Mkango Resources has entered into a non-binding Heads of Terms Agreement with MetalNRG whereby MetalNRG will earn up to a 75% interest in the Thambani exclusive prospecting licence in Malawi, by spending up to $2,000,000 on exploration.
The terms of the agreement outline that the parties will enter into a Binding Definitive Agreement on or before 30 June 2019 that shall include the following elements:
- MetalNRG must spend $500,000 on exploration within the Thambani licence within 12 months of the date of the Definitive Agreement, including a drilling programme totalling approximately 1500 m (the “Initial Workplan”). The details of the Initial Workplan will be determined in conjunction with Mkango Resources. The completion of this Initial Workplan shall entitle MetalNRG to a 25% economic interest in the Thambani Licence, with such interest limited to uranium only.
- After the completion of the Initial Workplan, MetalNRG may elect to further explore and develop the Thambani License by spending $700,000 over the subsequent 12 months (the “Second Workplan”). The completion of the Second Workplan shall entitle MetalNRG to a 49% economic interest in the Thambani licence, limited to uranium.
- Following the completion of the Second Workplan, MetalNRG may elect to further explore and develop the Thambani license by spending $800,000 over the subsequent 12 months (the “Third Workplan”). The completion of the Third Workplan shall entitle MetalNRG to a 75% economic interest in the Thambani Licence, limited to uranium.
- Mkango Resources to have right of first refusal on 100% of the offtake for uranium and other minerals.
- If, following MetalNRG’s initial expenditure of $500,000 and the completion of the Initial Workplan, MetalNRG is not satisfied with the exploration results produced during the first 12 months, it may elect, at its sole discretion, to discontinue future funding of the Second and Third Workplans, but it will retain a 25% economic interest in the uranium assets and operations which are the subject of the Thambani Licence.
Positive times ahead
Alexander Lemon, president of Mkango Resources, said: "This transaction is another milestone for Mkango and for Malawi, and is further endorsement of the company's strategy and potential. With MetalNRG funding the Thambani uranium project and the previously announced transaction with Talaxis funding Mkango Resources’ Songwe Hill rare earths project, our shareholders can look forward to an exciting year of news flow and progress in two of the market’s most strategic commodities at present.”
Mkango Resources' primary business is exploration for rare earth elements and associated minerals in Malawi. The company holds interests in three exclusive prospecting licenses in Malawi: Phalombe, Thambani and Chimimbe Hill.