TIDMMKA
RNS Number : 1209I
Mkango Resources Limited
03 August 2023
MKANGO RESOURCES LTD.
COTEC HOLDINGS CORP.
550 Burrard Street
755 Burrard Street
Suite 2900
Suite 428
Vancouver
Vancouver
BC V6C 0A3
V6Z 1X6
Canada
Canada
MAGINITO COMPLETES ACQUISITION OF PIONEERING RARE EARTH MAGNET
RECYCLER HYPROMAG
HIGHLIGHTS:
-- Maginito (Mkango 90%; CoTec 10%) completes transaction to
increase its ownership in HyProMag to 100%
- GBP1 million (C$1.7 million) cash consideration, funded from
existing working capital in Maginito; and
- 9,742,031 Mkango shares equivalent to GBP1m (C$1.7m) at a price per share of 10.26 pence
-- Maginito targeting first production from the UK in 2023 and
Germany in 2024, with parallel technology roll-out into the US
London / Vancouver: August 3, 2023 - Mkango Resources Ltd.
(AIM/TSX-V: MKA) (the "Company" or "Mkango") is pleased to announce
that, further to the previous announcement on May 16, 2023,
Maginito Limited ("Maginito") has completed the transaction to
increase its ownership in HyProMag Limited ("HyProMag") to 100% for
a cash and share consideration (the "Transaction").
The consideration payable to the selling HyProMag shareholders
(the "Vendors") comprises GBP1m (C$1.7m) in cash and the issue of
9,742,031 Mkango common shares (the "Consideration Shares")
equivalent to GBP1m (C$1.7m) at a price equal per share to 10.2648
pence based on the volume weighted average price of a Mkango common
share on the AIM Market of the London Stock Exchange ("AIM") for
the 10 business days ended on May 14, 2023, being the date prior to
the date of the share purchase agreement.
In addition, up to a further GBP3m (C$5.1 m) may be payable to
the Vendors in four tranches, either in cash or in Mkango common
shares (at Mkango's option), conditional upon the achievement by
HyProMag of certain production milestones in the period to 30 June
2026. The Consideration Shares are subject to a one-year lock up
(which includes the four month plus one day statutory hold period
applicable in Canada, which expires on December 3, 2023) and the
shares which may be issued on milestones will have a six-month lock
up (and a statutory hold period applicable in Canada, which will
expire four months plus one day after issuance, if any).
Mkango has closed the Transaction as an "Expedited Acquisition"
under applicable rules of the TSX Venture Exchange (the "TSX-V").
Mkango intends to seek TSX-V approval for the Transaction in
accordance with the rules applicable to Expedited Acquisitions.
Under the terms of the Transaction, if Maginito is listed on a
recognised stock exchange, Mkango is entitled to transfer shares of
Maginito held by Mkango equivalent in value to the milestone
payments (instead of issuing Mkango shares) to the Sellers, upon
the attainment of the milestones.
Admission to trading on AIM and Total Voting Rights
Application has been made for the Consideration Shares, which
will rank pari passu with the existing common shares of no par
value each ("Common Shares") of the Company, to be admitted to
trading on AIM ("Admission") and it is expected that Admission of
the Consideration Shares will become effective and dealings will
commence at 8:00 a.m. BST on or around August 4, 2023.
Following the issue of these Placing Shares, the total issued
share capital of the Company will consist of 253,172,896 Common
Shares. The Company does not hold any Common Shares in Treasury.
Therefore, the total current voting rights in the Company following
Admission will be 253,172,896 and this figure may be used by
shareholders in the Company as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change in their interest in, the share capital of
the Company under the FCA's Disclosure Guidance and Transparency
Rules.
Maginito
Maginito is focused on developing green technology opportunities
in the rare earths supply chain, encompassing neodymium (NdFeB)
magnet recycling as well as innovative rare earth alloy, magnet,
and separation technologies.
As a result of completion of the Transaction, Maginito holds a
100% interest in HyProMag focused on short loop rare earth magnet
recycling in the UK, a 90% direct and indirect interest (assuming
conversion of Maginito's recently announced convertible loan) in
HyProMag GmbH, a company focused on short loop rare earth magnet
recycling in Germany, and a 100% interest in Mkango Rare Earths UK
Ltd ("Mkango UK"), a company focused on long loop rare earth magnet
recycling in the UK via a chemical route. A new US subsidiary, to
be jointly owned by Maginito and CoTec, is expected to be formed to
develop rare earth recycling opportunities in the United
States.
In March 2023, CoTec invested GBP1.5 million (C$2.6 million)
into Maginito, and Maginito and CoTec agreed to collaborate on the
commercialisation of downstream rare earth technologies in the
United States. Mkango UK was at the same time transferred to become
a subsidiary of Maginito. In connection with CoTec's investment,
John Singleton, Chief Operating Officer of CoTec, was appointed to
the Board of Maginito.
HyProMag
HyProMag was founded in 2018 by the late Professor Emeritus Rex
Harris, former Head of The Magnetic Materials Group ("MMG") within
the School of Metallurgy and Materials at the University of
Birmingham ("UoB"), Professor Allan Walton, current Head of the
MMG, and two Honorary Fellows, Dr John Speight and Mr David
Kennedy, leading world experts in the field of rare earth magnetic
materials, alloys and hydrogen technology, with significant
industry experience. The HPMS process for extracting and
demagnetising NdFeB alloy powders from magnets embedded in scrap
and redundant equipment was originally developed within the MMG and
subsequently licenced to HyProMag. The MMG has been active in the
field of rare earth alloys and processing of permanent magnets
using hydrogen for over 40 years. Originated by Professor Emeritus
Rex Harris, the hydrogen decrepitation method, which is used to
reduce NdFeB alloys to a powder, is now ubiquitously employed in
worldwide magnet processing.
Under the terms of the Transaction, the founding Directors and
management of HyProMag will continue to provide support and work
closely with Maginito to further scale-up and roll-out the HPMS
technology.
HyProMag is establishing short loop recycling facilities for
NdFeB magnets at Tyseley Energy Park in Birmingham, UK and other
locations using the patented HPMS process to provide a sustainable
solution for the supply of NdFeB magnets and alloys for a wide
range of markets including, for example, automotive and
electronics. Short loop magnet recycling is expected to have a
significant environmental benefit, requiring an estimated 88% less
energy versus primary mining to separation to metal alloy to magnet
production . The plant at Tyseley Energy Park is being developed
together with the UoB, with a minimum capacity of 100tpa NdFeB
(neodymium, iron, boron). This GBP4.3 million (C$7.3 million)
project is being funded by Driving the Electric Revolution, an
Industrial Strategy Challenge Fund challenge delivered by UK
Research and Innovation ("UKRI"). The focus of the project is to
take the HPMS technology to a greater scale and efficiency with
revolutionary new design of processing equipment and extensive
automation of processing methods for inert atmosphere powder
handling and pressing. HyProMag is the primary industrial user and
operator of the plant. First production is targeted for late 2023,
which follows successful piloting at the UoB in 2022 as featured on
BBC Midlands News: https://youtu.be/9P-dsNCffWw .
HyProMag GmbH
In November 2021, HyProMag established an 80%-owned subsidiary
in Germany, HyProMag GmbH, to roll out commercialisation of HPMS
technology into Germany and Europe. The remaining 20% equity
interest is owned by Professor Carlo Burkhardt of Pforzheim
University.
HyProMag GmbH is developing a similar sized plant to that at
Tyseley Energy Park and will be the first in Germany using the
patented HPMS process. First production is targeted for 2024.
Maginito has entered into a convertible loan agreement (the
"Convertible Loan") with HyProMag GmbH. Under the terms of the
Convertible Loan, Maginito has granted HyProMag GmbH a loan
facility for EUR2.5 million (C$3.7 million) available to be drawn
down in accordance with an agreed investment plan. Upon conversion
of the Convertible Loan, Maginito's direct and indirect equity
interest in HyProMag GmbH will increase from 80% to 90%.
This investment by Maginito will contribute to the matched
funding requirements to unlock the EUR3.7 million (C$5.40 million)
grants announced by Mkango on November 23, 2022, for development of
the production facility in Baden-Württemberg State.
About Mkango Resources Ltd.
Mkango's corporate strategy is to develop new sustainable
primary and secondary sources of neodymium, praseodymium,
dysprosium and terbium to supply accelerating demand from electric
vehicles, wind turbines and other clean technologies. This
integrated Mine, Refine, Recycle strategy differentiates Mkango
from its peers, uniquely positioning the Company in the rare earths
sector. Mkango is listed on the AIM and the TSX-V.
Mkango is developing its flagship Songwe Hill rare earths
project ("Songwe") in Malawi with a Definitive Feasibility Study
completed in July 2022 and an Environmental, Social and Health
Impact Assessment approved by the Government of Malawi in January
2023. Malawi is known as "The Warm Heart of Africa", a stable
democracy with existing road, rail and power infrastructure, and
new infrastructure developments underway.
In parallel, Mkango and Grupa Azoty PULAWY, Poland's leading
chemical company and the second largest manufacturer of nitrogen
and compound fertilizers in the European Union, have agreed to work
together towards development of a rare earth separation plant at
Pulawy in Poland (the "Pulawy Separation Plant"). The Pulawy
Separation Plant will process the purified mixed rare earth
carbonate produced at Songwe Hill.
Through its ownership of Maginito ( www.maginito.com ), Mkango
is also developing green technology opportunities in the rare
earths supply chain, encompassing neodymium (NdFeB) magnet
recycling as well as innovative rare earth alloy, magnet, and
separation technologies.
Mkango also has an extensive exploration portfolio in Malawi,
including the Mchinji rutile exploration project, the Thambani
uranium-tantalum-niobium-zircon project and Chimimbe nickel-cobalt
project.
For more information, please visit www.mkango.ca
About CoTec Holdings Corp.
CoTec is a publicly traded investment issuer listed on the TSX-V
under the ticker CTH, and the OTCQB under the ticker CTHCF. The
company is an ESG-focused company investing in innovative
technologies that have the potential to fundamentally change the
way metals and minerals can be extracted and processed for the
purpose of applying those technologies to undervalued operating
assets and recycling opportunities, in rare earths, low carbon iron
ore (green steel) and copper as the company seeks to transition
into a mid-tier mineral resource producer. CoTec is committed to
supporting the transition to a lower carbon future for the
extraction industry, a sector on the cusp of a green revolution as
it embraces technology and innovation.
For more information, please visit www.cotec.ca .
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ('MAR') which has
been incorporated into UK law by the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement via Regulatory
Information Service, this inside information is now considered to
be in the public domain.
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 and CoTec. Generally, forward looking statements
can be identified by the use of words such as "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, the availability of (or delays in
obtaining) financing to develop Songwe Hill, the Tyseley Recycling
Plant, the HyProMag GmbH Recycling Plant, the Mkango UK Pilot
Plant, the Pulawy Separation Plant, 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
Maginito's 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
Tyseley Recycling Plant, the HyProMag GmbH Recycling Plant, the
Mkango UK Pilot Plant, the Pulawy Separation Plant and future
investments in the United States pursuant to the proposed
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 and
CoTec disclaim 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 and CoTec undertake 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
@MkangoResources
SP Angel Corporate Finance LLP
Nominated Adviser and Joint Broker
Jeff Keating, Kasia Brzozowska
UK: +44 20 3470 0470
Alternative Resource Capital
Joint Broker
Alex Wood, Keith Dowsing
UK: +44 20 7186 9004/5
Bacchus Capital Advisers
Financial Adviser
Richard Allan
UK: +44 203 848 1642
UK: +44 7857 857 287
richard.allan@bacchuscapital.co.uk
Tavistock Communications
PR/IR Adviser
Jos Simson, Cath Drummond
UK: +44 (0) 20 7920 3150
mkango@tavistock.co.uk
For further information on CoTec, please contract:
CoTec Holdings Corp.
Braam Jonker
Chief Financial Officer
braam.jonker@cotec.ca
Canada: +1 604 992-5600
The TSX Venture Exchange has neither approved nor disapproved
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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
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ACQNKBBKABKDPFK
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