REG - Capital Metals PLC - Update re Project Funding

Capital MetalsAnnouncement

26/06/2024 15:30

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RNS Number : 0187U  Capital Metals PLC  26 June 2024

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VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
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26 June 2024

 

Capital Metals PLC

 

("Capital Metals" or the "Company")

 

Update re Project Funding

 

Capital Metals (AIM: CMET), a mineral sands company approaching mine
development stage at the high-grade Eastern Minerals Project in Sri Lanka (the
"Project"), has been informed by Sheffield Resources Limited (ASX: SFX)
("Sheffield") that it has placed on hold its transaction with Capital Metals
to acquire a 50% interest in the Project. Capital Metals understands that
Sheffield is seeking to maintain and reserve its balance sheet in favour of
the Thunderbird Mineral Sands Mine in Western Australia ("Thunderbird") as
Sheffield reallocates cash to support its primary asset at this time. Capital
Metals remains in constructive dialogue with Sheffield, which is also a
substantial and supportive shareholder of the Company.

 

Whilst discussions with Sheffield and LB Group were ongoing, the Company also
continued to study alternative funding options via equipment vendor finance
and offtake finance, which are not dilutive to equity. Given the productive
nature of these discussions and Capital Metals' healthy cash resources, the
Company intends to develop the Project in a way that retains 100% equity in
the Project. To further aid the development, the Company has also been in
positive discussions with highly qualified individuals to run the development
and operations of the Project.

 

The Company is therefore moving ahead with its low-cost drilling programme
targeting substantial near-term resource tonnage and grade upside which the
Directors believe should significantly increase the Net Present Value of the
Project. A further operational update on drilling will be provided in due
course.

 

Capital Metals will also continue discussions with parties who have previously
expressed interest, including LB Group and Sheffield, should its cash position
improve, but only if there is sufficient certainty that a transaction would be
concluded that is incremental to the value of proceeding independently while
retaining 100% equity in the Project.

 

Greg Martyr, Executive Chairman of Capital Metals, commented:

 

"Sheffield's decision to place this transaction on hold is a function of its
internal issues and not a reflection of the Project. Sheffield's share price
has fallen by almost 40% in the past month and it has reported additional
costs at Thunderbird meaning it has less capacity to spend cash on growth
projects. I am confident that with some key personnel hires, Capital Metals is
more than capable of advancing its Project independently, with the benefit of
a larger resource being targeted through the imminent drilling programme and a
supportive framework in Sri Lanka. The value for shareholders of proceeding
independently could, in the Board's opinion, be significantly more rewarding
for shareholders."

 

Bruce Griffin, CEO of Sheffield and Non-Executive Director of Capital Metals,
commented:

 

"In light of our company's commitments at Thunderbird and a challenging stock
market environment, we did not consider this an appropriate time to make
additional capital commitments outside of Thunderbird. Sheffield's decision
has nothing to do with the Project. We remain a supportive shareholder in
Capital Metals and are hopeful with time that we can assist with and
participate in the growth of the Project."

 

 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)

 

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