Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF) has signed a project development funding agreement with the US International Development Finance Corporation (DFC) for $4.6 million to support the Songwe Hill rare earth project in Malawi.
The reimbursable funding will be used to advance front-end engineering design (FEED) and value engineering studies for the project.
Mkango’s subsidiary, Lancaster Exploration Limited, will match the DFC’s contribution over an 18-month period. Repayment of the funding will only be required if Mkango secures construction or operational financing within 10 years of the agreement. The DFC will also retain the option to provide or arrange future financing for the project under commercial terms.
"The DFC recognises the game-changing development potential of the Project and this initial Project Development Funding provides a path for MKAR to secure the longer-term development funding needed to develop Songwe Hill and position the Mkango group as one of the few key players in the global rare earth supply chain," said Mkango president Alexander Lemon.
In London, Mkango shares were on the front foot changing hands at 45.89p.