Mr. William Dawes reports

MKANGO MAGNETIC MATERIALS LIMITED ANNOUNCES HYPROMAG USA ADVANCES TEXAS RE MAGNET FACILITY

Mkango Magnetic Materials Ltd. has noted HyProMag USA LLC has delivered the first major process equipment to its rare earth magnet recycling and manufacturing facility in Northlake, Tex., marking an important milestone as the project advances toward financing, commissioning and operations.

The arrival of the equipment highlights the continuing progress being made in detailed engineering and procurement in developing a secure, sustainable and domestic source of recycled rare earth permanent magnets in the United States. In December, 2025, HyProMag USA secured a long-term lease agreement for its Northlake, Tex., facility, located at Ironhead Commerce Center, Building 1, Dallas-Fort Worth, Denton county, Texas. The project site is strategically located near critical infrastructure, the BNSF intermodal rail link and Alliance Airport.

The Northlake, Tex., facility is expected to become one of the first commercial-scale integrated rare earth magnet recycling and magnet manufacturing operations in the United States. Project development continues to advance, with electrical power capacity secured through Oncor Electric Delivery Company LLC, permitting progressing with Weston Solutions Inc., and contractor selection under way. HyProMag USA is targeting initial magnet cutting and finishing operations in the first half of 2027, followed by commissioning of phase 1 integrated recycling and manufacturing operations in mid-2028.

The milestone follows the successful completion of the recently announced expansion prefeasibility study, which confirmed the potential to significantly increase HyProMag USA's production capacity while maintaining robust project economics. The expansion PFS highlighted the opportunity to establish one of the largest rare earth magnet recycling and manufacturing platforms in the United States, targeting approximately 4,192 metric tonnes per annum of NdFeB magnet production and approximately 6,000 metric tonnes of total salable materials annually by 2034.

The Northlake, Tex., facility is expected to create approximately 100 direct jobs and play an important role in supporting the development of a secure, resilient and sustainable domestic rare earth magnet supply chain. By recovering valuable magnetic materials from end-of-life products and manufacturing scrap, HyProMag USA aims to transform waste streams into a domestic resource for new magnet production, reducing reliance on imported rare earth materials and supporting U.S. manufacturing.

Julian Treger, chief executive officer of CoTec, commented: "The delivery of the first process equipment to the Northlake, Tex., facility marks an important milestone for HyProMag USA as we advance toward commercial operations. The project is expected to create around 100 direct jobs and support work force training and skills development, helping build the skilled professionals required for advanced manufacturing in the United States. By establishing a domestic source of recycled rare earth magnets, HyProMag USA will strengthen U.S. manufacturing capacity and contribute to a more secure and resilient rare earth magnet supply chain."

About HyProMag USA LLC

HyProMag USA is developing advanced rare earth magnet recycling and manufacturing operations to establish a secure domestic U.S. supply chain for NdFeB magnets, essential components for artificial intelligence infrastructure, medical systems, robotics, electric vehicles and advanced electronics. Leveraging the revolutionary HPMS technology, developed over 15 years with over $100-million (U.S.) in research and development investment, HyProMag USA is designed to deliver 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 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 is owned 50:50 by CoTec Holdings and HyProMag Ltd. HyProMag is 100 per cent owned by Maginito Ltd., which is owned on a 79.4/20.6-per-cent basis by Mkango 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, 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.

Maginito holds a 100-per-cent interest in HyProMag and a 90-per-cent indirect interest in HyProMag GmbH, focused on short loop rare earth magnet recycling and manufacturing in the United Kingdom and Germany, respectively, and a 100-per-cent interest in Mkango Rare Earths U.K. Ltd., focused on long loop rare earth magnet recycling in the U.K. through a chemical processing route.

Maginito and CoTec are also expanding HPMS recycling technology into the United States through the 50/50 owned HyProMag USA joint venture company.

Remloy has developed a plant in Bitterfeld, Germany, which recycles end-of-life rare earth magnets through a melting process (medium loop rare earth magnet recycling) to produce NdFeB alloy powders for the bonded and hot deformed magnet markets, complementary to HyProMag's short loop recycling process, to produce sintered magnets, and to Mkango U.K.'s long loop recycling process, to produce mixed rare earth carbonates and oxides.

Mkango currently owns 100 per cent of the advanced-stage Songwe Hill rare earth project in Malawi and the proposed Pulawy rare earth separation plant in Poland. On grant of the large-scale mining licence, the government of Malawi may elect to take a free 10-per-cent interest in the entity holding that licence. Both the Songwe and Pulawy projects have been selected as strategic projects under the European Union Critical Raw Materials Act as has HyProMag GmbH. Songwe has also received development funding from the U.S. International Development Finance Corp., the U.S. government's development finance institution, securing $4.6-million (U.S.) in reimbursable funding for front-end engineering and design. Mkango Rare Earths Ltd. has signed a business combination agreement with Crown PropTech Acquisitions, pursuant to which MKAR, which will hold the Songwe Hill and Pulawy projects, is expected to become listed on Nasdaq, subject to the satisfaction or waiver of closing conditions.

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