TIDMMKA
RNS Number : 1993S
Mkango Resources Limited
19 December 2016
MKANGO RESOURCES LTD.
706 27 Avenue NW,
Calgary, Alberta T2M 2J3
MKANGO ENTERS INTO AGREEMENT WITH NOBLE TO COLLABORATE IN THE
RARE EARTHS SECTOR AND RAISES GBP450,000 IN CONNECTION WITH THE
TRANSACTION
THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES
OR FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES
Calgary, Alberta: December 19, 2016 - Mkango Resources Ltd.
(TSXV / AIM: MKA) (the "Company" or "Mkango"), is pleased to
announce that it has entered into a collaboration agreement (the
"Agreement") with Noble Resources International ("Noble"), which
will also allow Noble to acquire up to a 12.5% interest in
Mkango.
Noble is one of world's largest commodity traders and the
largest in Asia, with a presence throughout the region. It is
listed on the Singapore Stock Exchange with a market capitalization
of approximately US$1.5 billion.
Under the key terms of the Agreement, Noble will provide the
following services to Mkango:
Ø Identifying the optimal markets and counterparties for
Mkango's future rare earths production from the Songwe Hill rare
earths project (the "Project") in Malawi, during the bankable
feasibility study and in advance of mine development;
Ø Identifying the best strategy for the Project's product mix
given the international market for different rare earths
concentrates and separated rare earths oxides, and advising Mkango
on the way forward;
Ø Identifying the optimal logistics route to take the Project's
production to market;
Ø Introductions to potential strategic partners to finance
development of the Project; and
Ø Assistance in market-related discussions with key
stakeholders, including Mkango's financial, technical and legal
advisers, prospective investors and lenders and relevant government
agencies associated with the Project.
Noble will also have the right to negotiate a marketing services
agreement for rare earths produced by the Project.
In connection with the Agreement, Mkango will, subject to
regulatory approval, issue 12 million common share purchase
warrants ("Warrant") to Noble, aligning Noble's interests with
those of Mkango's shareholders. Each whole Warrant will entitle
Noble to acquire one common share of the Company at a price of 6.6
pence for a period of two years following the date of the
Agreement. The Warrants give Noble the right to acquire up to a
12.5% interest in Mkango.
Will Dawes, Chief Executive of Mkango, stated: "This is a
Company transforming transaction and we are delighted to be working
with Noble, the largest commodity trader in Asia, seeing this as a
key stepping stone to moving the Project through the development
phase. Mkango is focused on one of the few advanced stage rare
earths projects outside China, and through Noble's network and
relationships in Asia and elsewhere, its marketing expertise,
logistics platform and offtake capabilities, we are very well
positioned to advance the project against the backdrop of a
recovering rare earths sector.
We are also very pleased to welcome two specialist institutional
funds, the Rare Earth Elements Fund and Metals Exploration Fund, as
major new investors in the Company, in addition to continued
support from existing shareholders."
In connection with the Agreement and in respect of ongoing
advice in the Asian and Australian markets, Zenith Advisory
Services Pty Ltd. will be issued, subject to regulatory approval,
with warrants to acquire 1.2 million common shares of the Company
on the same terms as those issued to Noble.
Complementary to and on the basis of the Agreement, Mkango has
raised GBP450,000 (GBP430,125 net of finders' fees) from existing
shareholders and new institutional investors.
As a result, following the Placing, two specialist Swiss mutual
funds, the Rare Earth Elements Fund and the Metals Exploration
Fund, will each hold an interest of 3.6% in Mkango.
The fund raising is subject to regulatory approval and is to be
completed by way of a placing of 12,857,124 common shares at 3.5 UK
pence per common share ("Share") (the "Placing").
The issue price equates to premiums of 29.6% and 1.5% relative
to the most recent closing Share prices of Mkango on the TSX
Venture Exchange and AIM, respectively.
The main uses of proceeds from the Placing will be to accelerate
the optimisation of the processing flow sheet and evaluation of
product marketing options to facilitate further marketing, offtake
and partnership discussions, as well as to evaluate additional
opportunities and other expenditures.
Mkango's current strategy is to bring in financial or strategic
partners to fund a bankable feasibility study for the Songwe Hill
rare earths project and further exploration for the Thambani
uranium project. The Agreement with Noble enhances Mkango's
position to deliver on this strategy and to advance the projects
against the backdrop of accelerating demand for rare earths used in
clean technology applications such as wind turbines and electric
vehicles.
Mkango will pay finders' fees in relation to the Placing
consisting of a fee equal to a maximum of 5% of the gross proceeds
from Shares placed with investors introduced by, or whose
subscriptions are attributable to the efforts of, the finders and
non-transferable finder's warrants ("Finder's Warrants") equal to a
maximum of 5% of the number of Shares issued in connection with
such investors' subscriptions under the Placing. Each Finder's
Warrant will entitle the finders to acquire one Share at a price of
3.5 UK pence for one year from the closing of the Placing.
The Placing was unanimously approved by the Directors of the
Company. The Placing, and any fees paid in connection therewith, is
subject to the approval of the TSX Venture Exchange.
Application has been made for the Depository Interests
representing the new common shares to be admitted to trading on
AIM. It is expected that Admission will become effective and
dealings in the new Depository Interests will commence on or around
22 December 2016.
About Noble Resources International
Noble Group (SGX: N21) manages a portfolio of global supply
chains covering a range of industrial and energy products. Noble
facilitates the marketing, processing, financing and transportation
of essential raw materials. Sourcing bulk commodities from low cost
regions such as South America, South Africa, Australia and
Indonesia, the Group supplies high growth demand markets,
particularly in Asia and the Middle East. For more information,
please visit www.thisisnoble.com.
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." Mkango holds, through its wholly owned
subsidiary Lancaster Exploration Limited, a 100% interest in two
exclusive prospecting licenses in southern Malawi, the Phalombe
licence and the Thambani licence..
The main exploration target in the 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. Mkango's strategy for
Songwe is to further optimise the project with a view to maximising
efficiency and reducing costs, thereby providing a strong platform
for entering into partnerships, marketing and offtake arrangements.
The main exploration targets in the Thambani licence are uranium,
niobium and tantalum. For more information, please visit
www.mkango.ca.
Cautionary Note Regarding Forward-Looking Statements
This news release may contain forward-looking statements.
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, delays in obtaining
financing or governmental or stock exchange approvals. The
forward-looking statements contained in this press release are made
as of the date of this press 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
SP Angel Corporate Finance LLP
Nominated Adviser and Broker
Jeff Keating , Caroline Rowe
UK: +44 20 3470 0470
For further information on Noble,
please contact:
Ms. Chelsea Phua
Bell Pottinger
Tel: +65 6333 3449
Email: CPhua@bellpottinger.com
Ms. Candice Adam
Argentus PR
Tel: +44 20 7397 2915
Email: candice.adam@argentuspr.com
Mr. Martin Debelle
Citadel-MAGNUS
Tel: +61 2 8234 0100
Email: mdebelle@citadelmagnus.com
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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