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AIM Rule 26

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The information included in this section is disclosed pursuant to AIM Rule 26 of the AIM Rules for Companies and was last updated on 14.11.2017

Company Description:

Click HERE for a description of the Company

Director Biographies:

Click HERE for Director Biographies

Board Committees:

On Admission, the Board will consist of two executive directors and four non-executive directors of whom Derek Linfield, David Berg and Eugene Chen are considered by the Board to be independent. The non-executive Chairman Derek Linfield is responsible for leadership of the Board and for the efficient conduct of the Board's function. The Chairman is expected to encourage the effective contribution of all directors and promote constructive and respectful relations between Directors and senior management.

The Directors believe that they have sufficient experience in implementing accounting systems and controls which will provide a reasonable basis for them to make proper judgements as to the financial position and prospects of the Company.

Audit Committee:

The Audit Committee is chaired by David Berg and also includes Eugene Chen and Adrian Reynolds who all have previous knowledge of financial reporting and internal controls. The Audit Committee is responsible for reviewing a wide range of matters, including quarterly, interim and annual results before their submission to the Board, and for monitoring the controls that are in force to ensure the integrity of information reported to shareholders. The Audit Committee through its Chairman, reports to the Board at the earliest possible Board meeting after the Audit Committee meeting. The Audit Committee meets formally prior to the release of the quarterly, interim and annual financial results and following the annual audit prior to the release of the annual results and as required to discharge their duties. The Audit Committee advises the board on the appointment of external auditors and on their remuneration for both audit and non-audit work, and discusses the nature, scope and results of the audit with the external auditors. The Audit Committee's overall goal is to ensure that the Company adopts and follows a policy of proper and timely disclosure of material financial information and reviews all material matters affecting the risks and financial position of the Company

Remuneration Committee:

The Company's remuneration committee comprises of David Berg, Derek Linfield and Adrian Reynolds with Eugene Chen appointed as Chairman. The remuneration committee is to meet at such times as shall be determined by the remuneration committee and has as its remit the determination and review of amongst others, the remuneration of executives on the Board and any benefit plans of the company.

The Remuneration Committee assumes general responsibility for assisting the Board in respect of remuneration policies for the Company and to review and recommend remuneration strategies for the Company and proposals relating to compensation for the Company's officers, directors and consultants and to assess the performance of the officers of the Company in fulfilling their responsibilities and meeting corporate objectives. It will have the responsibility for, inter alia, administering share and cash incentive plans and programmes for Directors and employees and for approving (or making recommendations to the Board on) share and cash awards for Directors and employees.

Key Management Remuneration
Key Management of the Company are Directors and Officers and their personal compensation includes the following:
  For the year ended,   December 31, 2016   December 31, 2015 Total Accrued
Compensation
Management and consulting fees:      
  William Dawes 106,966 21,843 128,809
  Alexander Lemon 106,966 21,843 128,809
  Sandra Evans 24,327 21,644 -
Total Management and consulting fees 238,260 65,329 257,618
Share-based awards      
  William Dawes 35,855 12,854 -
  Alexander Lemon 35,855 12,854 -
  Derek Linfield 21,513 10,618 -
  David Berg 12,908 8,383 -
  Adrian Reynolds 12,908 8,383 -
  Eugene Chen 12,908 5,030 -
  Sandra Evans 4,303 - -
Total share-based awards 136,248 58,122 -


As at November 14, 2017, the following options were held by the Directors and Officers of the Company:
  Date of Grant(1) Exercise Price
Canadian Dollars
Number of
Options(2)
William Dawes June 15, 2016
Nov 1, 2017
$                   0.06
$ 0.07
1,750,000
705,000
Alexander Lemon June 15, 2016
Nov 1, 2017
$                   0.06
$ 0.07
1,750,000
705,000
Derek Linfield June 15, 2016
Nov 1, 2017
$                   0.06
$ 0.07
1,050,000
680,000
David Berg June 15, 2016
Nov 1, 2017
$                   0.06
$ 0.07
630,000
180,000
Adrian Reynolds June 15, 2016
Nov 1, 2017
$                   0.06
$ 0.07
630,000
180,000
Eugene Chen June 15, 2016
Nov 1, 2017
$                   0.06
$ 0.07
630,000
180,000
Sandra Evans (CFO) June 15, 2016
Nov 1, 2017
$                   0.06
$ 0.07
210,000
50,000
Total     9,330,000

1. At June 14, 2016, all outstanding options issued to Directors and Officers were cancelled.
2. The options vest over a 2 year period and are expensed using the black-scholes model.

Nominations Committee:

The Company considers that, at this this stage in its development, it is not necessary to establish a formal nominations committee. This decision will be kept under review by the Directors on an on-going basis.

AIM Rules Compliance Committee:

It is the intention of the Directors to establish an AIM Rules Compliance Committee that will, following Admission, ensure that procedures, resources and controls are in place to ensure AIM Rules compliance by the Company is operating effectively at all times and that the executive directors are communicating as necessary with the Company's Nominated Adviser regarding ongoing compliance with the AIM Rules and in relation to all announcements and notifications and proposed or potential transactions.

Country of Incorporation:

Canada (Alberta)

There are significant differences between UK corporate law and those applicable to the Company by means of its incorporation in Alberta, Canada.

Share Issues:

The Company is not required under Canadian law to offer new Common Shares to existing Shareholders on a pre-emptive basis as is required of companies incorporated under the UK Companies Act. The Company is subject to a number of anti-dilution provisions under the rules of the TSX-V. Should the Company cease to be listed on the TSX-V, the Company has undertaken pursuant to the nominated advisor and broker agreement to adopt appropriate anti-dilution provisions for as long as the Company remains on Aim.

Rule 17 of the Aim Rules:

When acquiring shares in the Company, shareholders are entitled under Canadian securities laws to categorise themselves as "objecting" ("Obos") or "non-objecting" ("Nobos"). By registering as such, which they usually do through the entity through which they acquired their shares, Obos are noting that they object to their interest and their details being disclosed to the Company. In respect of interests up to 10 percent of the issued share capital of the Company after which level Canadian securities law makes disclosure mandatory. Nobos on the other hand are noting the fact that they do not object to their shareholdings and their details being disclosed to the Company.

Rule 17 of the AIM Rules requires, inter alia, that an AIM quoted company must notify the market of any changes of which it is aware to its Shareholders' interests in three percent or more of the Common Shares and changes thereto ( of any movements through a percentage point upwards or downwards).The Shareholders approved on the 19th November 2015 a resolution, effective from Admission, to change the Company's constitution to require that Shareholders holding interests in three percent or more of the Company's Common Shares inform the Company thereof and to inform the Company of relevant subsequent changes thereto.

Country of Operation:

Malawi

Current constitutional documents:

Click HERE for the Articles of Incorporation and Bylaws

Trading Platforms:

The Company's Common Shares are also listed and posted for trading on the TSX Venture Exchange.

AIM Securities in Issue:

98,864,853

This section was updated on 14.11.2017.

Securities not in public hands:


31.5 %

This section was updated on 15th June 2016.

Restrictions on transfer of the Securities:

Trading restriction for onward sale of Placing Shares to residents of Canada is four months and one day post Admission, thereafter no restriction on transfer of Common Shares. No restrictions apply to existing shares (i.e. non Placing Shares) nor in respect of transfers occurring through CREST.

Significant Shareholders:
Shareholder Name Shares Held % Holding
Talaxis Ltd 14,285,715 14.4%
Resources Early Stage Opportunity Company Ltd 9,871,473 9.9%
Leo Mining & Exploration Limited (Note 1) 8,546,205 8.7%
Mr Myles McNulty 5,000,000 5.06%
JXC Ventures Ltd 3,635,000 3.7%
Jub Capital Ltd 3,005,659 3.04%
Rare Earth Elements Fund 3,000,000 3.03%
Metals Exploration Fund 3,000,000 3.03%

Note 1 : William Dawes and Alexander Lemon, both executive directors of Mkango, each hold a 17.3% interest in Leo Mining and Exploration Ltd

This section was last updated on 14.11.2017.

Financials:

Click HERE for the financial statements of the Company

Notifications:

Click HERE for all notifications made by the Company

Corporate Governance Code:

The Company is subject, among other laws and regulations, to instruments published by relevant Canadian securities regulators. One such instrument, NI 58-101 - Disclosure of Corporate Governance Practices, prescribes certain disclosure by the Company of its corporate governance practices in addition NP 58-201 - Corporate Governance Guidelines, provides non-prescriptive guidelines on corporate governance practices for reporting issuers such as the Company. This section sets out the Company's approach to corporate governance and addresses the Company's compliance with NI 58-101 and NP 58-201.

As a result of its listing on the TSX-V and being a reporting issuer in the Canadian province of Alberta, the Company has already established corporate governance practices and procedures appropriate for a publicly listed company of its size and stage. The Company complies with relevant Canadian corporate governance standards to the extent that the Directors reasonably consider appropriate for a company of Mkango Resources' size and type. In particular, the Company has established and properly constituted an Audit Committee and a Remuneration Committee and it is the intention of the Directors to establish an AIM Rules Compliance Committee following Admission with formally delegated duties and responsibilities. Pursuant to the Business Corporations Act (Alberta) and the Company's current bylaws, not less than 25 percent of the members of each of these committees must be Canadian residents.

Takeover Code:

The Company is not subject to the UK City Code on Takeovers and Mergers. As a company incorporated in Alberta and listed on the TSX Venture Exchange, it falls under the Canadian law. However, Canadian laws applicable to the Company provide for early warning disclosure requirements and for takeover bid rules made to security holders in various jurisdictions in Canada.

Admission Document and Circulars:

Click HERE for the Company's AIM admission document.

Key Advisers:

Nominated Advisor and Broker:


SP Angel Corporate Finance LLP

Prince Frederick House

35-39 Maddox Street

London

W1S 2PP

Placing Agent:

Jub Capital

100 New Bond Street

London

W1S 1SP

Canadian Legal Counsel to the Company:

Gowling Lafleur Henderson LLP

1600, 421-7 Avenue S.W.

Calgary

Alberta T2P 4K9

Canada

English Solicitors to the Company:

Gowlings Wragge Lawrence Graham UK LLP

4 More London Riverside

London

SE1 2AU

Reporting Accountants to the Company:

BDO LLP

55 Baker Street

London

W1U 7EU

Auditor:

MNP LLP

300-111 Richmond SW

Toronto, ON

M5H 2G4

Canadian Registrars and Transfer Agent:

Computershare Trust Company of Canada

Suite 600

530-8th Avenue SW

Calgary

Alberta

TSP 3S8

UK Registrars and Transfer Agent:

Computershare Investor Services plc

The Pavillions

Bridgewater Road

Bristol

BS99 6ZZ