In these difficult times, Mkango Resources is working proactively to protect its staff and business. The Company remains focused on completion of the Feasibility Study for Songwe and development of downstream opportunities through Maginito which includes Maginito’s 25% interest in Hypromag, a UK based company focused on rare earth magnet recycling.
The Company is taking the necessary pre-emptive precautions in response to COVID-19 and providing ongoing advice to its staff in the country. In this rapidly evolving environment, we are prioritising the safety of our employees.
With the drill programme for Songwe completed in 2018, most of Mkango’s in-country operations can be completed offsite, and all of our employees are now working from home when possible. All travel has been curtailed.
William Dawes, Chief Executive of Mkango states:
“The welfare of the Company’s staff remains the main priority for Mkango. Whilst the current market environment is very challenging, Mkango’s strong financial position means the Company is well positioned to weather ongoing market uncertainty for the foreseeable future.
“The impact of COVID-19 has focused attention on the vulnerability of supply chains globally, already a major concern in the rare earths sector prior to the pandemic, and Mkango looks forward to further engagement with Government and market participants to play a major role in future development of a robust and sustainable rare earth supply chain for global markets.”
Mkango continues to be in a strong financial position with a current unaudited consolidated cash position totaling approximately US$7.4 million.
In November 2017, Mkango entered into an agreement with Talaxis to fund the feasibility study for Songwe. Talaxis has invested £12 million in Lancaster Exploration, Mkango’s subsidiary which owns the Songwe project, for 49% of Lancaster.
Talaxis also has an option to acquire a further 26% of Lancaster by arranging financing for project development including funding the equity component thereof. Talaxis also holds a 24.5% interest in Maginito.
Whilst the Feasibility Study is continuing with work underway in Australia, South Africa and the UK, the Company believes it is inevitable that some workstreams will be impacted, however the degree of impact is currently uncertain.
Following a review of the various ongoing workstreams, the Company is now targeting completion of the Feasibility Study in the second half of 2021, in line with an anticipated more stable market environment and favourable backdrop to advance project development. Mkango notes, however, that extended periods of COVID-19 disruption may further impact this timing.
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