Mkango Provides Update on Work Programme for the Songwe Hill Rare Earths Deposit and Other Corporate Developments
London / Calgary: May 3, 2018 - Mkango Resources Ltd. (AIM / TSXV: MKA) (the "Company" or "Mkango") is pleased to provide a corporate update.
Songwe Hill Rare Earths Deposit
Following receipt of the £6 million investment by Talaxis Limited (“Talaxis”) in January 2018, the initial phases of the feasibility study for Songwe have commenced.
Preparation is well advanced for the largest diamond drilling programme to date at Songwe. Drilling is targeted to commence within the next month, once all drill roads and pads are completed.
- The programme is for a minimum of 5,000 metres and will be focused on infill, step-out and geotechnical drilling, the latter for the purposes of mine design.
- The drill plan is based on a refined geological model developed in-house by Mkango’s technical team in consultation with The MSA Group and Bara Consulting, who have been appointed resource and mining consultants, respectively.
- Cartwright Drilling has been appointed as drilling contractor, with a combined Canadian and Malawian drilling team to operate two diamond drill rigs both running 24 hours.
- Over 50 drill pads are being constructed for the drill programme, as well as an enlarged camp to accommodate the larger team versus previous drill programmes.
- Mkango has run two successful drill programmes at Songwe in 2011 and 2012, culminating in a maiden Mineral Resource Estimate, also previously working with Cartwright Drilling, the MSA Group and Bara Consulting.
- Mkango is targeting completion of an updated Mineral Resource Estimate by the end of 2018.
In terms of other aspects of the feasibility study, metallurgical optimisation is underway at laboratories in Australia and Canada. The work programme has been scaled up following receipt of the Talaxis funding and is focused on flotation, hydrometallurgy and acid regeneration.
The Environmental, Social and Health Impact Assessment is underway and being completed in accordance with World Bank Standards and Equator Principles.
Appointment of Alternative Resource Capital
Mkango has appointed Alternative Resource Capital as Joint Broker and corporate sponsored research provider, effective May 2, 2018.
Alternative Resource Capital is a trading name of Shard Capital Partners LLP (“ARC”), which is authorised and regulated by the FCA. ARC is a London based broker with a focus on small to mid-cap listed resource companies. Under the terms of the agreement (“Agreement”), ARC will provide corporate broking and research services to the Company, and provide general market intelligence, feedback on the market’s view of the Company and on market activity in the shares. The Agreement provides for a monthly fee of £2,083 per month in connection with the provision of research services and runs for an initial term of 12 months with a two month notice of termination provision.
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 an agreement with Talaxis, Talaxis will fully fund a feasibility study for Songwe by investing £12 million (C$21 million) for a 49% interest in the project (via Mkango subsidiary Lancaster Exploration Ltd). 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 £5 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 £2 million (C$3.3 million), Talaxis will acquire a 49% interest in Maginito Ltd, 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 £1 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.
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. 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
Chief Executive Officer
Financial Public Relations
Tim Blythe, Camilla Horsfall, Nick Elwes
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
Alex Wood, Rob Collins
UK: +44 20 7186 9004; +44 20 7186 9001
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.