REG - Capital Metals PLC - Statutory Appeal Hearing Decision

Capital MetalsAnnouncement

19/10/2023 09:15

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RNS Number : 6706Q  Capital Metals PLC  19 October 2023

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19 October 2023

 

Capital Metals plc

 

("Capital Metals" or the "Company")

 

Statutory Appeal Hearing Decision

 

GSMB Ordered to Reissue the Industrial Mining Licences

 

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 received a favourable decision from
the statutory appeal hearing (the "Statutory Appeal") against the notice of
cancellation of Industrial Mining Licences 16236 and 16237 (the "IMLs") which
was issued in May 2023 by the Geological Survey and Mines Bureau (the "GSMB").

 

The Statutory Appeal was heard before the Secretary to the Ministry of
Environment (the "Secretary") on 27 September 2023. Having considered the
written and oral submissions, the Secretary determined that the cancellation
of the IMLs was not correct and ordered the GSMB to reissue the IMLs to the
Company's Sri Lankan subsidiary, Damsila Exports (Pvt) Limited (the
"Decision").

 

In his Decision, the Secretary criticised the conduct of the GSMB noting that
it had violated certain provisions within the Mines and Minerals Act in its
suspension and cancellation of the IMLs. The Secretary stated:

 

"Therefore, at a time when the country is moving towards sustainable
development, although the government institutions should encourage investors
to create such large-scale projects and support the country to earn foreign
exchange, it appears that [the GSMB] have not done so. I would like to
emphasize that the GSMB should act transparently and with a good understanding
of good governance principles while working as a government agency."

 

This clears the path for the Company to work towards finalising an offtake and
financing agreement with LB Group (002601:SHENZHEN; Market Cap: US$6.4
billion) further to the previously announced Memorandum of Understanding
("MoU") announced on 9 May 2023.

 

Greg Martyr, Executive Chairman, commented:

 

"We are delighted that the Secretary has ordered the reissuance of the IMLs
enabling us to now fast-track the development of the Project. This follows
almost a year of legal and lobbying efforts to enable us to get the Project
back on track.

 

The Eastern Minerals Project will be a first-of-a-kind for Sri Lanka,
comprising modern mining practices, in-country value addition, knowledge and
skills transfer, regional infrastructure improvements, and substantial foreign
exchange income for the country.

 

While the interference with the IMLs has cost us the best part of a year, we
have in that time secured an offtake MoU with the world's number one
manufacturer of high-performance titanium dioxide pigments to fund the Project
into production and seen continued improvements in the prices of our main
products. This will benefit all stakeholders.

 

We expect to be extremely busy in re-engaging with LB Group, accelerating the
satisfaction of the conditions required to meet the numerous outstanding
mining applications as well as the reissued IMLs, commencing work on the
Environmental Impact Assessment for the southern part of the Project in EL199,
securing port access at Oluvil, and building out the team.  It will be a
pleasant change to be working on these value adding initiatives rather than
fighting against the injustice we suffered at the hands of a few over the last
12 months.

 

We look forward to working with the GSMB, which has been given clear
instructions from the Secretary and is now under the purview of President
Ranil Wickremesinghe, as well as the Board of Investment, which has an
increased role in the appraisal of and recommendation for the approval of
mineral licences following the recently announced procedural changes.

 

I would like to thank our team, particularly in Sri Lanka, for their
unstinting efforts towards securing this outcome. This is a good decision for
Capital Metals and for Sri Lanka."

 

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 3554

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

 Jonathan Evans / Oliver Stansfield

 

About Capital Metals

 

Capital Metals plc is a British company listed on the AIM segment of the
London Stock Exchange and one of only a few foreign investors in Sri Lanka's
mining industry. Following exploration and development activities including
detailed environmental assessments between 2017 and 2022, the Company's Sri
Lankan subsidiary, Damsila Exports (Pvt) Limited, was issued an initial two
licences in August 2022 to mine heavy mineral sands in the Eastern Province,
containing industrial minerals including ilmenite, rutile, zircon, and
garnet.

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