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 47km2 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 37km2
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
Greg Martyr (Executive
Chairman)
|
Via Vigo Consulting
|
Vigo Consulting (Investor Relations)
Ben Simons / Peter Jacob
|
+44 (0)20 7390 0234
capitalmetals@vigoconsulting.com
|
SPARK Advisory Partners (Nominated Adviser)
Neil Baldwin / James
Keeshan
|
+44 (0)20 3368 3554
|
Tavira Financial
Jonathan Evans / Oliver
Stansfield
|
+44 (0)20 7100 5100
|
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
Follow us on social
media:
X (formerly Twitter):
@MetalsCapital
LinkedIn: @Capital Metals
plc