Investment Highlights for CoTec Holdings Corp. (CTH-TSXV; CTHCF-OTCQB)

CoTec Holdings Corp.
Suite 428
755 Burrard Street
Vancouver, BC
V6Z 1X6
Phone: (604) 992-5600
https://cotec.ca/

• CoTec Holdings Corp. (“CoTec” or “the Company”) is a forward-thinking mineral resource extraction and ESG-focused enterprise dedicated to transforming the global metals and minerals industry through innovative technologies and strategic asset acquisitions. By leveraging the growing demand for sustainable mining solutions, environmentally conscious technologies, and undervalued mining assets, CoTec is poised to become a leading mid-tier disruptor in the commodities sector.
  
  
• The Company employs a two-pronged approach to its business: (1) Technology Investments: acquiring stakes in disruptive mineral extraction technologies that prioritize efficiency, environmental sustainability, and scalability; and (2) Asset Transformation: applying these technologies to underutilized or undervalued mineral-based assets to enhance profitability and operational efficiency. 
  
  
  • The Company’s objective is to build a robust portfolio comprising 10 transformative technologies and 30-40 complementary assets. 
    
    
  • CoTec’s investments prioritize recycling and waste mining. This allows the Company to reprocess existing mining waste and scrap to unlock value in previously unprofitable or dormant assets that were thought to outlive their profitability, transforming undervalued commodity-rich assets into profitable ventures.
    
    
• The Company’s strategic approach provides it with three key competitive advantages: (1) low cost of entry; (2) reduced time to revenue (three to five years); and (3) strong barrier to entry due to proprietary technology.
  
  
• CoTec’s revenue model is built on two pillars: (1) Equity Appreciation: value growth from its technological investments, mining operations and joint ventures; and (2) Operational Revenue: income generated through the application of these technologies to its mining and recycling assets.
  
  
• CoTec’s financing strategy emphasizes minimizing shareholder dilution by leveraging non-dilutive funding sources, such as government grants, debt financing, and off-take agreements. The Company’s low corporate overhead—with only four full-time employees—ensures operational efficiency, while its disciplined capital allocation is guided by a strong governance framework led by a leadership team with a proven track record of value creation, and a demonstrated record of company-building in a unique space.

• CoTec currently holds a stake in four technologies—Maginito Ltd (20.6% equity stake), focusing on rare earth element (REE) recycling to address global supply chain challenges; Binding Solutions Ltd (BSL) (3% equity stake); MagIron LLC (16.86% equity stake) to advance low-carbon steel production; and Ceibo Inc. (3% equity stake), whose proprietary technology revolutionizes the extraction of copper from low-grade ores and waste materials.
  
  
  • The Company’s key assets include: (1) Lac Jeannine: A former iron ore mine in Quebec with potential for reprocessing historical tailings; (2) HyProMag USA: A U.S.-based joint venture leveraging patented technology for rare earth magnet recycling; and (3) MagIron’s Plant 4: A Minnesota-based iron ore concentrator designed to process waste materials into high-grade iron ore concentrate.
    
    
  • Maginito, through the operations of HyproMag and its other subsidiaries, aims to generate a sustainably domestic source of rare earth raw material that will support the defense, aerospace, automotive, medical science, and energy transition industries, reducing its dependance on Chinese REE supply.
    
    
  • HyProMag’s core proprietary technology—Hydrogen Processing of Magnet Scrap (HPMS)—is a highly energy efficient hydrogen-based process used to extract and recover NdFeB alloy powders from magnets in end-of-life scrap and redundant electrical equipment, such as computer hard drives and EV motors.
    
    
  • Maginito now holds a 100% interest in HyProMag Limited (www.hypromag.com) and a 90% direct and indirect interest in HyProMag GmbH (www.hypromag.de), companies focused on short loop rare earth magnet recycling in the UK and Germany, respectively, and a 100% interest in Mkango UK, a company focused on long loop rare earth magnet recycling in the UK via a chemical route.
    
    
• On January 3, 2024, CoTec and Maginito announced a joint venture to apply the HPMS technology into the U.S. market. The venture—HyProMag USA (www.hypromagusa.com),—is to be jointly owned by Maginito and CoTec. This provides CoTec with a 50% direct equity interest and a further 10.3% indirect interest through its 20.6% equity interest in Maginito.
  
  
  •  HyProMag USA’s feasibility study demonstrated robust economics, with results yielding a post-tax NPV of $262 million and real IRR of 23% at current prices, and post-tax NPV of $503 million and real IRR of 31% when using forecasted prices. 
    
    
• CoTec’s Binding Solutions Ltd (BSL) investment marked its first entry into the green steel space. BSL has developed a proprietary cold agglomeration process that transforms iron ore fines into high-quality pellets without high-temperature sintering, enabling green steel production at scale. CoTec has the exclusive right to apply BSL’s pelletization technology to ferroalloy and slag waste projects in Canada, Germany, Austria, and the Netherlands for a period of 36 months from the date of the investment agreement.
  
  
• CoTec has entered into an option agreement to acquire the Lac Jeannine property in Quebec, comprising a contiguous block of 31 mineral claims covering an aggregate of 1,649.34 hectares. The property has an estimated 73 million metric tons of resources at 6.7% total iron, resulting in 4.9 million metric tons of contained total iron, with lands surrounding the tested area  potentially holding an additional 50 to 75 metric tons.
  
  
  •  Preliminary Economic Assessment (PEA) yielded a pre-tax NPV is $93.6 million, and an IRR of 38%, and the after tax NPV is $59.5 million, and an IRR of 30% with payback achieved in 2.5 years. The Company is planning to conduct a feasibility study during 1H 2025.
    
    
• CoTec expanded its green steel market footprint through its MagIron investment. MagIron was established to support the decarbonization of the U.S. steel industry through the acquisition and restart of an iron ore processing plant (Plant 4) in the midwestern U.S., designed to process previously discarded waste materials.
  
  
  • MagIron has secured lands containing more than 193 million metric tons of iron bearing waste material, which is sufficient to support an estimated 20+ years of operation. 
    
    
• Plant 4 is a relatively new, past-producing iron ore concentrator benefiting from over $170 million of prior investment. The plant, completed in early 2015 and operated for 21 months, previously displayed a run-rate of approximately 2.0 million mtpa and was designed to expand to 3.0 million metric tons per year relatively quickly.
  
  
  • MagIron intends to restart the operations at Plant 4 following completion of a refurbishment program, which is currently anticipated to take approximately 24 months and cost approximately $80 million. 
    
    
• Ceibo has developed a proprietary technology that could represent a leading, low-carbon, high recovery process to mine copper from low-grade primary and waste material using a high throughput leaching technology.
  
  
  • CoTec is currently working on the identification of potential operational application opportunities for Ceibo technology. Opportunities identified by CoTec, if pursued by Ceibo, will be done in cooperation with CoTec as a joint partner/investor. 
    
    
• CoTec believes its market valuation does not accurately reflect the value of its technology and asset acquisitions. Third-party NPV estimates place the combined equity ownership of just two projects—Lac Jeannine and HyProMag USA—at $217.5 million, exceeding the Company’s current market cap. Additionally, CoTec’s technological investments represent further significant, yet unrecognized, value.
  
  
• As of September 30, 2024, the Company’s cash and cash equivalent position was C$1.17 million.

Updated on February 18, 2025.