Mid-project Update For Hypromag Usa

MID-PROJECT UPDATE FOR HYPROMAG USA FEASIBILITY STUDY

London / Vancouver: July 15, 2024 - CoTec Holdings Corp. (TSXV: CTH; OTCQB: CTHCF) ("CoTec") and Mkango Resources Ltd. (AIM/TSX-V: MKA) ("Mkango") are pleased to announce the findings of the mid-project review for the bankable feasibility study ("Feasibility Study") for HyProMag USA, LLC, a Delaware corporation ("HyProMag USA"). Canada-based BBA USA Inc. ("BBA") and U.S.-based PegasusTSI Inc. ("PegasusTSI") have been engaged to complete the HyProMag USA bankable Feasibility Study to engineer and design its REE magnet recycling plants and a production facility in the United States.

The Feasibility Study will be completed during Q4, 2024. HyProMag USA has the potential to supply the U.S. market with a sustainable, long term domestic supply of neodymium/iron/boron (NdFeB) permanent magnets to enable the creation of secure, low carbon and traceable rare-earth supply chains.

The key findings are:

Feasibility Study is now 50 per cent complete:

o Technology and design requirements for HyProMag's ongoing commissioning of the Tyseley facility in the UK, and associated pilot plant design and operating criteria have been successfully transferred to the U.S.-based Feasibility Study

Production:

o Targeted production capacity of a minimum of 500 tonnes per annum NdFeB magnets with the option to expand to 800 tonnes per annum NdFeB magnets production

o Opportunities to produce a range of additional NdFeB alloy products such as alloy powders, pellets and strip cast flakes are also being considered, as well as the recycling of swarf

Project Definition Rating Index ("PDRI"):

o Level of definition is more than sufficient to complete the current Feasibility Study and move to the Detailed Design following the completion of the current study phase

Value engineering:

o Design, layout and critical equipment sourcing have been challenged for reliable and cost-effective project implementation

o Identified opportunities to further optimize the project

Capital estimate:

o Association for the Advancement of Cost Engineering (AACE) Class 3 estimate to be confirmed in Q4 2024 with the completion of the Feasibility Study

Site selection:

o Four short-listed 'hub' site options located in Fort Worth, Texas have been identified. Approximate size of the hub site is 90,000 sq. ft

o Request for Proposal (RFP) process for Fort Worth has commenced to select preferred choice. Final site selection to be completed in Q4 2024

o Initial 'spoke' facilities targeting sites in South Carolina and Nevada

Permitting:

o Baseline permitting for the Fort Worth, Texas 'hub' facility to commence in Q1 2025. Completion of permitting is expected within nine months

Project Schedule:

o Notice to proceed targeted in Q1 2025

o First U.S. magnet production targeted in H2 2026

Supply and off take:

o High-level engagement with potential feed supply and product off takers providers has commenced

Funding:

o Focused discussions with U.S. Federal and State Government bodies to support funding and incentive opportunities have been launched

Julian Treger, CoTec CEO commented: "We are very pleased with the progress of the Feasibility Study, the learnings from HyProMag's facilities in the UK and Germany have been invaluable to PegasusTSI and BBA and support an accelerated project schedule targeting first magnets in H2 2026. In parallel with the Feasibility Study, the company is now focused on securing funding from the U.S. Government. HyProMag USA's proposed U.S. facility fully meets the requirements of the U.S. Defence Production Act (DPA) Title III to provide a secure, long-term, commercial-scale magnet recycling and production facilities in the United States. HyProMag USA is supported by the Minerals Security Partnership[1] which aims to accelerate the development of secure, diverse and sustainable supply chains for critical minerals. As the Feasibility Study progresses, HyProMag USA will be adding resources to support the production roll out. We are very excited the business can be used as a platform to support the revitalizing of U.S. magnet production, metallization and skills development in the United States, a strategic priority for the U.S. Government."

Will Dawes, Mkango CEO commented: "The mid-project review has further highlighted the opportunity we have in the United States and we are very excited to see the HyProMag USA Feasibility Study progressing on track. The plant design has significant embedded optionality and opportunities to process and produce a wide range of feeds and NdFeB products, respectively, complementing the growing cluster of rare earth processing and manufacturing in Texas. This development provides a strong platform for growth in North America, underpinned by HyProMag's HPMS recycling technology, which provides the solution for unlocking the supply chain for rare earth magnet recycling."

HyProMag USA plans to develop a low cost, low carbon, sustainable rare earth magnet recycling and production business underpinned by HyProMag Limited's patented Hydrogen Processing of Magnet Scrap ("HPMS") recycling technology. HyProMag has sublicenced the HPMS technology to HyProMag USA, which is 50:50 per cent owned by CoTec and Maginito.

The Feasibility Study will be based on a hub-and-spoke model using three HPMS vessels and one magnet manufacturing hub which will based in Fort Worth, Texas (together the "U.S. Project"). The Feasibility Study will include the completion of sufficient engineering design works to support a AACE Class 3 capital estimate, as well as final site selection to be completed in Q4 2024 and site permitting completed by Q4 2025 in line with the initial project schedule. This targets initial revenue in H2 2026. Environment and permitting studies will be supported by U.S.-based Weston Solutions, Inc.

Following completion of the Feasibility Study, CoTec and Mkango will make a joint decision in H1 2025 as to whether HyProMag USA will proceed with the construction of the U.S. Project. CoTec is responsible for funding the Feasibility Study and the project development costs. Funding provided by CoTec would be in the form of shareholder loans to HyProMag USA.

In parallel, HyProMag USA is working on securing U.S. Government funding, U.S. State financial grants and incentives and strategic partnerships with U.S. companies for feed supply and recycled NdFeB magnet offtake.

HyProMag is commercialising HPMS recycling technology in the UK, Germany and United States. HyProMag is also evaluating other jurisdictions, and recently launched a collaboration with Envipro on rare earth magnet recycling in Japan. HPMS technology was developed at the University of Birmingham, 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 this solution.

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CoTec Holdings Corp.

Braam Jonker

Chief Financial Officer

Canada: +1 604 992-5600