Pilot Plant Successfully Commissioned

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Vancouver

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PILOT PLANT SUCCESSFULLY COMMISSIONED FOR LONG-LOOP RECYCLING OF RARE EARTH MAGNETS

Highlights

• Mkango Rare Earths UK has successfully commissioned a long-loop recycling pilot plant at Tyseley Energy Park in Birmingham, which processes NdFeB magnet scrap or swarf to produce rare earth carbonates and oxides via a chemical route
• Complements the short-loop recycling plant currently being commissioned by HyProMag and University of Birmingham also at Tyseley Energy Park, which processes NdFeB magnet scrap to produce rare earth alloys and magnets
• Both recycling processes are underpinned by the patented Hydrogen Processing of Magnet Scrap (HPMS) technology developed at University of Birmingham, which liberates NdFeB magnets from end-of-life scrap streams in a cost effective and energy efficient way

London / Vancouver: July 1, 2024 - Mkango Resources Ltd. (AIM/TSX-V: MKA) (the "Company" or "Mkango") is pleased to announce that Mkango Rare Earths UK ("Mkango UK") has successfully commissioned a pilot plant designed to produce separated magnet rare earths (neodymium/praseodymium and dysprosium/terbium carbonates or oxides) via a long-loop recycling process. Mkango UK is 100% owned by Maginito Limited ("Maginito"), which is 79.4% owned by Mkango and 20.6% owned by CoTec Holdings ("CoTec").

The long-loop pilot plant received 70% of its funding from the UKRI's Driving Electric Revolution Challenge, delivered by Innovate UK, as part of the grant-funded project "Secure Critical Rare Earth Magnets for the UK" (SCREAM). Project partners include HyProMag, Bowers & Wilkins, European Metal Recycling (EMR), GKN Automotive, Jaguar Land Rover, and the University of Birmingham.

William Dawes, Chief Executive of Mkango stated: "This is a significant achievement for the Mkango UK team. We considered it key to develop this technical capability, given that some of the HPMS product not suitable for short-loop magnet manufacture and all swarf produced by HyProMag will require long loop chemical processing. This pilot plant enables us to determine the cost structure and carbon footprint of the baseline process, enabling the evaluation of different options for long-loop recycling on a commercial basis."

Nielson Beddoe, Processing Engineering Manager of Mkango UK stated: "We're very excited to have reached this major milestone. This is a credit to our excellent technical team in Birmingham and we are looking forward to the next steps as we progress through process optimization, scoping studies and evaluation of bolt-on technology enhancements. The development of the long-loop process enhances the technical flexibility to process different scrap streams, including swarf, and to produce a range of rare earth products. This strengthens ongoing customer engagement working closely with the HyProMag team."

Professor Allan Walton, Head of the Magnetic Materials Group at University of Birmingham and founding Director of HyProMag stated: "We are excited to see this additional capability for long-loop chemical processing brought to Tyseley Energy Park with the support of the University of Birmingham. Commissioning of the short-loop recycling plant is gathering momentum following commissioning of the commercial scale magnet manufacturing presses in December last year, with infrastructure development starting in the coming weeks, and delivery of the powder processing plant and HPMS vessel expected in July and August, respectively."

Rare earth magnets play a key role in clean energy technologies including electric vehicles and wind turbine generators, and they are also a key component in electronic devices including mobile phones, hard disk drives and loudspeakers. The UK has no domestic source of primary rare earths. The development of domestic sources of recycled rare earths via HPMS, a homegrown technology, is a significant opportunity for the UK to fast-track the development of sustainable and competitive rare earth magnet production.

Both long-loop and short-loop recycling technologies are underpinned by the patented HPMS technology developed at University of Birmingham, which liberates magnets from end-of-life scrap streams in a cost effective and energy efficient way to produce a recycled NdFeB alloy powder, which is manufactured into a magnet (via the short loop process) or into a rare earth carbonate or oxide (via the long loop chemical process).

Optimisation of long-loop pilot operations is underway, targeting near-term pilot scale production of the first 50kg batch of rare earth carbonates and oxides, in parallel with completion of scoping studies and evaluation of options to advance long loop recycling via stand-alone development, joint venture or other commercial arrangements. The long-loop recycling route is used to process NdFeB HPMS powder not suitable for short-loop recycling or for the processing of magnet swarf (i.e. the powder produced from grinding and finishing magnets).

In parallel, commissioning of the commercial scale short-loop magnet recycling plant by University of Birmingham and HyProMag (main industrial partner and exclusive HPMS licencee) is underway.

HyProMag is also commercialising HPMS recycling technology in Germany and United States, with commercial production targeted for 2025 and 2026, respectively.

HPMS technology is underpinned by approximately US$100 million of research and development funding, and has major competitive advantages versus other rare earth magnet recycling technologies, which are largely focused on chemical processes but do not solve the challenges of liberating magnets from end-of-life scrap streams - HPMS provides the solution.