Mkango Resources Ltd. (AIM/TSX-V: MKA) is pleased to announce that
it has conditionally raised gross proceeds of £750,000
(approximately C$1.3 million) through the issuance, on a private
placement basis, of 15,000,000 common shares of the Company (the
“Subscription Shares”) at a price per Subscription Share of 5 pence
(“p”) (approximately C$0.086) (the “Subscription”).
William Dawes, Chief Executive of Mkango
stated: “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. 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 in Malawi as well as the Pulawy Rare Earths
Separation Project in Poland. Mkango believes this strategic review
will help maximise returns for its shareholders whilst it seeks to
expand its recycling business.”
Recycling Near-Term
Milestones
HyProMag is commercialising Hydrogen Processing
of Magnet Scrap (“HPMS”) recycling technology in the UK, Germany
and United States. HPMS technology was developed at the University
of Birmingham, underpinned by approximately US$100 million of
research and development funding, and has major competitive
advantages versus other rare earth magnet recycling technologies,
which are largely focused on chemical processes but do not solve
the challenges of liberating magnets from end-of-life scrap streams
– HPMS provides the solution.
Near term milestones for the recycling business
include full commissioning of the recycling plant in the UK with
initial commercial sales of NdFeB by HyProMag targeted for H2 2024,
commissioning of the pilot scale (chemical route) recycling plant
in UK to produce rare earth oxides and carbonates in H1 2024 and
completion of the USA Feasibility Study in H2 2024. Initial
production in the UK is targeted at 25-30tpa NdFeB with significant
expansion potential.
Based on scaled-up production scenarios for the
recycling business, scoping studies to date indicate potential to
generate annual revenue of up to US$50m per site and strong margins
at current prices across multiple production centres starting with
the UK (100-350tpa), followed by Germany (126-380tpa) and the
United States (500tpa), with other jurisdictions such as Japan and
Canada being evaluated.
The proposed operating configuration for UK and
Germany operations are similar and comprise a Hydrogen Processing
of Magnet Scrap (HPMS) recycling vessel, a powder processing plant,
presses, sintering furnaces and other magnet manufacturing
equipment to produce NdFeB alloys, sintered blocks and finished
magnets.
As announced previously, the proposed operating
configuration for the United States operations is a modular, hub
and spoke model, with the initial deployment of three Hydrogen
Processing of Magnet Scrap (HPMS) recycling vessels at the spokes
and a central hub comprising of rare earth (NdFeB) alloy and magnet
manufacturing, subject to the outcome of the recently commenced USA
Feasibility Study which is being funded by CoTec Holdings Inc
(“CoTec”).
The Subscription
Mkango has conditionally raised gross proceeds
of £750,000 (approximately C$1.3 million) through the issuance, on
a private placement basis, of 15,000,000 Subscription Shares at a
price per Share of 5p (approximately C$0.086). The net proceeds of
the Subscription after fees is expected to be £720,000
(approximately C$1.2 million). The issue price equates to a
discount of 25.7% and 21.8% to the trailing five-day volume
weighted average price (“VWAP”) of Mkango’s shares on AIM and TSX-V
respectively. The Company intends to use the net proceeds of the
Subscription to acquire additional equipment for the UK recycling
business to underpin HyProMag’s transition to first commercial
sales of recycled NdFeB in the UK targeted for H2 2024, orders of
long lead time equipment in Germany, and to fund ongoing recycling
and corporate costs.
William Dawes, CEO and a director of the
Company, has agreed to subscribe for 3,000,000 Subscription Shares,
for £150,000. Following the Subscription, William Dawes will be the
beneficial owner of, and will directly or indirectly
control, a total of 12,521,443 Shares in the Company, which will
represent 4.66% per cent. of the enlarged share capital of the
Company (post-completion of the entire Subscription). Following
completion of the Subscription, William Dawes will hold 3,975,238
Shares in his own name, with 8,546,205 of the Shares controlled
through Leo Mining & Exploration Limited, a company in which
William Dawes is a Director and of which he owns 17.3% of the
issued and outstanding shares.
Following the Subscription, Resources Early
Stage Opportunity Company Ltd will be the beneficial owner of a
total of 15,999,747 Shares in the Company, which represents 5.96%
per cent of the enlarged share capital.
The Subscription is expected to close on or
around 10th April, 2024 and is subject to the receipt of all
necessary approvals including the approval of the TSX-V, and
admission of the Subscription Shares to trading on AIM.
The Subscription
Shares will rank pari passu with the Company’s existing shares and
application has been made for the Subscription Shares to be
admitted to trading on AIM (“Admission”). It is expected that
Admission will become effective and dealings in the Subscription
Shares will commence at 8:00am on or around 10th April, 2024. The
Subscription Shares will be subject to a statutory hold period in
Canada expiring on the date that is four months and one day from
issuance of the Subscription Shares, and will also be listed for
trading on the TSX-V, provided that approval of such listing from
the TSX-V is obtained.
In accordance with the
Disclosure Guidance and Transparency Rules (DTR 5.6.1R) the Company
hereby notifies the market that immediately following Admission of
the Subscription Shares, its issued and outstanding share capital
will consist of 268,453,574 shares. The Company does not hold any
shares in treasury. Shareholders may use this figure as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change to their
interest in, the Company under the Financial Conduct Authority’s
Disclosure and Transparency Rules.
In connection with the
Subscription, Mkango has agreed to pay, at completion of the
Subscription, commissions of 5% in cash and 5% in non-transferable
broker warrants to Jub Capital Management LLP (“Jub Capital”) on
funds raised by Jub Capital. The broker warrants will have a term
of 3 years from issue and an exercise price of 5p each
(approximately C$0.086). The total number of broker warrants to be
issued on completion of the Subscription is 600,000. Payment of the
commissions (and issuance of the warrants) to Jub Capital is
subject to acceptance of the TSX-V. The shares issuable pursuant to
exercise of the broker warrants will be subject to a statutory hold
period in Canada expiring on the date that is four (4) months and
one day from issuance of the warrants. SP Angel Corporate Finance
LLP will be paid a corporate finance fee of £3,000.
The issuance of the
Subscription Shares to William Dawes, CEO and a director of Mkango,
constitutes a related party transaction under Multilateral
Instrument 61-101 – Protection of Minority Security Holdings in
Special Transactions (“61-101”). The issuance of the Subscription
Shares to William Dawes is exempt from the formal valuation
requirements of Section 5.4 of MI 61-101 pursuant to Subsection
5.5(b) of MI 61-101 as no securities of the Company are listed on
certain exchanges specified by MI 61-101. The issuance of the
Subscription Shares to William Dawes is also exempt from the
minority shareholder approval requirements of Section 5.6 of MI
61-101 pursuant to Subsection 5.7(1)(a) of MI 61-101 as, at the
time such issuance was agreed to, neither the fair market value of
the issuance matter of the issuance nor the consideration therefor
exceeded 25% of Mkango’s fair market capitalisation. The issuance
of the Subscription Shares to William Dawes was approved by the
board of directors of Mkango, with William Dawes abstaining from
voting.
Related party transaction under the AIM
Rules for Companies (the “AIM Rules”)
As William Dawes is a director of the Company,
his participation in the Subscription also constitutes a related
party transaction pursuant to Rule 13 of the AIM Rules. The
directors of Mkango, other than William Dawes, consider, having
consulted with SP Angel Corporate Finance LLP, the Company’s
nominated adviser, that the terms of Mr Dawes’ participation in the
Subscription, are fair and reasonable insofar as the Company’s
shareholders are concerned.
About Mkango Resources
Ltd.
Mkango is listed on the AIM and the TSX-V.
Mkango’s corporate strategy is to become a market leader in the
production of recycled rare earth magnets, alloys and oxides,
through its interest in Maginito Limited (“Maginito”), which is
owned 79.4 per cent by Mkango and 20.6 per cent by CoTec, and to
develop new sustainable sources of neodymium, praseodymium,
dysprosium and terbium to supply accelerating demand from electric
vehicles, wind turbines and other clean energy technologies.
Maginito holds a 100 per cent interest in
HyProMag and a 90 per cent direct and indirect interest (assuming
conversion of Maginito’s convertible loan) in HyProMag GmbH,
focused on short loop rare earth magnet recycling in the UK and
Germany, respectively, and a 100 per cent interest in Mkango Rare
Earths UK Ltd (“Mkango UK”), focused on long loop rare earth magnet
recycling in the UK via a chemical route.
Maginito and CoTec are also rolling out
HyProMag’s recycling technology into the United States via the
50/50 owned HyProMag USA LLC joint venture company.
Mkango also owns the advanced stage Songwe Hill
rare earths project and an extensive rare earths, uranium,
tantalum, niobium, rutile, nickel and cobalt exploration portfolio
in Malawi, and the Pulawy rare earths separation project in Poland.
Discussions with the Government of Malawi in relation to the Mining
Development Agreement for Songwe Hill are ongoing.
For more information, please
visit www.mkango.ca
Market Abuse Regulation (MAR)
Disclosure
The information contained within this
announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 ('MAR') which has been incorporated into UK law
by the European Union (Withdrawal) Act 2018. Upon the publication
of this announcement via Regulatory Information Service, this
inside information is now considered to be in the public
domain.
Cautionary Note Regarding
Forward-Looking Statements
This news release contains forward-looking
statements (within the meaning of that term under applicable
securities laws) with respect to Mkango. Generally, forward looking
statements can be identified by the use of words such as
“targeted”, “plans”, “expects” or “is expected to”, “scheduled”,
“estimates” “intends”, “anticipates”, “believes”, or variations of
such words and phrases, or statements that certain actions, events
or results “can”, “may”, “could”, “would”, “should”, “might” or
“will”, occur or be achieved, or the negative connotations thereof.
Readers are cautioned not to place undue reliance on
forward-looking statements, as there can be no assurance that the
plans, intentions or expectations upon which they are based will
occur. By their nature, forward-looking statements involve numerous
assumptions, known and unknown risks and uncertainties, both
general and specific, that contribute to the possibility that the
predictions, forecasts, projections and other forward-looking
statements will not occur, which may cause actual performance and
results in future periods to differ materially from any estimates
or projections of future performance or results expressed or
implied by such forward-looking statements. Such factors and risks
include, without limiting the foregoing, receipt of TSX-V approval
for the Subscription, the availability of (or delays in obtaining)
financing to develop Songwe Hill, and the various recycling plants
in the UK, Germany and the US as well as the separation plant in
Poland, governmental action and other market effects on global
demand and pricing for the metals and associated downstream
products for which Mkango is exploring, researching and developing,
geological, technical and regulatory matters relating to the
development of Songwe Hill, the ability to scale the HPMS and
chemical recycling technologies to commercial scale, competitors
having greater financial capability and effective competing
technologies in the recycling and separation business of Maginito
and Mkango, availability of scrap supplies for recycling
activities, government regulation (including the impact of
environmental and other regulations) on and the economics in
relation to recycling and the development of the various recycling
and separation plants of Mkango and Maginito and future investments
in the United States pursuant to the cooperation agreement between
Maginito and CoTec, the outcome and timing of the completion of the
feasibility studies, cost overruns, complexities in building and
operating the plants, and the positive results of feasibility
studies on the various proposed aspects of Mkango’s, Maginito’s and
CoTec’s activities. The forward-looking statements contained in
this news release are made as of the date of this news release.
Except as required by law, the Company disclaims any intention and
assume no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by applicable law. Additionally,
the Company undertakes no obligation to comment on the expectations
of, or statements made by, third parties in respect of the matters
discussed above.
For further information on Mkango,
please contact:
Mkango Resources Limited
William DawesChief Executive
Officerwill@mkango.ca Canada: +1 403 444
5979www.mkango.ca@MkangoResources |
|
Alexander LemonPresidentalex@mkango.ca |
SP Angel Corporate Finance
LLP
Nominated Adviser and Joint BrokerJeff Keating,
Caroline Rowe, Kasia BrzozowskaUK: +44 20 3470 0470
Alternative Resource
Capital
Joint BrokerAlex Wood, Keith DowsingUK: +44 20
7186 9004/5
Tavistock Communications
PR/IR AdviserJos Simson, Cath DrummondUK: +44
(0) 20 7920 3150mkango@tavistock.co.uk
The TSX Venture Exchange has neither
approved nor disapproved the contents of this press release.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This press release does not constitute an offer
to sell or a solicitation of an offer to buy any equity or other
securities of the Company in the United States. The securities of
the Company will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act") and
may not be offered or sold within the United States to, or for the
account or benefit of, U.S. persons except in certain transactions
exempt from the registration requirements of the U.S. Securities
Act.
NOTIFICATION AND PUBLIC DISCLOSURE OF
TRANSACTIONS BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITIES AND
PERSONS CLOSELY ASSOCIATED WITH THEM:
1 |
Details of the person discharging managerial
responsibilities / person closely associated |
a) |
Name |
William Dawes |
2 |
Reason for the notification |
a) |
Position/status |
Chief Executive Officer |
b) |
Initial notification /Amendment |
Initial Notification |
3 |
Details of the issuer, emission allowance market
participant, auction platform, auctioneer or auction
monitor |
a) |
Name |
Mkango Resources Ltd |
b) |
LEI |
213800RPILRWRUYNTS85 |
4 |
Details of the transaction(s): section to be repeated for
(i) each type of instrument; (ii) each type of transaction; (iii)
each date; and (iv) each place where transactions have been
conducted |
a) |
Description of the financial instrument, type of instrument |
common
shares of nil par value each |
|
|
Identification code |
ISIN:
CA60686A4090 |
|
|
b) |
Nature of the transaction |
Subscription |
c) |
Price(s) and volume(s) |
|
Price(s) |
Volume(s) |
|
|
|
|
5 pence |
3,000,000 |
|
d) |
Aggregated information |
N/A –
single transaction as above |
|
|
-
Aggregated volume |
|
|
|
-
Price |
|
|
|
e) |
Date of the transaction |
25 March 2024 |
f) |
Place of the transaction |
Outside a trading venue |
Grafico Azioni Mkango Resources (TSXV:MKA)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni Mkango Resources (TSXV:MKA)
Storico
Da Dic 2023 a Dic 2024