Mkango Resources Ltd. (AIM/TSX-V: MKA) (the "Company" or "Mkango")
is pleased to announce that its subsidiary, Maginito Limited
(“Maginito”), has completed the acquisition of an initial 25%
interest in HyProMag Limited (“HyProMag”), a private, United
Kingdom-based company focused on rare earth magnet recycling, as
previously announced on 23 September 2019 (the “Transaction”).
Maginito has invested an initial £300,000 for a 25% interest in
HyProMag, and has an option to invest a further £1 million to
increase its interest up to 49%.
Maginito is 75.5% owned by Mkango, which is
completing a Feasibility Study for the Songwe Hill rare earths
project in Malawi, and 24.5% owned by Talaxis Limited (“Talaxis”),
a wholly-owned subsidiary of Noble Group Holdings Limited (“Noble”)
focused on technology metals investment and development. Maginito
is a related party of Mkango, Talaxis and Noble.
Consistent with Maginito’s strategy focused on
downstream opportunities relating to the rare earths supply chain,
the Transaction will generate potential synergies, such as first
right to supply primary production if required for blending with
recycled production from HyProMag, as well as product offtake and
marketing rights, leading to enhanced marketing flexibility and
access to downstream markets for rare earth permanent magnets,
which are critical materials for electric vehicles, wind turbines,
consumer electronics and other technology applications.
Highlights of the Transaction include:
- HyProMag has licenced a patented process for extracting and
demagnetising neodymium iron boron (“NdFeB”) alloy powders from
magnets embedded in scrap and redundant equipment named HPMS
(Hydrogen Processing of Magnet Scrap). This was originally
developed within the Magnetic Materials Group (“MMG”) at the
University of Birmingham (“UoB”).
- Maginito has invested £300,000 for an initial 25% interest in
HyProMag and provided a £200,000 convertible loan facility, both of
which will be fully funded from Maginito’s existing cash resources
which are earmarked for such strategic investments. Maginito has a
four-year option to increase its interest in HyProMag to up to 49%
by investing an additional £1 million. Maginito has a right of
first refusal to acquire the balance of HyProMag.
- The founding directors of HyProMag, comprising Professor
Emeritus Rex Harris, former Head of the MMG, Professor Allan
Walton, current Head of the MMG, and two Honorary Fellows, Dr John
Speight and Mr David Kennedy, are leading world experts in the
field of rare earth magnetic materials, alloys and hydrogen
technology, and have significant industry experience. Pursuant to
the Transaction, HyProMag has appointed William Dawes, a Director
of Maginito and CEO of Mkango, to join the Board of HyProMag.
- Maginito’s initial investment of £300,000 will fully satisfy
HyProMag’s matched funding requirements for the three year, £2.6
million Innovate UK grant funded project, “Rare-Earth Recycling for
E-Machines” (“RaRE”), which aims to establish a pilot rare earth
magnet recycling facility at Tyseley Energy Park, Birmingham
(“Tyseley”), to produce sintered rare earth (NdFeB) magnets for use
in new electric motor designs for automotive use, and includes
Advanced Electrical Machines Research Limited and UoB as
collaborators.
William Dawes, Chief Executive of Mkango
stated: “We are very pleased to become a substantial
shareholder of HyProMag via Maginito and look forward to working
with the HyProMag team, supporting the future growth of the company
and development of this very exciting technology. We see rare earth
magnet recycling as a major growth industry, complementing the
development of new sustainable primary production, such as Mkango’s
advanced stage Songwe Hill rare earths project in Malawi. This
investment further enhances Mkango’s role in developing a robust
and sustainable electric vehicle and clean technology supply chain
for global markets.”
Daniel Mamadou, Executive Director of
Talaxis said: “Our investment in HyProMag marks an
exciting step for Maginito and for Talaxis. We are proud to be part
of a project that has the potential to revolutionise the magnet
recycling sector and support the growing global shift towards
renewable energy and electric vehicles. This investment further
strengthens our position as the supply partner of choice in the
technology metals industry and underlines Noble’s wider commitment
to decarbonisation and sustainability.”
About HyProMag
The Magnetic Materials Group within the School
of Metallurgy at the University of Birmingham has been active in
the field of rare earth alloys and processing of permanent magnets
using hydrogen for over 40 years. Originated by Professor Rex
Harris, the hydrogen decrepitation method, which is used to reduce
NdFeB alloys to a powder, is now ubiquitously employed in worldwide
magnet processing. In a further development, the MMG patented a
process for extracting and demagnetising NdFeB powders from magnets
embedded in redundant equipment using hydrogen in a process called
HPMS (Hydrogen Processing of Magnet Scrap). This patent and related
intellectual property is at the core of HyProMag. The MMG continues
to develop new research and development opportunities, cooperates
widely in Europe and is currently involved in two significant EU
projects (SusMagPro and Neohire). The directors of HyProMag all
provide their expertise to the MMG and there is potential for
HyProMag to gain possible future access to new intellectual
property.
HyProMag’s strategy is to establish a recycling
facility for NdFeB magnets at Tyseley in Birmingham to provide a
sustainable solution for the supply of NdFeB magnets and alloy
powders for a wide range of markets including, for example,
automotive and electronics. A number of product options are being
evaluated including hydrogen decrepitated (HD) demagnetised powders
suitable for magnet producers, alloy ingot remelted from HD powders
suitable for alloy feed or magnet production, anisotropic alloy
powders (HDDR) for bonded magnets and sintered NdFeB magnets as
required by the RaRE project for automotive applications.
About Mkango Resources
Limited
Mkango's primary business is exploration for
rare earth elements and associated minerals in the Republic of
Malawi, a country whose hospitable people have earned it a
reputation as “the warm heart of Africa”. The Company holds
interests in four exclusive prospecting licenses in Malawi: the
Phalombe licence, the Thambani licence, the Chimimbe Hill licence
and the Mchinji licence.
The main exploration target in the 51% held
Phalombe licence is the Songwe Hill rare earths deposit. This
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
and a Feasibility Study is currently underway, the initial phases
of which included a 10,900 metre drilling programme and an updated
mineral resource estimate, announced in February 2019. In March
2019, the Company announced receipt of a £7 million (C$12.3
million) investment from Talaxis to fund completion of the
Feasibility Study. Following completion of the Feasibility Study,
Talaxis has an option to acquire a further 26% interest in Songwe
by arranging financing for project development including funding
the equity component thereof.
The main exploration targets in Mkango’s
remaining three 100% held licences are, in the Thambani licence,
uranium, niobium, tantalum and zircon, in the Chimimbe Hill
licence, nickel and cobalt, and in the Mchinji licence, nickel,
cobalt, base metals and graphite.
Mkango also holds a 75.5% interest in Maginito
with the balance owned by Talaxis. Maginito is focused on
downstream opportunities relating to the rare earths supply chain,
in particular neodymium alloy powders, magnet and other
technologies geared to accelerating growth in the electric vehicle
market.
For more information, please visit
www.mkango.ca.
About Talaxis
Founded in 2016, Talaxis is a wholly-owned
subsidiary of Noble Group Holdings Limited and invests in and
develops projects that are related to technology metals, with a
special focus on rare earth elements. Talaxis focuses on battery
and electric vehicle materials such as nickel, lithium, graphite
and vanadium. Talaxis has supply chain partners in the upstream and
midstream segments, and also focuses on research and development
solutions for industrial consumers in the downstream segment.
Talaxis prioritises sustainable ventures with a strong emphasis on
corporate social responsibility. These include projects that
contribute to the decarbonisation of the economy and that are
aligned with the United Nations Sustainable Development Goals.
For more information, please visit
www.talaxis.com.
Market Abuse Regulation (MAR)
Disclosure
Certain information contained in this
announcement may have been deemed inside information for the
purposes of Article 7 of Regulation (EU) No 596/2014 until the
release of this announcement.
Cautionary Note Regarding
Forward-Looking Statements
This news release contains forward-looking
statements (within the meaning of that term under applicable
securities laws) with respect to Mkango, its business and the
Project. Generally, forward looking statements can be identified by
the use of words such as “plans”, “expects” or “is expected”,
“scheduled”, “estimates” “intends”, “anticipates”, “believes”, or
variations of such words and phrases, or statements that certain
actions, events or results “can”, “may”, “could”, “would”,
“should”, “might” or “will”, occur or be achieved, or the negative
connotations thereof. Forward looking statements in this news
release include statements with respect to the global market for
products using the rare earth metals the Company is exploring for,
completion of the feasibility study and of the Transaction
contemplated in the agreement with HyProMag, as well as plans for
Tyseley and first commercial sales from Tyseley. Readers are
cautioned not to place undue reliance on forward-looking
statements, as there can be no assurance that the plans, intentions
or expectations upon which they are based will occur. By their
nature, forward-looking statements involve numerous assumptions,
known and unknown risks and uncertainties, both general and
specific, that contribute to the possibility that the predictions,
forecasts, projections and other forward-looking statements will
not occur, which may cause actual performance and results in future
periods to differ materially from any estimates or projections of
future performance or results expressed or implied by such
forward-looking statements. Such factors and risks include, without
limiting the foregoing, market demand for the metals and associated
downstream products for which Mkango is exploring, researching and
developing, the positive results of a feasibility study on the
Project, delays in obtaining financing or governmental or stock
exchange approvals. The forward-looking statements contained in
this news release are made as of the date of this news release.
Except as required by law, the Company disclaims any intention and
assumes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by applicable law. Additionally,
the Company undertakes no obligation to comment on the expectations
of, or statements made by, third parties in respect of the matters
discussed above.
For further information on Mkango,
please contact:
Mkango Resources LimitedWilliam
Dawes
Alexander LemonChief Executive
Officer
Presidentwill@mkango.ca
alex@mkango.ca
UK: +44 207 3722 744Canada: +1 403 444 5979
www.mkango.ca@MkangoResources
BlytheweighFinancial Public
RelationsTim Blythe, Camilla HorsfallUK: +44 207 138 3204
SP Angel Corporate Finance
LLPNominated Adviser and Joint BrokerJeff Keating,
Caroline RoweUK: +44 20 3470 0470
Alternative Resource
CapitalJoint BrokerAlex Wood, Rob CollinsUK: +44 20 7186
9004; +44 20 7186 9001
For more information about Talaxis,
please visit www.talaxis.com or
contact:
FinsburyAlastair Hetherington,
Dorothy Burwell, Humza VandermanTel: +44 20 7251 3801Email:
noble@finsbury.com
Citadel-MAGNUSPeter Brookes,
Helen McCombieTel: +61 2 8234 0100Email:
media@citadelmagnus.com
The TSX Venture Exchange has neither
approved nor disapproved the contents of this press release.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This press release does not constitute an offer
to sell or a solicitation of an offer to buy any equity or other
securities of the Company in the United States. The securities of
the Company will not be registered under the United States
Securities Act of 1933, as amended (the “U.S. Securities Act”) and
may not be offered or sold within the United States to, or for the
account or benefit of, U.S. persons except in certain transactions
exempt from the registration requirements of the U.S. Securities
Act.
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