Mkango Announces Launch of Innovative Project to Use Recycled Rare Earth Magnets in Electric Vehicles
Mkango Announces Launch of Innovative Project to Use Recycled Rare Earth
Magnets in Electric Vehicles
LONDON and VANCOUVER, British Columbia, May 27, 2020 -- Mkango Resources Ltd. (AIM/TSX-V: MKA) (the "Company"
or "Mkango") is pleased to announce the launch and provide further details of the Innovate UK grant funded project, “Rare-Earth
Recycling for E-Machines” (“RaRE” or the “Project”) in which HyProMag Limited (“HyProMag”) is a partner. Mkango’s
subsidiary, Maginito Limited (“Maginito”), holds a 25% equity interest in HyProMag.
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.
Fundamental to the Project is a patented process for extracting and demagnetising neodymium iron boron (“NdFeB”) alloy
powders from magnets embedded in scrap and redundant equipment named HPMS (Hydrogen Processing of Magnet Scrap),
originally developed within the Magnetic Materials Group (“MMG”) at the University of Birmingham (“UoB”) and subsequently
licenced to HyProMag. In addition to HyProMag and UoB, the Project features a strong set of partners with complementary
expertise:
• Advanced Electric Machines Research Limited - extensive experience in designing motors for customers including
Airbus and Tevva Motors
• Bentley Motors Limited - an iconic automotive brand and part of the VW Group, one of the world’s largest car
manufacturers
• Intelligent Lifecycle Solutions Limited - a global leader in the processing of electronics waste working with Fortune 500
companies and UK government agencies
• Unipart Powertrain Applications Limited - one of the largest UK based Tier 1 automotive partners and a recognised
volume automotive supplier able to supply globally
The total budget for RaRE is £2.6 million, of which Innovate UK will fund £1.9 million with Project partners funding the £0.7
million balance. HyProMag’s contribution will be fully funded from the £300,000 investment made by Maginito in January 2020.
William Dawes, Chief Executive of Mkango stated: “We are very excited about this innovative project and the opportunity
to scale up and commercialise the HPMS technology. We envisage that recycling of rare earth magnets will play a key role in
the development of robust supply chains to catalyse and support growth in the electric vehicle sector and in other clean
technologies. Further building on our platform within the circular economy and downstream markets is a key component of our
strategy, underpinned by the sustainable development of the Songwe Hill rare earths project in Malawi.”
Daniel Mamadou, Executive Director of Talaxis stated: “We are excited to see this project progress to its next phase and
welcome the support of all partners involved. With the increasing need for sustainably sourced commodities, RaRE highlights
the role that closed loops chains can play in rare earths supply, to meet the environmental and economic demands of the
growing electric vehicle market. As an early participant in this project, we look forward to continuing to support the
development of the rare earth recycling industry going forward, in parallel with the Songwe Hill rare earths project in Malawi.”
Nick Mann, Operations General Manager of HyProMag stated: “RaRE is an exciting project and a fantastic opportunity to
prove the importance and worth of short loop recycled magnetic material. NdFeB magnets are essential for many future
technologies, and the emerging electric vehicle market is of increasing importance. Being involved at this level means we not
only get to work with and supply recycled magnets to some of the most innovative and globally recognised companies, but
also allows us to influence the design of products with the aim of making recycling a better option in the future. I believe this
is industry, technology, recycling and innovation working together at its impressive best.”
RaRE Project
Building on work completed at the UoB to devise a method to extract magnets from waste electronics, HyProMag will scale up
the HPMS process and re-process the product back into new magnetic materials at pilot scale to demonstrate the quality of
material which can be produced in terms of its magnetic behaviour, mechanical performance and corrosion resistance, all of
which are key to the end user application. Intelligent Lifecycle Solutions will establish the scrap sorting process to maximise
process efficiency and rare earth material volumes.
The recycled magnets will be built into an ancillary electric motor designed by Advanced Electric Machines Research to a
Bentley Motors specification and focused on reducing the overall complexity of electrical systems in electric vehicles and
designed with recycling in mind. This will be the first time that such a recycled motor will have been demonstrated. Unipart will
take this motor design and use it as the core focus for the design of a flexible volume motor assembly line suitable for
production volumes of 100,000 units per year.
Innovate UK will fund £1.9 million of the £2.6 million total Project costs with the balance funded by the Project partners. In the
case of HyProMag, Innovate UK will contribute £657,717 and HyProMag will contribute £281,879. HyProMag’s contribution will
be fully funded from the investment by Maginito in HyProMag announced on January 10, 2020, whereby Maginito invested
£300,000 for a 25% equity interest in HyProMag and provided a £200,000 convertible loan facility, now fully drawn.
Maginito has an option to increase its interest to up to 49% in HyProMag and the first right to supply primary production from
Songwe Hill, if required, for blending with recycled production from HyProMag, as well as product offtake and marketing rights.
Maginito is 75.5% owned by Mkango, which is completing a Feasibility Study for the Songwe Hill rare earths project in
Malawi, and 24.5% owned by Talaxis Limited (“Talaxis”), a wholly-owned subsidiary of Noble Group Holdings Limited (“Noble”),
which is focused on investment in and development of technology metal opportunities.
About HyProMag
The Magnetic Materials Group within the School of Metallurgy at the University of Birmingham has been active in the field of
rare earth alloys and processing of permanent magnets using hydrogen for over 40 years. Originated by Professor Rex Harris,
the hydrogen decrepitation method, which is used to reduce NdFeB alloys to a powder, is now ubiquitously employed in
worldwide magnet processing.
In a further development, the MMG patented a process for extracting and demagnetising NdFeB powders from magnets
embedded in redundant equipment using hydrogen in a process called HPMS (Hydrogen Processing of Magnet Scrap). This
patent and related intellectual property is at the core of HyProMag’s business. The MMG continues to develop new research
and development opportunities, cooperates widely in Europe, including a major EU project, SusMagPro, which is also focused
on recycling of magnets. The directors of HyProMag all provide their expertise to the MMG and there is potential for HyProMag
to gain possible future access to new intellectual property.
HyProMag’s strategy is to establish a recycling facility for NdFeB magnets at Tyseley in Birmingham to provide a sustainable
solution for the supply of NdFeB magnets and alloy powders for a wide range of markets including, for example, automotive
and electronics. A number of product options are being evaluated including hydrogen decrepitated (HD) demagnetised powders
suitable for magnet producers, alloy ingot remelted from HD powders suitable for alloy feed or magnet production, anisotropic
alloy powders (HDDR) for bonded magnets and sintered NdFeB magnets as required by the RaRE project for automotive
applications.
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.
Following the investment by Maginito, HyProMag appointed William Dawes, a Director of Maginito and Chief Executive Officer
of Mkango, to the Board of HyProMag.
For more information, please visit https://hypromag.com/
About Mkango
Mkango's primary business is exploration for rare earth elements and associated minerals in the Republic of Malawi, a country
whose hospitable people have earned it a reputation as “the warm heart of Africa”. The Company holds interests in four
exclusive prospecting licenses in Malawi: the Phalombe licence, the Thambani licence, the Chimimbe Hill licence and the
Mchinji licence.
The main exploration target in the 51% held Phalombe licence is the Songwe Hill rare earths deposit. This features carbonatite
-hosted rare earth mineralisation and was subject to previous exploration in the late 1980s. Mkango completed an updated Pre
-Feasibility Study for the project in November 2015 and a Feasibility Study is currently underway, the initial phases of which
included a 10,900 metre drilling programme and an updated mineral resource estimate, announced in February 2019. In March
2019, the Company announced receipt of a £7 million (C$12.3 million) investment from Talaxis to fund completion of the
Feasibility Study. Following completion of the Feasibility Study, Talaxis has an option to acquire a further 26% interest in
Songwe by arranging financing for project development including funding the equity component thereof.
The main exploration targets in Mkango’s remaining three 100% held licences are, in the Thambani licence, uranium, niobium,
tantalum and zircon, in the Chimimbe Hill licence, nickel and cobalt, and in the Mchinji licence, rutile, nickel, cobalt, base
metals and graphite.
Mkango also holds a 75.5% interest in Maginito with the balance owned by Talaxis. Maginito is focused on downstream
opportunities relating to the rare earths supply chain, in particular, recycling and other innovative technologies for the
production of neodymium alloy powders and magnets used in electric vehicles, wind turbines and other industries geared to
decarbonisation of the economy.
For more information, please visit www.mkango.ca.
About Talaxis
Founded in 2016, Talaxis is a wholly-owned subsidiary of Noble Group Holdings Limited and invests in and develops projects
that are related to technology metals, with a special focus on rare earth elements. Talaxis focuses on battery and electric
vehicle materials such as nickel, lithium, graphite and vanadium. Talaxis has supply chain partners in the upstream and
midstream segments, and also focuses on research and development solutions for industrial consumers in the downstream
segment. Talaxis prioritises sustainable ventures with a strong emphasis on corporate social responsibility. These include
projects that contribute to the decarbonisation of the economy and that are aligned with the United Nations Sustainable
Development Goals.
For more information, please visit www.talaxis.com.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement may have been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this announcement.
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, its business and the Project. Generally, forward looking statements can be identified by the use of words
such as “plans”, “expects” or “is expected”, “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. Forward looking statements in this news release include
statements with respect to the global market for rare earth metals the Company is exploring for, completion of the feasibility
study for Songwe, investments by Maginito in Hypromag contemplated in the agreement between Maginito and HyProMag and
of the plans and results with respect to the Project, as well as plans for Tyseley and first commercial sales from Tyseley.
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, governmental action relating to COVID-19, COVID-19 and other market effects on global demand for the metals and
associated downstream products for which Mkango is exploring, researching and developing, the positive results of a feasibility
study on the Project and delays in obtaining financing or governmental or stock exchange approvals. 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 disclaims any intention and assumes 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
undertakes 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 Alexander Lemon
Chief Executive Officer President
[email protected] [email protected]
Canada: +1 403 444 5979
www.mkango.ca
@MkangoResources
Blytheweigh
Financial Public Relations
Tim Blythe, Camilla Horsfall
UK: +44 207 138 3204
SP Angel Corporate Finance LLP
Nominated Adviser and Joint Broker
Jeff Keating, Caroline Rowe
UK: +44 20 3470 0470
Alternative Resource Capital
Joint Broker
Alex Wood, Rob Collins
UK: +44 20 7186 9004; +44 20 7186 9001
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.