Mr. Will Dawes reports

MKANGO RESOURCES LIMITED ANNOUNCES HYPROMAG USA ADVANCES TEXAS HUB & MAGNET PLATFORM

Mkango Resources Ltd.'s HyProMag USA LLC has provided an update on the development of its Ironhead facility and the buildout of its U.S. commercial platform. The company has increased its projected magnet production capacity, started procurement of key long-lead equipment, and is progressing detailed engineering, feedstock aggregation and commercial offtake discussions while also initiating a search for United States-based executive leadership to support the next phase of growth.

Following completion of the Class 2 AACE capital cost estimate in fourth quarter 2025 and the commissioning of HyProMag's United Kingdom and German plants, HyProMag USA has begun ordering critical-path long-lead equipment to support a targeted second half 2027 commissioning of the Texas hub. In parallel, detailed engineering is advancing, and the company is in discussions with feedstock suppliers, potential offtake partners and financing counterparties as it transitions from feasibility and pilot validation into execution of a scaled domestic magnet recycling and manufacturing platform in the United States.

Key highlights:

• Long-lead equipment procurement under way: the company has commenced procurement of three hydrogen processing of magnet scrap vessels along with magnet processing and finishing equipment to secure the development schedule for the Texas hub.
• Increased magnet production and updated economics: detailed engineering for a rare earth magnet recycling and manufacturing operation at the Texas hub, supported by two preprocessing spoke sites at Intelligent Lifecycle Solution facilities in South Carolina and Nevada, indicates:
  • Annual production capacity of approximately 1,048 metric tonnes of recycled sintered neodymium-iron-boron magnets and 478 metric tonnes of NdFeB co-products (total payable capacity of 1,526 metric tonnes NdFeB) over a 40-year operating life.
  • Posttax net present value of approximately $416-million (U.S.) and a real internal rate of return of 26.3 per cent based on current market prices.
  • Posttax NPV was approximately $797-million (U.S.), and a real IRR was 37.1 per cent based on forecast market prices.
  • Total initial capital cost was approximately $152-million (U.S.), including an 8.2-per-cent contingency and detailed design and engineering costs, over a one-year construction phase.
• Power supply discussions initiated: HyProMag USA has started formal discussions with Oncor Electric Delivery Company LLC to provide power to the Texas hub and expects the facility to be supplied predominantly from renewable resources.
• Ironhead building and early works: Preparatory work is under way for the project execution phase at the Ironhead building in Northlake, Tex., in the Dallas-Fort Worth metro area, including planning for the delivery and installation of early works equipment.
• Inserma system installation at ILS spoke sites: Three Inserma Anoia SL third-generation hard disk (drive) magnet separation systems have been installed at the ILS preprocessing sites in Williston, S.C., and Las Vegas, Nev. Inserma is currently implementing additional machine upgrades, including artificial-intelligence embedded HDD recognition and data traceability functions.
• Feedstock security and diversification: HyProMag USA continues to build its feedstock base through its partnership with ILS and a broader multisource purchasing strategy. In addition to HDDs, ILS is actively targeting other bulk NdFeB feedstock, including electric motor rotors, wind turbine magnets, speaker assemblies and end-of-life MRI machines.
• Offtake engagement: The company is in discussions with multiple potential offtake customers and, together with HyProMag Ltd., is providing magnet samples for product verification and qualification.
• U.S. leadership buildout: HyProMag USA has engaged a leading global executive search and consulting firm to identify a U.S.-based chief executive officer and chief financial officer to support a potential future public listing and continued rollout of the business.
• Prefeasibility expansion study for future plants: The company is targeting completion of a Class 3 AACE estimate and optimal configuration study in third quarter 2026 for additional plants that will mirror the Texas hub, with the objective of expanding U.S.-based production to approximately 4,656 metric tonnes of NdFeB saleable products.
• Financing: The company is in discussions with three financial institutions and continues to advance its project finance discussions following the procurement of the long-lead equipment.

Julian Treger, Cotec Holdings Corp. chief executive officer, commented: "We are making strong progress on our first plant in Texas. Ordering long-lead items now keeps the Texas hub on track and signals our confidence in the project and our ability to deliver it on schedule. ILS's growing portfolio of NdFeB feedstock, combined with stockpiling prior to commissioning, is designed to support a smooth ramp-up and optimized batch production. Any additional feedstock secured can underpin our future expansion of the plans.

"Our near-term focus is on securing feedstock and offtake commitments to support our project financing and enable a construction start in Q4 2026. Importantly, we are not starting from scratch -- the underlying technology is already commissioned and operating in the U.K. and Germany, and our goal is to scale that proven model in the United States. In parallel, we are building the leadership and operational platform needed to support long-term growth and preparing for a potential future U.S. listing."

Will Dawes, Mkango chief executive officer, commented: "HyProMag USA continues to progress towards commercial development and is well placed to play a key role in the development of more robust domestic rare earth supply chains in the United States. The company has significant competitive advantages in the sector underpinned by the energy-efficient and cost-effective HPMS and Inserma technologies and proven capabilities to make commercial grade magnets for a range of applications. The project is complemented by existing operations in U.K. and Germany, which effectively derisk the technologies and facilitate ongoing offtake discussions.

"We have a strong platform for growth in the United States and are excited to see the large-scale expansion plans move to the prefeasibility stage."

Detailed design and project economics

The Texas hub Class 2 AACE capital cost estimate and study are being carried out by a multidisciplinary team appointed by Cotec and Mkango and led by independent engineering firms PegasusTSI and BBA. The study, which is approximately 35 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 fourth quarter 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, the company has begun engaging prospective advisers and investment banks as part of a continuing evaluation.

Any potential listing will remain subject to project execution milestones, market conditions and regulatory approvals. No decision has been made at this time, and any such transaction would not be expected before late 2026 or early 2027.

About Mkango Resources 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, which is owned 79.4 per cent by Mkango and 20.6 per cent by Cotec, and 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 Ltd. 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 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 route.

Maginito and Cotec are also rolling out HPMS recycling technology into the United States through the 50/50-owned HyProMag USA joint venture company.

Mkango also owns the advanced stage Songwe Hill rare earth project in Malawi and the Pulawy rare earth separation project in Poland (Pulawy). Both the Songwe and Pulawy projects have been selected as strategic projects under the European Union Critical Raw Materials Act. Mkango has signed a business combination agreement with Crown PropTech Acquisitions to list the Songwe Hill and Pulawy rare earth projects on Nasdaq through a special-purpose acquisition company merger under the name Mkango Rare Earths Ltd.

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