Mkango Magnetic Materials Limited - Hypromag USA Deploys Mobile Inserma System

Mkango Resources Ltd. (MKA) released an operations update on October 19, 2026, regarding HyProMag USA, a 50:50 joint venture between CoTec Holdings and HyProMag Limited, which is 79.4% owned by Mkango via Maginito. The company has deployed a third Inserma HDD separation system as a mobile processing unit, complementing fixed installations in South Carolina and Nevada. This mobile unit is intended for customer trials, feedstock development, and on-site processing campaigns across the United States.

Feedstock inventories under contract and in storage, alongside active procurement efforts, are expected to support the initial commissioning and ramp-up of Phase 1 at the Texas Hub in 2028. Commercial sales of recovered PCB material to downstream smelter partners have commenced, generating revenue that partly offsets the cost of acquiring magnet-bearing feedstock. Sourcing is diversifying beyond hard disk drives (HDDs) into industrial, healthcare, government, and IT asset disposition sectors.

Additionally, a next-generation Inserma system designed for high-capacity drives, including helium-filled models for hyperscale data centers, is currently being tested. Early results indicate processing times of under three seconds per drive. Operations are R2v3- and ISO-certified with documented chain-of-custody. The update also reiterated corporate context, including $4.6 million in DFC funding for the Front-End Engineering Design (FEED) at Songwe Hill, the Pulawy project, and the CPTK SPAC merger to list Songwe and Pulawy on Nasdaq.

Mkango Resources Ltd. (MKA) issued a non-earnings operational update that serves as a follow-up to previous disclosures rather than introducing new substantive developments. The company highlighted the mobile configuration of its third Inserma unit and the commencement of commercial PCB sales to smelter partners. While these steps de-risk operations, they represent a very small revenue stream and are not considered market-moving events.

The third Inserma system and the associated hub-and-spoke feedstock strategy were previously disclosed, with expectations for February 2026 delivery, March 2026 SC commissioning, and June 2026 installation of three Inserma systems. The "mobile" designation is the only novel element in this release.

The update fixes the Phase 1 commissioning and ramp-up timeline at the Texas Hub in 2028. This continues a pattern of delays observed in prior communications: December 2025 cited mid-2027; June 2026 cited H2 2027; July 2026 cited an integrated HPMS section in Q2 2028; and October 13, 2026, cited mid-2028. The most recent October 19, 2026, update reiterated the 2028 target, indicating the project's integrated start-up has drifted approximately one year. This release repeats that timeline rather than reversing it.

PCB revenue is described only qualitatively as partly offsetting costs, with no specific dollar figure provided. Relative to a market capitalization of approximately $256 million, a project capital cost of roughly $152 million, and NPV estimates ranging from $416 million to $797 million, this revenue is immaterial in isolation.

Prior-period context not included in today's release indicates a FY-2025 net loss of $17.6 million, cash holdings of $3.06 million at December 31, 2025, and a going-concern flag in the latest MD&A.

Mkango Resources Ltd. (AIM/TSX-V: MKA) has shifted its focus from upstream rare-earth development to downstream rare-earth magnet recycling and manufacturing. The company holds a 79.4% stake in Maginito, with CoTec retaining the remaining 20.6%. Through Maginito, Mkango owns 100% of HyProMag Ltd in the UK, 90% of HyProMag GmbH in Germany, and 100% of Mkango Rare Earths UK. Additionally, Mkango wholly owns Remloy, a medium-loop recycled NdFeB alloy powder business acquired from Heraeus for €8M in Bitterfeld, Germany.

The company is also advancing HyProMag USA, a 50:50 joint venture between CoTec and HyProMag, which is rolling out HPMS technology in the United States. This initiative is the subject of the company's latest release. On the upstream side, Mkango retains 100% ownership of the Songwe Hill project in Malawi and the proposed Pulawy separation plant in Poland, both designated as EU CRMA Strategic Projects.

The HyProMag USA Texas Hub in the Dallas-Fort Worth area represents the company's near-term flagship project, serving as the first integrated US facility for HPMS magnet recycling and manufacturing. Prior-period context indicates that capacity estimates for Phase 1 of payable NdFeB products have varied across releases, ranging from approximately 1,552t to 1,526t, and more recently to 1,034t. Capital costs for the project have been estimated between $142M and $152M. Post-tax net present value (NPV) figures have ranged from approximately $416M at current prices to ~$797M at forecast prices.

Regarding its resource assets, the Songwe Hill DFS reports a post-tax NPV of approximately $339M and an internal rate of return (IRR) of 24%.