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Mkango looking at long term production potential In Malawi

Outlined at Songwe Hill is already an inferred and indicated resource of 32mln tonnes of rare earths
Mkango looking at long term production potential In Malawi
Members of Mkango's mining team

These are exciting times for rare earths explorer Mkango Resources Ltd (LON:MKA, CVE:MKA).

Not only is it bullish on the outlook for the rare earth sector, it also has one of the few advanced stage rare earth projects in the world.

Last year's prefeasibility study for its Songwe Hill project in Malawi outlined an inferred and indicated resource of 32mln tonnes of rare earths, with the potential for a long 18-year mine life exploiting just the higher confidence indicated material.

An international research study

Now, the firm is part of a large international research study, HiTech AlkCarb, which will provide greater understanding of the geology and geophysics of the Phalombe licence, which hosts Songwe, and which could show the area could support a much longer term and bigger rare earth project.

Speaking to Proactive, Will Dawes, Mkango's chief executive, explained, that the delegation was part of the EU funded €5.4 million HiTech AlkCarb research project and saw a large group of international and Malawian expert geologists and geophysicists‎ visit a number of prospects in the Phalombe licence in addition to other areas over the course of a week.

Apart from Songwe, ‎other prospects in the Phalombe licence visited by the party were the Nkalonje, Mantrap, Knoll and Namangale areas.

Without getting too geologically technical, this pioneering research is looking at the potential of whether there are additional buried carbonatite bodies, which could host more rare earths and thereby expand the long term potential of the Phalombe licence.

Dawes  explained that in the years following the original ground geophysics at Songwe, which was carried out six years ago, the focus was the outcropping mineralised carbonatite (above surface), from which the 32 million tonne resource was delineated, and the focus was not on potential buried carbonatites but that could all change now.‎ The original ground geophysics together with our collaboration in ‎HiTech AlkCarb will enable a greater understanding of that potential.

Potential for a longer mine life?

"We're not just looking at  Songwe  as an 18 year mine life operation. This project, the surrounding area and the other prospects have the potential to have a much longer mine life - and to be a very long term and sustainable producer of rare earths," he said.

Notably, Dawes said the Nkalonje vent was also of particular interest for follow-up work and could have potential for an underlying carbonatite ‎hosted rare earths deposit.

Dawes reckons the sort of data coming from the HiTech AlkCarb study in parallel with developing a better understanding of the exploration upside will provide an enhanced platform to bring in a partner to complete additional drilling and a definitive feasibility study, thereby accelerating development of the Songwe and the Phalombe licence.

The same can be said for the group's 136.9 sq km Thambani licence also in Malawi, prospective for uranium, tantalum and niobium where a partner would also be sought.

For Songwe Hill, the next major step would be a definitive feasibility study, said Dawes - Songwe's credentials were already underlined in an updated pre-feasibility report last November.

That envisaged Songwe Hill production of 2,841 tonnes of rare earths in mixed chemical concentrate per year over the 18 years.

The project's net present value (NPV) was US$345mln with up-front capital expenditure forecast at US$216mln.

Some 65% of the rare earths production value would be neodymium and praseodymium and over 15% the heavy rare earths, dysprosium and terbium.

These four are among the most valuable and used in hi-tech permanent magnet applications seen as critical components in the next wave of consumer products, electronics and green energy.

Bullish on rare earth market

Dawes said 50% of overall rare earth demand is geared towards clean energy and cleantech, and he is very bullish on the outlook for prices and the market.

The HiTech AlkCarb project is not the only cutting edge research into rare earths the group is involved in. It's also involved in the SoS RARE research consortium looking at extraction and processing methods. So there is much to look forward to.

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Mkango Resources Ltd Timeline

Newswire
February 20 2017
Newswire
November 28 2016

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