Mkango Resources Ltd. (AIM / TSXV: MKA) (the
"
Company" or "
Mkango"), the rare
earths exploration and development company focused on Malawi, is
pleased to announce an updated mineral resource estimate for the
Songwe Hill Rare Earths Project (“Songwe”).
- 60% increase in total Measured and Indicated Resources
to 21 million tonnes (“mt”), including first Measured Resource
estimate for Songwe
- Majority of the previously delineated near surface
Inferred Resource upgraded to either the Measured or Indicated
categories
- Key objectives of 2018 drilling programme achieved,
with the updated resource underpinning the ongoing feasibility
study
- Approximately 95% of the Measured and Indicated Mineral
Resource blocks are less than 160 metres (“m”) below the surface of
the hill indicating that the majority will be accessible by open
pit mining
- Updated and enlarged resource underpins Mkango’s
strategy to be a long term, sustainable producer of neodymium,
praseodymium, dysprosium and terbium used in permanent magnet
motors for electric vehicles, wind turbines and other clean
technologies
- Publication of the NI 43-101 Technical Report in
relation to the resource update will trigger the next £7m milestone
investment from Talaxis to fund completion of the feasibility
study
Cut-off grade |
Measured Mineral Resource estimate |
Indicated Mineral Resource estimate |
Total Measured and Indicated Mineral Resource
estimate |
Inferred Mineral Resource estimate |
Base Case 1.0% TREO |
8.8 mt grading 1.50% TREO |
12.2 mt grading 1.35% TREO |
21.0 mt grading 1.41% TREO |
27.5 mt grading 1.33% TREO |
TREO: total rare earth oxides based on total
La2O3, CeO2, Pr6O11, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3,
Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3. Grades of individual rare
earth oxides are shown in the appendix. 4% geological losses
applied to account for voids.
William Dawes, Chief Executive of Mkango
stated: “All the objectives for the 2018 drill programme
have been achieved and we are very pleased to announce this
increased resource at Songwe. This provides a solid platform for
completion of a revised mine plan to be incorporated into the
feasibility study. Based on the larger Measured and Indicated
Resource, the feasibility study will evaluate opportunities to
include more tonnes into the mine plan, expand operations, extend
the mine life, reduce the strip ratio and therefore reduce mining
costs.”
The updated base case Mineral Resource Estimate
equates to a 60% increase in the Measured and Indicated Resource
tonnage and a 48% increase in the Inferred Resource tonnages versus
the base case 2012 Mineral Resource Estimate, which formed the
basis for the 2015 pre-feasibility study. The Mineral Resource is
open at depth. The combined Measured and Indicated Mineral Resource
Estimate, totaling 21mt grading 1.41% TREO, will form the basis of
the updated mine plan for the ongoing feasibility study, which will
evaluate a bulk tonnage, open pit mining operation focused on broad
zones of near surface and outcropping rare earths mineralisation.
The updated resource supersedes the 2012 Mineral Resource Estimate,
and therefore renders the mining and economic information in 2015
pre-feasibility study obsolete. Updated mining and economic
information will be generated as part of the ongoing feasibility
study based on the new resource.
The Measured Mineral Resource Estimate comprises
42% of the combined Measured and Indicated Mineral Resource
Estimate indicating a substantial increase in geological confidence
to support the completion of the Feasibility Study.
The majority of the previously delineated near
surface Inferred Mineral Resource Estimate has been upgraded to
either the Measured or Indicated categories, achieving a key
objective of the 2018 drill programme. Approximately 95% of the
Measured and Indicated Mineral Resource Blocks are at a depth of
less than 160m below the surface of the hill indicating that the
majority will be accessible by open pit mining.
Bulk samples for pilot metallurgical test work
totaling approximately 60 tonnes have been selected from areas
within the Measured and Indicated Mineral Resource Estimates and a
public awareness campaign to communicate progress of the project
and explain the bulk sampling programme is underway in Malawi.
Pilot testing will commence following export of the bulk sample and
completion of ongoing metallurgical optimisation.
Mineral Resource Estimate
The Mineral Resource Estimate was independently
prepared by The MSA Group of South Africa (“MSA”). Jeremy Witley
Pr. Sci Nat. (the Qualified Person (QP) for the Mineral Resource
Estimate) of MSA in collaboration and agreement with Dr. Scott
Swinden, PGeo, the QP for the Exploration Information, has
currently identified 1.0% TREO as an appropriate cut-off grade for
the current Mineral Resource Estimate. This will be further refined
over the course of the ongoing feasibility study. The Mineral
Resource Estimates at different cut-off grades are illustrated in
the table below.
|
Mineral Resource estimates at different cut–off
grades1 |
|
0.5% TREO cut off
grade |
Base Case 1.0% TREO cut off
grade |
1.5% TREO cut off
grade |
|
Million |
TREO |
TREO |
Million |
TREO |
TREO |
Million |
TREO |
TREO |
|
tonnes |
% |
tonnes |
tonnes |
% |
tonnes |
tonnes |
% |
tonnes |
Resource Categories |
|
|
|
|
|
|
|
|
|
Measured |
13.34 |
1.26 |
167,573 |
8.81 |
1.50 |
131,929 |
3.67 |
1.86 |
68,278 |
Indicated |
24.30 |
1.06 |
258,092 |
12.22 |
1.35 |
165,469 |
3.13 |
1.79 |
55,805 |
Total Measured & Indicated |
37.64 |
1.13 |
425,665 |
21.03 |
1.41 |
297,398 |
6.80 |
1.83 |
124,084 |
Total Inferred |
59.65 |
1.02 |
608,194 |
27.54 |
1.33 |
366,154 |
5.92 |
1.75 |
103,414 |
1 Mineral
resources are not mineral reserves and do not have demonstrated
economic viability |
The mineral resource has been drilled to a
maximum depth of 355 m below the surface of Songwe Hill and is
based on three phases of diamond drilling completed by Mkango in
2011, 2012 and 2018 totaling approximately 17,800 m in 125 drill
holes. The areas drilled to date are in an elevated position on the
northern slopes of Songwe Hill, which rises approximately 230 m
above the surrounding plain. The mineral resource forms an
irregular, roughly circular surface expression with a diameter of
approximately 450 m. The maximum depth of the Inferred Mineral
Resource is 390 m below surface, with the Measured and Indicated
Mineral Resource occurring to a maximum depth of 200 m, paralleling
the topographic surface of the hill and surrounding plain. The
majority of the Measured and Indicated Mineral Resource occurs to a
depth of approximately 160 m.
Geological domains, comprising Carbonatite,
Mixed (altered and brecciated Carbonatite and Fenite) and Fenite
dominant rock types, were used to guide the mineral resource
evaluation. The Carbonatite dominant domain generally comprises a
higher proportion of elevated TREO grade mineralisation than the
Fenite dominant domain.
Key assumptions, parameters and methods used to estimate
the Mineral Resources
- The drillhole intersections were used to estimate proportions
of carbonatite (defined for this estimate as >15% Ca) and
non-carbonatite for each cell in a three dimensional block model by
means of indicator kriging. TREO values and density were estimated
for carbonatite and non-carbonatite separately for the entire model
using ordinary kriging. The final grade for the block was derived
by multiplying the estimated proportion of carbonatite and
non-carbonatite in the block by the estimated grade of carbonatite
and non-carbonatite;
- The estimation block model cells are 20 mN by 20 mE by 5 mRL.
The block models comprise sub-celled block dimensions of 5 mN x 5
mE x variable RL to closely fit the topography;
- No capping or cutting to limit any input grade data was
undertaken as part of the mineral resource estimation, extreme
outlier grades not being a feature of this deposit;
- Datamine Studio RM was the modelling package; and
- The mineral resource was classified as Measured, Indicated and
Inferred based on the degree of geological certainty and drillhole
density, supported by confidence parameter outputs from kriging
(Kriging Efficiency and Slope of Regression). In general, the
Mineral Resource was classified as Measured where it occurs within
a 30 m by 30 m drillhole grid, Indicated where the Mineral Resource
occurs within a drillhole spacing of closer than 50 m by 50 m.
Inferred Mineral Resources were declared within the more sparsely
drilled areas and extrapolation from the closest drillhole was
limited to 50 m.
Scientific and technical information contained
in this release including sampling, analytical, and test data
underlying the information has been approved and verified by Dr.
Scott Swinden PGeo of Swinden Geoscience Consultants Ltd who is a
“Qualified Person” in accordance with National Instrument 43-101 –
Standards of Disclosure for Mineral Projects.
Scientific and technical information contained
in this release relating to the mineral resource estimate has been
approved and verified by Jeremy Witley Pr. Sci Nat of The MSA Group
Pty Ltd, who is a “Qualified Person” in accordance with National
Instrument 43-101 – Standards of Disclosure for Mineral
Projects.
Mkango operated an industry-standard programme
of strict QAQC protocols for drill hole analyses, including the
insertion of blanks, standards and duplicates and check analyses of
more than 3% of the samples carried out by Actlabs, Ancaster,
Ontario. Sample preparation and analytical work for the drilling
and channel sampling programmes were provided by Intertek-Genalysis
Laboratories (Perth, Australia), employing ICP-MS techniques
suitable for rare earth element (REE) analyses and following strict
internal QAQC procedures, inserting duplicates, blanks and
standards. Internal Laboratory QAQC was also completed to include
blanks, standards and duplicates.
Verification activities were conducted by the
Qualified Persons during site visits to Songwe and at the MSA
office, and included the inspection of the drilling and trenching
programmes, the review of core handling and core sampling
procedures, the review of borehole data collection protocols and
QA/QC systems, checks of the database against the original borehole
logs, checks of the database against original Assay Certificates
and the examination of the database used for the Mineral Resource
estimation.
The NI 43-101 compliant technical report in
respect of the mineral resource estimates described herein will be
filed on SEDAR within the next 45 days.
About Mkango Resources
Limited
Mkango's primary business is 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. This
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 a Feasibility Study is currently underway, the initial phases
of which included a 10,900 metre drilling programme and updated
mineral resource estimate.
Under the terms of an agreement with Talaxis,
Talaxis will fully fund the Feasibility Study for Songwe by
investing £12 million for a 49% interest in the project (via Mkango
subsidiary Lancaster Exploration Ltd). Talaxis will also have the
option to acquire a further 26% interest by arranging funding for
project development including funding the equity component thereof.
If Talaxis exercises its option, Mkango will retain a 25% interest,
free carried to production. To-date, Talaxis has invested £5
million, which has funded the initial phases of the Feasibility
Study, for a 20% interest in the project, with Mkango holding
80%.
By investing a further £2 million, Talaxis will
acquire a 49% interest in Maginito Ltd, a new subsidiary of Mkango
focused on neodymium alloy powders, magnets 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 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.
Market Abuse Regulation (MAR)
Disclosure
Certain information contained in this
announcement may have been deemed inside information for the
purposes of Article 7 of Regulation (EU) No 596/2014 until the
release of this announcement.
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 with Talaxis, 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
Limited
William Dawes |
Alexander Lemon |
|
Chief Executive
Officer |
President |
|
will@mkango.ca |
alex@mkango.ca |
|
UK: +44 207 3722
744 |
|
|
Canada: +1 403 444
5979 |
|
|
www.mkango.ca |
|
|
@MkangoResources |
|
|
BlytheweighFinancial Public
RelationsTim Blythe, Camilla Horsfall, Julia TilleyUK: +44 207 138
3204
SP Angel Corporate Finance
LLPNominated Adviser and Joint BrokerJeff Keating,
Caroline RoweUK: +44 20 3470 0470
Alternative Resource
CapitalJoint BrokerAlex Wood, Rob CollinsUK: +44 20 7186
9004; +44 20 7186 9001
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.
Appendix
Rare earths distribution at different cut-off
grades |
|
|
|
|
|
|
Measured Mineral Resource - Individual Rare
Earth Grades at 0.5%, 1.0% and 1.5% TREO
Cut-Offs |
Cut-Off |
Million |
La2O3 |
CeO2 |
Pr6O11 |
Nd2O3 |
Sm2O3 |
Eu2O3 |
Gd2O3 |
Tb4O7 |
Dy2O3 |
Ho2O3 |
Er2O3 |
Tm2O3 |
Yb2O3 |
Lu2O3 |
Y2O3 |
TREO |
%TREO |
Tonnes |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
0.5 |
13.34 |
2,948 |
5,664 |
602 |
2,033 |
301 |
82 |
194 |
24 |
109 |
18 |
42 |
5 |
31 |
4 |
504 |
12,560 |
1 |
8.81 |
3,581 |
6,793 |
715 |
2,391 |
343 |
94 |
221 |
27 |
124 |
20 |
47 |
6 |
35 |
5 |
572 |
14,975 |
1.5 |
3.67 |
4,673 |
8,517 |
874 |
2,855 |
392 |
107 |
251 |
31 |
140 |
22 |
52 |
7 |
38 |
5 |
631 |
18,594 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indicated Mineral Resource - Individual Rare
Earth Grades at 0.5%, 1.0% and 1.5% TREO
Cut-Offs |
Cut-Off |
Million |
La2O3 |
CeO2 |
Pr6O11 |
Nd2O3 |
Sm2O3 |
Eu2O3 |
Gd2O3 |
Tb4O7 |
Dy2O3 |
Ho2O3 |
Er2O3 |
Tm2O3 |
Yb2O3 |
Lu2O3 |
Y2O3 |
TREO |
%TREO |
Tonnes |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
0.5 |
24.30 |
2,538 |
4,797 |
502 |
1,687 |
256 |
69 |
165 |
20 |
90 |
15 |
35 |
4 |
25 |
3 |
415 |
10,620 |
1 |
12.22 |
3,369 |
6,195 |
634 |
2,083 |
301 |
81 |
191 |
23 |
103 |
16 |
39 |
5 |
28 |
4 |
465 |
13,535 |
1.5 |
3.13 |
4,688 |
8,279 |
826 |
2,637 |
359 |
96 |
224 |
26 |
116 |
18 |
42 |
5 |
30 |
4 |
508 |
17,858 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inferred Mineral Resource - Individual Rare
Earth Grades at 0.5%, 1.0% and 1.5% TREO
Cut-Offs |
Cut-Off |
Million |
La2O3 |
CeO2 |
Pr6O11 |
Nd2O3 |
Sm2O3 |
Eu2O3 |
Gd2O3 |
Tb4O7 |
Dy2O3 |
Ho2O3 |
Er2O3 |
Tm2O3 |
Yb2O3 |
Lu2O3 |
Y2O3 |
TREO |
%TREO |
Tonnes |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
ppm |
0.5 |
59.65 |
2,346 |
4,601 |
494 |
1,691 |
255 |
68 |
159 |
19 |
85 |
14 |
33 |
4 |
25 |
3 |
399 |
10,197 |
1 |
27.54 |
3,189 |
6,079 |
639 |
2,134 |
306 |
82 |
188 |
22 |
100 |
16 |
39 |
5 |
29 |
4 |
464 |
13,296 |
1.5 |
5.92 |
4,375 |
8,064 |
825 |
2,700 |
368 |
98 |
226 |
27 |
122 |
19 |
47 |
6 |
35 |
5 |
558 |
17,475 |
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