Noble, one of world's largest commodity traders and the largest in Asia, will identify the optimal markets and counter-parties for output from Mkango’s Songwe Hill rare earths project in Malawi.
Songwe Hill is in development and heading towards completion of a definitive feasibility study.
Noble will advise on the best strategy for the product mix at the project, and the optimal logistics route to take the project’s production to market.
The commodity trader will also be able to introduce Mkango to parties interested in financing development of the project.
Mkango said Noble would also be in its corner in market-related discussions with key stakeholders, including Mkango's financial, technical and legal advisers, prospective investors and lenders and relevant government agencies associated with the project.
Shares in Mkango shot up 8% in the first half hour of trading to 3.51p as the company revealed it would issue 12mln warrants to Noble, with an exercise price of 6.6p.
Should Noble exercise all of the warrants, which have a life-span of two years, it would end up with a 12.5% stake in Mkango.
Will Dawes, chief executive of Mkango, said the deal should transform the company.
"Mkango is focused on one of the few advanced stage rare earths projects outside China, and through Noble's network and relationships in Asia and elsewhere, its marketing expertise, logistics platform and off-take capabilities, we are very well positioned to advance the project against the backdrop of a recovering rare earths sector,” Dawes said.
Mkango added it has raised £450,000 from existing and new institutional investors through the issue of shares at 3.5p, a premium of a quarter of a penny to last Friday’s closing price.
Two specialist Swiss unit trust funds, the Rare Earth Elements Fund and the Metals Exploration Fund, are buying into the company and each will end up with an interest of 3.6% in Mkango after the share issue.
The main uses of proceeds from the placing will be to accelerate the optimisation of the processing flow sheet and evaluation of product marketing options to facilitate further marketing, off-take and partnership discussions.