During the three months ended June 30, London-listed Mkango Resources continued to advance its recycling interests in the UK and Germany – held through its HyProMag subsidiary – towards commercial production in 2025.

In parallel, the company progressed the ongoing feasibility study for HyProMag USA.

The company is also reviewing strategic options for the Songwe Hill rare earths project and Pulawy rare earths separation project, in Malawi and Poland, respectively.

Discussions are ongoing with potential strategic investors, project finance providers, grant funding bodies and other sources, to support recycling scale-up opportunities and further technology roll-out.

During the period under review, Mkango Rare Earths UK successfully commissioned a pilot plant producing separated magnet rare earths (neodymium/praseodymium and dysprosium/terbium carbonates or oxides) via a long-loop recycling process.

A nonbinding memorandum of understanding was signed between HyProMag and Envipro Holdings to launch a collaboration on rare earth magnet recycling in Japan and the UK.

Mkango completed a fundraising of £750 000 ($955 000) in April, including a £150 000 (U$191 000) investment by Mkango CEO William Dawes.

Also, the company undertook a significant cost-cutting exercise in the quarter, and focused its activities on the recycling business, enabling a 35% reduction in ongoing operating cost requirements for the business.

The company reported a loss after tax for the quarter of $659 320, compared with a loss of $1.09-million reported for the June 2023 quarter.

SUBSEQUENT EVENTS
On July 15, the findings of the mid-project review for the bankable feasibility study for HyProMag USA were announced.

Canada-based BBA USA and US-based PegasusTSI have been engaged to complete the feasibility study and to engineer and design rare earth element magnet recycling plants and a production facility in the US.

With completion of the US feasibility study expected by the end of the year, a positive production decision in the first half of 2025 is expected to result in initial revenue from HyProMag USA in the second half of 2026.

In late July, British Virgin Islands company Lancaster Exploration and Malawi company Lancaster Exploration ‒ both 100%-owned subsidiaries of Mkango ‒ and the government of Malawi signed the mineral development agreement for the Songwe Hill project.

This is expected to enable further value to be unlocked from the Songwe Hill and Pulawy rare earth separation plant projects as part of the company’s ongoing evaluation of strategic options for these assets.

The feasibility study for Songwe Hill, and subsequent work, identified a number of areas for potential cost optimisation. The company continues to evaluate these and other cost-reduction opportunities in light of the currently weak rare earth market pricing environment.

NEAR-TERM CATALYSTS
Mkango expects to take a production decision on the HyProMag USA operation during the first half of 2025.

The scope of operations comprises a hub and spoke model, with three hydrogen processing of magnet scraps (HPMS) spokes and one magnet manufacturing hub to be located in Texas in the US.

Further, full commissioning of the short-loop HPMS recycling plant in the UK and initial commercial sales of neodymium magnets by HyProMag are targeted for the first quarter of 2025.

HyProMag Germany's first commercial production is targeted for 2025.

FUNDING
Subsequent to quarter end, the company announced several financing arrangements.

On August 21, it conditionally raised gross proceeds of £1.25-million (about $1.58-million) through the issuance, on a private placement basis, of 25-million units of the company.

This placing will allow the company to acquire additional equipment for the 2025 commercial development of HyProMag’s rare earth magnet recycling operations at Tyseley Energy Park, in Birmingham, in the UK, and its recycling operation at Pforzheim, Germany, in addition to increasing working capital.

On August 21, EIT RawMaterials provided funding of €200 000 (about $214 111).

This will fund the start of process optimisation for the Songwe Hill project.

Following the £1.25-million ($1.58-million) raised in August from existing shareholders and the investment from EIT, Mkango posits that it remains well positioned to cement its position and early mover advantage in rare earth magnet recycling.

On August 29, it was announced that HyProMag Germany was also participating in the €8-million grant-funded GREENE project, of which HyProMag Germany would receive €350 125.