Mr. William Dawes reports

MKANGO MAGNETIC MATERIALS LIMITED ANNOUNCES HYPROMAG USA SECURES POWER AND ADVANCES PROJECT

Mkango Magnetic Materials Ltd.'s HyProMag USA LLC has provided an update on development activities for its Texas Hub rare-earth magnet recycling and manufacturing project. HyProMag USA has secured electrical power capacity with Oncor Electric Delivery Company LLC for the Texas hub development. HyProMag USA expects the facility's electricity requirements to be supplied predominantly from renewable energy resources.

Key highlights

• Power capacity secured with Oncor Electric Delivery Company LLC for both cutting and finishing operations and phase 1 developments with a pathway through a substation upgrade to provide power for phase 2.
• PegasusTSI Inc. (Pegasus) has commenced contractor selection for cutting and finishing operations and Weston Solutions Inc. is advancing permitting activities.
• Targeted commissioning of cutting and finishing operations in H1 2027 with the processing of neodymium iron boron (NdFeB) magnet blocks, initially supplied from HyProMag Group operations, to produce finished magnets.
• Phase 1 development is targeted for completion in mid 2028 and is designed to produce approximately 550 tonnes per annum (tpa) of NdFeB magnet blocks and finished magnets and approximately 484 tpa (tonnes per annum) of co-products, representing approximately 1,034 tpa of total payable production.
• Phase 2 development envisages expansion to approximately 1,526 tpa of total payable production.
• Electricity supply expected to be sourced predominantly from renewable energy resources.

Julian Treger, CoTec chief executive officer, commented: "Securing power with Oncor, advancing permitting activities through Weston Solutions and commencing contractor selection are important milestones for the Texas hub. Initial cutting and finishing operations in 2027 are expected to establish U.S. magnet finishing and qualification capabilities aligned with internationally recognized magnetic material and quality standards, while the full phase 1 development will deliver integrated recycling and magnet manufacturing capacity. Together, these activities further derisk the project and demonstrate continued progress towards establishing a domestic and sustainable rare-earth magnet supply chain in the United States."

Cutting and finishing operations in 2027 comprise the initial magnet finishing and qualification facility, enabling production and qualification of finished NdFeB magnets using magnet blocks supplied from HyProMag Group operations. The facility is designed to process NdFeB magnet blocks and support qualification of finished magnets in accordance with ASTM A977/A977M, the national classification standard for magnetic materials, together with quality management systems aligned with ISO 9001 and customer-specific quality, performance, and traceability requirements. The objective is to establish qualification capabilities consistent with those expected of leading North American permanent magnet manufacturers and establish a strategic training facility for the finishing of NdFeB magnets in advance of the main Texas hub developments.

Weston Solutions Inc. is advancing permitting activities, while engineering partner Pegasus has commenced a request for quotation (RFQ) process for the selection of a general contractor for cutting and finishing operations. Pegasus and BBA USA Inc. are HyProMag USA's United States-based engineering, procurement and construction management firms.

Phase 1 represents the first integrated recycling and magnet manufacturing stage of the Texas hub and is designed to produce approximately 550 tpa (tonnes per annum) of sintered NdFeB magnet blocks and finished magnets, together with approximately 484 tpa of co-products, representing total payable production of approximately 1,034 tpa. Upon completion of phase 2, the Texas hub is expected to produce approximately 1,048 tpa of NdFeB magnet blocks and cylinders, together with approximately 478 tpa of co-products, representing total payable production of approximately 1,526 tpa.

About HyProMag USA

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 AI (artificial intelligence) infrastructure, defence systems, robotics, electric vehicles and advanced electronics. Leveraging the revolutionary HPMS technology, developed over 15 years with over $100-million (U.S.) in R&D investment, the company 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 is owned 50:50 by CoTec Holdings Corp. and HyProMag Ltd. HyProMag is 100 per cent owned by Maginito, which is owned on a 79.4-/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 Corp., 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 direct and indirect interest (assuming conversion of Maginito's convertible loan) 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. (Mkango U.K.), focused on long-loop rare-earth magnet recycling in the U.K. via a chemical processing route.

Maginito and CoTec are also expanding Hydrogen Processing of Magnet Scrap (HPMS) recycling technology into the United States via 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 via 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-earths project in Malawi and the proposed Pulawy rare-earths 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. The Songwe and Pulawy projects and HyProMag GmbH have been selected as strategic projects under the European Union Critical Raw Materials Act. Songwe has also received development funding from the U.S. International Development Finance Corp. (DFC), 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. (MKAR) has signed a business combination agreement with Crown PropTech Acquisitions (CPTK) to list the Songwe Hill and Pulawy rare-earths projects on Nasdaq via a SPAC (special purpose acquisition company) merger under the name Mkango Rare Earths Ltd.

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