LONDON (ShareCast) - (Sharecast News) - Mkango Resources announced the start of flotation pilot plant test work for the Songwe Hill Rare Earths project in Malawi on Wednesday.
The AIM-traded firm said Flotation pilot plant processing had begun at ALS Metallurgy in Perth, Australia, with a new, "optimised" flotation regime developed and scaled-up as part of the pilot programme.

Preparation for hydrometallurgical pilot testing was underway at ANSTO in Australia, meanwhile, which the company said would process rare earth mineral concentrate produced from the flotation pilot plant.

Design and engineering studies by lead engineer SENET - a DRA Global Group company - were continuing at the same time, with the Songwe feasibility study targeted for completion in the fourth quarter.

Scoping studies for rare earth separation had been completed, the board confirmed, with strategic options for moving forward with potential sites being evaluated.

Rising rare earth prices and concerns over the security of supply provided a "very favourable" market backdrop, the directors added, with "accelerating demand" geared to growth in green technology applications.

The selection and piloting of the flotation processing flowsheet was said to be an integral part of the feasibility study, and a "critical step" towards commercialisation of the Songwe project.

Mkango said the feed for the flotation pilot plant was derived from the 60 tonne bulk sample previously shipped from Malawi to Australia, having been selected from areas within the previously-announced upgraded measured and indicated mineral resource estimates, which underpinned the ongoing feasibility study.

No further resource drilling was required, the board confirmed.

"The start of pilot plant processing is a major milestone for the company and Mkango joins the ranks of the very few rare earths projects that have been advanced to this stage of development," said chief executive officer William Dawes.

"We look forward to announcing results from the pilot plant when available."

Dawes said Mkango was "uniquely positioned" in the rare earths sector with an integrated "mine, refine, recycle" strategy, encompassing sustainably-sourced rare earths from Malawi, rare earth magnet recycling in the UK via its interest in HyProMag, and strategic options to develop EU and UK rare earth separation and refining capacity.

"Rare earth prices have risen significantly over the recent months and the demand outlook is very positive, directly linked to growth in electric vehicles, wind power and other clean technology applications."

At 1223 GMT, shares in Mkango Resources were up 15.54% at 20.22p.

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