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Mkango Resources sets itself for rare earths upswing as EVs take off

Snapshot

An investment at the project level from major commodities trader Talaxis is helping it along

Electric vehicles

Quick facts: Mkango Resources Ltd

Price: 8.75 GBX

LSE:MKA
Market: LSE
Market Cap: £11.64 m
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  • Mkango is a rare earth (and other metals) explorer with three licences in Malawi
  • Songwe Hill (Phalombe) is the flagship project and is being developed in collaboration with Noble Group division Talaxis
  • Rare earth metals come overwhelmingly from China at present

What it does

Mkango Resources Ltd’s (LON:MKA) Songwe Hill rare earth operation in Malawi is moving rapidly towards a production decision.

Significant investment at the project level from major commodities trader Talaxis is helping it along.

So far, Talaxis has committed £12mln at the project level, but with a feasibility study well underway the presence of a major player in the world of commodities is providing investors with some food for thought when it comes to thinking about future funding. 

The Talaxis investment as it stands will net out at a 49% interest for Talaxis once the project is taken through the bankable feasibility stage.

Once that study is published, Talaxis can take its stake up to 75% by arranging the finance to take Songwe Hill through to production and an arrangement that gives Mkango a 25% free carried interest.

The mineral resource for Songwe stands at 8mln tonnes grading 1.50% TREO (rare earth metals) measured, 12.2 Mt grading 1.35% indicated and 27.5 Mt grading 1.33% inferred.

Metallurgy 

Talaxis also made an investment totalling £2m in Mkango’s downstream arm Maginito, which has a collaboration in place with powder alloy pioneer Metalysis into permanent magnet manufacturing.

Permanent magnets are critical materials for most electric vehicles, direct-drive wind turbines and many other high growth applications.

Thambani

At Thambani, also in Malawi, Mkango has an agreement with MetalNRG for it to spend US$2mln on exploration for a 75% interest.

Uranium indications at Thambani were confirmed by a World Bank-funded nationwide airborne geophysical programme.

Grab samples have also returned high-grade uranium, tantalum and niobium values, and Mkango continues to carry out detailed exploration work on the project.

How it's doing

In September, Mkango said it had also discovered significant showings of titanium dioxide mineralisation in a soil sampling and auger drilling programme at its 869 square kilometre Mchinji licence in Malawi.

“We are very pleased to add this new rutile and ilmenite discovery to our portfolio of projects in Malawi," said Alex Lemon, the company's president.

"These early-stage results show similarities in terms of saprolite-hosted mineralisation to the recent rutile discoveries made on the adjoining Sovereign Metals licence to the east, and suggest the potential for discovering high-grade rutile deposits within Mkango's large licence area, in what could potentially be a new province of rutile mineralisation."

“Mkango is focused on developing the Songwe rare earth deposit in Phalombe district in Malawi and is looking forward to completing the feasibility study."

Video

 

Inflexion points

  • Metallurgical optimisation is underway for ore at Songwe Hill focused on flotation, hydrometallurgy and acid regeneration
  • Feasibility study at Songwe Hill will trigger production decision by Talaxis
  • Results from exploration at Thambani 

Blue Sky

The funds invested in Maginito by Talaxis will be used to advance complementary downstream opportunities in the rare earths supply chain, in particular new rare earth alloy, magnet and other technologies geared to accelerating growth in the electric vehicle market, including the Metalysis Joint Venture, says SP Angel.

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Mkango Resources is 'incredibly excited' to discover new rutile and ilmenite...

Mkango Resources Ltd's (LON:MKA) (CVE:MKA) Alex Lemon talks to Proactive London about their operations in Malawi and their latest set of results. Lemon explains how the findings show significant signs of titanium dioxide mineralisation in a soil sampling and auger drilling programme at its...

on 15/9/20

3 min read