Mkango reports positive cash position, progress on multiple fronts

(Sharecast News) - Mkango Resources said in its 2025 financial statements on Friday that it had a cash position of $3.1m as at 31 December.

After the year end, Mkango raised net proceeds of �11.7m, or about $15.5m, through the issue of 37,878,788 shares at 33p each.

The AIM-traded company said the technical report for Malawi's Songwe had been filed on SEDAR+ following the results of the updated feasibility study announced on 19 March.

It said the study gave Songwe a post-tax net present value of about $339m, using a 10% nominal discount rate, with an internal rate of return of 24%, a 3.4-year payback period from the start of full production and post-tax life-of-operations nominal cash flow of $1.55bn.

Mkango also highlighted progress across its rare earth magnet recycling and manufacturing projects in the UK, Germany and the United States.

In the UK, HyProMag produced its first recycled neodymium-iron-boron alloy powder from the commercial-scale Hydrogen Processing of Magnet Scrap vessel at Tyseley Energy Park in Birmingham in July 2025.

Mkango said 9.2 tonnes had been produced to date, of which 7.4 tonnes had been shipped to customers.

The Tyseley plant was officially opened in January by Chris McDonald, the UK minister for industry in the Department for Energy Security and Net Zero and the Department for Business and Trade.

Mkango said it was evaluating a phased capacity expansion from next year, initially to 100 to 350 tonnes per year of NdFeB alloys and magnets and subsequently to 1,000 tonnes per year.

HyProMag had also started pre-processing hard disk drives at Tyseley using an automated unit developed and manufactured by Inserma Anoia.

Mkango said the unit provided magnet feedstock for HPMS processing and created an opportunity for automated recovery of printed circuit board assemblies.

In Germany, HyProMag announced first commissioning runs of recycled NdFeB alloy powder from the commercial-scale HPMS vessel at its Pforzheim plant in April.

The site was fully permitted for production of up to 750 tonnes per year of NdFeB magnets and alloys.

It said the Pforzheim plant was officially opened on 28 April by Germany's Federal Ministry for Economic Affairs, with the ceremony presided over by Stefan Rouenhoff, parliamentary state secretary at the Federal Ministry for Economic Affairs and Energy.

Mkango said HyProMag had also been explicitly referenced in a UK-Germany joint statement on critical raw materials cooperation signed in Berlin on 27 April.

Once fully commissioned, the German plant was expected to have a minimum initial capacity of about 100 tonnes per year, rising to about 350 tonnes per year with multiple shifts.

A further expansion to a targeted 750 tonnes per year was under evaluation.

In the US, HyProMag USA signed a lease in December for its proposed rare earth magnet recycling and manufacturing facility in Dallas-Fort Worth, Texas.

The site was at the Ironhead Commerce Center, close to infrastructure including the BNSF intermodal rail link and Alliance airport.

Mkango said an updated Class 2 AACE capital cost estimate for HyProMag USA, completed as part of detailed engineering design and value engineering work, confirmed improved economics.

The project was estimated to have a post-tax NPV of $409m and real IRR of 27.6% based on current market prices, rising to $780m and 38.7% respectively using forecast market prices.

Concept studies for the expansion of the South Carolina and Nevada hubs were announced in January, which would increase total HyProMag USA magnet and alloy production capacity from 1,552 tonnes to 4,656 tonnes of NdFeB per year.

Mkango said the expanded developments had a post-tax NPV of more than $2bn and a real IRR of 38.7% based on forecast market prices, supporting the start of pre-feasibility studies.

It said HyProMag USA also entered into an agreement with electronics recycler Intelligent Lifecycle Solutions in July 2025 for feedstock supply and pre-processing site sharing in Nevada and South Carolina, with Inserma units commissioned in South Carolina in March.

On its upstream rare earth projects, Mkango said its subsidiary Mkango Rare Earth had confidentially submitted a draft Form F-4 registration statement to the US Securities and Exchange Commission in connection with its planned business combination with Crown PropTech Acquisitions.

The implied pro forma valuation of Mkango's shareholding in Mkango Rare Earth was $400m, excluding debt, closing cash, transaction expenses, certain sponsor and affiliate investments, any PIPE proceeds and amounts remaining in Crown PropTech's trust account.

Alongside the Songwe feasibility study update, Mkango also reported results in March for a pre-feasibility study on the proposed PuBawy rare earths separation plant in Poland.

PuBawy had a post-tax NPV of about $779m, using a 10% nominal discount rate, with an IRR of 40%, a 3.4-year payback period from the start of full production and post-tax life-of-operations nominal cash flow of $4.95bn.

Using Adamas Intelligence upside forecasts, Mkango said Songwe's post-tax NPV would increase to about $489m, with a nominal IRR of 29%, payback of 2.9 years and post-tax life-of-operations nominal cash flow of $2.04bn.

Under the same assumptions, PuBawy's expanded 100% neodymium-praseodymium separation case would rise to a post-tax NPV of about $892m, with a nominal IRR of 43%, payback of 1.89 years and post-tax life-of-operations nominal cash flow of $5.58bn.

Mkango Rare Earth also entered into a project development funding agreement with the US International Development Finance Corporation in September, securing $4.6m in reimbursable funding for Songwe.

The firm said the funding was expected to support front-end engineering and design and value engineering studies.

At 1054 BST, shares in Mkango Resources were down 4.09% at 44.6p.

Reporting by Josh White for Sharecast.com.

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