Mkango Resources Ltd. (AIM/TSX-V: MKA) (the "Company" or "Mkango")
is pleased to announce that Mkango and Grupa Azoty Zakłady Azotowe
”Pulawy” S.A. (“Grupa Azoty PULAWY”) (together the “Parties”) have
agreed to work together towards development of a rare earth
separation plant (the "Plant”) in Poland.
A new Polish wholly owned subsidiary of Mkango,
Mkango Polska, has been established and a highly experienced
Country Director for Poland, Dr Jarosław Pączek, has been
appointed, together with rare earth separation experts, Carester,
and a strong team of technical advisors and engineers.
Grupa Azoty PULAWY (Warsaw Stock Exchange: ZAP)
is part of The Grupa Azoty Group, the European Union’s second
largest manufacturer of nitrogen and compound fertilizers, and a
major chemicals producer. Its products are exported to over 20
countries around the world, including Europe, the Americas and
Asia.
The Parties have signed an exclusive lease
option agreement for a site adjacent to Grupa Azoty PULAWY’s large
scale fertiliser and chemicals complex at Pulawy in Poland, which
provides excellent infrastructure, access to reagents and utilities
on site, and an attractive operating environment, resulting in a
highly competitive operating cost position for the Plant, based on
scoping studies to date.
Located within a Polish Special Economic Zone,
the site provides excellent access to European and international
markets. Production from the Plant will strengthen Europe’s
security of supply for rare earths, used in electric vehicles, wind
turbines and other green technology and strategic applications, and
aligns with European initiatives to create more robust, diversified
supply chains.
Development of the Plant is expected to bring
significant benefits to the Mkango group:
- Higher
value-added products with increased margins – targeting 2,000
tonnes per year of separated neodymium (Nd) / praseodymium (Pr)
oxides, and 50 tonnes per year dysprosium (Dy) and terbium (Tb)
oxides in a heavy rare earth enriched carbonate
- Greater
integration – plant development fully underpinned by sustainably
sourced, purified mixed rare earth carbonate from Mkango’s Songwe
Hill operations, with other synergies being evaluated
- Increased
marketing flexibility with a broader range of potential customers –
future opportunities to produce and market separated heavy rare
earths
- Catalyst for
regional growth and the green transition – potential for further
downstream developments and related businesses, including
renewables, creating additional jobs in the region
Engagement with financial institutions is
underway to accelerate development, and additional strategic
partnerships, downstream developments and marketing opportunities
are being evaluated.
Feasibility studies for the Plant are being
undertaken in parallel with Mkango’s Songwe Hill rare earths
project (“Songwe”) in Malawi and other opportunities, including
Mkango’s interest in HyProMag Limited, which is developing
production of short loop recycled rare earth magnets in the UK.
William Dawes, Chief Executive of Mkango
stated: “Development of this Plant will underline Mkango’s
unique positioning in the rare earths sector. Our integrated “mine,
refine, recycle” strategy, encompassing sustainably sourced light
(NdPr) and heavy (Dy/Tb) rare earths from Malawi and rare earth
magnet (NdFeB) recycling in the UK, via our interest in HyProMag,
is now enhanced by the opportunity to create a rare earths
separation and downstream hub in Poland, working with one of
Europe’s largest chemical and fertilizer companies.
“Rare earths are a vital component of magnets
required in many technologies needed for the green energy
transition. Therefore, their security of supply is becoming
increasingly important to governments worldwide, especially in
Europe and the US. We have carried out extensive due diligence on
the site and believe the development of the Plant in Poland will
enhance the sustainable supply of rare earths into Europe, as well
as bringing significant benefits to the region, creating new jobs
and potential, additional, downstream developments.
“We very much look forward to working with Grupa
Azoty PULAWY and our partners worldwide to create value for all
stakeholders and contribute to development of a more robust and
sustainable rare earths supply chain.”
Andrzej Skwarek, Management Board Member
of Grupa Azoty PULAWY stated: “We look forward to working
together with Mkango on this exciting project, which complements
the adjacent activities of Grupa Azoty PULAWY, benefiting from
synergies in relation to reagents, by-products, utilities and
infrastructure. As an industry leader in Poland, Grupa Azoty PULAWY
welcomes this potential new development to the region and will
continue to support Mkango as it progresses through the feasibility
studies.”
Jarosław Pączek, Mkango’s Country
Director for Poland stated: “This is a very exciting
development for Poland at a time when Europe is focused on
strengthening supply chains for critical materials and
transitioning to a greener economy. The creation of a new European
hub for rare earths at the heart of central Europe in Poland
complements battery, electric vehicle and renewable energy
developments in the region, with a site strategically located for
European trade and transport routes and benefiting from plug and
play access to reagents and utilities. I look forward to working
with Mkango and Grupa Azoty PULAWY on this groundbreaking project
for Poland and Europe.”
Pulawy Rare Earths Separation
Plant
The Plant is expected to initially produce
approximately 2,000 tonnes per year of neodymium, praseodymium and
/ or didymium (NdPr) oxides as well as a heavy rare earth enriched
carbonate, containing approximately 50 tonnes per year dysprosium
and terbium oxides. It is also expected to produce lanthanum cerium
carbonate. Mkango is evaluating marketing and processing options
for the heavy rare earth enriched carbonate and lanthanum cerium
carbonate. The Plant will use best-in-class, conventional and
proven technology, and will benefit from excellent rail and road
infrastructure as well as the direct supply of the required
processing reagents from Grupa Azoty PULAWY. It will also have
access to a local skilled workforce, on-site engineering and
project development expertise and R&D science institutes.
Based on scoping studies undertaken to date, the
Plant is expected to have highly competitive operating costs.
Feasibility Studies and Technical
Team
Extensive scoping studies and due diligence has
been completed to date on the Plant site. Further feasibility
studies will be completed by Carester, SENET (a DRA Global Group
Company) and a local engineering firm, Prozap, together with
support from Grupa Azoty PULAWY. The Carester team has extensive
operating and advisory experience in rare earth separation at
industrial scale, and will also provide ongoing technical support
during construction and operation of the Plant. Mkango is also
working closely with ANSTO to optimise feed specifications for the
Plant.
Mkango will also be supported by its Chief
Technical Advisor, Mike Vaisey, formerly Vice President, Research
and Technology, for Lynas Corporation. Mr Vaisey has 25 years of
international experience in the mining and chemical industries, in
senior operational and technical development roles, with a track
record of successful technology commercialisation.
Development of the Plant is expected to be
underpinned by the sustainable supply of a purified mixed rare
earth carbonate from Mkango’s Songwe Hill project in Malawi. Mkango
will also evaluate the potential to process third party feeds.
The feasibility studies for the Plant will run
in parallel with those for the Songwe Hill rare earths project.
The Company will seek to maximise the renewable
energy content and minimise the carbon impact of the developments
in both Malawi and Poland, as part of the feasibility studies.
Environmental and Social
Benefits
In addition to synergies with the existing
operations, the Plant is expected to bring significant benefits to
Poland and the EU, including additional jobs and potential for
further downstream value-added developments. It is also expected to
support the development of a more robust supply chain for rare
earths in Europe and other markets, catalysing the green transition
globally.
Sustainability is integral to Mkango’s vision
and the Company intends to implement robust sustainability policies
in Poland to support the Company’s ethos of actively engaging with
local communities as well as implementing and supporting
community-based initiatives.
Mkango Polska
Mkango has established a Polish subsidiary,
Mkango Polska, to develop the Plant and investigate other business
opportunities in Poland. The Company has appointed Dr Jarosław
Pączek as Country Director for Poland and to support the Company’s
growth in the region. Dr Pączek has been appointed to the board of
Mkango Polska.
Dr Pączek holds a PhD in law and is a corporate
financier by training. Over his career in private equity, he led
teams on many high-profile projects and has sourced and managed
transactions in many different industries and geographies. Prior to
his career in private equity, Dr. Pączek gained experience as the
deputy general director of the largest Polish mobile phone operator
and as a lawyer working for Hogan and Hartson, a Washington based
law firm. Amongst his various affiliations he is a member of the
Chartered Institute of Securities and Investment and a Fellow of
the Chartered Institute of Arbitrators.
Scientific and technical information contained
in this release has been approved and verified by Nicholas Dempers
Pr.Eng (RSA) Reg. No 20150196, FSAIMM of SENET (a DRA Global Group
Company), who is a "Qualified Person" in accordance with National
Instrument 43-101 -- Standards of Disclosure for Mineral
Projects.
About
Mkango
Mkango’s corporate strategy is to develop new
sustainable primary and secondary sources of neodymium,
praseodymium, dysprosium and terbium to supply accelerating demand
from electric vehicles, wind turbines and other clean technologies.
This integrated ‘mine, refine, recycle’ strategy differentiates
Mkango from its peers, uniquely positioning the Company in the rare
earths sector.
Mkango is developing the 51% owned Songwe Hill
rare earths project in Malawi with the ongoing Feasibility Study
funded through a £12 million investment by strategic partner
Talaxis Limited. Malawi is known as “The Warm Heart of Africa”, a
stable democracy with existing road, rail and power infrastructure,
and new infrastructure developments underway. 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.
In parallel, through its 75.5% interest in
Maginito Limited (www.maginito.com), Mkango is developing 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 holds a 25% interest in UK rare earth (NdFeB) magnet
recycler, HyProMag Limited (www.hypromag.com).
Maginito’s strategy is underpinned by offtake
rights for sustainably sourced primary and secondary raw materials
from Songwe and HyProMag, respectively, and is geared to
accelerating growth in the electric vehicle sector, wind power
generation and other industries driven by decarbonization of the
economy.
Mkango also has an extensive exploration
portfolio in Malawi, including the recently announced Mchinji
rutile discovery, for which assay results are pending, in addition
to the Thambani uranium-tantalum-niobium-zircon project and
Chimimbe nickel-cobalt project.
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, the Plant
and Songwe. Generally, forward looking statements can be identified
by the use of words such as “plans”, “expects” or “is expected to”,
“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 and pricing for the metals and associated
downstream products for which Mkango is exploring, researching and
developing, factors relating the development of the Plant,
including the outcome of the feasibility study, cost overruns,
complexities in building and operating the Plant, changes in
economics and government regulation, the positive results of a
feasibility study on Songwe and delays in obtaining financing or
governmental approvals for, and the impact of environmental and
other regulations relating to, Songwe and the Plant. 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 Canada: +1 403 444
5979 |
Alexander LemonPresidentalex@mkango.ca |
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www.mkango.ca @MkangoResources |
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Jarosław PączekCountry Director, PolandJPaczek@mkango.caPoland:
+48664144130 |
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BlytheweighFinancial Public RelationsTim BlytheUK:
+44 207 138 3204 |
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SP Angel Corporate Finance LLPNominated Adviser
and Joint BrokerJeff Keating, Caroline RoweUK: +44 20 3470
0470 |
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Alternative Resource CapitalJoint
BrokerAlex Wood, Keith DowsingUK: +44 20 7186 9004/5 |
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Bacchus Capital AdvisersStrategic
and Financial AdviserRichard AllanUK: +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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