Capital Metals reports progress at Eastern Minerals Project

21st Mar 2024 16:17

(Sharecast News) - Capital Metals, a mineral sands company on the verge of mine development at the high-grade Eastern Minerals Project in Sri Lanka, reported substantial progress in securing necessary permits and approvals for its operations on Thursday.

The AIM-traded firm said after engagement with the Geological Survey and Mines Bureau (GSMB), it had received confirmation of the GSMB's intention to process seven outstanding industrial mining licence (IML) applications.

That step would pave the way for the granting of further IMLs, essential for the comprehensive mine plan covering the entire 47 square kilometre EL168 licence area.

Additionally, Capital Metals said it was in advanced discussions with the Coast Conservation Department (CCD) to obtain an additional permit to mine, covering all CCD-managed land in the EL168 area.

That permit would offer flexibility for future mining activities, complementing the IMLs once granted.

In another development, the GSMB issued a 'no objection' letter for Capital's application to have a Board of Investment (BOI)-registered company controlling its project interests in Sri Lanka.

That, the board said, should provide legal protections and fiscal incentives, enhancing its investment in its Sri Lankan subsidiary Damsila Exports.

The company said it was also gearing up for drilling activities scheduled to start in April, using aircore and sonic rigs in a bid to increase resource confidence, confirm reserves, and explore for additional mineralisation.

It expected the work would lead to a substantial increase in the project's resource base, motivating further exploration activities.

Furthermore, Capital Metals said it had engaged IHC Mining to conduct studies on the value addition potential of garnet and monazite minerals, which were previously undervalued.

Initial tests showed significant contributions from both minerals, with the potential to substantially enhance the project's value.

Additionally, the company had started the environmental impact assessment (EIA) process for the EL199 tenement area, representing a significant extension of the project.

Completion of the EIA was a crucial step toward obtaining IMLs for EL199, targeted for the first half of 2025.

Capital Metals emphasised that mining activities in the EL168 licence area remained the primary focus, and were not dependent on the EIA approval for EL199.

"I am pleased to provide these positive updates on licensing and pre-construction activities, which are particularly relevant now we are in advanced discussions with two industrial groups to conclude a funding transaction in the near term to support our operations into production," said executive chairman Greg Martyr.

"Given the company's healthy cash resources and advanced nature of these funding transaction discussions, we have accelerated a number of budget workstreams to prepare for commencement of construction and expedite the development process.

"The recent positive engagement from the GSMB, CCD and the BOI regarding advancing our capacity to mine, as well as providing foreign investor protections and incentives, has also encouraged us to commit to an additional mineral study for garnet and monazite, as well as a drilling programme aimed at increasing resource certainty and resource expansion."

At 1539 GMT, shares in Capital Metals were flat at 4.2p.

Reporting by Josh White for Sharecast.com.