Capital Metals PLC (AIM:CMET) updated investors on its dispute with Sri Lanka, where its Industrial Mining Licences (IMLs) hosting the company’s high-grade Eastern Minerals project continue to be suspended.
Greg Martyr, Capital Metals' chair, in a statement said the company is “hopeful that logic will prevail”.
The company noted that it has divested 60% of its Sri Lankan subsidiary, Damsila Exports, to comply with local regulations.
Despite receiving written evidence of the ownership changes, the Geological Survey and Mines Bureau (GSMB) has not lifted the suspension or provided any indication of when it will do so, the company explained.
Capital Metals said it has formally written to the GSMB and various high-level Sri Lankan officials, reminding them of the consequences of their actions and reserving the company's rights in relation to potential illegal activities and breaches of international treaty obligations.
In the meantime, it is engaged in positive dialogue with a potential funding and offtake partner, who has indicated they will seek to conclude long-form agreements to fund the project once the suspension is lifted.
"We are hopeful that logic will prevail within the GSMB to enable us to build the project which, with a capital cost of over US$80mln, will provide significant benefits to Sri Lanka through much-needed foreign investment, increased employment opportunities, and export revenues," Martyr said.
Capital Metals invested US$11mln in the exploration and development of the project between 2017 and 2022.