Mkango Raises £1.25M (C$2.19M) from Existing Shareholders and IN Addition, €0.20M (C$0.30M) from Eit Rawmaterials to Advance Its Portfolio of Advanced Stage Strategic Rare Earth Assets
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MKANGO RESOURCES LTD.
550 Burrard Street
Suite 2900
Vancouver
BC V6C 0A3
Canada
MKANGO RAISES £1.25M (C$2.19M) FROM EXISTING SHAREHOLDERS AND IN ADDITION, €0.20M (C$0.30M)
FROM EIT RAWMATERIALS TO ADVANCE ITS PORTFOLIO OF ADVANCED STAGE STRATEGIC RARE EARTH
ASSETS
Highlights
• Mkango Resources (“Mkango” or the “Company”) has conditionally raised gross proceeds of £1.25M
(C$2.19M) via a direct Company subscription from existing shareholders (the “Subscription”).
• EIT RawMaterials GmbH (“EIT RawMaterials”) will , subject to the approval of the Toronto Venture
Exchange (TSX-V), provide additional funding of €200,000 (C$302,000) and receive a 5.7% interest in
Mkango Polska sp. z o.o. (“Mkango Polska”), currently a 100% held subsidiary of Mkango developing
the Pulawy Rare Earths Separation Project in Poland (the “Pulawy Project”), which will fund
commencement of process optimisation for the Songwe Hill Rare Earths Project (the “Songwe Project”)
in Malawi, a future source of mixed rare earth carbonate feed for the Pulawy Project.
• EIT RawMaterials is an impact investor, and provides strategic support to start -up and scale -up
projects across metals and minerals value chain. EIT RawMaterials was established in 2015 to develop
raw materials into a major strength for Europe by driving innovation, education, and
entrepreneurship. EIT RawMaterials is the acting legal entity of the K nowledge and Innovation
Community “EIT RawMaterials” comprising some 300 members from industry, university and research
and development in the raw materials sector collaborating with the European Institute of Innovation
and Technology, and co -funded by the European Union, and mandated to lead the European Raw
Materials Alliance.
• Last month’s signing of the Mine Development Agreement (‘’MDA’’) for the Songwe Project and the
opportunity to progress process optimisation through the investment by EIT RawMateria ls enhance
options for the Songwe and Pulawy Projects in conjunction with the ongoing strategic review.
• In parallel, discussions continue with potential strategic investors, project finance providers, grant
funding bodies and other sources to finance recy cling scale-up opportunities and further technology
roll-out.
• Use of proceeds from the Subscription include the acquisition of additional equipment for the 2025
commercial development of rare earth magnet recycling operations at Tyseley Energy Park in
Birmingham, UK and at Pforzheim, Germany , by HyProMag Limited (“HyProMag”) and HyProMag
GmbH, respectively, in addition to working capital.
• The Company continues to put a strong focus on cost cutting initiatives to conserve working capital in
order to advance the Company’s assets , and e xecutive management have agreed to continue the
salary reductions and bonus scheme announced on 10th May 2024.
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London / Vancouver: August 21, 2024 – Mkango Resources Ltd. (AIM/TSX-V: MKA) is pleased to announce that
it has conditionally raised gross proceeds of £1.25 million (approximately C$2.19 million) through the issuance,
on a private placement basis, of 25,000,000 Units of the Company at a price of £0.05 per Unit (approximately
C$0.088). A Unit comprises one common share of the Company (the “Subscription Share”) and one warrant (the
“Warrant”). Each Warrant will entitle the holder to acquire one common share at a price of £0.07 per common
share (“Mkango Share”) for a period of 3 years following the closing of the Subscription . EIT RawMaterials will
provide funding of €200,000 (C$302,000) and receive a 5.7% interest in Mkango Polska, currently a 100% held
subsidiary of Mkango. EIT RawMaterials’ interest in Mkango Polska is convertible into common shares of Mkango
(“Mkango Shares”) by no later than 30 November 2024 or such later time as the parties may agree in writing at
the prevailing market price of Mkango Shares (subject to a minimum price of C$0.115 per Mkango Share) via put
and call options exercisable by either Mkango or EIT RawMaterials.
William Dawes, Chief Executive of Mkango stated: “In light of progress being made by HyProMag as it progresses
towards commercialisation of rare earth magnet recycling in the UK and Germany and completion of the USA
feasibility study, and with the recent s igning of the Min e Development Agreement for Songwe, existing
shareholders were happy to continue to support the Company with further investment at a minimal discount to
prevailing prices. Furthermore, the investment by EIT RawMaterials further highlights the strategic importance
of Songwe and Pulawy to the strengthening of rare earth supply chains in Europe and beyond.
‘’Since obtaining the MDA for Songwe last month, we now believe there is additional value to be unlocked from
both Songwe and Pulawy which is not reflected in our current market capitalisation and will be considered in our
review of strategic options for the project . Nevertheless, our current focus remains on advancing our recycling
business to commercial production – the see-through valuation for Mkango’s interest in Maginito implied by the
CoTec investment alone was £15 million in March 2023 with significant progress made by Maginito since then.”
The Subscription
The issue price equates to a discount of 4% and 22.1% to the trailing five-day volume weighted average price
(“VWAP”) of Mkango’s shares on AIM and TSX-V respectively.
The Subscription is expected to close on or around 5 September 2024 and is subject to the receipt of all necessary
approvals including the approval of the TSX-V, and admission of the Subscription Shares to trading on AIM.
The 25,000,000 Subscription Shares will rank pari passu with the Company’s existing shares and application will
be made for the Subscription Shares to be admitted to trading on AIM ( “Admission”). It is expected that
Admission will become effective and dealings in the Subscription Shares will commence at 8:00am on or around
5th September, 2024. The Subscription Shares and Mkango Shares issuable pursuant to exercise of the Warrants
will be subject to a statutory hold period in Canada expiring on the date that is four months and one day from
issuance of the Subscription Shares and Warrants and will also be listed for trading on the TSX-V, provided that
approval of such listing from the TSX-V is obtained.
In accordance with the Disclosure Guidance and Transparency Rules (DTR 5.6.1R) the Company hereby notifies
the market that immediately following Admission of the Subscription Sha res, its issued and outstanding share
capital will consist of 293,453,574 Mkango S hares. The Company does not hold any shares in treasury.
Shareholders may use this figure as the denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct
Authority’s Disclosure and Transparency Rules.
In connection with the Subscription, Mkango has agreed to pay, at completion of the Subscription, commissions
of 5% in cash and 5% in non-transferable broker warrants (“Broker Warrants”) to Jub Capital Management LLP
(“Jub Capital”) on funds raised by Jub Capital. The Broker Warrants will have a term of 3 years from issue and an
exercise price of 5p each (approximately C$ 0.088). The total number of Broker Warrants to be issued on
completion of the Subscription is 1,250,000. Payment of the commissions (and issuance of the Broker Warrants)
to Jub Capital is subject to acceptance of the TSX -V. The Mkango Shares issuable pursuant to exercise of the
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Broker Warrants will be subject to a statutory hold period in Canada expiring on the date that is four (4) months
and one day from issuance of the Broker Warrants.
The EIT RawMaterials Investment
In addition to the Subscription, Mkango Polska will, subject to TSX -V approval, receive further funding of
€200,000 from EIT RawMaterials. EIT RawMaterials is a European innovation initiative that aims to develop raw
materials into a major strength for Europe. It focuses on responsible sourcing, sustainable materials and circular
societies for a carbon-neutral future.
This funding will be used to optimise the chemical and physical properties of the raw material, specifically mixed
rare earth carbonate sourced from Songwe Hill in Malawi, in preparation for the production of rare earth oxides
at the planned Pulawy Project in Poland.
The funding is structured as a combination of equity and grant funding. EIT RawMaterials will be issued with 6
new shares in Mkango Polska resulting in a 5.7% interest in Mkango Polska for PLN300. Concurrently, a grant of
€200,000 will be awarded to Mkango Polska by EIT RawMaterials. €150,000 of this grant is payable immediately
and €50,000 is payable upon final approval of the final project report scheduled by no later than 30 June 2025.
A put and call agreement has been entered into between EIT RawMaterials and Mkango, whereby both the
equity investment and grant can be converted, subject to TSX-V approval, at either parties' option into Mkango
Shares no later than 30 November 2024 or such later time as the parties may agree in writing.
The number of Mkango Shares to be issued to EIT RawMaterials shall be determined by dividing the sum of
€200,000 and PLN 300 converted to Canadian dollars by the closing price of a Mkango Share on the TSX-V on the
day before the date of conversion, subject to a minimum share price of C$0.115.
About Mkango
Mkango is listed on the AIM and the TSX -V. Mkango’s corporate strategy is to become a market leader in the
production of recycled rare earth magnets, alloys and oxides, through its interest in Maginito Limited
(“Maginito”), which is owned 79.4 per cent by Mkango and 20.6 per cent by CoTec, and to develop new
sustainable sources of neodymium, praseodymium, dysprosium and terbium to supply accelerating demand
from electric vehicles, wind turbines and other clean energy technologies.
Maginito holds a 100 per cent interest in HyProMag and a 90 per cent direct and indirect interest (assuming
conversion of Maginito’s convertible loan) in HyProMag GmbH, focused on short loop rare earth magnet
recycling in the UK and Germany, respectively, and a 100 per cent interest in Mkango Rare Earths UK Ltd
(“Mkango UK”), focused on long loop rare earth magnet recycling in the UK via a chemical route.
Maginito and CoTec are also rolling out HyProMag’s recycling technology into the United States via the 50/50
owned HyProMag USA LLC joint venture company. HyProMag is also evaluating other jurisdictions, and recently
launched a collaboration with Envipro on rare earth magnet recycling in Japan.
Mkango also owns the advanced stage Songwe Hill rare earths project and an extensive rare earths, uranium,
tantalum, niobium, rutile, nickel and cobal t exploration portfolio in Malawi, and the Pulawy rare earths
separation project in Poland.
For more information, please visit www.mkango.ca
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR') which has been
incorporated into UK law by the European Union (Withdrawal) Act 2018. Upon the publication of this
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announcement via Regulatory Information Service, this inside information is now considered to be in the public
domain.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward -looking statements (within the meaning of that term under applicable
securities laws) with respect to Mkango. Generally, forward looking statements can be identified b y the use of
words such as “targeted”, “plans”, “expects” or “is expected to”, “scheduled”, “estimates” “intends”,
“anticipates”, “believes”, or variations of such words and phrases, or statements that certain actions, events or
results “can”, “may”, “coul d”, “would”, “should”, “might” or “will”, occur or be achieved, or the negative
connotations thereof. Readers are cautioned not to place undue reliance on forward -looking statements, as
there can be no assurance that the plans, intentions or expectations u pon which they are based will occur. By
their nature, forward -looking statements involve numerous assumptions, known and unknown risks and
uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts,
projections and other forward -looking statements will not occur, which may cause actual performance and
results in future periods to differ materially from any estimates or projections of future performance or results
expressed or implied by such forward -looking statements. Such factors and risks include, without limiting the
foregoing, the availability of (or delays in obtaining) financing to develop the Songwe Hill Project, the various
recycling plants in the UK, Germany, governmental action and other market effects on global demand and pricing
for the metals and associated downstream products for which Mkango is researching and developing, , the ability
to scale the HPMS and chemical recycling technologies to commercial scale, competitors having greater financial
capability and effective competing technologies in the recycling and separation business of Maginito, availability
of scrap supplies for recycling activities, government regulation (including the impact of environmental and other
regulations) on and the economics in relation to recycling and the development of the various recycling plants
of Maginito and future investments in the United States pursuant to the cooperation agreement between
Maginito and CoTec, the outcome and timing of the completion of the feasibility studies, cost overruns,
complexities in building and operating the plants, and the positive results of feasibility studies on the various
proposed aspects of Maginito’s activities. The forward -looking statements contained in this news release are
made as of the date of this news release. Except as required by law, the Company disclaims any intention and
assume no obligation to update or revise any forward -looking statements, whether as a result of new
information, future events or otherwise, ex cept as required by applicable law. Additionally, the Company
undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of
the matters discussed above.
For further information on Mkango, please contact:
Mkango Resources Limited
William Dawes Alexander Lemon
Chief Executive Officer President
[email protected] [email protected]
Canada: +1 403 444 5979
www.mkango.ca
@MkangoResources
SP Angel Corporate Finance LLP
Nominated Adviser and Joint Broker
Jeff Keating, Caroline Rowe
UK: +44 20 3470 0470
Alternative Resource Capital
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Joint Broker
Alex Wood, Keith Dowsing
UK: +44 20 7186 9004/5
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. Neither
the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any equity or other
securities of the Company in the United States. The securities of the Company will not be registered under the
United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold within
the United States to, or for the account or benefit of, U.S. persons except in certain transactions exempt from the
registration requirements of the U.S. Securities Act.