Mkango Resources Ltd has entered into an agreement with Talaxis Ltd, a wholly owned subsidiary of Noble Group Ltd.
Under the agreement, Talaxis has agreed to fully fund a bankable feasibility study (BFS) for Mkango's Songwe Hill rare earths project in return for a 49% interest in the project.
Talaxis will invest £12 million (CAN$20 million) in the project for the BFS in three tranches, with the first tranche of £2 million (CAN$3.3 million) invested on receipt of regulatory approval.
Talaxis will also have the option to acquire a further 26% interest in the Project by arranging funding for Project development.
Talaxis may also acquire up to a 49% interest in a new venture to be established by Mkango focused on neodymium alloy powders, magnet and other technologies, including Mkango's collaboration with Metalysis, by investing £2 million (CAN$3.3 million) in two tranches.
Upon completion of the above investments, Mkango will retain a 25% interest in Songwe, free carried to production, and a 51% in interest in the new venture. Talaxis and Mkango have agreed to cooperate as preferred partners on rare earths projects worldwide and on other projects in Malawi.
William Dawes, Chief Executive Officer of Mkango, said: "This transaction is transformational for Mkango and for Malawi, and is a further endorsement of the Company's strategy and potential. This Agreement significantly strengthens our balance sheet whilst ensuring that the Company is fully funded to progress Songwe and our collaboration with Metalysis. It also comes at a pivotal time in the rare earth market with a very strong demand outlook for rare earths such as neodymium and praseodymium used in permanent magnets for electric vehicles, wind turbines and other clean technology applications. We are very excited to be working with Talaxis, and moving forward with the bankable feasibility study for Songwe and Phase II of the research and development programme with Metalysis."
Daniel Mamadou, Executive Director of Talaxis said: "The global push to decarbonise the economy is creating pressure on the supply of critical elements to the green tech sector. Environmental regulation and the policy changes are driving the price of technology metals. Supported by our access to global logistics capabilities, an extensive marketing network and a team of experienced professionals, Talaxis is pleased to enter into this agreement, which further strengthens our supply chain specialised in tech metal products."
Read the article online at: https://www.globalminingreview.com/exploration-development/16112017/mkango-enters-agreement-with-talaxis-to-progress-songwe-hill-project/