(Alliance News) - Mkango Resources Ltd on Tuesday said planning for the US feasibility study for its joint venture with CoTec Holdings Corp, HyproMag Ltd, has started, with completion targeted for mid-2024.
Mkango is a Vancouver-based mineral exploration and development company and CoTec is a Vancouver-based company focused on acquiring mineral extraction technologies. Hypromag is a wholly owned subsidiary of Maginito Ltd, which is 79% owned by Mkango and 21% owned by CoTec.
Last month, the companies announced they were partnering up for the roll-out of HyProMag's rare earth magnet recycling technology.
The companies are proposing a modular, hub and spoke model, with the initial deployment of three hydrogen processing of magnet scrap recycling vessels at the spokes and a central hub comprising of rare earth alloy and magnet manufacturing, explained Mkango.
CoTec will fund the initial operations for the JV, which includes the costs of the feasibility study, and if the JV proceeds, CoTec will also fund GBP30 million to GBP50 million in developing costs.
Potential operation scenarios could target earnings before interest depreciation and amortisation margins of between 35% and 40%, Mkango said.
Mkango Chief Executive Officer Will Dawes said: "We are very excited about opportunities for growth in the United States and look forward to working with CoTec and HyProMag as we continue to scale-up and roll-out the HPMS rare earth magnet recycling technology. HPMS has potential to unlock the supply chain for rare earth magnet recycling and it's fantastic to see this UK developed, homegrown, innovative technology continuing to gain traction internationally."
Shares in Mkango were down 2.0% at 8.33 pence each in London on Tuesday afternoon.
By Sabrina Penty, Alliance News reporter
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Mkango Res (MKA)