JOHANNESBURG (miningweekly.com) – Noble Group subsidiary Talaxis has entered into definitive agreements with Mkango Resources to acquire up to a 75% interest in Mkango’s Lancaster Exploration subsidiary, as well as a 49% stake in its downstream metals division Maginito Investments.
In January, Talaxis paid Mkango £5-million in return for a 20% stake in Lancaster, which holds the licence for the Songwe Hill rare earths project, in Malawi.
Mkango will start a major drilling programme at Songwe shortly, and is targeting the completion of an updated mineral resource estimate by the end of this year.
Once Mkango publishes the National Instrument 43-101-compliant technical report in relation to the updated mineral resource estimate, Talaxis will invest an additional £7-million to fund the completion of a feasibility study for a further 29% interest in Lancaster.
On completion of the feasibility study, Talaxis will have the option to acquire a further 26% interest in Lancaster by arranging funding for 100% of remaining project development costs, thereby, increasing its aggregate interest to 75%.
If Talaxis exercises its option, Mkango will retain a 25% interest, free carried to production.
Mkango is targeting completion of a feasibility study for Songwe by the end of 2019.
Meanwhile, Talaxis in January also invested £1-million in return for a 24.5% interest in Maginito. On successful completion of the second phase of the research and development programme with Metalysis, Talaxis will invest an additional £1-million for a further 24.5% interest, increasing its total interest in Maginito to 49%.
Maginito is focused on downstream opportunities relating to the rare earths supply chain, specifically neodymium alloy powders, magnet and other technologies pertaining to the electric vehicle market.
It is collaborating with Metalysis on advanced alloys using neodymium or praseodymium with other elements for permanent magnet manufacturing.
Talaxis and Mkango also committed to being each other's preferred partner for all rare earths projects, as well as for all activities in Malawi.
"Following the signing of the definitive agreements, Mkango has a clearly defined pathway to production against the backdrop of a strong outlook for rare earths geared to the electric vehicle market,” said Mkango CEO William Dawes, adding that the company looks forward to working with Talaxis to develop Songwe as a long-term, sustainable producer of rare earths and complementary downstream technologies through Maginito.
Talaxis executive director Daniel Mamadou added that the company is pleased to sign the definitive agreements with Mkango. “Our focus is to ensure that our clients can benefit from a supply chain specialised in technology metals that is reliable and resilient to external shocks."