REG - Mkango Resources Ltd - FEASIBILITY STUDY: SONGWE & PFS RESULTS: PUŁAWY
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MKANGO RESOURCES LTD.
550 Burrard Street
Suite 2900
Vancouver
BC V6C 0A3
Canada
MKANGO ANNOUNCES RESULTS OF UPDATED FEASIBILITY STUDY FOR THE SONGWE HILL RARE
EARTHS PROJECT IN MALAWI AND PRE-FEASIBILITY RESULTS FOR THE PROPOSED PUŁAWY
RARE EARTH SEPARATION PLANT IN POLAND
London / Vancouver: March 19, 2026 - Mkango Resources Ltd. (AIM/TSX-V: MKA)
(the "Company" or "Mkango") is pleased to announce the results of the updated
definitive feasibility study ("DFS") for the Songwe Hill Rare Earths Project
("Songwe" or the "Project") in Malawi, and results of a pre-feasibility study
("PFS") for the proposed Puławy Rare Earths Separation Plant ("Puławy") in
Poland.
Alexander Lemon, President of Mkango commented: "We are delighted to announce
the results of our updated NI 43-101 DFS for the Songwe Hill Rare Earths
project and the PFS results for the Puławy Rare Earth Separation Plant.
Incorporating revised rare earth pricing, capital and operating cost
assumptions, these studies reflect our commitment to moving these high-quality
projects forward. As one of the few companies in the sector to update
feasibility studies with current market pricing, Mkango is uniquely positioned
as a future supplier of both mined and recycled rare earths - a critical
differentiator as global demand for green transition materials accelerates.
Songwe in Malawi and Puławy in Poland are landmark projects for the
communities and economies they are expected to transform and our mission to
deliver sustainable, long-term value for our shareholders."
Based on updated feasibility‑study inputs and assumptions regarding rare
earth pricing, production volumes, recoveries, capital and operating costs,
discount rates, tax regimes, project schedules, and market demand forecasts,
as well as the technical, environmental and regulatory parameters set out in
the DFS and PFS and as summarised in this release (the "Study-level
Assumptions"), selected study-level outputs from the DFS and PFS include:
● Songwe is among the very few rare earths projects globally
to have achieved the DFS stage, with a Mining Development Agreement, a full
Environmental, Social, Health Impact Assessment ("ESHIA") completed in
compliance with IFC Performance Standards. The Global Industry Standard on
Tailings Management (2020) ("GISTM") has been adopted for design and
management of the tailings storage facility, as well as Songwe being selected
as a strategic project under the European Union Critical Raw Materials Act
("CRMA").
· Songwe will produce a value-add purified mixed rare earth carbonate
("MREC") product, which can be sold into international markets and is suitable
for the proposed Puławy separation plant in Poland.
· Neodymium, praseodymium, dysprosium and terbium are critical for the
green transition, used in permanent magnets for electric vehicles, wind
turbines and many electronic devices.
● Operating life of 18 years for Songwe, with production averaging
5,954 tonnes per year total rare earth oxides ("TREO") for the first full five
years of production, including 1,953 tonnes per year of neodymium and
praseodymium oxides, and 56 tonnes per year of dysprosium and terbium oxides,
in a MREC grading 55% TREO (dry basis).
● Songwe initial capital expenditure ("capex") of approximately
US$325.5 million (including a US$27.8 million contingency) for development of
mine, mill, flotation and hydrometallurgy plants, tailings storage facility,
and related project infrastructure in Malawi.
● Puławy initial plant capex of approximately US$212 million
(including a US$35.4 million contingency) for development of a Rare Earth
Separation plant and related project infrastructure in Poland.
● Songwe post-tax net present value ("NPV") of approximately US$339
million, using a 10% nominal discount rate, with an internal rate of return
("IRR") of 24%, payback period of 3.4 years from start of full production and
post-tax life-of-operations nominal cash flow of US$1.55 billion.
● Puławy post-tax NPV of approximately US$779 million, using a 10%
nominal discount rate, with an IRR of 40%, payback period of 2.12 years from
start of full production and post-tax life-of-operations nominal cash flow of
US$4.95 billion.
● Applying Adamas Intelligence upside forecasts(( 1 )), Songwe's
post-tax NPV increases to approximately US$489 million with a nominal IRR of
29%, payback period of 2.9 years from start of full production and post-tax
life-of-operations nominal cash flow of $2.04 billion while Puławy's expanded
100% neodymium/praseodymium ("NdPr") separation case rises to a post-tax NPV
of approximately US$892 million and nominal IRR of 43%, payback period of 1.89
years from start of full production and post-tax life-of-operations nominal
cash flow of $5.58 billion.
Summary of Selected Financial DFS-level outputs for Songwe Hill - Post-Tax
Basis
Item Unit Value
Life of operations post-tax nominal cash flow US$ million 1,554.0
Payback period from project start(1) Years 5.9
Payback period from start of full production Years 3.4
Post-tax NPV at 10% (nominal) discount rate US$ million 339.5
Post-tax IRR (nominal) % 24.3
(1) Assumes project start i.e. start of capital expenditure in July 2027.
(2) Figures based on Mkango owning all of the shares of Mkango Rare Earths
Limited ("MKAR"). Mkango's interest in MKAR will be diluted following the
proposed business combination with Crown Proptech Acquisitions and related
proposed listing on Nasdaq of the MKAR shares to a significant majority
interest, subject to the final transaction structure. It is expected that MKAR
will be a "controlled company" for Nasdaq listing purposes.
Songwe - Project Overview
Mkango appointed SENET, a DRA Global company, as the principal consultant to
complete the original and the updated DFS. SENET is a leading engineering,
procurement and construction management (EPCM) minerals processing and project
delivery firm located in Africa. Other primary consultants for the updated DFS
included the following:
Geology, Mineral Resource, and Geotechnical Investigation: The MSA Group (Pty)
Ltd ("MSA")
Mining: Bara Consulting (Pty) Ltd ("Bara")
Comminution: Grinding Solutions Limited ("Grinding Solutions"), Keramos
Process Plant including On-Site and Off-Site Infrastructure: SENET, a DRA
Global Company ("SENET")
Hydrometallurgy: Australian Nuclear Science and Technology Organisation
("ANSTO")
Flotation: KYSPY Investments (Pty) Ltd ("KYSPYmet"), ALS Metallurgy (Pty) Ltd
("ALS Metallurgy")
Tailings Storage Facility (TSF): Epoch Resources (Pty) Ltd ("Epoch")
Environmental, Social and Health Impact Assessment (ESHIA): Digby Wells and
Associates (Pty) Ltd ("Digby Wells Environmental"), Kongiwe Environmental
(Pty) Ltd
Geochemistry: SGS Australia (Pty) Ltd
Geotechnical testwork: Western Geotechnical and Laboratory Services
Logistics: C. Steinweg Bridge (Pty) Ltd
Market Intelligence: Adamas Intelligence Inc ("Adamas")
The DFS is based on a conventional open pit contract mining operation, feeding
mills, flotation and hydrometallurgy plants on site in Malawi to produce a
MREC, with an operating life (mining and processing) of 18 years. The Company
believes there is potential to increase the mine life given the additional
Inferred Resource, and the potential to expand the Mineral Resource. The DFS
supports the declaration of a Proven and Probable Mineral Reserve Estimate of
18.1 million tonnes grading 1.16% TREO.
Songwe features broad zones of outcropping rare earth mineralisation on the
northern slopes of a steep sided hill. The annual processing capacity is
assumed to be approximately 1.0 million tonnes per year of ore producing an
average of 5, 954 tonnes of TREO in MREC per year for the first five years and
4, 081 tonnes of TREO in MREC per year in years 6 to 18. The MREC will be
cerium depleted. Because cerium is currently considered to have challenging
market fundamentals, there is a strong economic rationale to remove as much
cerium as possible and, as a result, a large proportion of the cerium will be
removed from the MREC during the hydrometallurgical process. Confirmation of
the flotation and hydrometallurgical processing flow sheets was underpinned by
seven piloting campaigns at ALS Metallurgy and ANSTO.
The final stage of hydrometallurgical piloting at ANSTO produced MREC grading
55% TREO equivalent, enriched in Nd/Pr oxides, which together made up 31% of
the rare earth oxide content in the carbonate product (i.e. Nd/Pr oxides /
TREO = 31%).
Energy supply of 25 megawatts ("MW") is expected to be obtained from the
Malawi grid network for the Project, which in Malawi is from hydroelectric and
solar sources. A 25 MW back up solar farm with battery storage and diesel
generators is also expected to be installed.
The MREC is expected to be exported via largely existing infrastructure. The
Project is located approximately 95 km by road from Blantyre, the largest
commercial centre in Malawi, which is served by a rail head and international
airport.
There have been significant improvements to local infrastructure in recent
years. The Malawi Roads Authority has upgraded an existing government road
from nearby Migowi to the Songwe Hill project site. This 15 -km government
road has been upgraded and widened to an all-weather gravel road with
reinforced concrete culverts, embankments and bridges installed.
The MREC is expected to be sold to the proposed Puławy project in Poland for
separation. The DFS is based on the sale of MREC. The Puławy PFS, completed
by PRODEO Consulting (Pty) Ltd and dated 19 March, 2026, indicates a
separation cost of approximately US$2.14(( 2 )) per kilogram of TREO in MREC
to produce the designated product suite at Puławy. The PFS forecasts a
separation plant CAPEX for the proposed separation plant (expanded capacity,
100% separation plant option) targeted at approximately US$212 million(( 3 )).
Based on the Study-level Assumptions, the following summary of the key inputs
and results of the updated Songwe DFS is presented in the tables below:
Summary of Mining and Processing Inputs and Results - Average over First Full
Five Years
Item Unit Value
Mining
Average yearly ore mined kt 2,186
Average TREO grade mined % 1.19
Average yearly waste mined kt 3,667
Average strip ratio (waste:ore) 1.68
Processing
Average yearly flotation plant feed kt 1,000.8
Average plant feed TREO grade % 1.50
Flotation TREO concentrate grade % 15.05
Average TREO recovery to concentrate % 74.10
Average yearly flotation concentrate feed to hydrometallurgical plant kt 74.06
Average NdPr oxide hydrometallurgical recovery to carbonate % 85.3
Average Ce oxide hydrometallurgical recovery to carbonate % 20.9
Average yearly TREOs in carbonate product t 5,954
Average carbonate TREO grade % 55
Average yearly carbonate production (dry basis) t 10,826
Summary of Mining and Processing Inputs and Results - Life of Operations
(averages)
Item Unit Value
Life of operations (mining and processing) Years 18
Mining
Average yearly ore mined kt 1,481
Average TREO grade mined % 1.16
Average yearly waste mined kt 3,311
Average strip ratio (waste:ore) 2.2
Processing
Average yearly flotation plant feed kt 1,000.8
Average plant feed TREO grade % 1.16
Flotation TREO concentrate grade % 11.64
Average TREO recovery to concentrate % 74.10
Average yearly flotation concentrate feed to kt 74.06
hydrometallurgical plant
Average NdPr oxide hydrometallurgical recovery to carbonate % 85.3
Average Ce oxide hydrometallurgical recovery to carbonate % 20.9
Average yearly TREOs in carbonate product t 4,634
Average carbonate TREO grade % 55.00
Average yearly carbonate production (dry basis) t 8,425
Summary of Mining and Processing Inputs and Results - Life of Operations
(totals)
Item Unit Value
Mining
Total ore mined kt 18,147.8
Total waste mined kt 40,553.9
Strip ratio (waste: ore) 2.2
Processing
Total flotation concentrate feed to hydrometallurgical plant kt 1,341.4
Total contained TREO in carbonate product kt 83.4
Total carbonate production (dry basis) t 151,644
Market and Financial Analysis
A detailed financial model was constructed based on input parameters and the
Study-level Assumptions set out in the DFS. Free cash flows were modelled in
both real and nominal terms for a range of discount rates and on a debt free
basis.
MREC price forecasts and underlying rare earth oxide ("REO") price forecasts
were based on the following current market analysis by Adamas Intelligence
from their Q4 2025 dated report entitled Rare Earth Market Outlook:
Independent Analysis for Inclusion in Mkango Resources' Songwe Hill
Feasibility Study (the "Adamas Analysis"). Adamas Intelligence highlights that
from 2024 through 2040:
· Global demand for NdFeB magnets is expected to increase at a compound
annual growth rate ("CAGR") of 8.5%, bolstered by double-digit growth from the
electric vehicle and wind power sectors, translating into comparable demand
growth for the rare earth elements ("REEs") (i.e., neodymium, praseodymium,
dysprosium and terbium) that these magnets contain.
· Global production of neodymium, praseodymium, dysprosium and terbium
are forecast to collectively increase at a slower CAGR of 7.4 % as the supply
side of the market increasingly struggles to keep up with rapidly growing
demand.
Based on the Adamas Analysis, from 2024 through 2040, the global rare earth
industry is expected to consistently underproduce neodymium, praseodymium,
dysprosium and terbium oxides (or oxide equivalents), resulting in the
depletion of historically accumulated inventories and, ultimately, shortages
of these critical magnet materials if supply is not increased beyond the
levels currently anticipated.
Songwe offers strong economic exposure to the rare earth permanent magnet
sector, which is the fastest-growing end-use category for rare earths and the
one most in need of additional rare earth supplies. Based on the DFS
metallurgical recoveries, MREC composition, and the Adamas Analysis, the DFS
indicates that the high proportion of valuable magnet-related REEs in the
Songwe Hill project's prospective TREO production means that a future mine
(with separation) could generate approximately 95% of its rare earth revenues
from just 34% of its production volume.
Adamas Intelligence forecasts the following for the basket value (real 2025 US
dollars) of Songwe Hill's TREO production:
· Base case: US$28.40/kg in 2025 increasing to US$69.60/kg in 2034
· Upside scenario: US$28.91/kg in 2025 increasing to US$79.39/kg in
2034
The key revenue drivers for Songwe are neodymium and praseodymium. The base
case basket value and MREC price forecasts reflect underlying neodymium oxide
(Nd oxide) and praseodymium oxide (Pr oxide) price forecasts.
Based on the preceding assumptions and the other Study-level Assumptions, the
discounted cash flow valuation analysis for the base case in the DFS provided
the following results:
· NPV at 10% (nominal) (7.3% real) of US$339 million as at 30 June 2025
· IRR of 24.3% (nominal) (21.3% real)
These are project‑level economic assessment outputs used to evaluate
potential economic viability and do not constitute corporate‑level forecasts
or guidance. Actual results may differ materially if Study-level Assumptions
change.
NPVs of Songwe Hill Project(1)
Financial Nominal Real Adamas Intelligence Adamas Intelligence
Evaluation
Discount
Discount
Base Case
Upside Case
Rate
Rate
Post-Tax NPV
Post-Tax NPV
(%)
(%)
(US$m)
(US$m)
8.0 5.37 461.2 644.8
Base Case 10.0 7.32 339.5 488.5
12.0 9.27 247.3 369.8
Nominal Internal Rate of Return 24.3% 29.3%
Real Internal Rate of Return 21.3% 26.1%
(1) As at 30 June 2025
Operating Costs
Cash operating costs include the costs of contract mining, milling, flotation,
leaching, purification and precipitation to produce a MREC in addition to
other costs associated with the operation. The operating costs do not include
the cost of separation, which is reflected in the 15% discount applied to the
basket value of the REOs in MREC. The estimate of operating expenditure
("OPEX"), and the associated general and administration ("G&A") costs,
were calculated to an accuracy of ±10% and were utilised in the economic
analysis of the Project.
Reagents and consumables account for 49% of estimated OPEX, with power
accounting for an additional 13%. The Company and SENET, together with the
Company's other consultants, have identified opportunities to reduce reagent
consumption and optimise the flowsheet. This will be investigated further in
parallel with front end engineering and design ("FEED") work for Songwe.
Operating Costs - Average over First Full Five Years
Item Value (US$/kg TREO)
Mining 5.4
Beneficiation - Milling and Flotation 9.1
Hydrometallurgical Plant 5.2
G&A and Other 2.5
Total Operating Costs 22.3
Operating Costs - Average over Life of Operations
Item Value (US$/kg TREO)
Mining 4.4
Beneficiation - Milling and Flotation 11.6
Hydrometallurgical Plant 6.8
G&A and Other 3.2
Total Operating Costs 26.1
Capital Expenditure
The estimate of initial capital expenditure costs was calculated to an
accuracy of ±10% and was utilised in the economic analysis of the Project.
The largest capex component is an integrated processing plant comprising a
mill, flotation plant, hydrometallurgical plant, and a sulphuric acid plant
with co-generated power capacity. The capex estimate for the integrated
processing plant was completed by SENET and covers the design, engineering,
procurement, supply/manufacture, construction and pre-commissioning of the
proposed new processing facility and associated plant complex infrastructure
including a 24.4 MW solar facility. Other major capex items include the cost
of a lined tailings storage facility with design provided by Epoch.
Based on the Study-level Assumptions in the DFS, total initial capital
expenditure is US$297.8 million, not including a contingency of US$27.8
million.
Capital Cost Summary
Item Value (US$ million)
Total Development Capital 297.8
Contingency 27.8
Total Development Capital Including Contingency 325.5
Sustaining capital and reclamation 91.5
Total Capital Expenditure 417.0
Capital Cost Breakdown
Description CAPEX (US$) Contingency (US$) Total CAPEX (US$)
Earthworks 8,151,015 776,287 8,927,303
Civil Works - Plant 19,480,113 2,060,397 21,540,510
Civil Works - Infrastructure 2,068,686 197,018 2,265,704
Infrastructure 2,918,556 138,979 3,057,535
Structural Steel 6,345,323 423,022 6,768,345
Plate Work 2,658,354 177,224 2,835,578
Tankage 4,332,050 322,047 4,654,097
Machinery and Equipment 52,477,378 2,894,436 55,371,814
Piping 5,404,822 557,332 5,962,154
Valves 1,708,249 176,150 1,884,399
Electricals 12,266,339 676,561 12,942,899
Instrumentation 4,887,810 504,019 5,391,829
Transport 5,354,754 600,116 5,954,870
E&I Installation 7,513,682 715,589 8,229,270
SMPP Installation 27,828,259 2,650,310 30,478,569
TOTAL DIRECT FIELD COSTS 163,395,391 12,869,485 176,264,875
Commissioning Spares 261,004 39,151 300,155
2-Year Operational Spares 1,887,855 283,178 2,171,033
Insurance and Critical Spares 2,207,202 331,080 2,567,541
Vendor Services 3,102,209 465,331 3,567,541
First Fills 644,483 96,672 741,155
TOTAL INDIRECT FIELD COSTS 8,102,753 1,215,413 9,318,166
TOTAL FIELD COST 171,498,144 14,084,898 185,583,042
Project Management (EPCM) 24,438,573 3,665,786 28,104,359
Insurances and Guarantees 3,290,594 0 3,290,594
TOTAL EPCM COSTS 27,729,167 3,665,786 31,394,953
TOTAL PROJECT COST 199,227,311 17,750,684 216,977,994
Mobile Plant and Equipment 3,899,263 584,889 4,484,152
Generator Plant 7,229,334 328,606 7,557,940
PV Solar Plant 13,545,135 1,459,305 15,004,440
Construction Camp 3,150,217 472,533 3,622,749
TSF Phase 1 and RWD 43,814,395 4,381,439 48,195,834
Mining Pre-Production 14,428,214 2,164,232 16,592,446
Other 12,460,340 623,017 13,083,357
TOTAL OTHER COST 98,526,897 10,014,022 108,540,919
TOTAL INITIAL COST 297,754,208 27,764,705 325,518,913
TSF Sustaining Capital - Phases 2 to 5 60,236,066 6,023,507 66,258,573
Mining Sustaining Capital 532,531 79,880 612,411
Closure Cost 16,675,138 1,026,618 17,701,756
Owners Cost 6,257,078 625,708 6,882,785
TOTAL SUSTAINING COST 83,699,813 7,755,712 91,455,525
TOTAL COST 381,454,021 35,520,417 416,974,438
The following assumptions were made in the preparation of this estimate:
· The LOO is 18 years.
· There will be a smooth transition between the various project
implementation phases.
Topography, Geotechnical and Materials:
· A 2 m deep soil improvement was assumed below all the earthworks
platforms.
· All the required fill material was assumed to be available within a 2
km radius, from either necessary excavations or designated borrow pits.
· No piling allowance has been included in the estimate.
· For the intermediate and hard rock excavations, 20 % and 15 % of the
bulk excavations volume was allowed for, respectively.
· Allowance was made for grading of the PV plants to a maximum gradient
of 14 %. This was done to allow for the axial movement of the panels.
· The process water pond and events pond were considered to have double
HDPE liner systems while the raw water pond was considered to have a single
HDPE liner system. All the relevant geotextiles and installation of the
systems were included.
· The ROM wall was included as a mechanically stabilised earth wall with
a gabion face. It was assumed that the gabion rock for that wall face would be
locally available, either from site or from commercial sources.
· Excavated material will be non-acid generating.
· No additional topographical studies were made available; therefore,
the structural design was not modified.
· The structural design assumptions were not modified after reviewing
the geotechnical report that became available after the initial assumptions
had been made.
Mineral Resource and Mineral Reserve Estimates
The DFS is based on the updated Mineral Resource Estimate with an effective
date of 30 June 2025, which restates the previous (2019) block model using
revised pit optimisation and cut-off assumptions. No new drilling has been
completed since 2018, and the geological block model remains unchanged.
Inclusive Mineral Resources are presented below in order to be consistent with
those reported by Mkango under the NI 43-101 standards.
The Mineral Resources are reported from within an optimised pit shell and
above a 0.55% TREO grade, as summarised below.
The Mineral Resource Estimate has an effective date of 30 June 2025.
Category Tonnage (Mt) TREO % TREO ('000 Tonnes)
Measured 13.6 1.27 173
Indicated 24.4 1.08 264
Measured & Indicated 38.1 1.15 437
Inferred 55.9 1.05 589
Notes:
1. Mineral Resources have been classified in accordance with the CIM
Definition Standards for Mineral Resources and Mineral Reserves (2014), as
incorporated by reference in NI 43-101.
2. All tabulated data has been rounded, and as a result minor
computational errors may occur.
3. Mineral Resources, which are not Mineral Reserves, have no
demonstrated economic viability.
4. The Mineral Resource estimate is reported on a 100% ownership basis.
5. Mineral Resources are reported from within an optimised pit shell.
6. For the purposes of assessing reasonable prospects for economic
extraction and cut-off grade, metallurgical recoveries were applied to
individual rare earth oxides. The average total rare earth oxide metallurgical
recovery is 39.6%.
7. Mineral Resources include the portion converted to Mineral
Reserves.
8. Mineral Resources are reported on an in-situ basis without applying
modifying factors.
9. A mean density of 2.73 t/m³ was applied for Measured, 2.67 t/m³ for
Indicated and 2.77 t/m³ for Inferred Resources.
TREO = La(2)O(3), CeO(2), Pr(6)O(11), Nd(2)O(3), Sm(2)O(3), Eu(2)O(3),
Gd(2)O(3), Tb(4)O(7), Dy(2)O(3), Ho(2)O(3), Er(2)O(3), Tm(2)O(3), Yb(2)O(3),
Lu(2)O(3), and Y(2)O(3)
The following sensitivity analyses are based on the updated Mineral Resource
statement with an effective date of 30 June 2025. The sensitivity of the
Mineral Resource at a variety of cut-off grades for the combined Measured and
Indicated categories is presented in the following table.
Cut-off Tonnage (Mt) TREO % TREO ('000 Tonnes)
TREO %
0.45 40.2 1.11 448
0.55 38.1 1.15 437
0.65 35.2 1.19 420
0.75 31.7 1.25 396
0.85 27.8 1.31 365
1.00 21.9 1.41 310
The Inferred Mineral Resources are presented at a variety of cut-off grades in
the table below.
Cut-off Tonnage (Mt) TREO % TREO ('000 Tonnes)
TREO %
0.45 59.7 1.02 608
0.55 55.9 1.05 589
0.65 49.9 1.11 553
0.75 43.5 1.17 508
0.85 37.0 1.23 456
1.00 28.1 1.33 373
The DFS supports the declaration of a Mineral Reserve Estimate for the
Project. The results of the DFS have shown that the mining inventory included
in the study, which is derived from only Measured and Indicated Mineral
Resources, can be viably mined based on the techno-economic assumptions in the
DFS. Mineral Reserves resulting from Measured Mineral Resources have been
considered as Proven Mineral Reserves while those generated from Indicated
Mineral Resources are categorised as Probable Mineral Reserves.
The TREO grades presented below are supported by individual rare earth oxide
grades (including Nd₂O₃, Pr₆O₁₁, La₂O₃, CeO₂ and other REEs),
which are included in the table for each reserve category.
Category Tonnage (Mt) TREO % CeO(2) Dy(2)O(3) Er(2)O(3) Eu(2)O(3) Gd(2)O(3) Ho(2)O(3) La(2)O(3) Lu(2)O(3) Nd(2)O(3) Pr(6)O(11) Sm(2)O(3) Tb(4)O(7) Tm(2)O(3) Y(2)O(3) Yb(2)O(3)
(ppm) (ppm) (ppm) (ppm) (ppm) (ppm) (ppm) (ppm) (ppm) (ppm) (ppm) (ppm) (ppm) (ppm) (ppm)
Proven Mineral Reserves 8.16 1.28 5,779 108 41 80 190 17 3,069 4 2,027 606 294 23 5 493 30
Probable Mineral Reserves 9.988 1.07 4,852 89 34 66 159 14 2,633 3 1,642 498 243 19 4 410 25
Total Ore Reserves 18.147 1.16 5,269 98 37 72 173 16 2,829 4 1,815 547 266 21 5 448 27
Notes:
1. Totals might not add up due to rounding.
2. Mineral Reserves are stated as tonnages and grades delivered to the
processing plant and are inclusive of dilution and mining losses
expected during mining.
3. Mkango owns 100 % of the Songwe Hill Project.
4. The Mineral Reserve is stated at a cut-off grade of 0.6% TREO
5. Ore tonnages are stated at an average in-situ density of 2.76
t/m(3).
The table below shows a summary of the total Mineral Reserves.
Mineral Reserve Estimate as at 30 April 2025
Category Tonnage (Mt) TREO % TREO (t)
Proven Mineral Reserves 8.160 1.28 104,183
Probable Mineral Reserves 9.988 1.07 106,801
Total Ore Reserves 18.147 1.16 210,984
Notes:
1. Totals might not add due to rounding.
2. Mineral Reserves are stated as tonnages and grades delivered to the
processing plant and are inclusive of dilution and mining losses expected
during mining.
3. The Mineral Reserve estimate is reported on a 100% ownership basis.
4. The Mineral Reserve is stated at a cut-off grade of 0.6% TREO.
5. Ore tonnages are stated at an average in-situ density of 2.76
t/m³.
6. A weighted average process recovery to carbonate of 40% was used to
calculate revenue from Mineral Reserves.
Mining Summary
The mine design was completed by Bara as part of the DFS and assumed the use
of a contract miner. The mine plan incorporates the use of stockpiles to
manage the grade profile and maximise returns. As part of the DFS, contract
mining companies were integrally involved in the process of estimating
mining-related inputs.
The mining method at Songwe will be conventional open-pit mining, making use
of relatively small-scale trucks and diesel-hydraulic excavators, selected to
match the mining conditions and required production rates. The procedure
followed in arriving at the mine design was as follows:
· A geotechnical evaluation was completed including logging of core on
site. The geotechnical data was collated in a database and used to inform a
geotechnical design of the pit slope design parameters.
· Using the slope design parameters, mining costs obtained from mining
contractors, modifying factors derived during the pre-feasibility mining
study, and product price data provided by Mkango from Adamas Intelligence, a
pit optimisation was completed. The results of the pit optimisation were
analysed, and a pit shell was selected on which to base the DFS pit design.
· Various scenarios of production rate, cut-off grade application, and
stockpiling strategy were tested during the pit optimisation, and informed the
options selected for the DFS pit design.
· Mine design criteria were developed for the pit design. A practical
pit design was completed which included the design of haul roads and safety
berms. The overall pit was split into two phases or cutbacks.
· A production schedule was developed, addressing all the material
types produced from the pit over the life of mine (LOM). These material types
included waste, Type 1 ore (included in Mineral Reserves Estimate, mine plan
and financial forecasts) and Type 2 material (stockpiled and not included in
Mineral Reserves Estimate, mine plan and financial forecasts).
Processing and Metallurgical Summary
Songwe Hill has been the subject of comprehensive test work completed over
several campaigns since 2010, ensuring that the orebody and optimal processing
routes are well understood. Surface grab samples, diamond drill core samples
from drilling campaigns and bulk samples have been collected during this time
and were used to determine the optimal beneficiation and recovery processes
for the Songwe ore. Mineralogical analyses indicates that synchysite is the
main rare earth bearing mineral within the carbonatite host rock. The
understanding of the ore has been of fundamental importance in developing
flowsheets for the beneficiation and recovery of rare earths.
The development of the processing flow sheet is underpinned by mineralogy,
comminution, flotation and hydrometallurgical test work undertaken at
laboratories in Australia (KYSPYmet, ALS Metallurgy, ANSTO, Keramos, SGS,
Bureau Veritas, Nagrom), South Africa (Mintek), Canada (SGS, XPS) and the
United Kingdom (Grinding Solutions, Camborne School of Mines, Natural History
Museum, Aberystwyth University) and were complemented by three PhD research
projects undertaken at Camborne School of Mines. Not only has this
international effort delivered a processing flow sheet for Songwe, but it has
led to a greater understanding of the mineralogy, geo-metallurgy and
beneficiation processes for primary carbonatite hosted rare earth deposits.
Numerous bench-scale flotation tests were completed at KYSPYmet to develop the
flotation regime for the DFS. This culminated in flotation piloting carried
out at ALS Metallurgy which was completed over a seven-day period. The first
three days were operated on a day shift only, with results collected during
the day's shift to be analysed and assessed overnight in order to optimize
conditions and make any adjustments for the next day of operation. The pilot
plant was operated continuously for the last four days with relatively stable
conditions.
Several different sets of data were collected during flotation piloting, which
were used for the assessment of concentrate grade and recovery:
· Control Samples: Grab samples were typically taken every three to
four hours during the trial on major streams. These results were used to
control the circuit and make necessary changes to optimise the circuit
performance.
· Shift Composites: Multiple samples were taken of major streams and
composited together over each nominal 12-hour shift.
· Surveys: Multiple samples were taken of every stream in the plant
over a one - two-hour period of stable operation. This data typically
represents optimised results and allows a full circuit mass balance to be
conducted.
· Timed final concentrate: The final concentrate was collected into 200
litre drums at timed intervals, nominally every three hours, and separated,
filtered, sampled and assayed. This enabled the calculation of recovery
(division of the REO units by the feed REO units over the time period).
ANSTO has conducted test work on Songwe flotation concentrate since mid-2019
in order to develop the hydrometallurgical flow sheet. Numerous tests were
completed over a two-year span, optimising conditions for each unit operation
in the hydrometallurgical plant. Bench-scale test work was conducted to
establish the optimal process parameters, focusing on the optimal extraction
of rare earths and effective rejection of impurities that might impact rare
earth recovery. After the bench-scale test work, step-through tests were
conducted on consecutive processing operations using material from the
previous test in the next, which further refined the conditions and target
reagent consumptions, rare earth extractions, and impurity levels. Following
the step-through tests, the pilot plant design criteria were generated to
upscale the process to continuous piloting. In many cases, bench-scale test
work, step-through test work and piloting overlapped, as various unit
operations were tested in parallel. Six campaigns of hydrometallurgical
piloting were completed resulting in a hydrometallurgical flow sheet
comprising the following steps:
· Gangue leach (hydrochloric acid) and acid regeneration using
sulphuric acid
· Caustic conversion of gangue leach residue and cerium oxidation to
reject cerium
· Caustic evaporation and regeneration
· Rare earth leach of caustic conversion residue
· Purification and rare earth carbonate precipitation
As noted above, the final stage of hydrometallurgical piloting at ANSTO
produced MREC grading 55% TREO equivalent, enriched in neodymium and
praseodymium (Nd/Pr) oxides, which together made up 31% of the rare earth
oxide content in the carbonate product (i.e., Nd/Pr oxides / TREO = 31%).
Environmental, Social and Health Impact Studies
Digby Wells Environmental undertook the ESHIA process and Kongiwe
Environmental (Pty) Ltd provided further input throughout. The ESHIA was
undertaken to conform with the Malawian Environmental Management Act, No. 19
of 2017 (the EMA Act) promulgated in 2019 and in alignment with the
International Finance Corporation (IFC) Performance Standards (PS) and the
GISTM (2020). During the ESHIA process, Digby Wells worked with local
Malawian experts, EnviroConsult, to ensure two-way knowledge transfer during
the ESHIA in terms of international good practice and local expertise and
compliance. The ESHIA was a culmination of over nine years of baseline studies
and was reviewed and approved by the Malawi Environmental Protection Authority
(MEPA) in January 2023.
Extensive stakeholder engagement has been undertaken in line with IFC
requirements with local communities and the Malawi government. This, in
conjunction with extensive corporate social responsibility projects throughout
the exploration stage, has resulted in a project enabling environment. The
Project is expected to contribute to the development of Malawi by providing
the country with an exportable product which is reliable, sought after and
profitable, all while ensuring that minimal negative impacts occur to their
surrounding environment and social fabric.
Proposed Puławy Separation Plant PFS
The pre-feasibility study ("PFS") in respect of the proposed separation plant
at Puławy was completed by PRODEO Consulting (Pty) Ltd with a base date of 25
February 2026, with no provision for escalation of OPEX or CAPEX. The PFS
has a level of accuracy of ±25% as is required for an AACE Class 4
estimate 4 , (The study considered both the original design and an expanded
30,000 t/a mixed rare earth carbonate feed case (wet basis), with NdPr product
split options of 0%, 50% and 100% separation.
The proposed project site in Puławy, next to the Grupa Azoty Puławy ("GAP")
fertiliser and chemicals complex, is suitable for the process plant, offering
excellent infrastructure and logistics and the opportunity to leverage
synergies with GAP for reagents, utilities, by-product sales and operational
readiness. At current projections, the project financials are expected to
improve with 100% separation of NdPr into the individual Nd and Pr
constituents. The base case assumed the expanded 30 000 t/a MREC (45% TREO,
wet basis) feed with 100% NdPr separation option.
Subject to the Study-level Assumptions in the PFS, the key outputs from the
financial model are as follows:
Using Adamas base case REO pricing:
· NPV (10% nominal discount rate) of US$779m
· IRR (nominal) of 39.7%
· Total cash flow (nominal) of US$4.95 billion
Using Adamas Upside REO pricing:
· NPV (10% nominal discount rate) of US$892m
· IRR (nominal) of 43.4%
· Total cash flow (nominal) of US$5.58 billion
Key assumptions for the financial model:
· 100% NdPr separation
· Discount rate of 10% (nominal)
· 19% corporate tax rate in Poland, with a EUR 37.5 million tax relief
under the special economic zone scheme
· 2.5% per annum escalations on revenues and OPEX from 2026 onwards
· Rare earth carbonate feed purchase discount: 15% discount on the
contained REO value in the rare earth carbonate purchased from the Project at
Songwe Hill, 25% discount on the rare earth carbonate sourced from market
· Payability factors of Nd oxide, Pr oxide and NdPr oxide 100%; SEGH
carbonate 75%; LaCe carbonate 100% at US$2/kg
· Adamas Intelligence base case (Q4 2025) rare earth price forecasts
(for the base case REO pricing only)
· Milestone schedule including an assumed engineering start date of
April 2026, procurement start date of September 2026, construction start date
of April 2027, commission start date of October 2028 and production ramp-up
start date of Q2 2029, ending in Q1 2030
· Life of operations from the first year of full production is 29 years
(2030 - 2058)
· Initial feed for the plant at 13,430 t/a REO throughput capacity
expected to be sourced from the Project at Songwe Hill (45% during the first
five years of Puławy's initial seven-year operation (2030-2036), with the
remaining 55% sourced from market). Following this, market-sourced carbonate
is expected to increase to maintain the throughput capacity
· All the reagents, utilities, power and consumables will be available
locally
· CAPEX is assumed to be incurred across 2027 and 2028 (25% in 2027,
and 75% in 2028)
· Depreciation is assumed on a straight-line basis over 20 years from
2029
· A by-product credit of EUR 180/t has been applied for the ammonium
bicarbonate by-product solution, based on a EUR 600/t reference price for 100%
ammonium bicarbonate and a 50% value factor on contained ammonium bicarbonate
in the 60% solution.
· For the financial analysis, transport costs for Songwe MREC from
Beira Port to Puławy have been assumed at US$50/t.
· For the financial analysis, exchange rates of US$1.00 = EUR0.85 and
EUR1.00 = PLN4.22 have been assumed.
The following table shows the operating cost breakdown for the proposed
Puławy separation plant options.
Description 50% NdPr 0% NdPr 100% NdPr
Separation Separation Separation
(US$/yr) (US$/yr) (US$/yr)
Reagents 14 483 789 14 355 492 14 499 208
Utilities 1 785 718 1 721 215 1 850 700
Power 3 877 772 3 148 980 3 906 714
Labour 4 210 766 4 210 766 4 210 766
Consumables 680 681 680 681 680 681
Maintenance 1 058 824 882 353 1 129 412
Analytical 553 161 529 812 556 945
General and Administration 851 879 851 879 851 879
Other Costs 1 007 364 961 284 1 012 831
TOTAL PLANT OPEX 28 509 953 27 342 461 28 699 135
USD/t REO 2 123 2 036 2 137
By-Product Credit 7 328 764 7 307 566 7 349 963
CAPEX estimates excluded various items including import duties/taxes, value
added taxes ("VAT"), similar taxes, financing costs and interest during
construction, forex deviations/fluctuations, sustaining capital, owner's
project contingency, changes in relevant laws, final operation closure and
rehabilitation costs, any provision for force majeure events, schedule delays,
costs associated with additional studies. OPEX estimates excluded all
operating expenditures not directly associated with the processing facility,
such as environmental, social and closure costs, VAT and applicable duties on
operating supplies and transportation costs, as well as organic, aqueous or
solid waste disposal fees, if any.
The following table shows the CAPEX breakdown for the proposed Puławy
separation plant options.
Description Factor (%) 50% NdPr 0% NdPr 100% NdPr
Separation Separation Separation
(US$) (US$) (US$)
Earthworks 20 6 384 608 5 318 648 6 672 952
Civil Works 35 11 173 064 9 307 633 11 677 666
Plant Infrastructure - Buildings 5 1 596 152 1 329 662 1 668 238
Buildings - 14 974 955 14 974 955 14 974 955
Structural Steel 13 4 149 995 3 457 121 4 337 419
Platework (Tanks) - 2 594 476 2 358 606 2 718 396
Machinery and Equipment 100 31 923 039 26 593 238 33 364 761
Piping 20 6 384 608 5 318 648 6 672 952
Valves 15 4 788 456 3 988 986 5 004 714
Electricals 35 11 173 064 9 307 633 11 677 666
Instrumentation 15 4 788 456 3 988 986 5 004 714
Commissioning Spares 1 319 230 265 932 333 648
Transport 10 3 192 304 2 659 324 3 336 476
Vendor Services 3 957 691 797 797 1 000 943
Plant First Fills (Lubricants Only) 1.5 478 846 398 899 500 471
TOTAL DIRECT FIELD COSTS 104 878 942 90 066 068 108 945 973
Control and Instrumentation Construction 45 2 154 805 1 795 044 2 252 121
Electrical Construction 45 5 027 879 4 188 435 5 254 950
TBP - 474 416 446 645 502 187
Diluent - 65 798 61 946 69 649
Heating, Ventilation and Air Conditioning - 1 764 706 1 764 706 1 764 706
Laboratory Equipment - 649 733 649 733 649 733
Two-Year Spares - 1 596 152 1 329 662 1 668 238
Strategic Spares - 1 915 382 1 595 594 2 001 886
Structural, Mechanical, Platework and Piping Construction 45 32 446 086 28 670 377 33 494 476
Engineering, Procurement and Construction Management 13 19 626 607 16 973 867 20 358 509
TOTAL INDIRECT COSTS 65 721 563 57 476 009 68 016 454
TOTAL DIRECT AND INDIRECT COSTS 170 600 506 147 542 077 176 962 427
Contingency 20 34 120 101 29 508 415 35 392 485
TOTAL COSTS 204 720 607 177 050 492 212 354 912
Financial metrics for the three NdPr separation options are summarised in the
following table.
Description 50% NdPr 0% NdPr 100% NdPr
Separation Separation Separation
Total Plant Capex (US$) 204 720 607 177 050 492 212 354 912
Total Plant Opex (US$/yr) 28 509 953 27 342 461 28 699 135
OPEX (US$/kg REO in Feed) 2 123 2 036 2 137
NPV (US$m) 659.6 563.2 779.1
IRR - Nominal (%) 36.6 36.2 39.7
IRR - Real (%) 33.2 32.9 36.3
Qualified Persons
An NI 43-101 Technical Report supporting the DFS is being prepared by SENET
under the guidance of Mr. Philemon Bundo, who is a "Qualified Person" in
accordance with National Instrument 43-101 - Standards of Disclosure for
Mineral Projects ("NI 43-101"). The Qualified Person at SENET has relied on
other Qualified Persons (who are specialists in their respective fields) for
their respective portions of the DFS. The Qualified Person at SENET has
reviewed the sections completed by others and has found no reason not to
accept their work.
Scientific and technical information contained in this news release relating
to Geology, Mineral Resource Estimate and Geotechnical Investigation has been
approved and verified by Mr. Jeremy Witley Pr. Sci Nat of The MSA Group Pty
Ltd, who is a "Qualified Person" in accordance with NI 43-101.
Scientific and technical information contained in this news release relating
to sampling, analytical, and test data underlying the Mineral Resource
Estimate has been approved and verified by Dr. Scott Swinden PGeo of Swinden
Geoscience Consultants Ltd who is a "Qualified Person" in accordance with NI
43-101.
The Mineral Reserve calculation was completed by Bara under the supervision of
Mr. Clive Brown, who is a "Qualified Person" in accordance with NI 43-101.
The tailings storage facility (TSF) study was completed by Epoch Resources
under the supervision of Mr. Guy Wiid, who is a "Qualified Person" in
accordance with NI 43-101.
The ESHIA study was completed by Digby Wells under the supervision of Mr.
Graham Trusler, who is a "Qualified Person" in accordance with NI 43-101.
The process design and cost estimation as well as the design and cost
estimation for the infrastructure associated with the integrated processing
plant for the DFS was completed by SENET under the supervision of Mr. Philemon
Bundo who is a "Qualified Person" in accordance with NI 43-101.
Scientific and technical information contained in this news release in
relation to metallurgical test work has been approved and verified by Mr.
Philemon Bundo, who is a "Qualified Person" in accordance with NI 43-101.
Market Intelligence contained in this news release in relation to the rare
earth element market was completed by Adamas Intelligence Inc and has been
approved and verified by Mr. Trevor Mills of Dahrouge Geological Consultant
USA Ltd., who is a "Qualified Person" in accordance with NI 43-101.
The NI 43-101 compliant Technical Report in respect of the results of the DFS
regarding Songwe described herein will be filed on the Company's profile on
SEDAR+ within the next 45 days.
The design and cost estimation for the Puławy PFS was completed by PRODEO
Consulting under the supervision of Mr. Nick Dempers, who is a "Qualified
Person" in accordance with NI 43-101.
Independence of Qualified Persons
All of the Qualified Persons referred to in this news release are independent
of Mkango.
SENET commissioned an independent review of the Songwe DCF model prepared by
MKAR, which underpins the Songwe financial analysis. Fraser McGill conducted
an assessment focused on internal consistency, transparency, and the
reasonableness of the key economic drivers and sensitivities. The review
concluded that the model captures the principal revenue and cost components
required to generate project cash flows, and that the economic outputs
reported are internally coherent within the stated assumptions. No material
deficiencies or major red flags were identified that would undermine the
economic conclusions.
About Mkango Resources Ltd.
Mkango is listed on the AIM and the TSX-V Stock Exchanges. 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, 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 Limited 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.
Mkango currently owns 100% of the advanced stage Songwe Hill rare earths
project in Malawi and the proposed Puławy rare earths separation plant in
Poland. Both the Songwe and Puławy projects have been selected as Strategic
Projects under the European Union Critical Raw Materials Act. As disclosed
in a news release dated 3 July 2025 and which can be located on Mkango's
SEDAR+_profile, Mkango signed a Business Combination Agreement with Crown
PropTech Acquisitions to list the Songwe Hill and Puławy rare earths projects
on NASDAQ via a SPAC Merger under the name Mkango Rare Earths Limited.
For more information, please visit www.mkango.ca
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
Montfort Communications
Nick Miles, Ann-marie Wilkinson, Jack Hickman
UK: +44 20 3514 0897
mkango@montfort.london
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
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 and FOFI
The forward-looking statements in this news release also include financial
outlooks and other forward-looking metrics relating to Mkango, Songwe Hill and
Puławy, including references to: financial and business prospects; future
results of operations, performance and cash flows (including anticipated NPV,
IRR and payback); estimated capital and operating costs; and expected revenue,
returns, production figures and other economic results relating to Songwe Hill
and Puławy. Such information, which may be considered future oriented
financial information or financial outlooks within the meaning of applicable
Canadian securities laws (collectively, "FOFI"), has been approved by
management of Mkango and is based on assumptions which management believes
were reasonable on the date such FOFI was prepared, having regard to the
industry, business, financial conditions, plans and prospects of Mkango,
including the Songwe DFS and the Puławy PFS. FOFI related to Songwe Hill is
subject to the requirements of NI 43-101. The purpose of FOFI related to
Puławy is to describe the prospective performance of Puławy based on the
PFS, which may be used in connection with sourcing financing to construct
Puławy. Readers are cautioned that such information may not be appropriate
for other purposes. Further, such information is highly subjective and should
not be relied on as necessarily indicative of future results and actual
results may differ significantly from such projections. FOFI constitutes
forward-looking statements and is subject to the same assumptions,
uncertainties, risk factors and qualifications as set forth below.
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. Forward-looking statements contained in this news
release include but are not limited to: Mkango becoming a future supplier of
mined rare earths, life-of-mine of Songwe Hill, cash flow projections,
potential to increase mine life given additional inferred resources, annual
processing capacity, assumed commodity prices and forecasting, exchange rates,
construction of Puławy, proposed plant throughput for Puławy, projected
process recovery rates, sustaining costs and proposed operating costs,
assumptions about closure costs and closure requirements, assumptions about
environmental, permitting and social risks. 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 and
the proposed Puławy separation plant in Poland, the ability to secure and
maintain valid mining rights, permits and licenses in respect of Songwe and
Puławy, the ability to obtain feedstock for Puławy from sources other than
Songwe, changes to costs of production from what is assumed, unrecognised
environmental risks, unanticipated reclamation expenses, unexpected variations
in process throughput, grade or recovery rates, failure of plant, equipment or
processes to operate as anticipated, changes to assumptions as to the
availability of electrical power and the power rates used in the operating
cost estimates and financial analysis, ability to maintain the social licence
to operate, accidents, labour disputes and other risks of the industry,
changes to interest rates, changes to tax rates, ability to secure offtake and
supply agreements with GOP, the potential for the owner of the land on which
the proposed Puławy plant is to be built terminating the lease, the ability
of Polska to obtain the necessary permits to construct the proposed Puławy
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 and the separation plant in
Poland, the ability of the Company to enter into agreements with customers to
purchase the planned output and delivery of MREC and separated rare earth
oxides, the risk that Mkango will not be able to meet its financial
obligations as they fall due, competition from existing and new competitors,
the growth of existing and emerging uses for MREC and separated rare earth
oxides, an increase in the global supply of rare earth oxides or dumping,
predatory pricing and other tactics by the Company's competitors, the ability
to obtain the necessary approvals from the government of Malawi to sell the
MREC, political and economic uncertainty in the jurisdictions in which the
Company operates and the impact of the recently commenced war in the Middle
East. 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.
The TSX Venture Exchange has neither approved nor disapproved the contents of
this news 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 news 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 except in certain transactions
exempt from the registration requirements of the U.S. Securities Act.
1 Recent REO price movements have driven Nd & Pr oxide prices to levels
broadly aligned with Adamas Intelligence's Q4 2025 base case pricing report
for 2028 and upside case for 2030-2031, providing support for the forecast
scenario.
2 The OPEX estimate was developed to the level of accuracy required for an
AACE Class 4 estimate (an overall weighted accuracy of ±25%). The OPEX
estimate has a base date of 25 February 2026, with no provision for
escalation.
3 The CAPEX estimate was developed to the level of accuracy required for an
AACE Class 4 estimate (an overall weighted accuracy of ±25%). The CAPEX
estimate has a base date of 25 February 2026, with no provision for
escalation.
4 Association for the Advancement of Cost Engineering (AACE) - Class 4
Estimate has an overall weighted accuracy of ±25%.
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