Zak Mir talks to Greg Martyr, Executive Chairman, Capital Metals as the mineral sands company approaching mine development stage at the high-grade Taprobane Minerals Project in Sri Lanka, announces a strategic investment of US$2 million by Ambeon Capital PLC together with an option for a period of 45 days for it or its nominated investors to invest up to a further US$2 million.
In this detailed article, we delve into an insightful conversation with Greg Martr, the Executive Chairman of Capital Metals, a mineral sands company on the verge of mine development at the high-grade Taprobane Minerals Project in Sri Lanka.
This interview reveals exciting news about a strategic investment and the subsequent project development that is set to propel Capital Metals forward. Drawing from our discussion, I explore the significance of this investment, the partnership with a local fund group, the company’s funding strategy, and the promising outlook for the project and its share price.
Introduction to the Strategic Investment
Capital Metals recently announced a strategic investment of US$2 million by Ambeon Capital PLC, a well-established fund group based in Sri Lanka, with an option to invest an additional US$2 million within 45 days. This development is a major milestone for Capital Metals as it nears the final investment decision (FID) stage for the Taprobane Minerals Project. The investment not only provides crucial funding but also brings on board a valuable local partner with deep commercial and mining sector experience.
Greg Martr shared that the relationship with Ambeon Capital was established through an interesting and somewhat serendipitous introduction last October. The three key principals of Ambeon were educated in Australia, have extensive funds under management, and returned to Sri Lanka about 15 years ago to establish their fund group. Their understanding of mining in Sri Lanka, though somewhat rare, made them an ideal partner for Capital Metals. Greg emphasised the smooth collaboration and mutual understanding that developed quickly between the two parties, which is critical for the joint venture’s success.
The Importance of a Local Partner in Sri Lanka
One of the recurring challenges for mining projects in Sri Lanka is navigating the local business environment and regulatory landscape. Greg explained that finding a local partner with both commercial acumen and mining sector understanding had been a long-standing goal for Capital Metals. The Ambeon group fits this requirement perfectly, providing not only capital but also significant local insight and connections.
Greg noted,
“There’s not a great deal of understanding of mining in Sri Lanka, but these guys had a decent understanding and have worked in it before.”
This local expertise is invaluable, as it helps smooth the path through regulatory approvals and stakeholder engagement, which can often be hurdles for foreign mining companies.
By having a strong local partner, Capital Metals is better positioned to mitigate jurisdictional risks and navigate potential slings and arrows that can arise from operating in an overseas jurisdiction. This partnership also aligns with the company’s strategy to become more Sri Lankan in its operations, especially as it looks toward a potential listing on the Colombo Stock Exchange later in the year.
Details of the Investment Structure and Funding Strategy
The investment deal with Ambeon Capital PLC is structured with an initial US$2 million injection, which is already secured, along with an option for Ambeon or its nominated investors to invest an additional US$2 million within 45 days. This option exists because Ambeon has other interested parties they are engaging with, and Capital Metals wants to keep momentum without delays.
Greg highlighted the strategic thinking behind this phased investment:
“It was always started as a $2 million deal, but we said, ‘Hey, let’s see what happens,’ and hopefully we’ll create a bit of FOMO and they can bring some of these other parties along.”
The involvement of other investors will help facilitate the next phase of funding, which aims for a $10 million equity raise tied to a potential listing in Sri Lanka later this year.
Aside from the new investment, Sheffield, the previous partner, has expressed the desire to maintain its 10% interest, which Greg indicated they would support if the option is exercised. This combination of funding ensures Capital Metals is well-financed not just to reach FID but to accelerate project development activities.
Advancing Toward Final Investment Decision (FID)
With this investment secured, Capital Metals is poised to accelerate its studies and advance toward FID. Greg explained that the funds will enable the company to move beyond just holding decisions back and instead focus on fast-tracking the necessary technical and environmental studies.
Originally, the target was to reach FID by the end of June, but the deal and associated negotiations slightly delayed this timeline. Greg shared candidly that the deal process was demanding but ultimately worthwhile, stating:
“This deal was so important to us and it actually did distract us… to make sure that we got it right and bedded it down.”
The updated outlook suggests FID will likely occur in the middle of the second half of the year, within a six-month timeframe. Legal counsel involved in the IPO process indicated the listing could be completed in as little as two months, although Greg remains conservative, estimating four months for the IPO process in Colombo.
Ultimately, the funding and local partnerships place Capital Metals on a strong path to secure all necessary approvals, be construction-ready, and have funding fully in place to commence production.
Project Strengths: Capital-Light and High-Grade
Capital Metals’ Taprobane Minerals Project is notable for being capital-light relative to many other mining ventures. This means the project does not require massive upfront capital expenditure, which reduces financial risk and dilution for shareholders.
Greg emphasised that this is a significant advantage as the company moves through the development stages. He also noted that the project’s net present value (NPV) remains robust, with an updated model expected to be released soon. Drilling results from phase one have been encouraging, and the company is preparing to launch phase two drilling shortly.
Although assay results are pending, preliminary feedback suggests the mineralisation is promising. Greg explained that lab processing times can be unpredictable, but the company plans to release an update on drilling progress within a week.
Market Performance and Share Price Outlook
Despite some challenges in the past, Capital Metals’ share price has rebounded strongly this year, rising approximately 67% so far. Greg acknowledged that while the share price might not feel particularly high, the recovery is substantial compared to last year when shares traded at around 5p.
Greg’s perspective on the share price is pragmatic:
“Share price is everything to me, but I don’t look at it daily and it doesn’t govern exactly what I do on a day-to-day basis. If we deliver what we said we were going to do, then the share price will respond.”
This focus on execution over short-term price movements is a hallmark of experienced leadership. With the current news flow and strategic developments, Greg is confident that the share price will continue to improve and move closer to the company’s valuation, especially as production approaches.
Conclusion: A Bright Future for Capital Metals
The recent strategic investment by Ambeon Capital PLC marks a pivotal moment for Capital Metals. The partnership brings not only much-needed capital but also local expertise and connections that will help navigate Sri Lanka’s regulatory landscape and accelerate the Taprobane Minerals Project’s development.
With funding secured to reach FID, ongoing drilling programs, and plans for a Sri Lankan listing, Capital Metals is well-positioned to advance toward production while minimising dilution and capital expenditure. The company’s pragmatic approach, combined with the strong backing of a local partner, bodes well for overcoming jurisdictional challenges and delivering value to shareholders.
As Capital Metals continues to progress, the market is responding positively, reflected in the share price recovery and growing investor interest. For stakeholders and potential investors, the company’s path forward offers an exciting opportunity in the mineral sands sector, supported by sound strategy and capable leadership.
