LONDON (ShareCast) - (Sharecast News) - Mkango Resources has entered into an agreement to increase its ownership stake in HyProMag from 42% to 100%, it announced on Tuesday, in a cash and share transaction.
The AIM-traded firm said completion would be subject to the approval of the TSX Venture Exchange, and approval under the UK's National Security and Investment (NSI) Act.

It expected the approval process would be completed by the third quarter of the year.

On completion, the consideration payable to the selling shareholders of HyProMag would consist of £1m in cash, and the issue of 9,742,031 Mkango common shares, also valued at £1m.

The share price would be set at 10.2648p, based on the volume-weighted average price of Mkango shares on AIM for the 10 business days prior to the share purchase agreement.

Additionally, the agreement included the possibility of up to an additional £3m being paid to the selling shareholders of HyProMag in four tranches.

The payment could be made either in cash or Mkango shares, at the discretion of Mkango.

However, the additional payments would be contingent on HyProMag achieving specific production milestones up to 30 June 2026.

To ensure the stability of the agreement, the shares issued on completion would be subject to a one-year lock-up period, while the shares issued on achievement of production milestones would be subject to a six-month lock-up.

"Since acquiring our initial interest in HyProMag in 2020, we have seen the company go from strength to strength, de-risking and further scaling-up the patented HPMS rare earth magnet recycling technology, building the team and developing further industry partnerships, all against the backdrop of growing interest in recycling and sustainable rare earth supply chains," said Mkango chief executive officer William Dawes.

"We look forward to working closely with the HyProMag team as we continue to support the growth of the business."

At 1206 BST, shares in Mkango Resources were up 10.12% at 11.7p.

Reporting by Josh White for Sharecast.com.

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