Capital Metals PLC Grant of Industrial Mining Licences (5593V)
August 10 2022 - 4:10AM
UK Regulatory
TIDMCMET
RNS Number : 5593V
Capital Metals PLC
10 August 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
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WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
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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 achievable(1) . 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."
(1) Results of Development Study and Project Economics RNS 12
May 2022
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 / T ara Benniman 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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