Mkango Continues to Identify New Zones of Mineralisation in Latest Drill Results from the Songwe Hill Rare Earths Project in Malawi
London / Calgary: November 7, 2018 - Mkango Resources Ltd. (AIM / TSXV: MKA) (the "Company" or "Mkango"), the rare earths exploration and development company focused on Malawi, is pleased to announce results for a further forty-five drill holes from the recently completed 10,900 metre diamond drill programme at the Songwe Hill Rare Earths Project ("Songwe"). Thirty-nine of the drill holes intersected significant zones of rare earths mineralisation grading above one per cent total rare earth oxides ("TREO"). The drilling programme is a key component of the ongoing initial phases of the Feasibility Study for Songwe, fully funded following investments by Mkango's strategic partner, Talaxis Limited, in January 2018.
Highlights from the results include the following:
|PX056||114.8 m grading 1.6% TREO (60.7 - 175.5 m) including 30.0 m grading 2.0% TREO (135.0 - 165.0 m). Inclined hole (60 degrees west).|
|PX059||63.0 m1 grading 1.7% TREO (6.0 - 69.0 m), including 23.0 m2 grading 2.3% TREO (7.0 - 30.0 m), and 15.4 m grading 1.6% TREO (128.0 - 143.4 m). Inclined hole (60 degrees west).|
|PX073||67.1 m grading 1.6% TREO (8.8 - 75.9 m) including 25.2 m grading 2.0% TREO (45.0 - 70.2 m). Inclined hole (60 degrees west).|
|PX076||40.2 m grading 1.8% TREO (60.4 - 100.7 m) including 20.0 m grading 2.4% TREO (60.4 - 80.4 m). Inclined hole (60 degrees west).|
|PX077||51.9 m3 grading 1.7% TREO (26.2 - 78.0 m). Inclined hole (60 degrees west).|
|PX090||25.7 m4 grading 3.9% TREO (39.5 - 65.2 m). Inclined hole (60 degrees west).|
|PX098||65.0 m5 grading 1.7% TREO (1.1 - 66.0 m) and 13.1 m grading 1.2% TREO (115.0 - 128.1 m). Inclined hole (60 degrees south).|
|PX103||165.2 m grading 1.6% TREO (2.6 - 167.8 m). Inclined hole (60 degrees east).|
|PX107||91.3 m6 grading 1.3% TREO (23.0 - 114.2 m) including 32.2 m7 grading 1.9% TREO (82.0 - 114.2 m). Inclined hole (60 degrees east).|
|PX108||45.8 m grading 1.4% TREO (8.2 - 54.0 m) and 57.3 m grading 1.7% TREO (76.9 - 134.2 m). Inclined hole (60 degrees east).|
|PX113||51.1 m8 grading 2.2% TREO (4.7 - 55.8 m). Inclined hole (50 degrees north).|
1 Includes two cavities totaling 5.9m not sampled. 2 Includes a 2.5m cavity not sampled. 3 Includes a 2.7m cavity not sampled. 4 Includes a 6.3m cavity not sampled. Due to the size of the cavity, the significance of this intersection is uncertain. 5 Includes a 2.3m cavity not sampled. 6 Includes two cavities totaling 2.3m not sampled. 7 Includes a 0.9m cavity not sampled. 8 Includes two cavities totaling 10.0m not sampled. Due to the size of the cavities, the significance of this intersection is uncertain. TREO: total rare earth oxides based on total La2O3, Ce2O3, Pr2O3, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3. These intersections are reported as down hole widths and do not necessarily represent true thicknesses and attitude of the mineralised zones, the estimation of which will require further refining of the geological model.
William Dawes, Chief Executive Officer, commented: "This is another excellent set of results from the now completed drilling programme at Songwe, which further demonstrates broad mineralised zones with continuity of mineralisation, and will underpin the resource update. The latter will commence on receipt of the assay results from the remaining 21 drill holes yet to be announced."
"Following the resource update and on subsequent publication of the related NI 43-101 technical report, anticipated in first quarter 2019, Talaxis will invest a further £7 million to fund completion of the Feasibility Study for Songwe, which will be the main focus for 2019. We look forward to announcing the remaining drill results in the coming weeks."
- The drill programme comprised infill drilling to confirm and upgrade the existing Indicated and Inferred Mineral Resource Estimates, testing extensions to the mineralisation, and geotechnical drilling.
- Drill holes PX072, PX073, PX084, PX085, PX088, PX090, PX091, PX094, PX095, PX119, PX120 and PX121 were step-out holes focused on testing north-west extensions of the mineralisation.
- Of these twelve drill holes, nine intersected broad zones of mineralisation, including the highest grade intersection of the current drill programme to date in PX090. Furthermore, this new zone of higher grade mineralisation in PX090 is located outside both the area of previously mapped carbonatite and the existing Indicated and Inferred Mineral Resource Estimates.
- The mineralised intersection in PX113 indicates the extension of the higher grade "black carbonatite" zone, located in the north-east as indicated on the accompanying geological map on the Company's website, to the north under cover.
- Drill holes PX038, PX039, PX040 and PX041 were step-out drill holes, focused on testing extensions of mineralisation to the south. The intersections in PX039 and PX040 further indicate that mineralisation may extend to the south beyond the limits of the existing Indicated and Inferred Mineral Resource.
- The remaining drill holes were focused on infill zones within the existing Indicated and Inferred Mineral Resource Estimates.
- Intersections of broad zones of mineralisation, as opposed to narrow veins or dykes, continue to support the concept of a bulk tonnage, open pit mining operation with low mining costs.
A schematic geological map illustrating the location of the drill hole collars and estimated drill hole traces is available on the Company's website (www.mkango.ca). The full set results and breakdown of TREO values are as follows:
Scientific and technical information contained in this release including sampling, analytical, and test data underlying the information has been approved and verified by Dr. Scott Swinden PGeo of Swinden Geoscience Consultants Ltd, who is a "Qualified Person" in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects.
Sample preparation and analytical work for the drilling and channel sampling programmes are being provided by Intertek-Genalysis Laboratories (Perth, Australia) employing ICP-MS techniques suitable for rare earth element (REE) analyses and following strict internal QAQC procedures inserting duplicates, blanks and standards. Internal Laboratory QAQC was also completed to include blanks, standards and duplicates.
About Mkango Resources Limited
Mkango's primary business is exploration for rare earth elements and associated minerals in the Republic of Malawi, a country whose hospitable people have earned it a reputation as "the warm heart of Africa". The Company holds interests in three exclusive prospecting licenses in Malawi, the Phalombe licence, the Thambani licence and the Chimimbe Hill licence.
The main exploration target in the 80% held Phalombe licence is the Songwe Hill rare earths deposit, which features carbonatite-hosted rare earth mineralisation and was subject to previous exploration in the late 1980s. Mkango completed an updated Pre-Feasibility Study for the project in November 2015 and a Feasibility Study is currently underway, the initial phases of which include the recently completed 10,900 metre drilling programme.
Under the terms of an agreement with Talaxis, Talaxis will fully fund the Feasibility Study for Songwe by investing £12 million for a 49% interest in the project (via Mkango subsidiary Lancaster Exploration Ltd). Talaxis will also have the option to acquire a further 26% interest by arranging funding for project development including funding the equity component thereof. If Talaxis exercises its option, Mkango will retain a 25% interest, free carried to production. To-date, Talaxis has invested £5 million, which is funding the initial phase of the Feasibility Study, for a 20% interest in the project, with Mkango holding 80%.
By investing a further £2 million, Talaxis will acquire a 49% interest in Maginito Ltd, a new subsidiary of Mkango focused on neodymium alloy powders, magnets and other technologies. This includes the collaboration with Metalysis Ltd announced in September 2017, which is focused on advanced alloys using neodymium or praseodymium with other elements for permanent magnet manufacturing. Permanent magnets are critical materials for most electric vehicles, direct drive wind turbines and many other high growth applications. Neodymium is a key rare earth component at Songwe. To date, Talaxis has invested £1 million for a 24.5% interest in Maginito with Mkango holding 75.5%.
The main exploration targets in Mkango's remaining two 100% held licences are, in the Thambani licence, uranium, niobium, tantalum and zircon and, in the Chimimbe Hill licence, nickel and cobalt.
For more information, please visit www.mkango.ca.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement may have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements (within the meaning of that term under applicable securities laws) with respect to Mkango, its business and the Project. Generally, forward looking statements can be identified by the use of words such as "plans", "expects" or "is expected", "scheduled", "estimates" "intends", "anticipates", "believes", or variations of such words and phrases, or statements that certain actions, events or results "can", "may", "could", "would", "should", "might" or "will", occur or be achieved, or the negative connotations thereof. Forward looking statements in this news release include statements with respect to the global market for products using the rare earth metals the Company is exploring for, completion of the feasibility study and of the transactions contemplated in the agreement with Talaxis, as well as the use of proceeds from the investments into the Company by Talaxis and the timing of such expenditures. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. Such factors and risks include, without limiting the foregoing, market demand for the metals and associated downstream products for which Mkango is exploring, researching and developing, the positive results of a feasibility study on the Project, delays in obtaining financing or governmental or stock exchange approvals. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additionally, the Company undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.
For further information on Mkango, please contact:
Mkango Resources Limited
Chief Executive Officer
Financial Public Relations
Tim Blythe, Camilla Horsfall, Julia Tilley
UK: +44 207 138 3204
SP Angel Corporate Finance LLP
Nominated Adviser and Joint Broker
Jeff Keating, Caroline Rowe
UK: +44 20 3470 0470
Alternative Resource Capital
Alex Wood, Rob Collins
UK: +44 20 7186 9004; +44 20 7186 9001
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