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CoTec Increases Equity Stake in Maginito to 20.6% through Conversion of £2M Loan Note

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CoTec Increases Equity Stake in Maginito through Loan Note Conversion

CoTec Holdings Corp. and Mkango Resources Ltd. have announced that CoTec has converted its £2 million convertible loan note in Mkango into additional shares of Maginito Ltd., a subsidiary of Mkango. This conversion has increased CoTec's equity position in Maginito from 10% to 20.6%. Maginito, in turn, owns 100% of HyProMag Limited, which focuses on rare earth magnet recycling. This move is part of a broader cooperation agreement between CoTec and Maginito to pursue rare earth element opportunities in the United States.

The Joint Venture and Funding

CoTec and Mkango have agreed to form a 50:50 joint venture to roll out HyProMag's rare earth magnet recycling technology in the United States. CoTec will be responsible for funding the development costs of the project, with an expected funding range of £30 million to £50 million over the first three years post-completion of the feasibility study. CoTec and Mkango also anticipate seeking US government funding for the project.

The Innovative Recycling Technology

HyProMag's patented Hydrogen Processing of Magnet Scrap technology (HPMS) enables the recovery and recycling of rare earth magnets with significantly reduced energy consumption compared to primary mining. The technology has the potential to revolutionize the recycling and production of rare earth magnets, offering a more sustainable and environmentally friendly approach.
Ongoing Roll-Out and Future Outlook
The roll-out of the HyProMag technology in the United States is progressing, with scoping studies underway and discussions with the US government, potential customers, and recycling partners in progress. The roll-out will benefit from operational experience gained in the UK and Germany. Production is expected to commence in the UK in 2023 and in Germany in 2024, with revenue from the US operation targeted for 2025/2026. In conclusion, CoTec's increased equity stake in Maginito and the joint venture with Mkango demonstrate their commitment to advancing sustainable and innovative rare earth magnet recycling technology. This partnership has the potential to transform the rare earths sector and contribute to a greener future.

Implications of CoTec's Equity Increase in Maginito for New Businesses

CoTec's decision to increase its equity stake in Maginito through loan note conversion could have significant implications for new businesses in the rare earth elements sector. The move, which forms part of a broader cooperation agreement to pursue rare earth opportunities in the United States, demonstrates the potential value of strategic partnerships in accessing new markets and technologies. The joint venture between CoTec and Mkango to roll out HyProMag's rare earth magnet recycling technology in the United States underscores the importance of collaboration in driving innovation and market expansion. This could serve as a model for new businesses, encouraging them to seek partnerships to leverage complementary strengths and resources. Furthermore, the commitment to funding the development costs of the project highlights the critical role of financial investment in supporting innovation and growth. This could inspire new businesses to secure adequate funding to drive their growth strategies. Finally, the focus on sustainable and environmentally friendly technology reflects a growing trend in the industry. This could prompt new businesses to prioritize sustainability in their operations and product offerings to meet market demand and regulatory requirements. In conclusion, CoTec's strategic moves offer valuable insights for new businesses in the rare earth elements sector, emphasizing the importance of strategic partnerships, adequate funding, and sustainability.
Story First Published at: https://financialpost.com/globe-newswire/cotec-completes-conversion-of-2m-mkango-loan-note-to-increase-equity-position-in-maginito-from-10-per-cent-to-20-6-per-cent
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