THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED.  ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

17 July 2023

Capital Metals plc

("Capital Metals" or the "Company")

Subscription to Raise £364,705

Related Party Transactions

Capital Metals (AIM: CMET), a mineral sands company approaching mine development stage at the high-grade Eastern Minerals Project in Sri Lanka (the "Project"), announces a subscription to raise gross proceeds of £364,705 through a subscription for 36,470,566 new ordinary shares (the "Subscription") at an issue price of 1p (the "Issue Price").

The Subscription comprises investments from predominantly non-United Kingdom investors whom were unable to participate in the placing of £500,000 announced on 20 June 2023 (the "June Placing"), and includes subscriptions from certain directors of the Company whose participation is set out below.

The proceeds from the Subscription and the June Placing will be applied to general working capital, to accelerate the Company's actions to secure the lifting of the suspension of its Industrial Mining Licences in the northern area of the Project (announced on 12 December 2022), and to advance the Environmental Impact Study at EL199 in the southern area which holds approximately 60% of the total mineral sands resource of the Project and is not subject to the suspension.  

The Subscription has been conducted within the share capital authorities granted at the General Meeting held on 12 July 2023.

Related Party Transactions - Directors' Subscriptions

It was previously notified on 23 June 2023 that certain directors (which now include a former director) intended to subscribe for shares, with the payment of subscription monies being satisfied following the payment of overdue directors' salaries and fees which certain directors have accrued to 30 June 2023. These shares (which are included in the above Subscription) will be issued on the basis of 1 new share for each 1 penny of fees owed (the "Directors' Subscriptions").

These Directors' Subscriptions are as follows:

Greg Martyr, Chairman of the Company, has subscribed for and been issued 3,000,000 ordinary shares of 0.2 pence each in the Company ("Ordinary Shares") at the Issue Price in lieu of outstanding fees of £30,000. Following the issue, Mr Martyr's shareholding stands at 7,582,746 Ordinary Shares, which represents 2.75% of the Company's total voting rights.

KL-Kepong International Limited has subscribed for and been issued 625,000 Ordinary Shares at the Issue Price in lieu of outstanding fees due in relation to Teh Kwan Wey's role as a non-executive director of the Company of £6,250. Mr Teh is the Head of Corporate for Kuala Lumpur Kepong Berhad, the parent company of KL-Kepong International Limited. Following the issue, KL-Kepong International Limited's shareholding stands at 11,822,984 Ordinary Shares, which represents 4.29% of the Company's total voting rights.

Chulu Holdings Pty Limited ATF The Chulu Trust ("Chulu Holdings"), a trust of which Michael Frayne, a former director and Chief Executive Officer of the Company, is a beneficiary, has subscribed for and been issued 1,000,000 Ordinary Shares at the Issue Price in lieu of outstanding fees of £10,000. Following the issue, Chulu Holdings' shareholding stands at 9,093,048 shares which represents 3.30% of the Company's total voting rights. Mr Frayne has an interest, in aggregate, over 14,190,006 Ordinary Shares, which represents 5.15% of the Company's total voting rights.

Mr Teh and Mr Martyr are non-independent directors insofar as the Directors' Subscriptions are concerned and have not taken part in the Board's consideration of the Directors' Subscriptions. James Leahy is the only independent director for this purpose. The independent director considers, having consulted with SPARK Advisory Partners Limited, the Company's nominated adviser, that the terms of the Directors' Subscriptions are fair and reasonable insofar as the Company's shareholders are concerned.

Admission and Total Voting Rights

Application will be made to the London Stock Exchange for admission of the 36,470,566 shares (the "Subscription Shares") to trading on AIM ("Admission"). It is expected that Admission will become effective and dealings in the Subscription Shares will commence at 8.00 a.m. on or around 21 July 2023.

The Subscription Shares will be issued fully paid and will rank pari passu in all respects with the Company's existing Ordinary Shares.

Following Admission, the total number of Ordinary Shares in the capital of the Company in issue will be 275,573,998 with voting rights. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company's share capital pursuant to (i) the Company's Articles, (ii) the Financial Conduct Authority's Disclosure Guidance and Transparency Rules and/or (iii) the AIM Rules for Companies issued by the London Stock Exchange plc as amended from time to time.

For further information, please visit www.capitalmetals.com or contact:

About Capital Metals

Capital Metals plc is a British company listed on the London Stock Exchange and one of only a few foreign investors in Sri Lanka's mining industry. After investing US$11 million in exploration and development activities including detailed environmental assessments between 2017 and 2022, the Company's Sri Lankan subsidiary, Damsila Exports (Pvt) Limited, was issued an initial two licences in August 2022 to mine heavy mineral sands in the Eastern Province, containing industrial minerals including ilmenite, rutile, zircon, and garnet.