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(Alliance News) - Mkango Resources Ltd on Thursday said it will increase its ownership of the Songwe Hill rare earths project and Maginito to 100% in a GBP13 million deal with Talaxis Ltd.
Shares in Mkango were up 12% at 28.00 pence in London on Thursday afternoon.
Mkango will acquire Talaxis' 49% stake in Lancaster Exploration which owns Songwe Hill and its 25% interest in Maginito Ltd, which holds a 25% interest in rare earths magnet recycler HyProMag Ltd.
The share transaction will see the Canadian mineral exploration firm pay the equivalent of GBP13 million, or 54.2 million shares, to restore its 100% ownership of Songwe Hill in Mali.
The simplified ownership structure will enhance development funding options at Songwe Hill, Mkango noted, including the potential introduction of additional investors and development partners.
Mkango is developing Songwe Hill with a feasibility study targeted for completion in the first quarter of 2022.
Non-Executive Chair Derek Linfield stated: "This transaction brings material benefits to both Mkango and Talaxis and strengthens Mkango's position as a future integrated supplier of rare earths."
Mkango has also conditionally raised GBP5.5 million from existing shareholders, including Linfield, through the issue of 23.0 million shares at 24p per share.
The proceeds will be used for the completion of the feasibility study at Songwe Hill and feasibility studies at Mkango Polska.
By Will Paige; willpaige@alliancenews.com
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