Aim-listed Mkango Resources has conditionally raised gross proceeds of £750 000 via a direct company subscription from existing shareholders, including a £150 000 investment by CEO William Dawes.
The proceeds will be used for the acquisition of additional equipment to underpin subsidiary HyProMag’s first commercial sales of recycled neodymium magnet at its Tyseley Energy Park facility, in Birmingham, in the UK, in the second half of this year, as well as for long lead time equipment in Germany, unlocking additional grant funding.
HyProMag is commercialising hydrogen processing of magnet scrap recycling technology in the UK, Germany and the US.
Discussions are ongoing with potential strategic investors, project finance providers, grant funding bodies and other sources to finance recycling scale-up opportunities and further technology rollout.
Mkango has completed a significant cost-cutting exercise in recent months, while streamlining operations to focus on recycling, which has enabled a significant reduction in the ongoing capital requirements for the business, it points out.
The company is launching a review of strategic options for its advanced-stage Songwe Hill rare earths project, in Malawi, and its Pulawy rare earths separation project, in Poland.
“Mkango sounded out the market in January of this year with a view to considering a fund raising to pursue all of Mkango’s existing business lines. Given the share price decline during this period, the company has decided to minimise shareholder dilution at the current share price by raising a relatively small amount of money from existing shareholders and myself in order to enable the company to achieve key milestones for HyProMag,” Dawes says.
“In addition, to ensure enough financial runway to achieve these goals, the company has implemented a cost-cutting exercise which will materially reduce the company’s monthly cash burn.
“As part of this process, the company has decided to launch a review of strategic options for its Songwe Hill rare earths project, as well as the Pulawy rare earths separation project. Mkango believes this strategic review will help maximise returns for its shareholders whilst it seeks to expand its recycling business,” he adds.