JOHANNESBURG (miningweekly.com) – The TSX-V has conditionally accepted dual-listed Mkango Resources’ transaction with Noble Group subsidiary Talaxis, which will invest £12-million to fund a bankable feasibility study (BFS) at Mkango’s Songwe Hill rare-earth project in Malawi.
"We are very pleased to announce conditional acceptance by the TSX-V, following which we have a definitive timetable for the transaction,” Mkango CEO William Dawes said on Monday.
He explained that, following shareholder approval and receipt of the investment by Talaxis, the company will start the initial phase of the BFS, including mobilisation for an extensive infill, geotechnical and exploration drilling programme, in the second quarter of 2018, in parallel with ongoing processing flow sheet optimisation and work in relation to the environmental, social and health impact assessment.
Following the agreement in respect of the transaction, Talaxis will invest £12-million in three tranches to fully fund the BFS at Songwe Hill in return for a 49% interest in the project.
The first and second tranches, which will total £5-million, will be invested following receipt of minority of approval. Minority approval is to be sought at a meeting scheduled for January 18, 2018.
The £12-million investment is in addition to Talaxis’ £2-million investment, over two tranches, in return for a 49% interest in a new venture (Newco) that is to be established by Mkango and which will focus on neodymium alloy powders, magnets and other technologies.
The first tranche of the investment into Newco, which will total £1-million will also be invested on receipt of the approval by minority shareholders.
A further £8-million will be invested on completion of the definitive documentation and according to the milestones set out in the transaction agreement between Mkango and Talaxis. Following this, Talaxis will hold a 49% interest in each of the project and Newco.
Talaxis will also have the option to acquire a further 26% interest in Songwe Hill by arranging funding for project development. Following this, Mkango will hold a 25% interest in the project, which will be free carried until the start of production.