Mkango Resources Limited has entered into an agreement with Talaxis Limited, a subsidiary of Noble Group, to acquire 49 percent stakes in Lancaster Exploration Limited, which owns the Songwe Hill Rare Earths Project in the country.
The Canadian mineral exploration and Development Company owned 51 percent of the project.
This is according to a statement published last week, signed by Mkango Non- Executive Chairman Derek Linfield and Noble Group Head of Corporate Development Stephen Motteram.
The Transaction is expected to bring significant benefits to the Mkango group.
“There will be consolidation of assets and off-take under Mkango’s control, increasing financial flexibility and underpinning the company’s future growth strategy and simplification of ownership structure enhances optionality for Songwe Hill development funding, including the potential introduction of additional strategic investors and development partners,” the release reads.
It adds that restoring 100 percent ownership over Songwe Hill brings Mkango’s structure in line with peers, providing greater transparency for investors.
In addition to Songwe Hill, Mkango Resources will also acquire Talaxis’ 24.5 percent interest in Maginito company, for 54,166,666 Mkango shares, equivalent to £13 million (about K14 billion) at the Placing Price.
Complementary to the Transaction, Mkango has conditionally raised £5.52 million (about K6 billion) from new and existing shareholders at a price of £0.24 per share including a proposed £700,000 (about K700 million) investment by Derek Linfield.
The new structure also gives Talaxis exposure to Mkango’s other assets and Mkango’s other exploration licences in Malawi.
Noble Group Head of Corporate Development Stephen Motteram released a statement alongside the announcement.
“[The corporate reorganisation] increases Talaxis’ exposure to Mkango’s other assets, such as the highly prospective Mchinji rutile exploration project in Malawi,. We look forward to working with management as the Feasibility Study for Songwe Hill and other work streams move towards completion,” Motteram said.
Mkango is developing Songwe Hill with a feasibility study targeted for completion in the first quarter of 2022.