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Mkango Resources signs off Songwe Hill development deal with Noble Group division

Talaxis already has a 20% stake in Lancaster following an investment of £5mln in January
electric vehicles
Magnets will feature in electric vehicles

Rare earths group Mkango Resources Ltd (LON:MKA) has signed off its agreement with trading group Noble to develop the Songwe Hill licence in Malawi.

Talaxis, a subsidiary of Noble, will acquire up 75% of Lancaster Exploration, which holds the licence, and up to 49% of Maginito, a downstream rare earths business.

WATCH: Mkango Resources signs definitive agreement to develop Songwe Hill licence

Rare earths such as neodymium alloy powders are used in magnets expected to be used extensively in electric vehicles. 

Talaxis already has a 20% stake in Lancaster following an investment of £5mln in January.

That money will fund a drilling programme with a resource estimate scheduled by the end of the year.

At that point, Talaxis can increase its stake in Lancaster to 49% through investing a further £7mln with an option to go up to 75% once a feasibility study is complete.

The feasibility study is expected to be completed by end 2019.

If Talaxis exercises its option, Mkango will retain a 25% interest, free carried to production.

Maginito will also receive a further £1mln once a second phase of R&D work is completed, which will takes Talaxis’ stake to 49%.

Daniel Mamadou, an executive director of Talaxis said: "As the market for permanent magnet technology continues to grow rapidly, access to reliable sources of neodymium becomes key.”

 

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