REG - Mkango Resources Ltd - HYPROMAG USA PROVIDES POSITIVE UPDATE TO VALUATION

Mkango ResourcesAnnouncement

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RNS Number : 5497L  Mkango Resources Limited  15 December 2025

 

 

 

 

MKANGO RESOURCES
LTD.

550 Burrard
Street

Suite
2900

Vancouver, BC V6C
0A3

Canada

 

HYPROMAG USA PROVIDES POSITIVE UPDATE TO VALUATION OF EXPANDED DALLAS-FORT
WORTH PLANT

AND COMMENCES STRATEGIC REVIEW TO EXPLORE A U.S. LISTING

 

Texas Facility Expansion Increases Magnet Capacity, Supports Domestic
Critical-Minerals Supply Chains and Increases Post-Tax NPV to US$780 million
(forecast prices) and US$409 million (current prices)

 

London / Vancouver: 15 December 2025 - Mkango Resources Ltd (AIM/TSX-V: MKA)
(the "Company" or "Mkango"), is pleased to announce that HyProMag USA, LLC
("HyProMag USA"), a U.S.-based leader in rare-earth recycling and processing,
has expanded the magnet capacity of its first facility (the "Texas Hub" or the
"Project") and has updated the valuation of the Project with the completion of
the Class 2 AACE i  capital cost estimate as part of the Detailed Engineering
Design and Value Engineering Phase (the "Detailed Design"). The Class 2 AACE
capital cost estimate and detailed value-engineering work confirm a
significant increase in magnet production capacity and materially improved
Project economics.

 

In parallel, HyProMag USA has commenced a strategic review to evaluate a
potential separate listing of the shares of HyProMag USA in the U.S. for late
2026 or early 2027, subject to successful execution of the Project and meeting
the required regulatory approvals.

 

Key Highlights

 

·    Uplift in project valuation: Detailed Engineering results for
state-of-the art rare earth magnet recycling and manufacturing operation in
the United States with a Texas Hub supported by two pre-processing spoke sites
co-located at Intelligent Lifecycle Solutions ("ILS") sites in South Carolina
and Nevada ii 

o  US$409 million post-tax Net Present Value ("NPV") iii  and 27.6% real
internal rate of return ("IRR") based on current market prices iv (, v )

o  US$780 million post-tax NPV and 38.7% real IRR based on forecast market
prices vi 

·    Increased magnet production capacity: 941 metric tonnes per annum of
recycled sintered neodymium-iron-boron ("NdFeB") magnets and 611 metric tonnes
per annum of associated NdFeB co-products (total payable capacity - 1,552
metric tonnes NdFeB) over a 40-year operating life

·    Competitive operating profile: Low all-in sustaining Cost
("AISC")(Xii, vii ) of US$22.3 per kg of NdFeB product versus current weighted
average market price of US$56.8 per kg of NdFeB products, with significant
scope for price recovery from current market conditions

·    Scalable design with expansion potential: The optimised layout allows
for the inclusion of an additional two furnaces within three years following
commissioning for an additional capital cost of approximately US$3 million

·    Up-front capital cost: Total initial capital cost of US$142
million viii  (inclusive of an 8.2% contingency margin and Class 2 AACE
estimated detailed design study and engineering costs) over a 1 year
construction phase.

·    Attractive payback ix  profile:

o  Payback at current market prices in 3.1 years at a profitability index
(PI) x  of 2.89

o  Payback at forecast prices in 2.2 years at a PI of 5.5

·    Industrial and workforce impact: The plant xi  is expected to support
revitalisation of the U.S. magnet sector and create 90-100 skilled magnet
manufacturing jobs

·    Feedstock security: HyProMag USA is continuing to develop its
feedstock sources and supply through its partnership with ILS xii 

·    Carbon profile: Independent ISO-compliant study confirmed a carbon
footprint of 2.35 kg CO(2)-eq per kg of NdFeB sintered block product  xiii 

·    Detailed Engineering: led by PegasusTSI Inc. (U.S.) and BBA USA Inc.
(Canada), with support from HyProMag's international teams and the University
of Birmingham

 

Julian Treger, CoTec CEO commented: "We are very pleased with the results of
the Detailed Design to date and the resulting increase in magnet capacity and
improved economics of the Texas Hub, the first of several hubs targeted by
HyProMag USA. We believe that the Project provides a unique opportunity for
the U.S. to partially address its dependence on foreign supplied rare earth
magnets and alloy powders, critical inputs for accelerating the reshoring of
U.S. manufacturing.  With the Texas site secured through a long-term lease,
Detailed Design well advanced and robust economics, our focus is now on
securing sufficient feedstock and the necessary finance to commence with
construction.

 

We have also started evaluating the pathway towards a potential U.S. listing,
recognising the opportunity to broaden our investor base and strengthen access
to capital. Any listing would be subject to a successful execution of the
Project and securing the necessary regulatory approvals. We expect that the
timing of a U.S. listing, if pursued, would be towards late 2026 or early
2027."

 

Will Dawes, Mkango CEO commented: "Detailed Design has further validated the
compelling economics for this transformational project, and we are excited to
now be exploring listing options in the U.S. Our recent signing of the
long-term lease for the project site at Dallas - Fort Worth together with
continued momentum towards project development are aligned with the urgent
necessity to develop more robust rare earth supply chains in the United
States. We look forward to working with our project partners and all
stakeholders to bring this exciting project to fruition."

Detailed Design and Project Economics Update

 

The Detailed Design, undertaken by a multidisciplinary team appointed by CoTec
and Mkango and led by independent engineers, PegasusTSI and BBA, is now circa
30% complete and part of the study to date included an optimisation of the
operation as well as an updated capex profile. This has resulted in an
increase in the post-tax NPV of the Project from US$262 million and an IRR of
23% based on current market estimate prices to an NPV of US$409 million and an
IRR of 27.6%. Using forecast market prices the post-tax NPV of the Project
increases from US$503 million and an IRR of 31% to a post-tax NPV of US$780
million and an IRR of 38.7%.

 

The main driver of the increased economics was the debottlenecking of the
magnet lines resulting in an increase in magnet production from circa 750
tonnes of magnets to 941 tonnes of magnets per annum. Furthermore, the Project
is expected to provide 611 tonnes of NdFeB alloy co-products per annum. The
average market price of NdFeB magnets increased by circa US$10 per kg product
from the feasibility study. NdFeB alloy co-products make up 39% of overall
production compared to 28% in the feasibility study with the additional third
Hydrogen Processing of Magnetic Scrap ("HPMS") vessel, resulting in an
increase in average market price of all NdFeB products from US$55 per kg
product to US$57 per kg product.

 

The Detailed Design review also resulted in an increase in capex for the
Project from US$135 million to US$142 million due to the addition of magnet
finishing equipment and advanced Grain Boundary Diffusion ("GBD") techniques.
GBD allows the Texas Hub greater operational flexibility to make grades of
magnets with higher coercivity (>20 kOe), which are capable of operating at
higher temperatures.

 

Potential Future U.S. Listing

 

HyProMag USA's owners, CoTec Holdings Corp. (TSXV: CTH; OTCQB: CTHCF)
("CoTec") and Mkango believe that a separate listing of the shares of HyProMag
USA in the U.S. could potentially provide HyProMag USA with access to a
broader investor audience, increased sources of potential capital, increased
research coverage from U.S. investment banks and institutions at a key time of
rebuilding U.S. critical mineral supply.

 

HyProMag USA has begun engaging with prospective advisors to evaluate this
pathway. Any listing-if ultimately pursued, would depend on:

·  Successful execution of the Texas Hub

·  Prevailing market conditions

·  HyProMag USA's ability to meet U.S. regulatory requirements and secure
necessary approvals.

While no decision has been made, HyProMag USA expects that any possible
listing would occur no earlier than late 2026 or early 2027.

 

Data Verification

 

The independent engineers are professional engineers employed by Pegasus TSI,
BBA, and Weston Solutions who are responsible for engineering design,
processing, infrastructure, transportation, services, capital costs, operating
costs, project timeline, permitting and economic analysis. The independent
engineers have reviewed and approved the scientific and technical content and
the resulting impact on the economics of the Project contained in this news
release.

 

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 Ltd 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 in Malawi
and the Pulawy rare earths separation project in Poland. Both the Songwe
Hill  and Pulawy projects have been selected as Strategic Projects under the
European Union Critical Raw Materials Act. Mkango signed a business
combination agreement dated 2 July 2025  with Crown Prop Tech Acquisitions
("CPTK") to list the Songwe Hill and Pulawy rare earths projects on NASDAQ via
a SPAC Merger under the name Mkango Rare Earths Limited.

 

For more information, please visit www.mkango.ca (//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. Generally,
forward looking statements can be identified by the use of words such as
"targeted", "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. 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 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 undertakes no obligation to comment on the
expectations of, or statements made by, third parties in respect of the
matters discussed above.

 

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.

 

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

@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 (020) 4530 9160/77

 

H&P Advisory Limited

Joint Broker

Andrew Chubb, Leif Powis, Jay Ashfield

UK: +44 20 7907 8500

 

 i  Association for the Advancement of Cost Engineering (AACE) - Class 2
Estimate includes contingency of 8.2%

 ii 
https://mkango.ca/news/hypromag-usa-expands-feedstock-supply-agreement-with-global-electronics-recycler-intelligent-lifecycle-solutions/

 iii  7% real discount rates. NPVs are calculated by discounting real US
dollar cash flows from 2026

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

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

 vi  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 (2025) Adamas Intelligence, over the life of the asset

 vii  All In Sustaining Cost per kilogram of product sold

 viii  Capital excludes any U.S. tarrifs

 ix  Payback defined as the period required to payback initial capital from
first production

 x  The profitability index is a measure of the capital efficiency of a
project and is defined as the project's NPV divided by the project capital
incurred to reach first production

 xi 
https://mkango.ca/news/hypromag-usa-finalises-long-term-lease-for-dallas-fort-worth-rare-earth-magnet-recycling-and-manufacturing-hub/

 xii 
https://mkango.ca/news/hypromag-usa-expands-feedstock-supply-agreement-with-global-electronics-recycler-intelligent-lifecycle-solutions/

 xiii 
https://mkango.ca/news/hypromag-usas-iso-compliant-product-carbon-footprint-study-confirms-exceptionally-low-co-sub-2-sub-footprint-of-2.35-kg-co-sub/

(Xii ) AISC is not a recognizes term under IFRS and have been determined
using industry guidelines and practices

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