Mkango Resources Ltd. entered a collaboration agreement with Noble Group Ltd. subsidiary Noble Resources International Pte. Ltd., allowing the company to acquire up to a 12.5% interest in Mkango.
Mkango will issue 12 million common share purchase warrants to Noble, with each warrant exercisable to acquire 1 Mkango share at 6.6 pence for a two-year period.
Under the deal, Noble will identify optimal markets and counterparties for future rare earths production from Mkango's Songwe Hill project in Malawi during the bankable feasibility study and in advance of mine development.
Noble will also advise Mkango on the optimal logistics route and the best strategy for the project's product mix, as well as assist the company in market-related discussions with key stakeholders. Noble will have the right to negotiate a marketing services agreement for rare earths produced at Songwe Hill.
In connection with the agreement, Zenith Advisory Services Pty. Ltd. will be issued warrants to acquire 1.2 million Mkango shares on the same terms as those issued to Noble.
Complementary to the deal, Mkango has secured gross proceeds of £450,000 through a placement to existing shareholders and new institutional investors.
Following the placing of 12,857,124 common shares at 3.5 pence apiece, the Rare Earth Elements Fund and the Metals Exploration Fund, will each hold a 3.6% interest in Mkango.
Mkango will use the proceeds to accelerate processing flow sheet optimization and the evaluation of options to facilitate further marketing, off-take and partnership discussions, as well as to evaluate additional opportunities and other expenditures.
The company is looking for financial or strategic partnerships to fund a bankable feasibility study on Songwe Hill and further exploration of its Thambani uranium project, also in Malawi.