RE: European Raw Materials Week, Brussels21 Nov 2025 13:37
Sorry to hear about your losses on BMN. I remember being invested there briefly at 3p, but not for long and thought I'd missed out on the rise when things went well, before the problems. I certainly wouldn't say that an AI induced market crash will have no impact on Mkango. I just disagree with your original post on the nature of that effect.
A general market crash would, all else being equal, reduce our SP (at least in the short term) and would impact the valuation of MKAR, something I discussed on this board earlier this week. Even if the valuation of MKAR crashed by 50% to $200m (which I think unlikely given the indicative valuation was carried out before the DoW/MP deal, the increase in RE prices, the US IDFC support and the run up in RE stocks), the whole business (including Hypromag) is currently trading at less than this value.
A crash would impact the price we could raise at on AIM, though it is not a surety that we will need substantive future raises as our UK and German plants become revenue generating and we don't have substantive outgoings at the Mkango level (salaries in shares, Cotec responsible for funding Hypromag US, US IDFC grant for Songwe development). But if we do need to raise, we would likely be looking at £2-3m, which is currently dilution of between 1.3-2.1%, so not material.
I say all else being equal, because we have lots of upcoming catalysts which are likely to cause us to re-rate. We have funded and built two Hypromag plants, and have potential US government support (through EXIM) for at least a third one in Texas, so we are not at the whim of the market / commercial lenders who's funding will dry up in the event of a crash.
If we were earlier stage, like some US RE companies, then I would agree that we would be in a more precarious position. But in my view, the management has already spent the years putting in the wilderness, putting in the hard graft to build and diversify the company, and I think we are now at the point where this has started to bear fruit. A crash would set us back, certainly in the short term, but it is unlikely to change the long term outcome imo.
The West needs rare earths. We have the tech that produces magnets at the cheapest cost outside of China and we have on our team, the leading RE magnet experts outside of China. This is what will drive our success.
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