Bring the milk and ½ cup sugar to a boil and mix well until the sugar has dissolved. Keep the mixture at a low boil for about 45 minutes, mixing occasionally during cooking time.
While you are reducing the milk, prepare the caramel: Put the remaining ½ cup sugar in a small saucepan over medium heat. Allow the sugar to melt, about 5 to 7 minutes. No need to stir, just swirl the saucepan around over the heat until it starts to melt. Once the sugar is a deep maple color it is ready. Quickly drizzle the caramel into the bottom of 8 4-ounce ramekins. The caramel will harden and crackle as it cools off. Don’t worry, it will liquefy once it’s in the oven with the flan.
Beat the eggs, egg yolks, coconut extract, and coconut milk in a mixing bowl.
Strain the reduced milk into a separate bowl. (Straining will remove any solid particles or milk skins.) Quickly whisk the egg mixture into the reduced milk mixture. Slowly pour into the prepared ramekins.
Place ramekins in a roasting pan and put on the middle rack in the oven. Carefully add warm water halfway up the sides of the ramekins.
Remove roasting pan from the oven and remove ramekins from the water and place on a wire rack to cool completely for at least 1 hour.
After 1 hour, cover ramekins with plastic wrap and transfer to the refrigerator and chill for at least 8 hours or overnight. (These can be made several days in advance and still taste delicious.)
When ready to serve, toast coconut in a dry pan just until it has a nice golden color. Carefully run a paring knife around edges of the ramekins to loosen the flan, invert onto serving plates, sprinkle with some of the toasted coconut and serve.
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