Aim- and TSX-listed Mkango Resources has announced that its subsidiary, Lancaster Exploration, along with other related entities, will merge with US-listed special purpose acquisition company Crown PropTech Acquisitions.

The proposed merged company will be named Mkango Rare Earths (MKAR) and will be listed on the Nasdaq.

The goal of this merger is to create a fully integrated rare earths company, combining Mkango’s Songwe Hill mining project, in Malawi, and its Pulawy processing facility, in Poland.

The merged company will focus on providing sustainably sourced rare earth materials for global markets, including North America, Europe and Asia.

Importantly, the merger does not include Mkango’s recycling operations in the US and Europe.

"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, with a strong emphasis on sustainability and critical industry demand.

“Partnering with Crown PropTech Acquisitions, an organisation that shares our strategic vision and values, enhances our platform for scalable growth and innovation.

“As we move towards a Nasdaq listing, we believe this combination will catalyse new opportunities, broaden our investor base and drive long-term value creation," Mkango president Alexander Lemon said on July 3.

The deal is expected to close in the fourth quarter of this year, but several approvals are still required. These include approval from the Nasdaq, Mkango shareholders, Crown shareholders and Canadian regulators.

A shareholder meeting will be called to approve the transaction and a proposed name change for Mkango.

If successful, Mkango is expected to retain a majority stake in the new company. Its shareholding in MKAR will be valued at about $400-million, excluding transaction expenses and any additional funds raised during the process.

To support the merger, Crown PropTech and its backers are investing $750 000 through convertible notes, of which $500 000 has already been funded, and another $250 000 will be added after a key filing with US regulators. These funds will help cover the combined group’s business and listing-related costs.

Songwe Hill is one of a few rare earths projects globally to reach an advanced development stage, including a completed feasibility study and environmental approvals. A mining agreement was signed with the government of Malawi in July 2024.

Meanwhile, Pulawy is being developed as a facility to separate and refine rare earth materials. It will initially process materials from Songwe Hill and potentially also from other sources in the future.

Both projects have received strategic project status under the EU’s Critical Raw Materials Act, which recognises their importance to Europe’s supply of essential minerals.

This designation should help the projects secure funding and faster permitting, particularly in Poland where approvals for such facilities are expected within 15 months.

“Based on the significant milestones achieved to date, we believe MKAR is uniquely positioned to become an important provider of not only rare earth carbonates via its mining site in Malawi, Africa, but also a provider of rare earth oxides through its planned separation facility in Pulawy, Poland,” Crown PropTech Acquisitions CEO Michael Minnick said.