Mr. William Dawes reports

MAGINITO COMPLETES ACQUISITION OF PIONEERING RARE EARTH MAGNET RECYCLER HYPROMAG

Ffurther to the previous announcement on May 16, 2023, Mkango Resources Ltd. has noted that Maginito Ltd. has completed the transaction to increase its ownership in HyProMag Ltd. to 100 per cent, for a cash and share consideration.

The consideration payable to the selling HyProMag shareholders (the vendors) comprises one million pounds sterling ($1.7-million (Canadian)) in cash and the issuance of 9,742,031 Mkango common shares, equivalent to one million pounds sterling ($1.7-million (Canadian)) at a price per share equal to 10.2648 pence, based on the volume-weighted average price of a Mkango common share on the Alternative Investment Market (AIM) of the London Stock Exchange for the 10 business days ended on May 14, 2023, being the date prior to the date of the share purchase agreement.

In addition, up to a further three million pounds sterling ($5.1-million (Canadian)) may be payable to the vendors in four tranches, either in cash or in Mkango common shares (at Mkango's option), conditional upon the achievement by HyProMag of certain production milestones in the period to June 30, 2026. The consideration shares are subject to a one-year lock-up (which includes the four-month-plus-one-day statutory hold period applicable in Canada, which expires on Dec. 3, 2023) and the shares which may be issued on milestones will have a six-month lock-up (and a statutory hold period applicable in Canada, which will expire four months plus one day after issuance, if any).

Mkango has closed the transaction as an expedited acquisition under applicable rules of the TSX Venture Exchange. Mkango intends to seek TSX-V approval for the transaction in accordance with the rules applicable to expedited acquisitions.

Under the terms of the transaction, if Maginito is listed on a recognized stock exchange, Mkango is entitled to transfer shares of Maginito held by Mkango equivalent in value to the milestone payments (instead of issuing Mkango shares) to the sellers, upon the attainment of the milestones.

Admission to trading on AIM and total voting rights

Application has been made for the consideration shares, which will rank pari passu with the existing common shares of no par value each of the company, to be admitted to trading on AIM, and it is expected that admission of the consideration shares will become effective and dealings will commence at 8 a.m. BT on or around Aug. 4, 2023.

Following the issue of these placing shares, the total issued share capital of the company will consist of 253,172,896 common shares. The company does not hold any common shares in treasury. Therefore, the total current voting rights in the company following admission will be 253,172,896 and this figure may be used by shareholders in the company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the company under the Financial Conduct Authority's (FCA) disclosure guidance and transparency rules.

Maginito

Maginito 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.

As a result of completion of the transaction, Maginito holds a 100-per-cent interest in HyProMag, focused on short loop rare earth magnet recycling in the United Kingdom, a 90-per-cent direct and indirect interest (assuming conversion of Maginito's recently announced convertible loan) in HyProMag GmbH, a company focused on short loop rare earth magnet recycling in Germany, and a 100-per-cent interest in Mkango Rare Earths U.K. Ltd. (Mkango U.K.), a company focused on long loop rare earth magnet recycling in the U.K. via a chemical route. A new United States subsidiary, to be jointly owned by Maginito and CoTec, is expected to be formed to develop rare earth recycling opportunities in the United States.

In March, 2023, CoTec invested 1.5 million pounds sterling ($2.6-million (Canadian)) into Maginito, and Maginito and CoTec agreed to collaborate on the commercialization of downstream rare earth technologies in the United States. Mkango U.K. was, at the same time, transferred to become a subsidiary of Maginito. In connection with CoTec's investment, John Singleton, chief operating officer of CoTec, was appointed to the board of Maginito.

HyProMag

HyProMag was founded in 2018 by the late Professor Emeritus Rex Harris, former head of the magnetic materials group (MMG) within the School of Metallurgy and Materials at the University of Birmingham (UoB), Prof. Allan Walton, current head of the MMG, and two honorary fellows, Dr. John Speight and David Kennedy, leading world experts in the field of rare earth magnetic materials, alloys and hydrogen technology, with significant industry experience. The HPMS (hydrogen processing of magnet scrap) process for extracting and demagnetizing neodymium (NdFeB (neodymium, iron, boron)) alloy powders from magnets embedded in scrap and redundant equipment was originally developed within the MMG and subsequently licensed to HyProMag. The MMG has been active in the field of rare earth alloys and processing of permanent magnets using hydrogen for over 40 years. Originated by Prof. Harris, the hydrogen decrepitation method, which is used to reduce NdFeB alloys to a powder, is now ubiquitously employed in worldwide magnet processing.

Under the terms of the transaction, the founding directors and management of HyProMag will continue to provide support and work closely with Mkango and Maginito to further scale-up and rollout the HPMS technology.

HyProMag is establishing short loop recycling facilities for NdFeB magnets at Tyseley Energy Park in Birmingham, U.K., and other locations using the patented HPMS process to provide a sustainable solution for the supply of NdFeB magnets and alloys for a wide range of markets including, for example, automotive and electronics. Short loop magnet recycling is expected to have a significant environmental benefit, requiring an estimated 88 per cent less energy versus primary mining to separation to metal alloy to magnet production. The plant at Tyseley Energy Park is being developed together with the UoB, with a minimum capacity of 100 tonnes per annum NdFeB (neodymium, iron and boron). This 4.3-million-pound-sterling ($7.3-million (Canadian)) project is being financed by Driving the Electric Revolution, an Industrial Strategy Challenge Fund challenge delivered by U.K. Research and Innovation (UKRI). The focus of the project is to take the HPMS technology to a greater scale and efficiency with revolutionary new design of processing equipment, and extensive automation of processing methods for inert atmosphere powder handling and pressing. HyProMag is the primary industrial user and operator of the plant. First production is targeted for late 2023, which follows successful piloting at the UoB in 2022, as featured on BBC Midlands News.

HyProMag GmbH

In November, 2021, HyProMag established an 80-per-cent-owned subsidiary in Germany, HyProMag GmbH, to roll out commercialization of HPMS technology into Germany and Europe. The remaining 20-per-cent equity interest is owned by Professor Carlo Burkhardt of Pforzheim University.

HyProMag GmbH is developing a similar-sized plant to that at Tyseley Energy Park and will be the first in Germany using the patented HPMS process. First production is targeted for 2024. Maginito has entered into a convertible loan agreement with HyProMag GmbH. Under the terms of the convertible loan, Maginito has granted HyProMag GmbH a loan facility for 2.5 million euros ($3.7-million (Canadian)) available to be drawn down in accordance with an agreed investment plan. Upon conversion of the convertible loan, Maginito's direct and indirect equity interest in HyProMag GmbH will increase from 80 per cent to 90 per cent.

This investment by Maginito will contribute to the matched financing requirements to unlock the 3.7-million-euro ($5.4-million (Canadian)) grants announced by Mkango on Nov. 23, 2022, for development of the production facility in Baden-Wurttemberg state.

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 the company in the rare earths sector. Mkango is listed on the AIM and the TSX Venture Exchange.

Mkango is developing its flagship Songwe Hill rare earths project 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. Malawi is known as the warm heart of Africa, a stable democracy with existing road, rail and power infrastructure, and new infrastructure developments under way.

In parallel, Mkango and Grupa Azoty PULAWY, Poland's leading chemical company and the second largest manufacturer of nitrogen and compound fertilizers in the European Union, have agreed to work together toward development of a rare earth separation plant at Pulawy in Poland. The Pulawy separation plant will process the purified mixed rare earth carbonate produced at Songwe Hill.

Through its ownership of Maginito, Mkango is also 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.

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.

About Cotec Holdings Corp.

Cotec is a publicly traded investment issuer listed on the TSX-V under the ticker CTH, and the OTCQB under the ticker CTHCF. The company is an environmental-, social- and governance-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, in rare earths, low carbon iron ore (green steel) and copper as the company seeks to transition 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.

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