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(Alliance News) - Mkango Resources Ltd on Thursday said that Maginito Ltd has successfully increased its ownership in HyProMag Ltd to 100% for a cash and share consideration.
Mkango is a Vancouver-based mineral explorer and developer with an extensive exploration portfolio in Malawi, including the Mchinji rutile exploration project and Chimimbe nickel-cobalt project.
It holds a 90% shareholding in Maginito, which is focused on developing green technology opportunities in the rare earths supply chain. CoTec Holdings Corp holds the remaining 10%.
According to the terms of the transaction, Maginito will pay a GBP1 million cash consideration to HyProMag shareholders, funded from existing working capital.
It will also issue 9.7 million Mkango shares, equivalent to GBP1 million, at a price per share of 10.26 pence.
HyProMag shareholders also have the opportunity to receive a further GBP3 million - either in cash or common shares - depending on whether the company receives certain production milestones up to June 30, 2026. This additional consideration would be paid in four tranches.
The consideration shares are subject to a one-year lock up, which includes the four month plus one day statutory hold period applicable in Canada. This expires on December 3, 2023.
The shares which may be issued on milestones will also have a six-month lock up.
Mkango Resources shares were trading 8.8% higher at 10.06 pence each in London on Thursday morning.
By Holly Beveridge, Alliance News reporter
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