Mkango's Q3 Results Highlight Progress at US, UK Rare Earths Plants

Canadian rare earths company Mkango Resources (TSXV:MKA) has released its third quarter financial results, spotlighting the progress of its US-based HyProMag USA rare earth recycling project.

HyProMag USA is focused on rare earth magnet recycling and manufacturing in Texas, representing a key component of Mkango’s efforts to meet the growing demand for sustainable rare earth materials. The project is owned by Maginito, Mkango's 79.4 percent owned joint venture with partner CoTec Holdings (TSXV:CTH,OTCQB:CTHCF).

A feasibility study for the project, released on November 25, revealed a post-tax net present value of US$262 million and a 23 percent internal rate of return at current rare earth prices, demonstrating the project’s economic viability even under conservative market conditions. At forecast market prices, it reported an NPV of US$503 million and an IRR of 31 percent.

The facility is targeting its first revenue generation in the first quarter of 2027, with a notice to proceed expected in mid-2025 following the completion of detailed engineering.

This phase of the project will be supported by CoTec, which is funding the initial engineering work.

On the financial aspect, the company reported a cash balance of US$2 million following a successful capital raise of GBP 1.25 million in early September and subsequent grant funding.

With its current footing, the company is seeking to advance its rare earth magnet recycling and manufacturing operations in the United Kingdom, Germany and the United States, alongside ongoing rare earth exploration and development activities in Malawi and Poland.

In the UK, the company is commissioning its scaled-up rare earths plant at Tyseley Energy Park in Birmingham, which remains on track for completion in April 2025. The facility will use Mkango’s patented Hydrogen Processing of Magnet Scrap (HPMS) technology, developed in partnership with the University of Birmingham, to recycle and manufacture rare earth magnets.

Magnet presses have already been commissioned, and the powder processing plant has been constructed, with infrastructure development underway.

HyProMag GmbH, Mkango’s German subsidiary, is similarly advancing its operations near Pforzheim.

Equipment for the plant, including sintering furnaces, magnet presses and HPMS vessels, has been ordered, with the facility expected to commence production in 2025.

Mkango is also progressing its mining and separation projects in Malawi and Poland, respectively. The advanced Songwe Hill rare earths project project, in particular, represents a critical component of Mkango’s strategy to vertically integrate mining and recycling operations to meet the growing demand for rare earth elements in clean energy technologies.

In July, the company executed a mining development agreement with the government of Malawi for the project. According to the Q3 report, Mkango has now completed strategic review of the Songwe Hill project and the Pulawy separation project.

For its long-term outlook, Mkango continues to prioritize the development of sustainable rare earth recycling and manufacturing to meet accelerating global demand for neodymium, praseodymium, dysprosium, and terbium.

These elements are vital for the manufacture of electric vehicles, wind turbines and other technologies central to the energy transition.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.