Zak Mir talks to Greg Martyr, Executive Chairman, Capital Metals, in the wake of the mineral sands company approaching mine development stage at the high-grade Taprobane Minerals Project in Sri Lanka, updating on drilling within the northern EL168 area, focusing on the Initial Mining Area of the existing 17.2 Mt Mineral Resource.

Greg Martr opened by reflecting on a particularly active six months for Capital Metals. Since their last update, the company has made significant strides, including a successful transaction with the Ambient Group. Greg expressed enthusiasm about the new doors this partnership has opened, emphasizing that the collaboration is already proving valuable, despite being only two weeks in.

Capital Metals also recently completed a rapidly oversubscribed fundraising round, which was closed early to avoid excessive dilution at the 2.5p share price level. Greg noted the strong support from shareholders and hinted at ongoing discussions regarding the potential exercise of options, signaling healthy interest and confidence in the company’s trajectory.

One of the most anticipated updates concerned Capital Metals’ drilling program within the northern EL168 area, focusing on the Initial Mining Area of the existing 17.2 million tonnes mineral resource. Greg reported the completion of the first phase with 170 holes drilled, totaling just over 1,500 meters. This drilling effort marks a substantial increase in depth compared to the 2016 resource calculations, which averaged only 1.6 meters, whereas the recent drilling averaged about 9 meters per hole, with some extending as far as 15 meters.

What stands out in this phase is the continuation of mineralization down to the basement rock in certain locations. While this extended mineralization is not uniform across all holes, the encouraging results point to the potential for a more substantial resource than previously understood. Assay results are expected shortly, which will provide further clarity on the resource’s quality and extent.

Greg highlighted the initiation of research coverage by Hannam & Partners, a respected name in mining research known for their rigorous analysis. This development represents a significant endorsement for Capital Metals, often seen as a “gold standard” in the sector. The research team’s detailed review of Capital Metals’ financial models has already led to improvements in the Net Present Value (NPV) calculations, with an updated model currently being finalized.

The company’s relatively low capital expenditure (capex) requirements further enhance its appeal. As mineralization increases, the economics of the project improve, making it more cost-effective to extract the resources. This combination of low capex and growing resource size is a powerful advantage as Capital Metals moves toward its investment decision.

Discussing the broader market context, Greg noted that the project’s sector is largely insulated from the ongoing tariffs and export restrictions affecting other industries, particularly Sri Lanka’s garment sector. While the garment industry faces uncertainty, the resource sector is gaining increasing importance for foreign investment in Sri Lanka. This shift benefits Capital Metals by positioning it favorably in the eyes of investors and policymakers alike.

Despite the complexities of the market, Capital Metals’ shares have shown remarkable strength, rising nearly 80% so far this year. Greg acknowledged that while the market can be volatile with limited sellers, the goal is to attract more professional investors. The backing of Hannam & Partners is expected to bring in this new wave of buyers, helping to stabilize and potentially increase the share price further.

Looking ahead, Greg remains optimistic about ticking all the necessary boxes leading up to a final investment decision by the end of the year. The company is focused on continued progress and delivering results that will pave the way for mine development.

Capital Metals is clearly on an exciting path as it advances the Taprobane Minerals Project. With strong drilling results, strategic partnerships, and a favorable investment climate, the company is building momentum toward its goal of becoming a significant player in Sri Lanka’s resource sector. Stakeholders and observers alike will be watching closely as Capital Metals moves through the next critical phases of development.

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