Mkango Resources Ltd (LON:MKA, CVE:MKA) shares rose on Monday as the firm unveiled a new partnership deal with MetalNRG PLC which is committing to spend US$2mln on exploration at the Thambani uranium project, in Malawi.
MetalNRG will earn up to 75% of Thambani as it invests in the project.
“This transaction is another milestone for Mkango and for Malawi, and is further endorsement of the company's strategy and potential,” said Alexander Lemon, Mkango president.
It is to spend US$500,000 in the first twelve months of the partnership. Initial work programmes will include 1,500 metres of drilling, and, upon completion it will secure its first 25% interest in the asset.
Following the initial programme the earn-in partnership deal sees MetalNRG investing a further US$700,000 over the subsequent twelve months and that would take its interest in the project up to 49%.
A third work programme, costing US$800,000 over a third year, would take MetalNRG’s stake to 75%.
Mkango, meanwhile, retains right of first refusal on 100% of Thambani’s offtake for uranium and other minerals.
Lemon added: “With MetalNRG funding the Thambani uranium project and the previously announced transaction with Talaxis funding Mkango's Songwe Hill rare earths project, Mkango shareholders can look forward to an exciting year of news flow and progress in two of the market's most strategic commodities at present.
“We are pleased to be working with MetalNRG, and look forward to a new drilling program being carried out at Thambani."
In afternoon trading, shares in Mankgo were 7.3% higher at 8.05p.
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