TIDMCMET
RNS Number : 8353N
Capital Metals PLC
03 February 2021
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.
3 February 2021
Capital Metals plc
("CMET" or the "Company")
Corporate and Operational Update
Capital Metals plc (AIM: CMET) is a natural resources company
focussed on the development of the Eastern Minerals Project in Sri
Lanka ("the Project"), one of the highest grade mineral sands
projects globally. The Company is pleased to provide the following
corporate and operational update.
Highlights:
-- Successful relisting of CMET following the acquisition of
Capital Metals Limited ("CML") and the Project
-- Oversubscribed GBP2 million fundraising to advance the
development of the Project through the permitting process towards
the grant of an Industrial Mining Licence ("IML")
-- Advancement of the permitting process following the release
of the Environmental Impact Assessment ("EIA") for public comment -
final permitting and grant of the IML is anticipated in time for
our target of first production in H1 2022
-- Renewal of the southern exploration licence EL199
-- Accelerating community relations and exploration programmes
-- Commencing independent project economic evaluation
-- Continued positive outlook for mineral sands commodities
Successful relisting following the completion of the acquisition
of the Project and GBP2 million fundraising
The Company is now funded to advance the next stage of
development of the Project which includes the finalisation of the
EIA and final permitting and grant of the IML.
Our local ESG team has accelerated its continuing efforts on our
community and government engagement programmes, raising awareness
of our Project , as well as the benefits to Sri Lanka and the local
Project areas, which have been particularly impacted by
COVID-19.
The Company has submitted new drilling programmes to the GSMB to
further explore our Project area. Less than 5% of the Project area
has been drilled to date and the JORC Resource is from surface to a
depth of 3m. Previous exploration work has shown continuation
beyond 3m and also returned grades in excess of 26% THM.
Accordingly, the Company expects to be able to upgrade the size of
the resource in due course.
Given the very high grades and simplicity of processing, no
blasting or chemicals are required, operating costs for development
are expected to be low, whilst existing infrastructure, including a
newly constructed port 32km away, is expected to ensure the capex
for development of the Project is relatively low.
Advancement of the Permitting and Licencing Processes
The Project has undergone extensive work over the last few years
and permitting is at an advanced stage with the EIA now completed
and released for public comment. Based on detailed interaction with
the relevant Sri Lankan authorities, the Company can then finalise
the EIA after the public comment period enabling the IML to be
issued thereafter.
The Company is also pleased to report that it has, as expected,
now been granted a further 2-year extension of its exploration
licence EL-199 which covers the southern portion of the Project.
This ensures continuity of tenure over the entire Project in the
medium term and enables us to move ahead with our exploration
programmes in the licence area.
Upon the issuance of the IML, the Company will look to conclude
ongoing discussions with potential offtake partners as well as
placing orders for long lead processing equipment. The Company
envisages healthy demand for its product, which will primarily
consist of Ilmenite, Rutile, Zircon and Garnet. Any offtake
agreements are expected to provide some form of prepayment or
financing initiatives, thereby mitigating any amounts required to
be sourced by the Company to bring the Project into production.
Construction is targeted to commence in Q4 2021, with first
production in H1 2022.
Independent Project economic evaluation
The Company has commenced work on an updated and independent
development study and economic analysis which is due to be
completed by the end of H1 2021. The study will be based on all
technical work completed to date including an estimated 1.65
million tonne per annum mining operation and capital expenditure of
US$35-40 million.
Outlook for Mineral Sands
2020 was a strong year for commodity prices including mineral
sands. The latest data suggests prices are tightening with premium
Zircon trading at around US$1,450- $1,500 per tonne (from a recent
low of US$1,430 per tonne) and Rutile US$1,130 per tonne (from a
recent low of US$1,090 per tonne). Ilmenite prices have also shown
improvement in the past year. Mineral sands are used in the housing
sector, white goods and for industrial production and are therefore
leveraged to improvement in the economic cycle, which is expected
to continue over the next few years.
Michael Frayne, CEO, commented:
"We are delighted to have hit the ground running in 2021 with
the acquisition of the Eastern Minerals Project and the
oversubscribed placing of GBP2 million. The Company is now in a
strong position to deliver on its key objectives of working with
the community and the government to obtain final permitting
approvals for the Project that will lead to the grant of a mining
licence and subsequent engagement with potential offtake partners
and industrial end users before first production within 12-18
months.
The Eastern Minerals Project is one of the highest grade and
economically robust minerals sands deposits in the world. With the
completion of the transaction enabling the acceleration of our
project development strategy, including further exploration, and
improving sentiment in the sector and demand for mineral sands, we
look forward to unlocking significant value for our
shareholders"
For further information, please visit www.capitalmetals.com or
contact:
Capital Metals plc Tel +44 (0) 20 7317 6800
Michael Frayne (CEO)
SPARK Advisory Partners (Nominated
Adviser)
Neil Baldwin / James Keeshan +44 (0) 20 3368 3554
Brandon Hill Capital Limited
(Broker)
Jonathan Evans/Oliver Stansfield +44 (0) 20 3463 5000
Glossary:
GSMB - The Geographical Survey and Mines Bureau of Sri Lanka
under the Mines and Minerals Act of Sri Lanka
JORC - the JORC Code provides minimum standards for public
reporting to ensure that investors and their advisers have all the
information they would reasonably require for forming a reliable
opinion on the results and estimates being reported. The current
version is dated 2012
THM - Total Heavy Minerals
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