CoTec Holdings Corp. Notes HyProMag USA Pre-Feasibility Study Outlining Future Expansion Options to Quadruple Planned U.S. Rare Earth Magnet Capacity, Indicating an Incremental Post-Tax NPV of Up to US$2.1 billion
The proposed expansion would quadruple planned magnet output, while Northlake's estimated value fell as costs and timing assumptions changed.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Summary
CoTec Holdings (CTHCF) outlined a completed pre-feasibility study evaluating three additional plants for its HyProMag USA rare earth magnet joint venture. The proposed expansion targets approximately 4,192 metric tons of magnets annually by 2034 across four plants, versus approximately 1,048 at Northlake alone.
The study estimates incremental post-tax net present value of US$1,854 million to US$2,062 million, excluding Northlake, based on forecast prices. Estimated expansion capital costs range from US$623 million to US$656 million. Northlake's updated post-tax net present value is approximately US$723 million, down from approximately US$797 million, reflecting a later construction timetable, higher capital costs and updated operating costs. Northlake Phase 1 commissioning is expected in mid-2028. The expansion remains at the pre-feasibility stage, with further study subject to ongoing review.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate point. Forward-looking: it has not happened yet and may not happen.The proposed expansion targets approximately 4,192 metric tons of magnets annually by 2034, versus approximately 1,048 at Northlake.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Recycled-only expansion estimates US$2,062 million post-tax net present value, 36% return and 2.3-year payback, using forecast prices.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Recycled-and-primary-feedstock expansion estimates US$1,854 million post-tax net present value, 31% return and 3-year payback, using forecast prices.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Northlake Phase 1 commissioning is expected in mid-2028; the facility is in detailed engineering.
- Minor point. Forward-looking: it has not happened yet and may not happen.Combined Northlake and expansion post-tax net present value is estimated at US$2.6 billion to US$2.8 billion.
5 minor points
- Minor point. Forward-looking: it has not happened yet and may not happen.First expansion plant's 2030 sustaining costs are estimated at US$37.4/kg recycled-only; US$41.6/kg recycled-and-primary of finished products sold.
- Minor point. Forward-looking: it has not happened yet and may not happen.Forecast 2030 weighted-average realized selling price is approximately US$100.5/kg, based on forecast prices and product mix.
- Minor point. Forward-looking: it has not happened yet and may not happen.Total platform salable material production targets approximately 6,000 metric tons annually by 2034, including magnets and other products.
- Minor point. Forward-looking: it has not happened yet and may not happen.The proposed Central Texas Hub would centralize alloy processing and finishing for the expanded manufacturing platform.
- Minor point. Forward-looking: it has not happened yet and may not happen.Third-party magnet finishing represents a potential additional revenue opportunity for the proposed platform.
Negative
- Moderate point. Forward-looking: it has not happened yet and may not happen.Expansion capital costs are estimated at approximately US$623 million recycled-only or US$656 million recycled-and-primary.
- Moderate pointNorthlake's estimated capital cost increased to approximately US$167 million, reflecting phased construction and finalized equipment orders.
- Moderate pointNorthlake post-tax net present value fell to approximately US$723 million from approximately US$797 million announced June 22, 2026.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Expansion remains at pre-feasibility stage; progression to a feasibility study is expected subject to ongoing review.
- Minor pointU.S. customer product validation is underway with potential offtake customers, rather than completed.
AI-generated analysis. How Rhea-AI works. Not financial advice.
VANCOUVER, BC / ACCESS Newswire / October 27, 2026 / CoTec Holdings Corp. (TSXV:CTH)(OTCQX:CTHCF) ("CoTec" or the "Company") notes the press release issued yesterday October 26, 2026, by its joint venture, HyProMag USA LLC ("HyProMag USA"), announcing the completion of an independent Pre-Feasibility Study ("PFS" or the "Study") undertaken by PegasusTSI Inc. and BBA USA Inc. evaluating the potential expansion of HyProMag USA's proposed U.S. rare earth magnet manufacturing platform beyond its first plant in Northlake, Texas (the "Northlake Texas Facility"), which is in detailed engineering, with Phase 1 commissioning expected in mid-2028.
The PFS evaluates a three-plant[i] phased expansion strategy: three new regional production plants, supported by a centralized manufacturing, finishing and technology hub (the "Central Texas Hub"), to produce commercial neodymium iron boron ("NdFeB") magnet products in the United States from both end-of-life recycled feedstock and primary alloy material. Together with the Northlake Texas Facility[ii], the platform targets total salable material production of approximately 6,000 metric tons per year by 2034, an increase of 4,474 metric tons per year above production from the Northlake Texas Facility.
Annual total magnetic material production in 2034 from HyProMag USA would comprise approximately 4,192 metric tons of magnets, 1,305 metric tons of magnetic NdFeB alloy powder and 503 metric tons of other salable material. The PFS economics listed below cover the three new plants, including the Central Texas Hub only; they do not include the Northlake Texas Facility, whose value is not included in the PFS results.
The Study builds upon the engineering and development work completed for the Northlake Texas Facility and outlines a pathway for HyProMag USA to develop from a Hydrogen Processing of Magnet Scrap ("HPMS")[iii] enabled magnet recycler into a fully integrated producer of commercial rare earth magnet products for U.S. customers.
HyProMag USA believes the platform combines the cost advantages and operational flexibility of both end-of-life recycled feedstock and primary alloy feedstocks, providing a flexible and scalable pathway to magnet manufacturing.
HyProMag USA may also benefit from potential future access to primary sourced feedstock from Mkango Magnetic Materials Limited ("Mkango") pursuant to certain Mkango supply rights to HyProMag USA.
Highlights
- The PFS evaluated two development options, both based on modular production systems:
- Case 1 - Recycled feedstock only: HPMS recycling of magnet scrap to produce NdFeB alloy powder, sintered magnet blocks, finished and packaged magnets; and
- Case 2 - Recycled and primary feedstock: as Case 1, with the additional capex to support primary NdFeB alloy as a feedstock to produce NdFeB alloy powder, sintered magnet blocks, finished and packaged magnets.
- Project economics with a post-tax NPV[iv],[v] of US
$1,854 million (Case 2) to US$2,062 million (Case 1) for the three new plants (excluding the Northlake Texas Facility), post-tax IRR of31% (Case 2) to36% (Case 1) and a Profitability Index (post-tax NPV divided by capital cost) of approximately 2.8x to 3.3x, based on forecast prices[vi] and a Class 3 AACE[vii] capital cost estimate of approximately US$656 million (Case 2) to US$623 million (Case 1), respectively, with a payback of 3 years (Case 2) and 2.3 years (Case 1). - Competitive Manufacturing Costs. For the first PFS Plant in 2030, the PFS estimates an All-In Sustaining Cost ("AISC") of approximately US
$41.6 per kg (Case 2) to US$37.4 per kg (Case 1) of finished NdFeB products sold. AISC includes all downstream processing and finishing costs, including plating and epoxy coating. Based on forecast market prices and the forecast product mix, the weighted average realized all-in selling price in 2030 is estimated at approximately US$100.5 per kg, supporting strong margins and attractive project returns. - Combined HyProMag USA platform value: The combined post-tax NPV range of the proposed Northlake Texas Facility and the potential PFS plants is estimated at US
$2.6 billion to US$2.8 billion . - The staged approach for the Northlake Texas Facility:[viii] Updated post-tax NPV of approximately US
$723 [ix],[x],[xi],[xii] million based on forecast prices and a capital cost estimate of approximately US$167 million [xiii], increased due to the phased construction approach and the finalization of equipment orders. The reduction from the post-tax NPV of approximately US$797 million announced on June 22, 2026, reflects the later construction timetable, the higher capital costs and updated operating cost assumptions consistent with the PFS. - Potential fourfold increase in U.S. magnet producing capacity: from approximately 1,048 metric tons per year of salable NdFeB magnets at the Northlake Texas Facility to approximately 4,192 metric tons per year across four plants by 2034. Phase 1 of the Northlake Texas Facility is expected to be commissioned in mid-2028.
- Integrated alloy processing and centralized finishing: The Central Texas Hub is expected to incorporate Vacuum Induction Melting ("VIM") and strip-casting operations, allowing the platform to process NdFeB alloy, provide magnet plating, passivation, coating, quality assurance and customer qualification for all plants.
- Higher-value magnet production: The production configuration would incorporate grain boundary diffusion ("GBD") capability, which would significantly increase the proportion of higher-value NdFeB magnet products. High-grade magnet production would increase from approximately
10% to20% of total magnet output, supporting enhanced product mix, market access and project economics. - Low-carbon production: supported by a previously completed carbon footprint of approximately 2.35 kg CO₂-eq per kilogram of NdFeB sintered block product for the Northlake Texas Facility[xiv].
- Commercial qualification pathway: Product performance data and customer validation are underway with potential U.S. offtake customers, with the support of the HyProMag Group.
- Additional revenue opportunities: The platform would provide future opportunities for third-party magnet finishing activities, supporting enhanced utilization of manufacturing infrastructure and potential additional revenue streams.
- The platform is expected to play a key role in re-establishing domestic NdFeB magnet manufacturing: in the United States, creating approximately 300 jobs across Texas, South Carolina, and Nevada, in addition to the 100 positions at the Northlake Texas Facility.
- Independent PFS: completed by PegasusTSI Inc. and BBA USA Inc. with support from HyProMag's international teams and the University of Birmingham, UK. Subject to ongoing review, the expansion strategy is expected to progress to a Feasibility Study at the appropriate time.
Julian Treger, Chief Executive Officer of CoTec, commented: "This Pre-Feasibility Study confirms the opportunity to establish a significant domestic rare earth magnet manufacturing platform in the United States. The Study demonstrates robust economics and a pathway to producing higher-value NdFeB magnet products for strategically important sectors including advanced manufacturing, energy, defense and AI-driven technologies. Importantly, the platform is designed with the flexibility to utilize primary alloy feedstock alongside recycled materials, providing greater supply chain resilience and supporting long-term operational competitiveness. The results highlight the platform's potential to create substantial long-term value while strengthening the U.S. rare earth magnet supply chain."
Professor Allan Walton, Founder of HyProMag and Head of the Magnetic Materials Group at the University of Birmingham, commented: "The objective of the HyProMag platform has always been to demonstrate that HPMS technology can recover rare earth magnetic materials and convert them into high-performance commercial magnet products. The PFS outlines a pathway to scaling that capability through an integrated manufacturing platform incorporating magnet production, finishing and product qualification. Importantly, the enhanced production configuration would support the manufacture of a broader range of commercial magnet products for demanding industrial applications, while the inclusion of finishing, quality assurance and product development capabilities provides a foundation for continued product optimization and customer qualification."
Platform Configuration
The PFS assessed three new production plants in South Carolina, Nevada and a second location in Texas, which would operate alongside the Northlake Texas Facility. Each plant is intended to process feedstock, operate HPMS and produce unfinished sintered NdFeB blocks.
The Central Texas Hub, located within the second Texas plant, is expected to incorporate alloy processing (VIM and strip-casting), GBD, machining, plating, passivation, epoxy coating, quality assurance, product qualification and technology development capabilities.
Under the proposed configuration, unfinished sintered blocks produced from South Carolina, Nevada and the second facility in Texas would be transferred to the Central Texas Hub for advanced manufacturing and finishing. The Central Texas Hub is also designed to support future partnerships with specialist manufacturing and finishing providers, enabling the efficient scaling of advanced magnet production capability.
Higher-Value Magnet Production
A key outcome of the PFS was the optimization of the manufacturing configuration to increase production of higher-value NdFeB magnet products. This enhanced product mix would be supported by further incorporation of GBD technology, which enables the production of higher-performance magnet grades required for demanding applications across medical, industrial automation, robotics, energy infrastructure and advanced manufacturing markets.
The increased proportion of higher-value magnet products would broaden exposure to premium end-use applications and is expected to support improved revenues, stronger operating margins and enhanced overall project returns.
Recycling of Magnet End Cuts By-Products
The PFS plants are designed to recover and reprocess manufacturing residues, including magnet machining end cuts, through the HPMS process, maximizing the use of rare earth materials. This integrated approach would support both production flexibility and the circular manufacturing characteristics of the HyProMag platform.
Integrated Manufacturing Platform
The Central Texas Hub is expected to create operating synergies through shared infrastructure and integrated processing capabilities. The Study indicates that the combination of integrated alloy processing, magnet manufacturing, finishing operations and flexible feedstock sourcing has the potential to support a competitive cost position for domestically manufactured rare earth magnet products. HyProMag USA believes these advantages will support the supply of U.S. manufactured magnets at competitive prices while providing customers with the benefits of domestic supply-chain security, traceability and low-carbon production.
The Central Texas Hub is also expected to evolve into an advanced manufacturing, product qualification and technology development center serving the broader manufacturing platform. In addition to supporting HyProMag USA production, the facility would provide future opportunities to support third-party magnet finishing activities, creating the potential for additional revenue streams and improved utilization of manufacturing infrastructure.
The proposed technology and product development center would leverage expertise from the wider HyProMag Group and the University of Birmingham's Magnetic Materials Group, supporting development, qualification and optimization of commercial magnet products.
Flexible Feedstock Platform
A key outcome of the independent PFS is the flexibility of a manufacturing platform capable of utilizing both recycled NdFeB materials and primary alloy feedstocks. This flexible sourcing model is expected to enhance supply-chain resilience, support production growth and provide the ability to optimize raw material inputs in response to market conditions and customer requirements. HPMS technology provides the foundation for processing recycled magnetic materials and integrating them into the broader manufacturing platform.
Advancing Commercial Magnet Qualification with HyProMag Group
Commercial magnet qualification activities continue across the wider HyProMag Group in the United Kingdom and Germany. These activities are expected to support qualification of future U.S.-produced magnet products, accelerate customer onboarding and reduce commercialization risk as the U.S. manufacturing platform expands. HyProMag USA believes this provides a meaningful advantage by allowing future U.S. operations to build upon existing technical and commercial progress rather than initiating qualification programs from a standing start.
About HyProMag USA
HyProMag USA is developing advanced rare earth magnet recycling and manufacturing operations to establish a secure domestic U.S. supply chain for NdFeB magnets, essential components for AI infrastructure, defense systems, robotics, electric vehicles, and advanced electronics. Leveraging the revolutionary HPMS technology, developed over 15 years with over US
Ownership
HyProMag USA LLC is owned 50:50 by CoTec and HyProMag Limited. HyProMag Limited is
For more information on HyProMag USA, please visit www.hypromagusa.com
About CoTec
CoTec Holdings Corp. (TSXV:CTH)(OTCQX:CTHCF) is redefining the future of resource extraction and recycling. Focused on rare earth magnets and strategic materials, CoTec integrates breakthrough technologies with strategic assets to unlock secure, sustainable, and low-cost supply chains.
CoTec's mission is clear: accelerate the energy transition while strengthening strategic mineral supply chains for the countries we operate in. By investing in and deploying disruptive technologies, the Company delivers capital-efficient, scalable solutions that transform marginal assets, tailings, waste streams, and recycled products into high-value critical minerals.
From its HyProMag USA magnet recycling joint venture in Texas, to iron tailings reprocessing and reclamation in Québec, to next-generation copper and iron solutions backed by global majors, CoTec is building a diversified portfolio with long-term growth, rapid cash flow potential, and high barriers to entry. The result is a differentiated platform at the intersection of technology, sustainability, and strategic materials.
For more information, please visit www.cotec.ca
For further information, please contact:
Braam Jonker, Chief Financial Officer - (604) 992-5600
Forward-Looking Information Cautionary Statement
Statements in this press release regarding the Company and its investments which are not historical facts are "forward-looking statements" which involve risks and uncertainties, including statements relating to the results of the PFS, including the estimated post-tax NPV, IRR, Profitability Index, AISC and capital costs for each case; the proposed three-plant expansion and centralized processing and finishing hub, including their locations, configuration and capabilities; the combined value of the four-plant platform; the updated post-tax NPV of the Northlake Texas Facility; the targeted salable magnet capacity of approximately 4,192 metric tons per year by 2034; the targeted alloy powder and total salable material production by 2034; the targeted commissioning of Phase 1 of the Northlake Texas Facility in mid-2028; the progression to a Feasibility Study; the use of recycled and primary feedstocks; the production of higher-value magnet grades; the qualification of magnet products with potential U.S. customers; potential third-party finishing revenues; expected job creation; expected cost, synergy and low-carbon benefits; and the benefits to the Company which may be implied from such statements.
Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements due to known and unknown risks and uncertainties affecting the Company, including but not limited to: availability of financing; environmental risks and costs; permitting and regulatory risks; labor costs and shortages; uncertain supply and price fluctuations in materials; increases in energy costs; labor disputes and work stoppages; equipment leasing and availability; heavy equipment demand and availability; contractor and subcontractor performance; worksite safety issues; project delays and cost overruns; extreme weather events; social, transport, or geopolitical disruptions; availability of suitable feedstock; equipment performance and reliability; the ability to secure customer offtake and feedstock supply arrangements; changes in rare earth and magnet prices; and the accuracy of the estimates and assumptions underlying the PFS. For further details regarding risks and uncertainties facing the Company please refer to "Risk Factors" in the Company's filing statement dated April 6, 2022, a copy of which may be found under the Company's SEDAR+ profile at www.sedarplus.ca.
Forward-looking statements are based on assumptions that HyProMag USA and the Company consider reasonable, including the assumptions underlying the PFS (including forecast market prices, a
The Company assumes no obligation to update forward-looking statements in this press release except as required by law. Readers should not place undue reliance on the forward-looking statements and information contained in this press release and are encouraged to read the Company's continuous disclosure documents which are available on SEDAR+ at www.sedarplus.ca.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
[i] Each site was envisioned as a brownfield and lease development with no space or utility constraints, enabling optimized layouts
[iii] Patented Hydrogen Processing of Magnet Scrap (HPMS) technology developed at University of Birmingham, which liberates NdFeB magnets from end-of-life scrap streams in a cost effective and energy efficient way.
[iv]
[v] NPV does not include the economic benefit of any government or state incentives, or carbon pricing
[vi] Forecast market prices ("Forecast Prices") are the prices for all NdFeB products sold in the U.S, excluding residual scrap feed, with the rare earth price component thereof derived from the latest rare earth forecasts from Q2 (2026) Adamas Intelligence, over the life of the asset.
[vii] Association for the Advancement of Cost Engineering (AACE) - Class 3 Estimate prepared by PegasusTSI
[ix]
[x] Forecast market prices ("Forecast Prices") are the prices for all NdFeB products sold in the U.S, excluding residual scrap feed, with the rare earth price component thereof derived from the latest rare earth forecasts from Q2 (2026) Adamas Intelligence, over the life of the asset.
[xi] NPV does not include the economic benefit of any government or state incentives, or carbon pricing.
[xii] Northlake Texas Facility updated post-tax NPV was completed by PegasusTSI Inc. and BBA USA Inc consistent with July 2026 announcement - all economic assumptions on forecast prices, discount rates, valuation dates and tax assumptions are consistent with the PFS valuation approach.
[xiii] Association for the Advancement of Cost Engineering (AACE) - Class 2 Estimate prepared by PegasusTSI.
[xiv] An independent ISO-compliant carbon footprint assessment previously completed for the Northlake Texas Facility project confirmed a product carbon footprint of approximately 2.35 kg CO₂-eq per kilogram of NdFeB sintered block product, supporting HyProMag USA's continued low-carbon manufacturing strategy. No carbon assessment has been completed for the PFS plants and the carbon production footprint for those plants may vary from the assessment completed for the Northlake Texas Facility.
SOURCE: CoTec Holdings Corp.
View the original press release on ACCESS Newswire
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What does CoTec's HyProMag USA expansion study estimate for project value and costs?
The three-plant expansion has estimated post-tax net present value of US$1,854 million to US$2,062 million, excluding Northlake. The recycled-only case estimates approximately US$623 million in capital costs; the recycled-and-primary-feedstock case estimates approximately US$656 million. These study economics use forecast prices.
How much magnet production does CoTec's HyProMag USA platform target by 2034?
The proposed four-plant platform targets approximately 4,192 metric tons of magnets annually by 2034, compared with approximately 1,048 metric tons at Northlake alone. Total annual salable material production would be approximately 6,000 metric tons, including approximately 1,305 metric tons of magnetic alloy powder and 503 metric tons of other salable material.
How much of HyProMag USA does CoTec own?
CoTec directly owns 50% of HyProMag USA, with HyProMag Limited holding the other 50%. HyProMag Limited is wholly owned by Maginito, which is owned 79.4% by Mkango Magnetic Materials and 20.6% by CoTec.