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Grant of Industrial Mining Licences

10 Aug 2022 10:10

RNS Number : 5593V
Capital Metals PLC
10 August 2022
 

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.

 

10 August 2022

Capital Metals plc

("Capital Metals" or the "Company")

Grant of Industrial Mining Licences

Capital Metals (AIM: CMET) is pleased to announce the grant by the Geological Survey and Mines Bureau of the Government of Sri Lanka ("GSMB") of the first two Industrial Mining Licences ("IMLs") for the Eastern Minerals heavy mineral sands project (the "Project"), one of the highest-grade mineral sands projects globally. The IMLs enable the commencement of mining activities in accordance with the development plan outlined in the Preliminary Economic Assessment ("PEA") completed in May 2022.

Highlights:

· IMLs granted for an initial 10-year period

· IMLs are a culmination of a rigorous approval process including the Project and Environmental Impact Assessment ("EIA") approvals received in November 2021

· IMLs are among the first to be issued in Sri Lanka in recent times to a non-Government entity for the purposes of mineral sands mining utilising modern mining methods, as part of the Government's commitment to attracting foreign direct investment

· Important milestone to facilitate the conclusion of discussions with offtakers, debt providers and other strategic funding parties to enable the development of the Project

The IMLs have been issued to the Company's local and wholly owned subsidiary, Damsila Exports Pvt Ltd, covering 16 hectares (160,000 square metres) of land within the Initial Mining Area. The IMLs were granted for an initial period of 10 years. The IMLs include some of the Project's highest-grade resources with grades up to 25% Total Heavy Minerals, and cover areas of the Project which have already been approved by the Coast Conservation and Coastal Resources Management Department in Sri Lanka following completion of the EIA process in November 2021.

The grant of the IMLs is an important milestone in ongoing discussions with offtakers and potential funding partners to develop the Project. Given the grant of these IMLs has now been successfully completed, the Board is confident in the timely issue of any further IMLs as they are submitted for approval.

Michael Frayne, Chief Executive Officer, commented:

"The grant of the IMLs is a key milestone in enabling the commencement of mining activities and the advancement of ongoing discussions with offtakers, debt providers and other strategic funding parties.

We are grateful to the Sri Lankan authorities for their cooperation, especially given the current economic and political situation, and believe this represents a strong endorsement of the Project and its future benefits to Sri Lanka. These IMLs are the culmination of a rigorous approval process and importantly provide a basis for the granting of further Industrial Mining Licences. I would like to congratulate our management team in Sri Lanka and thank those stakeholders working in the Sri Lankan government departments for their continued assistance.

The strong current and forecast prices for our minerals, coupled with the clear potential for further expansion of our high-grade resource, suggests further upside to our compelling base case NPV of US$155 million and IRR of 56% is achievable1. We look forward to keeping shareholders updated with further progress as we work with all stakeholders to bring the Project into production in a timely manner."

1Results of Development Study and Project Economics RNS 12 May 2022

 

For further information, please visit www.capitalmetals.com or contact: 

Capital Metals plc

Michael Frayne (CEO)

James Mahony (CFO)

Via Vigo Consulting

Vigo Consulting (Investor Relations)

Ben Simons / Tara Benniman

+44 (0)20 7390 0234

capitalmetals@vigoconsulting.com

SPARK Advisory Partners (Nominated Adviser)

Neil Baldwin / James Keeshan

+44 (0)20 3368 3554

WH Ireland Limited (Joint Broker)

Harry Ansell / Katy Mitchell

+44 (0)20 7220 1666

Tavira Securities Limited (Joint Broker)

Jonathan Evans / Oliver Stansfield

+44 (0)20 7100 5100

 

About Capital Metals

Capital Metals is developing the Eastern Minerals Project in Sri Lanka, approximately 220km east of Colombo. The Project is one of the highest-grade mineral sands projects globally, with a current JORC Resource of 17.2Mt with an average grade of 17.6% Total Heavy Minerals, and potential for significant resource extension. In May 2022, a third-party Preliminary Economic Assessment ("PEA") provided an NPV for the Project of US$155-235M based on existing resources, with further identified optimisation potential. The PEA outlined an attractive low funding requirement of US$37.3M, with expansions funded through cashflows from the Project, which is forecast to deliver US$645M of revenue and net operating cashflows of US$391M.

 

CMET's goal is to become a high margin producer of mineral sands for the international market, with a commitment to applying best-in-class 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$100m in direct government royalties and taxes to be paid.

 

For more information, visit our website www.capitalmetals.com and follow us on social media:

LinkedIn: https://www.linkedin.com/company/capitalmetals/

Twitter: https://twitter.com/MetalsCapital

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12

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