Mkango Resources Ltd on Monday said it has raised £3.5 million through a placing and subscription of 28.0 million new shares at a price of 12.5 pence each.
The placing price represents a 24% discount to Friday’s closing price of 16.50 pence per shares. Shares in the Vancouver-based mineral exploration and development company were down 21% at 13.00p each in London on Monday morning.
Mkango said it will use the proceeds on ‘catalysing near term milestones for the company’s mining and recycling assets’. It said this includes finalisation of the mine development agreement for the Songwe Hill rare earths project with the government of Malawi, as well as the development of a new rare earth magnet recycling facility in Germany by HyProMag GmbH.
At the end of January, Mkango said the Malawi Environment Protection Agency approved the environmental social health impact assessment for the Songwe Hill rare earths project. The project is in the Phalombe district of the east African country.
Looking ahead, Mkango said it is continuing to advance discussions with potential lenders and strategic investors for the Songwe Hill rare earths project and the Pulawy Separation Project in Poland.
The company added that in connection with the placing, Mkango subsidiary Maginito Ltd has entered into a convertible loan agreement with HyProMag. Under the agreement, Maginito will be able to acquire up to a 50% interest, which will, if converted, result in Maginito holding a direct and indirect interest in HyProMag GmbH of 66.8%.
Chief Executive William Dawes said: ‘I am very pleased to welcome new institutional and private investors to the shareholder base and thank existing shareholders for their strong support for this oversubscribed fund raising. This positions the Company for some major upcoming milestones, as negotiations for the Mine Development Agreement approach their conclusion, and to capitalise on its early mover advantage in rare earth magnet recycling with potential for near term production.’
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