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.

1 August 2023

Capital Metals plc

("Capital Metals" or the "Company")

Grant of Share Options and Warrants

&

Issue of Equity

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 the grant of share options over 8,000,000 ordinary shares to certain Directors as set out below, as well as 3,050,000 options to employees and consultants, (the "Options") for the purpose of encouraging the retention of key individuals and, in the case of the executive director, providing additional incentives aligned to future success milestones. In addition, 1,000,000 warrants ("Warrants") have been issued to service providers of the Company.

Following this announcement, and the cancellation of 8,750,000 historical share options, the Company now has a total of 14,550,000 share options in issue, representing approximately 4.8% of the fully diluted share capital of the Company. In addition, there are 13,088,405 warrants outstanding.

Schedule of Directors Options

*Note 1: Options granted to Mr Martyr are in consideration of additional responsibilities taken on as Executive Chairman from 1 July 2023, and are aligned to the following future success milestones:

·    One-third shall vest on full reinstatement of Industrial Mining Licences 16236 and 16237 (which were suspended as announced on 12 December 2022)

·    One-third shall vest on signing of a joint venture agreement with LB Group (as announced on 9 May 2023) to fund the development of the Project (or such similar agreement with another entity)

·    One-third shall vest when the 30-day volume weighted average share price of the Company exceeds 5 pence

1,500,000 options which had previously been granted to Mr Martyr have been cancelled.  

*Note 2: One-third of the Options granted to Mr Leahy shall vest immediately, and one-third shall vest on each of the following two anniversaries of the date of grant. 1,500,000 options which had previously been granted to Mr Leahy have been cancelled.

Related Party Transaction

The issue of the Options to Mr Martyr and Mr Leahy have been treated as related party transactions under AIM Rule 13.

As recipients of Options, Mr Martyr and Mr Leahy are not independent and have not taken part in the Board's consideration of the Option grant. Teh Kwan Wey is the 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 Option grant to Messrs Martyr and Leahy are fair and reasonable insofar as the Company's shareholders are concerned.

Other Warrants & Options

3,050,000 options and 1,000,000 warrants, all with an exercise price of 3 pence and an exercise period ending 31 July 2028, have been awarded to service providers, consultants and employees of the Company.

Issue of Equity

Capital Metals has issued 2,047,600 ordinary shares of 0.2 pence each ("Ordinary Shares") at a price of 1 pence per share to various service providers as consideration for services rendered. Application will be made to the London Stock Exchange for admission of these shares, which will be issued fully paid and will rank pari passu in all respects with the Company's existing Ordinary 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 7 August 2023.

Following Admission, the total number of Ordinary Shares in the capital of the Company in issue will be 277,621,598 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 quoted on the AIM segment of 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. 

Appendix - Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them.