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REGISTERED NUMBER: 11473586 (England and Wales)

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025

FOR

HYPROMAG LTD

HYPROMAG LTD (REGISTERED NUMBER: 11473586)

CONTENTS OF THE FINANCIAL STATEMENTS

for the Year Ended 31 December 2025

| Page |

Statement of financial position | 1 |

Notes to the financial statements | 2 |  | to |  | 7

HYPROMAG LTD (REGISTERED NUMBER: 11473586)

STATEMENT OF FINANCIAL POSITION

31 December 2025

| 31.12.25 |  | 31.12.24

| Notes | £ | £ |

FIXED ASSETS

Tangible assets | 5 | 578,344 |  | 313,380 |  |

Investments | 6 | 17,680 |  | 17,680 |  |

596,024 |  | 331,060 |  |

CURRENT ASSETS

Stocks | 36,267 |  | - |  |

Debtors | 7 | 131,759 |  | 92,859 |  |

Cash at bank and in hand | 17,736 |  | 22,253 |  |

185,762 |  | 115,112 |  |

CREDITORS

Amounts falling due within one year | 8 | (1,704,842 | ) | (788,449 | ) |

NET CURRENT LIABILITIES | (1,519,080 | ) | (673,337 | ) |

TOTAL ASSETS LESS CURRENT LIABILITIES | (923,056 | ) | (342,277 | ) |

CAPITAL AND RESERVES

Called up share capital | 164 |  | 164 |  |

Share premium | 499,936 |  | 499,936 |  |

Retained earnings | (1,423,156 | ) | (842,377 | ) |

SHAREHOLDERS' FUNDS | (923,056 | ) | (342,277 | ) |

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 Statement of income and retained earnings has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 16 July 2026 and were signed on its behalf by:

W D Dawes - Director

HYPROMAG LTD (REGISTERED NUMBER: 11473586)

NOTES TO THE FINANCIAL STATEMENTS

for the Year Ended 31 December 2025

1. | STATUTORY INFORMATION

| HyProMag Ltd 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: | 11473586

| Registered office: | Tyseley Energy Park

| The Fordrough

| Hay Mills

| Birmingham

| B25 8DW

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

| The principal activity of the company is that of hydrogen processing of Magnet scrap, licenced from

| university of Birmingham. The principal activity of the Mkango Group is the exploration, development, and recycling of rare earth elements and associated minerals, with a strong focus on sustainability and clean technology applications.

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.

| Preparation of consolidated financial statements

| The financial statements contain information about HyProMag Ltd as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent, Mkango Resources Ltd, which can be obtained from, https://mkango.ca/investors/financials/. Their registered office is 550 Burrard Street, Suite 2900, Vancouver, British Columbia, V6C 0A3, Canada..

| 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.

| Revenue recognition

| Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

| Revenue comprises the fair value of the consideration received or receivable for the sale of goods and provision of service in the ordinary course of the company's activities. Revenue is shown in net sales/ value added tax returns rebates and discounts.

| The company recognises revenue when:

| The amount of revenue can be reliably measured;

| It is probable that future economic benefits will flow to the entity;

| and specific criteria have been met for each of their companies activities.

HYPROMAG LTD (REGISTERED NUMBER: 11473586)

NOTES TO THE FINANCIAL STATEMENTS - continued

for the Year Ended 31 December 2025

2. | ACCOUNTING POLICIES - continued

| Tangible fixed assets

| Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

| Plant and machinery - 33% on cost

| Computer equipment - 33% on cost

| Motor Vehicles - 33% on cost

| Assets under construction relate to machines that are currently in the process of being constructed.

| Investments in subsidiaries

| Investments in subsidiary undertakings are recognised at cost.

| Stocks

| Work in progress is valued at the lower of cost and net realisable value.

| Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition.

| 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 Statement of Income and Retained Earnings, 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.

HYPROMAG LTD (REGISTERED NUMBER: 11473586)

NOTES TO THE FINANCIAL STATEMENTS - continued

for the Year Ended 31 December 2025

2. | ACCOUNTING POLICIES - continued

| 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 2025, its liabilities exceeded its assets by £923,056. 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 9 (2024 - 6 ) .

4. | AUDITORS' REMUNERATION

| 31.12.25 |  | 31.12.24

£ | £ |

| Fees payable to the company's auditors for the audit of the company's financial statements | 15,700 |  | 7,875 |  |

HYPROMAG LTD (REGISTERED NUMBER: 11473586)

NOTES TO THE FINANCIAL STATEMENTS - continued

for the Year Ended 31 December 2025

5. | TANGIBLE FIXED ASSETS

| Assets |

| under |  | Plant and |  | Motor |  | Computer |

| construction |  | machinery |  | vehicles |  | equipment |  | Totals

£ | £ | £ | £ | £ |

| Cost

| At 1 January 2025 | 311,956 |  | 402,256 |  | - |  | 8,087 |  | 722,299 |  |

| Additions | 161,041 |  | 102,282 |  | 11,999 |  | 2,329 |  | 277,651 |  |

| At 31 December 2025 | 472,997 |  | 504,538 |  | 11,999 |  | 10,416 |  | 999,950 |  |

| Depreciation

| At 1 January 2025 | - |  | 401,981 |  | - |  | 6,938 |  | 408,919 |  |

| Charge for year | - |  | 8,430 |  | 2,997 |  | 1,260 |  | 12,687 |  |

| At 31 December 2025 | - |  | 410,411 |  | 2,997 |  | 8,198 |  | 421,606 |  |

| Net book value

| At 31 December 2025 | 472,997 |  | 94,127 |  | 9,002 |  | 2,218 |  | 578,344 |  |

| At 31 December 2024 | 311,956 |  | 275 |  | - |  | 1,149 |  | 313,380 |  |

6. | FIXED ASSET INVESTMENTS

| Shares in

| group

| undertakings

£ |

| Cost

| At 1 January 2025

| and 31 December 2025 | 17,680 |  |

| Net book value

| At 31 December 2025 | 17,680 |  |

| At 31 December 2024 | 17,680 |  |

| The company invested in HyproMag GmbH in October 2021 and currently owns 80% of the company.

7. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |

| 31.12.25 |  | 31.12.24

£ | £ |

| Amounts owed by group undertakings | 39,263 |  | 32,400 |  |

| Other debtors | 92,496 |  | 60,459 |  |

131,759 |  | 92,859 |  |

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

HYPROMAG LTD (REGISTERED NUMBER: 11473586)

NOTES TO THE FINANCIAL STATEMENTS - continued

for the Year Ended 31 December 2025

8. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |

| 31.12.25 |  | 31.12.24

£ | £ |

| Trade creditors | 98,053 |  | 201,169 |  |

| Amounts owed to group undertakings | 1,559,452 |  | 561,035 |  |

| Taxation and social security | 28,336 |  | 7,200 |  |

| Other creditors | 19,001 |  | 19,045 |  |

1,704,842 |  | 788,449 |  |

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

9. | 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.

10. | OTHER FINANCIAL COMMITMENTS

| The company had total leasing commitments of £3,780 (2024: £11,340) at the year end.

11. | RELATED PARTY DISCLOSURES

| The company has taken advantage of the exemption from the disclosures according to FRS102 Section 1AC35 regarding the transactions between fellow group companies, where the subsidiary party to the transaction is wholly owned by such a member.

| During the year the company undertook transactions with the following companies who were not wholly owned :

| HyProMag USA - Amounts owed by related party at 1/1/25 £32,400, Recharged to related party £119,744, Paid by related party (£112,881) Amounts owed by related party at 31/12/25 £39,263.

| HyProMag GMBH - Recharged to related party £119,744, paid by related party (£119,744) Amounts owed by related party at 31/12/25 £nil.

| Mkango Serviceco UK Ltd -Amounts owed to related party at 1/1/25 £239,410, Recharged by related party £232,848, Amounts owed to related party at 31/12/25 £472,258.

12. | POST BALANCE SHEET EVENTS

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

HYPROMAG LTD (REGISTERED NUMBER: 11473586)

NOTES TO THE FINANCIAL STATEMENTS - continued

for the Year Ended 31 December 2025

13. | 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.