REG - Mkango Resources Ltd - HYPROMAG USA EXPANDS DETAILED ENGINEERING PHASE

Mkango ResourcesAnnouncement

11/03/2025 07:15

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RNS Number : 0884A  Mkango Resources Limited  11 March 2025

 

 

 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

 

HYPROMAG USA EXPANDS DETAILED ENGINEERING PHASE TO INCLUDE THREE HPMS VESSELS
AND INITIATES CONCEPT STUDIES FOR FURTHER EXPANSION AND COMPLEMENTARY "LONG
LOOP" RECYCLING

 

London / Vancouver: March 11, 2025 - CoTec Holdings Corp. (TSXV: CTH; OTCQB:
CTHCF) ("CoTec") and Mkango Resources Ltd. (AIM/TSX-V: MKA) ("Mkango") are
pleased to announce that HyProMag USA LLC ("HyProMag USA") will expand the
upcoming detailed design phase of its U.S. permanent magnet recycling and
manufacturing project (the "Project") to include three HPMS i  vessels.

In addition, and concurrently, HyProMag USA will begin conceptual studies to
evaluate further expansion to triple the capacity of the Project, versus that
envisaged in the Feasibility Study, across the Project footprint of Fort
Worth, Texas ("Texas Hub"), South Carolina and Nevada as well as integrated
USA development of long loop chemical processing, which is complementary to
the HPMS short-loop process. Long-loop chemical processing is used to process
any material not suitable for short-loop recycling as well as swarf generated
from magnet finishing. HyProMag USA is targeting to supply 10% of U.S.
domestic demand for NdFeB magnets within five years of commissioning. ii 

The November 2024 base case Feasibility Study (the "Feasibility Study") iii ,
which was based on two HPMS vessels, indicated a NPV(7%) of US$262 iv  million
based on current market prices v (, vi ) and US$503 million based on forecast
prices vii . With the inclusion of the third HPMS vessel for an incremental
capital cost of circa US$7 million, the Feasibility Study indicated a NPV(7%)
of US$279 million based on current market prices and US$593 million based on
forecast prices.

Julian Treger, CoTec CEO commented: "The potential expansion of HyProMag USA
is compelling from a value perspective as the modular design of the production
hubs is expected to allow for significant upfront cost savings and
optimization opportunities could result in even higher returns than the strong
economics shown by the Feasibility Study. Additionally, it will also play a
key role in supporting the US strategy of reshoring manufacturing capability,
reducing dependance on foreign magnets and rare earths.

The increased production capacity could also allow the flexibility to produce
a wider range of products and specialist magnets, further improving both
financial returns and the company's ability to become a supplier of choice."

Will Dawes, Mkango CEO commented: "The HyProMag USA Feasibility Study
highlighted the strong economics of the Project, with significant
opportunities for further expansions, coupled with ancillary developments to
add value, broaden the product suite and strengthen the competitive
positioning."

The Feasibility Study included the Texas Hub, and two pre-processing
facilities located in South Carolina and Nevada respectively. It is envisaged
that additional expansion capacity and downstream development could be added
at either the Texas Hub and / or the two pre-processing facilities, which will
be evaluated during the concept studies, as well as the potential to process
additional primary feed if required to initially support the expansion. The
modular nature of the production design should allow duplication with limited
design adjustments and should benefit from the construction and ramp-up
learnings of the Texas Hub, and commissioning of the UK and Germany
operations. With the increased production capacity, the Project will generate
additional NdFeB co-products suitable for long loop chemical processing. The
opportunity to develop an integrated long loop chemical processing plant will
also be evaluated during the concept studies.

 

Both long-loop and short-loop recycling technologies are underpinned by the
HPMS technology, which liberates magnets from end-of-life scrap streams in a
cost effective and energy efficient way to produce a recycled NdFeB alloy
powder, which is manufactured into a magnet (via the short loop process) or
into a rare earth carbonate or oxide (via the long loop chemical process). In
March 2025, HyProMag USA announced the results of an independent ISO-Compliant
product carbon footprint study which confirmed an exceptionally low CO(2)
footprint of 2.35 kg CO(2) eq. per kg of NdFeB cut sintered block
product. viii 

The Texas Hub's annual production with a third HPMS vessel will be 750 metric
tons per annum of recycled sintered NdFeB magnets and 807 metric tons per
annum of associated NdFeB co-products (total payable capacity - 1,557 metric
tons NdFeB within five years of commissioning) over a 40 year operating life.
It is expected that the third reactor will provide the Texas Hub with
significant optionality to supply the U.S. market with additional NdFeB alloy
powder. The detailed design will further incorporate debottlenecking and
optimization of the three existing magnet lines at the proposed Texas Plant.

Ownership

HyProMag USA is owned 50:50 by CoTec and HyProMag Limited. HyProMag Limited is
100 per cent owned by Maginito Limited ("Maginito"), which is owned on a
79.4/20.6 per cent basis by Mkango and CoTec.

About HyProMag

HyProMag is commercializing HPMS recycling technology in the UK, Germany and
United States. HyProMag is also evaluating other jurisdictions, and in
mid-2024 launched a collaboration with Envipro on rare earth magnet recycling
in Japan. HPMS technology was developed at the Magnetic Materials Group (MMG)
at 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 this solution.

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. CoTec Holdings Corp. is a forward-thinking resource
extraction company committed to revolutionizing the global metals and minerals
industry through innovative, environmentally sustainable technologies and
strategic asset acquisitions. With a mission to drive the sector toward a
low-carbon future, CoTec employs a dual approach: investing in disruptive
mineral extraction technologies that enhance efficiency and sustainability
while applying these technologies to undervalued mining assets to unlock their
full potential. By focusing on recycling, waste mining, and scalable
solutions, the Company accelerates the production of critical minerals,
shortens development timelines, and reduces environmental impact. CoTec's
strategic model delivers low capital requirements, rapid revenue generation,
and high barriers to entry, positioning it as a leading mid-tier disruptor in
the commodities sector.

For more information, please visit www.cotec.ca.

About Mkango Resources Ltd.

Mkango is listed on the AIM and the TSX-V. Mkango's corporate strategy is to
become a market leader in the production of recycled rare earth magnets,
alloys and oxides, through its interest in Maginito Limited ("Maginito"),
which is owned 79.4 per cent by Mkango and 20.6 per cent by CoTec, and to
develop new sustainable sources of neodymium, praseodymium, dysprosium and
terbium to supply accelerating demand from electric vehicles, wind turbines
and other clean energy 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, respectively, and a 100 per cent interest in Mkango Rare Earths UK
Ltd ("Mkango UK"), focused on long loop rare earth magnet recycling in the UK
via a chemical route.

Maginito and CoTec are also rolling out HPMS recycling technology into the
United States via the 50/50 owned HyProMag USA LLC joint venture company.

Mkango also owns the advanced stage Songwe Hill rare earths project and an
extensive rare earths, uranium, tantalum, niobium, rutile, nickel and cobalt
exploration portfolio in Malawi, and the Pulawy rare earths separation project
in Poland. Mkango has signed a letter of Intent with Crown PropTech
Acquisitions to list the Songwe Hill and Pulawy rare earths projects on NASDAQ
via a SPAC Merger.

For more information, please visit www.mkango.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.
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 successful conclusion of the MDA, the availability of (or
delays in obtaining) financing to develop Songwe Hill, the Recycling Plants
being developed by Maginito in the UK, Germany and the US (the "Maginito
Recycling Plants"), the results of the Feasibility Study and 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 Maginito
Recycling Plants, and 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 because 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 CoTec, please contract:

CoTec Holdings Corp.

Braam Jonker

Chief Financial Officer

braam.jonker@cotec.ca

Canada: +1 604 992-5600

 

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

@MkangoResources

 

SP Angel Corporate Finance LLP

Nominated Adviser and Joint Broker

Jeff Keating, Jen Clarke, Devik Mehta

UK: +44 20 3470 0470

Alternative Resource Capital

Joint Broker

Alex Wood, Keith Dowsing

UK: +44 20 7186 9004/5

 

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.

 

 i  Patented Hydrogen Processing of Magnet Scrap (HPMS) technology developed
at University of Birmingham, which liberates NdFeB magnets from end-of-life
scrap streams in a cost effective and energy efficient way

 ii  Federal Register: 88 FR 9430, Pages 9430-9475 (46 pages).  Department of
Commerce, Bureau of Industry and Security: "The Effect of Imports of
Neodymium-Iron-Boron (NdFeB) Permanent Magnets on the National Security."

 iii  November 2024 independent HyProMag USA feasibility study undertaken by a
multidisciplinary team appointed by CoTec and Mkango and led by independent
engineers, Canada-based BBA USA Inc. ("BBA") and U.S. based PegasusTSI Inc.
("PegasusTSI") with other independent experts and support from University of
Birmingham, HyProMag Ltd and HyProMag GmbH.

 iv  7% real discount rates. NPVs are calculated by discounting real US dollar
cash flows from 2025 post tax

 v  Current market prices ("Current Prices") for all NdFeB products sold in
the U.S, excluding residual scrap, derived from U.S. 2024 price quotes, over
the life of the asset

 vi  NPV does not include the economic benefit of any government or state
incentives, or carbon pricing

 vii  Forecast market prices ("Forecast Prices") are the prices for all NdFeB
products sold in the U.S, excluding residual scrap feed, with the rare earth
price component thereof derived from the latest rare earth oxide price
forecasts from Q4 (2024) Adamas Intelligence, over the life of the asset

 viii  Cut Sintered Block Product is the final product prior to nickel plating
and magnetization

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