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Pensana Rare Earths

Dynamo1
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Pensana Rare Earths

#340624

Postby Dynamo1 » September 16th, 2020, 12:52 pm

If you look at today's NdPr (t) prospective values:
PRE 990,000
MP Materials 351,000
Lynas Corp 675,000

Company valuations / Market Cap.
PRE US$160m (190m x .66 x 1.28GBP/USD) - as at 12.50pm 16/9
MP Materials US$1.5bn
Lynas Corp. US$1.67bn

PRE is almost as big (in prospective NdPr reserves as the two biggest Companies in the free world).
The Banking Feasibility Study will re-address the valuation of PRE, grades of material will come into play but imho don't be surprised to see an upgraded company valuation of anywhere between £2 and £4.

Car manufacturers will all have to prioritise EV's. They will also have to ensure continuity of supply. It wouldn't surprise me if one of the majors e.g. Tesla, VW buy a rare earth company (or at least take a large stake). The potential for PRE is huge.

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Re: Pensana Rare Earths

#344908

Postby Dynamo1 » October 3rd, 2020, 3:47 pm

Updated Market Cap. to take into account new shares issued to Angolan Wealth fund.

PRE USD156m (203,095,822 x .60 x 1.29 GBP/USD) as at 02/10/2020.

Should build momentum on the way to Banking Feasibility Study due the end of this month.

Dynamo1
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Re: Pensana Rare Earths

#346672

Postby Dynamo1 » October 10th, 2020, 9:56 am

Updated Market Cap. (only gone up >$50m this week...).

PRE USD208m (203,095,822 x .79 x 1.30 GBP/USD) as at 10/10/2020.

There will be a feeding frenzy shortly on LSE as institutions get involved. Note brokers haven't even targeted institutions yet (awaiting BFS).
This stock has a long way to run.

everhopeful
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Re: Pensana Rare Earths

#346733

Postby everhopeful » October 10th, 2020, 1:45 pm

I see that Dave Hammond the Chief Operating Officer is leaving. This was announced after the market closed yesterday. Why? What effect will it have on the stock do you think?

Dynamo1
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Re: Pensana Rare Earths

#346749

Postby Dynamo1 » October 10th, 2020, 3:07 pm

everhopeful wrote:I see that Dave Hammond the Chief Operating Officer is leaving. This was announced after the market closed yesterday. Why? What effect will it have on the stock do you think?


Everhopeful - the announcement was made pre-opening yesterday 07.00am 9/10/20 and the shareprice rose by 8p during the course of the day so I don't think it is a major blow. He is stepping down as at 01/01/21 so plenty of time to find someone else as the Company transitions from exploration to development.

I think the share will continue on it's run until after the BFS at which time institutions will be actively targeted by the brokers. I understand that the brokers can account for circa 80% of the shares in issue and they are with long-term holders. The BFS will provide a value well in excess of today's shareprice maybe near £4.00. When the institutions come on board there will be a major squeeze on the available stock.

That's the bullish case, if I were to highlight potential bear traps they would be cash burn of circa $5.5m pa and a potential fundraise early next year and of course you can never 100% trust African governments. These are just my views and are not intended to be investing advice although I will be investing another £24k worth on Monday. I would probably take some profit shortly after BFS hopefully at around £1 / £1.20.

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Re: Pensana Rare Earths

#346902

Postby Dynamo1 » October 11th, 2020, 11:52 am

A contrarian view from Yahoo finance:

https://uk.finance.yahoo.com/news/pensa ... 54875.html

Highlighting funding requirements and cash burn.

GrahamPlatt
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Re: Pensana Rare Earths

#346906

Postby GrahamPlatt » October 11th, 2020, 12:14 pm

The article says they have over $4m cash at present, sufficient for 9 months development costs given their cash burn. But I do not think this includes the $8.6m they’re about to receive for issuing a further 13.5m shares to the Anglian Government’s sovereign wealth fund.

Dynamo1
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Re: Pensana Rare Earths

#347033

Postby Dynamo1 » October 12th, 2020, 9:02 am

GrahamPlatt wrote:The article says they have over $4m cash at present, sufficient for 9 months development costs given their cash burn. But I do not think this includes the $8.6m they’re about to receive for issuing a further 13.5m shares to the Anglian Government’s sovereign wealth fund.


Yes I agree, hopefully will provide more leeway before fundraise.

Interesting note earlier about a potential rare earths processing facility in the UK. They are certainly ambitious, I wonder how many billions that will cost??? Let's see if the UK government will chip in. I'm looking forward to the Wood Group report in 3 months time.

https://www.miningreview.com/central-af ... -facility/

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Re: Pensana Rare Earths

#347165

Postby Dynamo1 » October 12th, 2020, 5:35 pm

Paul Atherley interview with VSA Capital about UK offshore.

https://www.youtube.com/watch?v=T8o0Nfv ... e=youtu.be

Interesting points - Boris looking to spend £50bn on UK wind industry.
Wood Group to examine whether Pensana can create a facility in the UK to turn rare earth oxide into magnet metal.
Pensana has a green and clean sustainable source of rare earths.
BFS still on course for end October.
Pensana expect to "break ground" in January 2021.
Linus currently worth £1.3bn Pensana (at time of interview) £180m - Paul thinks company's are comparable in product / scale.
So Linus 7.2 times market capitalisation of Pensana - there's still a lot of room for growth and catching up with true value.

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Re: Pensana Rare Earths

#347282

Postby everhopeful » October 13th, 2020, 9:43 am

I cannot quite understand what the plan is for processing the ore from Angola at the moment. The idea of a plant in the UK is interesting but there are huge hurdles in terms of price and the potential for pollution. What are Pensana planning to do to process the ore at the moment. Also do we know if there is any thorium contamination of the deposits which would introduce a further problem with managing radioactivity.
I am enjoying a decent capital uplift on my original investment but wondering if I should bank the profit.

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Re: Pensana Rare Earths

#347283

Postby Dynamo1 » October 13th, 2020, 9:48 am

everhopeful wrote:I cannot quite understand what the plan is for processing the ore from Angola at the moment. The idea of a plant in the UK is interesting but there are huge hurdles in terms of price and the potential for pollution. What are Pensana planning to do to process the ore at the moment. Also do we know if there is any thorium contamination of the deposits which would introduce a further problem with managing radioactivity.
I am enjoying a decent capital uplift on my original investment but wondering if I should bank the profit.


It will be sent to China for processing. The Chinese have built the railroad and port in Angola for this purpose and as part of their general Angolan investment. As to whether you should bank a profit, perhaps wait for BFS (and any potential uplift) then bank your original investment and have a free ride with the rest (imho).

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Re: Pensana Rare Earths

#347293

Postby everhopeful » October 13th, 2020, 10:08 am

Thanks Dynamo1. I thought the processing would need to be in China which introduces a geopolitical risk and does nothing to reduce the global dependence on China for processed metals. I will hang on for the BFS as you suggest and take stock then. I have a very small part of my portfolio put aside for highly speculative investment but it brings considerable interest because of the research in to different areas of investment required. My holding in Highland Gold has done very well and if the takeover goes ahead, as I think it will, I shall have a chunk of cash in the speculative pot, so no rush to sell PRE.

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Re: Pensana Rare Earths

#347495

Postby Dynamo1 » October 13th, 2020, 7:36 pm

A couple of days ago Pensana Rare Earths Plc (LSERE, ASXM8) advised that they had appointed the Wood Group to undertake a study into the establishment of an integrated rare earth processing facility in the UK ("the Wood Group Study") with a view to creating the world's first sustainable magnet metal supply chain. This is excellent news for the UK and Pensana Rare Earths.

One site they should consider is the UK’s largest enterprise zone (the Humber). This zone is already the centre of operations for UK blade manufacturing, offshore pre-assembly and service. It provides space for numerous UK (and some European) offshore equipment manufacturers and supply chains.

It is said that 80% of all North Sea offshore wind farms and 60% of the entire European market for renewable energy is within 12 hours reach of the Humber. There is a deep-water port at Able Marine Energy Park, Port of Grimsby and there are rapidly growing operation and maintenance centre’s for the offshore wind industry.

Siemans have already invested heavily in the Humber Enterprise zone site, the German turbine manufacturer together with Associated British Ports invested £310m in a new offshore wind blade factory. Siemans Gamesa recently unveiled its next generation model. Its offshore wind turbine blade plant has already provided the blades for the largest farm to be built (and will for its successor) Hornsea One and Hornsea Two. The new 14MW direct drive turbines will use 108M long blades and the turbines will require over 7 tonnes of permanent magnets each. This confirms that there will be no shortage of demand, there are many more wind farms to be built...

All of this would tie in nicely with Boris Johnson’s £50bn UK offshore wind revolution and Pensana’s desire to build a UK rare earths processing facility. Boris aims to quadruple UK wind capacity to 40GW by 2030. UK demand for rare earth metals can only increase, the financial markets are already starting to appreciate this with the sharp increase in rare earth companies market capital across the world. Pensana should be in pole position to ensure a cost-effective supply to UK industry, ensuring the UK is not held to ransom by China who presently control all the other processing facilities.

Should the Wood Group Study recommend that Pensana build its facility within the Humber Enterprise Zone (or similar) the benefits would include; job creation, security of magnet supply, tax breaks and government support plus excellent transport links (shipping and rail). There are also enhanced capital allowances which are available to business(es) making large investments in plant and machinery.

All of these factors would be hugely advantageous to Pensana should it decide to go ahead. The financial commitment for such a facility would be huge and Pensana will need all the support it can get. Perhaps also, there will be pollution concerns but the prospect of creating and owning one of the only major rare earth facilities outside of China is too big an opportunity to miss. One thing is certain, you cannot guarantee continuity of supply if you are reliant on one country for processing.

Will there be competition? Well yes, the US have already stated they will assist MP Materials (privately owned) with funding as well as Australia’s Lynas Corp to develop rare earth separation facilities in California and Texas that will rival China’s.

Could such a facility be built in Africa – yes of course, there would be less environmental concerns, cheaper labour etc. but you would be at the mercy of Chinese (built and owned) infrastructure and the instability of government and economic policy.

As an aside, MP Materials could be an interesting investment play, they are expected to list on the New York Stock Exchange (NYSE) later this year under the ticker MP. The company stated it was “poised to become the Western champion of rare earth magnetics, onshoring a critical sector that will power a sustainable future.” No doubt Tesla and EV manufacturers would be interested in securing a rare earth supply source nearer to home.

Pensana have a switched-on management team who should be able to make the most of any opportunity that falls its way, let’s hope the Wood Group Study is of the same opinion and recommends the building of the rare earth facility in the UK. Remember, the Humber Enterprise Zone is very well positioned to serve the UK and European markets.

Regards D1

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Re: Pensana Rare Earths

#348433

Postby Dynamo1 » October 17th, 2020, 9:54 am

Updated Market Cap.

PRE USD235m (203,095,822 x .90 x 1.29 GBP/USD) as at 17/10/2020.

A pretty good end to the week with a 10p rise yesterday. Probably this is in anticipation of the BFS and the Coola block update both due before end October.

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Re: Pensana Rare Earths

#350226

Postby Dynamo1 » October 24th, 2020, 8:13 am

Updated Market Cap.

PRE USD208.5m (203,095,822 x .79 x 1.30 GBP/USD) as at 24/10/2020.

A difficult week where the price dropped quite sharply to start with but steadied by Friday. Broker advising T10 as BFS is rumoured to be very good.
We will have to wait and see...

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Re: Pensana Rare Earths

#350958

Postby everhopeful » October 27th, 2020, 10:16 am

Heading south still despite the appointment of Baroness Northover as a non exec. Actually the involvement of a Baroness may have a negative correlation with performance. Test and Trace comes to mind.

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Re: Pensana Rare Earths

#352172

Postby Dynamo1 » October 31st, 2020, 12:02 pm

Yes I guess it's to be expected. The Company assured BFS by end of October and missed deadline. A couple of weeks before "update" won't matter in the grand scheme of things. Price fell on relatively small volume.

As I wrote on yesterday on LSE.

"I’m glad the BFS wasn’t released on a Friday, it’s a traders sell up and go home day (in general). Plus, with the turmoil in the markets and the US election - news could be buried. By the 16th there will be a new president in the US and the Fed will have announced a major support package that will ensure a stock market rally.
Good to see my suggestion a couple of weeks ago about Humber for the U.K. processing plant has made it to the final three...
Rare earth prices are rocketing, when the institutions see how much resource we are sitting on, the share price will follow."

Weekly market cap has taken a tumble:

203,095,822 x .66 = £134,043,242.5 / GBP USD 1.29 = US$172915782.9

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Re: Pensana Rare Earths

#356409

Postby Dynamo1 » November 14th, 2020, 9:23 am

Not too much happening with PRE in the past couple of weeks apart from a sudden jump (circa 11%) yesterday to 78p ahead of the expected BFS "update" due on Monday 16th October.

Shares in issue Price Market Capital GBP Exchange Market Capital USD
203095822 0.78 GBP158,414,741.2 1.32 USD209,107,458.3

It was rumoured that there was a share tip on "Hot Stock Rockets" on Advfn but that is behind a paywall and I'm not going to give Clem any more money...I note that one of the contributors to Advfn for stock tips also happens to be a director of SI Capital (Pensana's stockbrokers) so make of that what you will.

If you are interested in how and why Pensana came to the LSE from ASX then below is a decent link to a webinar which includes Paul Atherley (from 30.25 mins). There is no Company specific information here but I found it interesting to find out about Pensana wanting greater access to capital markets. The webinar is really aimed at Aussie companies who might be considering a move away from ASX.

An interesting point that Paul made was that they haven't yet started to target institutional investors. They have been concentrating on shareholders who will treat the Company as an investment not day-traders. No doubt they will be targeting the institutions after the BFS.

https://www.lsegissuerservices.com/spar ... l-aus-2020

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Re: Pensana Rare Earths

#358683

Postby Dynamo1 » November 21st, 2020, 10:24 am

Shares in issue Price Market Capital GBP Exchange Market Capital USD
203095822 0.67 GBP158,414,741.2 1.33 USD180,978,687

A pretty poor week for the shareprice to be honest. But that's what happens when you underdeliver on a promise.
Paul Atherley repeatedly advised that the BFS would be ready by the end of October and then suggested "an update" by 16th November.
Well, there was an update but not too much meat on the bones sadly. Full BFS still not available and unlikely to be ready until January. This delay has stopped any upward momentum dead in it's tracks and has done nothing to instil trust in the Company with regard to it's announcements.

However, I learn that PRE will shortly be appointing an additional broker who will tasked with targeting corporate institutions. We shall have to wait and see. It is pleasing to see that the government is going ahead with a number of green initiatives hopefully PRE will get some of the action. I note my tip for the UK rare earths processing site (Humber) is still in the running, I think it would make sense to select somewhere close to it's potential customer base.

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Re: Pensana Rare Earths

#360870

Postby Dynamo1 » November 28th, 2020, 1:35 pm

Shares Price Market Capital £ GBP/USD Market Capital U$
203095822 0.75 £152,321,866.50 1.33 US$202,588,082.40
Decent jump in shareprice midweek in response to Liberium being appointed joint-broker. Liberium will be targeting institutions off the back of the BFS (when it hopefully turns up in January).

Rare earth prices have been skyrocketing over the past few months, MP Materials in the US has seen it's stock nearly double in value since the beginning of November. PRE perhaps due a re-rating, but it's one thing talking about future production, it's another if you are actually producing. PRE still has some way to go before it is in a position to reap the rewards of high rare earth prices. No doubt they will require further financing, perhaps the UK government will assist in the same way the US has with MP (I can see big incentives being offered to the [soon to be announced] processing facility).

I think PRE will be a good long term investment. There will be a sea of change with regard to green energy and the motor industry who will have to stop producing diesel / petrol motors by 2030. All governments will be undertaking green initiatives in the next couple of years, they can't afford to be seen slacking.

If I was looking for potential hurdles they would be:

Political stability in Angola (all ok now, but it is Africa...).
China - they have financed most of the infrastructure in Angola, will they be a willing partner?
Financing - they will need money early next year but hopefully institutions will step in.
Oversupply - causing a price crash. Difficult to see at the moment but there are quite a few rare earth minors all racing to produce the stuff. I wonder what would happen if one of the big boys BLT or RIO decided to start mining for these metals (after all, rare earths aren't that rare...), they could potentially produce huge amounts and quickly change the economics.

I don't think it will be long before portfolio managers will be including rare earth producers in their bucket of stocks. Let's hope PRE is one that they choose.


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