Mkango Announces Proposed Investment in HyProMag to Establish a Rare Earth Magnet Recycling Facility in the UK
Mkango Announces Proposed Investment in HyProMag to Establish a Rare
Earth Magnet Recycling Facility in the UK
LONDON and VANCOUVER, British Columbia, Sept. 23, 2019 -- Mkango Resources Ltd. (AIM/TSX-V: MKA) (the "Company"
or "Mkango") is pleased to announce that Maginito Limited (“Maginito”), has signed an investment term sheet and one year
exclusivity agreement with HyProMag Limited (“HyProMag”), a private company focused on rare earth magnet recycling (the
“Transaction”). Maginito is 75.5% owned by Mkango, which is completing a Feasibility Study for the Songwe Hill rare earths
project (“Songwe”) in Malawi, and 24.5% owned by Talaxis Limited (“Talaxis”), the technology metals investment and
development company and a wholly-owned subsidiary of Noble Group Holdings Limited. Consistent with Maginito’s strategy,
the rationale for the Transaction includes potential synergies, such as blending of primary production originating from Songwe
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 neodymium iron boron (“NdFeB”) alloy
powders from magnets embedded in scrap and redundant equipment named HPMS (Hydrogen Processing of Magnet
Scrap, the “Technology”). This was originally developed within the Magnetic Materials Group (“MMG”) at the University
of Birmingham (“UoB”).
• Subject to completion of definitive agreements and due diligence, Maginito will invest £300,000 for an initial 25%
interest in HyProMag and provide a £200,000 convertible loan facility, both of which will be fully funded from Maginito’s
existing cash resources. Maginito will have an option to increase its interest in HyProMag to up to 49%, and the first
right to supply any primary rare earth raw materials for blending with recycled materials, if required, and to market the
magnetic end products.
• 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.
• Maginito’s initial investment of £300,000 will fully satisfy HyProMag’s matched funding requirements for the three year,
£2.6 million Innovate UK grant funded project, “Rare-Earth Recycling for E-Machines” (“RaRE”), which aims to establish
a pilot rare earth magnet recycling facility at Tyseley Energy Park, Birmingham (“Tyseley”), and includes Advanced
Electrical Machines Research Limited and UoB as collaborators.
Further details will be provided on the Transaction and on HyProMag following completion of due diligence and the execution of
definitive agreements. In consideration for exclusivity, Maginito has paid £20,000 to HyProMag.
William Dawes, Chief Executive of Mkango stated: “We are very pleased to be working with the leading team and
University in the field of magnetic materials. We believe that rare earth magnet recycling and primary production will play
complementary roles in the development of a sustainable electric vehicle supply chain and we see clear synergies with the
development of Mkango’s advanced stage Songwe Hill rare earths project in Malawi.”
Prof. Allan Walton, Director of HyProMag stated: “In recent years the rare earth materials which are used in permanent
magnets have come under considerable supply constraints. At the same time there is very little recycling of these materials
partly due to the technological challenges for efficiently separating magnets from end of life products. This investment in
HyProMag will exploit HPMS in order to provide a secure supply of rare earth alloys with a very low environmental footprint. The
strategic alliance with Mkango has future potential for supplementing and enhancing products with additional independent
supply chains.”
Daniel Mamadou, Executive Director of Talaxis stated: “We are excited to be partnering with HyProMag and Mkango on
this ground-breaking project that has the potential to revolutionise rare earths magnet recycling for the electric vehicle market.
The investment is an excellent strategic fit with Talaxis’ technology metals portfolio, strengthening our position in the rare
earths supply chain and underlining our commitment to decarbonisation and sustainability.”
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 forty 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. The MMG continues to
develop new research and development opportunities, cooperates widely in Europe and is currently involved in two significant
EU projects (SusMagPro and Neohire). The directors of HyProMag all provide their expertise to the MMG and there is potential
for HyProMag to gain possible future access to new IP.
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 facilities will initially be based under the umbrella of MMG process development with phased transfer into Tyseley over two
years and first sales from Tyseley projected in year three.
About Mkango Resources Limited
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, 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 neodymium alloy powders, magnet and other technologies
geared to accelerating growth in the electric vehicle market.
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 chains 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 products using the rare earth metals the Company is exploring for, completion
of the feasibility study and of the Transaction contemplated in the agreement with HyProMag, 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, market 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, 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]
UK: +44 207 3722 744
Canada: +1 403 444 5979
www.mkango.ca
@MkangoResources
Blytheweigh
Financial Public Relations
Tim Blythe, Camilla Horsfall, Julia Tilley
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
For more information about Talaxis, please visit www.talaxis.com or contact:
Finsbury
Alastair Hetherington, Dorothy Burwell, Humza Vanderman
Tel: +44 20 7251 3801
Email: [email protected]
Citadel-MAGNUS
Peter Brookes, Helen McCombie
Tel: +61 2 8234 0100
Email: [email protected]
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.