The Canada-listed firm launched the funding yesterday with its major shareholder Leo Mining and Exploration (Leominex) taking the lead, committing the first C$750,000, and it is now seeking further investments from new and existing investors.
"In the current funding market we believe this is a significant step forward for the company," Dawes told Proactive Investors.
Mkango filed a NI 43-101 compliant resource estimate in November with a substantial resource in the indicated category.
Many of the 'scoping' elements of the project are now well advanced, Dawes added, and he is targeting completion of a pre-feasibility study (NYSE:PFS) before the end of this year.
Importantly, because of the success of the initial phase of work he said Mkango is now able to realise meaningful cost savings as it pursues the PFS, because no further drilling is needed at this time.
"Drilling is expensive and time consuming, but we've already completed sufficient drilling to support a PFS. Now we can focus on metallurgy and the economics of the project."
"Our indicated resources would be sufficient to support an operation for at least 20 years mining and processing around 500,000 tonnes per year."
Dawes adds this is the first time Mkango has come back to the market for more money since its inception and initial fund raise in 2011.
Major shareholder Leominex, which is associated with management of Mkango and a major US hedge fund, is subscribing for 4.285mln new units, comprising one share and a half warrant, priced at C$0.175 each.
Each whole warrant will convert to new shares at a price of C$0.35 within the first year following the placing.
A further 7.144 mln units will be offered to investors on the same terms.
As well as spending money on Songwe's pre-feasibility programmes, Mkango also intends to fund further exploration across its prospective acreage, which has potential for rare earths, uranium and zircon.
"Malawi has significant potential for ion adsorption clay hosted rare earth deposits, which are the current focus for regional exploration."
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.