Mr. Julian Treger reports

COTEC COMPLETES CONVERSION OF POUNDS STERLING2M MKANGO LOAN NOTE TO INCREASE EQUITY POSITION IN MAGINITO FROM 10 PER CENT TO 20.6 PER CENT

Cotec Holdings Corp. has converted its two million pounds sterling convertible loan note in Mkango Resources Ltd. into additional shares of Mkango's subsidiary, Maginito Ltd. As a result of the conversion, Cotec's equity position in Maginito has increased from 10 per cent to 20.6 per cent. Maginito owns 100 per cent of HyProMag Ltd.

In February, 2023, Cotec and Maginito entered into a co-operation agreement in relation to rare earth element (REE) opportunities in the United States. In early September, 2023, Cotec and Mkango entered into a binding letter agreement pursuant to which they have agreed to form a 50:50 joint venture to pursue the roll out of HyProMag's innovative rare earth magnet recycling technology in the United States. If the joint venture proceeds with the construction of the U.S. project, Cotec will also be responsible for financing all the development costs of the U.S. project, with a total expected financing of 30 million pounds sterling to 50 million pounds sterling during the first three years postcompletion of the feasibility study, subject to results of the feasibility study. All financing provided by Cotec would be in the form of shareholder loans. Cotec and Mkango also expect that the joint venture will seek U.S. government funding for the U.S. project.

HyProMag's patented hydrogen processing of magnet scrap technology (HPMS) enables the recovery and recycling of rare earth magnets embedded in scrap sources such as electronic waste, electric motors and wind turbines, using 88 per cent less energy versus primary mining to separation to metal alloy to magnet production. HyProMag has the added capability to then remanufacture the recovered material into rare earth magnets with a significantly reduced carbon footprint. The HPMS technology, developed at the University of Birmingham, United Kingdom, and licensed by HyProMag, has benefited from approximately $100-million in research and development funding.

As announced on Sept. 14, 2023, the rollout of the HyProMag technology in the U.S. is continuing with scoping studies ahead of the commencement of the feasibility study. Discussions with the U.S. government, potential customers and recycling partners have commenced and are continuing. The U.S. rollout will be completed in parallel with U.K.- and German-based developments, and is expected to benefit from operational experience and production ramp-up in the U.K. and Germany. First production is expected in the U.K. in 2023 and in Germany in 2024. Revenue from the U.S. operation is targeted for 2025/2026.

Julian Treger, Cotec chief executive officer, commented: "With the Maginito conversion completed, our focus will be the operational roll out of the HyProMag technology in the United States. This conversion simplifies our investment structure in the exciting and revolutionary HyProMag technology to a 20.6-per-cent equity interest in Maginito, and a direct 50-per-cent interest in the U.S. operations.

"The Maginito investment is an example of the Cotec business model of acquiring minority positions in disruptive technology combined with joint-venture participation at an operational level. It also allows Cotec to commence, together with its other operational opportunities, its transition from a technology investment company to resource producer."

Will Dawes, Mkango CEO, commented: "We view the completion of Cotec's conversion as an endorsement of the implied value inherent in Maginito and specifically the proprietary HPMS technology that has potential to unlock a significant opportunity in the U.S. market. We look forward to working with Cotec and HyProMag as we focus on the operational rollout of the technology and move into the next phase of growth."

About Maginito

Maginito is a U.K.-based company owned, following the conversion, as to 79.4 per cent by Mkango and 20.6 per cent by Cotec. It is focused on developing green technology opportunities in the rare earths supply chain, encompassing neodymium magnet (NdFeB (neodymium, iron and boron)) recycling, as well as innovative rare earth alloy, magnet and separation technologies.

Maginito holds a 100-per-cent interest in HyProMag and a 90-per-cent direct and indirect interest (assuming conversion of Maginito's 2.5-million-euro (approximately $3.6-million) convertible loan) in HyProMag GmbH, focused on short-loop rare earth magnet recycling in the U.K. and Germany, and a 100-per-cent interest in Mkango Rare Earths U.K. Ltd., a company focused on long-loop rare earth magnet recycling in the U.K. via a chemical route.

About Cotec Holdings Corp.

Cotec is a publicly traded investment issuer listed on the TSX Venture Exchange and the OTCQB and trades under the symbol CTH and CTHCF, respectively. The company is an ESG-focused (environment, social and governance) 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, as the company transitions 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. The company has made five investments to date and is actively pursuing operating opportunities where current technology investments could be deployed.

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