REG - Mkango Resources Ltd - COTEC COMPLETES CONVERSION OF £2M MKANGO LOAN NOTE

Mkango ResourcesAnnouncement

02/10/2023 07:00

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RNS Number : 2597O  Mkango Resources Limited  02 October 2023

 

 

 

 

MKANGO RESOURCES LTD.
 
 COTEC HOLDINGS CORP.

550 Burrard Street
 
                                         755 Burrard
Street

Suite 2900
 
 
               Suite 428

Vancouver
 
 
           Vancouver

BC V6C 0A3
 
 
              V6Z 1X6

Canada
 
 
                    Canada

 

COTEC COMPLETES CONVERSION OF £2M MKANGO LOAN NOTE

TO INCREASE EQUITY POSITION IN MAGINITO FROM 10 PER CENT TO 20.6 PER CENT

 

London / Vancouver: October 2, 2023- CoTec Holdings Corp. (TSXV: CTH; OTCQB:
CTHCF) ("CoTec") and Mkango Resources Ltd. (AIM/TSX-V: MKA) ("Mkango") are
pleased to announce that CoTec has converted its £2 million convertible loan
note in Mkango into additional shares of Mkango's subsidiary Maginito Ltd.
("Maginito"). As a result of the conversion, CoTec's equity position in
Maginito has increased from 10 per cent to 20.6 per cent. Maginito owns 100%
of HyProMag Limited ("HyProMag").

In February 2023, CoTec and Maginito entered into a co-operation agreement in
relation to rare earth element ("REE") opportunities in the United States. In
early September 2023, CoTec and Mkango entered into a binding letter agreement
pursuant to which they have agreed to form a 50:50 joint venture (the "Joint
Venture") to pursue the roll-out of HyProMag's innovative rare earth magnet
recycling technology in the United States. If the Joint Venture proceeds with
the construction of the US Project, CoTec will also be responsible for funding
all the development costs of the US Project, with a total expected funding of
£30 million to £50 million during the first three years post completion of
the Feasibility Study, subject to results of the Feasibility Study. All
funding provided by CoTec would be in the form of shareholder loans. CoTec and
Mkango also expect that the Joint Venture will seek US government funding for
the US Project.

HyProMag's patented Hydrogen Processing of Magnet Scrap technology ("HPMS")
enables the recovery and recycling of rare earth magnets embedded in scrap
sources such as electronic waste, electric motors and wind turbines using 88%
less energy versus primary mining to separation to metal alloy to magnet
production.  HyProMag has the added capability to then remanufacture the
recovered material into rare earth magnets with a significantly reduced carbon
footprint. The HPMS technology, developed at the University of Birmingham, UK
and licensed by HyProMag, has benefited from approximately $100 million in
research and development funding.

As announced on 14 September 2023, the roll-out of the HyProMag technology in
the US is continuing with ongoing scoping studies ahead of the commencement of
the feasibility study. Discussions with the US Government, potential customers
and recycling partners have commenced and are ongoing. The US roll-out will be
completed in parallel with UK and German based developments and is expected to
benefit from operational experience and production ramp-up in the UK and
Germany. First production is expected in the UK in 2023 and in Germany in
2024. Revenue from the US operation is targeted for 2025/2026.

Julian Treger, CoTec CEO commented: "With the Maginito conversion completed
our focus will be the operational roll out of the HyProMag technology in the
United States. This conversion simplifies our investment structure in the
exciting and revolutionary HyProMag technology to a 20.6% equity interest in
Maginito and a direct 50% interest in the US operations."

"The Maginito investment is an example of the CoTec business model of
acquiring minority positions in disruptive technology combined with joint
venture participation at an operational level. It also allows CoTec to
commence, together with its other operational opportunities, its transition
from a technology investment company to resource producer."

Will Dawes, Mkango CEO commented; "We view the completion of CoTec's
conversion as an endorsement of the implied value inherent in Maginito and
specifically the proprietary HPMS technology that has potential to unlock a
significant opportunity in the US market. We look forward to working with
CoTec and HyProMag as we focus on the operational roll out of the technology
and move into the next phase of growth."

About Maginito

Maginito is a UK based company owned, following the conversion, as to 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 €2.5 million
(approximately C$3.6 million) 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 Mkango in the rare earths sector.
Mkango is listed on the AIM and the TSX Venture Exchange ("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 producer
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 (http://www.mkango.ca)

 

About CoTec Holdings Corp.

CoTec is a publicly traded investment issuer listed on the TSX- V and the
OTCQB and trades under the symbol CTH and CTHCF respectively. CoTec 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 CoTec 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. CoTec 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 (http://www.cotec.ca) .

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by CoTec and
Mkango 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 expectations with respect to the timing and benefits of the
Joint Venture. Generally, forward looking statements can be identified by the
use of words such as "plans", "expects" or "is expected to", "scheduled",
"targeted for", "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 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,  the positive
results of feasibility studies on the various proposed aspects of Mkango's,
Maginito's and CoTec's activities, and those risks set out in CoTec's and
Mkango's public documents filed on SEDARplus. The forward-looking statements
contained in this news release are made as of the date of this news release.
Except as required by law, Mkango 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, Mkango 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
Alexander Lemon

Chief Executive Officer                  President

will@mkango.ca
alex@mkango.ca

Canada: +1 403 444 5979

www.mkango.ca (http://www.mkango.ca)

@MkangoResources

 

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

mkango@tavistock.co.uk

 

For further information on CoTec, please contract:

 

CoTec Holdings Corp.

Braam Jonker

Chief Financial Officer

braam.jonker@cotec.ca

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 CoTec or Mkango in the
United States. The securities of CoTec and Mkango 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.

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