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(Alliance News) - Capital Metals PLC on Friday said the Sri Lankan Geological Survey & Mines Bureau has formally reinstalled its industrial mining licences 16236 and 16237 to its Sri Lankan subsidiary Damsila Exports (Pvt) Ltd.
The Sri Lanka-focused mineral sands company's licences had previously been subject to a suspension and notice of cancellation until a statutory appeal ruling, announced in mid-October, ordered them to be reissued.
The licences were granted for an initial 10-year period from August 2022, Capital Metals noted, pursuant to the approval of an environmental impact assessment in November.
Capital Metals said the licences cover an initial 16 hectares of land for the commencement of mining activities, including some of the project's highest-grade resources with grades up to 25% total heavy minerals.
The Coast Conservation & Coastal Resources Management Department in Sri Lanka also issued an extension to its permit to mine pursuant to the EIA approval in November 2021, which Capital Metals said evidenced further in-country support for the project.
Capital Metals said the reinstatement of the licences is a "key milestone" in moving from the previously announced memorandum of understanding to the finalisation of negotiations with LB Group, which Capital Metals described as "the world's number one manufacturer of high-performance titanium dioxide pigments".
Capital Metals said this would help "unlock" the funding for the total capital expenditure for the project.
"The reinstatement of the IMLs marks the culmination of over a year's unrelenting efforts to overcome interference by a minority of bad actors who no longer hold their offices. We are working towards execution of the joint venture with LB Group to fund the total capital expenditure for one of the highest-grade heavy mineral sands projects globally, with additional upside not yet included in the resource," said Capital Metals Executive Chair Greg Martyr.
"This will be a significant project to kick-start much-needed foreign investment in Sri Lanka's heavy mineral sands mining and export industry which could be a major contributor to rebuilding the economy.
"We would like to thank the new team at the GSMB for their cooperation in what has been a challenging period after many changes in numerous related government departments in Sri Lanka. We look forward to working constructively with them, as well as the board of investment, the CCD, and all other stakeholders, as we progress mine construction planning."
Shares in Capital Metals were up 17% to 5.63 pence each in London on Friday afternoon.
In October, Capital Metals hailed the expulsion of Naseer Ahamad from his party and as Sri Lanka's Minister of Environment. Chair Martyr said this was a "positive development" as the company believed the minister to be "primarily responsible for the illegal interference" with its licences.
By Greg Rosenvinge, Alliance News senior reporter
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