Mr. Julian Treger reports

COTEC INVESTMENT MAGIRON ACQUIRES REYNOLDS PELLET PLANT AND LAUNCHES UNITED STATES BASED DR GRADE PELLET AND MERCHANT PIG IRON STRATEGY

Cotec Holdings Corp. has noted MagIron LLC's press release dated Dec. 19, 2025. Cotec owns 16.5 per cent of the equity in MagIron on a fully diluted basis.

MagIron announced that it has entered into a binding asset purchase agreement (APA) to acquire an iron ore pelletizing plant located near Reynolds, Ind., from Altos Hornos De Mexico SAB de CV (ASHMSA). The acquisition is subject to the satisfaction of certain conditions precedent and is expected to close before Dec. 31, 2025. The acquisition is a significant milestone in MagIron's strategy to produce direct-reduction-grade pellets and, over time, establish the U.S.'s first integrated merchant pig iron operation.

The Reynolds pellet plant is a modern straight-grate, past-producing, restart-ready pelletizer benefiting from approximately $440-million of prior investment. The facility has previously operated at an annualized run rate of approximately 2.2 million tonnes per annum of pellets and was designed to expand to 3.0 million tonnes per annum of pellets with limited additional capital. The Reynolds pellet plant was previously integrated with MagIron's existing iron ore concentrating facility in Minnesota before being placed into care and maintenance in 2016.

Following completion of the acquisition, MagIron will own 100 per cent of a vertically integrated portfolio of assets, including an iron ore concentrator, a rail loadout facility and a pelletizer, which were originally built at a total cost of approximately $660-million.

These integrated facilities will allow MagIron to not only restart iron oxide pellet production relatively quickly, but also to pursue the development of the U.S.'s first vertically integrated merchant pig iron producer. To advance this strategy, MagIron is working with Primetals Technologies, a world leader in the fields of engineering and plant building, to assess the feasibility of a downstream expansion to produce granulated pig iron, which would position MagIron as the only merchant pig iron producer in the United States. This new, entirely domestic supply chain will allow the United States to reduce its near-total dependence on foreign imports of this critical material and also improve the quality of pig iron used given the lower levels of impurities compared with existing imports from Brazil. Establishing an onshore merchant pig iron producer is essential for the United States to secure the supply chains of strategically important industries, including automotive, aerospace and defence.

MagIron due diligence process

The acquisition follows an extensive due diligence process, including technical, commercial, legal and environmental reviews from third party consultants. This work included a review of historical production and cost data from when the facility was operating in 2016, which validated key assumptions underpinning MagIron's restart plans, including capex (capital expenditure) requirements, operating costs, production volumes and the restart schedule.

Larry Lehtinen, chief executive officer of MagIron, said: "Acquiring the Reynolds pellet plant is a transformative step for MagIron. Together with our successful test work at the NRRI, we are well advanced in establishing an entirely domestic supply chain of high-quality, low-carbon ore-based metallics for American steel production. Supported by one of the largest and long-life iron resources in North America, MagIron is positioned to be a dependable, long-term partner to the U.S. steelmaking industry -- strengthening supply security, improving quality, reducing exposure to increasingly unreliable foreign markets and supporting the transition to cleaner, low-carbon steelmaking."

Julian Treger, chief executive officer of Cotec, commented: "This is a significant step forward for MagIron. Once the acquisition is completed, all the necessary buildings block will be in place for MagIron to execute on its strategy of becoming a fully integrated multidecade DR pellet producer to America's fast-growing electric arc furnace steel industry. As investors, we are also encouraged by MagIron's stated strategy of pursuing the development of merchant pig iron facilities due to the much higher market prices for pig iron compared to DR pellets.

"The acquisition and restart of the MagIron operations will be funded at the MagIron level and does not require funding by Cotec. We believe that the successive value-accretive asset acquisitions, including the acquisition, by MagIron over the past few years and our 16.5-per-cent equity interest in these assets serves as another marker of the value created by the Cotec team and our belief that there remains a significant gap between the intrinsic value of our assets and our current share price."

About Cotec Holdings Corp.

Cotec Holdings is redefining the future of resource extraction and recycling. Focused on rare earth magnets and strategic materials, Cotec integrates breakthrough technologies with strategic assets to unlock secure, sustainable and low-cost supply chains for the United States and its allies.

Cotec's mission is clear: accelerate the energy transition while strengthening U.S. economic and national security. By investing in and deploying disruptive technologies, the company delivers capital-efficient, scalable solutions that transform marginal assets, tailings, waste streams and recycled products into high-value critical minerals.

From its HyProMag USA magnet recycling joint venture in Texas to iron tailings reprocessing in Quebec to next-generation copper and iron solutions backed by global majors, Cotec is building a diversified portfolio with long-term growth, rapid cash flow potential and high barriers to entry. The result is a game-changing platform at the intersection of technology, sustainability and strategic materials.

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