Mkango Resources Ltd. (AIM/TSX-V: MKA) (the "Company" or "Mkango")
is pleased to announce the following events:
Talaxis Warrant Exercise
With the objective of minimising dilution to
Mkango shareholders, Talaxis Limited (“Talaxis”) has agreed with
Mkango to amend the terms of a warrant held by Talaxis (the
“Warrant”) to enable a cashless exercise. Under this amendment
Talaxis has agreed to a cashless exercise of the Warrant for
1,000,000 common shares (“New Shares”) in lieu of payment for
12,000,000 Shares at 6.6 pence. The Warrant was due to expire on 31
December 2020. This amendment significantly reduces the dilution to
other Mkango shareholders and avoids the Company issuing 12,000,000
shares at a significant discount to the current market price of
Mkango Shares. The amendment of the Warrant and the issuance of the
New Shares remain subject to TSX-V acceptance.
Following the issuance of the Shares to Talaxis
pursuant to the amended Warrant and taking into account the warrant
exercise below, Talaxis will increase its ownership of Mkango from
14,285,715 shares to 15,285,715 shares post-Warrant exercise,
representing an increase from 10.7% to 11.3% of the issued and
outstanding shares. Talaxis maintains its 49% ownership in the
Songwe Hill Rare Earths Project (the “Project”) and its option to
acquire a further 26% interest in the Project by arranging
financing for project development including funding the equity
component
thereof.
Talaxis is a substantial shareholder in Mkango
and is therefore a related party as defined by the AIM Rules for
Companies. The amendment to the terms of the Warrant is a related
party transaction for the purposes of AIM Rule 13 of the AIM Rules
for Companies. The directors of Mkango consider, having consulted
with the Company's Nominated Adviser, SP Angel Corporate Finance
LLP, that the terms of the related party transaction are fair and
reasonable insofar as its shareholders are concerned.
Non-Executive Director Warrant
Exercise
Mr. Shaun Treacy, non-executive director of
Mkango, has exercised warrants for 1,200,000 New Shares at a price
of 6.6 pence each, for total proceeds to Mkango of £79,200
(US$107,000). Following the warrant exercise, Mr. Treacy will own a
1.4% interest in Mkango.
After these two transactions, there are no
further warrants outstanding.
William Dawes, Chief Executive of Mkango
stated: “The cashless warrant exercise agreed with Talaxis
minimises potential dilution to other Mkango shareholders as the
Company enters a transformational period of growth, with
anticipated 2021 news flow including results from the ongoing
feasibility study for the Songwe Hill rare earths project and the
recently completed rutile exploration programme in Malawi, and
developments in relation to Maginito and its interest in UK rare
earth magnet recycler, HyProMag. Furthermore, the warrant exercise
by non-executive director, Shaun Treacy, demonstrates confidence in
the Company and the market outlook. With the growing global demand
for critical materials related to electric vehicles and wind power,
Mkango is uniquely positioned in the rare earths sector, where we
anticipate increasing market focus and corporate activity.”
The New Shares issued Pursuant to the warrant
exercises, will rank pari passu with the existing common shares.
Application has been made for the New Shares issued to Mr Treacy to
be admitted to trading on AIM ("Admission"). It is expected that
Admission will become effective and dealings in the Shares will
commence on or around January 8, 2021. The New Shares will also
trade on the TSX-V.
In accordance with the Disclosure Guidance and
Transparency Rules (DTR 5.6.1R) the Company hereby notifies the
market that immediately following Admission of the New Shares to Mr
Treacy, its issued share capital will consist of 134,200,721
shares. The Company does not hold any shares in treasury.
Shareholders may use this figure 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 under the FCA's Disclosure and Transparency Rules.
Following receipt of TSX-V approval for the
amendment to the terms of the Warrant and the issue of the
1,000,000 Shares to Talaxis, application will be made for these New
Shares to be admitted to trading on AIM. A further announcement
will be made at such time.
About
Mkango
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 four exclusive prospecting licenses in Malawi: the
Phalombe licence, the Thambani licence, the Chimimbe Hill licence
and the Mchinji licence.
The main exploration target in the 51% 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 an updated
mineral resource estimate, announced in February 2019. In March
2019, the Company announced receipt of a £7 million (C$12.3
million) investment from Talaxis to fund completion of the
Feasibility Study. Following completion of the Feasibility Study,
Talaxis has an option to acquire a further 26% interest in Songwe
by arranging financing for project development including funding
the equity component thereof.
The main exploration targets in Mkango’s
remaining three 100% held licences are, in the Thambani licence,
uranium, niobium, tantalum and zircon, in the Chimimbe Hill
licence, nickel and cobalt, and in the Mchinji licence, rutile,
nickel, cobalt, base metals and graphite. Mkango recently completed
an extensive exploration program following a new rutile discovery
within the Mchinji licence.
Mkango also holds a 75.5% interest in Maginito
(www.maginito.com) with the balance owned by Talaxis. Maginito was
established by Mkango and Talaxis to pursue downstream green
technology opportunities in the rare earths supply chain,
encompassing neodymium (NdFeB) magnet recycling as well as
innovative rare earth alloy, magnet and separation
technologies.
Maginito’s strategy is underpinned by offtake
rights for sustainably sourced primary and secondary raw materials,
and geared to accelerating growth in the electric vehicle sector,
wind power generation and other industries driven by
decarbonization of the economy.
For more information, please visit
www.mkango.ca.
About Talaxis
Founded in 2016, Talaxis is a wholly-owned
subsidiary of Noble Group Holdings Limited and invests in and
develops projects that are related to technology metals, with a
special focus on rare earth elements. Talaxis focuses on battery
and electric vehicle materials such as nickel, lithium, graphite
and vanadium. Talaxis has supply chain partners in the upstream and
midstream segments, and also focuses on research and development
solutions for industrial consumers in the downstream segment.
Talaxis prioritises sustainable ventures with a strong emphasis on
corporate social responsibility. These include projects that
contribute to the decarbonisation of the economy and that are
aligned with the United Nations Sustainable Development Goals.
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. 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,
governmental action relating to COVID-19, COVID-19 and other market
effects on global 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 and
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 |
Canada: +1
403 444 5979 |
|
|
|
www.mkango.ca |
|
@MkangoResources |
|
|
|
Blytheweigh |
|
Financial
Public Relations |
|
Tim
Blythe |
|
UK: +44 207
138 3204 |
|
|
|
SP Angel Corporate Finance LLP |
|
Nominated Adviser and Joint Broker |
|
Jeff Keating, Caroline Rowe |
|
UK: +44 20 3470 0470 |
|
|
|
Alternative Resource Capital |
|
Joint
Broker |
|
Alex
Wood |
|
UK: +44 20
7186 9004 |
|
|
|
Bacchus Capital Advisers |
|
Strategic
and Financial Adviser |
|
Richard
Allan |
|
UK: +44 20
3848 1642 |
|
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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