London / Vancouver: February 13 , 2023 – Mkango Resources Ltd. (AIM/TSX-V: MKA) is pleased to announce that it has conditionally raised gross proceeds of £3.5 million (approximately C$5.7 million) via a placing and subscription totalling 28,000,000 new common shares without par value each in the Company (the “Placing Shares”) at a price of 12.5 pence (“p”) (approximately C$0.205) per Placing Share (the “Placing”).
- The Company conditionally raised £3.5m (£3.3m net) issuing 28m new shares at 12.5p to progress the Songwe Hill Rare Earths Project as well as rare earth magnet recycling business with HyProMag in Europe.
- Following finalisation of the fundraise, the Company will invest €2.5m in HyProMag GmbH, a subsidiary of HyProMag Ltd, developing a production facility in Baden-Württemberg State, Germany.
- This unlocks €3.7 in matched funding grants assisting project development that will have a minimum capacity of 100tpa NdFeB (neodymium, iron, boron) comprising recycled rare earth sintered magnets, alloy pellets and powders with first production targeted for 2024.
- In return, Mkango through its subsidiary, Maginito Limited, will increase its interest in HyProMag to 66.8% if the loan facility is converted.
- The facility in Germany is similar size to the £4.3m project being developed by HyProMag Limited and the University of Birmingham at Tyseley Energy Park in the UK with first production targeted for H2/23.
- The Company remains in close discussion with potential lenders and strategic investors for project funding of the Songwe Hill Rare Earths Project.
- Government is finalising Mine Development Agreement that will set mining license terms and conditions for the Songwe Hill Project representing a key milestone ahead of project funding and start of development works.
- The strategy is to kick start mining operations development for production of mixed rare earth carbonate in Malawi with the downstream processing project in Poland to be developed and funded separately.
- The team is continuing to evaluate financing options to complete the Pulawy Separation Project feasibility study.
Conclusion: The team successfully raised £3.5m to develop hard rock mining project in Malawi and recycling business in Europe. Additional funds will help the team to progress with its well diversified strategy focused on development of both primary and secondary supply of rare earth oxides capitalising on increasing demand for permanent magnets.
*SP Angel acts as nomad and broker to Mkango Resources
William Dawes, Chief Executive of Mkango stated: “I am very pleased to welcome new institutional and private investors to the shareholder base and thank existing shareholders for their strong support for this oversubscribed fund raising. This positions the Company for some major upcoming milestones, as negotiations for the Mine Development Agreement approach their conclusion, and to capitalise on its early mover advantage in rare earth magnet recycling with potential for near term production.”
Prof. Carlo Burkhardt, Co-founder and Director of HyProMag GmbH stated: “We are very pleased that Mkango Resources is sharing this journey with us as we scale up operations in Germany. This investment enables us to stay at the forefront of rare earth magnet recycling in Europe and creates a strong platform for future growth in the region.”
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