Mkango and CoTec Provide Update on Roll-Out Of HyProMag’s Rare Earth Magnet Recycling Technology Into the United States
Mkango and CoTec Provide Update on Roll-Out Of HyProMag’s Rare Earth
Magnet Recycling Technology Into the United States
LONDON and VANCOUVER, British Columbia, Oct. 10, 2023 -- Mkango Resources Ltd. (AIM/TSX-V: MKA) (“Mkango”) and
CoTec Holdings Corp. (TSXV: CTH; OTCQB: CTHCF) (“CoTec”) are pleased to provide an update on the roll-out of HyProMag’s
rare earth magnet recycling technology into the United States. HyProMag Ltd (“HyProMag”) is a wholly owned subsidiary of
Maginito Ltd (“Maginito”), which is 79.4% owned by Mkango and 20.6% owned by CoTec.
Based on positive scoping studies to date, Maginito and CoTec have commenced planning for the feasibility study for the
United States operation (“Feasibility Study”), targeted for completion by mid-2024.
The proposed operating configuration for the United States operations is a modular, hub and spoke model, with the initial
deployment of three Hydrogen Processing of Magnet Scrap (HPMS) recycling vessels at the spokes and a central hub
comprising of rare earth (NdFeB) alloy and magnet manufacturing, subject to the outcome of the Feasibility Study.
Operating scenarios tested through the scoping studies highlighted:
• A range of production scenarios and product suites are potentially viable, including finished magnets, sintered blocks
and alloy products, and incorporating up to 100% recycled NdFeB feed;
• Potential for US$50 million per year of revenue generation, based on assumed production of 500 tonnes per year of
NdFeB magnets and a blended product price of US$100/kg, which is within the range of current pricing for the different
products evaluated during the scoping studies;
• A target EBITDA margin of 35% to 40% would potentially be achievable under a range of scenarios, with a minimum
estimated capital expenditure of US$30 million; and
• Market conditions and rare earth prices are currently subdued, indicating potential upside versus the current pricing
scenario as market conditions recover, in parallel with further optimization of the development scope.
The actual results of the United States operations could vary materially depending on future pricing of rare earth elements, final
product mix, agreed sales pricing for each product, capacity at which the HPMS vessels and magnet manufacturing will be
operated, quality and cost of scrap feed material, primary product ratio and other material inputs. These key inputs will be
further explored and optimized during the completion of the Feasibility Study.
The basis of design, product suite and operating parameters for the United States operations will be further confirmed, refined
and de-risked as the recycling and magnet manufacturing facilities are commissioned and production commences at Tyseley
Energy Park (“Tyseley”) in the United Kingdom. First production of rare earth magnets from Tyseley is targeted for this year.
The Tyseley development is being funded by the UK Research and Innovation “Driving the Electric Revolution” challenge.
HyProMag is the primary industrial user and operator of the plant, and the principal licensee for the underlying HPMS
technology from the University of Birmingham.
The University of Birmingham has approved a sub-license of the HPMS technology to the HyProMag US operations, allowing
Maginito and CoTec to proceed with the formation of a joint venture company. The joint venture company, HyProMag US, will
be 50% held each by Maginito and CoTec, with CoTec responsible for funding all feasibility and development costs.
Julian Treger, CoTec CEO commented; “We are very pleased with the progress and the results of the scoping studies.
HyProMag US continues to benefit from front-end engineering and development of the plants in the UK and Germany, which
significantly de risks the US operations.”
“As the planning for the Feasibility Study commences with our partner Mkango, CoTec is focused on the operational roll-out of
the HyProMag technology. HyProMag’s exciting recycling technology offers a long-term, sustainable and low carbon solution
for the supply of domestic REE magnets. Discussions with the US Government, potential customers and recycling partners
have commenced and are ongoing.”
Will Dawes, Mkango CEO commented ; “We are very excited about opportunities for growth in the United States and look
forward to working with CoTec and HyProMag as we continue to scale-up and roll-out the HPMS rare earth magnet recycling
technology. HPMS has potential to unlock the supply chain for rare earth magnet recycling and it’s fantastic to see this UK
developed, homegrown, innovative technology continuing to gain traction internationally.”
HPMS technology was developed at the University of Birmingham, underpinned by approximately US$100 million of research
and development funding, and has major competitive advantages versus other rare earth magnet recycling technologies, which
are largely focused on chemical processes but do not solve the challenges of liberating magnets from end-of-life scrap streams
– HPMS provides the solution. HyProMag’s company presentation can be viewed via the following link: HyProMag Corporate
Presentation
Maginito
Maginito is a UK based Company owned 79.4 per cent by Mkango and 20.6 per cent by CoTec. It 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.
Maginito holds a 100 per cent interest in HyProMag and a 90 per cent direct and indirect interest (assuming conversion of
Maginito’s convertible loan) in HyProMag GmbH, focused on short loop rare earth magnet recycling in the UK and Germany,
and a 100 per cent interest in Mkango Rare Earths UK Ltd (“Mkango UK”), a company focused on long loop rare earth magnet
recycling in the UK via a chemical route.
About Mkango Resources Ltd.
Mkango's corporate strategy is to develop new sustainable primary and secondary sources of neodymium, praseodymium,
dysprosium and terbium to supply accelerating demand from electric vehicles, wind turbines and other clean technologies.
This integrated Mine, Refine, Recycle strategy differentiates Mkango from its peers, uniquely positioning the Company in the
rare earths sector. Mkango is listed on the AIM and the TSX-V.
Mkango is developing its flagship Songwe Hill rare earths project (“Songwe”) in Malawi with a Definitive Feasibility Study
completed in July 2022 and an Environmental, Social and Health Impact Assessment approved by the Government of Malawi
in January 2023.
In parallel, Mkango and Grupa Azoty PULAWY, Poland's leading chemical have agreed to work together towards development
of a rare earth separation plant at Pulawy in Poland (the “Pulawy Separation Plant”) to process the purified mixed rare earth
carbonate produced at Songwe Hill.
Mkango also has an extensive exploration portfolio in Malawi, including the Mchinji rutile exploration project, the Thambani
uranium-tantalum-niobium-zircon project and Chimimbe nickel-cobalt project.
For more information, please visit www.mkango.ca
About CoTec Holdings Corp.
CoTec is a publicly traded investment issuer listed on the Toronto Venture Stock Exchange (“TSX- V”) and the OTCQB and
trades under the symbol CTH and CTHCF respectively. The Company is an environment, social, and governance (“ESG”)-
focused company investing in innovative technologies that have the potential to fundamentally change the way metals and
minerals can be extracted and processed for the purpose of applying those technologies to undervalued operating assets and
recycling opportunities, as the Company transitions into a mid-tier mineral resource producer.
CoTec is committed to supporting the transition to a lower carbon future for the extraction industry, a sector on the cusp of a
green revolution as it embraces technology and innovation. The Company has made four investments to date and is actively
pursuing operating opportunities where current technology investments could be deployed.
For more information, please visit www.cotec.ca.
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated
under the Market Abuse Regulations (EU) No. 596/2014 ('MAR') which has been incorporated into UK law by the European
Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service, this inside
information is now considered to be in the public domain.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements (within the meaning of that term under applicable securities laws) with
respect to Mkango and CoTec, including their plans to proceed with the roll-out of HyProMag’s rare earth magnet recycling
technology into the United States by way of a new joint venture and the anticipated structure, costs and benefits of that joint
venture. Generally, forward looking statements can be identified by the use of words such as “plans”, “expects” or “is expected
to”, “scheduled”, “estimates” “intends”, “anticipates”, “believes”, or variations of such words and phrases, or statements that
certain actions, events or results “can”, “may”, “could”, “would”, “should”, “might” or “will”, occur or be achieved, or the negative
connotations thereof. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no
assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking
statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that
contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur,
which may cause actual performance and results in future periods to differ materially from any estimates or projections of
future performance or results expressed or implied by such forward-looking statements. Such factors and risks include,
without limiting the foregoing, the availability of (or delays in obtaining) financing to develop HyProMag US’s operations,
Songwe Hill, the Tyseley Recycling Plant, the HyProMag GmbH Recycling Plant, the Mkango UK Pilot Plant, the Pulawy
Separation Plant, governmental action and other market effects on global demand and pricing for the metals and associated
downstream products for which Mkango is exploring, researching and developing, geological, technical and regulatory matters
relating to the development of Songwe Hill, the ability to scale the HPMS and chemical recycling technologies to commercial
scale, competitors having greater financial capability and effective competing technologies in the recycling and separation
business of Maginito and Mkango, availability of scrap supplies for Maginito’s recycling activities, government regulation
(including the impact of environmental and other regulations) on and the economics in relation to recycling and the
development of the Tyseley Recycling Plant, the HyProMag GmbH Recycling Plant, the Mkango UK Pilot Plant, the Pulawy
Separation Plant and future investments in the United States pursuant to the proposed cooperation agreement between
Maginito and CoTec, the outcome and timing of the completion of the feasibility studies, cost overruns, complexities in
building and operating the plants, and the positive results of feasibility studies on the various proposed aspects of Mkango’s,
Maginito’s and CoTec’s activities. The forward-looking statements contained in this news release are made as of the date of
this news release. Except as required by law, the Company and CoTec disclaim any intention and assume no obligation to
update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as
required by applicable law. Additionally, the Company and CoTec undertake no obligation to comment on the expectations of,
or statements made by, third parties in respect of the matters discussed above.
For further information on Mkango, please contact:
Mkango Resources Limited
William Dawes
Chief Executive Officer
Canada: +1 403 444 5979
www.mkango.ca
@MkangoResources
Alexander Lemon
President
SP Angel Corporate Finance LLP
Nominated Adviser and Joint Broker
Jeff Keating, Kasia Brzozowska
UK: +44 20 3470 0470
Alternative Resource Capital
Joint Broker
Alex Wood, Keith Dowsing
UK: +44 20 7186 9004/5
Tavistock Communications
PR/IR Adviser
Jos Simson, Cath Drummond
UK: +44 (0) 20 7920 3150
For further information on CoTec, please contract:
CoTec Holdings Corp.
Braam Jonker
Chief Financial Officer
Canada: +1 604 992-5600
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. Neither the TSX
Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any equity or other securities of the
Company in the United States. The securities of the Company will not be registered under the United States Securities Act of
1933, as amended (the "U.S. Securities Act") and may not be offered or sold within the United States to, or for the account or
benefit of, U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act.