Big picture - Why invest in Mkango Resources Ltd
Mkango Resources Ltd Snapshot
The Company's mission is to spearhead the development of mining in Malawi, to provide maximum shareholder value and to implement meaningful and successful social responsibility programs.
Company principles include:
Targeted exploration and development with a strong focus on assessment of commercial implications and management of risk
Focus on building long term and sustainable stakeholder relationships in Malawi and globally
Cultivate in-house technical excellence coupled with support of cost effective and synergistic research and development programs
Seek to become the partner of choice for exploration, research and project development focused on rare earth elements and the Republic of Malawi
Empowerment of local and international staff through training and other initiatives, and fostering of a diverse workplace culture
Songwe Hill is located in southeastern Malawi, between Lake Chilwa and the Mulanje Massif. It lies within exclusive prospecting licence EPL 0284/10 which Mkango refers to as the 'Phalombe Licence'. The EPL lies entirely within the Southern Region of Malawi and Songwe Hill is within the Phalombe administrative district. It is approximately 70km from the former capital, Zomba and approximately 90km from the commercial centre of Blantyre (which has an international airport and a railhead). The national highway S145 passes within 15km of Songwe Hill and is being upgraded. Secondary gravel and dirt roads provide vehicle access to the exploration camp.
The deposit lies on the north-facing slopes of Songwe Hill, a steep-sided conical hill with a diameter of approximately 800m that rises to a summit elevation of 990m. Songwe Hill abuts onto the slopes of the adjacent and larger Mauze Hill which rises above the alluvial plains south of Lake Chilwa and straddles the border with Mozambique. The slopes of Songwe Hill are densely vegetated with elephant grass following the rainy season but, in other times of the year, vegetation does not hinder access.
The Songwe Hill area has a sub-tropical climate. Maximum monthly rainfall is between 125cm and 218cm during the rainy season of December to March. The project area is warm from September to April with average daytime maximum temperature of around 26°C. The monthly average temperature ranges from 22°C in August to 27°C in December. The monthly minimum average temperature ranges from 11.4°C in August to almost 21°C in October. The climatic conditions are not expected to impact on the operation of the proposed mine, which has been planned to operate all year round.
Geology and mineralisation
Songwe Hill is interpreted as a volcanic vent that is expressed as a steep-sided hill approximately 800m in diameter. Information from surface mapping and drill core indicates that the vent complex consists of a multi-phase intrusion characterised by diverse carbonatites and breccias. The carbonatite is best exposed along the north-eastern slope of Songwe Hill. The vent complex cuts the western end of the large Mauze nepheline syenite intrusion, but the external contacts on the western and northwestern sides of the vent are hidden beneath recent surficial eluvial deposits.
The principal lithologies that comprise the Songwe Hill vent complex are carbonatite, fenite and breccia. The carbonatites are dominantly grey calcic carbonatites, although subordinate ferro-carbonatites are present. The fenites comprise dominantly K-feldspar rocks and appear to form an aureole around the carbonatite. They are interpreted to have formed through metasomatism related to the carbonatite intrusion. The breccias range from clearly abraded pebble-sized fragments (pebble dykes) to angular blocks that are metres in diameter and include significant volumes of breccia in which the fragments appear to have undergone little or no movement.
The principal zone of REE mineralisation outcrops along the northeastern slope of Songwe Hill. REE mineralisation is present in carbonatites, fenites and breccias, which are exposed intermittently over a surface area of approximately 350m by 100m. The REE mineralisation is untested to the northeast and southwest beyond the limits of the present drilling and below the deepest vertical intersection of approximately 350m below the surface of Songwe Hill and there is additional regional exploration potential in the Songwe and other carbonatites. The mineralised body is interpreted to be a carbonatite plug with essentially sub-vertical margins. In plan view, it is elongated in a northeast-southwest direction.
The dominant REE-bearing minerals are synchysite and apatite. The apatite is anomalously enriched in the HREO's compared to apatites in most carbonatite deposits. The REE mineralisation is closely associated with strontianite and baryte and is interpreted to have formed through sub-solidus hydrothermal alteration following the carbonatite intrusion.
Mkango completed a Pre-Feasibility Study for the Songwe Hill Project in September 2014, which was subsequently updated in November 2015. The Pre-Feasibility Study is based on a conventional open pit operation using contract mining, a mine life of 18 years and is focused only on the Probable Mineral Reserve Estimate.
The Songwe Hill Project features broad zones of outcropping REE mineralisation on the northern slopes of a steep sided hill. The annual processing capacity was assumed at 500,000 tonnes per year of ore with a view to producing an average of approximately 2,840 tonnes of REO in mixed chemical concentrate per year with a large proportion of the cerium removed during the hydrometallurgical process. Cerium is currently considered to have challenging market fundamentals and, under Mkango's current strategy to produce a concentrate, there is a strong economic rationale to remove as much as possible of the cerium from the final concentrate.
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The Thambani exploration licence, located in the Mwanza District, was originally granted by the Malawi Minister of Natural Resources, Energy and Environment on September 10, 2010 in respect of an area of 468km2. In September 2013 and September 2015, the Government of Malawi granted further two year renewals for the licence. At the second renewal the Company requested a reduction in the licence size to the current area of 136.9km2.
Mkango's exploration activities to date include acquisition of Landsat7 and ASTER satellite imagery for the licence area, systematic ground radiometric surveys to confirm and detail previously-known airborne anomalies, reconnaissance geological mapping and litho-geochemical sampling programs. The work has identified a number of potential uranium and associated Nb-Ta targets over the Thambani Massif, which is mainly composed of nepheline-bearing syenite gneiss, forming two prominent ridges known as Thambani East Ridge and West Ridge.
A systematic ground radiometric survey completed by Mkango previously revealed two distinct uranium anomalies occurring across the Thambani East and West Ridges: A strong uranium anomaly, measuring approximately 3km by 1.5km, occurs along the length of the Thambani East ridge, with a north-south trend, and a second uranium anomaly, measuring approximately 1.5km by 0.4km, occurring on the West Ridge along the western contact of the nepheline-bearing syenite body with the biotite-hornblende gneisses.
Mkango completed a trenching program across the Thambani Massif primarily focused on two sites of historical uranium exploration, known as the Chikoleka and Little Ngona targets. An initial set of 9 trenches, selected on the basis of anomalous ground radiometric results, have been re-examined and geochemically sampled across profiles from soil/overburden into bedrock.
The first set of assay results of 142 soil and rock chip samples returned variably anomalous U, Nb and Ta values in most trenches, ranging up to 4.70 per cent. U308, 3.25 per cent. Nb2O5 in soil and up to 0.42 per cent. U308, 0.78 per cent. Nb2O5 and 972 ppm Ta2O5 in rock chips, notably higher than results from the 2013 reconnaissance surface geochemical sampling program. Results associated with the 10 best U308 assays are summarized in Table 1.
Preliminary mineralogical studies carried out on six rock samples from the Little Ngona River and Chikoleka targets, using SEM at the Natural History Museum London, indicate that pyrochlore group minerals, mainly betafite, are the principal carriers of U, Nb and Ta for these samples.
Assays from the 10 highest - U308 samples from the Thambani trenching program
Mr Derek Linfield
Mr Linfield is a legal consultant and former Managing Partner of Stikeman Elliott (London) LLP, the London office of Canadian law firm Stikeman Elliott LLP between 2005 and 2015. He practiced as a Canadian lawyer in London for 20 years, where he focused on cross-border financings and M&A in the mining and oil & gas sectors, including taking internationally managed companies to the TSX and the TSX-V as well as Canadian companies to the London Stock Exchange. A former educator, Mr Linfield holds BA(Ed) and BSc degrees from Memorial University of Newfoundland as well as LLB and MBA degrees from McGill University. He is a Director of MUN (UK) Limited, the UK campus of Memorial 32 University of Newfoundland, as well as immediate past chairman of Canada Day in London and the Foundation for Canadian Studies in the UK as well as a former Director of the Canada UK Chamber of Commerce where he is now an advisor to the Board.
Mr William Dawes
Chief Executive Officer and Executive Director
Mr Dawes is a graduate of Bristol University (BSc Geology) and Royal School of Mines, Imperial College, London (MSc Mineral Exploration with distinction). Having trained as a geologist in South Africa, he worked as a mining analyst based in London and then for Rio Tinto's exploration division. Subsequently, he gained significant global mining transaction experience in the metals and mining team of Robert Fleming & Co, Chase Manhattan Bank and JPMorgan. Mr Dawes is a founding Director of Mkango and Mkango's Major Shareholder, Leominex, and since 2004 has been involved in the exploration and evaluation of a variety of projects throughout Central Asia, the Middle East and Africa. He has 13 years' experience in exploration and business development and 9 years in mining finance, mergers and acquisitions. He is a Fellow of the Geological Society, a Professional Member of the Institute of Materials, Minerals and Mining and holds the Chartered Financial Analyst designation.
Mr Alexander Lemon
President and Executive Director
Mr Lemon is a graduate of the Royal School of Mines, Imperial College, London (MSc Dic in Mineral Exploration) and Oxford Brookes University (BSc Geological Sciences). He has 21 years' experience in mineral exploration and business development. Mr Lemon is a founding Director and President of Mkango and Mkango's major Shareholder, Leominex. From 1994 to 2001 was the Managing Director of a gold mining company, which owned and operated a producing gold mine in Central Asia, where he gained extensive operating experience in emerging markets including government negotiations and project management. From 2001 to 2005, he worked for a family office, Allied Commercial Exporters as an investment adviser. Since 2005 has been involved in the exploration and evaluation of a variety of projects throughout Central Asia and Africa. He is a Fellow of the Geological Society and a Member of the Southern African Institute of Mining & Metallurgy.
Mrs Sandra Beaulieu
Chief Financial Officer
Mrs Beaulieu is a financial professional based in Calgary, Alberta, Canada with over 20 years' experience in the resource sector, both domestically and internationally. Her skills include controllership, treasury and internal control governance with extensive experience in North America. Sandra has held positions with international resource companies requiring her to oversee sound financial controls and her familiarity with and guidance of financial system implementation, upgrading and maintenance has given her a distinct advantage when advising and assisting emerging enterprises. As a consultant, Mrs Beaulieu has managed the entire financial function for a number of listed and/or quoted companies, TSX-V capital pool Companies and sole proprietorships.
Mr David Berg
Company Secretary and Non-Executive Director
Mr Berg is currently an independent businessman. He spent 28 years of consecutive service with one of Canada's largest publicly traded companies, serving in the capacity of vice president of operations. He managed a business unit with over C$1.5 billion in annual revenue and a total of 8500 employees. His corporate experience has encompassed financial, retail services and petroleum businesses. As a former chairman and Director of Potash One, he actively contributed to its successful development from an early stage exploration company to its acquisition by K & S of Germany for C$434 million in 2011. He is also the adviser, founder and Director of numerous other private and publicly traded companies. Currently, he operates a private consulting business specialising in the provision of management services and the development of business models for public and private companies.
Mr Adrian Reynolds
Mr Reynolds has an MSc in Geology, a Graduate Diploma of Mining Engineering and over 30 years' experience in the natural resources sector, including more than 15 years' experience with Randgold Resources Limited. At Randgold, he was part of the executive team that developed that company's original successful strategy whereby it grew from an exploration company to a very profitable mid-tier mining company. His key responsibilities included technical oversight of the mining operations including Feasibility studies, audits, compliance and evaluation of new opportunities. He was also a Director of Morila Ltd and Société des Mines de Loulo S.A. Mr Reynolds initially built his experience in both oil and coal exploration and then moved into deep level gold mining with Gencor Ltd in the Free State Goldfields. Joining Rand Mines Limited in 1985, he held positions in geological management in Rand Mines Limited and its successor Randgold & Exploration Company Limited. Mr Reynolds is currently an independent consultant and the Non-Executive Chairman of Digby Wells Environmental, one of the foremost mining environmental consultancies in Africa. He is also a Non-Executive Director of Aureus Mining.
Mr Eugene Chen
Mr Chen is an independent lawyer practicing corporate finance and securities law. Previous experience includes two years with McMillan LLP in Calgary, Alberta, Canada, six months with Heenan Blaikie LLP (subsequently dissolved), 3 years with Gowling Lafleur Henderson LLP, 5 years with Fraser Milner Casgrain LLP and 9 years with McLeod & Company LLP.
Office - Canada:
259 Windermere Road SW
P / F: +44 207 3722 744
Nominated Advisor and Broker:
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
100 New Bond Street
Canadian Legal Counsel to the Company:
Gowling Lafleur Henderson LLP
1600, 421-7 Avenue S.W.
Alberta T2P 4K9
English Solicitors to the Company:
Gowlings Wragge Lawrence Graham UK LLP
4 More London Riverside
Reporting Accountants to the Company:
55 Baker Street
300-111 Richmond SW
Canadian Registrars and Transfer Agent:
Computershare Trust Company of Canada
530-8th Avenue SW
UK Registrars and Transfer Agent:
Computershare Investor Services plc