REG - Mkango Resources Ltd - SIGNING OF NOTE PURCHASE AGREEMENT OF SPAC MERGER

Mkango ResourcesAnnouncement

03/06/2025 07:00

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RNS Number : 1130L  Mkango Resources Limited  03 June 2025

 

 

 

 

MKANGO ANNOUNCES SIGNING OF NOTE PURCHASE AGREEMENT IN RESPECT OF SPAC MERGER

 

Highlights

·      US$750,000 committed to be invested in Mkango's subsidiary,
Lancaster Exploration Limited, pursuant to a Note Purchase Agreement in
connection with its proposed SPAC merger and NASDAQ listing.

·      US$500,000 of such commitment has been deposited in escrow with
release pending the signing of a definitive business combination agreement for
the SPAC merger and certain approvals by the TSX-V.

·      US$250,000 of such commitment is to be invested pending the
filing of a registration statement on Form F-4 with the U.S. Securities and
Exchange Commission.

·      Committed funds are to provide working capital to assist
Lancaster in completing the SPAC merger and advancing its standalone public
listing on NASDAQ.

 

London / Vancouver:  3 June 2025 - Mkango Resources Ltd (AIM/TSX-V: MKA)
("Mkango") is pleased to announce that its wholly-owned subsidiary, Lancaster
Exploration Limited ("Lancaster"), has entered into a US$750,000 Note Purchase
Agreement (the "NPA") with one sponsor (the "F-4 Note Investor") and an
affiliate of the other sponsor (the "BCA Note Investor") of Crown PropTech
Acquisitions, a Cayman Islands exempted company (OTC: CPTK) ("CPTK"), in
connection with the previously announced (8 January 2025) proposed merger (the
"Merger") between Lancaster, certain other wholly-owned subsidiaries of Mkango
(with Lancaster, the "Company"), and CPTK.

The Merger would create a vertically integrated global pure play rare earths
platform that is intended to result in the ordinary shares of Lancaster being
listed on NASDAQ. Upon the Merger and listing, Lancaster, as the listed
entity, would hold Mkango's rare earths project at Songwe Hill in Malawi and
the proposed separation plant in Pulawy Poland. Mkango's interest in the
HyProMag recycling business would not form part of the Merger.

Pursuant to the NPA, Lancaster has agreed to issue and sell two convertible
promissory notes (together, the "Notes"), one to the BCA Note Investor in the
principal amount of US$500,000 (the "BCA Note") and one to the F-4 Note
Investor in the principal amount of US$250,000 (the "Form F-4 Note"), upon
satisfaction of different sets of conditions. The BCA Note Investor has
deposited US$500,000 into escrow, with its release to Lancaster pending the
satisfaction of conditions including the execution of a definitive business
combination agreement for the Merger (the "BCA") and approval by the TSX
Venture Exchange ("TSX-V") of the potential conversion of the BCA Note into
shares of Lancaster. Lancaster intends to return the escrowed funds to the BCA
Note Investor if the BCA Note is not issued by 30 June 2025, which is the
expiration date of exclusivity regarding the BCA and which may be extended.
The Form F-4 Note is expected to be issued following the execution of the BCA
and, subject to TSX-V approval of the potential conversion of the Form F-4
Note into shares of Lancaster, upon the submission of a registration statement
on Form F-4 with the U.S. Securities and Exchange Commission ("SEC") covering
the issuance of share consideration pursuant to the Merger.

Following issuance, the Notes will accrue interest at a rate of 12% per annum,
9% of which will be paid in kind, subject to conditional approval of the
TSX-V, such that the Notes' principal amounts will be increased by the amount
of such interest payments semi-annually, and 3% of which will be paid in cash
semi-annually. The maturity date of the Notes is to be one year after their
respective issuances.

If the Notes are outstanding at the time of the Merger, the principal and
accrued and unpaid interest of the Notes will convert (the "Standard
Conversion") into twice the number of shares to which such dollar amount would
equate based on the implied dollar value of Company shares in the proposed BCA
(the "Proposed BCA Valuation"). Alternatively, if CPTK satisfies certain cash
thresholds at the time of the Merger, the BCA Note Investor and the F-4 Note
Investor may opt to have any portion of such principal and interest repaid in
cash as well as convert into half the number of shares to which such dollar
amount would equate based on the Proposed BCA Valuation, with the balance of
the Notes, if any, converting pursuant to the Standard Conversion.

If the Notes remain outstanding by their maturity dates, the BCA Note Investor
and the F-4 Note Investor will be entitled to receive 1.2 times the original
principal amount of the Notes in addition to any accrued and unpaid interest,
less any principal amounts already paid as of the maturity date.

Information about the NPA will be provided in a Current Report on Form 8-K to
be filed by CPTK with the SEC and is available at www.sec.gov.

Alexander Lemon, President of Mkango, commented: "This Note Purchase Agreement
unlocks working capital to assist Lancaster in its NASDAQ listing whilst
minimising dilution at the Mkango level. We're grateful for the continued
support from CPTK and its sponsors and affiliates as we enter this exciting
new phase for the Company and advance this transformative transaction for
Mkango."

Michael Minnick, CEO of CPTK, added: "Our thesis for the rare earths sector
continues to strengthen, particularly with the demonstrated growth in AI and
the evolving robotics applications, amongst others. We believe the Mkango team
is well-positioned in this sector based on their completed definitive
feasibility study, environmental compliance, and signed mining development
agreement with the government of Malawi."

About Mkango Resources Ltd.

Mkango is listed on AIM and the TSX-V. Mkango's corporate strategy is to
become a market leader in the production of recycled rare earth magnets,
alloys and oxides, through its interest in Maginito Limited ("Maginito"),
which is owned 79.4 per cent by Mkango and 20.6 per cent by CoTec Holdings
Corp ("CoTec"), and to develop new sustainable sources of neodymium,
praseodymium, dysprosium and terbium to supply accelerating demand from
electric vehicles, wind turbines and other clean energy technologies.

Maginito holds a 100 per cent interest in HyProMag and a 90 per cent direct
and indirect interest (assuming conversion of Maginito's convertible loan) in
HyProMag GmbH, focused on short loop rare earth magnet recycling in the UK and
Germany, respectively, and a 100 per cent interest in Mkango Rare Earths UK
Ltd ("Mkango UK"), focused on long loop rare earth magnet recycling in the UK
via a chemical route.

Maginito and CoTec are also rolling out HyProMag's recycling technology into
the United States via the 50/50 owned HyProMag USA LLC joint venture company.

Mkango also owns the advanced stage Songwe Hill rare earths project and an
extensive rare earths, uranium, tantalum and niobium exploration portfolio in
Malawi, and the Pulawy rare earths separation project in Poland.

Songwe Hill is one of the few rare earth projects to have advanced to the NI
43-101 compliant Definitive Feasibility Study ("DFS") stage. The project has
an expected mine life of 18 years and is designed to produce a 55% mixed rare
earth carbonate, yielding approximately 1,953 tonnes per annum of NdPr and 56
tonnes per annum of DyTb.

Mkango's proposed Pulawy separation facility site, located in a Special
Economic Zone in Poland, stands adjacent to the EU's second largest
manufacturer of nitrogen fertilisers, and features established infrastructure,
access to reagents and utilities on site.

For more information, please visit www.mkango.ca (https://www.mkango.ca/)

About Crown Proptech Acquisitions

CPTK is a Cayman Islands exempted special purpose acquisition company formed
in 2021 for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business combination
with one or more businesses, with approximately $5.6 million cash in trust.

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 ('MAR') which has been incorporated into UK law by the
European Union (Withdrawal) Act 2018. Upon the publication of this
announcement via Regulatory Information Service, this inside information is
now considered to be in the public domain.

Additional Information and Where to Find It

If a definitive agreement is entered into in connection with the Merger,
Lancaster and CPTK will prepare a registration statement, including a proxy
statement/prospectus, to be filed with the SEC. The proxy statement/prospectus
will be mailed to CPTK's shareholders. CPTK urges investors and other
interested persons to read, when available, the proxy statement/prospectus, as
well as other documents filed with the SEC, because these documents will
contain important information about the Merger. Such persons can also read
CPTK's filings with the SEC for a description of the security holdings of its
officers and directors and their respective interests as security holders in
the consummation of the transactions described herein. The proxy statement
statement/prospectus, once available, can be obtained, without charge, at the
SEC's web site at www.sec.gov.

Participants in the Solicitation

Lancaster and CPTK and their respective directors, executive officers and
other members of their management and employees, under SEC rules, may be
deemed to be participants in the solicitation of proxies of CPTK's
shareholders in connection with the Merger. Investors and security holders may
obtain more detailed information regarding the names, affiliations and
interests of CPTK's directors and officers in CPTK's SEC filings. Information
regarding the persons who may, under SEC rules, be deemed participants in the
solicitation of proxies to CPTK's shareholders in connection with the Merger
will be set forth in the proxy statement/prospectus for the Merger when
available. Information concerning the interests of Lancaster's and CPTK's
participants in the solicitation, which may, in some cases, be different than
those of their respective equityholders generally, will be set forth in the
proxy statement/prospectus relating to the Merger when it becomes available.

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, the
Company, CPTK, their businesses and the Merger. Generally, forward looking
statements can be identified by the use of words such as "targeted", "plans",
"expects" or "is expected to", "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, but are not limited
to, statements with respect to CPTK's successor entity being listed on NASDAQ,
the BCA Note Investor's and the F-4 Note Investor's investments through the
NPA, and the potential Merger. 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, whether the BCA will be executed, whether the TSX-V
will consent to the conversion of the Notes for shares of Lancaster, whether
NASDAQ will approve the listing of shares of Lancaster, the availability of
(or delays in obtaining) financing to develop Songwe Hill and the  recycling
plants in the UK, Germany and the US as well as the contemplated separation
plant to be constructed in connection with real estate rights held by Mkango
Polska Sp. Z.o.o (the "Pulawy Project"), geological, technical and regulatory
matters relating to the development of Songwe Hill, governmental action and
other market effects on global demand and pricing for the metals and
associated downstream products for which Mkango or the Company is exploring,
researching and developing, the ability to scale the HPMS and chemical
recycling technologies to commercial scale, competitors having greater
financial capability and effective competing technologies in the recycling and
separation business of Maginito and Mkango, availability of scrap supplies for
recycling activities, government regulation (including the impact of
environmental and other regulations) on and the economics in relation to
recycling and the development of the various recycling and separation plants
of Mkango and Maginito and future investments in the United States pursuant to
the cooperation agreement between Maginito and CoTec, the outcome and timing
of the completion of feasibility studies for Songwe Hill, cost overruns,
complexities in building and operating Songwe Hill and the Pulawy Project, the
positive results of feasibility studies on the various proposed aspects of
Mkango's and Maginito's activities, and delays in obtaining financing or
governmental or stock exchange approvals and other risks that are detailed in
the periodic reports filed by CPTK with the SEC. The forward-looking
statements contained in this news release are made as of the date of this news
release. Except as required by applicable law, each of Mkango, CPTK and 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. Additionally, each of Mkango, CPTK and the Company
undertakes no obligation to comment on the expectations of, or statements made
by, third parties in respect of the matters discussed above.

No Offer or Solicitation

This press release shall not constitute a solicitation of a proxy, consent, or
authorization with respect to any securities or in respect of the Merger. This
press release shall also not constitute an offer to sell or the solicitation
of an offer to buy any securities, nor shall there be any sale of securities
in any states or jurisdictions in which such offer, solicitation, or sale
would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. No offering of securities shall be made except
by means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.

For further information on Mkango, please contact:

Mkango Resources Limited, Lancaster Exploration Limited and Mkango Polska Sp.
Z.o.o

William Dawes

Chief Executive Officer
will@mkango.ca (mailto:will@mkango.ca)

Canada: +1 403 444 5979
www.mkango.com (https://www.mkango.com/)

@MkangoResources

Alexander Lemon

President
alex@mkango.ca (mailto:alex@mkango.ca)

SP Angel Corporate Finance LLP
Nominated Adviser and Joint Broker

Jeff Keating, Jen Clarke, Devik Mehta

UK: +44 20 3470 0470

Alternative Resource Capital
Joint Broker

Alex Wood, Keith Dowsing

UK: +44 20 7186 9004/5

 

Cohen Capital

Strategic and Financial Adviser

Brandon Sun

USA: +1 929 432 1254

 

Welsbach Corporate Solutions LLC-FZ

Supply Chain Advisor

Daniel Mamadou SG:

+65 6879 7107

 

The TSX Venture Exchange has neither approved nor disapproved the contents of
this press release. Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release shall not constitute an offer to sell, or a solicitation of
an offer to buy, or a recommendation to purchase, any securities in any
jurisdiction, or the solicitation of any vote, consent or approval in any
jurisdiction in connection with or with respect to the proposed Merger, nor
shall there be any sale, issuance or transfer of any securities in any
jurisdiction where, or to any person to whom, such offer, solicitation or sale
may be unlawful under the laws of such jurisdiction. This press release does
not constitute either advice or a recommendation regarding any securities. No
offering of securities shall be made except by means of a prospectus meeting
the requirements of the Securities Act of 1933, as amended, or an exemption
therefrom.

 

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