23 March 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.
Capital Metals plc
("CMET" or the "Company")
Capital Metals plc (AIM:CMET), a natural resources company focused on the development of the Eastern Minerals Project located in the Eastern Province in Sri Lanka ("the Project"), one of the highest-grade mineral sands projects globally, is pleased to provide an outline of its expected near-term project milestones.
These key workstreams, which aim to demonstrate and unlock the significant value of the Eastern Minerals Project, are as follows:
Development Study and Project Economics
IHC Mining, a leading global mining services group with specialist expertise in developing mineral sands operations, is nearing completion of the Development Study for the Project. The report will include estimated Project economics, incorporating the significant global price of the Company's suite of heavy minerals. The Study is being prepared to a Scoping Study level but is expected to provide the necessary information to make a Final Investment Decision and move promptly into the first stage of development and production. The Company anticipates the release of the final report by mid-April 2022.
Results from 2021 drill programme
The Company currently has a JORC-compliant resource of 17.2Mt at 17.6% Total Heavy Minerals, making it one of the highest grade projects globally. However, this resource is based on just 10% of the existing land package that currently makes up the Project. With known heavy minerals throughout the tenements, the Company undertook an auger drilling campaign in Q4 2021 to identify additional areas of high grade and provide the basis of a fully-funded 2022 drilling campaign, which is intended to materially increase the existing resource. The drill samples are continuing to be assayed by an independent laboratory. There are currently significant global back logs in analysis of mineral samples, however the Company is working with the laboratory to complete the assays as soon as possible and further updates will be made in due course.
Industrial Mining License ("IML")
Following the grant of the Environmental Impact Assessment in November 2021, the Company is working closely with the Sri Lankan government authorities in order to obtain the IML, which will enable the Company to then move swiftly into commissioning the mineral sands concentrator to enable first production of a heavy minerals concentrate. As outlined below, senior management will be meeting Sri Lankan officials in late March 2022 and are confident as to the near-term issue of the IML. However, the precise timing of the award is largely under the Sri Lankan government's control.
Offtake and Strategic Party Discussions
Discussions continue with strategic parties with strong interest shown by offtakers and other strategic companies in the Project. A number of the interested parties have completed site visits and taken samples to assess the composition of the mineral sands at the Project. The completion of the key milestones outlined above will enable discussions to be concluded with these parties. The Company expects any offtake and or strategic party agreements will provide a significant proportion of any CAPEX requirement to bring the Eastern Minerals Project into production.
Both Michael Frayne (CEO) and Richard Stockwell (Technical Manager) will be in Sri Lanka at the end of this month to meet Sri Lankan authorities and stakeholders as well as undertake further planning in relation to the resource drilling scheduled for later in the year.
Following the recent placing in February 2022, the Company confirms it has cash balances of £1.44m as at 28 February 2022 which the Directors believe will be sufficient to complete the milestones as set out above.
Michael Frayne, Chief Executive Officer commented:
"I am very grateful to our team and the independent consultants who are working diligently towards finalisation of our key milestones before construction of our mineral sands concentrator can begin.
"This is a highly exciting period for the Company as we look to transition into production. We are focused on delivering these key milestones in the near term particularly given the market for mineral sands is in robust health with recent prices being at or near record highs. We are seeing a substantial amount of interest for our mineral sands product and look forward to keeping shareholders updated in the near term."
For further information, please visit www.capitalmetals.com or contact:
Capital Metals plc
Michael Frayne (CEO)
James Mahony (CFO)
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