Mkango Resources Executes 550,000 Warrants at 7 Pence Each, Boosting Share Capital Ahead of Key Rare Earth Projects

Details of Warrant Exercise and Impact on Share Capital

Mkango Resources announced receipt of an exercise notice converting 550,000 warrants into common shares at 7 pence each. To satisfy this, Mkango will issue an equal number of new common shares, termed Warrant Shares, which will carry identical rights to existing shares. The company has applied for these shares to be admitted to trading on AIM, with admission expected to take effect and trading to commence at 8:00 am on or about 27 July 2026.

Following admission, Mkango’s total issued and outstanding share capital will be 387,803,618 shares. The company confirmed it holds no treasury shares, a key disclosure under the Disclosure Guidance and Transparency Rules (DTR 5.6.1R). This total forms the basis for shareholder notifications to the Financial Conduct Authority regarding shareholding changes. Additionally, the Warrant Shares will be listed on the TSX-V, ensuring dual-market trading availability.

Rare Earth Magnet Recycling Strategy via Maginito

Mkango’s strategy focuses on leading the production of recycled rare earth magnets, alloys, and oxides through its controlling 79.4% stake in Maginito Limited, with CoTec Holdings Ltd owning the remaining 20.6%. This positions Mkango at the forefront of rare earth recycling technology development, addressing growing demand from electric vehicles, wind turbines, and clean energy sectors. The company emphasizes securing sustainable supplies of neodymium, praseodymium, dysprosium, and terbium in line with global energy transition needs.

Maginito’s portfolio includes full ownership of HyProMag Limited and a 90% interest in HyProMag GmbH, both focused on short loop rare earth magnet recycling in the UK and Germany. Mkango Rare Earths UK Ltd, wholly owned by Maginito, specializes in long loop rare earth magnet recycling in the UK via chemical processes. Furthermore, Maginito and CoTec are expanding HPMS recycling technology in the U.S. through the 50/50 joint venture HyProMag USA. This multi-country approach provides geographic diversification and access to significant end markets across three major developed economies.

Strategic Development and Funding for Songwe Hill in Malawi

Mkango wholly owns the advanced-stage Songwe Hill rare earths project in Malawi, designated as a Strategic Project under the European Union Critical Raw Materials Act, underscoring its importance to EU supply chain security. The project has secured US$4.6 million in reimbursable development funding from the U.S. International Development Finance Corporation (DFC) for Front End Engineering and Design activities.

This DFC funding validates Songwe Hill’s technical and commercial viability, enabling detailed engineering progress without immediate capital expenditure, though the funding is reimbursable and will be repaid from future revenues or financing. The EU Strategic Project status provides policy support that may facilitate permitting and development. Together, these funding and policy supports highlight Songwe Hill’s strategic significance to both U.S. and European authorities focused on securing rare earth element supplies.

Puławy Rare Earth Separation Plant and EU Strategic Status

In addition to Songwe Hill, Mkango owns and is advancing the Puławy rare earths separation plant in Poland, also designated a Strategic Project under the EU Critical Raw Materials Act. This facility is designed to process rare earth concentrates into separated oxides and intermediate products, complementing Songwe Hill’s mining output with downstream processing capabilities.

Having both Songwe Hill and Puławy recognized as Strategic Projects affords Mkango substantial institutional backing within European policy frameworks, potentially easing regulatory approvals, enabling access to EU funding, and signaling alignment with EU objectives for critical raw materials supply diversification. The combined mining and separation operations position Mkango to capture value across the rare earth supply chain from ore to purified elements for magnet and alloy manufacturing.

Proposed NASDAQ Listing via Business Combination Agreement

Mkango has entered a Business Combination Agreement with Crown PropTech Acquisitions to list its Songwe Hill and Puławy projects on NASDAQ through a special purpose acquisition company (SPAC) merger under the name Mkango Rare Earths Limited. This transaction aims to enhance capital market visibility and access to institutional equity capital beyond the AIM and TSX-V exchanges, accelerating project development.

The proposed combination is subject to various conditions, including shareholder, regulatory, stock exchange, court, and third-party approvals, as well as SEC registration statement effectiveness and NASDAQ listing approval. The announcement includes forward-looking statements cautioning that completion is not guaranteed and may be affected by shareholder redemptions and available cash at closing.

Market Abuse Regulation Compliance and Inside Information Disclosure

Mkango disclosed that the warrant exercise announcement constitutes inside information under the Market Abuse Regulations (EU) No. 596/2014, incorporated into UK law. The company determined that the warrant exercise and issuance of 550,000 new shares, along with resulting share dilution, meet the threshold for inside information disclosure. Upon publication via the Regulatory Information Service, this information entered the public domain.

This disclosure aligns with Mkango’s obligations as an AIM-listed entity regulated by the Financial Conduct Authority, reflecting standard practice for significant corporate actions like warrant exercises and capital raises. The announcement timing on 22 July 2026, with expected Admission around 27 July 2026, provides shareholders and investors timely notice of the share issuance and capital structure changes.

Risks Related to Warrant Exercise and Share Dilution

The 550,000 warrant exercise at 7 pence per share represents a modest increase, accounting for less than 0.2% of the pro-forma 387,803,618 shares. However, it results in dilution for existing shareholders not participating in future capital raises at similar or lower prices. The announcement does not disclose proceeds or their intended use. Investors should assess whether the capital raised materially advances Mkango’s development or funding needs.

Broader risks include technological, operational, and capital challenges in scaling rare earth recycling; conditions affecting the US$4.6 million reimbursable DFC funding; potential changes in EU policy impacting Strategic Project status; and political, fiscal, legal, permitting, taxation, and currency risks across Malawi, Poland, Germany, the UK, and the US. Mkango also faces competition from better-funded entities with potentially superior technologies.

Admission Timeline and Trading Details

Admission of the Warrant Shares to AIM trading is expected to be effective and trading to commence at 8:00 am on or about 27 July 2026, approximately five days after the announcement. The phrase "on or around" reflects potential adjustments pending satisfaction of London Stock Exchange admission requirements. The Warrant Shares will also be listed on the TSX-V, enabling trading on both exchanges.

Admission timing may change depending on meeting London Stock Exchange and TSX Venture Exchange conditions. Investors should monitor official company and exchange announcements for confirmation. Dual-listing ensures shares will be freely tradable on London and Toronto markets upon Admission.

Operations Across Multiple Countries and Technology Platforms

Mkango’s operations span the UK, Germany, Poland, Malawi, and the US, reflecting a geographically diversified approach to mining and recycling. UK operations focus on long loop rare earth magnet recycling via Mkango Rare Earths UK Ltd using chemical methods, while German operations via HyProMag GmbH focus on short loop recycling. Songwe Hill in Malawi represents mining, and the Puławy facility in Poland handles downstream separation and processing. The HyProMag USA joint venture extends recycling technology into North America.

This diversification exposes Mkango to varied regulatory environments, supply chains, and market dynamics. Scaling HPMS and chemical recycling technologies commercially involves technical, capital, and market risks. Availability of scrap materials for Maginito’s recycling is a key supply chain dependency. Environmental and regulatory requirements impact operational feasibility and economics. Feasibility studies may yield less favorable results, potentially requiring major revisions to project economics and timelines.

Capital Raise Context and Warrant Pricing

The 7 pence warrant exercise price provides a benchmark for the valuation at which capital is raised. These warrants reflect terms set at issuance, though the announcement does not specify their original issue date, consideration paid, or strike price relative to share price at issuance. Without this context, investors cannot fully evaluate the economics or attractiveness of the warrant exercise price.

The relatively small warrant exercise size suggests it relates to a discrete prior financing instrument rather than a major ongoing capital raise. Mkango’s capital needs for Songwe Hill, Puławy, and Maginito’s expansion are substantial, and this exercise alone will not significantly address funding requirements. Investors should consider the company’s broader capital strategy, including the proposed NASDAQ listing which may provide substantially larger funding.