Leo Mining and Exploration (Leominex), the principal shareholder in Toronto-listed Mkango Resources, is set merge with Forte Energy. Mkango Resources is currently in an advanced stage in its pre-feasibility study of its wholly-owned Songwe Hill rare earths project in Malawi. This is one of two areas Mkango has been awarded a concession to explore within Malawi’s borders.
Forte Energy, registered on the Australian Securities Exchange and London Stock Exchange AIM, is acquiring unlisted British Virgin Islands registered company Leominex which has a 48 percent stake in Mkango Resources. The conditions of the proposed acquisition are clearly outlined in Forte Energy’s company announcement (11 July 2013). The proposal will have to be agreed on by the shareholders of Forte, Leominex and Mkango. Mkango also produced a news release to notify shareholders.
Forte Energy has uranium assets in Mauritania and Guinea with initial exploration work indicating the potential for rare earths. The proposed transaction will make Forte an indirect 48 percent shareholder of Mkango. Leominex, which currently has a 48 percent stake in Mkango, also holds approximately 8 percent of the shares in Signet Mining Services. Signet Mining Services is focussed on uranium exploration and development in Niger (seven 100 percent owned exploration licences) and Chad (four 100 percent owned exploration licences).
Mkango Resources’ President, Alex Lemon, and Chief Executive Officer, William Dawes, are among the 55 shareholders of Leominex. They both have approximately a 17-percent share in Leominex and they will thus hold around 8 percent of the expanded Forte Energy share capital on completion of the proposed acquisition.
Managing Director for Forte Energy, Mark Reilly, explained the impact of the acquisition
The proposed transaction to acquire Leominex would create an African focussed uranium and rare earth explorer and developer with an enhanced portfolio of project interests and the technical expertise and financial strength to advance its assets towards production.
In addition, the combined business will benefit from deeper technical expertise and a board with experience in developing and building numerous projects.
Recent work at Songwe Hill indicates that Mkango Resources can produce a high grade rare earth product from the ore. Mkango’s CEO explained the implications of this new base case metallurgical flow sheet
This is a major milestone in the development of the Songwe Hill rare earth project and the company is now well positioned to further progress discussions with potential strategic investors, separation facilities and off-take partners.
Mkango has delineated a significant Indicated and Inferred rare earth resource at Songwe and is spearheading development of a major, world class rare earth mineral province in Malawi.
The initial concept test work indicates that Mkango Resources’ President’s suggestion that Malawi could become “the rare earth centre of Africa, if not the world” may not be too ambitious.