News

Vancouver, British Columbia – February 7, 2023 – CoTec Holdings Corp. (TSXV: CTH) (“CoTec” or the “Company”) is pleased to provide an update in respect of its portfolio, investment initiatives and other matters.

Julian Treger, CEO, commented: “2022 was a very successful year for CoTec, despite challenging macro- economic conditions during the second half of the year. Since re-admission to the Toronto Venture Exchange (“TSX-V”) nine months ago, we have completed three investments, reviewed many potential opportunities and progressed to due diligence on several of them. During that time, there has also been considerable value creation at our investments, leading to an increase in our portfolio with CoTec reporting a profit for the first time since inception on the back of these gains.

“Recently we have identified two potential joint venture opportunities for the application of the Binding Solutions Limited (“BSL”) technology, and we have commenced high level discussions with the respective counter parties in this regard. If successful, these could potentially lead to future operating revenue for CoTec. We are also looking forward to working with the Mkango Resources Ltd. (“Mkango”) team to pursue rare earth elements (“REE”) opportunities in the United States and will provide an update on this front in due course.

“During 2023 we will continue to identify disruptive technology solutions that fit the CoTec investment criteria and also work with our current investments to develop operational applications of their technologies. If appropriate, we will further strengthen our team and will also focus on marketing and investor relations in an attempt to close the value gap between our view of the CoTec value proposition and our current share price. Finally, we have applied for listing on the OTC Market in the United States (“OTC”), which we believe will make it easier for US based investors to purchase our shares. Our application is currently being reviewed by the regulators at the OTC.

“The focus on ESG in the globally emerging green economy demands technology solutions for the mining industry’s emissions and environmental challenges while meeting the ever-increasing demand for resources. CoTec’s ultimate strategy of creating a technology driven mid-tier mineral resource producer, focused on limiting carbon emissions and minimising operational footprint is at the forefront of this trend.”

CoTec Portfolio

BSL

BSL is developing an innovative suite of technologies and continues to test its solutions with many of the world’s leading steel and iron ore producers. This resulted in 2022 revenues increasing by more than 100% year-over-year. To meet the continuing growth in customer demand, the company is planning a full-scale production module to produce bulk samples of 10Kt to 50Kt for its customers for furnace trials and act as a demonstration plant. As previously reported, BSL estimates that its technology for creating green pellets could result in a meaningful reduction in global carbon emissions by replacing sintering and induration processes which account for approximately 15% of carbon emissions from the global steel industry. CoTec

believes BSL’s technology has the potential to reduces these emissions by around 90%. Once the technology is proven for a particular operation, the low-cost and modular nature of BSL’s process also means it can deliver significant reductions in capital investment costs when compared to traditional pelletization processes.

CoTec invested US$2 million into BSL at a pre-money valuation of US$75 million and has the option to invest a further US$2 million at a maximum valuation of US$130 million. CoTec’s current internal valuation of BSL indicates a value significantly in excess of this threshold so, subject to the availability of funding and Board approval, CoTec expects to exercise this option.

MagIron LLC (“MagIron”)

MagIron owns an iron ore processing plant together with significant iron ore tailings and fines in Minnesota that could support operations for decades. MagIron’s goal is to become an important strategic supplier of high quality, low carbon iron units to support the creation of a green steel industry in the United States.

CoTec owns approximately 16% of MagIron. Since the Company’s investment, MagIron issued a convertible note with a conversion price that is more than double the price CoTec paid for its investment. This resulted in a significant revaluation of CoTec’s investment during the second quarter of 2022.

MagIron continues to work with the BSL team to explore the possibility of applying BSL’s pelletizing technology at the MagIron facility to produce green pellets.

Mkango

CoTec has entered into definitive agreements with Mkango and its wholly owned subsidiary, Maginito Limited (“Maginito”) on February 1, 2023. Under the terms of the agreements, CoTec provided a two-year secured convertible loan of GBP2 million to Mkango (which amount includes approximately GBP1.5 million in interim funding previously provided by CoTec) and will subscribe for a 10% equity interest in Maginito for GBP1.5 million by March 15^th, 2023. Mkango has two main assets - a rare earth development project in Malawi which, according to a feasibility study that Mkango published in August¹ 2022, has a post-tax NPV10% of US$559 million and, more interestingly to CoTec, an interest in a green process utilizing hydrogen to recycle rare earth magnets and extract the rare earth elements (“REE”) from them.

During the third quarter of 2022, a pilot plant for rare earth magnet recycling was commissioned in the United Kingdom to scale up the technology and a demonstration plant at Tyseley in Birmingham is expected to be built and commissioned during the second half of 2023. A further plant is also scheduled to be built in Germany in 2024. All three of these plants have received government support in the form of grant funding.

CoTec and Mkango will also enter into a co-operation agreement regarding future investment in rare earth processing technologies in the United States. CoTec believes that the Mkango recycling technology will align well with the desire of the United States to be strategically independent of China.

¹ See “NI 43-101 Technical Report on the Songwe Hill Rare Earth Element Project in Malawi”, prepared for Mkango by SENET, a DRA Global Group Company dated August 18, 2022 with an effective date of July 1, 2022. The report can be accessed under Mkango’s SEDAR profile at www.sedar.com.

CoTec Pipeline

In addition to the existing investments and commitments described above, CoTec is exploring numerous additional investment opportunities including disruptive technologies focused on the creation of green concrete and rapid heap leaching of copper and gold. CoTec’s ability to make further investments is subject to its ability to secure additional capital to fund these investments.

Finally, CoTec is focused on identifying joint venture opportunities for the application of the BSL technology and will soon start the feasibility work in relation to REE opportunities in the United States in collaboration with Mkango, as it pursues its goal of becoming a mineral producing company.

Other Matters

Our newly appointed Chief Operating Officer, John Singleton, joined CoTec on January 2, 2023. John spent the bulk of his career at Rio Tinto Plc and his technical, project evaluation and business development background provides strong support to the CoTec team. The Company will continuously seek to strengthen its team throughout the year in response to investment and operational opportunities.

The Company believes that its shares are trading at a significant discount to their current ‘sum of the parts’ value based on the Company’s view of the value of its investments and intends to accelerate its marketing efforts in early 2023 to address the matter.

CoTec submitted an application for trading on the OTC in January 2023. The application is being reviewed by the relevant regulators and, if approved, the Company’s shares should be trading on one of the OTC’s markets by early March 2023.

About CoTec

CoTec is an ESG-focused company investing in innovative technologies that have the potential to fundamentally change the way metals and minerals can be extracted and processed for the purpose of applying those technologies to undervalued operating assets and recycling opportunities, as the Company seeks to transition into a mid-tier mineral resource producer. The Company is committed to supporting the transition to a lower carbon future for the extraction industry, a sector on the cusp of a green revolution as it embraces technology and innovation. CoTec is a publicly traded investment issuer listed on the Toronto Venture Stock Exchange and trades under the symbol CTH.V

For further information, please contact:
Braam Jonker – (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" that involve risks and uncertainties, including statements relating to management’s expectations with respect to its current and potential future investments, the value of such investments 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. 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, as well as its other disclosure documents, copies of which may be found under the Company’s SEDAR profile at www.sedar.com.

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 news release.