MKANGO RESOURCES LTD.
550 Burrard Street
Suite 2900
Vancouver
BC V6C 0A3
Canada
MKANGO SIGNS MINING DEVELOPMENT
AGREEMENT WITH MALAWI GOVERNMENT FOR THE SONGWE HILL RARE EARTH
PROJECT
Highlights
· Lancaster Exploration, a 100%
owned subsidiary of Mkango Resources Limited, and the Malawi
Government have signed a Mining Development Agreement ("MDA") for
the Songwe Hill Rare Earths Project in Malawi
· The signing of the Songwe MDA
confirms the fiscal terms applicable to the project and enhances
the options to create value for shareholders in the context of the
ongoing strategic review and engagement with potential strategic
investors, development and commercial banks, and
offtakers.
London / Vancouver: July 29, 2024 - Mkango Resources Ltd. (AIM/TSX-V: MKA) (the "Company" or
"Mkango") is pleased to announce that Lancaster Exploration
Limited, a British Virgin Islands company and Lancaster Exploration
Limited, a Malawi company, both 100% owned subsidiaries of
Mkango, and the Malawi Government have signed the Mining
Development Agreement ("MDA") for the Songwe Hill Rare Earths
Project ("Songwe Hill" or the "Project") in Malawi. The signing
ceremony was held at the Office of the President and Cabinet in
Lilongwe, Malawi during the evening of Friday 26th July
2024.
Hon. Minister Monica Chang'anamuno MP, Minister of
Mining for Malawi stated: "The signing of the
MDA marks a momentous and significant occasion in the history of
Malawi's mining sector. It is with great pride and optimism that we
sign the MDA between the Government of Malawi and Lancaster
Exploration Limited (Mkango) paving the way to start mining Rare
Earths at Songwe Hill in Phalombe.
The MDA signed by the Government of
Malawi is a product of almost two years of hard work. I would like
to thank the team at Mkango for their positive partnership spirit
during the negotiation period. This Agreement is not just a
contractual obligation; it symbolizes a renewed partnership, a
commitment to sustainable development, and a shared vision for a
prosperous future for both parties. The journey to this has been
marked by diligent negotiations, mutual respect, and a deep
understanding of the potential that lies beneath our
feet.
The conclusion and signing of this
MDA is a testament to what can be achieved when we work together
with a common purpose. It will ensure that the benefits of our
mineral wealth are shared equitably and that our environmental and
social responsibilities are upheld. The MDA we have signed today is
a win-win agreement and is based on the belief that Government, the
mining investor and Malawians share some fundamental interests of
benefitting from these future mining activities. On behalf of the
Malawi Government I would like to take this opportunity to assure
the investors that the Government will adhere to its obligations
reflected in this MDA.
I would like to reiterate
Government's commitment in ensuring that it provides requisite
infrastructure to support the mining activities at Songwe Hill and
the country in general. The future mining operations at Songwe Hill
in Phalombe will have far-reaching impacts on our economy. As we
are all aware mining represents the hopes and dreams of the
Malawian people for economic growth, wealth and job creation in
line with Vision 2063 and the Agriculture, Tourism and Mining (ATM)
Strategy championed by His Excellency the President Dr Lazarus
McCarthy Chakwera.
To the management team at Lancaster
Exploration Limited (Mkango) I would like to thank you for your
unwavering commitment to Malawi. Together, we are not just signing
an agreement; we are embarking on a journey towards a brighter,
more prosperous future for Malawi. Let this be a shining example of
what can be achieved through partnership, perseverance, and a
shared vision for a better tomorrow."
Alexander Lemon, President of Mkango
stated: "We are very pleased to announce this
major milestone for the Company and the nation of Malawi. I am
delighted that the MDA has been agreed and signed with the
Government of Malawi. The Project when developed, is expected to be
a game changer and transformational for Malawi and Mkango
welcomes the very strong support it is receiving from the
Government of Malawi and all stakeholders. When developed, my hope
is that Songwe Hill will catalyse a new industrial revolution in
Malawi, creating employment opportunities, producing high
value-added exports, as well as further unlocking Malawi's mineral
potential and new infrastructure developments."
Songwe is one of the very few rare
earths projects globally to have completed a definitive feasibility
study and hold a signed and approved Environmental, Social, Health
Impact Assessment ("ESHIA"), which was completed in compliance with
IFC Performance Standards and The Global Industry Standard for
Tailings Management (2020) ("GISTM") adopted for design and
management of the tailings storage facility.
The key rare earths being targeted
at Songwe are neodymium, praseodymium, dysprosium and terbium which
are all critical for the green transition and are essential to
permanent magnets for electric vehicles, wind turbines and many
electronic devices.
Key components of the MDA
include:
Ø 5% royalty
of gross revenue
Ø 30%
corporate tax rate
Ø 10%
non-diluting equity Interest in the Project to Malawi
Government
Ø Exemption
from customs and excise duties - Lancaster will be exempted from
Export Duty, Import Duty, Import Excise and Import VAT on imports
and exports of capital goods as provided in the applicable
law
Ø 10 years
stability period
Ø 10 years
Tax loss carry forward
Ø Community Development
Expenditure is an allowable tax deduction
About Mkango
Mkango is listed on the AIM and the TSX-V. Mkango's
corporate strategy is to become a market leader in the production
of recycled rare earth magnets, alloys and oxides, through its
interest in Maginito Limited ("Maginito"), which is owned 79.4 per
cent by Mkango and 20.6 per cent by CoTec Holdings Limited
("CoTec"), and to develop new sustainable sources of neodymium,
praseodymium, dysprosium and terbium to supply accelerating demand
from electric vehicles, wind turbines and other clean energy
technologies.
Maginito holds a 100 per cent
interest in HyProMag Limited ("HyProMag") and a 90 per cent direct
and indirect interest (assuming conversion of a convertible loan)
in HyProMag GmbH, focused on short loop rare earth magnet recycling
in the UK and Germany, respectively, and a 100 per cent interest in
Mkango Rare Earths UK Ltd ("Mkango UK"), focused on long loop rare
earth magnet recycling in the UK via a chemical route.
Maginito and CoTec are also
rolling out HyProMag's recycling technology into the United States
via the 50/50 owned HyProMag USA LLC joint venture company.
HyProMag is also evaluating other jurisdictions,
and recently launched a collaboration with Envipro on rare earth
magnet recycling in Japan.
Mkango also owns the advanced stage Songwe Hill rare
earths project and an extensive rare earths, uranium, tantalum,
niobium, rutile, nickel and cobalt exploration portfolio in Malawi,
and the Pulawy rare earths separation project in Poland.
For more information, please
visit www.mkango.ca
Market Abuse Regulation (MAR) Disclosure
The information contained within this
announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 ('MAR') which has been
incorporated into UK law by the European Union (Withdrawal) Act
2018. Upon the publication of this
announcement via Regulatory Information
Service, this inside information is now considered to be in the
public domain.
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. Generally, forward looking statements can
be identified by the use of words such as "targeted", "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, the availability of (or delays in
obtaining) financing to develop the various recycling plants in the
UK, Germany, governmental action and other market effects on global
demand and pricing for the metals and associated downstream
products for which Mkango is researching and developing, , the
ability to scale the HPMS and chemical recycling technologies to
commercial scale, competitors having greater financial capability
and effective competing technologies in the recycling and
separation business of Maginito, availability of scrap supplies for
recycling activities, government regulation (including the impact
of environmental and other regulations) on and the economics in
relation to recycling and the development of the various recycling
plants of Maginito and future investments in the United States
pursuant to the cooperation agreement between Maginito and CoTec,
the outcome and timing of the completion of the feasibility
studies, cost overruns, complexities in building and operating the
plants, and the positive results of feasibility studies on the
various proposed aspects of Maginito's activities and technical,
permitting, environmental, financing and other risks associated
with the development of Songwe Hill. 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 assume 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.com
@MkangoResources
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, Keith Dowsing
UK: +44 20 7186 9004/5
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.