Raises £5.52m To Accelerate Its Integrated Mine, Refine, Recycle Strategy
Mkango Resources Ltd. (AIM/TSXV: MKA) reports that Mkango and Talaxis Limited, a subsidiary of Noble Group, have entered into an agreement whereby Mkango regarding a number of projects.
Under the deals Mkango will acquire Talaxis’ 49% interest in Lancaster Exploration Limited, which owns the Songwe Hill Rare Earths Project in Malawi and Talaxis’ 24.5% interest in Maginito Limited, which holds a 25% interest in rare earths magnet recycler HyProMag Limited for 54,166,666 Mkango shares equivalent to £13m at the Placing Price.
Complementary to the Transaction, Mkango has conditionally raised £5.52m from new and existing shareholders at a price of £0.24 per share, including a proposed £700,000 investment by Non-Executive Chairman Derek Linfield.
On completion of the Transaction, Mkango will own 100% of Lancaster and Maginito, in addition to its existing wholly owned interests in Mkango Polska (which is developing a rare earth separation plant in Poland) and three other exploration licences in Malawi, which includes the exciting Mchinji exploration project.
The Transaction is expected to bring significant benefits to the Mkango group, including:
- Consolidation of assets and offtake under Mkango’s control, increasing financial flexibility and underpinning the Company’s future growth strategy
- Simplification of ownership structure enhances optionality for Songwe Hill development funding, including the potential introduction of additional strategic investors and development partners
- Restoring 100% ownership over Songwe Hill brings Mkango’s structure in line with peers, providing greater transparency for investors
- Increasing ownership of Maginito to 100% provides greater exposure to HyProMag and the rare earth recycling market, which the board expects to have substantial growth potential
- Greater integration between the mining, separation and recycling businesses, increasing synergies along the value chain
Non-Executive Chairman, Derek Linfield, said the new structure is expected to enable Talaxis to participate in any share price upside as Mkango advances its projects and gives Talaxis exposure to Mkango’s other assets, which include the Pulawy Separation Plant (the “Separation Plant”) currently undergoing feasibility studies in Poland and Mkango’s other exploration licences in Malawi.
“This transaction brings material benefits to both Mkango and Talaxis and strengthens Mkango’s position as a future integrated supplier of rare earths,” Mr Linfield said.
“Talaxis has strongly supported the advancement of Songwe Hill and Maginito since its initial investments in 2017, subsequent to which Mkango has grown downstream, adding investments in recycling (via HyProMag) and the Separation Plant in Poland. At the same time, market conditions for rare earths have improved markedly.
“We believe this transaction delivers a better platform to create value and a structure more aligned with the strategies of both companies. We look forward to Talaxis’ continued support as we progress towards development of Songwe Hill and our other projects.”
Stephen Motteram, Head of Corporate Development for Noble Group, said Talaxis is excited to support this reorganisation and simplification of Mkango’s corporate structure.
“With the increasing electrification of the global economy, Talaxis sees significant growth in the permanent magnet market, especially from EVs and wind power.
“This corporate reorganisation allows Talaxis to better share in the upside from Mkango’s integrated Mine, Refine, Recycle strategy, which includes the recently announced and highly attractive Pulawy Separation Plant project in Poland and Mkango’s strategic interest in rare earths magnet recycler, HyProMag.
“It also increases Talaxis’ exposure to Mkango’s other assets, such as the highly prospective Mchinji rutile exploration project in Malawi. We look forward to working with management as the Feasibility Study for Songwe Hill and other work streams move towards completion.”
For further information please visit: https://www.mkango.ca/