Acquisition of Principal Shareholder of Malawi-Focussed Mkango Resources will not proceed

Mkango

Malawi has been making headlines this year as a potential lead producer in rare earths. This pronouncement has been heralded by the CEO and president of Mkango Resources, the Toronto-listed firm that is in the advanced stages of a pre-feasibility study of its flagship Songwe Hill rare earths project in Malawi.

In July 2013, the company indicated that Leo Mining and Exploration (Leominex), the principal shareholder of Mkango, was set to be acquired by Forte Energy. However, yesterday (16 September 2013), Mkango announced that the acquisition will not proceed. No further information has been provided.

According to Mkango’s Corporate Update,

Mkango continues to work towards completion of its pre-feasibility study (“PFS”) for the Songwe Hill rare earth project. The Company recently appointed SNC-Lavalin (Pty) Ltd to complete various aspects of the PFS, including the beneficiation and hydrometallurgical process plants and project infrastructure.

It holds, through its wholly owned subsidiary Lancaster Exploration Limited, a 100% interest in two exclusive prospecting licenses covering a combined area of 1,751 km² in southern Malawi. The main exploration target is the Songwe Hill rare earth deposit, which features carbonatite hosted rare earth mineralisation and was subject to previous exploration in the late 1980s.

Also in July 2013, Mkango released its base case metallurgical flow sheet, which indicates that the company project at Songwe Hill in Phalombe, Malawi, will produce high-grade rare earths.

Mkango has 100% interest in two exploration licences in Malawi in Phalombe and Mwanza Districts through Lancaster Exploration Limited (incorporated in Blantyre in May 2011), a wholly-owned subsidiary of Lancaster Exploration. Lancaster Exploration, incorporated in August 2007 in the British Virgin Islands, is a wholly-owned subsidiary of Mkango.

For further information about the activities of Mkango and subsidiaries, read the company’s Consolidated Financial Statements and Management Discussion and Analysis from June 2013.

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