AIM/TSXV-listed rare earths junior Mkango Resources has commenced with the initial phases of a feasibility study for its Songwe rare earths project, following receipt of a £6 million investment by Talaxis in January 2018.
Malawi – 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 m 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 Resources 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 Resources has appointed Alternative Resource Capital as joint broker and corporate sponsored research provider, effective 2 May 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, 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.
Additional project information
Mkango Resources’ primary business is the exploration for rare earth elements and associated minerals in the Republic of Malawi.
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.
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).
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, 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.