Capital Metals PLC Update re Temporary Suspension of IMLs (0529B)
30 May 2023 - 10:44PM
UK Regulatory
TIDMCMET
RNS Number : 0529B
Capital Metals PLC
30 May 2023
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.
30 May 2023
Capital Metals plc
("Capital Metals", the "Company" or the "Group")
Update re Temporary Suspension of Industrial Mining Licences
Capital Metals (AIM: CMET), a mineral sands company approaching
mine development stage at the high-grade Eastern Minerals Project
in Sri Lanka (the "Project"), provides the following update
regarding the temporary suspension by the Geological Survey and
Mines Bureau ("GSMB") of the Company's Industrial Mining Licences
("IMLs").
As previously announced, Capital Metals has informed the GSMB
that the Company has reserved all rights, including under
international law, in relation to potential illegal activities by
the GSMB and potential breaches of international treaty
obligations, pursuant to which the Company has issued a Notice of
Dispute(*) . The latest action of the GSMB has been to send the
Company a notice of cancellation of the IMLs, purportedly due to
failure to comply with certain licence conditions, being primarily
a lack of mining and associated activities. This is despite the
GSMB's instructions when suspending the IMLs (announced on 12
December 2022) to "stop all mining and transport activities with
immediate effect."
The Board is consulting with its international and local legal
advisers but considers the reasons for the notice of cancellation
to be devoid of merit and standing in contradiction to previous
instructions issued by the GSMB.
The Group will follow the appeal procedure i n accordance with
Sri Lanka's Mines and Minerals Act which stipulates that a
cancellation shall not take effect unless and until an appeal has
been disallowed.
Greg Martyr, Chairman of Capital Metals, commented:
"We believe the notice of cancellation of the IMLs is a
desperate act of a small number of individuals within the GSMB and,
given what is at stake, will be overturned when common sense
prevails.
First the GSMB instructed the Company to cease activities on the
licences while it investigated the ownership structure of the
licence-holding subsidiary as it pertained to the level of foreign
ownership. Now, absurdly, the GSMB is attempting to cancel the IMLs
due to failure to undertake activities which it prevented the
Company from undertaking. As such, we believe the purported
non-compliance with licence conditions will not stand up to
scrutiny when due process is followed.
Through the LB Group MoU announced earlier this month, the
Project is now potentially funded and ready to go. We are confident
that the interests of the country and the rule of law will soon
outweigh the follies of one or two individuals within the GSMB. We
are working diligently to accelerate that outcome while positioning
the Company to pursue all actions to protect the interests of its
shareholders should the need arise."
*Notice of Dispute under the 1980 Agreement between the
Government of the United Kingdom and Northern Ireland and the
Government of the Democratic Socialist Republic of Sri Lanka for
the Promotion and Protection of Investments.
For further information, please visit www.capitalmetals.com or
contact:
Capital Metals plc Via Vigo Consulting
Michael Frayne (CEO)
Vigo Consulting (Investor Relations) +44 (0)20 7390 0234
Ben Simons / Peter Jacob capitalmetals@vigoconsulting.com
SPARK Advisory Partners (Nominated
Adviser)
Neil Baldwin / James Keeshan +44 (0)20 3368 3554
Tavira Financial
Jonathan Evans / Oliver Stansfield +44 (0)20 7100 5100
About Capital Metals
Capital Metals plc is a British company listed on the London
Stock Exchange and one of only a few foreign investors in Sri
Lanka's mining industry. After investing US$11 million in
exploration and development activities including detailed
environmental assessments between 2017 and 2022, the Company's Sri
Lankan subsidiary, Damsila Exports (Pvt) Limited, was issued an
initial two licences in August 2022 to mine heavy mineral sands in
the Eastern Province, containing industrial minerals including
ilmenite, rutile, zircon, and garnet.
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