Mr. William Dawes reports

MKANGO MAGNETIC MATERIALS LIMITED - HYPROMAG USA DEPLOYS MOBILE INSERMA SYSTEM

Mkango Magnetic Materials Ltd.'s HyProMag USA LLC has deployed its third Inserma Anoia S.L. hard disk drive (HDD) separation system as a mobile processing unit, expanding HyProMag USA's processing and customer engagement capabilities across the United States. The deployment further strengthens HyProMag USA's partnership with Intelligent Lifecycle Solutions (ILS) and supports the expansion of a scalable nationwide platform for the recovery and recycling of rare-earth magnets from end-of-life HDDs.

Feedstock inventories currently under contract and in storage, together with active procurement programs, continue to strengthen the feedstock platform and are expected to support initial commissioning and ramp-up activities for phase 1 at the planned Dallas-Fort Worth facility (the Texas hub) in 2028. HyProMag USA has also completed commercial sales of recovered printed circuit board (PCB) material to downstream smelter partners, generating revenue that supports the acquisition and retention of magnet-bearing feedstock inventory.

Julian Treger, chief executive officer of CoTec Holdings Corp., commented: "The deployment of our third Inserma system as a mobile processing unit represents an important step in the development of the Dallas-Fort Worth project. Together with continued progress in feedstock sourcing and commercial PCB recovery, it strengthens our operating platform and expands our ability to engage directly with customers across multiple end markets. These milestones provide increasing confidence in our ability to support commissioning activities and establish a long-term domestic supply of recycled rare-earth materials."

Graham Davy, managing director of ILS, commented: "The focus of the ILS team has been on demonstrating that HDDs can be efficiently processed into separate, marketable material streams. We have continued to build feedstock inventories, completed commercial sales of recovered PCB materials to smelter partners for HyProMag USA and expanded our capabilities through the deployment of a mobile Inserma system. The mobile unit allows us to work directly with customers at their facilities, supporting trial programs, demonstrating material recovery performance and creating opportunities to secure additional feedstock supply."

Key highlights

• Processing capability expanded: HyProMag USA's third Inserma HDD separation system has been deployed as a mobile processing unit to support customer qualification programs, secure on-site recovery campaigns and future feedstock growth opportunities across the United States.
• Commissioning readiness advanced: Feedstock inventories currently under contract and in storage, together with active procurement programs, are expected to support initial commissioning and ramp-up of phase 1 activities at the Texas hub in 2028.
• PCB revenue supports magnet acquisition: Commercial sales of recovered PCB material to smelter partners have generated revenue within the HDD processing flow sheet, partly offsetting the cost of acquiring and retaining magnet-bearing feedstock for future rare-earth recycling operations.
• Feedstock channels diversified: Sourcing activities continue to expand across industrial, health care, government and IT asset disposition sectors.
• Secure processing platform: R2v3-certified operations, ISO-certified management systems and documented chain-of-custody procedures support secure handling of data-bearing equipment.
• Data centre market focus: Mobile processing capability enables on-site recovery programs within hyperscale data centres and secure IT asset disposition environments.
• Inserma testing: A next-generation Inserma system designed specifically for the high-capacity HDDs used in hyperscale data centres, including helium filled units, is currently being tested, with early results indicating processing times of under three seconds per drive and successful processing of modern high-capacity data centre formats.
• Partnership network expanding: Relationships across the data centre, electronics recycling and rare-earth magnet value chain continue to support platform growth.

Expanding feedstock access

To support continued growth in feedstock volumes, HyProMag USA has deployed its third Inserma HDD separation system as a mobile processing unit to complement existing operations in South Carolina and Nevada. Unlike the fixed installations currently operating through the ILS partnership, the system has been configured for mobile deployment and is intended to support customer trials, feedstock development programs and on-site processing campaigns across the United States.

Feedstock inventories currently under contract and in storage, together with active procurement programs, continue to strengthen the feedstock platform and are expected to support initial commissioning and ramp-up activities at the Texas hub. Feedstock sourcing activities continue to expand beyond HDDs into industrial, health care, government and IT asset disposition sectors, increasing confidence in the scalability of HyProMag USA's feedstock platform and supporting future supply requirements for the Texas hub.

Commercial PCB recovery

ILS has completed commercial sales for HyProMag USA of recovered PCB material to downstream smelter partners. The sales validate an additional revenue stream within the HDD processing flow sheet and show that value can be recovered from secondary material streams. Magnet-bearing materials are being retained as feedstock inventory for future rare-earth recycling operations. Revenue from recovered PCB material partly offsets the cost of acquiring magnet-bearing feedstock, improving the economics of building the inventory required to support Texas hub operations.

Secure recovery and chain of custody

ILS operates under internationally recognized recycling and management standards, including R2v3 certification and ISO-certified management systems, supporting responsible recycling practices, operational controls and continuous improvement initiatives. The recovery process is supported by documented chain-of-custody procedures designed to provide traceability from collection through processing and final disposition. These controls support the requirements of data center operators, IT asset disposition providers, enterprise customers and government organizations seeking secure and auditable management of end-of-life electronic equipment.

Building strategic partnerships

HyProMag USA continues to expand relationships across the electronics recycling, data infrastructure and rare-earth magnet value chain. Working alongside data center operators, IT asset disposition providers, recyclers, technology companies and downstream processing partners, HyProMag USA is developing an integrated platform for the collection, recovery and recycling of magnet-bearing materials. HyProMag USA is evaluating additional feedstock pathways, including industrial and transportation-related material streams, with pilot programs and commercial opportunities under review.

About Intelligent Lifecycle Solutions

Intelligent Lifecycle Solutions (ILS) provides secure recovery, processing and recycling services for end-of-life electronic equipment. Through its operating facilities in South Carolina and Nevada, ILS supports the recovery of valuable materials from electronic waste streams while maintaining robust data security and chain-of-custody protocols.

About HyProMag USA

HyProMag USA is developing advanced rare-earth magnet recycling and manufacturing operations to establish a secure domestic United States supply chain for neodymium iron boron (NdFeB) magnets, essential components for AI (artificial intelligence) infrastructure, defense systems, robotics, electric vehicles and advanced electronics. Leveraging the revolutionary hydrogen processing of magnet scrap (HPMS) technology, developed over 15 years with over $100-million (U.S.) in R&D (research-and-development) investment, HyProMag USA delivers faster magnet-to-magnet short-loop recycling that uses 88-per-cent less energy and reduces carbon emissions by 85 per cent compared with conventional methods. HPMS accepts a wide range of magnet-bearing feedstocks -- including end-of-life EV (electric vehicle) motors, data-centre and industrial equipment, consumer electronics, and manufacturing scrap -- enabling recovery of magnet-grade material without chemical processing.

Ownership

HyProMag USA LLC is owned 50:50 by CoTec Holdings and HyProMag. HyProMag Ltd. is 100 per cent owned by Maginito Ltd., which is owned on a 79.4-per-cent/20.6-per-cent basis by Mkango Magnetic Materials and CoTec.

About Mkango Magnetic Materials Ltd.

Mkango is listed on the Alternative Investment Market and the TSX Venture Exchange. Mkango's corporate strategy is to become a market leader in the production of recycled rare-earth magnets, alloys and oxides, through its interest in Maginito Ltd., which is owned 79.4 per cent by Mkango and 20.6 per cent by CoTec Holdings, and the Remloy business acquired by its wholly owned German subsidiary, to develop new sustainable sources of neodymium, praseodymium, dysprosium and terbium to supply accelerating demand from electric vehicles, wind turbines and other clean energy technologies.

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