CoTec Completes Conversion of £2m Mkango Loan Note to Increase Equity Position in Maginito from 10 Per Cent to 20.6 Per Cent

LONDON, UK and VANCOUVER, BC / ACCESSWIRE / October 2, 2023 / CoTec Holdings Corp. (TSXV:CTH)(OTCQB:CTHCF) ("CoTec") and Mkango Resources Ltd. (AIM:MKA)(TSX-V:MKA) ("Mkango") are pleased to announce that CoTec has converted its £2 million convertible loan note in Mkango into additional shares of Mkango's subsidiary Maginito Ltd. ("Maginito"). As a result of the conversion, CoTec's equity position in Maginito has increased from 10 per cent to 20.6 per cent. Maginito owns 100% of HyProMag Limited ("HyProMag").

In February 2023, CoTec and Maginito entered into a co-operation agreement in relation to rare earth element ("REE") opportunities in the United States. In early September 2023, CoTec and Mkango entered into a binding letter agreement pursuant to which they have agreed to form a 50:50 joint venture (the "Joint Venture") to pursue the roll-out of HyProMag's innovative rare earth magnet recycling technology in the United States. If the Joint Venture proceeds with the construction of the US Project, CoTec will also be responsible for funding all the development costs of the US Project, with a total expected funding of £30 million to £50 million during the first three years post completion of the Feasibility Study, subject to results of the Feasibility Study. All funding provided by CoTec would be in the form of shareholder loans. CoTec and Mkango also expect that the Joint Venture will seek US government funding for the US Project.

HyProMag's patented Hydrogen Processing of Magnet Scrap technology ("HPMS") enables the recovery and recycling of rare earth magnets embedded in scrap sources such as electronic waste, electric motors and wind turbines using 88% less energy versus primary mining to separation to metal alloy to magnet production. HyProMag has the added capability to then remanufacture the recovered material into rare earth magnets with a significantly reduced carbon footprint. The HPMS technology, developed at the University of Birmingham, UK and licensed by HyProMag, has benefited from approximately $100 million in research and development funding.

As announced on 14 September 2023, the roll-out of the HyProMag technology in the US is continuing with ongoing scoping studies ahead of the commencement of the feasibility study. Discussions with the US Government, potential customers and recycling partners have commenced and are ongoing. The US roll-out will be completed in parallel with UK and German based developments and is expected to benefit from operational experience and production ramp-up in the UK and Germany. First production is expected in the UK in 2023 and in Germany in 2024. Revenue from the US operation is targeted for 2025/2026.