Capital Metals (AIM:CMET) - High-Grade, Long-Life Mineral Sands Resource

Interview with Gregory Martyr, Executive Chairman of Capital Metals PLCRecording date: 1st May 2024Capital Metals (AIM:CMET) is an intriguing investment opportunity in the mineral sands space, with its high-grade Eastern Minerals Project located on the east coast of Sri Lanka. The project boasts a resource of over 17 million tons at an impressive grade of 17%, making it one of the highest-grade mineral sands projects globally.The company aims to produce ilmenite (50% of revenue), zircon (20% of revenue), rutile, and garnet through a four-stage process, with a modest capex of approximately $80 million for the first 10 years. The project's economics are compelling, with a base case valuation of $155 million and an upside case of $235 million, compared to the current market cap of just $15 million.Despite recent challenges, including a dispute with a former minister and the economic crisis in Sri Lanka, Capital Metals has persevered and strengthened its position. The company is now well-funded, with $2.5 million in the bank, and is in advanced discussions with potential partners, LB Group and Sheffield Resources, to secure funding for the project's development.The agreement with the chosen partner will involve a 50% stake in the project in exchange for funding Capital Metals into production. This deal is expected to be announced by mid-May 2024, with the goal of reaching a final investment decision (FID) by Q1 2025 and commencing production in the first quarter of 2026.Capital Metals has a lean corporate structure and a strong shareholder base that has supported the company through recent challenges. The company's management team, led by Executive Chairman Greg Marr, brings extensive experience in the resources sector and is focused on delivering value to shareholders.The Eastern Minerals Project benefits from a simple, well-established mining process and strong demand for its products, particularly ilmenite, which will be sold primarily to pigment producers in China. The company is committed to maintaining its social license to operate and has plans to contribute to local communities through job creation, infrastructure improvements, and education initiatives.In conclusion, Capital Metals presents a compelling investment case, with a high-grade, long-life mineral sands resource, a clear path to production, and significant upside potential. As the company secures funding and advances the Eastern Minerals Project, investors may be well-positioned to benefit from the growing demand for mineral sands and the project's attractive economics.—View Capital Metals' company profile: https://www.cruxinvestor.com/companies/capital-metalsSign up for Crux Investor: https://cruxinvestor.com

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