Mkango Resources has been granted an exclusive prospecting licence covering the Chimimbe Hill nickel-cobalt deposit and other targets in Mchinji district, central Malawi, it announced on Wednesday.
The AIM-traded firm said the Chimimbe Hill licence covers an area of 98.48 square kilometres, and featured laterite and saprolite-hosted nickel, cobalt,chrome and other mineralisation.
It said "significant" historical exploration had been completed, including pitting, drilling and metallurgical test work.
Magnetic anomalies in the licence area indicated exploration potential for additional nickel - cobalt mineralisation, the board claimed.
Mkango said it would re-evaluate the Chimimbe Hill deposit in the context of geophysical data produced by the recent World Bank airborne geophysical survey of Malawi, recent infrastructure developments in the region, potential synergies with its Songwe Hill rare earths project and Thambani uranium-tantalum-niobium project - both in Malawi - options relating to sulphuric acid and alternative reagents supply, potential by-products, as well as opportunities to produce nickel and cobalt products for the battery electric vehicle market.
The evaluation of the licence would be funded from the company's existing working capital, which totaled $0.87m as at 30 September.
Since then, Mkango had announced the receipt of £0.24m ($0.32m) from the exercise of warrants.
"We are delighted to have been granted the Chimimbe Hill nickel-cobalt exploration licence, which is consistent with our strategy to target raw materials and technologies geared to accelerating growth in the electric vehicle market," said Mkango's president Alexander Lemon.
"Both nickel and cobalt are increasingly in demand as cathode materials for batteries in electric vehicles."
Lemon said the new licence, when combined with the Songwe Hill rare earths project and the company's collaboration with Metalysis on neodymium alloys for permanent magnets, positioned Mkango as a potential future supplier of the critical raw materials used in both batteries and permanent magnet motors in electric vehicles.
"We are commencing a full historical data review for Chimimbe Hill, including an evaluation of exploration potential from recent geophysics, and look forward to updating shareholders on this new licence and the recently announced transaction with Talaxis in due course."