Aim-listed Mkango Resources has cut the salaries of its executive management team by between 25% and 50% from April through to September.
This comes as part of the company’s cost-cutting initiatives and is complementary to Mkango’s recent £750 000 private placement closing, as announced on April 11.
The company said in a May 10 statement to shareholders that the salary reductions would serve to conserve additional working capital to advance its assets.
However, in connection with these salary reductions, the board has implemented a bonus scheme in the form of shares to incentivise the executive management team, while nonexecutive directors, including the nonexecutive chairperson have foregone their remuneration since January 1.
Mkango has also issued about four-million restricted share units (RSUs) in line with its RSU plan, adopted on October 25, 2023, to Mkango CE William Dawes, Alexander Lemon and Robert Sewell.
Each RSU is exchangeable, upon vesting, for one common share of the company. Included in these RSUs are 1.25-million RSUs allocated upon the surrender of 1.25-million options, previously granted on August 30, 2021, and May 30, 2023, to the company's chairperson Derek Linfield, to provide further incentives to management and in appreciation of the salary reductions referred to above.
In addition to the normal vesting conditions contained in the RSU plan, Mkango revealed that the RSUs issued to Dawes and Lemon would not vest until first commercial sales of recycled neodymium magnets (NdFeB) at the Tyseley Energy Park were achieved.
Following the surrender of options and the granting of RSUs, the total number of ordinary shares under option is about 26.8-million, representing 10% of the company's total issued share capital.
''With development of the recycling operations gathering momentum globally, including the recent US feasibility study commencement, placement of equipment orders for Germany, the UK chemical recycling pilot plant commissioning nearing completion and HyProMag's targeted first commercial sales of recycled NdFeB at Tyseley Energy Park later this year, Mkango's executive management team are happy to be incentivised for a significant portion of our compensation.
“We firmly believe in the long-term robust economics and growth potential offered through our investment in HyProMag and the complementary recycling routes being developed by Mkango Rare Earths UK. This arrangement comes in addition to the recent £150 000 I subscribed for personally in the last private placement,” Dawes said.