Mkango Resources Ltd. (AIM:MKA) (TSX-V:MKA) (the
"
Company" or "
Mkango") is pleased
to announce that following receipt of both shareholder and final
TSX Venture Exchange approval, investments totalling £6 million
(C$10.5 million) have been received by Mkango subsidiaries in
accordance with the previously announced agreement (“Agreement”)
with Talaxis Limited (“Talaxis”):
- Talaxis has invested £5 million (C$8.8 million) into Mkango
subsidiary, Lancaster Exploration Limited (“Lancaster”), in return
for a 20% interest in Lancaster. Lancaster holds the licence for
the advanced stage Songwe Hill rare earths project (“Songwe”) in
Malawi.
- The investment into Lancaster will fund the initial phase of
the Feasibility Study for Songwe, including an extensive drilling
programme starting in the second quarter of 2018, in parallel with
ongoing processing flow sheet optimisation and work in relation to
the Environmental, Social and Health Impact Assessment.
- Talaxis has also invested £1 million (C$1.8million) into a new
Mkango subsidiary, Maginito Limited (“Maginito”), in return for a
24.5% interest in Maginito.
- Maginito is focused on neodymium alloy powders, magnet and
other technologies relating to electric vehicles and other
cleantech applications. This includes the collaboration with
Metalysis Ltd announced in September 2017, which is focused on
advanced alloys using neodymium or praseodymium with other elements
for permanent magnet manufacturing.
A further £8 million (C$14 million) will be
invested by Talaxis into Lancaster and Maginito subject to
completion of definitive documentation and the following
milestones:
- On Mkango publishing an updated resource (compliant with NI
43-101 - Standards of Disclosure for Mineral Projects), Talaxis
will invest £7 million (C$12.3 million) into Lancaster for a
further 29% interest, increasing its total interest in Lancaster to
49%. This will fund further expenditure in relation to completion
of the feasibility study.
- On successful completion of the Phase II R&D programme with
Metalysis, Talaxis will invest £1 million (C$1.8 million) into
Maginito for a further 24.5% interest, increasing its total
interest in Maginito to 49%.
Upon completion of the feasibility study for
Songwe, and subject to completion of the definitive documentation,
Talaxis will have the option to acquire a further 26% interest in
Lancaster, increasing its aggregate interest to 75%, by arranging
funding for 100% of remaining project development costs, including
funding the equity component thereof. If Talaxis exercises its
option, Mkango will retain a 25% interest, free carried to
production.
William Dawes, Chief Executive Officer
of Mkango, said: "Following receipt of the investment from
Talaxis, Mkango is uniquely positioned. We are one of very few
companies with an advanced stage rare earths project fully funded
to completion of a Feasibility Study with a clearly defined
development pathway to production. This is complemented by
downstream growth opportunities focused on the electric vehicle
technology space. We look forward to working with Talaxis as well
as the Government and people of Malawi as we move the project
through the development phase to become a leading sustainable
producer of rare earths.”
Talaxis is the holder of 13.6% of the issued and
outstanding common shares of Mkango. As such, pursuant to
Multilateral Instrument 61-101 - Protection of Minority Security
Holders in Special Transactions, the transaction was subject
disinterested shareholder approval (after excluding any votes
attached to common shares held by Talaxis), which it obtained at
the shareholder meeting held on January 18, 2018.
In addition to its 13.6% shareholding, Talaxis
holds 12 million warrants of Mkango which, upon exercise, could
result in Talaxis holding 22.5% of the then-issued and outstanding
shares of Mkango. Talaxis has agreed with Mkango that it will not
exercise any warrants which would increase the holding of Talaxis
in Mkango to 20% or more.
Market Abuse Regulation (MAR)
Disclosure
Certain information contained in this
announcement would have been deemed inside information for the
purposes of Article 7 of Regulation (EU) No 596/2014 until the
release of this announcement.
About Mkango Resources
Limited
Mkango's primary business is the exploration for
rare earth elements and associated minerals in the Republic of
Malawi, a country whose hospitable people have earned it a
reputation as “the warm heart of Africa”. The Company holds
interests in three exclusive prospecting licenses in Malawi, the
Phalombe licence, the Thambani licence and the Chimimbe Hill
licence.
The main exploration target in the 80% held
Phalombe licence is the Songwe Hill rare earths’ deposit, which
features carbonatite hosted rare earth mineralisation and was
subject to previous exploration in the late 1980s. Mkango completed
an updated Pre-feasibility Study for the project in November 2015
and is currently commencing a Feasibility Study.
Under the terms of the Agreement with Talaxis,
Talaxis will fully fund a feasibility study for Songwe by investing
£12 million (C$21 million) for a 49% interest in the project (via
Lancaster). Talaxis will also have the option to acquire a further
26% interest by arranging funding for project development. If
Talaxis exercises its option, Mkango will retain a 25% interest,
free carried to production. To date, Talaxis has invested £5
million (C$8.8 million), which is funding the initial phase of the
Feasibility Study, for a 20% interest in the project with Mkango
holding 80%.
By investing a further £2 million (C$3.3
million), Talaxis will acquire a 49% interest in Maginito, a new
subsidiary of Mkango focused on neodymium alloy powders, magnet and
other technologies. This includes the collaboration with Metalysis
Ltd announced in September 2017, which is focused on advanced
alloys using neodymium or praseodymium with other elements for
permanent magnet manufacturing. Permanent magnets are critical
materials for most electric vehicles, direct drive wind turbines
and many other high growth applications. Neodymium is a key rare
earth component at Songwe. To date, Talaxis has invested £1 million
(C$1.8 million) for a 24.5% interest in Maginito with Mkango
holding 75.5%.
The main exploration targets in Mkango’s
remaining two 100% held licences are, in the Thambani licence,
uranium, niobium, tantalum and zircon and, in the Chimimbe Hill
licence, nickel and cobalt.
For more information, please visit
www.mkango.ca.
Cautionary Note Regarding
Forward-Looking Statements
This news release contains forward-looking
statements (within the meaning of that term under applicable
securities laws) with respect to Mkango, its business and the
Project. Generally, forward looking statements can be identified by
the use of words such as “plans”, “expects” or “is expected”,
“scheduled”, “estimates” “intends”, “anticipates”, “believes”, or
variations of such words and phrases, or statements that certain
actions, events or results “can”, “may”, “could”, “would”,
“should”, “might” or “will”, occur or be achieved, or the negative
connotations thereof. Forward looking statements in this news
release include statements with respect to the global market for
products using the rare earth metals the Company is exploring for,
completion of the feasibility study and of the transactions
contemplated in the Agreement, as well as the use of proceeds from
the investments into the Company by Talaxis and the timing of such
expenditures. Readers are cautioned not to place undue reliance on
forward-looking statements, as there can be no assurance that the
plans, intentions or expectations upon which they are based will
occur. By their nature, forward-looking statements involve numerous
assumptions, known and unknown risks and uncertainties, both
general and specific, that contribute to the possibility that the
predictions, forecasts, projections and other forward-looking
statements will not occur, which may cause actual performance and
results in future periods to differ materially from any estimates
or projections of future performance or results expressed or
implied by such forward-looking statements. Such factors and risks
include, without limiting the foregoing, market demand for the
metals and associated downstream products for which Mkango is
exploring, researching and developing, the positive results of a
feasibility study on the Project, delays in obtaining financing or
governmental or stock exchange approvals. The forward-looking
statements contained in this news release are made as of the date
of this news release. Except as required by law, the Company
disclaims any intention and assumes no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
applicable law. Additionally, the Company undertakes no obligation
to comment on the expectations of, or statements made by, third
parties in respect of the matters discussed above.
For further information on Mkango,
please contact:Mkango Resources
LimitedWilliam Dawes
Chief Executive Officer
will@mkango.ca
UK: +44 207 3722 744Canada: +1 403 444
5979www.mkango.ca@MkangoResources
Alexander LemonPresidentalex@mkango.ca
BlytheweighFinancial Public RelationsTim Blythe,
Camilla Horsfall, Nick ElwesUK: +44 207 138
3204 SP Angel Corporate Finance
LLPNominated Adviser and BrokerJeff Keating, Caroline
RoweUK: +44 20 3470 0470 |
|
The TSX Venture Exchange has neither
approved nor disapproved the contents of this press release.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This press release does not constitute an offer
to sell or a solicitation of an offer to buy any equity or other
securities of the Company in the United States. The securities of
the Company will not be registered under the United States
Securities Act of 1933, as amended (the “U.S. Securities Act”) and
may not be offered or sold within the United States to, or for the
account or benefit of, U.S. persons except in certain transactions
exempt from the registration requirements of the U.S. Securities
Act.
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