LONDON, UK: Mkango Resources Ltd. and Talaxis Limited have entered into an agreement whereby 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 million Mkango shares, equivalent to £13 million.
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.
Completion of the Placing and Transaction are subject to customary closing conditions and the approval of the TSX Venture Exchange (“TSX-V”).
Completion of the Transaction and the investments proposed by Mr Linfield and Resource Early Stage Opportunities Company (“RESOC”), another related party proposing to participate in the Placing, are also subject to the approval of the independent shareholders of the Company. One additional investor has also made its participation in the Placing conditional on shareholder approval of the Transaction.
Mkango has scheduled its Annual General and Special Meeting of Shareholders to approve, amongst other things, the Transaction and the investments by Mr Linfield and RESOC, on 6 October 2021. See “Related Party Transaction, Control Person Approvals and Other Regulatory Matters” below for further discussion.
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.
Derek Linfield, Non-Executive Chairman of Mkango, stated: “This transaction brings material benefits to both Mkango and Talaxis and strengthens Mkango’s position as a future integrated supplier of rare earths.
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, stated: “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.”
Mkango Resources Ltd share price
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4 Aug, 4:00 pm GMT-4 ·Disclaimer
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