Mkango Resources Ltd. (LON:MKA) (TSX-V:MKA) has announced that, following recent shareholder and exchange approvals, investments totalling £6mln (C$10.5mln) made by Talaxis Limited have been received by the rare earths explorer’s subsidiaries.
The AIM/TSXV listed firm said Talaxis has invested £5mln (C$8.8mln) into Lancaster Exploration Limited - the subsidiary which holds the licence for the advanced stage Songwe Hill rare earths project in Malawi - in return for a 20% interest in the business.
The group said the investment into Lancaster will fund the initial phase of the Feasibility Study for Songwe, including an extensive drilling programme starting in the second quarter of 2018.
It said Talaxis has also invested £1mln (C$1.8mln) into a new Mkango subsidiary, Maginito Limited, in return for a 24.5% interest in Maginito.
The group pointed out that Maginito is focused on neodymium alloy powders, magnet and other technologies relating to electric vehicles and other cleantech applications.
Mkango said a further £8mln (C$14mln) will be invested by Talaxis into Lancaster and Maginito subject to completion of definitive documentation and a number of milestones.
Mkango “uniquely positioned”
William Dawes, Mkango’s chief executive officer commented: "Following receipt of the investment from Talaxis, Mkango is uniquely positioned. We are one of very few companies with an advanced stage rare earths project fully funded to completion of a Feasibility Study with a clearly defined development pathway to production. This is complemented by downstream growth opportunities focused on the electric vehicle technology space.”
He added: “We look forward to working with Talaxis as well as the Government and people of Malawi as we move the project through the development phase to become a leading sustainable producer of rare earths."
Talaxis is the holder of 13.6% of the issued and outstanding common shares of Mkango. In addition to its shareholding, Talaxis also holds 12mln warrants Mkango which, upon exercise, could result in Talaxis holding 22.5% of the then-issued and outstanding shares of the group.
However, Talaxis has agreed with Mkango that it will not exercise any warrants which would increase its holding in the firm to 20% or more.