The two year renewal of the Phalombe Licence by the Malawi government is a strong validation of work completed so far and the site's potential, rare earths explorer Mkango Resources Ltd (CVE:MKA, CVE:MKA) told investors.
Phalombe hosts the group's flagship Songwe Hill project, along with the Nkalonje, Mantrap, Knoll and Namangale prospects.
The licence has been renewed until January 2019, the firm said in a corporate update.
An updated prefeasibility study for Songwe released in November last year envisaged production of 2,841 tonnes of rare earths in mixed chemical concentrate per year over an 18 year mine life.
The project's net present value also rose 18% to US$345mln using an average price for a basket of rare earths of US$59.8kg, while the up-front capital expenditure was forecast at US$216mln.
Rare earth exploration is an evolving field and the Phalombe licence was recently visited by a large delegation in connection with the €5.4 million HiTech AlkCarb research project led by the Camborne School of Mines, University of Exeter and funded under the European Union's Horizon 2020 Research and Innovation programme in which Mkango is an industry partner.
The study has particular relevance to Mkango in its scope to better understand the potential for large, unexposed mineralised bodies of carbonatite, the host rock for rare earth mineralisation, on either a prospect or regional scale.
Such targets at may include the summit of Songwe hill and the Nkalonje vent system where and geophysics work will cover the areas to further assess their potential as future drill targets.