Mr. Julian Treger of Cotec reports

MKANGO SUBSIDIARY MAGINITO AND COTEC FORM HYPROMAG USA JOINT VENTURE AND COMMENCE PROCESS TO APPOINT EPCM PROVIDER FOR THE FEASIBILITY STUDY

Cotec Holdings Corp. and Mkango Resources Ltd. have formed a 50/50 joint venture entity which will roll out HyProMag Ltd.'s hydrogen processing of magnet scrap (HPMS) recycling technology into the united States. The newly formed joint venture company, HyProMag USA LLC, plans to develop a low-cost, low-carbon, sustainable rare earth magnet recycling and production business underpinned by HPMS. HyProMag has sublicenced the HPMS technology to HyProMag USA.

HyProMag is 100 per cent owned by Maginito, which is owned on a 79.4/20.6 per cent basis by Mkango and Cotec and is commercializing rare earth magnet recycling in the United Kingdom, Germany and United States. Revenue from the joint venture is targeted for 2025/2026.

HyProMag USA will initially focus on completing a bankable feasibility study through a hub and spoke model using three HPMS vessels and one magnet manufacturing hub.

The joint venture has recently initiated a request for proposal process from leading engineering, procurement and construction management (EPCM) providers and has ordered three HPMS reactors to expedite the development of the U.S. project. Following completion of the feasibility study, Cotec and Mkango will make a joint decision as to whether the joint venture will proceed with the construction of the U.S. project.

Julian Treger, Cotec chief executive officer, commented: "HyProMag is supported by the Minerals Security Partnership and we are looking forward to working with leading EPCM providers to design and build these facilities using HyProMag's considerable experience from the plants being developed in the U.K. and in Germany. Cotec and Mkango are focused on delivery and will be exploring U.S. government funding and strategic partnerships for feed supply and rare earth element (REE) magnet offtake in the first half of 2024.

"We look forward to working and collaborating with local, state and federal stakeholders targeting the completion of the feasibility study."

Will Dawes, Mkango chief executive officer, commented:

"We see the united States as a core component of our growth strategy and look forward to progressing the U.S. feasibility study over the course of the year, in parallel with further development of operations in the U.K., Germany and other jurisdictions.

"HyProMag's recycling technology has major competitive advantages versus other recycling technologies and is a key enabler for cost effective and energy efficient separation, recycling and production of rare earth magnets with a significantly reduced carbon footprint.

"We are receiving strong interest for recycled magnets from potential customers and for recycling solutions from original equipment manufacturers (OEMs) and automotive and recycling companies."

HPMS technology was developed at the University of Birmingham, underpinned by approximately $100-million (U.S.) of research and development funding 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.

Maginito

Maginito is 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 (NdFeB) 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. (Mkango U.K.), a company focused on long loop rare earth magnet recycling in the U.K. through a chemical route.

About Mkango Resources Ltd.

Mkango's corporate strategy is to develop new sustainable sources of neodymium, praseodymium, dysprosium and terbium to supply accelerating demand from electric vehicles, wind turbines and other clean technologies.

About Cotec Holdings Corp.

Cotec is an environment, 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, as it transitions into a mid-tier mineral resource producer.

We seek Safe Harbor.