Mkango Resources (CVE:MKA) announced a non-brokered placing to raise up to C$1.5 million, replacing a previous C$500,000 financing announced last April 16, to further advance its Songwe Hill rare earth project in Malawi.
The Canadian rare earth miner will use the funds to continue flow sheet optimization, complete aspects of the Environmental, Social and Health Impact assessment and drill hole planning, all of which are necessary to complete the feasibility study.
Mkango also said it would use some of the proceeds to address any non - contingent fees payable in connection with a proposed listing on the AIM board of the London Stock Exchange.
The firm is issuing up to 60 million units at C$0.025 each for gross proceeds of up to C$1.5 million after the Venture exchange agreed to waive its requirement that Units have a minimum issue price of C$0.05.
Each unit consists of one common share and one purchase warrant for a share in Mkango, entitling the holder to acquire one share for C$0.05 for three years following the closing date of the placing.
Mkango announced a positive pre-feasibility study in September 2014 the highlights of which are a US$293 million after-tax net present value and 36% after-tax internal rate of return (IRR), marked by an initial capital investment of US$217 million, one of the lowest in the rare earth industry.
The company’s 100% owned Songwe Hill Rare Earth Project is located in southeastern Malawi and it is easily accessible by road from Zomba, the former capital, and Blantyre, the African country’s most important business town.