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Tony - agree with you 100% it will ultimately come down to an international political solution/stand-off with China. Problem is, we're in no-man's land now pending the ever-looming UK and US elections, to expect any HMG intervention and support in RE supply chains.
However, PA isn't relying on HMG backing any more. If he can get Longonjo off the ground, it will be just too embarrassing for any future UK government to cold-shoulder Angola's approval, and that gives PA an opportunity to get his foot in the door on Saltend development.
My feeling is that the PRE directors have probably been pressed by the Longonjo lender consortium, to 'put more skin' in the game to demonstrate some late-stage proof of commitment. We'll soon see.
One thing is clear in this board's cross-debate between PRE versus RBW and the rest - PRE is the furthest ahead on the Lassonde curve and is on the verge of breaking through into the extraction stage, but now it's reached do-or-die time.
Failure to get Longonjo over the line will destroy PRE's already battered credibility utterly.
It does mean something for Directors to put money into the company. It has an impact in conversations they have with other stakeholders.
What is needed are mechanism to support funding sources by the western governments to secure essential commodity resources that are adversely affected by China commodity manipulation or other Governments that wish to harm Western Governments and their people. Rainbow rare earths and Pensana projects are both needed. They are on similar delivery pathways, they both rely on a western government alliance, they both rely on a climate protection agenda they both need receptive financers and governments providing support for a long term market free of Chinese interference. China supports its industries quite intensively. It may go against western government ethos to take a leaf out of the Chinese market book, but in some way that may be necessary for western governments to do.
I also wish we had more respect for people who are trying to support western rare earth projects in this area without all the cross board company interference. I have investments in both. Both companies have merits and both have a risk of going bust which says something about the risk we are all taking in trying to help secure a better future quite probably for those in a younger generations than ourselves.
Tony
The new tax year coming up so looks like it could be good timing , new tax free investment here we come -
Lewis - Yes, I agree with Lessee. You are a very clever chap and you win. Pick your medal up on the way out.
Please do move on Lewis. We get it. You sold out. You broke even. Well done.
Yes, the muppet show has continued even post anti-economics poster boy Kwasi broke ground.
There were two helmets on that picture, well 4.
You are on the wrong board sum, this isn't the telegram fan club board, this is the public forum where anyone who has listened to the BS while the SP dropped from £2 to 15p can comment.
No one has answered the question re financing the plc (lights on, salaries) beyond 6-9 months.
2 mill loan back of incentivised salaries to the company. What a great bunch they are. It suggests a burn rate of 3-4 mill a year outside of the ring fenced project. Wow!
Must have expensive bulbs or it could be the trips to Angola to see the dirt road and telegraph poles again that has cost 4mill so far.
Far too many muppets about ; unfortunately the recent fall looks completely unnecessary and we are in the same boat as we were a month ago when we were 33/4p - except we are now closer to the funding being finalised I may have to have a scratch around the sofa ….. I need to take advantage of this silly price
Lewis - you really should get out a bit more. Take a long, hard look at yourself and ask yourself, why am I commenting on a board about a company I'm not invested in, trying to antagonise complete strangers whilst hiding behind a keyboard.
You've got to admit, it's a bit f***ing odd, isn't it?
Hi Lewis probably worth reading the RNS before posting.
When you have a couple of questions for you: How much cash does Rainbow have today and how much does it need to fund the next three years?
Suggest circa £1 million and >£15 million. Next raise @ 5p?
Not sure that you have answered the question regarding plc level funding (non project) in 6 months time? Deep pocket directors putting coins in the meter or an equity raise. M&G perhaps at 15p?
Don't worry about rainbow, they don't have to raise finance for a project that on today's pricing would be loss making as PRE would.
Take a look at HZM if you think that the current proposed finance will be enough for completion on time and the appetite of financiers elsewhere as a result.
The terms at best will be crippling.
The problem pre had was Saltend and the debacle of breaking ground twice. The mine could have been producing by now.
Good luck to all that still have faith in the companies rhetoric. At least the Angolan near by have benefited ftom the "Well paid jobs". Almost akin to the PRE board.
I will await your neurotic multiple posts in response :-)
Not me Hogsnipe! Bizarre mash-up of out of date information.
Anyone make any sense of this:
https://jornalf8-net.translate.goog/2024/terras-raras-governo-vulgar-povo-lixado/?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en-GB
Mish-mash of years-out-of-date stuff with a couple of startling claims. What to make of it?
"On 28 March 2024, two of the company’s directors have made available a loan facility of GBP 2 million to meet the underlying operating costs of the UK over the next 6 to 9 months"
Given Saltend financing is contingent on LJ being financed, it is good to see Directors putting their own money in - and not an insignificant amount either. No doubt the regular downrampers will attempt to negatively spin the loan, but anyone invested or thinking of investing in PRE should be encouraged by this development.
Worth a 10 min read - can't disagree much with Cornford's views:
https://masterinvestor.co.uk/commodities/green-seedling-part-2/
ALK - speculative punt, PRE not just yet.
Thanks Hogsnipe.
Key nuget for me is: Review by the six-member board, head of investment and key analysts of
FSDEA to review the early-stage construction activities being funded by
the US$15 million bridging loan from FSDEA, ahead of conclusion of the
main financing.
Lewis just took a moment to read through Rainbow's Interims.. three more years to catch up with PRE!
How much more equity with they need to raise to fund the DFS and then the FEED and then the Financing.. first full year of production 2027/8 .. maybe? (US$15-25m?)
From today's RNS:
Rainbow is currently carrying out a Definitive Feasibility Study ("DFS") at Phalaborwa, which is on track to be completed in the last quarter of 2024/early 2025. Following completion of the DFS, a Final Investment Decision will be made by the Board prior to construction and the expected commencement of operations by the end of 2026.
Lengthy coverage of Pernsana's unaudited 6 monthly results to 31 Dec 2023 on FT site today:
https://markets.ft.com/data/announce/detail?dockey=600-202403280928PR_NEWS_PRUKDSCL_0099-1
Combing for nuggets now....
Move along Lewis.
I would be a lot more worried about Rainbow right now if i were you. Circa £1 million in the bank to fund the project as well as its corporate overheads. Next raise 5p? Maybe Chairman Zero can help out?
PRE by contrast has FSDEA US$15 million funding to fund the project as well as deep pocket Directors funding the G&A.
Crunch time. Hopefully the week long visit results in signatures.
2 mill loan from directors to keep lights on in the UK in the meantime for next 6-9 months.
Question, post 6-9 months, where will bill money come from, a raise? Guessing it can't be done against the ring fenced project so guessing group equity.
Interesting times.
High time the Western politicians, the banks and industry users of rare earths all agreed that high tariffs should go on all Chinese rare earth exports and magnets etcetera and seriously support an independent supply chain away from China. Those countries using Chinese imported rare earth material to should have tariffs imposed on any product they export to countries supporting a western supply chain security model. Unfortunately to many people take backhanders from the Chinese Government as reported on GB news this evening and that includes certain people in our own parliament.
TheGreekLizard - Goldman Sachs may be optimistic, but tightening markets and lower interest rates won't be the key drivers for rare earth magnet metals and materials future pricing.
This is well worth a read (Feb 21 2024):
https://theoregongroup.com/investment-insights/the-wests-pursuit-of-rare-earths-hits-resistance-from-china/
China only needs to paralyze Western investment in building independent rare eath supply chains for about another 3 or 4 years, and then it will have achieved complete domination and control of the market. This will be the main determinant of where Nd Pr materials prices are going in 2024 to 2030, not global demand or borrowing costs.
Some key points from the above link:
"Rare earth prices surged in 2022, but then fell to some of their lowest levels for years after China ramped up production to 210,000 tonnes in 2022. Then in 2023, China issued — for the first time since it introduced a quota system in the 1990s — three quotas in one year, with the total a record high of 255,000 tons, a 21.4% year-on-year increase.
This oversupply has flooded the market and put significant downward pressure on prices, especially as demand contracts with high interest rates hitting the energy transition".
Net profit at China Northern Rare Earth Group (one of the largest Rare Earth companies in China) is estimated to have fallen 60% from 2022-2023.
“If you’ve got 90% market share of magnet processing capacity, there’s a goldilocks price where you earn a return but you don’t encourage anyone in the rest of the world to build capacity”
Chinese companies are also moving to dominate the international industry, for example, Shenghe Resources, the largest importer of rare earths in China, has moved aggressively in just the last few years to influence the international market:
- acquired stakes in two Australian companies that own rare earth mines in Greenland and Tanzania, with exclusive rights to the minerals
- acquired a 7.7% stake in MP Materials, the largest mine and processing plant in the US
- acquired a 9.9% stake in Australia’s Vital Metals
- acquired Canada’s rare earths stockpile
The Oregon Group Report ends by asking the question:
Is the West prepared to finance long-term, higher-priced investments to bypass cheap and efficient Chinese supply chains that are working to suppress prices and technological advancement, buy up stock and potentially introduce export restrictions to tighten supply?
That is indeed the question....
(Bloomberg) -- Commodities will advance this year as central banks in the US and Europe move to reduce interest rates, helping to support industrial and consumer demand, according to Goldman Sachs Group Inc.
Raw materials may return 15% over 2024 as borrowing costs come down, manufacturing recovers, and geopolitical risks persist, analysts including Samantha Dart and Daan Struyven said in a March 24 note. Copper, aluminum, gold and oil products may climb, according to the bank, which also stressed the need for investors to be selective as gains wouldn’t be universal.
Commodities have made a modest advance in the first quarter, with crude strengthening, gold hitting a record, and copper topping $9,000 a ton. Policymakers at both the US Federal Reserve and European Central Bank have signaled their intention to reduce borrowing costs this year as inflation ebbs. In addition, China has flagged further support for its recovery.
“We find that US rate cuts in non-recessionary environments lead to higher commodity prices, with the biggest boost to metals (copper and gold in particular), followed by crude oil,” the analysts said. “Importantly, the positive impact on prices tends to increase with time, as the growth impulse from looser financial conditions filters through.”
Goldman’s cautiously bullish outlook echoes comments from other market watchers. Commodities are entering a fresh cyclical upswing aided by tighter supplies and an upturn in the global economy, Macquarie Group Ltd. said earlier this month. Jeff Currie, formerly the head of commodities research at Goldman and now at Carlyle Group LP, has also forecast gains as the Fed cuts rates. Elsewhere, JPMorgan Chase & Co. highlighted gold’s upside potential.
https://www.bnnbloomberg.ca/goldman-says-commodities-to-benefit-as-central-banks-cut-rates-1.2051105
Lack of funding for new mining projects could reduce the availability of rare earth metals and minerals by 20-50%, creating shortages that impacts the production of batteries, McKinsey warns. Rising interest rates and less available finance made mining companies cut investment, with sector spending falling to around $40 billion in 2022, despite soaring demand.
Absolutely.