited, the Sri Lankan subsidiary holding the EL168
exploration licences, initial IMLs and applications, by providing protections
against nationalisation under the Constitution of Sri Lanka as well as
additional fiscal incentives.

Drilling Update

Final preparations are underway to commence both Aircore and Sonic rig
drilling programmes in April 2024. Drilling will provide resource infill and
confirmation in the Initial Mining Area, which was the focus of the
Preliminary Economic Assessment undertaken by IHC Mining in 2022.

Drilling and subsequent assay and geo-metallurgical assessment is designed to
increase resource confidence and allow the calculation of a Proven Reserve to
underpin a minimum of the first 12 months of operation. Drilling will also
include exploration at depth and westward to discover additional, buried
shorelines where they exist and where dune mineralisation has previously been
identified. Accordingly, a substantial resource increase is anticipated from
this initial work programme, which is expected to subsequently motivate
further resource confirmation and exploration activity.

Garnet and Monazite Study

The Company has mandated IHC Mining to undertake further studies on the
potential value addition from garnet and monazite minerals that were largely
ignored in historical valuations, but the contribution of which is expected to
add significant value to the Project. Test work completed by IHC Mining has
shown monazite to contribute 2.3kg/t of Heavy Mineral Concentrate ("HMC") and
garnet to contribute 200kg/t of HMC.

Garnet will be separated and sized into standard saleable product mesh sizes
and an XRF analysis will be completed to confirm the quality of the product
for the growing media blasting and water jet cutting markets.  Previous
valuations for garnet were at a low, bulk price in the vicinity of
US$250-300/t, whereas sized and bagged product can achieve sale values of
US$600/t in the current market.

A monazite product will be separated and chemically analysed to determine
inherent Rare Earth Oxides and allow for value and market assumptions on the
final product. No value has been attributed to monazite previously.

Commencement of Environmental Impact Assessment ("EIA") on EL199

Work has commenced on the EIA for the EL199 tenement area ("EL199"). EL199 is
a 37km(2) southern extension of the Project containing approximately half of
the Project resource. Completion of the EIA is a precursor to the application
for IMLs for the EL199 area, which the Company is targeting to start receiving
in H1 2025. The Company has received formal confirmation from the GSMB that
the EL199 tenement is able to be retained by the Company for a further period
of two years thereby allowing sufficient time for the conclusion of the EIA
and submission of IML applications. For the avoidance of doubt, mining of the
EL168 licence area is the initial priority for the Company and is not
dependent on the EIA approval and subsequent issuance of IMLs on EL199.

Greg Martyr, Executive Chairman, commented:

"I am pleased to provide these positive updates on licensing and
pre-construction activities, which are particularly relevant now we are in
advanced discussions with two industrial groups to conclude a funding
transaction in the near term to support our operations into production.

Given the Company's healthy cash resources and advanced nature of these
funding transaction discussions, we have accelerated a number of budget
workstreams to prepare for commencement of construction and expedite the
development process.

The recent positive engagement from the GSMB, CCD and the BOI regarding
advancing our capacity to mine, as well as providing foreign investor
protections and incentives, has also encouraged us to commit to an additional
mineral study for garnet and monazite, as well as a drilling programme aimed
at increasing resource certainty and resource expansion.

We look forward to updating stakeholders further on material initiatives to
move the Project into production."

 

 For further information, please 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 3554

 Neil Baldwin / James Keeshan
 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)

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDQFLBLZXLEBBQ