Maginito Completes Acquisition of Pioneering Rare Earth Magnet Recycler Hypromag

HIGHLIGHTS:

• Maginito (Mkango 90%; CoTec 10%) completes transaction to increase its ownership in HyProMag to 100%
• £1 million (C$1.7 million) cash consideration, funded from existing working capital in Maginito; and
• 9,742,031 Mkango shares equivalent to £1m (C$1.7m) at a price per share of 10.26 pence
• Maginito targeting first production from the UK in 2023 and Germany in 2024, with parallel technology roll-out into the US

LONDON, UK / VANCOUVER, BC / ACCESSWIRE / August 3, 2023 / Mkango Resources Ltd. (AIM/TSX-V: MKA) (the "Company" or "Mkango") is pleased to announce that, further to the previous announcement on May 16, 2023, Maginito Limited ("Maginito") has completed the transaction to increase its ownership in HyProMag Limited ("HyProMag") to 100% for a cash and share consideration (the "Transaction").

The consideration payable to the selling HyProMag shareholders (the "Vendors") comprises £1m (C$1.7m) in cash and the issue of 9,742,031 Mkango common shares (the "Consideration Shares") equivalent to £1m (C$1.7m) at a price equal per share to 10.2648 pence based on the volume weighted average price of a Mkango common share on the AIM Market of the London Stock Exchange ("AIM") for the 10 business days ended on May 14, 2023, being the date prior to the date of the share purchase agreement.

In addition, up to a further £3m (C$5.1 m) may be payable to the Vendors in four tranches, either in cash or in Mkango common shares (at Mkango's option), conditional upon the achievement by HyProMag of certain production milestones in the period to 30 June 2026. The Consideration Shares are subject to a one-year lock up (which includes the four month plus one day statutory hold period applicable in Canada, which expires on December 3, 2023) and the shares which may be issued on milestones will have a six-month lock up (and a statutory hold period applicable in Canada, which will expire four months plus one day after issuance, if any).

Mkango has closed the Transaction as an "Expedited Acquisition" under applicable rules of the TSX Venture Exchange (the "TSX-V"). Mkango intends to seek TSX-V approval for the Transaction in accordance with the rules applicable to Expedited Acquisitions.

Under the terms of the Transaction, if Maginito is listed on a recognised stock exchange, Mkango is entitled to transfer shares of Maginito held by Mkango equivalent in value to the milestone payments (instead of issuing Mkango shares) to the Sellers, upon the attainment of the milestones.