Mkango Resources Ltd shares soared on Monday after it said a feasibility study on the development of a rare earth magnet recycling and manufacturing operation showed ‘robust economics’.
The producer of recycled rare earth magnets, alloys and oxides said the results of an independent feasibility study for the HyProMag USA project were positive.
Shares in Mkango Resources were up 27% to 7.90 pence in London on Monday morning.
The project is the development of a rare earth magnet recycling and manufacturing operation in the United States with a central hub in Dallas Fort Worth, Texas supported by two sites in the eastern and western US.
The study set out a $262 million post-tax net present value and 23% real internal rate of return based on current market prices of neodymium iron boron recovered by the process.
Using forecast prices, the post-tax net present value rises to $503 million.
The study also found an all-in sustaining cost of $19.6 per kg of neodymium iron product, which compares to current weighted average market prices of $55 per kg for the product.
Payback is achieved at current market prices in 3.9 years. Payback is the period required to payback initial capital, measured from first production. At forecast prices, payback is achieved in 3.1 years.
The up-front capital cost of the project is $125 million over a 1.7 year construction phase.
Mkango Chief Executive Officer Will Dawes said: ‘This is a major milestone for HyProMag, further validating the hydrogen processing of magnet scrap technology and opportunity to roll-out into the US. Our strategy to develop rare earth magnet recycling and manufacturing hubs in the US, UK, Germany and, in the future, Asia, is aligned with the evolving geopolitical environment through the development of more robust rare earth supply chains for the respective domestic markets, while catalysing new centres of excellence in magnetic materials and cross-fertilisation of skills across jurisdictions and between industry and academia.’
HyProMag is 100% owned by Maginito Ltd, which is owned on a 79.4/20.6% basis by Mkango and CoTec Holdings Corp. HyProMag USA is owned 50:50 by CoTec and Maginito.
Copyright 2024 Alliance News Ltd. All Rights Reserved.
