PAL Equatorial Palm Oil Plc

TIDMCMET

RNS Number : 2465S

Capital Metals PLC

13 July 2022

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13 July 2022

Capital Metals plc

("Capital Metals" or the "Company")

Project Update

Capital Metals (AIM: CMET) is pleased to provide an update on the Eastern Minerals heavy mineral sands project in Sri Lanka (the "Project"), one of the highest-grade mineral sands projects globally, which is closely approaching the final investment decision for development.

The Board and local management team are monitoring the economic and political developments in Sri Lanka. The Board expects that recent political changes should enable change to occur more rapidly with increased international cooperation and an overriding requirement to encourage foreign investment and job creation in the country. The local management team's focus has been on advancing discussions with the Geological Survey and Mines Bureau ("GSMB") to advance the Industrial Mining Licence ("IML") and, as there are currently limited field activities, the day-to-day operations have been largely unaffected. We are pleased with progress on several key areas which are necessary to commence mine development, as outlined below.

Industrial Mining Licence

The Company is in continual contact with the GSMB for the purposes of obtaining the IML and the Board has been encouraged by recent ongoing levels of interaction. The Board believes all relevant stakeholders are focused on achieving this objective in an expedient manner despite the current economic and political situation.

Metallurgical Process Test Work

IHC Mining is continuing its Metallurgical Process Test Work Study, which will enable the confirmation and refining of process flowsheets defined in the IHC Development Study and provide updated product specifications to assist with ongoing discussions with off-takers.

THM Composition

In cooperation with the Company's technical team, the Laboratory of the GSMB is currently analysing the mineral assemblage of the Total Heavy Minerals ("THM") from the 2021 drilling programme which will provide the specific details on percentage and grade of ilmenite, zircon, rutile, and garnet. It will also provide further data on mineral assemblage to complement the Metallurgical Process Test Work Study results. The completion of this analysis has been impacted by the energy and fuel shortages in Sri Lanka.

Oluvil Port

Discussions with the Sri Lanka Ports Authority ("SLPA") for the use by the Company of Oluvil Port for processing infrastructure and export facilities are ongoing and negotiations are continuing.

Michael Frayne, Chief Executive Officer, commented:

"The current situation continues to be very challenging for all Sri Lankans and we are therefore even more focussed on maintaining our support for our local staff and the Project communities during this time.

Clearly the award of the IML will be pivotal in unlocking the value of the Project. Whilst we cannot control the timing of its issuance, we remain in regular and constructive dialogue with the relevant authorities and are responding to frequent information requests, which we believe is a positive indication of progress. In a similar vein, the support we are now seeing from the SLPA for usage of the Oluvil Port is reassuring given the significant benefit it will provide to the local community and the Project. We believe the Sri Lankan government and departments recognise the critical necessity to accelerate the development of foreign direct investment and export income generating projects like ours.

We continue to have positive discussions with prospective offtakers who are interested in our products, with the objective that such parties will form a significant part of the future capex funding package.

Our Project remains one of the highest-grade mineral sands projects globally. Demand for our products is strong and we share a common interest with Sri Lanka in bringing the Eastern Minerals Project into production."

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

 
 Capital Metals plc                                 Via Vigo Consulting 
  Michael Frayne (CEO) 
  James Mahony (CFO) 
 Vigo Consulting (Investor Relations)               +44 (0)20 7390 0234 
  Ben Simons / Oliver Clark                          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.

Our 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.

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