Mkango Resources Ltd. (AIM/TSX-V: MKA) (the
"
Company" or "
Mkango") is pleased
to announce that it has received final approval from the TSX
Venture Exchange in respect of the transaction announced on 5
August 2021 whereby Mkango has acquired (the
“
Acquisition”) the 49% interest of Talaxis Limited
(“
Talaxis”) in Lancaster Exploration Limited
(“
Lancaster”), which owns the Songwe Hill Rare
Earths Project in Malawi, and Talaxis’ 24.5% interest in Maginito
Limited (“
Maginito”), which holds a 25% interest
in rare earth magnet recycler HyProMag Limited
(“
HyProMag”), for common shares in the Company
(the “
Shares”) aggregating to 54,166,666 Shares
(the “
Acquisition Shares”). As a result of the
Acquisition, Mkango owns 100% of the shares of Lancaster and 100%
of the shares of Maginito.
Mkango has also received final approval from the
TSX Venture Exchange in respect of the issuances of 2,916,666
Shares to Mr Derek Linfield, Chairman of Mkango, and 1,666,666
Shares to Resource Early Stage Opportunities Company
(“RESOC”) pursuant to the placing announced on 5
August 2021 (together, the “Subscription
Shares”).
In addition, the Company has received final
approval for the issue of 541,666 Shares to Bacchus Capital
Advisers (“BCA”) as part payment of its advisory
fee in connection with the Acquisition (“Fee
Shares”).
Following this and the issuance of Shares to two
optionholders referred to below, Talaxis will own 69,452,381
Shares, representing approximately 32.4 per cent. of the enlarged
issued share capital, Mr. Derek Linfield will own 8,056,227 Shares,
representing approximately 3.8 per cent. of the enlarged issued
share capital and RESOC will own 15,999,747 Shares, representing
approximately 7.5 per cent. of the enlarged issued share
capital.
The Shares issued to Talaxis in connection with
the Acquisition and to Mr. Derek Linfield, RESOC and BCA are
subject to a statutory hold period in Canada expiring on the date
that is four months and one day from the issuance of the
Shares.
In connection with the closing of the
Acquisition, Mkango has issued 33,333 non-transferable warrants to
Merlin Partners LLP which advised in connection with issuance of
the Shares to RESOC. Each warrant is exercisable for a period of 12
months with an exercise price of £0.24 per warrant. The warrants
(and the underlying Shares) are subject to a statutory hold period
in Canada expiring on the date that is four months and one day from
the issuance of the warrants.
As disclosed in the Company’s press release
dated 16 August 2021, additional compensation (cash and warrants)
was paid to the brokers in connection with the private placement
which completed on 16 August 2021. In aggregate, 385,098 warrants
(including the 33,333 warrants issued to Merlin Partners LLP in
connection with the Shares issued to RESOC) were issued to
brokers.
Board Restructuring and Employment
Agreements
As per the terms of completion of the
Acquisition, Mkango has entered into a lock-in deed (the
“Lock-In Deed”) with Talaxis which provides,
amongst other things, that for so long as it holds 10% or more of
the Company’s Shares, Talaxis will not, during the first 12 months
following the Acquisition, sell or transfer any of its Shares,
other than pursuant to certain limited exceptions. For the second
12 months following the Acquisition, Talaxis has agreed to an
orderly market arrangement.
In addition, under the Lock-In Deed the Company
has agreed that for so long as Talaxis owns 10% or more of Mkango's
Shares, Talaxis will be entitled to nominate a person for election
to the board of the Company (the “Board”).
Pursuant to the Lock-in Deed and his conditional
election at the Company’s annual general and special meeting of
shareholders held on 6 October 2021 (“AGM”), Mr
Stephen James Motteram has been appointed as a non-executive
director to the Board. As Talaxis’ nominee, he is considered a
non-independent director.
Mr Motteram, aged 50, has 25 years’ experience
in financial institutions and trading houses, specialising in
project development, commodities trading, M&A, and corporate
restructuring with transaction experience in Australia, China, SE
Asia, Africa, South America, Russia and the Middle East. He has
worked for the Noble Group Holdings group (the parent group of
Talaxis) since 2011 and is currently their Head of Corporate
Development. Mr Motteram holds a B. Agricultural Science (Honours)
from the University of Melbourne and an MBA from the Melbourne
Business School and Ivey Business School. He is a Member of CPA
Australia and a Graduate and Member of the Australian Institute of
Company Directors.
The following information about Mr Motteram is
disclosed pursuant to Rule 17 and Schedule Two paragraph (g) of the
AIM Rules for Companies:
Current directorships and/or partnerships: |
Former directorships and/or partnerships (within the last
five years): |
General Alumina Holdings Limited General Alumina Jamaica Inc.
General Alumina Jamaica Limited M.H.A.G Servicos & Mineracao
S.A.Noble Resources DMCC |
Xanadu Mines LtdCockatoo Coal Limited |
Mr Adrian Reynolds has retired from the Board
after over 10 years as a director. The Board would like to thank Mr
Reynolds for his very significant contribution to the development
of the Company. He has played a key role in the evolution of the
Company from an early exploration stage to an advanced stage of
development with an integrated strategy.
Derek Linfield, Chairman of Mkango, stated: “We
are extremely pleased to finalise our restructuring of the Talaxis
interests and to welcome Talaxis as a significantly increased
shareholder in Mkango. The resulting structure, with Mkango holding
100% of Songwe, Maginito and Mkango Polska, gives us a streamlined
platform to move all the assets forward, maximising synergies and
allowing us to accelerate our integrated mine, refine, recycle
strategy to develop a rare earths mine in Malawi, a separation
plant in Poland and, through our interest in HyProMag, a rare earth
magnet recycling business in the UK.
“I would also like to welcome Stephen to the
Board and look forward to accessing his considerable experience to
strengthen the skill sets available to the Board. I would also like
to add my personal thanks to Adrian who has provided wise counsel
to me as Chairman during my entire tenure and we will miss his
contribution to the Board.
“The Company is excited to be moving forward with its new
structure in the current favourable demand and pricing environment
for rare earths”.
The Company also announces that each of Mr Will
Dawes, Chief Executive Officer, and Mr Alex Lemon, President, has
entered into employment agreements with Mkango Rare Earths UK
Limited, a wholly-owned subsidiary of Mkango, to replace previous
consulting agreements held directly with Mkango. The employment
agreements are on terms substantially similar to, and replace,
those consulting agreements.
Grant of Restricted Share Units and
Options
The Company also announces that, further to the
approval of the Stock Option Plan, RSU Plan and EMI Share Option
Plan by shareholders at the AGM, it has issued 2,000,000 restricted
share units (“RSUs”) under the RSU Plan and an
aggregate of 900,000 options to acquire Shares
(“Options”) under the Stock Option Plan and the
EMI Share Option Plan, in each case to each of Mr Dawes and Mr
Lemon.
The RSUs have a vesting period of 10 years but
will not vest until a NI 43-101 Report is filed in support of a
feasibility study for the Songwe Hill rare earths project in Malawi
other than in connection with a change of control.
The Options have an exercise price of C$0.50 per
share and are exercisable for a period of 10 years, in accordance
with the Stock Option Plan and EMI Share Option Plan, respectively,
but will not vest until a NI 43-101 Report is filed in support of a
feasibility study for the Songwe Hill rare earths project in
Malawi. In accordance with the Stock Option Plan, the Company may
accelerate the vesting of all options if an offer is made by a
third party to purchase all of the Shares of the Company.
Under the EMI Stock Option Plan, options vest on a change of
control.
As disclosed in the management information
circular mailed to shareholders in connection with the AGM (the
“Circular”), the aggregate number of common shares
of the Company which may be reserved for issuance under the RSU
Plan, in combination with the aggregate number of Shares issuable
under the Stock Option Plan and EMI Share Option Plan, will not
exceed 15,000,000 Shares, subject to adjustment in accordance with
the RSU Plan and as permitted by the TSXV. As also disclosed in the
Circular, amendments were made to the Company’s Stock Option Plan
primarily to (i) reflect that the 10% and 2% limits set out
therein would include securities granted under all security based
plans of the Company (instead of to securities issued only under
the Stock Option Plan); and (ii) to clarify the vesting terms of
stock options on termination of employment (which changes were
consistent with similar provisions in the RSU Plan and EMI Share
Option Plan).
The Company also announces that it has issued an
aggregate of 1,340,000 Shares to two individuals who exercised
their options under the Company’s Stock Option Plan
(“Option Shares”). The options had an exercise
price of C$0.06 in respect of 630,000 options, C$0.07 in respect of
180,000 options, C$0.11 in respect of 250,000 options and C$0.14 in
respect of 280,000 options, for a total consideration of
C$117,100.
Admission to trading and Total Voting
Rights
Application will be made for the 60,631,664
Shares (being the Acquisition Shares, the Subscription Shares, the
Option Shares and the Fee Shares), which will rank pari passu with
the Company’s existing Shares, to be admitted to trading on AIM
("Admission"). It is expected that Admission will
become effective and dealings in the new shares will commence at
8:00am on or around 2 November 2021. The Shares will also trade on
the TSX Venture Exchange.
In accordance with the Disclosure Guidance and
Transparency Rules (DTR 5.6.1R) the Company hereby notifies the
market that immediately following Admission, its issued share
capital will consist of 214,581,548 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 FCA's Disclosure
and Transparency Rules.
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 ('RIS'), this inside information is now
considered to be in the public domain.
About Mkango
Mkango's corporate strategy is to develop new
sustainable primary and secondary sources of neodymium,
praseodymium, dysprosium and terbium to supply accelerating demand
from electric vehicles, wind turbines and other clean technologies.
This integrated Mine, Refine, Recycle strategy differentiates
Mkango from its peers, uniquely positioning the Company in the rare
earths sector.
Mkango is developing Songwe Hill in Malawi with
a Feasibility Study targeted for completion in Q1 2022. Malawi is
known as "The Warm Heart of Africa", a stable democracy with
existing road, rail and power infrastructure, and new
infrastructure developments underway.
In parallel, Mkango recently announced that
Mkango and Grupa Azoty PULAWY, Poland's leading chemical
company and the second largest manufacturer of nitrogen and
compound fertilizers in the European Union, have agreed to
work together towards development of a rare earth Separation Plant
at Pulawy in Poland. The Separation Plant will process the purified
mixed rare earth carbonate produced at Songwe.
Through its subsidiary Maginito
(www.maginito.com), Mkango is also developing green technology
opportunities in the rare earths supply chain, encompassing
neodymium (NdFeB) magnet recycling as well as innovative rare earth
alloy, magnet, and separation technologies. Maginito holds a 25%
interest in UK rare earth (NdFeB) magnet recycler, HyProMag
(www.hypromag.com) with an option to increase its interest to
49%.
Mkango also has an extensive exploration
portfolio in Malawi, including the Mchinji rutile project, the
Thambani uranium-tantalum-niobium-zircon project and Chimimbe
nickel-cobalt project.
For more information, please
visit www.mkango.ca
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, its business, HyProMag,
the Separation Plant and Songwe. Generally, forward looking
statements can be identified by the use of words such as “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, technical and commercial risks in scaling
up HyProMag’s business to commercial production, governmental
action relating to COVID-19, COVID-19 and other market effects on
global demand and pricing for the metals and associated downstream
products for which Mkango is exploring, researching and developing,
factors relating the development of the Separation Plant, including
the outcome and timing of the completion of the feasibility
studies, cost overruns, complexities in building and operating the
Separation Plant, changes in economics and government regulation,
the positive results of a feasibility study on Songwe Hill and
delays in obtaining financing or governmental approvals for, and
the impact of environmental and other regulations relating to,
Songwe Hill and the Separation Plant. 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 assumes 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
Dawes |
|
Alexander
Lemon |
Chief Executive Officer |
|
President |
will@mkango.ca |
|
alex@mkango.ca |
Canada: +1 403 444 5979 |
|
|
www.mkango.ca |
|
|
@MkangoResources |
|
|
BlytheweighFinancial Public
RelationsTim BlytheUK: +44 207 138 3204
SP Angel Corporate Finance
LLPNominated Adviser and Joint BrokerJeff Keating,
Caroline RoweUK: +44 20 3470 0470
Alternative Resource
CapitalJoint BrokerAlex Wood, Keith DowsingUK: +44 20 7186
9004/5
Bacchus Capital
AdvisersStrategic and Financial AdviserRichard Allan,
Andrew KrelleUK: +44 20 3848 1642 / +44 79 5636 2903
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.
Dealings by Persons Discharging
Managerial Responsibilities
1 |
Details of the person discharging managerial
responsibilities / person closely associated |
a) |
Name |
- Derek Linfield
- Will Dawes
- Alexander Lemon
|
2 |
Reason for the notification |
a) |
Position/status |
- Non-Executive Chairman
- Chief Executive Officer
- President
|
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 |
1. Participation in Placing2a. Grant of RSUs2b. Grant of Options
and EMI Options3a. Grant of RSUs3b. Grant of Options and EMI
Options |
c) |
Price(s) and volume(s) |
|
Price(s) |
Volume(s) |
|
|
|
|
1.
24 pence |
2,916,666 |
|
|
|
|
2a. N/A |
2,000,000 |
|
|
|
|
2b. C$0.50 |
900,000 |
|
|
|
|
3a. N/A |
2,000,000 |
|
|
|
|
3b. C$0.50 |
900,000 |
|
d) |
Aggregated information |
See above. |
|
- Aggregated volume |
|
|
|
|
|
- Price |
|
|
|
|
e) |
Date of the transaction |
29 October 2021 |
f) |
Place of the transaction |
Outside a trading venue |
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