Capital Metals announced it has now received all necessary consents to commence the drilling programme, focusing on increasing the resource as well as obtaining greater certainty in the proposed initial mining area. The drilling programme will commence shortly. The current Project MRE of 17.2Mt at 17.6% Total Heavy Minerals already places the Project's deposit among the highest grades globally.

The MRE was estimated on pre-2016, hand auger drilling of 1,643 holes for 2,621 metres. Drilling was limited to the beach and foredune formations and, due to the hand augur drilling method, terminated at the groundwater table at an average depth of 1.6 metres. Mineralisation remains open below the groundwater table and potential for additional resources also exists west of the foredune formation across the Project.

Hand auger drilling is ineffective below the groundwater table and, as such, drilling to date has not penetrated to the basement which is anticipated at approximately an average of 10 metres depth. The resource drilling also excluded marine sands in the coastal plain behind the foredune formation. Deep sonic drilling in 2018 in the back-beach and foredunes at Komari, some of which was west (outside) of the existing resource, returned results including 14 metres at 26.3% THM and 8 metres at 26.6% THM.

This, together with contemporary analysis of other trailing continental margins, suggests that a substantial additional resource has been excluded at depth and laterally in parallel palaeo-beach formations on the immediate coastal plain. Accordingly, a substantial resource increase is anticipated from this drilling programme. Drilling will include a comprehensive Quality Assurance sampling programme.

To expedite the analysis stage, all routine and Quality Assurance samples will be delivered in batches to laboratories in Johannesburg for heavy liquid separation and mineralogical assessment using a mix of XRF, XRD and QEMScan. The Company expects to be able to report initial results starting next quarter, although visual results are expected to be reportable in the current quarter. The Company has also commenced work on a detailed submission on the feasibility of mining below the groundwater table, which is permissible in most beach mineral sands projects globally and has already taken place elsewhere in Sri Lanka.

Discussions are advancing with the relevant authorities in Sri Lanka in this regard.