REG - Capital Metals PLC - Update re Temporary Suspension of IMLs

Capital MetalsAnnouncement

30/05/2023 13:45

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RNS Number : 0529B  Capital Metals PLC  30 May 2023

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30 May 2023

 

Capital Metals plc

 

("Capital Metals", the "Company" or the "Group")

 

Update re Temporary Suspension of 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"), provides the following update regarding the temporary suspension
by the Geological Survey and Mines Bureau ("GSMB") of the Company's Industrial
Mining Licences ("IMLs").

 

As previously announced, Capital Metals has informed the GSMB that the Company
has reserved all rights, including under international law, in relation to
potential illegal activities by the GSMB and potential breaches of
international treaty obligations, pursuant to which the Company has issued a
Notice of Dispute(*). The latest action of the GSMB has been to send the
Company a notice of cancellation of the IMLs, purportedly due to failure to
comply with certain licence conditions, being primarily a lack of mining and
associated activities. This is despite the GSMB's instructions when suspending
the IMLs (announced on 12 December 2022) to "stop all mining and transport
activities with immediate effect."

 

The Board is consulting with its international and local legal advisers but
considers the reasons for the notice of cancellation to be devoid of merit and
standing in contradiction to previous instructions issued by the GSMB.

 

The Group will follow the appeal procedure in accordance with Sri Lanka's
Mines and Minerals Act which stipulates that a cancellation shall not take
effect unless and until an appeal has been disallowed.

 

Greg Martyr, Chairman of Capital Metals, commented:

 

"We believe the notice of cancellation of the IMLs is a desperate act of a
small number of individuals within the GSMB and, given what is at stake, will
be overturned when common sense prevails.

 

First the GSMB instructed the Company to cease activities on the licences
while it investigated the ownership structure of the licence-holding
subsidiary as it pertained to the level of foreign ownership. Now, absurdly,
the GSMB is attempting to cancel the IMLs due to failure to undertake
activities which it prevented the Company from undertaking. As such, we
believe the purported non-compliance with licence conditions will not stand up
to scrutiny when due process is followed.

 

Through the LB Group MoU announced earlier this month, the Project is now
potentially funded and ready to go. We are confident that the interests of the
country and the rule of law will soon outweigh the follies of one or two
individuals within the GSMB. We are working diligently to accelerate that
outcome while positioning the Company to pursue all actions to protect the
interests of its shareholders should the need arise."

 

*Notice of Dispute under the 1980 Agreement between the Government of the
United Kingdom and Northern Ireland and the Government of the Democratic
Socialist Republic of Sri Lanka for the Promotion and Protection of
Investments.

 

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

 Capital Metals plc                           Via Vigo Consulting

 Michael Frayne (CEO)
 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 London Stock Exchange
and one of only a few foreign investors in Sri Lanka's mining industry. After
investing US$11 million in 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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