Business
Results of Development Study and Project Economics
Results of Development Study and Project Economics.
About this update from Capital Metals Plc
[{"type":"text","content":"\n \n \n 12 May 2022\n \n \n \n Capital Metals plc\n \n \n \n \n \n \n (\"CMET\" or the \"Company\")\n \n \n \n \n \n \n Results of Development Study and Project Economics\n \n \n \n \n \n \n \n \n \n Study Demonstrates Exceptional Economics\n \n \n \n \n \n \n \n \n Capital Metals plc (AIM:CMET), a company developing the Eastern Minerals Project in Sri Lanka (the \"Project\"), one of the highest-grade mineral sands projects globally, is pleased to announce the results of an independent Development Study and Preliminary Economic Assessment (the \"Study\").\n \n \n The Study demonstrates exceptional economics resulting in a high margin operation, enabling a short payback period. Whilst the Study provides a highly compelling investment, the long-term price assumptions used are below current prices suggesting even more attractive economics are feasible. Moreover, the Study does not take into account any potential resource extensions, which would enable the expansion of mine life and throughput, providing even further upside.\n \n \n The Study was undertaken by IHC Mining, a leading independent global mining services group with specialist expertise in developing mineral sands projects. The results of the Study are expected to have a positive impact in finalising the ongoing discussions with offtakers, debt providers and other strategic funding parties.\n \n \n \n Highlights\n \n \n \n ·\n Base Case ungeared post tax internal rate of return (\"IRR\") of 56% and Net Present Value (using an 8% discount rate) (\"NPV8\") of US$155m, with a Upside Price Case IRR of 73% and NPV8 of US$235m\n \n \n ·\n Base Case shows total revenues of US$645m, operating cashflows of US$391m and net profit of US$262m over initial 10-year Project life\n \n \n ·\n Base Case comprises a conservative 3.5 year, 4-stage approach to the development of the Project, with production expansion funded through operations, and 3.7 year payback period\n \n \n ·\n The staged development approach means that the funding requirement is $37.3m until the Project is self-funding compared to the total development capex of $81m\n \n \n ·\n Significant positive benefits to Sri Lanka and local community identified with over 300 direct new jobs to be created and over US$100m in direct government royalties and taxes\n \n \n ·\n The Study assesses the Project wi...