logo-loader
viewMkango Resources Ltd

Mkango Resources on 'clearly defined pathway' to production with drilling at Songwe Hill underway

Mkango is now well underway with the largest drill programme to date at Songwe

Mkango
The drilling programme at Songwe beginning to yield results

Mkango Resources Ltd (LON:MKA) said it has a “clearly defined pathway to production” after it kicked off a major diamond drilling programme at the Songwe Hill rare earths project in Malawi earlier this year.

The drilling programme is for 10,000 metres and is focused on infill, step-out and geotechnical drilling.

More than 50 drill pads have been constructed along with new access roads and enlarged camp infrastructure.

Mkango is targeting completion of an updated mineral resource estimate by the end of 2018.

The drilling programme is a key component for the feasibility study for Songwe, which is being fully funded by Noble Group Ltd subsidiary Talaxis.

Development deal with Talaxis

At the end of January, Talaxis invested an initial £5mln into Lancaster Exploration Limited - the subsidiary which holds the licence for Songwe Hill - in return for a 20% interest in the business.

Talaxis also invested £1mln into a new Mkango subsidiary, Maginito Limited, in return for a 24.5% interest in Maginito.

Once the updated resource estimate has been delivered, Talaxis can increase its stake in Lancaster to 49% through investing a further £7mln with an option to go up to 75% once the 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 take Talaxis’ stake to 49%.

Largest drill programme to date at Songwe

Among the most recent intercepts were 147.2 metres at 1.6% total rare earth oxides (TREO) and 91 metres at 1.5% TREO.

The latest results go to support the company's vision of a bulk tonnage operation, although we'll have to wait for the feasibility study to see how the numbers play out

“Mkango is fully funded to completion of a feasibility study with a clearly defined pathway to production,” said Dawes.

“We look forward to keeping the market updated as we progress through the drilling programme and other major milestones."

Quick facts: Mkango Resources Ltd

Price: 4.65 GBX

LSE:MKA
Market: LSE
Market Cap: £6.18 m
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Mkango Resources Ltd named herein, including the promotion by the Company of Mkango Resources Ltd in any Content on the Site, the Company...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Mkango Resources' Will Dawes welcomes launch of innovative rare earth...

Mkango Resources Ltd's (LON:MKA)(CVE:MKA) Will Dawes caught up with Proactive's Andrew Scott following the launch of its Innovate UK grant-funded project "Rare-Earth Recycling for E-Machines" (RaRE). Dawes adds they've been continuing work on the feasibility study at Songwe Hill with...

on 2/6/20

2 min read