LONDON (ShareCast) - (Sharecast News) - Mkango Resources announced a transformative business combination agreement with Crown PropTech Acquisitions on Thursday, to spin out its rare earth mining and processing assets into a new, Nasdaq-listed entity.
The AIM-traded firm said the new company, to be named Mkango Rare Earths (MKAR), would own the Songwe Hill project in Malawi and the Pulawy separation plant in Poland - both designated as strategic projects under the EU Critical Raw Materials Act.

If completed, the transaction would create a vertically integrated, pure-play global rare earths platform spanning mining, refining, and separation.

Mkango said it expected to retain a significant majority equity interest in MKAR, which would pursue a Nasdaq listing under the ticker MKAR.

The deal would give Mkango's shareholding in MKAR a pre-expense pro forma valuation of $400m, excluding proceeds from any concurrent PIPE financing or amounts in CPTK's trust.

Songwe Hill is one of the few rare earth projects globally to have reached a NI 43-101 compliant definitive feasibility study stage and had an approved environmental and social impact assessment in line with IFC standards.

Pulawy, located in a Polish special economic zone, was meanwhile positioned to process rare earths both from Songwe and other external sources, with expedited permitting expected due to its EU strategic designation.

"This transaction is expected to significantly accelerate the growth trajectory of the Mkango group and position us as a key player in the global rare earth supply chain," said Mkango president Alexander Lemon.

"Partnering with CPTK enhances our platform for scalable growth and innovation."

The business combination was expected to close in the fourth quarter of the year, subject to regulatory and shareholder approvals and the satisfaction of closing conditions.

Mkango said the new company aimed to support critical materials supply chains across North America, Europe and Asia, at a time when rare earth security is increasingly under geopolitical scrutiny.

"We believe MKAR is uniquely positioned to become an important provider of rare earth oxides via its integrated approach, spanning extraction in Africa and separation in Europe," commented CPTK CEO Michael Minnick.

Mkango said its rare earth recycling interests, including its majority stake in Maginito and HyProMag, were not part of the transaction.

Shareholders of Mkango would be asked to approve the deal and a proposed name change at a meeting to be scheduled.

At 1319 BST, shares in Mkango Resources were up 46.8% at 25.69p.

Reporting by Josh White for Sharecast.com.

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