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Great stuff, hopefully they announce tomorrow morning along with the placing RNS. They do normally announce the grants via RNS, so can’t see why they wouldn’t in the morning.

Massive volume just after US open, encouraging.

Bid and ask are steadily rising, encouraging ahead of tomorrow.

GLR, there has been a fair bit of speculation around it potentially being GKN's discontinued RE magnet business GKN PM, which I understand has had 20m euros (£17.42m) invested in it. If the purchase is done through Maginito (which I assume it may be?), our share of the purchase is 79.4% of total purchase price, which would mean an uplift from £4.3m to £5.42m for the total acquisition price. Would they sell it for £5.42m, a discount of £12m? Possibly, it is a hefty discount but perhaps they don't have many other alternative buyers. Would Ionic also be interested in purchasing it given that they provided the feedstock for the pilot plant? Perhaps our existing German operations would give us an advantage here.

My understanding is that the assets only include a pilot plant at 400tpa scale and that the commercial plant they had planned was 10x larger at 4ktpa of magnets. For a firm like GKN the 400tpa scale would certainly be too small to continue on with as a standalone division, but it feels like a much more sensible scale for Hypromag to be operating at, particularly when you line it up with the scale of our other businesses. So, a 400tpa pilot plant, that did successfully produce some finished magnets. Perhaps it wouldn't require as much additional work or investment as some have assumed.

Over 16m share traded since the news of the placing (1st April onwards). That's approaching 50% of the total number of shares placed on the UK market. A large majority of these are buys. Feels like MM's have had a significant amount of placing shares to shift over the past few days, and are happy with a 2.5-7.5% spread on these, hence the buy price between high 33's and mid 35's. Assuming that a decent chunk of the shares have been taken by institutions and PI's who plan to hold them longer term, you would think that the MM's will soon run out of shares and we will move higher. I know quite a few of my friends have bought decent holdings at 34p-35p, not having been invested previously. Will be interesting to see what happens tomorrow.

Sorry I should say getting to the 750tpa capacity is less urgent

I don't think the machinery as it stands can produce up to 750tpa. We are doing a feasibility study on the potential expansion of machinery to 750tpa. The environmental permit we have for the Pforzheim site covers up to 750tpa. So if we wanted to go above that we would need to go through a new permitting process. The presentation timeline has German expansion to 750tpa slated for 2027, but it is a little unclear/ambiguous, as the text below doesn't include this in the 2027 box and instead includes it in the outlook box (which I take to mean 2028 and beyond).

I think you are right GLR, the focus should be to operate what we have at nameplate capacity and prove feedstock and offtake in UK/Germany prior to Hypromag USA listing, effectively polish our existing operations to make them as shiny as possible in order to maximise confidence and value of US listing. I'm sure we don't have over 350tpa of offtake lined up in Europe right now, so getting to that capacity is less urgent than the other objectives mentioned above.

Ah ok thanks Drantley. So Carlo has 20% ownership at the moment, but once the Maginito loan is converted to equity that will drop to 10%, and if Maginito then buy out his remaining 10% Mkango would effectively own ~79% through our ~79% holding of Maginito. You would think they might be clearer in their communication on this, rather than leave us to join the dots left in presentation footnotes…

Haha SG, that’s funny. But understandable given the company hasn’t exactly been clear in its communication on this, only providing a reference to a buy out in the footnote of a slide. Anyway, good to understand that it is likely their intention to buy out Carlo eventually, both through converting the loan to equity and through purchasing his residual shares. Even if they don’t buy out his remaining 10% I assume that he won’t be ponying up his share of the expansion capex and so his shareholding would be further diluted by Maginito providing that funding.

SG, think AI has got that wrong. The RNS does not say that the sintering furnace has been installed, just that it has been delivered and will be installed and commissioned sequentially.

Good news today, hopefully the commissioning of the rest of the equipment can be done in short order and commercial production is not far off.

SG, where is AI getting the information that we are buying out Carlo Burkhardt in full? I’ve had a look for references to this but haven’t found any so far. Based on my previous understanding, once we convert our loan into equity Maginito will directly own 90% of Hypromag Gmbh, with Carlo owning the remaining 10%. But AI seems to be referring to a 20% buy out in your earlier post. We know that the conversion of the loan was always intended to happen when it had been fully drawn and operational milestones had been hit, so I don’t think there was ever any sense that Carlo would be disgruntled. I am keen to understand though if there is any evidence suggesting that we also want to buy out the 10% stake he will still hold after the current loan is fully converted?

My non-AI understanding is that this is the contractual 180 days (90 + 90 days) obligation that they have is to confirm to Sovereign whether or not they want to be the operator of the mine, not the owner. But the view amongst investors, including Rick Rule and Charles Archer, is that if they decide to be the operator then they will want to own the whole project and therefore the decision to operate is an de facto decision to own 100% / buy out Sovereign.

Nice post GLR. Just arrived back from a week in Ireland for Easter to 23C and sunshine at home, and combined with a potential peace deal, I think there is plenty of room for optimism. Our worst case scenario was a Nasdaq listing in a highly risk off environment (although as you say, even at half the indicative value we would still be way above current market cap). That worst case scenario now looks less likely.

Q1 was supposed to be a quarter of delivery, and I hope that we now get this in Q2 instead. If they deliver even half of what we expect, the SP should be at least 100% higher than it is today, if they deliver on all of it we should be well north of £1. I'm assuming that we won't bounce much higher than mid 30's until Friday, when the new shares are issued. As others have said, feels like it is being held here until then to let in those who missed out on the placing. My confidence in management has been dented, but they have a massive runway now in front of them to earn back the trust of shareholders by delivering us massive value.

On your Cotec cashed up point, Cotec will need to be funding 20.6% of any Hypromag costs through their stake in Maginito, so when we say that the purchase price for German magnet manufacturer is £4.3m or the capex for Tyseley or Germany is £2.2m and £3.95m respectively, in my view this is only considering the 79.4% share that Mkango are on the hook for. So you can effectively add 25% to all three of those numbers for the all in cost, including that funded by Cotec.

Lots of interest on the bid in the closing auction, including 250k at 33.5p. Shows that some didn’t get the full allocation they wanted in the placing.

Hi velcro, great post, good to see you back on here. Sorry about the eyesight issues, good luck with the fix. All the best.

Hi Floyd, I read about this at the time. Chatting to AI about it at the time the view was that this potentially opened up an opportunity for Hypromag to step into. GKN would still be the ultimate customer for magnets, but have decided not to manufacture them themselves. Their magnet facility would only have been a customer for our RE oxide, rather than the finished magnets, now they will just be a customer for our finished magnets. This may tie in with the decision to purchase a German magnet manufacturer.

From what I have read, the PIPE financing should be at $10 a share, but again, let’s see how it plays out.

The PIPE financing will be additional MKAR equity, so if we raise $50m through it that will mean 5m new shares in MKAR. I agree that this doesn’t directly increase the $400m value of Mkango’s shares in MKAR, but you could argue that given that it unlocks US funding and gets us well on the way to FID, that it does actually increase the value of MKAR by more than just the amount raised, and therefore indirectly increases the valuation of Mkango’s MKAR shares. We will find out when the listing occurs and the market has its say.

Osebo, Mkango’s share of MKAR is valued at $400m in the BCA, not $320m. Crownproptech’s share is about $70m which is additional to the $400m. Are you risk adjusting for the potential that the SPAC doesn’t happen? If so, fair enough. But the $400m valuation of Mkango’s share is already risk adjusted for execution of the projects themselves (which have a combined NPV in excess of $1bn).

*Market cap

Osebo, from what I understand the listing market will be $470m or so (maybe more when Cohen and other fees are taken into account) + whatever we raise through the PIPE financing (I’m guessing around $50m). The shares will be valued at $10 but who knows where the will open at on the first day on the Nasdaq, that will depend on sentiment and investor appetite. So the value to Mkango will start at $400m before the listing, and any PIPE financing will be on the $400m/$10 share basis.