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

Capital MetalsAnnouncement

09/06/2023 10:30

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RNS Number : 2624C  Capital Metals PLC  09 June 2023

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9 June 2023

 

Capital Metals plc

 

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

 

Update re Temporary Suspension of Industrial Mining Licences:

 

Sri Lankan Committee on Public Enterprises Appoints Independent Legal Adviser
to Investigate Misappropriation in the GSMB

 

Capital Metals (AIM: CMET), a mineral sands company approaching mine
development stage at the high-grade Eastern Minerals Project in Sri Lanka (the
"Project"), notes reports in the Sri Lankan media regarding the appointment by
the Committee on Public Enterprises ("COPE") in Sri Lanka of an independent
legal officer to investigate misappropriation within the Geological Survey and
Mines Bureau ("GSMB"). COPE is a parliamentary committee established by the
Sri Lankan parliament to ensure the compliance of financial discipline in
public corporations and other semi-governmental bodies in which
the Government of Sri Lanka has a financial stake.

 

At a recent COPE meeting held on 6 June 2023, the chairman of the GSMB was
summoned to attend in order to answer questions regarding the practices and
improprieties of the GSMB.  It was revealed that applications pertaining to
mining and exploration activities have been incorrectly directed to the
Minister of the Environment for approval in order to facilitate the issuance
of licences. Discussing matters unrelated to Capital Metals' licences, the
chairman of COPE stated:

"…there is no provision in the Mines & Minerals Act that applications
should be directed to the Minister for his approval ... and as such, the GSMB
chairman appears to have acted according to his own whims and fancies and not
in accordance with the Act. Thus, it is apparent that the licences have been
issued in an illegal manner and the chairman has violated the mandate."

Following the meeting, a local media publication, the Colombo Page reported:

"…there was evidence to show that issued licences had been arbitrarily
cancelled without any methodology and this was indicative of malpractice and
possibly fraud."

Capital Metals now understands from media reports that COPE has appointed a
sub-committee to review the processes within the GSMB and ensure procedural
propriety. An independent legal officer will have specific responsibility to
investigate any misappropriation within the GSMB.

Greg Martyr, Chairman of Capital Metals, commented:

 

"We are pleased to see the questionable governance practices of the GSMB are
beginning to be exposed. Our complaints and lobbying efforts in Sri Lanka
appear to be having a positive impact. COPE has highlighted that the GSMB
chairman appears to have acted on his own accord with an inappropriate direct
line for approvals from the Minister of the Environment, and Capital Metals
has witnessed this first hand with the illegal suspension and purported
cancellation of our mining licences.

We regard this public exposure of the chairman of the GSMB, which has been
covered extensively in local Sri Lankan press, as a positive step towards
removing bad actors, implementing governance reforms and by extension
resolving our licence issues. We will continue with our extensive lobbying and
legal actions with a view to resolving our issues amicably with the GSMB, but
we will not rest until our legal rights have been fully restored."

 

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

 

 Capital Metals plc                           Via Vigo Consulting

 Greg Martyr (Chairman)

 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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