Toast the coconut by spreading it out in a thin layer in a skillet. Break up any lumps with your fingers. Set the pan over medium heat and,heat it, stirring constantly until the coconut is evenly toasted. This will take about 10 minutes. DO NOT walk away or stop stirring, it can burn easily. Set the pan aside to cool.
Add the sugar to the coconut milk and stir until the sugar is completely dissolved. Stir until you no longer feel any sugar crystals. Add the extract and put in the refrigerator to chill.
Add the coconut mixture to your ice cream maker and process according to the directions.
When the ice cream is firm, add a 1/2 cup of the toasted coconut to the ice cream while the machine is running, and let it incorporate completely.
Spread the ice cream in a metal loaf pan and freeze until firm.
Serve as is or sprinkled with extra toasted coconut.
If your ice cream has been in the freezer overnight, let it sit out on the counter to soften a bit before scooping.