Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF) said it increased its interest in the rare earth magnet recycling company HyProMag to 41.6% from 25% following the conversion of a loan into HyProMag shares.
HyProMag has exercised its right to convert a £200,000 loan into HyProMag shares, Mkango said in a statement. The loan was part of a £500,000 financing package completed in January 2020.
HyProMag is pioneering commercialisation of short loop magnet recycling via a patented technology named Hydrogen Processing of Magnet Scrap (HPMS). This extracts and demagnetises neodymium iron boron (NdFeB) alloy powders from magnets embedded in scrap and redundant equipment, such as mobile phones, hard disk drives and loudspeakers.
The process was originally developed within the Magnetic Materials Group at the University of Birmingham and subsequently licensed to HyProMag.
HyProMag will use the remainder of the loan to scale up the magnet recycling technology and is set to become the UK's first producer of recycled, sintered NdFeB rare earth magnets and materials, said Mkango.
It said the technology will provide the UK with a domestic source of recycled rare earth magnets, which play a key role in clean energy technologies including electric vehicles and wind turbine generators.
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William Dawes, chief executive of Mkango, stated: "We are very pleased to increase our interest in HyProMag, which has the technology, team and network of partnerships to unlock the supply chain for rare earth magnet recycling.
“We look forward to supporting its future growth as it scales up to commercial production and developing new opportunities for collaboration in the recycling sector. Recycling is a key component of Mkango's 'mine, refine, recycle' strategy and will become an increasingly important part of the rare earth supply chain in the UK, Europe and elsewhere."
Mkango has set up a new UK subsidiary, Mkango Rare Earths UK Ltd, to develop complementary opportunities in rare earth recycling
The company has an option to increase its interest in HyProMag to 49% via its wholly owned subsidiary, Maginito.
Maginito has the first right to supply primary production, if required for blending with recycled production from HyProMag, as well as product offtake and marketing rights.
Mkango share rose nearly 2.5% to 31.00p in opening trade.