Publication of New National Minerals Policy

Capital Metals (AIM: CMET), a mineral sands company approaching mine development stage at its high-grade Taprobane Minerals Project in Sri Lanka (the "Project"), welcomes the publication by the Government of Sri Lanka of the country's new National Minerals Policy (the "Policy").

The Policy has been under development since the new government was elected in late 2024 and this is the first time it has been revised since 1999. The Policy recognises the significant role the mineral sector can play in terms of employment and foreign investment at a time when both are crucial to the revival of the Sri Lankan economy. This is further reflected in the government's recent transfer of responsibility for the minerals sector from the Ministry of Environment to the Ministry of Industry and Entrepreneurship Development ("Ministry of Industry"), recognising the need for the mining sector to be proactively advanced.

The Policy was prepared with input from all stakeholders, including from Capital Metals and other industry participants. It has as a primary objective to determine the extent of the resource wealth of the nation, which is known to be significant but for which research has been hampered by red tape and corruption under previous governments. The Policy also seeks to provide guidelines that will help in the creation of an appropriate administrative, legal, and functional framework for managing the national mineral wealth sustainably by luring investments, generating employment, boosting competitiveness, and adopting modern practices in exploration, mining, processing, and value addition in compliance with economic development and environmental concerns.

The Policy allocates responsibility for guidance on value addition to the Geological Survey and Mines Bureau ("GSMB"). Capital Metals has been in active discussions with the GSMB regarding practical value addition solutions. The Policy is also expected to free up the process for granting mining and exploration licences, which has been effectively frozen since the GSMB was transferred into the purview of the Ministry of Industry, as the GSMB resets its practices in accordance with the new Policy.

Capital Metals is well placed to assist in the fulfilment of key Policy objectives including acquiring knowledge of the Company's mineral resources through ongoing exploration and evaluation of coastal deposits and leading by example through the introduction of modern mining practices and environmental stewardship, aligned with world leading Australian standards which are well regarded in Sri Lanka.

The Policy was originally expected to be published in October 2025 and therefore its delay will impact the timing of a Final Investment Decision ("FID") which the Company is now guiding to occur in Q2 this year. All pre-FID workstreams within the Company's control, including finalising development and logistics plans and advancing financing discussions, are progressing well but can only be completed in parallel with the final government approvals required. A further update on technical and operational progress will be announced in the near future.

Greg Martyr, Executive Chairman of Capital Metals, commented:

"The publication of the new National Minerals Policy is a strong statement that the recently elected Sri Lankan Government is open for business in the minerals sector and is being co-operative and proactive in encouraging profitable and responsible mining practices. Capital Metals is proud to be a key contributor towards enabling the country to execute on its Policy objectives for the effective and sustainable management of its mineral resources.

This is a very positive formalisation of the shift in attitude we have been seeing for some time towards the sector, and particularly in the last 18 months as the new government focusses on eliminating corruption and choosing key industry sectors which can revitalise the country's economy. We will continue to work with all stakeholders to bring country's most advanced mineral sands project to fruition."

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