MKANGO RESOURCES LTD.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the year ended December 31, 2021

This Management's Discussion and Analysis ("MD&A") provides a review of the operational performance of Mkango Resources Ltd. ("Mkango", or the "Company"). The report was prepared in accordance with the requirements of National Instrument 51-102 - Continuous Disclosure Obligations, and it should be read in conjunction the audited consolidated financial statements for the year ended December 31, 2021 (the "Financial Statements"). The Financial Statements and the accompanying notes have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are prepared in United States dollars unless otherwise stated. This document is dated April 27, 2022.

The Board of Directors of the Company have reviewed and approved the information contained in this MD&A and the Financial Statements.

Readers are cautioned that this MD&A contains certain forward-looking statements. Please see the section concerning "Forward Looking Statements" below.

Additional information relating to the Company can be found on the Canadian System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com. The Company is listed on the TSX Venture Exchange (the "TSX-V") and holds an additional listing on the AIM Market of the London Stock Exchange ("AIM") under the symbol MKA.

FORWARD LOOKING STATEMENTS

Certain disclosures set forth in this MD&A may constitute forward-looking statements concerning anticipated development of the Company's operations in future periods. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believes", "budget", "continue", "could", "estimate", "forecast", "intends", "may", "plan", "predicts", "projects", should", "will" and other similar expressions. All estimates and statements that describe the Company's future, goals, or objectives, including management's assessment of future plans and operations, including statements regarding exploration results and budgets, mineral resource estimates, work programs, capital expenditures, timelines, strategic plans, market price of commodities or other statements that are not statement of fact may constitute forward-looking information under securities laws. Forwardlooking information is based on reasonable assumptions that have been made by the Company as at the date of such information but, by their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Company's control, including the impact of general economic and political conditions, the impacts, direct and indirect, of the COVID-19 pandemic, industry conditions, volatility of commodity prices, currency fluctuations, accuracy of drilling and other exploration results, realization of mineral resource estimates, environmental risks, changes in environmental, tax and royalty legislation or other government regulation, the speculative nature of strategic metal exploration and development including the risks of contests over title to properties, the risks associated with obtaining necessary licences or permits, including and not limited to approval of any future mining licence applications and exploration licence extensions, operating or technical difficulties in connection with development activities; personnel relations, competition from other industry participants, the lack of availability of qualified personnel or management, availability of drilling equipment and access, stock market volatility and the ability to access sufficient capital from internal and external sources. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to the price of rare earth elements ("REEs" or "rare earths"); the demand for REEs; the ability to carry on exploration and development activities; the timely receipt of any required approvals; the ability to obtain qualified personnel, equipment and services in a timely and cost-efficient manner; the ability to operate in a safe, efficient and effective manner; and the regulatory framework including and not limited to licence approvals, social and environmental matters, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Mkango's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements. Mkango disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

OVERALL PERFORMANCE AND OUTLOOK

In the fourth quarter of 2021, the Company focused on advancing all aspects of its rare earths' Mine, Refine, Recycle strategy. Terms not otherwise defined in this and the following sections of the MD&A are defined in the Corporate Structure Section.

Highlights for the three months ended December 31, 2021, include:

The Company had cash of \$4,446,850 at December 31, 2021 compared to \$6,248,132 at September 30, 2021 and \$4,924,567 at December 31, 2020.
The comprehensive loss for the three months ended December 31, 2021 was \$3,671,355 compared to \$837,938 for the three months ended December 31, 2020. This increased loss resulted primarily from mineral project expenditures which increased in the current three months by \$1,183,771 compared to the three months ended December 31, 2020 as work on the Feasibility Study continued. There was a reduction in foreign exchange gains of \$224,822, primarily due to the weakening of GBP against the USD during the quarter.
The restructuring of Talaxis' interests in both the Songwe Hill Rare Earths Project and Maginito was completed, resulting in the Company owning 100% of the shares of Lancaster and Maginito for the issue of 54,166,666 common shares.
Shareholder approval was obtained for the issuance of 2,916,666 Shares to Mr Derek Linfield, Chairman of Mkango, and 1,666,666 Shares to Resource Early Stage Opportunities Company. The Company now has 214,581,548 common shares in issue of which Talaxis has an interest of 32.4%.
The Company increased its interest in HyProMag from 25.0% to 41.6% following the exercise of HyProMag's right to convert a loan of £200,000 into shares of HyProMag.
HyProMag established a subsidiary in Germany to roll out commercialisation of Hydrogen Processing of Magnetic Scrap technology in Europe and to further support government initiatives to strengthen European rare earth supply chains and accelerate the green transition.

SUBSEQUENT EVENTS

Since year-end 2021 the Company has announced:

the production of neodymium and praseodymium enriched rare earth carbonate from final piloting as the Feasibility Study nears completion.
support from the European Raw Materials Alliance ("ERMA") with securing finance for the development of a rare earth separation plant to be located in Pulawy, Poland.
a collaboration with HyProMag, Bowers & Wilkins, European Metal Recycling, GKN Automotive Innovation Centre, Jaguar Landrover and University of Brimingham in the Driving the Electric Revolution at UK Research and Innovation grant funded project, Secure Critical Rare Earth Magnets for UK ("SCREAM").
the completion of initial sampling and ground geophysics at its Nkalonje Rare Earths Project and the identification of drill targets.

OVERVIEW OF THE BUSINESS

Mkango is focused on the mining, refining and recycling of rare earths. The Company is listed on the TSX Venture Exchange in Toronto and the Alternative Investment Market in London. The Company has developed its integrated 'Mine, Refine, Recycle' strategy to both produce and recycle primary and secondary rare earths, in particular new sustainable sources of neodymium, praseodymium, dysprosium and terbium to supply accelerating demand from electric vehicles, wind turbines and other clean technologies. This strategy differentiates Mkango from its peers, uniquely positioning the Company in the rare earths sector, and is focused on advancing the Songwe Hill project through the feasibility and development phases, whilst in parallel advancing three complementary downstream opportunities in the rare earths supply chain through Maginito Limited and Mkango UK both focused on rare earth magnet recycling, and Mkango Polska, focused on rare earth separation.

MINE

Mkango has several properties in the Republic of Malawi, Africa ("Malawi"), including its flagship Songwe Hill rare earths project ("Songwe Hill") and the Nkalonje Hill exploration target ("Nkalonje Hill") both held within 11 Phalombe retention licences (the "Phalombe Licences"). Mkango is also pursuing mineral exploration opportunities with three additional 100% owned properties in Malawi, the Thambani retention licences ("Thambani Licences"), the Chimimbe Hill exploration licence ("Chimimbe Licence") and the Mchinji exploration licence ("Mchinji Licence").

Songwe Hill

Songwe Hill, a carbonatite-hosted rare earth deposit, is the main development target in Malawi. Historical exploration programmes were originally carried out at Songwe Hill in the late 1980s. After three phases of exploration drilling in 2011, 2012 and 2018, Mkango completed a NI43-101 compliant technical report and upgraded Mineral Resource estimate for Songwe Hill in January 2019, and is currently working on a definitive feasibility study (the "Feasibility Study") which is expected to conclude during the second quarter of 2022.

Songwe Hill is located in south-eastern Malawi, between Lake Chilwa and the Mulanje Massif, approximately 70km from the former capital Zomba and approximately 90km from the commercial centre of Blantyre, which has an international airport and a railhead. Paved roads run from the urban centres to within 12km of Songwe Hill. Secondary gravel and dirt roads provide vehicle access to the exploration camp, with recently upgraded bridges capable of taking 20-tonne trucks.

Highlights of the nearly completed Feasibility Study are as follows:

All pilot test work has been completed, with the final stage of hydrometallurgical piloting at ANSTO successfully producing rare earth carbonate grading 55% total rare earth oxides ("TREO") equivalent, enriched in neodymium and praseodymium ("Nd / Pr") oxides, which together make up 31% of the rare earth oxide content in the carbonate product (i.e. Nd / Pr oxides / TREO = 31%).
Neodymium and praseodymium are key components of permanent magnets used in electric vehicles, wind turbines and many electronic devices and prices for Nd / Pr oxides have risen by 85% and 135% respectively over the last 12 months.
The rare earth carbonate produced at Songwe Hill will feed Mkango's proposed Pulawy separation plant development in Poland.
Technical aspects of the Feasibility Study for Songwe Hill are close to completion, with the majority of engineering workstreams 100% complete and the majority of other key workstreams more than 90% complete.
Negotiations for the Mining Development Agreement ("MDA") with the Government of Malawi are also well advanced. The MDA was recently highlighted to the Malawi Parliament in a speech by Malawi State President His Excellency Lazarus Chakwera and also during the Malawi 2022/23 Budget by the Minister of Finance Hon Sosten Gwengwe MP, and both Mkango and the Government of Malawi are prioritising its successful completion.
The MDA confirms the fiscal and legal terms for project development, upon completion of which the results of the feasibility study and valuation metrics will be announced.
During this period, Mkango will continue to advance ongoing discussions with potential strategic investors and off-takers, and work closely with its brokers, project finance advisors, Terrafranca Capital Partners Ltd and United States strategic advisors, Jones Group International to arrange construction financing, assuming a positive construction decision. Mkango also recently engaged EIT RawMaterials (www.eitrawmaterials.eu) to further support financing discussions in Malawi and Poland. EIT RawMaterials provides support to Mkango within the framework of the European Raw Materials Alliance.

Nkalonje Hill

Nkalonje Hill is located 23 km by road (14 km straight line) north-west of Songwe Hill, within the Company's Phalombe Licences. Nkalonje Hill is approximately 95 km by road from the commercial centre of Blantyre, which has an international airport and a railhead. Paved roads run from Blantyre to within 19 km of Nkalonje Hill.

Nkalonje Hill is underlain by an alkali silicate–carbonatite intrusive complex geologically similar to Songwe Hill, comprising two connected hills underlain by fenite, nepheline syenite and breccia. Regional geophysical data from the World Bank funded programme in 2016 demonstrates that Nkalonje Hill is marked by a magnetic low and thorium high. Thorium radiometrics are known as a highly effective tool for rare earths exploration and the Songwe Hill carbonatite is also characterised by a thorium radiometric anomaly, identified through previous geophysical surveys.

The fenites on Nkalonje Hill are intruded by carbonatite veins and dykes that are locally enriched in rare earth elements, suggesting potential for a larger mineralised carbonatite body below surface.

The Company has completed initial sampling and ground geophysics and identified drill targets with encouraging results announced on 7 April 2022. These results include:

Mapping and geophysics results confirmed that the major geological features of Nkalonje Hill are those of an alkali silicate-carbonatite intrusive complex, similar to Songwe Hill.
Assays of carbonatite dyke samples in the first of Mkango's targets ("Target 1") returned grades of up to 5.92% TREO with a median grade of 2.96%.
Geophysics has also identified a primary shallow drilling target ("Target 2") beneath exposed mineralised dykes and a secondary deeper drilling target.

The similarities between Nkalonje Hill and Songwe Hill, and the high TREO grades from the assay results, demonstrate a strong case for further investigation. In the long term, the close proximity of Nkalonje Hill to Songwe provides a good potential source of additional feedstock for processing at Songwe Hill.

Planned work at Nkalonje Hill consists of continued evaluation of the dykes at Target 1, including new sampling (including channel sampling where possible) in order to trace the grade of the dykes along strike. A soil/auger sampling and trenching programme is planned to ground truth the geophysical anomalies at Target 2.

Mchinji

The Company has a 100% interest in the Mchinji Licence in respect of an area of 868.69 sq km in the Mchinji District, Malawi. Mkango is evaluating the Mchinji deposit in the context of geophysical data produced by an airborne geophysical survey which was part of a \$25 million World Bank funded nationwide airborne geophysical programme (the "World Bank Survey"). Exploration is focusing on rutile, gold, base metals, nickel-cobalt and graphite.

Mkango has completed reconnaissance shallow soil sampling and an auger programme in its Mchinji Licence. The results confirmed the presence of rutile plus anatase (both naturally occurring mineral forms of TiO2 mineralisation.

Chimimbe Hill

The Company has a 100% interest in the Chimimbe Licence in respect of an area of 98.48 sq km around Chimimbe Hill, Mchinji district, Malawi. Exploration has identified a number of areas with potential for laterite and saprolite hosted nickel, cobalt, chrome, rutile, gold and base metals and other mineralization.

Thambani Uranium Licences

The Company has a 100% interest in the Thambani Licence in respect of an area of 136.9 sq km in Thambani, Mwanza District, Malawi. Exploration has identified a number of areas with potential for uranium ("U"), tantalum ("Ta"), niobium ("Nb"), zircon and mineral corundum.

Mkango is currently evaluating strategic options for Mchinji, Chimimbi and Thambani, including opportunities for joint venture and other potential avenues to create value.

REFINE

PULAWY SEPARATION PLANT

On June 7, 2021, the Company announced that Mkango and Grupa Azoty Zakłady Azotowe "Pulawy" S.A. ("Grupa Azoty PULAWY") have agreed to work together towards development of a rare earth separation plant (the "Plant") in Poland. The Plant will process the purified mixed rare earth carbonate derived from Songwe Hill into separated rare earth oxides.

A new Polish wholly owned subsidiary of Mkango, Mkango Polska, has been established and a highly experienced Country Director for Poland, Dr Jarosław Pączek, has been appointed, together with rare earth separation experts, Carester, and a strong team of technical advisors and engineers.

Grupa Azoty PULAWY (Warsaw Stock Exchange: ZAP) is part of The Grupa Azoty Group, the European Union's second largest manufacturer of nitrogen and compound fertilizers, and a major chemicals producer. Its products are exported to over 20 countries around the world, including Europe, the Americas and Asia.

The Parties have signed an exclusive lease option agreement for a site adjacent to Grupa Azoty PULAWY's large scale fertiliser and chemicals complex at Pulawy in Poland, which provides excellent infrastructure, access to reagents and utilities on site, and an attractive operating environment, resulting in a highly competitive operating cost position for the Plant, based on scoping studies to date.

Located within a Polish Special Economic Zone, the site provides excellent access to European and international markets. Production from the Plant will strengthen Europe's security of supply for rare earths, used in electric vehicles, wind turbines and other green technology and strategic applications, and aligns with European initiatives to create more robust, diversified supply chains.

Development of the Plant is expected to bring significant benefits to the Mkango group:

Higher value-added products with increased margins targeting 2,000 tonnes per year of separated neodymium (Nd)/praseodymium (Pr) oxides, and 50 tonnes per year dysprosium (Dy) and terbium (Tb) oxides in a heavy rare earth enriched carbonate
Greater integration plant development fully underpinned by sustainably sourced, purified mixed rare earth carbonate from Songwe Hill's operations, with other synergies being evaluated
Increased marketing flexibility with a broader range of potential customers future opportunities to produce and market separated heavy rare earths
Catalyst for regional growth and the green transition potential for further downstream developments and related businesses, including renewables, creating additional jobs in the region
Engagement with financial institutions is underway to accelerate development, and additional strategic partnerships, downstream developments and marketing opportunities are being evaluated.

The Company received support from ERMA with securing finance for the development of the rare earth separation plant.

Feasibility studies for the Plant are being planned in parallel with the Songwe Hill rare earths project in Malawi.

RECYCLE

The Company is pursuing downstream opportunities in the rare earths supply chain, with a particular focus on rare earth magnet recycling through its 41.6% interest in HyProMag, a company with a patented process, licenced from the University of Birmingham ("UoB"), to extract and demagnetise NdFeB (neodymium, iron and boron) magnets embedded in scrap and redundant equipment named Hydrogen Processing of Magnet Scrap ("HPMS"), and a 100% interest in Mkango UK, which is focused on chemical processing of magnet scrap. Mkango increased its interest in Maginito (which hold its shares in HyProMag) for 75% to 100%. Maginito increased its interest in HyProMag from 25% to 41.6% in November 2021.

HyProMag is currently developing plants for short loop magnet recycling in the UK and Germany, the latter through its 80% owned German subsidiary, HyProMag Germany, and is uniquely positioned to unlock the supply chain for rare earth magnet recycling.

Mkango UK will develop a pilot plant in the UK to chemically process recycled HPMS NdFeB powder and magnet swarf (i.e. the powder produced from grinding and finishing magnets) from a range of scrap sources including electronic waste, electric motors and wind turbines, complementing the short loop magnet recycling routes being developed by HyProMag.

Mkango UK and HyProMag are also collaborating with Bowers & Wilkins, European Metal Recycling, GKN Automotive Innovation Centre, Jaguar Land Rover and UoB in The Driving the Electric Revolution Challenge at UK Research and Innovation grant funded project, SCREAM project.

SCREAM will establish a recycled source of rare earth magnets in the UK to provide greater security of supply to UK industry, whilst aiming to achieve a 10% reduction in cost and a significant reduction in environmental impact, with an estimated 88% less energy for short loop (i.e. magnet to magnet) recycled magnets versus primary mining to separation to metal alloy to magnet production.

The Project includes pilot plants for short loop recycling, encompassing scrap pre-processing, HPMS and production of recycled sintered magnets, as well as for complementary recycling routes, namely remelting and strip casting to produce NdFeB alloys as well as chemical processing, the latter being developed by Mkango UK.

HyProMag will work with UoB to develop a new semi continuous version of the HPMS process and to produce short loop recycled sintered magnets at multiple grades to match the requirements for a range of applications.

CORPORATE STRUCTURE

The Company is incorporated in the province of British Columbia, Canada. The Company's registered office is Suite 2900, 550 Burrard Street, Vancouver, British Columbia, Canada, V6C 0A3. The Company's current structure is as follows:

The Phalombe Licence, the Thambani Licence and the Chimimbe Licence are held by Lancaster Exploration Limited ("Lancaster BVI"), a company which was incorporated under the laws of the British Virgin Islands ("BVI") on August 3, 2007. Lancaster BVI is 100% owned by Mkango.

Lancaster Exploration Limited ("Lancaster Malawi") was incorporated on May 19, 2011, under the laws of Malawi. Lancaster Malawi is a wholly owned subsidiary of Lancaster BVI.

MKA Exploration Limited ("MKA Exploration") was incorporated under the laws of the BVI on July 25, 2018 and is wholly owned by Mkango. MKA Exploration's wholly owned subsidiary, MKA Exploration Limited ("MKA Exploration Malawi") was incorporated under the laws of Malawi on May 6, 2019. The Mchinji Licence is held by MKA Exploration.

Maginito Limited ("Maginito") was incorporated under the laws of the BVI on January 3, 2018. Maginito is 100% owned by Mkango. Maginito is focused on developing green technology opportunities in the rare earths supply chain, encompassing neodymium (NdFeB) magnet recycling as well as innovative rare earth alloy, magnet and separation technologies. This includes its investment in HyProMag Limited ("HyProMag") as discussed below.

Mkango Polska Sp. z o.o. ("Mkango Polska") was incorporated under the laws of Poland and 100% ownership was acquired by the Company on March 22, 2021. Mkango Polska is developing a rare earth separation plant at Pulawy in Poland, working with Grupa Azoty PULAWY, Poland's leading chemicals company and the second largest manufacturer of nitrogen and compound fertilizers in the European Union. The Pulawy Separation Plant is expected to process the purified mixed rare earth carbonate derived from Songwe Hill into separated rare earth oxides.

Mkango Rare Earths UK Limited ("Mkango UK") was incorporated on June 23, 2021 under the laws of England and Wales. Mkango UK is 100% owned by the Company. Mkango UK was established to further develop the Company's rare earths strategy in the UK.

HyProMag Limited ("HyProMag") was incorporated on 19 July 2018 under the laws of England and Wales. HyProMag is 41.6% owned by Maganito. Maganito has an option to increase it ownership of HyProMag to 49%. The remining shares of HyProMag are owned by individuals who are original founders of the business (including the estate of one of the founders who was recently deceased). HypoMag is focused on the extraction and demagnetisation of NdFeB magnets embedded in scrap and redundant equipment using HPMS process.

HyProMag GmbH ("HyProMag Germany") was incorporated on 3 October 2021 under the laws of Germany. HyProMag Germany is 80% owned by HyProMag, with the remaining 20% owned by Professor Carlo Burkhardt of Pforzheim Univerity. HyProMag Germany has sublicensed HPMS from HyProMag for use in Germany.

DISCUSSION OF OPERATIONS

Mkango holds a 100% interest in Lancaster BVI, which holds a 100% interest in 17 exploration licences, 15 of which are held as 5 year retention exploration licences in southern Malawi, the Phalombe Licencess, the Thambani Licence and the Chimimbe Licence. Mkango also holds a 100% interest in MKA Exploration Limited BVI which holds a 100% interest in the Mchinji Licence.

		For the year
		ended December 31,
Licence	Project	2021	2020
Phalombe	Songwe Hill project
	Metallurgy expenses	2,600,781	1,236,424
	Government fees	24,643	17,289
	ESHIA (1)	293,447	64,057
	Technical studies	2,050,561	639,068
	Consulting fees	274,090	181,931
	Grant refund	-	(53,703)
	Malawi office and camp expenses	81,717	98,770
Phalombe total		5.325.239	2,183,836
REE Separation Plant pre-feasibility Study	Consulting fees	456,644	-
Thambani, Chimimbe, Mchinji and Nkalonje	Project expenditures	231,202	188,580
Total mineral project and research and development expenses		\$6,013,085	\$2,372,416

(1) Environmental Social Health Impact Assessment and Corporate Social Responsibility expenditures.

Exploration and evaluation expenditures are recognized in the consolidated statement of comprehensive loss as mineral project expenditures pending determination of technical feasibility and commercial viability.

SONGWE HILL

Background

The Phalombe retention Licences are located in southeast Malawi, within which the Songwe Hill Rare Earth deposit is the main development target and features carbonatite hosted rare earth mineralization. Songwe Hill was subject to historic exploration programs during the late 1980s. Lancaster BVI was awarded the licence by the Malawi government on January 21, 2010 and has subsequently renewed it, with the most recent renewal on the June 1, 2021 when the Phalombe Licence was transferred into 11 retention licences covering a total of 250 sq km. Each retention licence is for a 5 year period from June 1, 2021 and certain licences are expected to be transferred into a mining licence once the Feasibility Study and ESHIA studies have been completed.

Exploration

Mkango has been exploring and evaluating the Songwe Hill rare earth deposit since January 2010. Following confirmation of the previously investigated enriched zones, exploration focused on identifying the nature and extent of the rare earth mineralized carbonatites and related rocks. Mkango's early exploration activities consisted of lithogeochemical sampling, soil sampling, channel sampling, geological mapping, ground magnetic, density and radiometric surveys, and petrographic/mineralogical analyses.

In particular, detailed geological mapping of Songwe Hill was carried out in 2010 and 2011. The mapping demonstrated that carbonatite outcrops existed over a significantly larger area than had previously been recognized. Mapping further achieved a more precise delineation of the distribution of the main rock types. The mapping broadened the surface area of known rare earth mineralization significantly beyond the areas identified in previous exploration and identified new areas of rare earth enriched carbonatite.

The results of these activities confirmed the rare earth enrichment initially identified by historical exploration and suggested that the mineralized carbonatites were more widespread than originally identified. Mkango embarked on diamond drilling campaigns in 2011 ("Phase 1"), 2011–2012 ("Phase 2") and 2018 ("Phase 3"). Mkango also produced a bulk sample after the Phase 3 drilling in 2018.

The Phase 1 programme was successful in confirming the presence of rare earth mineralization first outlined by historical exploration. Eleven of the 13 holes intersected significant zones of rare earth mineralization. Having confirmed the presence of the mineralization, the Phase 1 drilling was expanded to areas not previously tested and demonstrated the extension of rare earth mineralization both laterally and vertically.

The Phase 2 drilling focused on expanding the area of known mineralization, infilling between existing holes and testing the mineralization at depth. All drill holes intersected rare earth mineralization and the maximum depth at which rare earth mineralization was encountered was 350 metres ("m") below the surface of the hill.

The original resource estimate based on the Phase 1 and Phase 2 drilling programs enabled a maiden resource of 13.2 million tonnes ("Mt") grading 1.62% total rare earth oxides ("TREO") in the Indicated Mineral Resource category and 18.6mt grading 1.38% TREO in the Inferred Mineral Resource category which was announced on October 10, 2012. The Indicated Resource estimate formed the basis for a Pre-Feasibility Study completed in 2014, which was subsequently updated in 2015.

Talaxis Agreement

In March 2017, Mkango announced a transaction with Talaxis, whereby Talaxis invested £500,000 in Mkango by means of a private placement. The private placement closed in October 2017, which resulted in Talaxis' ownership of 12.5% in Mkango's outstanding Shares. In addition, Talaxis owned warrants, which could, if exercised, increase its ownership to 18.1% of Mkango's Shares. These warrants were exercised on December 21 2020 by way of a cashless exercise for the issue of 1,000,000 Shares. In November of 2017, Mkango announced a further transaction with Talaxis (the "Talaxis Agreement"), whereby Talaxis agreed to make investments totalling £12 million (\$16 million) in Lancaster BVI to fund the Feasibility Study for Songwe Hill, with an option to fund project development, and a further investment totalling £2 million (\$2.8 million) in Maginito (described more fully below) to further advance Mkango's downstream strategy.

On January 24, 2018, in accordance with the terms of the Talaxis Agreement, Talaxis invested an initial £5 million (\$7 million) for a 20% interest in Lancaster BVI and a further £1 million (\$1.3 million) for a 24.5% interest in Maginito.

On May 18, 2018, Mkango signed the Songwe Hill Joint Venture Agreement, the Talaxis Investment Agreement and the Cooperation Deed (the "Definitive Agreements") in relation to the Talaxis Agreement.

On March 28, 2019, in accordance with the terms of the Definitive Agreements, Talaxis invested £7 million (\$9.0 million) for a further 29% interest in Lancaster BVI.

On August 5, 2021 the Company announced the restructuring of Talaxis' interests in both the Songwe Hill Rare Earths Project and Maginito to simplify and optimise the Company's ownership structure. Mkango increased ownership of the Songwe Hill Rare Earths Project to 100% as part of a £13 million (\$18 million) share transaction with Talaxis. On August 16, 2021, the Company announced that further to the Company's announcement of 5 August 2021, it had received TSX-V conditional approval for the fundraising and, after shareholder approval, the transaction was completed on November 1, 2021.

Feasibility Study

Following the receipt of £5 million (\$7 million) by Lancaster BVI on January 24, 2018, pursuant to the transaction with Talaxis, Mkango commenced the Feasibility Study, the initial phases of which comprised an extensive diamond drilling programme, metallurgical optimisation and work in relation to the ongoing ESHIA.

On June 4, 2018, Mkango announced commencement of the major Phase 3 diamond drilling programme at Songwe Hill. The programme was completed in early September 2018 and comprised 91 drill holes totalling 10,900 m of infill, step-out and geotechnical drilling, the latter for the purposes of mine design.

In five press releases between August 21, 2018 and December 3, 2018 (www.sedar.com), Mkango announced the

results of all 91 drill holes which, together with a schematic geological map illustrating the location of the drill hole collars and estimated drill hole traces, are available on the Company's website at www.mkango.ca.

Approximately 60% of the Phase 3 drill holes were infill holes aimed at better defining the geology and geometry of the mineralized body, to facilitate a better understanding of the geological characteristics and setting of the mineralization, and to refine the geological model as a prelude to re-defining the Mineral Resource. All infill holes intersected significant widths of mineralized carbonatite and breccia. Modelling of the lithologies based on geochemistry confirms that the core of the deposit is a uniformly mineralized carbonatite intrusive with steep sides.

Approximately 30% of the Phase 3 drill holes were step-out holes, aimed at expanding the known Mineral Resource by identifying or better delineating mineralization that is outside the volume of the previously defined Mineral Resource. Most of these holes contained mineralized intersections although not all reached their targeted depths. These holes have resulted in expansion of the estimated Mineral Resources by identifying new areas of mineralized carbonatite beyond the limits of the previous exploration programs.

Oriented core was recovered from 16 of the holes to provide geotechnical information within the Mineral Resource for future mine design.

Forty-nine of the drill holes intersected significant zones of rare earths mineralisation grading above 1% total TREO which are shown in Table 1 of Appendix A of the MD&A and the full set of the results and breakdown of TREO values are shown in Table 2 of Appendix A of the MD&A.

Laboratory assay data was used to produce a 3D model based on geochemical coding that is reflective of the main mineralization, and that is objective, repeatable, and provides a consistent and meaningful illustration of the distribution of rare earth mineralization in the context of the geological setting.

The principal geochemical discriminators of the lithological variation were found to be aluminium, silicon, potassium, and calcium. Calcium was used as the final indicator, which gave a good separation with the same accuracy and resolution as if all four discriminators had been used.

The geological model constructed from the geochemistry provides a good framework within which to interpret the geology of the deposit. This is a heterogeneous geological environment that is not easily interpreted from lithological observations of drill hole core and outcrop samples alone. The model provides an estimate of the shape and extent of the carbonatite and is considered a useful tool to describe the shape of the main ore body. The model was also applied to validate the indicator approach that was used to estimate the carbonatite proportion in each cell of the resource block model.

On February 4, 2019, Mkango announced an updated Mineral Resource estimate for Songwe Hill: 8 Mt grading 1.50% TREO in the Measured Mineral Resource category, 12.2 Mt grading 1.35% TREO in the Indicated category and 27.5 Mt grading 1.33% TREO in the Inferred Mineral Resource category, applying a base case cut-off grade of 1.0% TREO.

The updated base case Mineral Resource Estimate equates to a 60% increase in the Measured and Indicated Resource tonnage and a 48% increase in the Inferred Resource tonnage versus the base case 2012 Mineral Resource Estimate, which formed the basis for the 2015 Pre-Feasibility study. The Mineral Resource is open at depth. The combined Measured and Indicated Mineral Resource Estimate, totalling 21 Mt grading 1.41% TREO, will form the basis of the updated mine plan for the ongoing Feasibility Study, which will evaluate a bulk tonnage, open pit mining operation focused on broad zones of near surface and outcropping rare earths mineralisation. The updated resource supersedes the 2012 Mineral Resource Estimate, and therefore renders the mining and economic information in the 2015 Pre-Feasibility study obsolete. Updated mining and economic information will be generated as part of the ongoing Feasibility Study based on the new resource.

The Measured Mineral Resource Estimate comprises 42% of the combined Measured and Indicated Mineral Resource Estimate, indicating a substantial increase in geological confidence to support the completion of the Feasibility Study.

The majority of the previously delineated near surface Inferred Mineral Resource Estimate has been upgraded to either the Measured Mineral Resource or Indicated categories, achieving a key objective of the 2018 drill programme. Approximately 95% of the Measured and Indicated Mineral Resource Blocks are at a depth of less than 160 m below the surface of the hill, indicating that the majority will be accessible by open pit mining.

Scientific and technical information in relation to these results and related disclosure, including sampling, analytical, and test data underlying the information, has been approved and verified by Dr. Scott Swinden of Swinden Geoscience Consultants Ltd, who is a "Qualified Person" in accordance with NI43-101.

Sample preparation and analytical work for the drilling and channel sampling programmes are being provided by Intertek-Genalysis Laboratories (Perth, Australia) employing ICP-MS techniques suitable for rare earth analyses and following strict internal Quality Assurance/Quality Control ("QAQC") procedures inserting duplicates, blanks and standards. Internal laboratory QAQC was also completed to include blanks, standards and duplicates.

The ESHIA studies are currently being completed in accordance with World Bank Standards and Equator Principles.

In terms of other aspects of the Feasibility Study, Mkango shipped a 60 tonne bulk sample to Australia for pilot test work. The bulk sample was selected from areas within the previously announced upgraded Measured and Indicated Mineral Resource Estimates, which underpin the ongoing Feasibility Study.

Potential pilot plant facilities were reviewed through a detailed tender process and ALS Metallurgy in Perth, Australia was selected. On February 24, 2021 the Company announced the commencement of flotation pilot test plant work. Following completion of flotation piloting, announced on March 2, 2021, the Company announced results of the flotation pilot plant programme on May 4, 2021:

The flotation piloting programme demonstrated that the flotation process is robust and straightforward to scale up and the results support a significant increase in both flotation recoveries and concentrate grade for the Feasibility Study versus the design criteria for the 2015 pre-feasibility study for Songwe Hill:
Significant increase in flotation recovery of total rare earth oxides ("TREO") to 74% from 67%;
Tripling of flotation concentrate grade to 15% TREO from 4.7% TREO;
Substantial increase in flotation upgrade, with the optimised flotation regime increasing the run-of-mine ore grade by 10 times versus three times in the pre-feasibility study and a positive impact on downstream integrated hydrometallurgical operations.
The flotation pilot plant generated over one tonne of flotation concentrate for hydrometallurgical pilot processing at ANSTO, the first phase of which is underway.
The ongoing Feasibility Study for Songwe Hill envisages processing of flotation concentrate via an integrated hydrometallurgical processing plant, located adjacent to the Songwe operations in Malawi, targeting a high grade purified mixed rare earth carbonate grading greater than 50% TREO.
The flotation and hydrometallurgical pilot plants provide SENET (a DRA Global Group Company) with key design parameters and essential operating data to assist it in the engineering of the Company's commercial scale operation.

On September 23, 2021 the Company announced that the management team of Mkango, as well as leading Malawian geotechnical engineering firm, Geoconsult Limited, and Zutari Limited, a geotechnical engineering firm which is based in South Africa, were on site at the Songwe Hill project to commence a major geotechnical drilling and pitting program.

The geotechnical test work program obtained samples from approximately 150 five-metre-deep pits and 22 twentymetre drill holes and is being undertaken to confirm the soil and ground characteristics of the Songwe Hill project area.

The geotechnical samples were tested and investigated in Malawi at the Geoconsult Limited laboratories in Lilongwe and provide the detailed geotechnical information that is required to finalize the detailed engineering design plans, prior to the completion of the Feasibility Study expected in Q2 2022.

On December 14, 2021 the Company announced that it had commenced the final stage of hydrometallurgy piloting at ANSTO in Australia following an extensive phase of flow sheet development and optimization.

On March 7, 2022 the Company announced the production of Neodymium and Praseodymium enriched rare earth carbonate from final piloting as the Feasibility Study nears completion. Highlights include:

The final stage of hydrometallurgical piloting at ANSTO for Songwe Hill has successfully produced rare earth carbonate grading 55% total rare earth oxides ("TREO") equivalent, enriched in neodymium and praseodymium ("Nd / Pr") oxides, which together make up 31% of the rare earth oxide content in the carbonate product (i.e. Nd / Pr oxides / TREO = 31%)

Neodymium and praseodymium are key components of permanent magnets used in electric vehicles, wind turbines and many electronic devices and prices for Nd / Pr oxides have risen by 85% and 135% respectively over the last 12 months
The rare earth carbonate produced at Songwe Hill will feed Mkango's proposed Pulawy separation plant development in Poland
Technical aspects of the feasibility study for Songwe Hill are close to completion, with the majority of engineering workstreams 100% complete and other key workstreams more than 90% complete. Negotiations of the MDA with the Government of Malawi are also well advanced
The MDA confirms the fiscal and legal terms for project development upon completion of which, the results of the feasibility study and valuation metrics will be announced
During this period, Mkango will continue to advance ongoing discussions with potential strategic investors and off-takers, and work closely with its brokers, project finance advisors, Terrafranca Capital Partners Ltd (www.terrafranca.co.uk), and United States strategic advisors, Jones Group International (www.jonesgroupinternational.com). Mkango also recently engaged EIT RawMaterials (www.eitrawmaterials.eu) to further support financing discussions in Malawi and Poland. EIT RawMaterials provides support to Mkango within the framework of the European Raw Materials Alliance.
The MDA was recently highlighted to the Malawi Parliament in a speech by Malawi State President His Excellency Lazarus Chakwera and also during the Malawi 2022/23 Budget by the Minister of Finance Hon Sosten Gwengwe MP, and both Mkango and the Government of Malawi are prioritising its successful completion

Scientific and technical information in relation to flotation piloting and metallurgy has been approved and verified by Nicholas Dempers Pr.Eng (RSA) Reg. No 20150196, FSAIMM of SENET (a DRA Global Group Company), who is a "Qualified Person" in accordance with National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

Other targets in the Phalombe Licence

On August 9, 2016, Mkango announced the results of the portion of the World Bank Survey covering approximately two thirds of the Phalombe Licence. The World Bank Survey highlighted a number of exploration targets within the Phalombe Licence. Songwe Hill was not covered by the World Bank Survey.

Apart from Songwe Hill, there are two other identified hypabyssal systems in the Phalombe Licence, namely Nkalonje and Namangale. In both cases, the World Bank Survey indicates strong thorium radiometric anomalies coincident with the intrusive rocks, which, similar to Songwe Hill, are expressed as steep hills rising above the surrounding plain. Thorium radiometrics are known as a highly effective tool for rare earths exploration and the carbonatite at Songwe Hill is also characterized by a thorium radiometric anomaly, identified through previous geophysical surveys. Unlike Songwe Hill, the Nkalonje Hill and Namangale hypabyssal systems do not feature large areas of outcropping carbonatite, the host rock for rare earths at Songwe Hill. However, both contain outcrops of carbonatite veins and dykes suggesting that there is potential for identifying a carbonatite body below surface. Other prospects within the Phalombe Licence include the Mantrap and Knoll prospects.

A map showing the thorium radiometric anomalies superimposed on a topographic map, indicating local infrastructure, and the locations of Nkalonje and Namangale can be accessed via the following link: http://www.mkango.ca/i/maps/Results-of-Airborne-Radiometric-Survey-(Th)-on-Topo-Aug.jpg.

In 2016, Songwe Hill and the Nkalonje Hill, Mantrap and Knoll prospects were visited by a large delegation of international and Malawian geology and geophysics experts in connection with the €5.4 million HiTech AlkCarb research programme led by the Camborne School of Mines, the University of Exeter and funded under the European Union's Horizon 2020 Research and Innovation programme in which the Company (through Lancaster BVI) was an industry partner. The scope of the research project encompassed building exploration expertise in hi-tech raw materials as well as improving and developing interpretation of geophysical and down hole data. Of particular relevance to Mkango was the opportunity to better understand the potential for large but unexposed mineralised bodies of carbonatite (the host rock for rare earth mineralisation) on either a prospect or regional scale.

Based on work to date, the highest priority of the targets within the Phalombe Licence is the abovementioned Nkalonje Hill hypabyssal system, where outcrop is largely fenite (altered country rock) with occasional carbonatite but where there may also be potential for underlying and larger zones of mineralised carbonatite.

On April 7, 2022 the Company announced the completion of initial sampling and ground geophysics at its Nkalonje Hill and the identification of drill targets. Highlights included:

Assays of carbonatite dyke samples return grades of up to 5.92% TREO (Total Rare Earth oxides) (median 2.96%).
Mapping and geophysics results confirm that the major geological features of Nkalonje Hill are those of an alkali silicate-carbonatite intrusive complex, similar to Songwe Hill.
Geophysics has identified a primary shallow drilling target beneath exposed mineralised dykes and a secondary deeper drilling target.

Geological mapping and geophysics data for Nkalonje Hill confirms the presence of previously mapped nepheline syenite, breccia and carbonatite.

The ground geophysics data support the geological interpretation of a ring complex structure, as seen at Songwe Hill, and at other carbonatite vents in Malawi. The overall diameter of this structure is approximately 1.7 km and comprises an outer ring of nepheline syenite and a central vent of breccia.
The breccia body is approximately 900 m in diameter and comparable in lateral extent to Songwe Hill.
Mapping to date has identified eight carbonatite dykes reaching 4 m in width and traceable at surface up to 90 m along strike.
Two different carbonatite types are noted at Nkalonje Hill: (1) calcite carbonatite and (2) a banded ferroan calcite carbonatite.
Assay results for 12 calcite carbonatite and 17 ferroan calcite carbonatite grab samples returned total rare earth oxide (TREO) grades of up to 5.92%, with a median value of 2.96% in the ferroan calcite carbonatite, suggesting concentration of the REE in the more evolved carbonatite phases.

		$ La_2O_3 Ce_2O_3 Pr_6O_{11} Nd_2O_3 Sn_2O_3 Et_2O_3 Gd_2O_3 Th_4O_7 Dy_2O_3 Ho_2O_3 Er_2O_3 Tm_2O_3 Yb_2O_3 Lt_2O_3 Y_2O_3 TREO$
	Median 7643		14134 1243		3224	$ 240\rangle$	57	120	17	102	22	69	11	72	10	762	2.96
atite	Max	17197	29706 2767		7300	551	123	254	36	277	65	185	23	129	16	2101 5.92
calcite ۰ $\overline{ }$ 욘 ఔ ௴ 빋	Min	4076	7571	695	1879	157	41	85	11	59	11	30	14	27	14	320	1.53
	Median 3343		5662	529	1557	150	35	82	12	56	110	28	14	23		275	1.20
onatite	Max	5474	8811	781	2172	204	50	109	15	75	14	36	15	31		423	1.80
čite ึ ਛੇ ී 빋	Min	1089	1874	169	480	55	16	40	16	32	16	19	lЗ	16		191	0.40

Table 1: Assay results for grab samples from Nkalonje Hill. Grades for individual rare earth oxides reported in parts per million (ppm), TREO in weight percent.

The geophysical characteristics of the central breccia vent include a low magnetic response, low density and high conductivity. However, it also includes a central gravity anomaly extending from the surface to approximately 300 m depth. This feature is tentatively interpreted as a shallow body of carbonatite, which fits the observed lithologies present at Nkalonje Hill, and the conceptual structure of the hill.

Exploration targets at Nkalonje Hill

Based on interpretation of the recent data, the Company has identified two drilling targets at Nkalonje Hill.

Target 1 is centred on known mineralisation around the carbonatite dykes. Further mineralisation at depth is interpreted from Induced Polarity (IP) and Natural Source Audio Magneto-Telluric (NSAMT) geophysical anomalies which present a series of potential shallow drill targets extending down-dip of the exposed dykes.
Target 2 is a conceptual target based on geophysical anomalies which consist of a surface radiometric anomaly (high Th), a gravity high and magnetitic low, with an IP anomaly at depth. The target is in a relatively eroded, poorly exposed part of the hill. These geophysical and geomorphological features fit with a conceptual model of

a central carbonatite body, common to other carbonatite complexes, which the surface dykes suggest may potentially contain REE mineralisation.

Work plan

Mkango retains, through its holding in Lancaster BVI, a 100% interest in the Phalombe Licence following the restructuring of Talaxis' interests to acquire the remaining 49% interest in the Phalombe licence which completed on November 1, 2021.

MCHINJI, MCHINJI DISTRICT

On July 4, 2019, MKA Exploration BVI was granted the Mchinji Licence by the Malawi Minister of Natural Resources, Energy and Environment in respect of an area of 868.69 sq km in the Mchinji district, Malawi, which is adjacent to licences with known mineral potential including the Chimimbe Hill licence, a nickel-cobalt licence to the south.

The Mchinji Licence runs for a three-year term, after which it can be renewed twice for a further two-year period with a 50% reduction in the Mchinji Licence area required with each renewal. Exploration is focusing on rutile, gold, base metals, nickel-cobalt and graphite.

Mkango has completed reconnaissance shallow soil sampling and an auger programme in the Mchinji Licence with results announced in September 2020. The results confirmed the presence of of rutile plus anatase (both naturally occurring mineral forms of TiO2 mineralisation. Early-stage results show geological similarities to saprolite-hosted rutile mineralisation recently discovered on the adjoining Sovereign Metals licence to the east.

On November 3, 2020, the Company announced the commencement of an extensive hand-auger drilling and soil sampling programme to identify rutile prospects within the Mchinji licence.

The drill programme was following up on the reconnaissance work announced on September 15, 2020.

The Company announced the completion of the programme on December 3, 2020, which was followed by mineral processing testwork on the samples, and now carrying out further desktop studies over the licence area.

Mkango retains a 100% interest in the Mchinji Licence.

CHIMIMBE HILL, MCHINJI DISTRICT

On November 14, 2017, Lancaster BVI was granted the Chimimbe Licence by the Malawi Minister of Natural Resources, Energy and Environment in respect of an area of 98.48 sq km around Chimimbe Hill, Mchinji district, Malawi. Exploration has identified a number of areas with potential for laterite and saprolite hosted nickel, cobalt, chrome, rutile, gold and base metals and other mineralization.

The Chimimbe Licence runs for a period of three years and is renewable for further periods of two years thereafter if the terms and conditions of the licence have been met. The licence has been renewed for a period of two years to November 10, 2022.

Mkango retains a 100% interest in the Chimimbe Licence.

THAMBANI, MWANZA DISTRICT

Background

Lancaster BVI was granted the Thambani Licence by the Malawi Minister of Natural Resources, Energy and Environment on September 10, 2010 in respect of an area, which was originally 468 sq km in Thambani, Mwanza District, Malawi. Exploration has identified a number of areas with potential for uranium ("U"), tantalum ("Ta"), niobium ("Nb"), zircon and mineral corundum.

The licence was originally issued by the Malawi government on a three-year basis and was subsequently renewed on September 10, 2015 for an additional two-year term when the Company requested a reduction in the Thambani Licence area to the current 136.9 sq km. The Thambani Licence was renewed for a further 2 years to September 10, 2019 and was subsequently renewed for an additional 2 years to September 10, 2021. The Company has subsequently been granted 4 retention licences for a period of five years to 19 October 2026.

The exploration activities conducted during 2011 and 2012 included acquisition of Landsat7 and ASTER satellite imagery for the Thambani Licence area, systematic ground radiometric surveys to confirm and detail previouslyknown airborne anomalies, reconnaissance geological mapping and litho-geochemical sampling programs. The work has identified a number of potential uranium targets over the Thambani Massif, which is mainly composed of nepheline syenite gneiss, forming two prominent ridges known as Thambani East Ridge and West Ridge. Historical airborne radiometric surveys and ground radiometric survey programs carried out by Mkango have revealed two distinct uranium anomalies occurring along the two ridges. A strong uranium anomaly, measuring approximately 3 kilometres ("km") by 1.5 km, occurs along the length of the Thambani East Ridge with a north-south trend and a second uranium anomaly, measuring approximately 1.5 km by 0.4 km along the western foot of the West Ridge possibly coincident with the contact between the nepheline syenite body and the biotite-hornblende gneisses to the west.

Initial results from follow up reconnaissance geochemical sampling conducted in 2013 returned locally anomalous uranium values, ranging up to 1,545 ppm U3O8, on both Thambani East Ridge and West Ridge. During the year ended December 31, 2014, the Company continued to progress the geological exploration studies on the Thambani project area, data analysis and geological modeling.

Mkango completed a trenching programme across the Thambani Massif primarily focused on two sites of historical uranium exploration, known as the Chikoleka and Little Ngona targets. An initial set of nine trenches, selected on the basis of anomalous ground radiometric results, have been re-examined and geochemically sampled across profiles from soil/overburden into bedrock.

The first set of assay results of 142 soil and rock chip samples returned variably anomalous U, Nb and Ta values in most trenches, ranging up to 4.70 % U3O88, 3.25 % Nb2O5 in soil and up to 0.42 % U3O8, 0.78 % Nb2O5 and 972 ppm Ta2O5 in rock chips, notably higher than results from the 2013 reconnaissance surface geochemical sampling programme. Results associated with the 10 best U3O8 assays are summarized in Table 1 of Appendix C of the MD&A.

Preliminary mineralogical studies carried out on six rock samples from the Little Ngona River and Chikoleka targets, using Scanning Electron Microscopy at the Natural History Museum London, indicate that pyrochlore group minerals, mainly betafite, are the principal carriers of U, Nb and Ta for these samples.

Airborne Geophysical Survey

On July 12, 2016, Mkango announced results of the airborne geophysical survey covering approximately two thirds of its Thambani Licence. As with the Phalombe Licence, this survey was part of a \$25 million World Bank funded nationwide airborne geophysical programme flown at 250m spacings.

The World Bank Survey confirms the presence of the previously identified uranium radiometric anomaly referred to above along the western flank of the Thambani East Ridge. The Little Ngona prospect, which previously yielded very encouraging uranium, niobium and tantalum values from geochemical sampling, is located at the northern end of this anomaly.

Further discrete uranium anomalies orientated approximately east-west, is located to the south of these anomalies and has yet to be investigated in detail. The previously identified uranium radiometric anomalies on the West Ridge and Chikoleka prospect in the north-west of the Thambani Licence area, which also yielded very encouraging results from previous geochemical sampling, were not covered by the World Bank Survey.

A map showing the uranium radiometric anomalies superimposed on a topographic map, indicating local infrastructure, and a digital elevation model can be accessed via the following link:

http://www.mkango.ca/i/maps/Results_of_Airborne_radiometric_survey_on_topo_U_July.jpg

The airborne survey also highlighted a number of magnetic anomalies not previously identified, including a 2.3 km linear magnetic high anomaly along the Thambani East Ridge, a further 1 km by 0.5 km magnetic high anomaly located to the north along the Thambani East Ridge, a magnetic low anomaly approximately co-incident with the abovementioned east–west orientated uranium anomaly and anomalies in a number of other locations. These areas require further investigation to determine the significance of the magnetic anomalies and whether they are related to mineralisation or geological features.

A map showing the magnetic anomalies superimposed on a topographic map, indicating local infrastructure, and a digital elevation model can be accessed via the following link: http://www.mkango.ca/i/maps/Results_of_Airborne_magnetic_survey_on_topo_July_2016.jpg

During 2019, Mkango commenced a subsequent exploration programme focused on further definition of uranium, tantalum and niobium mineralization in the licence area. Results were as follows:

Assay results from 128 rock samples collected during the 2019 exploration programme returned uranium, tantalum and niobium values ranging up to 0.74% U3O8, 0.41% Ta2O5 and 3.24% Nb2O5. Of the total, 43 graded above 500ppm U3O8, of which 13 graded above 1,000ppm U3O8; all but one of these 43 samples were in-situ rock samples. Results associated with the ten best U3O8 assays are summarised in the table below, nine of which are grab samples from outcrop (prefixed G-) and one a hand-auger sample of highly weathered rock in a trench (prefixed T-).

The objective of the programme was to identify new areas of outcropping mineralisation through further geological reconnaissance and sampling, guided by handheld spectrometer. Sampling was focussed on the uranium anomalies identified by previous airborne and ground radiometric surveys, including areas where previous sampling gave encouraging results. The aims of the sampling were to better delineate the mineralised zones and to localise future drill sites to test the downdip extension of surface mineralisation. Field observations and sampling results suggest that mineralisation occurs in zones that are conformable with gneissic banding.

Assays from the 10 highest grade U3O8 samples from the 2019 Thambani sampling programme are described in Table 2 of Appendix C of the MD&A.

The 2019 sampling programme was focused on radiometric uranium anomalies associated with the Thambani Massif, a body of nepheline-bearing syenite gneiss which dominates the north-eastern part of the licence. Previous work has shown the uranium anomalies to be associated with niobium and tantalum mineralisation.

Two suites of samples were collected: 1) in-situ grab samples from outcrop; and 2) extremely friable, highly weathered rock from trenches that were manually excavated to approximately 10m long, 1.5m wide and 2m deep, and oriented west to east across the regional strike of the gneissic foliation. Grab samples are selective and are not necessarily representative of the mineralisation on the property.

A location map and sampling maps can be found at https://mkango.ca/projects/thambani

A total of 58 surface grab samples were collected, 54 of which were from outcrop associated with the prominent radiometric anomaly along the western slope of the Thambani East Ridge, and four from outcrop in the Supe River.

Ten trenches were excavated by hand over radiometric anomalies. Three of these (the Western Trenches) were spaced 25m apart, immediately adjacent to a pit where the highest grades were encountered in 2017. The seven other trenches were excavated over radiometric anomalies at widely separated locations on the lower slope of the Thambani East Ridge. In all of the trenches, highly weathered nepheline syenite gneiss was encountered below a bouldery soil horizon approximately 0.5m thick. The westward dip of the banded gneiss observed in outcrop on the ridges was recognisable in the trenches despite strong weathering.

In the Western Trenches, 70 samples were collected, 61 of which were horizontal channel samples of 2m length collected along each wall in all of the three trenches. Five similar samples were collected in one trench at the foot of the Thambani East Ridge.

Assays summarised in the table below show that grades in the fresh rock tended to be higher, suggesting extensive secondary remobilisation of the elements of interest.

Summary of assay results (grades in ppm) from the 2019 Thambani sampling programme are described in Table 3 of Appendix C of the MD&A.

This programme provides new information on the nature, disposition and grade ranges of mineralisation in the Thambani Massif. Sampling of mainly fresh samples on the Thambani East Ridge indicates that the U-Ta-Nb mineralisation occurs within the gneissic bands, and surface observations indicate that it may occur in conformable zones. This provides a target for shallow drilling on the down-dip extension of the surface showings.

Scientific and technical information contained in this section has been approved and verified by Dr. Scott Swinden of Swinden Geoscience Consultants Ltd, who is a "Qualified Person" in accordance with NI 43-101.

Mkango is currently evaluating strategic options for Thambani, including opportunities for joint venture and other potential avenues to create value.

Mkango currently retains a 100% interest in the Thambani Licence.

RECYCLE

Mkango's recycling interests are held via 100% owned subsidiaries, Maginito and Mkango UK. Maginito is focused on developing green technology opportunities in the rare earths supply chain, encompassing short loop NdFeB magnet recycling, via its interest in HyProMag, as well as innovative rare earth alloy, magnet, and separation technologies. Mkango UK was established to further develop the Company's rare earths strategy in the UK and is focused on chemical processing of NdFeB magnet scrap.

HyProMag Limited

On September 23, 2019, the Company announced that Maginito had signed an investment term sheet and one year exclusivity agreement with HyProMag, a private company focused on rare earth magnet recycling. Consistent with Maginito's strategy, the rationale for the transaction includes potential synergies, such as blending of primary production originating from Songwe Hill with recycled production from HyProMag, as well as enhanced marketing flexibility and access to downstream markets for rare earth permanent magnets, which are critical materials for electric vehicles, wind turbines, consumer electronics and other technology applications.

HyProMag has licenced a patented process for extracting and demagnetising NdFeB alloy powders from magnets embedded in scrap and redundant equipment named Hydrogen Processing of Magnet Scrap. This technology was originally developed within the Magnetic Materials Group ("MMG") at the UoB. The founding directors of HyProMag, comprising Professor Emeritus Rex Harris, former head of the MMG, Professor Allan Walton, current head of the MMG, and two honorary fellows, Dr John Speight and Mr David Kennedy, are leading world experts in the field of rare earth magnetic materials, alloys and hydrogen technology, and have significant industry experience.

On January 9, 2020 the Company announced that Maginito had completed the acquisition of an initial 25% interest in HyProMag. Maginito has invested an initial £300,000 for a 25% interest in HyProMag, with an option to invest a further £1 million to increase its interest up to 49% and the first right to supply any primary rare earth raw materials for blending with recycled materials, if required, as well as product offtake and marketing rights.

On May 1, 2020 the Company advanced \$261,106 (£200,000) to HyProMag under the Convertible Loan dated January 9, 2020. The Convertible Loan has a maturity date of April 30, 2023, carries interest at 5% per annum and is unsecured.

On May 28, 2020, the Company announced the launch and provided further details of the Innovate UK grant funded project, "Rare-Earth Recycling for E-Machines" ("RaRE") in which HyProMag is a partner. RaRE will for the first time establish an end to end supply chain to incorporate recycled rare earth magnets into electric vehicles, whereby recycled magnets will be built into an ancillary electric motor to ultimately support the development of a commercial ancillary motor suite. In addition to HyProMag and UoB, RaRE features a strong set of partners with complementary expertise, comprising Advanced Electric Machines Research Limited, Bentley Motors Limited, Intelligent Lifecycle Solutions Limited and Unipart Powertrain Applications Limited. The total budget for RaRE is £2.6 million, of which Innovate UK funded £1.9 million, with RaRE partners funding the £0.7 million balance. HyProMag's contribution was fully funded from the £300,000 investment made by Maginito in January 2020.

On November 30, 2020 the Company announced that HyProMag and partners, European Metal Recycling Limited ("EMR") and UoB were awarded a grant from the Industrial Strategy Challenge Fund, delivered by UK Research and Innovation, for a new ground breaking project entitled "Rare-Earth Extraction from Audio Products", which investigated ways of recycling rare earth magnets from speakers used in automotive and consumer electronics applications, which account for approximately 20% of the current market for rare earth magnets, according to Adamas Intelligence, and therefore represent a significant opportunity for rare earth magnet recycling. On September 30, 2021, the Company announced the successful completion of the project.

On August 5, 2021 the Company announced the restructuring of Talaxis' interests to acquire the remaining 24.5% interest in Maginito which it did not own. The transaction was completed on November 1, 2021 and Mkango now owns 100% of Maginito.

On November 11, 2021 the Company announced that HyProMag had established a subsidiary in Germany to roll out commercialisation of HPMS technology in Europe and to further support government initiatives to strengthen European rare earth supply chains and accelerate the green transition.

Mkango Rare Earths UK Limited

On March 14, 2022, the Company announced that Mkango UK will collaborate with HyProMag, Bowers & Wilkins ("B&W Group"), EMR, GKN Automotive Innovation Centre ("GKN Automotive"), Jaguar Land Rover and UoB in the Driving the Electric Revolution challenge at UK Research and Innovation grant funded project, SCREAM.

Mkango UK's role in SCREAM is to establish a pilot plant in the UK to chemically process recycled HPMS NdFeB powder and magnet swarf (i.e. the powder produced from grinding and finishing magnets) from a range of scrap sources including electronic waste, electric motors and wind turbines, complementing the short loop magnet recycling routes being developed in parallel.

The Company is continuing to evaluate new downstream opportunities relating to the rare earths supply chain.

SELECTED CONSOLIDATED FINANCIAL INFORMATION

Information discussed herein reflects the Company as a consolidated entity.

Financial Position

The following financial data is derived from the Company's consolidated statements of financial position as at December 31, 2021, 2020 and 2019:

As at December 31,	2021	2020	2019
Total assets	5,263,167	5,779,388	9,830,234
Shareholders' equity of parent	4,004,595	10,213,006	12,225,788

Total assets

Total assets were \$5,263,167 as at December 31, 2021 as compared to \$5,779,388 as at December 31, 2020. Total assets decreased by \$516,221 as a result of the loss for the year offset by equity finance received during the year.

Total assets were \$5,779,388 as at December 31, 2020 as compared to \$9,830,234 as at December 31, 2019. Total assets decreased by \$4,050,846 as a result of the loss for the year.

At January 1, 2021, the Company had an opening cash position of \$4,924,567. Cash received during the year ended December 31, 2021 was \$6,757,867 from the issue of shares, net of expenses, and \$94,589 from the exercise of share options. Cash used in operations was \$7,135,038 and cash of \$7,585 was spent on computer equipment. The effect of exchange rate changes on cash was a decrease of \$187,550 during the year for a closing cash position of \$4,446,850.

At January 1, 2020, the Company had an opening cash position of \$9,530,017. Cash received during the year ended December 31, 2020 was \$106,897 from the exercise of warrants. Cash used in operations was \$4,213,208 and cash of \$641,930 was used for the investment in HyProMag. The effect of exchange rate changes on cash was an increase of \$142,791 during the year for a closing cash position of \$4,924,567.

Total shareholders' equity (deficit) of parent

Total shareholders' equity was \$4,004,595 as at December 31, 2021 compared to \$10,213,006 as at December 31, 2020. The decrease of \$6,208,411 is due to the loss attributable to common shareholders of \$6,781,562 and the loss on acquisition of the Talaxis non-controlling interest in Lancaster BVI and Maginito of \$7,651,934, offset by proceeds from the issue of shares and exercise of share options of \$6,852,456 and share-based payments of \$1,371,148.

Total shareholders' equity was \$10,213,006 as at December 31, 2020 compared to \$12,225,788 as at December 31, 2019. The decrease of \$2,012,782 is due to the loss attributable to common shareholders of \$2,253,628 offset by proceeds from the exercise of warrants of \$106,897.

RESULTS OF OPERATIONS

Summary Results of Operations

The following financial data is derived from the Company's consolidated financial statements as at December 31, 2020, 2019 and 2018:

		Year ended December 31,
	2021	2020	2019
Mineral project and research and development expenditures	6,013,085	2,372,416	1,747,499
Other expenditures*	3,516,064	1,747,493	1,992,205
Other items**	177,924	(52,223)	(700,468)
Total net loss	9,707,073	4,067,786	3,039,236
Total net loss attributable to non-controlling interest	2,925,511	1,814,158	1,370,584
Total net loss attributable to the common shareholders	6,781,562	2,253,628	1,668,652
Basic and diluted loss per share	\$ (0.044)	\$ (0.017)	\$ (0.013)
Weighted average number of common shares (basic and diluted)	153,119,372	133,000,721	124,173,150
Distributions or Dividends	\$ Nil	\$ Nil	\$ Nil

* Other expenditures represent all other expenditures, other than mineral project and research and development expenditure, disclosed in the statement of comprehensive loss and includes non-cash items.

** Other items are share of associated company losses, gains on the revaluation of warrants and options and interest income.

The net loss for the year ended December 31, 2021 was \$9,707,073 compared to the net loss reported for the year ended December 31, 2020 of \$4,067,786. The net loss increased by \$5,639,287 for the comparable periods. The significant items contributing to the change include:

Increased mineral project expenditure of \$3,640,669 as a result of ongoing work on the Feasibility Study.
General and administrative expenses, excluding share-based payments increased by \$515,577 as a result of increased directors and officer salaries, consulting fees and shareholder compliance costs.
Increased share-based payment expenses of \$1,252,894 and foreign exchange losses increased by \$297,726.

The net loss for the year ended December 31, 2020 was \$4,067,786 compared to the net loss reported for the year ended December 31, 2019 of \$3,039,236. The net loss increased by \$1,028,550 for the comparable periods. The significant items contributing to the change include:

Increased mineral project expenditure of \$650,667 as a result of ongoing work on the Feasibility Study.
The result for 2019 included a credit of \$700,369 from the revaluation of warrants which expired or were exercised during 2019
Share of losses and fair value adjustments in respect of the investment in HyProMag of \$89,822.
Reduced Share based payment expenses of \$146,833 and foreign exchange gains increased by £220,813

The net loss for the year ended December 31, 2019 was \$3,039,236 compared to the net loss reported for the year ended December 31, 2018 of \$7,176,128. The net loss decreased by \$4,136,892 for the comparable periods. The significant items contributing to the change include:

The Maginito research and development expenses decreased by \$384,423 as no significant payments were required during the period to advance the collaborative research programme with Metalysis, which has been discontinued,
A \$378,927 decrease in warrant revaluation expense for the year ended December 31, 2019 because all outstanding non-broker warrants expired or were exercised during the year.
A \$415,627 decrease in foreign exchange loss, which resulted from the revaluation of cash balances held in currencies other than the US dollar at the end of the period.
A \$2,817,310 decrease in exploration expenses resulting from the significant costs incurred during the year ended December 31, 2018 when the Songwe Hill project drilling programme was underway. The Company incurred \$546,732 in expenses for the certain technical studies during the year ended December 31, 2019

General and administrative expenses decreased by \$247,209 for the year ended December 31, 2019 mainly as a result of lower legal costs related to the Talaxis investment agreement signed in 2018 and a reduction in Director and Officer compensation as no retirement payments were made in 2019.

The selected period information and summary of financial results below is derived from and should be read in conjunction with the Financial Statements.

SUMMARY OF QUARTERLY FINANCIAL RESULTS

The following is selected financial data from the company's quarterly financial statements for the last eight quarters ending with the most recently completed quarter, being the quarter ended December 31, 2021:

Total Operations			2021		2020
Attributable to common shareholders	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Expenses	2,149,088	1,207,784	1,135,769	739,742	568,752	505,742	596,350	505,213
Other items	1,169,709	263,405	5,030	111,037	(137,136)	(108,894)	(54,189)	377,792
Net loss for period	(3,318,797)	(1,471,189)	(1,140,799)	(850,779)	(431,616)	(396,848)	(542,161)	(883,003)
Loss per share - basic and diluted	\$(0.019)	\$(0.010)	\$(0.009)	\$(0.006)	\$(0.003)	\$(0.003)	\$(0.004)	\$(0.007)

The financial data for the eight periods reported have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and interpretations issued by the International Financial Reporting Interpretations Committee, in effect on December 31, 2021. The financial data does not include the non-controlling interest share of net loss for the period. The Company's principal activities require expenditures which include both exploration and general and administrative expenses.

Expenses rose steadily quarter on quarter through 2021 as the Company continued with work on the Feasibility Study. Other items increased in Q4 2021 as a result of increased share-based payment charges on share options and restricted stock units issued during the period.

Quarterly expenses remained consistent throughout 2020 with the loss fluctuating quarterly due mainly to unrealized exchange losses on cash balances in foreign currencies other than the US Dollar.

RELATED PARTY TRANSACTIONS AND BALANCES

a) Leo Mining Exploration Ltd. ("Leo Mining") is considered related by virtue of common directors and officers who have an ownership in, and exercise significant influence over, both companies. The Company and Leo Mining have formalized their relationship with respect to services provided by Leo Mining. A written agreement sets out the types of services, which may be provided, and the costs associated with such services. The Company repays the disbursements made by Leo Mining on its behalf. During the year ended December 31, 2021, the Company had incurred costs of \$59,975 (December 31, 2020 - \$71,441) for reimbursed exploration and administrative expenses. As of December 31, 2021, the Company has an outstanding advance to Leo Mining in the amount of \$5,764 (December 31, 2020 – receivable - \$4,891). The amount is unsecured and due on demand.
b) Talaxis is considered a related party. Transactions and balances with Talaxis are disclosed throughout the consolidated financial statements.
c) The Company incurred costs of \$1,540,596 (December 31, 2020 \$597,297) for key management fees and director fees for the year ended December 31, 2021. The non-executive Directors of the Company were each entitled to a fee of \$16,000 per year and the Chairman of the Board was entitled to a fee of \$40,000 per year With effect from October 1, 2021 fees were increased to \$25,000 per year for the non-executive directors and \$94,591 (GBP 70,000) for the Chairman of the Board. As of December 31, 2021, the Company has an outstanding payable due to directors and officers of \$13,648 (December 31, 2020 –

\$35,063). The current liabilities due to key management and directors are unsecured, due on demand and non-interest bearing.

December 31,	2021	2020
Consulting fees	454,274	387,411
Director fees	119,216	94,798
Compensation	80,832	-
Share-based payments	886,274	115,088
Total key management compensation	1,540,596	597,297

As of December 31, 2021, the Company had an outstanding payable due to directors and officers of \$13,648 (December 31, 2020 – \$35,063). The current liabilities due to key management and directors are unsecured, due on demand and non-interest bearing.were as follows:

December 31,	2021	2020
Due to related parties with common directors	486	(891)
Due to key management and directors	13,648	35,063
Total due to related parties	14,134	34,172

EXPENDITURES

	For the year ended For the three months ended December
				September	December
Total expenses attributable to common		December 31,		30,	31,
shareholders and non-controlling interest	2021	2020	2021	2021	2020
General and administrative
Audit and tax management	120,026	91,911	42,026	35,902	37,854
Legal fees	240,691	184,135	107,055	43,300	39,282
Director and Officer salaries	753,776	532,813	278,195	162,214	130,776
Salaries and consulting fees	411,310	210,984	149,073	114,045	63,828
Rent, storage, telephone and insurance	201,761	208,653	63,062	51,326	60,135
Travel	55,392	127,840	14,771	15,857	24,494
AIM listing expense	111,082	95,416	25,597	37,429	24,240
Share-based payments	1,371,148	118,254	1,177,321	42,106	8,572
Depreciation	31,544	31,344	8,147	7,829	7,761
Investor relations and marketing	219,334	146,243	46,173	25,910	49,536
Sub total - General and administrative	3,516,064	1,747,593	1,911,420	535,918	446,478
Mineral project expenditures
Songwe Hill Project
Metallurgy expenses	2,600,781	1,237,453	732,851	467,451	253,174
Government fees	24,643	17,289	1,409	826	7,866
ESHIA	293,447	64,057	32,775	127,288	17,751
Grant refund accrued	-	(53,703)	-	-	-
Technical studies	2,050,561	638,038	767,168	641,517	137,319
Consulting fees	274.090	181,931	96,727	46,184	33,523
Malawi office and camp expenses	81,717	98,770	22,410	69,021	48,043
REE Separation Plant Feasibility Study	456,644	-	26,327	378,774	-
Thambani, Mchinji and Chimimbe projects	231,202	188,581	88,325	16,865	86,485
Sub total - Mineral projects	6,013,085	2,372,416	1,767,992	1,747,926	584,161
Interest income	(11,134)	(8,641)	(625)	(3,530)	(8,621)
Share of associated company's losses	7,620	40,239	22,970	25,566	11,163
Fair value adjustment	17,116	49,583	(8,438)	9,008	49,583
Foreign exchange (gain) loss	164,322	(133,404)	(21,964)	189,661	(244,826)
Sub total	177,924	(52,223)	(8,057)	220,705	(192,701)
Total Expenses net of interest income	\$9,707,073	\$4,067,786	\$3,671,355	\$2,504,549	\$837,938

Three months ended December 31, 2021 compared to the three months ended December 31, 2020

Total expenses net of interest income include those attributable to both the common shareholders and to the noncontrolling interest. Total expenses increased by \$2,833,417 from \$837,938 for the three months ended December 31, 2020 to \$3,671,355 for the three months ended December 31, 2021, as a result of the following:

a) General and administrative: General and administrative expenses were \$1,464,942 higher for the three months ended December 31, 2021 compared to the three months ended December 31, 2020. Director and Officer Salaries were \$147,419 higher due pay rises for Directors and an ex-gratia payment to a former director. Salaries and consulting fees were \$85,425 higher reflecting the continuing consultancy arrangement with Jones Group International. Legal expenses were \$67,773 higher due to work carried out on employment and updating the share option schemes. The share-based payment charge was \$1,168,749 higher as a result of charges arising from share options and restricted stock units issued during the period and a strategic and financial advisory agreement.
b) Mineral Projects: Mineral project expenses were \$1,183,831 higher for the three months ended December 31, 2021 compared to the three months ended December 31, 2020. Metallurgy costs were \$479,677 higher as the work on flotation and hydrometallurgy progresses. Technical studies were \$629,849 higher reflecting increased costs as the Feasibility Study advanced, including the completion of a pitting and drilling study during the period.

c) Foreign Exchange Gain: The foreign exchange loss for the three months ended December 31, 2021 was \$222,862 lower than the gain recognized for the three months ended December 31, 2020. The exchange loss in the three months ended December 31, 2021 arose on funds held in GBP.

Three months ended December 31, 2021 compared to the three months ended September 30, 2021

Total expenses increased by \$1,166,806 from \$2,504,549 for the three months ended September 30, 2021 to \$3,671,355 for the three months ended December 31, 2021, as a result of the following:

a) General and administrative: General and administrative expenses were \$1,375,502 higher for the three months ended December 31, 2021 compared to the three months ended September 30, 2021. Director and Officer Salaries were \$115,981 higher due to pay rises for Directors and an ex-gratia payment to a former director. The share-based payment charge was \$1,135,215 higher as a result of charges arising from share options and restricted stock units issued during the quarter.
b) Mineral Projects: Mineral project expenses for the three months ended December 31, 2021 were in line with the three months ended September 30, 2021. Metallurgy costs were \$265,400 higher as the work on flotation and hydrometallurgy neared completion. Technical studies were \$125,651 higher reflecting increased costs as the Feasibility Study advanced. Work on a REE Separation Plant Pre-feasibility Study reduced by \$352,447 during the three months ended December 31, 2021 as the study was completed.
c) Foreign Exchange Gain: The foreign exchange gain for the three months ended December 31, 2021 was \$211,625 higher than the loss incurred for the three months ended September 30, 2021. The exchange gain in the three months ended December 31, 2021 arose on funds held in GBP following the supplementary placement in August 2021.

Year ended December 31, 2021 compared to the year ended December 31, 2020

Total expenses increased by \$5,639,287 to \$9,707,073 for the year ended December 31, 2021 from \$4,067,786 for the year ended December 31, 2020, as a result of the following:

a) General and administrative: General and administrative expenses were \$1,768,471 higher for the year ended December 31, 2021 compared to the year ended December 31, 2020. Director and Officer Salaries were \$220,963 higher due to pay rises for Directors and an ex-gratia payment to a former director. Salaries and consulting fees were \$200,326 higher reflecting the consultancy arrangement with Jones Group International. The share-based payment charge was \$1,252,894 higher as a result of charges arising from share options and restricted stock units issued during the quarter and from a strategic and financial advisory agreement.
b) Mineral Projects: Mineral project expenses for the year ended December 31, 2021 were \$3,640,669 higher than for the year ended December 31, 2020. Metallurgy costs were \$1,363,328 higher as the work on flotation and hydrometallurgy neared completion. Technical studies were \$1,412,523 higher reflecting increased costs as the Pre-feasibility Study advanced. A REE Separation Plant pre-feasibility Study in Pulawy, Poland cost \$456,644 during the year ended December 31, 2021.
c) Foreign Exchange Gain: The foreign exchange loss for the year ended December 31, 2021 was \$164,322 compared to a gain of \$133,404 for the year ended December 31, 2020. The exchange loss in the year ended December 31, 2021 arose on funds held in GBP following the supplementary placement in August 2021. The gain in the year ended December 31, 2020 arose due to the part reversal of the effect of COVID-19 on exchange rates reducing cash held to meet payment obligations in foreign currencies other than the US Dollar.

DISCLOSURE CONTROLS AND PROCEDURES

In connection with National Instrument 52-109 (Certificate of Disclosure in Issuer's Annual and Interim Filings) ("NI 52-109"), the chief executive officer and chief financial officer of the Company have filed Form 52-109FV1 – Certificate of Annual Filings - Venture Issuer Basic Certificate with respect to the financial information contained in the Financial Statements for the three and twelve months ended December 31, 2021 and this accompanying MD&A (together, the "Interim Filings").

In contrast to the full certificate under NI 52-109, the Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI 52-109. For further information the reader should refer to the Venture Issuer Basic Certificate filed by the Company with the Annual Filings on SEDAR at www.sedar.com.

COMMITMENTS

The Company holds three exploration licences and eleven retention licences in Malawi with commitments to pay annual licensing fees and to meet spending commitments for exploration expenses throughout the life of the licences. As of the date of this report, all licences were in good standing with the Malawi government.

The Company is continuing to meet the terms and conditions of its four exploration licences and provides updates to Malawi's Ministry of Mining on a regular quarterly basis regarding progress of all its work programs.

ISSUED AND OUTSTANDING SHARE INFORMATION

As at the date of this report, the Company has 215,206,548 Shares, 385,098 broker warrants, 15,730,000 stock options and 4,000,000 restricted share units in issue.

OFF BALANCE SHEET ARRANGEMENTS

The Company is not party to any off balance sheet arrangements or transactions.

ACCOUNTING POLICIES AND ESTIMATES

Management is required to make judgments, assumptions and estimates in the application of IFRS that have a significant impact on the financial results of the Company. Details outlining Mkango's accounting policies are contained in the notes to the Financial Statements.

RISK FACTORS

Environmental Risk

The Company is subject to substantial environmental requirements. The current and anticipated future operations and exploration activities of the Company in Malawi require permits from various governmental authorities and such operations and exploration activities are and will be governed by local laws and regulations governing various elements of the mining industry including, without limitation, land use, the protection of the environment, prospecting, development, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, and other matters. Globally, environmental legislation is evolving towards stricter standards and enforcement, more stringent environmental impact assessments of new mining projects and increasing liability exposure for companies and their directors and officers. There is no assurance that future environmental regulations will not adversely affect the Company's operations.

Exploration and Commercial Viability Risk

The Company does not currently produce rare earth elements from Songwe Hill where it is currently engaged in a Feasibility Study. While the Company has produced a pre-feasibility study, there is no assurance that the Feasibility Study will demonstrate the commercial viability of the project. Some of the factors that affect the financial viability of a given mineral deposit include its size, grade and proximity to infrastructure and the realizable value of the minerals extracted. These factors include, but are not limited to, government approval for mining licences and exploration licence extensions applications, government regulations, taxes, royalties, land tenure, land use, environmental protection and reclamation and closure obligations. All or some of these factors may have an impact on the economic viability of Songwe Hill.

Macroeconomic Risk

From a macroeconomic perspective, ongoing global market uncertainty has led to a significant reduction in risk appetite with respect to funding investment into mining companies. The ability for mining companies to access capital through traditional means may be significantly diminished, with the possible long-term result that projects may take longer to develop or may not be developed at all.

Foreign Countries and Political Policy Risk

The Company has interests in properties that are located in the developing country of Malawi. The Company's mineral exploration may be affected in varying degrees by political instability and government regulations relating to foreign investment and the mining industry. Changes, if any, in mining or investment policies or shifts in political attitude in Malawi may adversely affect the Company's operations. Operations may be affected in varying degrees by government regulations with respect to, but not limited to, restrictions on production, price controls, export controls, currency remittance, direct and indirect taxes, tax assessments, royalties, expropriation of property, foreign investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use and mine safety. Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory of judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions.

Resource and Reserve Risk

Estimates of reserves and resources are inherently uncertain. There is a degree of uncertainty attributable to the calculation of reserves, resources and corresponding grades being mined or dedicated to future production. Until reserves or resources are actually mined and processed, the quantity of reserves or resources and grades must be considered as estimates only. In addition, the quantity of reserves or resources may vary depending on rare earth prices, operating costs and mining efficiency. Any material change in the quantity of reserves, resources or grade may affect the economic viability of Songwe Hill.

Mining Risks

The mining industry has been subject to considerable price volatility, over which companies have little control, and a material decline in the price of rare earth elements could result in a significant decrease in the Company's future anticipated revenues. The mining industry has inherent business risks and there is no assurance that products can continue to be produced at economical rates or that produced reserves will be replaced.

Coronavirus Risk

The global outbreak of COVID-19 (coronavirus) has had a significant impact on businesses through the restrictions put in place by the governments of countries in which the Company operates regarding travel, business operations and isolation/quarantine orders.

The Company is proactively managing the potential impact of COVID-19 with the health and safety of our employees, contractors, local communities and other stakeholders being the highest priority. The Company is continuously reviewing the situation and actively amending operations to comply with Malawi government guidelines and restrictions ensuring the health and safety of all members.

The Definitive Feasibility Study is nearing completion and the Company believes that the remaining work streams will not be seriously impacted. The Company is targeting completion of the Definitive Feasibility Study in the second quarter of 2022. We note, however, that further COVID-19 outbreaks may impact this timing.

Conflict in Ukraine

The Directors do not consider the current conflict in Ukraine will have a significant impact on the Company at its current stage of development.

Readers are cautioned that the foregoing is a summary only of certain risk factors and is not exhaustive and is qualified in its entirety by reference to, and must be read in conjunction with the additional information on these and other factors that could affect Mkango's operations and financial results that are included in reports on file with Canadian securities regulatory authorities and may be accessed through on SEDAR at www.sedar.com.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

All financial instruments are initially recognized at fair value on initial recognition of the instrument. Measurement in subsequent periods depends on whether the financial instrument has been classified as fair value through profit or loss ("FVTPL"), held for trading, loans and receivables, financial assets available-for-sale, financial assets held-tomaturity, and other financial liabilities.

Financial assets and financial liabilities classified as FVTPL are measured at fair value with changes in fair value recognized in net earnings or loss. Financial assets, available-for-sale, are measured at fair value, with changes in fair value recognized in other comprehensive income. Financial assets held-to-maturity, loans and receivables and other financial liabilities are measured at amortized cost using the effective interest method of amortization.

Accounts receivable is designated as loans and receivables. Accounts payable and accrued liabilities and due to related parties are designated as other financial liabilities.

The fair value of cash, accounts receivable, accounts payable and amounts due to related party approximates the carrying value. Financial instruments and share-based payment transactions are measured at fair value. The main financial risks affecting the Company are discussed below:

Fair values

Financial assets and liabilities have been classified into categories that determine their basis of measurement and for items measured at fair value, whether changes in fair value are recognized in the consolidated statement of comprehensive loss. Those categories are fair value through profit or loss; loans and receivables; and, for most liabilities, other financial liabilities.

In establishing fair value, the Company used a fair value hierarchy based on levels defined below:

Level 1 quoted prices in active markets for identical assets or liabilities;
Level 2 inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs for the asset or liability that are not based on observable market data.

Cash are measured at level 1; The option to acquire shares in the associate and the convertible loan derivative financial instruments are measured at level 3.

The fair value of these financial instruments was determined using binomial pricing models for American and Bermudan style options. The key input to these models is the volatility rate which was in the range of 67 to 70% which is an estimate based on volatility rates of comparable companies to Mkango Resources Limited. A 10% increase in the volatility rate would result in an additional charge to the income statement of \$1,800 and a 10% decrease would result in a credit to the income statement of \$3,300.

The carrying value of accounts receivable, subscriptions receivable, accounts payable and accrued liabilities and current liabilities due to related parties, approximates the fair value due to their short-term nature and maturity. Warrants with an exercise price in a currency other than the functional currency are recorded as a derivative liability and carried at fair value.

Credit risk

Credit risk is the risk of loss associated with counterparty's inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash, receivables.

Concentration risk

The majority of the Company's cash is held by one major international bank. Deposits held with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and bear minimal risk.

Foreign currency rate risk

The functional and reporting currency of the Company is the United States dollar. The Company enters into transactions denominated in Canadian dollars, the United States dollar, the British sterling, the Australian dollar, South African rand and Malawian kwacha. The Company raises its equity in British sterling and Canadian dollars and then purchases Euros, British sterling, United States dollars, Australian dollar, South African Rand and Malawi Kwacha funds to settle liabilities. The Company minimizes exposure to foreign exchange loss by converting funds to the appropriate currencies upon receipt of funding based on the expected use of the various foreign currencies.

The Company's exposure to foreign currency risk as at December 31, 2021 and December 31, 2020, is most significantly influenced by the following cash amounts held in foreign currencies (amounts shown in US dollars):

	December 31, 2021	December 31, 2020
Cash:
Canadian dollars	87,763	78,559 \$
United States dollars	82,950	586,954
Pound Sterling	4,229,086	2,602,026
Euro	16,914	288,469
Malawi Kwacha	23,972	18,438
Australian dollar	6,165	1,350,121
	4,446,850	4,924,567 \$

A 5% reduction in the value of the Canadian dollar, Euro, British pound and Australian dollar in comparison to the US Dollar would cause a total change in net loss of approximately \$217,000 (December 31, 2020: \$216,000). A 5% change in the value of the Malawian Kwacha in relation to the US Dollar would not cause a material change in net loss.

Liquidity Risk

Liquidity risk includes the risk that, as a result of the Company's operational liquidity requirements:

The Company will not have sufficient funds to settle a transaction on the due date;
The Company will be forced to sell financial assets at a value which is less than what they are worth; or
The Company may be unable to settle or recover a financial asset at all.

The Company's operating cash requirements, including amounts projected to complete the Company's existing capital expenditure programme and the Feasibility Study are continuously monitored and adjusted as input variables change. As these variables change, liquidity risks may require the Company to consider various financing alternatives.

The Company has in the past relied on equity financings to fund its activities. Should it, however, need to raise additional funds and while it has been successful in raising funds in the past, there is no guarantee that adequate funds will be available in the future.

The following table outlines the maturities of the Company's financial liabilities as at December 31, 2021:

			Greater than 1
	Contractual Cash Flows	Less than 1 Year	Year
Accounts payable and accrued
liabilities	1,244,438	1,244,438	-
Due to related parties	14,134	14,134	-

The following table outlines the maturities of the Company's financial liabilities as at December 31, 2020:

			Greater than 1
	Contractual Cash Flows	Less than 1 Year	Year
Accounts payable and accrued
liabilities	254,927	254,927	-
Due to related parties	34,172	34,172	-

Capital Risk

The Company's objective when managing capital is to maintain a flexible capital structure which will allow it to execute its capital expenditure programme, which includes expenditures in mining activities which may or may not be successful. The Company has no externally imposed capital requirements. Prior to the Talaxis transaction, the Company depended on equity placements to remain solvent. Should it need to do so again in the future, cash from these placements may or may not be available depending on market or other conditions.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2021, the Company had a working capital surplus of \$3,286,388 (December 31, 2020 – \$4,838,890) and retained earnings deficit attributable to the shareholders of the Company of \$39,034,055 (December 31, 2020 - \$6,313,809).

The Company's total capital consists of Mkango's shareholders' equity of \$4,004,595, as at December 31, 2021 (December 31, 2020 –\$10,213,006). The operations of the Company for the next 12 months will be funded by funding alternatives currently being reviewed for ongoing and new projects.

DIRECTORS AND OFFICERS

William Dawes, Director and Chief Executive Officer

Alexander Lemon, Director and President

Derek Linfield, Non-Executive Chairman of the Board of Directors

Shaun Treacy, Non-Executive Director (Audit Committee Chairman, Remuneration Committee)

Susan Muir, Non-Executive Director (Audit Committee, Remuneration Committee Chairman and Corporate Secretary)

Stephen Motteram, Non-Executive Director (Audit Committee, Remuneration Committee) Tim Slater, Interim Chief Financial Officer

APPENDIX A

Table 1 - Selected Drill Results

Forty-nine of the drill holes intersected significant zones of rare earths mineralisation grading above 1% total TREO.

PX056	114.8 m grading 1.6% TREO (60.7 – 175.5 m) including 30.0 m grading 2.0% TREO (135.0 – 165.0 m). Inclined hole (60 degrees west).
PX059	63.0 m1 grading 1.7% TREO (6.0 – 69.0 m), including 23.0 m2 grading 2.3% TREO (7.0 – 30.0 m), and 15.4 m grading 1.6% TREO (128.0 – 143.4 m). Inclined hole (60 degrees west).
PX073	67.1 m grading 1.6% TREO (8.8 – 75.9 m) including 25.2 m grading 2.0% TREO (45.0 – 70.2 m). Inclined hole (60 degrees west).
PX076	40.2 m grading 1.8% TREO (60.4 – 100.7 m) including 20.0 m grading 2.4% TREO (60.4 – 80.4 m). Inclined hole (60 degrees west).
PX077	51.9 m3 grading 1.7% TREO (26.2 – 78.0 m). Inclined hole (60 degrees west).
PX081	53.3m4 grading 2.2% TREO (3.7 – 57.0 m) including 26.8 m grading 3.1% TREO (3.7 – 30.5 m). Inclined hole (60 degrees east).
PX086	73.3 m grading 1.9% TREO (21.5 – 94.8 m). Inclined hole (60 degrees west).
PX087	74.4 m5 grading 2.1% TREO (16.2 – 90.6 m). Inclined hole (60 degrees west).
PX090	25.7 m6 grading 3.9% TREO (39.5 – 65.2 m). Inclined hole (60 degrees west).
PX092	74.9 m grading 1.9% TREO (10.1 – 84.9 m) and 51.9 m grading 1.5% TREO (97.6 – 149.5 m EoH). Inclined hole (60 degrees south).
PX093	83.9 m grading 1.9% TREO (1.5 – 85.4 m) including 18.0 m grading 3.0% TREO (21.0 – 39.0 m). Inclined hole (60 degrees west).
PX098	65.0 m7 grading 1.7% TREO (1.1 – 66.0 m) and 13.1 m grading 1.2% TREO (115.0 – 128.1 m). Inclined hole (60 degrees south).
PX103	165.2 m grading 1.6% TREO (2.6 – 167.8 m). Inclined hole (60 degrees east).
PX107	91.3 m8 grading 1.3% TREO (23.0 – 114.2 m) including 32.2 m9 grading 1.9% TREO (82.0 – 114.2 m). Inclined hole (60 degrees east).
PX108	45.8 m grading 1.4% TREO (8.2 – 54.0 m) and 57.3 m grading 1.7% TREO (76.9 – 134.2 m). Inclined hole (60 degrees east).
PX109	53.0 m grading 2.1% TREO (22.0 – 75.0 m) including 22.0 m grading 3.0% TREO (24.0 – 46.0 m). Inclined hole (60 degrees east).
PX113	51.1 m10 grading 2.2% TREO (4.7 – 55.8 m). Inclined hole (50 degrees north).
PX112	100.9 m grading 3.3% TREO (5.9 – 106.8 m EoH) including 20.5 m grading 4.2% TREO (5.9 – 26.4 m) and 22.2 m grading 4.1% TREO (36.0 – 58.2 m). Inclined hole (60 degrees south).
PX125	104.5 m grading 1.5% TREO (3.5 – 108.0 m) including 51.5 m grading 1.9% TREO (3.5 – 55.0 m). Inclined hole (60 degrees south).

1 Includes two cavities totaling 5.9m not sampled. 2 Includes a 2.5m cavity not sampled. 3 Includes a 2.7m cavity not sampled. 4 Includes a 3.8m cavity not sampled. 5 Includes a 2.7m cavity not sampled. 6 Includes a 6.3m cavity not sampled. Due to the size of the cavity, the significance of this intersection is uncertain. 5 Includes a 2.3m cavity not sampled. 6 Includes two cavities totaling 2.3m not sampled. 7 Includes a 0.9m cavity not sampled. 8 Includes two cavities totaling 10.0m not sampled. 9 Includes a 0.9m cavity not sampled. 10 Includes two cavities totaling 10.0m not sampled. Due to the size of the cavities, the significance of this intersection is uncertain. TREO: total rare earth oxides based on total La2O3, Ce2O3, Pr2O3, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3. These intersections are reported as down hole widths and do not necessarily represent true thicknesses and attitude of the mineralized zones, the estimation of which will require further refining of the geological model.

Drill holes PX072, PX073, PX078, PX079, PX080, PX083, PX084, PX085, PX088, PX089, PX090, PX091, PX093, PX094, PX095, PX109, PX114, PX118, PX119, PX120, PX121, PX122, PX123 and PX124 were step-out holes focused on testing north and north-west extensions of the mineralisation. Of these 24 drill holes, 19 intersected broad zones of mineralisation. The mineralised intersection in PX113 indicates the extension of the higher grade carbonatite zone located in the north-east as indicated on the accompanying geological map on the Company's website, to the north under cover. Drill holes PX038, PX039, PX040 and PX041 were step-out drill holes, focused on testing extensions of mineralisation to the south. The intersections in PX039 and PX040 further indicate that mineralisation may extend to the south. The remaining drill holes were focused on infill zones in the previous exploration/resource area defined by drill holes PX001 to PX035. Intersections of broad zones of mineralisation, as opposed to narrow veins or dykes, continue to support the concept of a bulk tonnage, open pit mining operation with low mining costs.

Drill Hole	From	To	Interval		La ₂ O	Ce ₂ O	Pr ₂ O ₃	Nd ₂ O ₃	Sm ₂ O	Eu ₂ O	Gd ₂ O ₃	Tb ₂ O	$Dy_2O$	Ho ₂ O ₃	Er ₂ O ₃	Tm ₂ O	$Yb_2O_3$	Lu ₂ O	$Y_2O_3$	TREO
	$\overline{m}$	$\overline{m}$	$\overline{m}$		ppm	ppm	ppm	ppm	ppm	ppm	ppm	ppm	ppm	ppm	ppm	ppm	ppm	ppm	ppm	%
PX039	122.9	142.0	19.2		4,394	7,467	756	2,432	323	82	188	$\overline{22}$	96	15	35	5	29	5	440	1.6%

PX040	28.0	43.0	15.0		5,020	7,061	645	2,006	303	90	239	33	164	28	67	9	47	6	844	1.7%

PX045a	9.8	30.9	21.1		2,006	4,148	495	1,833	309	89	217	27	127	20	47	6	33	5	547	1.0%


PX050	8.0	161.0	153.0		2,790	5,578	643	2,353	344	87	214	26	128	21	51	$\overline{7}$	40	$\overline{5}$	607	1.3%
including	96.0	126.0	30.0		4,370	8,097	890	3,132	430	108	267	32	149	24	57	$\overline{8}$	53	$\overline{7}$	654	1.8%
including	137.9	161.0	23.2		3,687	7,162	808	2,899	415	105	254	31	145	$\overline{24}$	55	$\overline{7}$	42	$\overline{5}$	651	1.6%

PX053	25.0	61.0	36.0		3,461	6,442	683	2,309	365	98	236	$\overline{27}$	117	18	39	$\overline{4}$	22	$\overline{3}$	492	1.4%

	74.4	94.6	20.2	(i)	2,920	5,507	585	1,972	288	72	169	$\overline{20}$	95	15	38	5	24	3	469	1.2%
(i) Includes 2.1m cavity not sampled.
PX054	23.4	182.0	158.7		2,733	5,233	582	2,097	322	86	205	24	113	18	44	6	34	5	521	1.2%
including	45.8	102.3	56.6		3,315	6,337	703	2,489	355	95	226	$\overline{28}$	133	$\overline{22}$	51	$\sqrt{6}$	36	$\overline{5}$	611	1.4%

PX055	21.4	47.5	26.2		3,921	6,592	676	2,282	332	85	193	$\overline{21}$	92	15	35	$\overline{5}$	28	$\overline{4}$	425	1.5%

	67.7	103.2	35.5		2,627	5,470	626	2,258	328	89	214	26	119	19	44	5	30	$\overline{4}$	520	1.2%

PX056	60.7	175.5	114.8		3,951	7,339	799	2,784	404	105	243	28	124	$\overline{20}$	47	$6\overline{}$	32	$\overline{4}$	570	1.6%
including	135.0	165.0	30.0		5,463	9,096	920	3,003	392	101	232	$\overline{26}$	116	18	43	$\overline{5}$	29	$\overline{4}$	516	2.0%

PX057	9.0	39.7	30.7		3,696	6,496	714	2,334	327	82	188	21	93	15	36	$\overline{4}$	23	$\mathbf{3}$	407	1.4%

PX058	29.5	71.0	41.6		2,885	5,784	636	2,208	311	83	190	$\overline{21}$	97	15	36	$\overline{4}$	$\overline{23}$	3	421	1.3%

PX059	6.0	69.0	63.0	(i)	3,980	7,314	785	2,617	392	112	279	36	173	29	76	10	57	8	879	1.7%

including	7.0	30.0	23.0	(ii)	5,890	9,922	1,012	3,237	469	138	358	47	227	38	100	13	76	10	1,171	2.3%
	128.0	143.4	15.4		4,122	7,352	778	2,645	370	94	212	25	121	$\overline{20}$	49	6	36	$\overline{5}$	604	1.6%
(i) Includes 5.9m cavity not sampled.
(ii) Includes 2.5m cavity not sampled.
PX063	4.4	21.4	17.0		2,951	6,117	698	2,540	359	100	239	32	168	29	71	$\bf{8}$	51	$\overline{7}$	838	1.4%
	96.4	109.8	13.4	$(i)$	3,908	8,548	1,000	3,703	558	135	292	29	126	20	46	5	33	5	616	1.9%

(i) Includes 5.5m cavity not sampled.

PX066	61.8	134.2	72.4		3,122	5,703	620	2,110	301	81	196	23	112	18	44	5	33	$\overline{4}$	510	1.3%
including	99.0	122.6	23.6		4,147	7,328	776	2,530	337	$\overline{90}$	219	$\overline{26}$	127	$\overline{20}$	50	$6\,$	40	$\overline{5}$	576	1.6%

PX067	6.0	128.8	122.8		3,237	5,661	598	2,105	312	85	197	$\overline{22}$	99	15	37	5	29	$\overline{4}$	452	1.3%

including	44.0	70.8	26.8		4,119	7,791	858	3,039	429	112	250	$\overline{27}$	120	19	46	6	39	6	564	1.7%

				Table 2 - Full set of TREO results for the Songwe Hill exploration programme

PX070	5.0	51.6	46.6		5,228	8,218	785	2,502	318	83	192	21	93	14	30	3	19	3	364	1.8%
	78.4	201.3	123.0		5,186	8,463	824	2,587	305	77	173	19	82	12	27	3	18	$\overline{2}$	330	1.8%
including	78.4	122.0	43.7		8,194	12,954	1,212	3,596	350	81	173	17	75	11	25	$\overline{3}$	18	$\overline{2}$	303	2.7%
PX072	12.6	28.4	15.8		3,364	6,889	773	2,693	405	104	247	28	121	18	41	5	25	3	532	1.5%
	93.9	147.8	53.9		2,358	4,684	525	1,886	301	77	179	20	94	16	39	$\sqrt{5}$	27	$\overline{4}$	486	1.1%

PX073	8.8	75.9	67.1		4,024	7,255	790	2,740	401	103	232	25	114	19	43	5	28	$\overline{4}$	507	1.6%
including	45.0	70.2	25.2		5,278	8,924	948	3,159	439	110	241	24	106	17	36	$\overline{4}$	21	3	438	2.0%
PX076	60.4	100.7	40.2		5,618	8,453	789	2,458	311	80	183	22	98	15	33	4	24	$\overline{3}$	404	1.8%
including	60.4	80.4	20.0		7,432	11,021	1,020	3,106	372	93	209	24	108	16	36	$\overline{4}$	25	3	434	2.4%

PX077	27.8	78.0	50.2		5,081	7,864	733	2,266	284	75	178	22	99	16	34	$\overline{4}$	22	3	415	1.7%
PX078	6.0	28.3	22.3		3,214	5,866	621	2,144	332	86	207	24	117	19	44	5	29	$\overline{4}$	517	1.3%
	76.2	144.4	68.3		5,114	8,386	832	2,745	366	90	205	22	103	17	39	5	27	3	482	1.8%
including	125.1	144.4	19.4		9,581	14,066	1,306	4,063	500	119	250	24	98	14	32	$\overline{4}$	20	3	403	3.0%
PX080	5.7	109.8	104.1	(i)	3,118	5,426	578	2,018	316	82	189	21	94	15	34	$\overline{4}$	25	3	406	1.2%
including	33.6	87.6	54.1	(i)	3,854	6,669	709	2,453	377	96	217	24	102	16	37	5	28	$\overline{4}$	438	1.5%
(i) Includes 2.1m of core loss not sampled.
PX081	3.7	57.0	53.3	(i)	6,530	10,274	979	3,058	377	97	243	29	137	22	52	6	36	$\overline{4}$	638	2.2%
including	3.7	30.5	26.8		9,531	14,108	1,290	3,863	440	108	269	32	144	24	56	$\overline{7}$	39	5	684	3.1%
(i) Includes 3.8m cavity not sampled.
PX083	31.0	73.2	42.2		2,338	4,551	521	1,961	330	92	228	28	134	21	49	6	31	$\overline{4}$	619	1.1%
PX086	21.5	94.8	73.3		4,503	8,452	903	3,098	431	115	272	32	158	26	61	$\overline{7}$	43	5	731	1.9%

PX087	16.2	90.6	74.4	(i)	5,731	9,603	981	3,234	410	107	247	30	143	23	53	6	36	$\overline{4}$	630	2.1%
(i) Includes 2.7m cavity not sampled.
PX088	47.0	100.7	53.7		1,894	3,988	486	1,919	355	94	225	27	132	22	53	6	35	$\overline{4}$	639	1.0%

PX089	54.3	88.5	34.2		2,215	4,270	465	1,694	285	80	195	23	110	18	42	5	29	$\overline{4}$	491	1.0%
PX090	39.5	65.2	25.7	(i)	12,424	18,649	1,670	4,792	512	138	324	39	167	25	56	$\overline{7}$	41	$6\overline{6}$	631	3.9%
(i) Includes 6.3m cavity not sampled. Due to size of cavity, the significance of this intersection is uncertain.
PX092	10.1	84.9	74.9		5,133	8,693	859	2,749	374	97	229	26	116	17	39	5	28	$\overline{4}$	482	1.9%
	97.6	149.5	51.9		3,376	6,493	708	2,472	375	99	232	26	120	19	49	$\overline{7}$	46	6	576	1.5%
PX093	1.5	85.4	83.9		5,070	8,720	892	2,948	394	104	243	29	132	21	51	$\overline{7}$	40	$\sqrt{5}$	592	1.9%
including	21.0	39.0	18.0		8,914	14,033	1,348	4,171	472	115	255	28	118	18	41	5	33	$\overline{5}$	474	3.0%
PX094	25.0	100.7	75.7	(i)	3,363	5,652	567	1,876	284	81	204	24	112	18	43	5	32	$\overline{4}$	482	1.3%
including	67.0	79.0	12.0		6,336	9,822	928	2,828	385	112	282	33	147	23	52	6	38	5	593	2.2%
(i) Includes 8.5m cavity not sampled.

PX095	60.0	82.9	22.9	(i)	2,116	4,470	510	1,880	273	73	175	21	108	19	47	6	34	$\overline{4}$	539	1.0%
(i) Includes 2.0m cavity not sampled.

PX098	1.1	66.0	65.0	(i)	3,682	7,400	836	2,942	428	112	278	35	168	29	73	10	55	8	872	1.7%
	115.0	128.1	13.1		3,013	5,409	579	1,974	306	84	213	27	124	20	46	6	29	4	568	1.2%
(i) Includes 2.3m cavity not sampled.
PX100	94.6	100.7	6.1		10,223	17,450	1,815	6,064	765	172	360	35	140	20	45	6	30	$\overline{4}$	616	3.8%

PX101	36.6	42.3	5.7		2,981	6,306	746	2,771	493	131	322	36	148	21	43	$\overline{5}$	29	$\overline{4}$	560	1.5%
PX102	8.7	36.0	27.3		2,730	6,487	789	2,869	342	78	163	17	76	11	25	3	14	$\overline{2}$	335	1.4%
	75.0	110.3	35.3		2,096	5,170	671	2,623	381	96	217	26	130	22	51	6	28	3	658	1.2%
PX103	2.6	167.8	165.2		3,512	6,903	788	2,809	412	111	263	31	144	23	55	$\overline{7}$	45	6	658	1.6%
PX104	1.9	47.0	45.1	(i)	2,562	5,388	617	2,273	338	96	230	28	139	22	52	$\overline{7}$	38	5	618	1.2%
	95.6	135.0	39.4		3,122	5,206	527	1,794	277	80	189	21	99	15	35	$\overline{4}$	25	$\overline{4}$	433	1.2%
(i) Includes 5.0m cavity not sampled PX105	3.8	79.5				5,036	550		312	86	199	24	112	18	43			4		1.2%
			75.7		2,711			1,963								5	27		523
PX106	51.9	67.5	15.7		2,579	5,090	562	1,968	294	81	192	23	108	17	40	5	25	3	478	1.1%
	79.7	109.0	29.3		2,036	4,451	527	1,952	317	87	209	25	121	21	51	$\overline{7}$	39	5	604	1.0%
PX107	23.0	114.2	91.3	(i)	3,041	5,727	632	2,258	336	95	232	29	140	23	60	8	48	6	700	1.3%
	82.0	114.2	32.2	(ii)	4,624	8,375	911	3,176	457	125	300	37	168	27	70	10	53	$\overline{7}$	827	1.9%
(i) Includes 2.3m cavity not sampled.
(ii) Includes 0.9m cavity not sampled.

PX108	8.2	54.0	45.8		3,553	6,243	656	2,234	360	106	261	32	149	24	58	$\overline{7}$	45	$\overline{7}$	705	1.4%
	76.9	134.2	57.3		4,774	7,740	761	2,417	333	90	205	23	102	15	34	$\overline{4}$	24	3	418	1.7%
PX109	22.0	75.0	53.0		6,078	9,518	896	2,790	348	88	204	23	97	15	33	$\overline{4}$	22	3	391	2.1%
including	24.0	46.0	22.0		8,845	13,770	1,285	3,962	477	121	280	31	130	19	41	5	27	3	512	3.0%
PX110	9.2	22.4	13.2		6,648	9,822	965	2,852	348	88	204	24	109	18	39	$\overline{4}$	22	3	451	2.2%
	85.0	100.7	15.7		4.927	9,588	1,102	3,601	475	117	270	$\overline{31}$	148	25	58	$\overline{7}$	41	5	676	2.1%
PX111	7.0	42.0	35.0		2,893	6,042	683	2,504	443	128	312	38	169	25	53	6	30	$\overline{4}$	657	1.4%
	69.5	115.9	46.4		3,666	6,542	670	2,313	357	97	232	26	111	17	40	$\overline{5}$	33	$\overline{4}$	476	1.5%
PX112	5.9	106.8	100.9		10,530	15,038	1,357	4,067	455	114	279	32	137	22	49	6	35	4	606	3.3%
including	5.9	26.4	20.5		14,172	19,387	1,698	4,949	518	131	323	37	160	25	58	$\overline{7}$	39	5	719	4.2%
including	36.0	58.2	22.2		13,856	19,053	1,655	4,776	495	121	289	31	128	19	41	$\overline{5}$	28	$\overline{4}$	522	4.1%
PX113	4.7	55.8	51.1	(i)	5,458	9,720	993	3,572	474	124	289	34	165	26	64	8	44	6	772	2.2%
(i) Includes 10.0m cavity not sampled.

PX114	56.0	100.7	44.7	(i)	3,762	6,498	663	2,194	319	80	186	21	98	15	34	$\overline{4}$	22	3	409	1.4%
(i) Includes two cavities totaling 9.3m not sampled.

PX115	2.7	17.7	15.0		2,365	4,945	564	2.107	316	84	195	23	107	18	42	5	31	$\overline{4}$	522	1.1%

	46.3	61.0	14.8		2.468	5.132	583	2.180	350	96	221	26	116	18	42	5	29	$\overline{4}$	493	1.2%

PX116	57.3	66.0	8.7		4.426	9.933	1.205		752	189	397	40	166	24	52		33		720	2.3%
								4,615								$6\overline{6}$		5

PX118	4.4	91.0	86.6		3.236	5,889	595	1.919	304	81	192	23	107	18	42	$\overline{5}$	31	$\overline{4}$	509	1.3%

including	46.0	91.0	45.0		3.715	6,777	681	2,170	328	86	200	$\overline{23}$	108	18	41	$\overline{5}$	30	$\overline{4}$	497	1.5%

	120.9	151.6	30.7	(i)	2.248	4.667	497	1,842	346	95	228	$\overline{27}$	133	22	52	6	33	$\overline{4}$	640	1.1%

(i) Includes 2.2m cavity not sampled
PX119	14.8	64.8	50.0		3,389	6,119	640	2,135	292	76	178	20	95	16	39	$\overline{5}$	28	$\overline{4}$	422	1.3%

including	14.8	24.6	9.8		8,483	12,932	1,184	3,347	334	84	193	$\overline{22}$	98	15	34	$\overline{4}$	23	$\overline{\mathbf{3}}$	380	2.7%

PX120	3.1	42.7	39.6		2,631	5,272	572	2,010	284	75	175	$\overline{20}$	90	14	34	$\overline{4}$	25	$\overline{\mathbf{3}}$	380	1.2%


PX121	60.0	95.5	35.5		3,598	6,143	655	2,218	336	89	212	24	113	17	40	$\overline{5}$	28	$\overline{4}$	487	1.4%


PX122	84.0	106.8	22.8	(i)	3.639	5.899	586	1.934	273	74	172	21	100	16	$\overline{37}$	5	$\overline{27}$	$\overline{3}$	431	1.3%

(i) Includes two cavities totaling 4.2m not sampled.
PX123	75.9	100.8	24.9		2,304	4,657	513	1,807	248	61	135	15	67	11	28	$\overline{4}$	19	3	331	1.0%

PX124	24.7	58.8	34.1		2.748	5.520	604	2,120	279	73	166	21	107	19	51	$\overline{7}$	40	5	556	1.2%


PX125	3.5	108.0	104.5		4,244	6,599	630	1,989	272	77	187	24	113	18	40	5	26	3	475	1.5%

including	$\overline{3.5}$	55.0	51.5		5,416	8,469	807	2,505	313	85	205	$\overline{27}$	135	22	51	6	34	$\overline{4}$	609	1.9%


Drill holes PX038, PX041, PX044, PX051, PX084, PX085 and PX091 did not intersect significant zones of mineralisation grading above 1% TREO

These intervals are reported as down hole widths and do not necessarily represent true thicknesses and attitude of the mineralised zones, the estimation of which requires further refining of the geological model.

APPENDIX B

THAMBANI, MWANZA DISTRICT

Trench No.	Profile	Sample No	From (m)	To (m)	Rock type	U308 Ppm	Nb2O5 ppm	Ta2O5 ppm
C3	A	U3622	0.5	1	Soil	47,094	32,462	45
C3	A	U3623	1	1.5	Soil	1,057	735	59
T11	C	U3508	0.5	1	Decomposed Feldspathic	4,231	7,805	743
T11	C	U3509	1	1.5	Decomposed Feldspathic	2,539	6,619	911
T11	B	U3505	0.5	1	Decomposed Feldspathic	2,369	5,424	972
T15	A	U3554	1	1.5	Feldspathic rock	1,657	4,346	67
T15	A	U3553	0.5	1	Feldspathic rock	1,616	3,754	431
T15	E	U3565	0.5	1	Feldspathic rock	1,553	3,525	41
T14	D	U3549	1.5	2	Feldspathic rock	1,432	3,034	434
T19	C	U3604	1	1.5	Feldspathic rock	1,367	5,525	675

Table 1 -Assays from the 10 highest- U3O8 samples from the Thambani trenching programme

Table 2 - Assays from the 10 highest grade U3O8 samples from the 2019 Thambani sampling programme

Sample ID.	U3O8 ppm	Ta2O5 ppm	Nb2O5 ppm
T0567	7,369	3,849	12,933
G1902	2,755	4,057	32,401
G1951	2,254	2,152	14,713
G1928	2,028	2,450	17,516
G1962	1,880	1,561	8.634
G1938	1,483	29	305
G1903	1,409	2,305	19,451
G1929	1,333	1,886	14,764
G1946	1,275	855	3,126
G1961	1,239	1,698	12,823

Table 3 - Summary of assay results (grades in ppm) from the 2019 Thambani sampling programme

		Rock grab samples		Trench samples
	U3O8	Ta2O5	Nb2O5	U3O8	Ta2O5	Nb2O5
Average	777	761	5,267	221	161	881
Median	659	542	3,340	93	87	654
Minimum	6	7	63	14	15	222
Maximum	2,755	4,057	32,401	7,369	3,849	12,933

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Mkango Resources Limited — Management Reports 2022

10523_rns_2022-04-27_2214829d-d51b-4775-9470-2d0c31d079dd.pdf

MKANGO RESOURCES LTD.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FORWARD LOOKING STATEMENTS

OVERALL PERFORMANCE AND OUTLOOK

SUBSEQUENT EVENTS

OVERVIEW OF THE BUSINESS

MINE

Songwe Hill

Nkalonje Hill

Mchinji

Chimimbe Hill

Thambani Uranium Licences

REFINE

PULAWY SEPARATION PLANT

RECYCLE

CORPORATE STRUCTURE

DISCUSSION OF OPERATIONS

SONGWE HILL

Background

Exploration

Talaxis Agreement

Feasibility Study

Other targets in the Phalombe Licence

Exploration targets at Nkalonje Hill

Work plan

MCHINJI, MCHINJI DISTRICT

CHIMIMBE HILL, MCHINJI DISTRICT

THAMBANI, MWANZA DISTRICT

Background

Airborne Geophysical Survey

RECYCLE

HyProMag Limited

Mkango Rare Earths UK Limited

SELECTED CONSOLIDATED FINANCIAL INFORMATION

Financial Position

Total assets

Total shareholders' equity (deficit) of parent

RESULTS OF OPERATIONS

Summary Results of Operations

SUMMARY OF QUARTERLY FINANCIAL RESULTS

RELATED PARTY TRANSACTIONS AND BALANCES

EXPENDITURES

Three months ended December 31, 2021 compared to the three months ended December 31, 2020

Three months ended December 31, 2021 compared to the three months ended September 30, 2021

Year ended December 31, 2021 compared to the year ended December 31, 2020

DISCLOSURE CONTROLS AND PROCEDURES

COMMITMENTS

ISSUED AND OUTSTANDING SHARE INFORMATION

OFF BALANCE SHEET ARRANGEMENTS

ACCOUNTING POLICIES AND ESTIMATES

RISK FACTORS

Environmental Risk

Exploration and Commercial Viability Risk

Macroeconomic Risk

Foreign Countries and Political Policy Risk

Resource and Reserve Risk

Mining Risks

Coronavirus Risk

Conflict in Ukraine

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Fair values

Credit risk

Concentration risk

Foreign currency rate risk

Liquidity Risk

Capital Risk

LIQUIDITY AND CAPITAL RESOURCES

DIRECTORS AND OFFICERS

APPENDIX A

Table 1 - Selected Drill Results

APPENDIX B

THAMBANI, MWANZA DISTRICT

Table 2 - Assays from the 10 highest grade U3O8 samples from the 2019 Thambani sampling programme

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Mkango Resources Limited Management Reports 2022