Capital Metals Plc

Capital Metals is a UK company listed on the London Stock Exchange (AIM: CMET). The company is developing the Eastern Minerals Project in Sri Lanka, approximately 220km east of Colombo, containing industrial minerals including ilmenite, rutile, zircon, and garnet. The project is one of the highest-grade mineral sands projects globally, with anticipated further grade and resource expansion.

In 2022, a third-party Preliminary Economic Assessment provided a project NPV of US$155-235m based on existing resources only, with further identified optimisation potential.

The company is committed to applying modern mining practices and bringing significant positive benefits to Sri Lanka and the local community. It expects over 300 direct new jobs to be created and over US$130m in direct government royalties and taxes to be paid.

In March 2024, the company announced it had granted Sheffield Resources (ASX: SFX) co-exclusivity with LB Group (002601:SHENZHEN) for either party to conclude a transaction to provide funding to support the development of the project into production in exchange for up to a 50% interest in the project.

Management Profile:

Gregory Martyr - Executive Chairman

Mr Martyr is an experienced resource industry banker, advisor and corporate executive. He has over 30 years’ experience in resources investment banking and corporate finance, as well as the management of international mining companies. He is also on the board of Euro Manganese Inc. From 2011 to 2016, Mr Martyr was a Managing Director with Standard Chartered Bank ultimately as the Global Head of Advisory, Mining and Metals. From 2005 until its 2011 acquisition by Standard Chartered Bank, he was a partner with Gryphon Partners, a boutique resource advisory firm and from 1994 to 2003, he was employed in several executive roles by Normandy Mining Ltd., including President, Americas. Prior to that he held positions with Deutsche Bank and Morgan Grenfell. Mr Martyr obtained a Bachelor of Economics and a Bachelor of Laws from the University of Sydney, Australia.

What are your key goals for the next 3, 6 and 12 months?

3 Months

Conclude Project Funding transaction

Additional progress of Project licensing and pre-construction activities

6 Months

Advance steps to commence construction activities

Conclude drilling programme to increase resource confidence to underpin a minimum of the first 12 months of operation and add additional resources

12 Months

Construction activities well advanced

What do you think makes your company such a compelling investment?

Project NPV8 (post tax) Base Case of $155m and Upside Case of $235m equate to 36p and 54p per share respectively against a current share price of 4.3p.

Execution of JV with LB Group or Sheffield Resources, both well-known and highly capable potential partners, will largely derisk the project.

17.2Mt resource at 17.6% Total Heavy Minerals with significant additional upside.

Project grades among highest globally with potential for extensive undrilled lateral and depth extension.