Member Info for Chinasyndrome

Might I suggest that the first thing that everybody does today is to checkout the price of NdPr in China overnight.
https://www.metal.com/Rare-Earth-Oxides

NdPr Oxide jumped around 12% and is now US$67,750/t !!!!

Problem is the Market Maker is destroying the SP to milk the ASX, then the LSE follows !
If he wants liquidity He would be better off putting in a support level and a following stop block, Long term holders are not going to sell out low, medium term holders are waiting for their CapGain Tax break and Day Traders are just about gutted, waiting to buy back in before the next Announcement.

Hi Tony,

We seem to be discussing "Unknown timelines" here, so I will agree that there could be some variation between our estimates. FYI there is a "Wet" season at Huambo Sept-Nov but it is usually not severe and so long as the Civils and most of the Heavy machinery are done by then should not be too much of a disruption to fitting out: Instrumentation, Services and Commissioning.

One thing I took from the BFS Update was that with the new "Resin" process they do not expect much change in CAPEX, Which was stated in the PFS ! Given they were talking about additional cost for the MREC plant I am now assuming that that part of the circuit is no longer in the plan. Which probably gets rid of the largest and least ESG compliant item ie a Rotary Kiln. I have an inclination this new process is going to be fairly simple and probably not much more than a simple flotation circuit. Pure speculation on my part of course, but if so could indicate a fairly quick and simple build.

Anyhow I think we can agree to disagree on some points, at the end of the day Pensana/Longonjo will get into Production because the World needs it to at which point we will all be very happy Shareholders.

Tony, As much as I like your Posts, Why are you making claims Contrary to what our BOD are saying ? Every indication from Management to date is that Construction commences in January, Having built eight, far more complicated Mines myself, I can see no reason to believe that Longonjo should take any more than Nine months to complete, especially if prefabricated. Usually delays are caused by Long Lead items, Crushers and Mills especially, Being "Free dig" Longonjo should only require an Off the Shelf Sizer and a medium sized Chinese SAG or Ball Mill.

I disagree with your observation that " is unlikely to follow NdPr prices at this time" as I fully expect the SP for Pensana to rise in sync with the rising NdPr prices, as you yourself say we are currently valued by the "In ground" value of our assets, your statement is therefore self-contradicting !

Of course prices will take off in December (If China does not withdraw its threat to Embargo), they are already going up in anticipation of that date.

Pensana appears to have sufficient "Operating Cash" till last until Easter at least, BFS, Coola, Construction, Processing Plant , REE Prices and several "News" events before then should see the SP back at an acceptable level for a CR.

Shareholders trying to Micro-manage the BOD is a sure way to kill a Company, blaming Management for the current woes with the SP is also not on as it is the shareholders who set the SP. That Longonjo , with a resource currently worth over US$50Billion is going to be a if not the largest supplier of NdPr to the UK and EU for decades to come.

Several years ago when Gold was around US$1,200/oz, takeover valuations were estimated at US$100 per Resource /oz
ie about 8% of the in ground value. Note that is for an undeveloped Resource not a mine.

Apply a similar methodology to Longonjo then discount it 50% (just in case) and you will find our MC should be US$2Billion today, not next year or the year after.

OK All, 21:30hrs EST; 9.30am GMT

??London has finally descended  66.5p  to match Today's close on the ASX $1.22 and now looks to have leveled out.? The Gaps have been closed, so can we please resume "Adding Value". Please don't leave a gap on opening tomorrow no matter what London/Sydney does overnight !

??IMO fair value has to now be well over $2,50 but lets take it slow and easy,  remember Coola, Her Ladyship and Resin, then factor in the constant rise in NdPr prices, with the China embargo and there is a distinct possibility in two weeks time it will put us closer to $3.00

??If the potential of a 100% rise in SP in under two weeks does not convince you DT's to hang on rather than dump at a 10% gain you need help !.

Tony, I beg to differ, That Gap was created after the BFS update (News) and was generating solid volume with some 300,000 shares traded in the first 20 or so minutes. Such a Gap is known as a "Breakaway Gap" in the Chartists Bible and does not need to be filled, but rather the opposite it is advised to ignore it and move to a higher set of indicators.

But our resident Chartist failed to mention that to his following DT's who performed like well trained Lap Dogs and immediately sold down the next day. Needless to say LSE followed and the ASX will follow the LSE close tomorrow !!! We need a circuit breaker or remove one of the feeding troughs.

Hi Tony, You don't think the Australian Broker would be deliberately feeding the Day Traders to keep the price of PM8 down so that he can make a profit on the price differential ? rather than doing his job by buying up PM8 at market and sending them to the UK to be converted ! That would be verging on fraudulent manipulation in my books.

I hope it is more a case of the DT's seeing the constant Gaps occurring when the ASX follows on from the LSE close then believing Chartist theory to justify a sell down ~ they thrive on volatility real or manufactured.

We then have the snowball effect ie when the ASX drops (see Gap) the LSE follows the next day and vice versa.
The only way we can break this chain is to get rid of one Exchange ie De-list from the ASX.

How many realize that today's Shanghai Nd price of US$59k/t is now well above Roskill's Base rate that was used in last years PFS; and which generated a Pre-tax IRR of 101% and an EBITDA of US$1.3 Billion,

The New York price is heading to close this year ABOVE Roskill's High case ! which gave an PT IRR 129% and EBITDA of US$2Billion ~ and we still only have 200M share issued :)
(it is already US$77k/t) with 30 trading days to go

Joe, Good question, Was the LSE raise last Friday in anticipation of the Update or Yumyum buying in ?
Today's ASX response was most definitely in response to the Update as it received almost universal approval on the Hot Copper BB. It matters little as the Company is still way below "Fair Value" due to a few DT Parasites milking the SP in Oz, they are a dying breed; but because most of the Oz Investors are maxed out the DT's can have a disproportionate effect.

Investors in the UK should now be concentrating on the upstream Processing facility, the mine is there and has been partially valued by Oz (who understand holes in the ground) the real profits will be made in Processing and Magnets, which Australians have yet to understand !

Well the ASX started to respond very well to the BFS Update, and PM8 were up almost 10% within the first hour of trading :)
THEN, the whole ASX crashed ie Went Off-Line, close of play for the day, Brokers get a very long lunch so will probably hung over tomorrow morning :) :)

Some very interesting comments in the Update. Best of all, a Revolutionary new Process that if employed at the mine will greatly enhance processing in the UK, Kitty has plenty of cash to keep Longonjo going, CAPEX is still around PFS levels $130M

Whoever was capping the Oz price at $1.27 either gave up or closed up at lunch time today; solid buying since then to close 3% up on the day at $1.28 ~ which was in line with other REE hopefuls.

Only one more (Oz) shopping day left till the BFS, so tomorrow should be a big day.

Hi Redroy, Yes you are correct, Peak has an option over a pretty good site on Tyneside, but I can't see them proceeding until they manage to get a Mining Licence, which is looking less and less likely as the newly re-elected Prez of Tanzania has his hands out for a greater share.

However that will not concern Pensana, from what I am hearing there is almost a bidding war going on between prospective local councils, keen on hosting a Processing facility ~ Humber and Merseyside are both great ports so it will come down to an evaluation as to which can offer the most cost effective solution. It will possibly come down to transport/cost of reagent suppliers and too downstream consumers.

With demand set to rise considerably, and the threat of a Chinese embargo the price of NdPr is already starting to move, this project was already attractive at the PFS stage, the fist part of BFS (Longonjo) will confirm the economics of the mine and the second part (UK) will greatly enhance the ROI for the proposed vertical integration of Mine to Magnet.

In case anybody missed it : The price of Neodymium has risen 25% in Ne York since Aug 1st.

I am not sure that many people recognize the true significance of these recent REE price rises for Pensana's ability to leverage future Profit !
ie: Leverage is the ability for a small rise in a commodity price to generate a much larger increase in returns for the Mine,

Looking at the PFS base case, we see Revenue of $3,821 / tcon
And costs of producing that ton of concentrate at $1,323 / tcon
Which implies a gross profit of around $2,500 / tcon

That profit was calculated on Nov 2019 commodity prices,
Since then NdPr has risen around 12.5% ~ which boosts revenue to $4,280/ tcon today and generates a gross Profit of $2,975 /tcon

That equates to an 19% increase in gross Profit projections since the PFS, without any increase in costs !
The fact that most costs are accounted for from the initial levels of revenue means that Price rises above that level are almost pure profit.

If we ever see NdPr rise ~ 60% to say ~ $100,000 /t we would see our revenue increase to $7,642/t and Profit $$6,320/t ie a 153% increase.

And don't laugh at that $100,000/t, in May 2011 Nd was worth $283,000 / t !!!

Hi Tony, That is an interesting way to evaluate a Resource, there is logic in the method, although I am loath to work on anything beyond 20 years in this economic climate. We both come up with similar SP valuations especially when you take your EPS and use a 10:1 PE ratio to estimate the Market Cap ~ +/- 50% before we have a good handle on the metrics is a reasonable level of accuracy.

Pity we can't realize the In-Ground value, as I estimate it to be in excess of US$20Billion just for the NdPr content alone. !

Oz traders finally seem to have become board of the elections and took PM8 back up to $1.18 at close (64p), don't know why they were worried, it will be a win-win outcome as far as Rare Earths go ! NdPr prices are still rising in Shanghai

LYC's main problem was they never really aligned with any significant market demand, back in 2010 the La Ce market was collapsing and demand for NdPr is only just starting to take off ~ soon to be ballistic. Then they have suffered from continual finance costs and problems with their host country Malaysia. They now have to build a brand new Processing plant at Kalgoorlie, 600+km from their suppliers and in the highest cost town for Wages and Power in Oz........ I certainly would not be waiting for LYC to pay any dividend ! You may be right with PRE, but I doubt it, once CAPEX has been paid there should be plenty left in the kitty, and I think our largest shareholder would be expecting such.

Ok Chaps, Those colonials have finally filled that Gap that they so carelessly left in their wake. So the DT's are now happy to let us resume the path to Fair Value before the BFS is released.. ASX:PM8 jumped up 12.5% today to close at $1.40 (77p) and would have been considerably higher if some yokel had not forgotten to move up his sell placement ! (we now have a 10c gap to $1.50 which will last 10 sec's tomorrow !)

Big News has finally put a floor to the downward trend,
The whole Oz market was down across the board awaiting the US to stabilize.

In this case it was a large 100k buy order placed at $1.35.
When a share is being dumped by DT's, short sellers and Bots, it tests their commitment and ability to drive the price down any further. Today's effect was immediate, as there is little point in attacking (selling into) it unless you have the backing to take it out. Sort of like going "All in" when playing Poker, ie Put up or shut up. The only sales after the block appeared were by a lonely BOT whose owner had obviously forgot he had it running !