TIDMMKA
RNS Number : 8306C
Mkango Resources Limited
24 January 2018
MKANGO RESOURCES LTD.
706 27 Avenue NW,
Calgary, Alberta T2M 2J3
MKANGO RECEIVES GBP6 MILLION (C$10.5 MILLION) INVESTMENT FROM
TALAXIS AND COMMENCES FEASIBILITY STUDY FOR THE SONGWE HILL RARE
EARTHS PROJECT IN MALAWI
London / Calgary: January 24, 2018 - Mkango Resources Ltd.
(AIM/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 GBP6 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 GBP5 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 GBP1 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 GBP8 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 GBP7 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 GBP1 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 GBP12
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 GBP5
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 GBP2 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 GBP1 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 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
Blytheweigh
Financial Public Relations
Tim Blythe, Camilla Horsfall, Nick
Elwes
UK: +44 207 138 3204
SP Angel Corporate Finance LLP
Nominated Adviser and Broker
Jeff Keating, Caroline Rowe
UK: +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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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