Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF), the rare earth miner, is hoping to achieve production from its rare earth recycling venture by the end of this year.
The group said it is targeting production in the UK by the fourth quarter of 2023 and sometime in 2024 for operations in Germany, according to a trading update.
HyProMag, which uses Hydrogen Processing of Magnet Scrap (HPMS) to recycle rare earths, became 100% owned by Mkango’s subsidiary Maginito in August.
CoTec, a strategic ESG-focused partner of Mkango, is working with the group on a 50/50 venture to help bring HPMS technology to the US.
Other partners or strategic relationships are being explored by the Canadian mining firm.
Additionally, the AIM-listed company is working on fleshing out a Mine Development Agreement (MDA) with the Government of Malawi to continue operations at the Songwe Hill rare earths project.
Mkango said a US$1 million investment and sale of US$1 million worth of Mkango shares to fund the HyProMag acquisition, as well as an agreement over a loan to acquire the recycling vehicles German business, had led to an increase in expenditure.
Post-tax losses in the nine months to 30 September increased to US$1.5 million compared to US$1.1 million a year prior.
Cash was at US$2.2 million by the end of September compared to US$493,000 at the start of 2023.
The increase in funds was largely due to a US$4 million share and placing fundraise in February this year, and was supported by CoTec upping its stake in the miner by more than US$450,000.
Net proceeds from this raise were used to help fund the German convertible loan and cover costs for pre-production operations at the Songwe Hill project.
Shares in Mkango were marked more than 6% higher on Thursday, having opened at 10.25p.