MKANGO RESOURCES LTD.
550 Burrard Street
Suite 2900
Vancouver
BC V6C 0A3
Canada
MKANGO RAISES £1.25M (C$2.19M) FROM
EXISTING SHAREHOLDERS AND IN ADDITION, €0.20M (C$0.30M) FROM EIT RAWMATERIALS TO
ADVANCE ITS PORTFOLIO OF ADVANCED STAGE STRATEGIC RARE EARTH
ASSETS
Highlights
· Mkango Resources ("Mkango" or
the "Company") has conditionally raised gross proceeds of £1.25M
(C$2.19M) via a direct Company subscription from existing
shareholders (the "Subscription").
· EIT RawMaterials GmbH ("EIT
RawMaterials") will, subject to the approval of the Toronto Venture
Exchange (TSX-V), provide additional funding of
€200,000
(C$302,000) and receive a 5.7% interest in Mkango Polska sp. z o.o.
("Mkango Polska"), currently a 100% held subsidiary of Mkango
developing the Pulawy Rare Earths Separation Project in Poland (the
"Pulawy Project"), which will fund commencement of process
optimisation for the Songwe Hill Rare Earths Project (the "Songwe
Project") in Malawi, a future source of mixed rare earth carbonate
feed for the Pulawy Project.
· EIT RawMaterials is an impact
investor, and provides strategic support to start-up and scale-up
projects across metals and minerals value chain. EIT RawMaterials
was established in 2015 to develop raw materials into a major
strength for Europe by driving innovation, education, and
entrepreneurship. EIT RawMaterials is the acting legal entity of
the Knowledge and Innovation Community "EIT RawMaterials"
comprising some 300 members from industry, university and research
and development in the raw materials sector collaborating with the
European Institute of Innovation and Technology, and co-funded by
the European Union, and mandated to lead the European Raw Materials
Alliance.
· Last month's signing of the
Mine Development Agreement (''MDA'') for the Songwe Project and the
opportunity to progress process optimisation through the investment
by EIT RawMaterials enhance options for the Songwe and Pulawy
Projects in conjunction with the ongoing strategic
review.
· In parallel, discussions
continue with potential strategic investors, project finance
providers, grant funding bodies and other sources to finance
recycling scale-up opportunities and further technology
roll-out.
· Use of proceeds from the
Subscription include the acquisition of additional equipment for
the 2025 commercial development of rare earth magnet recycling
operations at Tyseley Energy Park in Birmingham, UK and at
Pforzheim, Germany, by HyProMag Limited ("HyProMag") and HyProMag
GmbH, respectively, in addition to working
capital.
· The Company continues to put
a strong focus on cost cutting initiatives to conserve working
capital in order to advance the Company's assets, and executive
management have agreed to continue the salary reductions and bonus
scheme announced on 10th May 2024.
London / Vancouver: August 21, 2024 - Mkango Resources Ltd. (AIM/TSX-V: MKA) is pleased to
announce that it has conditionally raised gross proceeds of £1.25
million (approximately C$2.19 million) through the issuance, on a
private placement basis, of 25,000,000 Units of the Company at a
price of £0.05 per Unit (approximately C$0.088). A Unit comprises
one common share of the Company (the "Subscription Share") and one
warrant (the "Warrant"). Each Warrant will entitle the holder to
acquire one common share at a price of £0.07 per common share
("Mkango Share") for a period of 3 years following the closing of
the Subscription. EIT RawMaterials will provide funding of €200,000
(C$302,000) and receive a 5.7% interest in Mkango Polska, currently
a 100% held subsidiary of Mkango. EIT RawMaterials' interest in
Mkango Polska is convertible into common shares of Mkango ("Mkango
Shares") by no later than 30 November 2024 or such later time as
the parties may agree in writing at the prevailing market price of
Mkango Shares (subject to a minimum price of C$0.115 per Mkango
Share) via put and call options exercisable by either Mkango or EIT
RawMaterials.
William Dawes, Chief
Executive of Mkango stated: "In light of progress being made by HyProMag
as it progresses towards commercialisation of rare earth magnet
recycling in the UK and Germany and completion of the USA
feasibility study, and with the recent signing of the Mine
Development Agreement for Songwe, existing shareholders were happy
to continue to support the Company with further investment at a
minimal discount to prevailing prices. Furthermore, the investment
by EIT RawMaterials further highlights the strategic importance of
Songwe and Pulawy to the strengthening of rare earth supply chains
in Europe and beyond.
''Since obtaining the MDA for Songwe last month, we now
believe there is additional value to be unlocked from both Songwe
and Pulawy which is not reflected in our current market
capitalisation and will be considered in our review of strategic
options for the project. Nevertheless, our current focus remains on
advancing our recycling business to commercial production -
the see-through valuation for Mkango's interest in Maginito implied
by the CoTec investment alone was £15 million in March 2023 with
significant progress made by Maginito since
then."
The
Subscription
The issue price equates to a
discount of 4% and 22.1% to the trailing five-day volume weighted
average price ("VWAP") of Mkango's shares on AIM and TSX-V
respectively.
The Subscription is expected to
close on or around 5 September 2024 and is subject to the receipt
of all necessary approvals including the approval of the TSX-V, and
admission of the Subscription Shares to trading on AIM.
The 25,000,000 Subscription Shares
will rank pari passu with the Company's existing shares and
application will be made for the Subscription Shares to be admitted
to trading on AIM ("Admission"). It is expected that Admission will
become effective and dealings in the Subscription Shares will
commence at 8:00am on or around 5th September, 2024. The
Subscription Shares and Mkango Shares issuable pursuant to exercise
of the Warrants will be subject to a statutory hold period in
Canada expiring on the date that is four months and one day from
issuance of the Subscription Shares and Warrants and will also be
listed for trading on the TSX-V, provided that approval of such
listing from the TSX-V is obtained.
In accordance with the Disclosure
Guidance and Transparency Rules (DTR 5.6.1R) the Company hereby
notifies the market that immediately following Admission of the
Subscription Shares, its issued and outstanding share capital will
consist of 293,453,574 Mkango Shares. The Company does not hold any
shares in treasury. Shareholders may use this figure as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change to their
interest in, the Company under the Financial Conduct Authority's
Disclosure and Transparency Rules.
In connection with the Subscription, Mkango has
agreed to pay, at completion of the Subscription, commissions of 5%
in cash and 5% in non-transferable broker warrants ("Broker
Warrants") to Jub Capital Management LLP ("Jub Capital") on funds
raised by Jub Capital. The Broker Warrants will have a term of 3
years from issue and an exercise price of 5p each
(approximately C$0.088). The total number of Broker Warrants
to be issued on completion of the Subscription is 1,250,000.
Payment of the commissions (and issuance of the Broker Warrants) to
Jub Capital is subject to acceptance of the
TSX-V. The Mkango Shares issuable pursuant to
exercise of the Broker Warrants will be subject to a statutory hold
period in Canada expiring on the date that is four (4) months and
one day from issuance of the Broker Warrants.
The EIT RawMaterials
Investment
In addition to the Subscription, Mkango Polska
will, subject to TSX-V approval, receive further funding of
€200,000 from EIT RawMaterials. EIT RawMaterials is a
European innovation initiative that aims to develop raw materials
into a major strength for Europe. It focuses on responsible
sourcing, sustainable materials and circular societies for a
carbon-neutral future.
This funding will be used to optimise the
chemical and physical properties of the raw material, specifically
mixed rare earth carbonate sourced from Songwe Hill in Malawi, in
preparation for the production of rare earth oxides at the planned
Pulawy Project in Poland.
The funding is structured as a combination of
equity and grant funding. EIT RawMaterials will be issued with 6
new shares in Mkango Polska resulting in a 5.7% interest in Mkango
Polska for PLN300. Concurrently, a grant of €200,000 will be
awarded to Mkango Polska by EIT RawMaterials. €150,000 of this
grant is payable immediately and €50,000 is payable upon final
approval of the final project report scheduled by no later than 30
June 2025.
A put and call agreement has been entered into
between EIT RawMaterials and Mkango, whereby both the equity
investment and grant can be converted, subject to TSX-V approval,
at either parties' option into Mkango Shares no later than
30 November 2024 or such later time as the parties may agree in
writing.
The number of Mkango Shares to be issued to EIT
RawMaterials shall be determined by dividing the sum of €200,000
and PLN 300 converted to Canadian dollars by the closing price of a
Mkango Share on the TSX-V on the day before the date of
conversion, subject to a minimum share price of C$0.115.
About Mkango
Mkango is listed on the AIM and the TSX-V. Mkango's
corporate strategy is to become a market leader in the production
of recycled rare earth magnets, alloys and oxides, through its
interest in Maginito Limited ("Maginito"), which is owned 79.4 per
cent by Mkango and 20.6 per cent by CoTec, and to develop new
sustainable sources of neodymium, praseodymium, dysprosium and
terbium to supply accelerating demand from electric vehicles, wind
turbines and other clean energy technologies.
Maginito holds a 100 per cent
interest in HyProMag and a 90 per cent direct and indirect interest
(assuming conversion of Maginito's convertible loan) in HyProMag
GmbH, focused on short loop rare earth magnet recycling in the UK
and Germany, respectively, and a 100 per cent interest in Mkango
Rare Earths UK Ltd ("Mkango UK"), focused on long loop rare earth
magnet recycling in the UK via a chemical route.
Maginito and CoTec are also
rolling out HyProMag's recycling technology into the United States
via the 50/50 owned HyProMag USA LLC joint venture company.
HyProMag is also evaluating other jurisdictions,
and recently launched a collaboration with Envipro on rare earth
magnet recycling in Japan.
Mkango also owns the advanced stage Songwe Hill rare
earths project and an extensive rare earths, uranium, tantalum,
niobium, rutile, nickel and cobalt exploration portfolio in Malawi,
and the Pulawy rare earths separation project in Poland.
For more information, please
visit www.mkango.ca
Market Abuse Regulation (MAR) Disclosure
The information contained within this
announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 ('MAR') which has been
incorporated into UK law by the European Union (Withdrawal) Act
2018. Upon the publication of this
announcement via Regulatory Information
Service, this inside information is now considered to be in the
public domain.
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. Generally, forward looking statements can
be identified by the use of words such as "targeted", "plans",
"expects" or "is expected to", "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. 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, the availability of (or delays in
obtaining) financing to develop the Songwe Hill Project, the
various recycling plants in the UK, Germany, governmental action
and other market effects on global demand and pricing for the
metals and associated downstream products for which Mkango is
researching and developing, , the ability to scale the HPMS and
chemical recycling technologies to commercial scale, competitors
having greater financial capability and effective competing
technologies in the recycling and separation business of Maginito,
availability of scrap supplies for recycling activities, government
regulation (including the impact of environmental and other
regulations) on and the economics in relation to recycling and the
development of the various recycling plants of Maginito and future
investments in the United States pursuant to the cooperation
agreement between Maginito and CoTec, the outcome and timing of the
completion of the feasibility studies, cost overruns, complexities
in building and operating the plants, and the positive results of
feasibility studies on the various proposed aspects of Maginito's
activities. 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 assume 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
Limited
William
Dawes
Alexander Lemon
Chief Executive
Officer
President
will@mkango.ca
alex@mkango.ca
Canada: +1 403 444 5979
www.mkango.ca
@MkangoResources
SP Angel
Corporate Finance LLP
Nominated Adviser and Joint Broker
Jeff Keating, Caroline Rowe
UK: +44 20 3470 0470
Alternative Resource
Capital
Joint Broker
Alex Wood, Keith Dowsing
UK: +44 20 7186 9004/5
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.