Mkango Resources Ltd. Announces Commencement of the Second Stage of Drilling at the Songwe Rare Earth Project in Malawi and Update on Activities

January 20, 2012 (Source: Marketwire) — Mkango Resources Ltd. (TSX VENTURE:MKA) (the “Corporation” or “Mkango“) is pleased to announce that the second stage of diamond drilling has commenced at the Songwe Hill rare earth project in Malawi.

Mkango’s drilling contractors, Cartwright Drilling Inc. of Goose Bay, Canada, commenced drilling on 10th January. Stage 2 drilling, designed to complement Stage 1 drilling completed in 2011, will mainly focus on an area measuring approximately 350m by 100m comprising rare earth enriched carbonatite, breccia and fenite lithologies, largely exposed at surface and open to depth.

The programme will comprise infill drilling and testing depth extensions of mineralisation intersected in the first stage. Stage 1 demonstrated that the mineralised zones have the potential to extend to at least 260m vertical depth and remain open laterally within the extents of the Songwe Hill carbonatite complex.

Other recent activities in relation to Songwe include the following:

  • Five approximately E-W bearing lines of systematic surface channel sampling using rock saws have been completed at Songwe and approximately 400 samples are being dispatched for assay. All sampling was carried out following best practice and included a comprehensive QAQC monitoring and control programme. Geological mapping has been continuing in conjunction with Dr Alan Woolley and the geological model has been further refined.
  • A detailed mineralogical programme has been completed by Mkango’s principal geologist, Dr Aoife Brady, comprising scanning electron microscope, electron microprobe and LA-ICP-MS analyses at the Natural History Museum and Aberystwyth University in the UK, the results of which are currently being reviewed.
  • Representative sections of core from 5 drill holes from Stage 1 (PX001, PX003, PX005, PX012 and PX009) with a total weight of 635kg have been sent to Mintek in South Africa for scoping metallurgical test work.
  • Grab samples from two yttrium enriched breccia targets proximal to Songwe and from other exploration targets within the licence area are being dispatched for assay. Preliminary SEM analysis of a sample from one of the breccia targets indicates xenotime in the breccia matrix may be the source of yttrium enrichment. The latter was carried out as part of a Phd research project focused on generating heavy rare earth targets in alkaline provinces, specifically Malawi, in collaboration with the British Geological Survey, Camborne School of Mines and Leominex.

In the Thambani licence area, reconnaissance work completed to date has identified a number of areas containing several existing and partially worked alluvial (and possibly elluvial) occurrences of zircon, which have become the initial exploration focus. There is also exploration potential for niobium, uranium, corundum and rare earths within the Thambani licence area.

The Songwe Hill Rare Earth Project

The Songwe Hill rare earth project is located within a 100% owned exclusive prospecting licence covering an area of 1,283 km2 in southeast Malawi (the “Phalombe Licence”). Songwe is accessible by road from Zomba, the former capital, and Blantyre, the principal commercial town of Malawi. Total travel time from Zomba is approximately 1.5 to 2 hours, which will reduce as infrastructure continues to be upgraded in the area.

Eleven of the thirteen holes drilled in Stage 1 intersected significant zones of rare earth mineralisation, including higher grade zones and areas of heavy rare earth enrichment. Drilling and surface mapping to date have confirmed that the extent of the mineralised carbonatite is much greater than indicated by historical exploration.

Scientific and technical information, including data verification, contained in this release has been approved and verified by Mr Mike Venter Pr.Sci.Nat, Principal Consultant at The MSA Group who is a “Qualified Person” in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

Sample preparation and analytical work for the drilling and channel sampling programs are being provided by Intertek-Genalysis Laboratories (Johannesburg, South Africa and Perth, Australia) employing ICP-MS techniques suitable for rare earth element (REE) analyses and following strict internal QAQC procedures inserting blanks, standards and duplicates.

Mkango Resources Ltd.

Mkango’s primary business is the exploration for rare earth elements and associated minerals in the Republic of Malawi. It holds, through its wholly owned subsidiary Lancaster, a 100% interest in two exclusive prospecting licenses covering a combined area of 1,751 km² in southern Malawi. The main exploration target is the Songwe Hill rare earth deposit, which features carbonatite hosted rare earth mineralisation and was subject to previous exploration in the late 1980s.

The Corporation’s corporate strategy is to further delineate the rare earth mineralisation at Songwe Hill and secure additional rare earth element and other mineral opportunities in Malawi and elsewhere in Africa.

Cautionary Note Regarding Forward-Looking Statements

This news release may contain forward-looking statements relating to the Corporation. 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, among others, the interpretation and actual results of current exploration activities; changes in project parameters as plans continue to be refined; future commodity prices; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of exploration.

The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, the Corporation disclaims any intention and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law. Additionally, the Corporation undertakes no obligation to comment on the expectations of, or statements made, by third parties in respect of the matters discussed above.

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.

How Will the Pacific Wildcat’s Rare Earth Reserves Update Impact Mkango Resources’ Activities in Malawi?

The Pacific Wildcat’s rare earth reserves update in Malawi has potential to impact Mkango Resources’ activities. The discovery of larger niobium reserves could shift the focus of both companies, as the competition for resources in the region intensifies. It may lead to strategic changes in extraction and processing methods.

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