REGISTERED NUMBER: 13473922 (England and Wales)

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

FOR

MKANGO RARE EARTHS UK LIMITED

Page

Statement of financial position

1

Notes to the financial statements

2

to

5

FIXED ASSETS

Tangible assets

4

333,278

284,253

CURRENT ASSETS

Debtors

5

310,861

305,138

Cash at bank

26,598

1,406

337,459

306,544

CREDITORS

Amounts falling due within one year

6

(1,701,121

)

(1,442,625

)

NET CURRENT LIABILITIES

(1,363,662

)

(1,136,081

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(1,030,384

)

(851,828

)

CAPITAL AND RESERVES

Called up share capital

1,000

1,000

Retained earnings

(1,031,384

)

(852,828

)

SHAREHOLDERS' FUNDS

(1,030,384

)

(851,828

)

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Income statement has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

W D Dawes - Director

1.	STATUTORY INFORMATION

Mkango Rare Earths Uk Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address are as below:

Registered number:

13473922

Registered office:

6th Floor, 100 Liverpool Street

London

EC2M 2AT

The presentation currency of the financial statements is the Pound Sterling (£).

The principal activity of the company during the year was the development and commercialisation of technologies for the recycling and processing of rare earth elements. The company is focused on establishing a long-loop rare earth magnet recycling supply chain in the United Kingdom via a chemical processing route. This forms part of the broader strategy of the Mkango group to support sustainable and circular solutions for rare earth magnet production.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

As described in the accounting policies of the financial statements, depreciation of tangible fixed assets has been based on estimated useful lives and residual values deemed appropriate by the directors. Estimated useful lives and residual values are reviewed annually and revised as appropriate.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant and machinery - 20% on cost

Financial instruments

A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument.

Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.

For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Government grants – other operating income

The company receives government grants from Innovate UK. These grants are recognised when the claim has been received. They are disclosed within Other Operating Income.

Going concern

The financial statements of the Company have been prepared on a going concern basis. The Company has incurred recurring losses during the financial year and, as at 31 December 2024, its liabilities exceeded its assets by £1,030,384. These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern.

The Company is, however, a subsidiary of Mkango Resources Limited (the "Parent"). The Parent has confirmed its continuing financial support and has undertaken to provide such funding as is necessary to enable the Company to meet its obligations as they fall due for a period of not less than twelve months from the date of approval of these financial statements.

Accordingly, the directors consider it appropriate to prepare the financial statements on a going concern basis.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 6 (2023 - 4 ) .

4.	TANGIBLE FIXED ASSETS

Plant and

machinery

£

Cost

At 1 January 2024

287,154

Additions

130,899

At 31 December 2024

418,053

Depreciation

At 1 January 2024

2,901

Charge for year

81,874

At 31 December 2024

84,775

Net book value

At 31 December 2024

333,278

At 31 December 2023

284,253

5.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.24

31.12.23

£

£

Amounts owed by group undertakings

114,718

172,567

Other debtors

196,143

132,571

310,861

305,138

Amounts owed by group undertakings are unsecured, interest free and are repayable on demand.

6.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.24

31.12.23

£

£

Trade creditors

28,432

83,321

Amounts owed to group undertakings

1,649,278

1,350,705

Taxation and social security

-

4,264

Other creditors

23,411

4,335

1,701,121

1,442,625

Amounts owed from group undertakings are unsecured, interest free and are repayable on demand.

7.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the auditors was unqualified.

Helen Tidyman (Senior Statutory Auditor)

for and on behalf of Sumer Auditco Limited

We draw attention to Note 2 to the financial statements, which indicates that the company is reliant on the wider Group for financial support. The Group consolidated financial statements included a material uncertainty related to going concern which may have a direct impact on the Group's ability to provide required financial support to the Company. As stated in Note 2, these events and conditions, along with other matters set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

In auditing the financial statement, we have concluded that the Directors use of the going concern basis of accounting in the preparation of financial statements is appropriate.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant section of this report.

8.	OTHER FINANCIAL COMMITMENTS

The company had total leasing commitments of £nil (2023 £89,000) at the year end.

9.	POST BALANCE SHEET EVENTS

There were no material events up to the date of approval of the financial statements by the Board.

10.	ULTIMATE CONTROLLING PARTY

The controlling party is Maginito Limited.

The ultimate controlling party is Mkango Resources Ltd a company registered in Canada..

Maginito is 79.4% owned by Mkango Resources Ltd and 20.6% owned by CoTec Holding Corp.