Aim- and TSX-V-listed Mkango Resources has announced the results of the updated definitive feasibility study (DFS) for its Songwe Hill rare earths project, in Malawi, and of a prefeasibility study (PFS) for its proposed Puławy rare earths separation plant, in Poland.

“Incorporating revised rare earth pricing, capital and operating cost assumptions, these studies reflect our commitment to moving these high-quality projects forward,” says Mkango president Alexander Lemon.

As one of the few companies in the sector to update feasibility studies with current market pricing, he says Mkango is uniquely positioned as a future supplier of both mined and recycled rare earths – a critical differentiator as global demand for green transition materials accelerates.

“Songwe in Malawi and Puławy in Poland are landmark projects for the communities and economies they are expected to transform and our mission to deliver sustainable, long-term value for our shareholders."

The company explains that Songwe is among the few rare earths projects globally to have reached the DFS stage, with a mining development agreement secured and a full environmental, social, health impact assessment (ESHIA) completed in compliance with International Finance Corporation performance standards.

The company also notes that the Global Industry Standard on Tailings Management has been adopted for design and management of the tailings storage facility (TSF), adding that Songwe has been selected as a strategic project under the EU Critical Raw Materials Act.

Mkango adds that Songwe will produce a value-add purified mixed rare earth carbonate (MREC) product, which can be sold into international markets and is suitable for the proposed Puławy separation plant, in Poland. 

The company also notes an operating life of 18 years for Songwe, with production averaging 5 954 t/y of total rare earth oxides (TREO) for the first full five years of production, including 1 953 t/y of neodymium/praseodymium (NdPr) oxides, and 56 t/y of dysprosium and terbium oxides, in a MREC grading 55% TREO (dry basis).     

Mkango explains that the Songwe initial capital expenditure (capex) is estimated at about $325.5-million, including a $27.8-million contingency, for development of the mine, mill, flotation and hydrometallurgy plants, TSF and related project infrastructure.

The company notes an initial plant capex of about $212-million, including a $35.4-million contingency, for the development of the Puławy rare earth separation plant and related project infrastructure in Poland.

The company expresses that neodymium, praseodymium, dysprosium and terbium are critical for the green transition, used in permanent magnets for electric vehicles, wind turbines and many electronic devices.

Mkango notes a post-tax net present value (NPV) of about $339-million, using a 10% nominal discount rate, with an internal rate of return (IRR) of 24%, a payback period of 3.4 years from start of full production and post-tax life-of-operations nominal cash flow of $1.55-billion for Songwe.

Additionally, the company estimates a post-tax NPV of about $779-million, using a 10% nominal discount rate, with an IRR of 40%, a payback period of 2.12 years from start of full production and post-tax life-of-operations nominal cash flow of $4.95-billion for Puławy.

Applying Adamas Intelligence upside forecasts, Mkango says Songwe's post-tax NPV increases to about $489-million with a nominal IRR of 29%, a payback period of 2.9 years from start of full production and post-tax life-of-operations nominal cash flow of $2.04-billion.

The company adds that Puławy's expanded 100% NdPr separation case rises to a post-tax NPV of about $892-million and nominal IRR of 43%, a payback period of 1.89 years from start of full production and post-tax life-of-operations nominal cash flow of $5.58-billion.