Mr. Will Dawes reports

MKANGO AND COTEC PROVIDE UPDATE ON ROLL-OUT OF HYPROMAG'S RARE EARTH MAGNET RECYCLING TECHNOLOGY INTO THE UNITED STATES

Mkango Resources Ltd. and Cotec Holdings Corp. have provided an update on the rollout of HyProMag's rare earth magnet recycling technology into the United States. HyProMag Ltd. is a wholly owned subsidiary of Maginito Ltd., which is 79.4 per cent owned by Mkango and 20.6 per cent owned by Cotec.

Based on positive scoping studies to date, Maginito and Cotec have commenced planning for the feasibility study for the United States operation, targeted for completion by mid-2024.

The proposed operating configuration for the United States operations is a modular hub-and-spoke model, with the initial deployment of three hydrogen processing of magnet scrap (HPMS) recycling vessels at the spokes and a central hub comprising of rare earth (NdFeB (neodymium, iron, boron) -- neodymium magnets) alloy and magnet manufacturing, subject to the outcome of the feasibility study.

Operating scenarios tested through the scoping studies highlighted:

• A range of production scenarios and product suites are potentially viable, including finished magnets, sintered blocks and alloy products, and incorporating up to 100 per cent recycled NdFeB feed;
• Potential for $50-million (U.S.) per year of revenue generation, based on assumed production of 500 tonnes per year of NdFeB magnets and a blended product price of $100 (U.S.)/kilogram (kg), which is within the range of current pricing for the different products evaluated during the scoping studies;
• A target EBITDA (earnings before interest, taxes, depreciation and amortization) margin of 35 per cent to 40 per cent would potentially be achievable under a range of scenarios, with a minimum estimated capital expenditure of $30-million (U.S.);
• Market conditions and rare earth prices are currently subdued, indicating potential upside versus the current pricing scenario as market conditions recover, in parallel with further optimization of the development scope.

The actual results of the United States operations could vary materially depending on future pricing of rare earth elements, final product mix, agreed sales pricing for each product, capacity at which the HPMS vessels and magnet manufacturing will be operated, quality and cost of scrap feed material, primary product ratio, and other material inputs. These key inputs will be further explored and optimized during the completion of the feasibility study.

The basis of design, product suite and operating parameters for the United States operations will be further confirmed, refined and derisked as the recycling and magnet manufacturing facilities are commissioned and production commences at Tyseley Energy Park in the United Kingdom. First production of rare earth magnets from Tyseley is targeted for this year.

The Tyseley development is being funded by the U.K. Research and Innovation "Driving the Electric Revolution" challenge. HyProMag is the primary industrial user and operator of the plant, and the principal licensee for the underlying HPMS technology from the University of Birmingham.

The University of Birmingham has approved a sublicence of the HPMS technology to the HyProMag U.S. operations, allowing Maginito and Cotec to proceed with the formation of a joint venture company. The joint venture company, HyProMag U.S., will be 50-per-cent held each by Maginito and Cotec, with Cotec responsible for financing all feasibility and development costs.

Julian Treger, Cotec chief executive officer, commented: "We are very pleased with the progress and the results of the scoping studies. HyProMag U.S. continues to benefit from front-end engineering and development of the plants in the U.K. and Germany, which significantly derisks the U.S. operations.

"As the planning for the feasibility study commences with our partner Mkango, Cotec is focused on the operational rollout of the HyProMag technology. HyProMag's exciting recycling technology offers a long-term, sustainable and low-carbon solution for the supply of domestic REE [rare earth element] magnets. Discussions with the U.S. government, potential customers and recycling partners have commenced, and are ongoing."

Will Dawes, Mkango CEO, commented: "We are very excited about opportunities for growth in the United States and look forward to working with Cotec and HyProMag as we continue to scale up and roll out the HPMS rare earth magnet recycling technology. HPMS has potential to unlock the supply chain for rare earth magnet recycling and it's fantastic to see this U.K.-developed, homegrown, innovative technology continuing to gain traction internationally."

HPMS technology was developed at the University of Birmingham, underpinned by approximately $100-million (U.S.) of research and development financing, and has major competitive advantages versus other rare earth magnet recycling technologies, which are largely focused on chemical processes, but do not solve the challenges of liberating magnets from end-of-life scrap streams -- HPMS provides the solution. HyProMag's company presentation can be viewed on-line.

Maginito

Maginito is a U.K.-based company owned 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 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 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 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 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.

In parallel, Mkango and Grupa Azoty PULAWY, Poland's leading chemical company, 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.

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.

We seek Safe Harbor.