Mkango releases year-end 2023 financial statements

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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

To view the Management's Discussion and Analysis, please click here 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/).

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").
• 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 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 to produce rare earth carbonates and oxides targeted for H1 2024.
• Initial commercial sales of NdFeB via HyProMag Ltd's short-loop recycling process at Tyseley Energy Park in the UK targeted for H2 2024.
• Completion of HyProMag 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.