Major Mkango shareholder agrees to cashless exercise of warrant
TSX-V- and Aim-listed Mkango Resources has announced that a significant shareholder Talaxis has agreed to amend the terms of a warrant held by it to enable a cashless exercise, in an effort to minimise dilution to Mkango shareholders.
The warrant had been due to expire on December 31.
Under the terms of the amendment, Talaxis has agreed to a cashless exercise of the warrant for one-million common shares, in lieu of payment for 12-million shares at 6.6p apiece. This avoids dilution to shareholders and Mkango issuing 12-million shares at a significant discount to the current market price of the company.
Following the issuance of the shares to Talaxis, its ownership will increase from about 14.2-million shares to 15.2-million shares, representing an increase from 10.7% ownership to 11.3% ownership.
Talaxis maintains its 49% ownership in the Songwe Hill rare earths project, in Malawi, and its option to acquire a further 26% interest in the project by arranging financing for project development, including funding the equity component thereof.
Mkango CEO William Dawes says the cashless warrant exercise agreed with Talaxis minimises potential dilution to other Mkango shareholders as the company enters a transformational period of growth.
The company this year expects results from an ongoing feasibility study for the Songwe Hill project and the recently completed rutile exploration programme in Malawi, and developments in relation to subsidiary Maginito and its interest in UK rare earth magnet recycler, HyProMag.
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