Mr. Julian Treger reports

HYPROMAG USA TO ESTABLISH EARLY MAGNET FINISHING CAPABILITY AS PART OF PHASED TEXAS HUB DEVELOPMENT

Cotec Holdings Corp. has noted the press release issued today by its joint venture, HyProMag USA LLC. HyProMag USA, a United States-based leader in rare-earth magnet recycling and manufacturing, is arranging a phased development strategy for its Ironhead facility in Dallas-Fort Worth, Tex. (the Texas hub), including fast-tracking of magnet finishing equipment commissioning and initial production.

Accelerated magnet finishing and initial sales

Under the phased plan, HyProMag USA is now targeting commissioning of its initial finished neodymium-iron-boron (NdFeB) magnet production equipment in Texas in H1 2027. These initial U.S. operations will utilize up to 20 tonnes of magnet blocks supplied by HyProMag Group operations in the United Kingdomi and Germanyii to be shaped and finished at HyProMag USA's operations for U.S. customers. The supply of finished magnet products to European customers from HyProMag operations in United Kingdom and Germany will not be affected by these arrangements.

Commitment to early works capital supports commissioning of the integrated Texas Hub's hydrogen processing of magnet scrap (HPMS) section now targeted for Q2 2028. At that stage, HyProMag USA expects to begin integrating U.S.-sourced magnet-bearing feedstock into its domestic recycling and magnet manufacturing operations.

Establishing this capability early also allows HyProMag USA to work directly with U.S. customers on product specifications and advance qualification programs, in parallel with the development of the broader integrated Texas hub. The initial finishing line will allow HyProMag USA to convert magnet blocks into customer-ready magnets produced to specific dimensions, tolerances, coatings and performance requirements.

Julian Treger, chief executive officer of Cotec Holdings, commented: "HyProMag's core advantage remains our ability to recover rare-earth magnets already contained in waste and return them to productive use through a faster, simpler and more efficient short-loop recycling process. Establishing finishing capability in Texas ahead of the integrated plant is a complementary step that will allow us to begin producing customer-ready magnets in the United States and work directly with customers on specifications and qualification.

"Magnet finishing is a critical and highly technical part of the value chain, with relatively limited commercial-scale capacity available in the United States. Developing this capability early will allow HyProMag USA to derisk downstream magnet making and build customer relationships. HyProMag USA is developing the full domestic platform for extracting magnets from waste, manufacturing recycled NdFeB products and delivering finished magnets tailored to our customer requirements."

Phased commissioning and ramp-up

Following targeted commissioning of cutting and finishing operations in H1 2027, commissioning of the HPMS section and integrated magnet manufacturing is targeted for Q2 2028, with initial annual production capacity of approximately 400 metric tonnes of recycled sintered NdFeB magnets and approximately 278 metric tonnes of NdFeB co-products, representing total payable capacity of approximately 678 metric tonnes of NdFeB material, with staged ramp-up thereafter.

Additional equipment is expected to be installed as it is received, supporting a staged ramp-up to the Texas hub's previously announced full targeted annual capacity of approximately 1,526 metric tonnes of magnetic products.

As announced on June 22, 2026, HyProMag USA has commenced procurement of long-lead equipment and continues to advance detailed engineering, feedstock aggregation, customer offtake and project financing discussions.

Building toward integrated U.S. waste-to-magnet production

The phased development strategy is intended to establish downstream finishing capability and customer relationships ahead of commissioning the Texas hub's HPMS operations. Once the HPMS section is operational, HyProMag USA expects to integrate U.S.-sourced magnet-bearing feedstock into a domestic platform spanning magnet recovery, recycling, manufacturing and finishing, enabling HyProMag USA's core objective of returning rare-earth magnets already circulating in the economy to productive use as customer-ready products.

Key highlights

• Initial strategic focus on downstream magnet finishing: Through the installation of finishing equipment in the Texas hub, HyProMag USA is developing expertise in downstream magnet making, which it believes will be a valuable complement to the proprietary HPMS process and a key strategic differentiator.
• Commissioning of finished magnet equipment now targeted for H1 2027 in partnership with the HyProMag Group: Initial U.S. production will be underpinned by NdFeB blocks supplied from the HyProMag Group (U.K. and Germany). This will allow HyProMag USA to provide magnets to U.S. off-takers in advance of the Texas hub start-up of integrated HPMS to magnet operations.
• Equipment ordered and staged ramp-up: HyProMag USA has ordered several of the long-lead equipment items for the Texas hub, including the HPMS vessels and magnet finishing equipment specified to U.S. market requirements based on feedback from potential customers. HyProMag USA will stage its early works equipment purchases to mitigate equipment supply risk and provide for a measured production ramp-up. Commissioning of the HPMS section of the Texas hub is targeted for Q2 2028, with a staged ramp-up thereafter.
• Customer engagement: First sample magnets have been supplied to potential customers in the United States and HyProMag USA is working with HyProMag operations in U.K. and Germany on increasing the supply of sample magnets responding to customer demand. HyProMag USA is engaging with multiple customers across North America, spanning both smaller customers and OEMs (original equipment manufacturers).
• Feedstock supply: HyProMag USA is making good progress in establishing strong relationships across a range of feedstock sources and several supply opportunities are being pursued, with tests for quality and recoverability of magnets imminent on some of the feedstock. Feedstock discussions have extended beyond hard disk drives into rotors, MRI machines and actuators, and discussions with several large recyclers are under way. HPMS provides a unique, energy efficient and cost-effective solution for recovering magnets from rotors and other assemblies with embedded magnets, which remains a major competitive advantage for the group.

Detailed design and project economics

The Texas hub Class 2 AACE capital cost estimate and study (the detailed design) is being carried out by a multidisciplinary team appointed by Cotec and Mkango Resources Ltd., and led by independent engineering firms PegasusTSI and BBA. The study, which is approximately 38 per cent complete, includes optimization of the operation as well as an updated capital cost profile. PegasusTSI and BBA have completed a 3-D plant model based on the Class 2 estimate prepared in Q4 2025.

Potential future U.S. listing

In December, 2025, HyProMag USA's owners, Cotec and Mkango, announced that they were exploring a potential U.S. listing for HyProMag USA. Since then, HyProMag USA has begun engaging prospective advisers and investment banks as part of a continuing evaluation.

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, which are critical components in AI (artificial intelligence) infrastructure, robotics, electric vehicles, wind turbines and advanced electronics. Leveraging the revolutionary HPMS technology developed over 15 years with over $100-million (U.S.) in R&D (research and development) investment, HyProMag 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 direct recovery of magnet-grade material without conventional chemical processing. HyProMag is focused on ensuring supply chain security and resilience for critical technologies and economic competitiveness.

About Cotec Holdings Corp.

Cotec is redefining the future of resource extraction and recycling. Focused on rare-earth magnets and strategic materials, Cotec integrates breakthrough technologies with strategic assets to unlock secure, sustainable and low-cost supply chains.

Cotec's mission is clear: accelerate the energy transition while strengthening strategic mineral supply chains for the countries the company operates in. By investing in and deploying disruptive technologies, the company delivers capital-efficient, scalable solutions that transform marginal assets, tailings, waste streams, and recycled products into high-value critical minerals.

From its HyProMag USA magnet recycling joint venture in Texas, to iron tailings reprocessing in Quebec, to next-generation copper and iron solutions backed by global majors, Cotec is building a diversified portfolio with long-term growth, rapid cash flow potential and high barriers to entry. The result is a differentiated platform at the intersection of technology, sustainability and strategic materials.

We seek Safe Harbor.