TIDMMKA
RNS Number : 1268T
Mkango Resources Limited
16 March 2023
MKANGO RESOURCES LTD. COTEC HOLDINGS CORP.
550 Burrard Street
755 Burrard Street
Suite 2900
Suite 428
Vancouver
Vancouver
BC V6C 0A3
V6Z 1X6
Canada
Canada
COMPLETION OF GBP1.5 MILLION INVESTMENT BY COTEC INTO MAGINITO
LIMITED AND CO-OPERATION AGREEMENT SIGNED FOR DEVELOPMENT OF RARE
EARTH TECHNOLOGIES IN THE UNITED STATES
Highlights
-- CoTec invests GBP1.5 million (C$2.5 million) in Mkango's
subsidiary, Maginito Limited ("Maginito"), for a 10% equity
interest and John Singleton, Chief Operating Officer of CoTec, has
been appointed to the Board of Maginito
-- Maginito now uniquely positioned in complementary short loop
and long loop technologies to recycle rare earth NdFeB magnets
through its existing interests in HyProMag and HyProMag GmbH, as
well as in Mkango subsidiary, Mkango UK, which has been transferred
from Mkango to Maginito
-- Major competitive advantages in the rare earth recycling sector:
o access to highly energy efficient, patented Hydrogen
Processing of Magnet Scrap ("HPMS") technology
o capability to manufacture rare earth magnets with a
significantly reduced carbon footprint
-- Near term production pipeline:
o short loop recycling plants to be commissioned in UK and
Germany in 2023 and 2024, respectively
o pilot plant for long loop recycling via chemical processing
targeted for commissioning in 2023
o scoping and feasibility studies for USA and other regions
proceeding in parallel
-- Mkango and CoTec will collaborate in the development of rare
earth technology opportunities in the United States with ongoing
scoping studies evaluating recycling, chemical processing, alloys
and magnet manufacturing
London, U.K. and Vancouver, CANADA - 16 March , 2023 - Mkango
Resources Ltd. (AIM/TSX-V: MKA) (the "Company" or "Mkango") and
CoTec Holdings Corp (TSX-V: CTH) ("CoTec") are pleased to announce
that they have closed the previously announced GBP1.5 million
investment (the "Investment") by CoTec into Mkango's subsidiary,
Maginito Limited ("Maginito"). In connection therewith, Maginito
and CoTec have agreed to collaborate on the commercialisation of
downstream rare earth technologies in the United States and Mkango
Rare Earths UK Ltd ("Mkango UK") has been transferred to become a
subsidiary of Maginito.
Maginito now holds a 42% interest in HyProMag Limited
("HyProMag") focused on short loop rare earth magnet recycling in
the UK, a 66.8% direct and indirect interest (assuming conversion
of Maginito's recently announced convertible loan) in HyProMag
GmbH, a company focused on short loop rare earth magnet recycling
in Germany, and a 100% interest in Mkango UK, a company focused on
long loop rare earth magnet recycling in the UK via a chemical
route. A new US subsidiary, to be jointly owned by Maginito and
CoTec, is expected to be formed to develop rare earth technology
opportunities in the United States.
William Dawes, Chief Executive of Mkango stated: "This is an
exciting milestone for Mkango and we look forward to working
closely with CoTec through a shared vision for Maginito to create a
large-scale, international business focused on downstream rare
earth technologies and recycling. Maginito will also benefit from
potential synergies with Mkango's development of primary rare
earths production in Malawi and Poland. The restructuring of
Maginito facilitates future access to capital and creates a strong
platform for its scale-up, international roll-out and further
partnership opportunities."
Julian Treger, Chief Executive of CoTec stated: "We are glad to
have closed this Investment and are now keen to work swiftly with
Mkango to roll-out production into North America. Underpinned by
unique green processing technologies, our development strategy will
be very helpful to establish US independence in the rare earth
realm and we hope to make further announcements in the coming
months to update the market on this process . These plants are also
expected to start generating revenues for CoTec in relatively short
order, demonstrating how our growth strategy of applying scalable
revolutionary technologies to create profitable green commodity
extraction assets works in practice."
GBP1,500,000 Maginito Investment
CoTec has subscribed for shares in Maginito (the "Maginito
Shares"), equivalent to a post-issuance 10% equity stake, for an
investment of GBP1.5 million (C$2.5 million).
CoTec and Mkango have entered into a shareholders' agreement
with respect to Maginito, pursuant to which CoTec has the right to
one Maginito Board seat for so long as CoTec continues to hold at
least a five percent (5%) shareholding in Maginito, increasing to
two Maginito Board seats if CoTec holds at least a twenty percent
(20%) shareholding in Maginito, as well as customary minority
investor rights and protections. Under a previously announced GBP2
million (C$3.3 million) convertible loan from CoTec to Mkango,
CoTec has the right to either convert the loan into Mkango shares
at 27p per share or into 10.6% of Maginito Shares. If it chooses
the option to convert the loan into Maginito Shares, it will hold a
20.6% interest in Maginito. Additionally, Mkango and Maginito have
entered into a management agreement whereby Mkango will continue to
manage Maginito.
Appointment of John Singleton to the Board of Maginito
In connection with the Investment John Singleton, Chief
Operating Officer of CoTec, has been appointed to the Board of
Maginito, joining Mkango Chief Executive William Dawes and Mkango
President Alexander Lemon. Mr Singleton has over twenty years'
experience in the mining industry. He started his career at De
Beers Consolidated Mines in South Africa as a Senior Geotechnical
Engineer, followed by 13 years at Rio Tinto Plc. During his time at
Rio Tinto Mr Singleton gained extensive operational, commercial and
technical experience across multiple product groups and served in
several senior leadership positions in Business Evaluation and
Corporate Development. Most recently he was Head of Corporate
Development at Centamin Plc. His experience includes business
development, strategy and capital planning, mergers and
acquisitions, assessment of investment opportunities, project
development and valuation. Mr Singleton has worked globally across
multiple commodities and has led several multi-discipline teams. He
is a Fellow of the Royal Geological Society and holds a BSc from
the University of Bristol and an MSc in Engineering Geology from
Imperial College London.
United States Co-operation Agreement
Mkango and CoTec have entered into a co-operation agreement
regarding future investments in rare earth processing technology
opportunities in the United States. Scoping studies are underway to
determine optimal sites there, and to evaluate the scope of
potential rare earth developments, which may include recycling,
chemical processing and the production of alloys and magnets.
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ('MAR') which has
been incorporated into UK law by the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement via Regulatory
Information Service, this inside information is now considered to
be in the public domain.
About Maginito
Maginito 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 42% interest in UK rare earth (NdFeB) magnet
recycler, HyProMag ( www.hypromag.com ) with an option to increase
its interest to 49%. Hypromag has licensed the patented technology
called HPMS (Hydrogen Processing of Magnet Scrap) developed in the
Magnetic Materials Group (MMG) at the University of Birmingham.
HyProMag's strategy is to establish short loop recycling
facilities for NdFeB magnets at Tyseley Energy Park in Birmingham,
U.K. (the "Tyseley Recycling Facilities") and other locations to
provide a sustainable solution for the supply of NdFeB magnets and
alloys for a wide range of markets including, for example,
automotive and electronics. The plant at Tyseley Energy Park is
being developed together with the University of Birmingham, with a
minimum capacity of 100tpa NdFeB (neodymium, iron, boron) and first
production is targeted for 2023. This GBP4.3 million project is
being funded by Driving the Electric Revolution, an Industrial
Strategy Challenge Fund challenge delivered by UK Research and
Innovation ("UKRI").
In November 2021, HyProMag established an 80%-owned subsidiary
in Germany, HyProMag GmbH, to rollout commercialisation of HPMS
technology into Germany and Europe. HyProMag GmbH is developing a
similar sized plant to that at Tyseley Energy Park (the "HyProMag
GmbH Recycling Facility"). Initial capacity is expected to be a
minimum of 100tpa NdFeB, comprising recycled rare earth sintered
magnets and alloys and will be the first in Germany using the
patented HPMS process, with first production targeted for 2024.
Maginito has entered into a convertible loan agreement (the
"HyProMag GmbH Convertible Loan") with HyProMag GmbH, to acquire up
to a 50% interest. Under the terms of the HyProMag GmbH Convertible
Loan, Maginito has granted HyProMag GmbH a loan facility for EUR2.5
million (approximately C$3.6 million) available to be drawn down in
accordance with an agreed investment plan and convertible into a
50% interest in HyProMag GmbH.
This investment by Maginito (which will be funded in part by
proceeds from Mkango's recently completed GBP3.5 million placing)
will contribute to the matched funding requirements to unlock the
EUR3.7 million (approximately C$5.3 million) grants announced by
Mkango on November 23, 2022, for development of the production
facility in Baden-Württemberg State.
Mkango UK is establishing a pilot plant at Tyseley Energy Park
(the "Mkango UK Pilot Plant") to chemically process recycled HPMS
NdFeB powder and magnet swarf (i.e. the powder produced from
grinding and finishing magnets) from a range of scrap sources
including electronic waste, electric motors and wind turbines,
complementing the short loop magnet recycling routes being
developed in parallel by HyProMag. The GBP1.1 million pilot plant
programme is being developed as part of the SCREAM Project
(https://scream-uk.com/). 70% of the costs are being funded by UK
Research and Innovation (UKRI) as part of the Driving the Electric
Revolution challenge.
About Mkango
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 listed on the AIM Market of the London Stock
Exchange ("AIM") and the TSX Venture Exchange ("TSX-V").
Mkango is developing its Songwe Hill rare earths project
("Songwe") in Malawi with a Feasibility Study completed in July
2022 and an Environmental, Social and Health Impact Assessment
approved by the Government of Malawi in January 2023. Malawi is
known as "The Warm Heart of Africa", a stable democracy with
existing road, rail and power infrastructure, and new
infrastructure developments underway.
In parallel, Mkango and Grupa Azoty PULAWY, Poland's leading
chemical company and the second largest manufacturer of nitrogen
and compound fertilizers in the European Union, have agreed to work
together towards development of a rare earth Separation Plant at
Pulawy in Poland (the "Pulawy Separation Plant"). The Pulawy
Separation Plant will process the purified mixed rare earth
carbonate produced at Songwe Hill.
Through its ownership of Maginito ( www.maginito.com ), Mkango
is also 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.
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.
For more information, please visit www.mkango.ca
About CoTec Holdings Corp.
CoTec is a publicly traded investment issuer listed on the
TSX-V. The Company is an ESG-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 the company seeks
to transition 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.
For more information, please visit www.cotec.ca .
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements (within
the meaning of that term under applicable securities laws) with
respect to Mkango and CoTec. Generally, forward looking statements
can be identified by the use of words such as "plans", "expects" or
"is expected to", "scheduled", "estimates" "intends",
"anticipates", "believes", or variations of such words and phrases,
or statements that certain actions, events or results "can", "may",
"could", "would", "should", "might" or "will", occur or be
achieved, or the negative connotations thereof. Readers are
cautioned not to place undue reliance on forward-looking
statements, as there can be no assurance that the plans, intentions
or expectations upon which they are based will occur. By their
nature, forward-looking statements involve numerous assumptions,
known and unknown risks and uncertainties, both general and
specific, that contribute to the possibility that the predictions,
forecasts, projections and other forward-looking statements will
not occur, which may cause actual performance and results in future
periods to differ materially from any estimates or projections of
future performance or results expressed or implied by such
forward-looking statements. Such factors and risks include, without
limiting the foregoing, the availability of (or delays in
obtaining) financing to develop Songwe Hill, the Tyseley Recycling
Plant, the HyProMag GmbH Recycling Plant, the Mkango UK Pilot
Plant, the Pulawy Separation Plant, governmental action and other
market effects on global demand and pricing for the metals and
associated downstream products for which Mkango is exploring,
researching and developing, geological, technical and regulatory
matters relating to the development of Songwe Hill, the ability to
scale the HPMS and chemical recycling technologies to commercial
scale, competitors having greater financial capability and
effective competing technologies in the recycling and separation
business of Maginito and Mkango, availability of scrap supplies for
Maginito's recycling activities, government regulation (including
the impact of environmental and other regulations) on and the
economics in relation to recycling and the development of the
Tyseley Recycling Plant, the HyProMag GmbH Recycling Plant, the
Mkango UK Pilot Plant, the Pulawy Separation Plant and future
investments in the United States pursuant to the proposed
cooperation agreement between Maginito and CoTec, the outcome and
timing of the completion of the feasibility studies, cost overruns,
complexities in building and operating the plants, and the positive
results of feasibility studies on the various proposed aspects of
Mkango's, Maginito's and CoTec's activities. The forward-looking
statements contained in this news release are made as of the date
of this news release. Except as required by law, the Company and
CoTec disclaim any intention and assume no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
applicable law. Additionally, the Company and CoTec undertake no
obligation to comment on the expectations of, or statements made
by, third parties in respect of the matters discussed above.
For further information on Mkango, please contact:
Mkango Resources Limited
William Dawes Alexander Lemon
Chief Executive Officer President
will@mkango.ca alex@mkango.ca
Canada: +1 403 444 5979
www.mkango.ca
@MkangoResources
SP Angel Corporate Finance LLP
Nominated Adviser and Joint Broker
Jeff Keating, Kasia Brzozowska
UK: +44 20 3470 0470
Alternative Resource Capital
Joint Broker
Alex Wood, Keith Dowsing
UK: +44 20 7186 9004/5
Bacchus Capital Advisers
Financial Adviser
Richard Allan
UK: +44 203 848 1642
UK: +44 7857 857 287
richard.allan@bacchuscapital.co.uk
For further information on CoTec, please contract:
CoTec Holdings Corp.
Braam Jonker
Chief Financial Officer
braam.jonker@cotec.ca
Canada: +1 604 992-5600
The TSX Venture Exchange has neither approved nor disapproved
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