HyProMag USA, a joint venture between Mkango Resources Ltd and CoTec Holdings Corp, has increased the projected magnet production capacity at its Texas Hub to 1,526 metric tons annually. The updated project economics indicate a post-tax Net Present Value (NPV) of approximately US$416 million based on current market prices, with a real internal rate of return (IRR) of 26.3%. The company has commenced procurement of long-lead equipment and is targeting commissioning in the second half of 2027.

Following the completion of a Class 2 AACE capital cost estimate in Q4 2025, HyProMag USA has begun ordering critical-path equipment, including three Hydrogen Processing of Magnet Scrap (HPMS) vessels. Detailed engineering is advancing, and the company is engaging with feedstock suppliers and potential offtake partners. The total initial capital cost is estimated at approximately US$152 million, including an 8.2% contingency and detailed design costs, over a one-year construction phase.

Project Economics and Capacity

The detailed engineering for the rare earth magnet recycling and manufacturing operation at the Ironhead facility in Northlake, Texas, supports two pre-processing spoke sites at Intelligent Lifecycle Solution (ILS) facilities in South Carolina and Nevada. The project is designed to have a 40-year operating life.

Operational Developments

HyProMag USA has initiated formal power supply discussions with Oncor Electric Delivery Company LLC, expecting the facility to be predominantly supplied by renewable resources. Preparatory work is underway at the Ironhead building in the Dallas-Fort Worth metro area. Additionally, three Inserma "3rd generation" hard disk drive (HDD) magnet separation systems have been installed at the ILS pre-processing sites in Williston, South Carolina, and Las Vegas, Nevada.

The company is diversifying its feedstock base through its partnership with ILS, targeting bulk NdFeB feedstock such as electric motor rotors, wind turbine magnets, and end-of-life MRI machines. Offtake discussions are ongoing with multiple potential customers, and magnet samples are being provided for product verification.

Strategic Expansion and Financing

HyProMag USA is targeting the completion of a Class 3 AACE estimate and optimal configuration study in Q3 2026 for additional plants. The objective is to expand U.S.-based production to approximately 4,656 metric tons of NdFeB saleable products. The company is also in discussions with three financial institutions to advance project financing.

Julian Treger, CoTec CEO, stated that ordering long-lead items keeps the Texas Hub on track and signals confidence in the project schedule. Will Dawes, Mkango CEO, highlighted the company's competitive advantages, including energy-efficient HPMS and Inserma technologies, which are already commissioned and operating in the UK and Germany.

Mkango Resources Ltd. has issued 143,334 common shares following the exercise of options by consultants of the company. The options were exercised at a price of C$0.06 per option, resulting in aggregate proceeds of C$8600.04. This issuance increases the company's issued share capital, which will impact shareholders' calculations for notifying their interests in the company.

Application has been made for the newly issued common shares to be admitted to trading on AIM. Admission is expected to become effective and dealings are anticipated to commence at 8:00am UK time on or around June 22, 2026. The common shares issued will also be listed on the TSX Venture Exchange. Following this admission, the company will have a total of 387,253,618 common shares in issue.

The details of the transaction are outlined in the table below:

Mkango Resources Ltd. is listed on the AIM and TSX-V Stock Exchanges. The company's corporate strategy focuses on becoming a market leader in the production of recycled rare earth magnets, alloys, and oxides through its interest in Maginito Limited. Additionally, Mkango is developing new sustainable sources of neodymium, praseodymium, dysprosium, and terbium to supply demand from electric vehicles and wind turbines.

The company owns 100% of the Songwe Hill rare earths project in Malawi and the proposed Puławy rare earths separation plant in Poland. Both projects have been selected as Strategic Projects under the European Union Critical Raw Materials Act. The information disclosed in this announcement constitutes inside information under the Market Abuse Regulations (EU) No. 596/2014.