REG - Mkango Resources Ltd - Mkango releases year-end 2023 financial statements

Mkango ResourcesAnnouncement

30/04/2024 07:00

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RNS Number : 5630M  Mkango Resources Limited  30 April 2024

 

 

 

 

MKANGO RESOURCES
LTD.

550 Burrard
Street

Suite
2900

Vancouver

BC V6C
0A3

Canada

 

30 April 2024

 

Mkango releases year-end 2023 financial statements

 

LONDON and VANCOUVER, British Columbia, 30 April 2024 (GLOBE NEWSWIRE) -
Mkango Resources Ltd (AIM / TSX-V:MKA) (the "Company" or "Mkango"), is pleased
to announce that it has released the Financial Statements and Management's
Discussion and Analysis for the period ending 31 December 2023.

 

To view the Financial Statements, please click here:
http://www.rns-pdf.londonstockexchange.com/rns/5630M_1-2024-4-30.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/5630M_1-2024-4-30.pdf)

 

To view the Management's Discussion and Analysis, please click
here http://www.rns-pdf.londonstockexchange.com/rns/5630M_2-2024-4-30.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/5630M_2-2024-4-30.pdf)

 

The reports are also available under the Company's profile on SEDAR
(www.sedar.com) and on the Company's website
(https://mkango.ca/investors/financials/
(https://mkango.ca/investors/financials/) ).

 

FULL YEAR HIGHLIGHTS:

 

·    Mkango continued to cement its leading position and early mover
advantage in rare earth magnet recycling via its 79.4% controlled subsidiary
Maginito Limited ("Maginito").

·    During 2023, Maginito completed the acquisition of 100% of HyProMag
Ltd ("HyProMag") which is targeting commercialising Hydrogen Processing of
Magnet Scrap ("HPMS") technology across multiple jurisdictions, including UK
(in H2 2024), Germany (in 2025) and the United States (in 2026).

·    The HPMS technology was developed to provide the solution for
liberating NdFeB magnets from end-of-life scrap streams in a cost effective
and energy efficient way with the resulting recycled NdFeB powder fed back
into multiple points of the rare
(https://www.linkedin.com/feed/hashtag/?keywords=rareearth&highlightedUpdateUrns=urn%3Ali%3Aactivity%3A7177998496057163776)
earth supply chain including (short-loop) magnet manufacturing, to produce
magnets with a significantly reduced carbon footprint, and (long-loop)
chemical processing to produce rare earth carbonates and oxides.

·    The acquisition of HyProMag was supported by a £1.5 million
(US$1.9m) investment by CoTec Holdings Corp. ("CoTec") into Maginito for a 10%
interest, and CoTec's interest in Maginito increased to 20.6% through the
conversion of a £2m (US$2.5m) convertible loan made to Mkango.

·    The strategic benefits of HyProMag's HPMS technology and strong
potential to contribute to development of responsible critical mineral supply
chains was validated when it was selected for support by the Minerals Security
Partnership ("MSP"), a collaboration of 14 countries and the European Union to
catalyse public and private investment in responsible critical minerals supply
chains globally.

·    In September 2023, Maginito and CoTec agreed to form a 50/50 joint
venture company, HyProMag USA LLC ("HyProMag USA"), to roll-out the HPMS
technology into the United States, with CoTec responsible for funding the
feasibility study and development costs, subject to the results of the
feasibility study.

·    HyProMag achieved a major milestone in December 2023, with first
production runs of short-loop recycled rare earth magnets completed at the
Tyseley Energy Park rare earths hub in Birmingham, UK - the first UK
production of sintered rare earth magnets on commercial scale equipment in
over 20 years.

·    The Tyseley scale-up and United States technology roll-out is
underpinned by successful piloting at the University of Birmingham ("UoB")
with over 3,000 finished rare earth magnets produced from piloting to date.

·    Mkango inaugurated a Board Sustainability Committee in the year and
additionally released its first Environmental Social Governance ("ESG") report
- which highlighted the low carbon credentials of its recycling business, and
the high Corporate Social Responsibility standards of its Songwe Hill Rare
Earths project in Malawi, underpinned by the Environmental Social Health
Impact Assessment ("ESHIA") (to IFC Performance Standards). The ESHIA was
approved in January 2023, following completion of the Definitive Feasibility
Study in 2022.

 

·    Loss after tax for the year ended 31 December 2023 of $4,179,951
compared to $5,985,963 for the year ended 31 December 2022.

 

 

SUBSEQUENT EVENTS:

 

·    HyProMag USA engaged BBA USA Inc ("BBA") and PegasusTSI ("Pegasus")
to complete the Feasibility Study for the USA recycling operations with
targeted completion in H2 2024. BBA and Pegasus successfully completed their
onboarding process through visits to key manufacturers in Germany, Poland and
the HyProMag Plant in Tyseley, UK. Commercial production in the USA is
targeted for H1 2026.

·    Mkango completed a fund raising of £750,000 (US$955,000) in April
2024, including a £150,000 (US$191,000) investment by Mkango CEO, William
Dawes, with the proceeds to be primarily used for the acquisition of
additional equipment to underpin HyProMag's transition to first commercial
sales of recycled NdFeB at Tyseley Energy Park in Birmingham, UK targeted for
H2 2024, and orders of long lead time equipment in Germany, unlocking
additional grant funding.

·    The Group has completed a significant cost-cutting exercise in recent
months, whilst streamlining operations to focus on recycling, which has
enabled a 35% reduction in the ongoing operating cost requirements for the
business.

 

·    Discussions are ongoing with potential strategic investors, project
finance providers, grant funding bodies and other sources to finance recycling
scale-up opportunities and further technology roll-out. In parallel, Mkango is
undertaking a review of strategic options for its advanced stage Songwe Hill
Rare Earth Project in Malawi and the Pulawy Rare Earth Separation Project in
Poland. The DFS for Songwe Hill and subsequent work identified a number of
areas for potential cost optimisation, and the Company continues to evaluate
these and other cost reduction opportunities in light of the current weak rare
earth market pricing environment.

 

NEAR TERM MILESTONES:

 

·    Full commissioning of pilot scale long loop (chemical route)
recycling process at Tyseley Energy Park
(https://www.linkedin.com/company/tyseley-energy-park/) to produce rare earth
carbonates and oxides targeted for H1 2024.

·    Initial commercial sales of NdFeB via HyProMag Ltd
(https://www.linkedin.com/company/hypromag-ltd/) 's short-loop recycling
process at Tyseley Energy Park
(https://www.linkedin.com/company/tyseley-energy-park/) in the UK targeted for
H2 2024.

·    Completion of HyProMag
(https://www.linkedin.com/feed/hashtag/?keywords=hypromag&highlightedUpdateUrns=urn%3Ali%3Aactivity%3A7177998496057163776)
USA Feasibility Study targeted in H2 2024. Scope comprises hub and spoke
model, with three HPMS spokes and one magnet manufacturing hub in Texas.

·    HyProMag GmbH ("HyproMag Germany") first commercial production in
Germany targeted for 2025.

 

 

About Mkango Resources Ltd.

Mkango is listed on the AIM and the TSX-V. 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 Limited ("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 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 UK and
Germany, respectively, and a 100 per cent interest in Mkango Rare Earths UK
Ltd ("Mkango UK"), focused on long loop rare earth magnet recycling in the UK
via a chemical route.

Maginito and CoTec are also rolling out HyProMag's recycling technology into
the United States via the 50/50 owned HyProMag USA LLC joint venture company.

Mkango also owns the advanced stage Songwe Hill rare earths project and an
extensive rare earths, uranium, tantalum, niobium, rutile, nickel and cobalt
exploration portfolio in Malawi, and the Pulawy rare earths separation project
in Poland. Discussions with the Government of Malawi in relation to the Mining
Development Agreement for Songwe Hill are ongoing.

For more information, please visit www.mkango.ca (http://www.mkango.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. Generally,
forward looking statements can be identified by the use of words such as
"targeted", "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, receipt of TSX-V approval for the Subscription, the
availability of (or delays in obtaining) financing to develop Songwe Hill, and
the various recycling plants in the UK, Germany and the US as well as the
separation plant in Poland, 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 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 various recycling and separation plants of Mkango and Maginito and
future investments in the United States pursuant to the 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 disclaims
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
undertakes 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 (http://www.mkango.ca)

@MkangoResources

 

SP Angel Corporate Finance LLP

Nominated Adviser and Joint Broker

Jeff Keating, Caroline Rowe, Kasia Brzozowska

UK: +44 20 3470 0470

 

Alternative Resource Capital

Joint Broker

Alex Wood, Keith Dowsing

UK: +44 20 7186 9004/5

 

The TSX Venture Exchange has neither approved nor disapproved the contents of
this press release. Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release does not constitute an offer to sell or a solicitation of
an offer to buy any equity or other securities of the Company in the United
States. The securities of the Company will not be registered under the United
States Securities Act of 1933, as amended (the "U.S. Securities Act") and may
not be offered or sold within the United States to, or for the account or
benefit of, U.S. persons except in certain transactions exempt from the
registration requirements of the U.S. Securities Act.

 

 

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