Mkango Resources (MKA)

Sector:

Mining

Index:

FTSE AIM All-Share

 19.75p
   
  • Change Today:
      0.000p
  • 52 Week High: 37.50
  • 52 Week Low: 18.50
  • Currency: UK Pounds
  • Shares Issued: 215.21m
  • Volume: 0
  • Market Cap: £42.50m

Mkango's Magninito inks deal with magnet recycling pioneer HyProMag

By Josh White

Date: Monday 23 Sep 2019

LONDON (ShareCast) - (Sharecast News) - Mkango Resources announced on Monday that its majority-owned subsidiary Maginito has signed an investment term sheet and one-year exclusivity agreement with HyProMag - a private company focused on rare earth magnet recycling.
The AIM-traded firm owns 75.5% of Maginito, which was currently completing a feasibility study for the Songwe Hill rare earths project in Malawi, with 24.5% owned by technology metals investment and development company Talaxis, which is a wholly-owned subsidiary of Noble Group.

It said that, consistent with Maginito's strategy, the rationale for the transaction included potential synergies including the blending of primary production originating from Songwe with recycled production from HyProMag, as well as enhanced marketing flexibility and access to downstream markets for rare earth permanent magnets, which Mkango described as "critical materials" for electric vehicles, wind turbines, consumer electronics and other technology applications.

HyProMag had licensed a patented process for extracting and demagnetising neodymium iron boron (NdFeB) alloy powders from magnets embedded in scrap and redundant equipment, dubbed 'Hydrogen Processing of Magnet Scrap' (HPMS), which was originally developed within the Magnetic Materials Group at the University of Birmingham.

The company said that, subject to completion of definitive agreements and due diligence, Maginito would invest £0.3m for an initial 25% interest in HyProMag, and provide a £0.2m convertible loan facility, both of which would be fully funded from its existing cash resources.

Maginito would have an option to increase its interest in HyProMag to up to 49%, and possess the first right to supply any primary rare earth raw materials for blending with recycled materials, if required, and to market the magnetic end products.

Mkango explained that the founding directors of HyProMag - Rex Harris, Allan Walton, Dr John Speight and David Kennedy - were considered "leading world experts" in the field of rare earth magnetic materials, alloys and hydrogen technology, and had "significant" industry experience.

Maginito's initial investment of £0.3m would fully satisfy HyProMag's matched funding requirements for the three year, £2.6m Innovate UK grant funded project, titled 'Rare-Earth Recycling for E-Machines', which aimed to establish a pilot rare earth magnet recycling facility at Tyseley Energy Park in Birmingham, and included Advanced Electrical Machines Research and the University of Birmingham as collaborators.

Mkango said further details would be provided on the transaction and on HyProMag following completion of due diligence and the execution of definitive agreements, adding that in consideration for exclusivity, Maginito had paid £20,000 to HyProMag.

"We are very pleased to be working with the leading team and university in the field of magnetic materials," said Mkango Resources chief executive officer William Dawes.

"We believe that rare earth magnet recycling and primary production will play complementary roles in the development of a sustainable electric vehicle supply chain and we see clear synergies with the development of Mkango's advanced stage Songwe Hill rare earths project in Malawi."

Professor Allan Walton, director of HyProMag, explained that in recent years the rare earth materials which were used in permanent magnets had come under "considerable" supply constraints.

"At the same time there is very little recycling of these materials partly due to the technological challenges for efficiently separating magnets from end of life products.

"This investment in HyProMag will exploit HPMS in order to provide a secure supply of rare earth alloys with a very low environmental footprint," Walton said.

"The strategic alliance with Mkango has future potential for supplementing and enhancing products with additional independent supply chains."

Daniel Mamadou, executive director of Talaxis, added that his company was "excited" to be partnering with HyProMag and Mkango on the "ground-breaking project" that he said had the potential to "revolutionise" rare earths magnet recycling for the electric vehicle market.

"The investment is an excellent strategic fit with Talaxis' technology metals portfolio, strengthening our position in the rare earths supply chain and underlining our commitment to decarbonisation and sustainability."

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MKA Market Data

Currency UK Pounds
Share Price 19.75p
Change Today 0.000p
% Change 0.00 %
52 Week High 37.50
52 Week Low 18.50
Volume 0
Shares Issued 215.21m
Market Cap £42.50m

MKA Star Ratings

Compare performance with the sector and the market.
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Key: vs Market vs Sector
Value
56.37% below the market average56.37% below the market average56.37% below the market average56.37% below the market average56.37% below the market average
46.77% below the sector average46.77% below the sector average46.77% below the sector average46.77% below the sector average46.77% below the sector average
Price Trend
3.52% below the market average3.52% below the market average3.52% below the market average3.52% below the market average3.52% below the market average
11.11% above the sector average11.11% above the sector average11.11% above the sector average11.11% above the sector average11.11% above the sector average
Income Not Available
Growth Not Available

MKA Dividends

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MKA Key Personnel

CEO William (Will) Drummond Dawes

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