Member Info for Hogsnipe

MAA86 - thank you for your kind words - us PRE long-term investors need to stick together don't we?

I'm as entitled as you to air my views on this board, and to my certain knowledge I've not once said PRE is worthless - quite the opposite in fact.

It must be strange for you living in a world where all issues are either black or white, so may I suggest if you are struggling to cope with intelligent and informed commentary here which tries to cover both sides of arguments - why don't you just filter out all the posts from all of us boring old f*rts?

You'll feel nice and safe in your isolated, opinion-less little world. Go for it.

Theo - no I don't, but you could always Google "Aerial photography survey drone video Longonjo Angola" and see where that takes you?

Me - I'm as just bored as TTony obviously is, waiting for the political earthquake of Trump II to register in the next 2 or 3 weeks and the ensuing international turmoil in his wake. Clearly no-one of a sound mind is going to make any major financial investments until the smoke has cleared and judgements can be called on whether he takes US critical minerals supply chains seriously enough to embark on the radical actions needed to break China's RE chokehold on US tech and military security.

Like TTony, I'm in a neutral position, so if my PRE holding should turn out to be worthless, it's covered by a number of successful ASML trades over the last 2 years. Still looking for some overall positive return on my cash though. Despite a near-5 year wait, I remain a patient man.

My, how things have moved on since Pensana was granted planning consent for the Saltend refinery:

https://imgur.com/a/XAgyb9a

Theo/4Kandles: hardly likely Joe would turn up in Luanda with suitcases of money to hand out is it? Also he's not likely to give any hard trade/tarrif assurances or guarantees, then have Trump embarrass him throughout Africa by tossing his toys out of the pram.

Nevertheless, in retrospect, Biden's visit was rather more than a jolly to boost his legacy, have a read here for a review of where things may be headed:

https://zedmultimedia.com/2024/12/05/the-economic-impact-of-president-joe-bidens-angola-visit/

under "Business and Financial Outcomes of Biden’s Visit"

Specifically:

"Expansion of Trade Agreements: New trade agreements are likely to include provisions for exporting rare earth minerals to the U.S., creating a steady revenue stream for Angola and securing critical materials for the U.S. clean energy sector."

Why else would the US DFC already have bunged Pensana a $3.4M feasibility study grant, if not to beef up Pensana's case to pitch for US funding/investment?

The same article comments on the de-risking of FDI in Angola - "Collaborations between U.S. financial institutions and Angola’s central bank could enhance financial governance and transparency, attracting international investors and boosting foreign direct investment (FDI), which totaled $8.2 billion in 2022".

Who could be bored by the emergence of the US as a potential backer for Pensana - it has very deep pockets, and with the Trump resurrection- a mission to ring-fence China's dominance?

Theo - I have a rather good knock knock joke for you - you start......

See these:

https://www.mining.com/china-bans-export-of-gallium-germanium-and-antimony-to-the-us/

https://www.ft.com/content/eca9a562-ffc7-4989-bbf6-734997409265

https://www.capitalbrief.com/briefing/china-strikes-back-bans-us-exports-of-critical-chipmaking-minerals-8c27889f-ce6d-4717-847f-50c4d4290e1c/

https://www.industryweek.com/the-economy/trade/news/55247135/china-curbs-exports-of-key-chipmaking-components-to-us

China today announced outright bans on exports to USA of some critical metals/minerals - restricting gallium, antimony, germanium, hard-surface minerals and graphite as tit-for-tat on the US's anti-China semiconductor trade restrictions announced yesterday, and Trump's pre-announcement of punitive China tariffs.

The threat is clearly imminent for a wider Chnia supply-chain embargo on all rare earth metals, should Trump/Biden fail to get the message on impending China tariffs in US and change course. This is a shot over SS Trump's bow before it even sets sail.

If Sleepy Joe/The Donald don't hear this message loud and clear - now is the last opportunity to invest rapidly in building alternative RE supply chains - they are courting military and economic chaos.

Wonder if PA has rammed this home in his presentation tonight? He'd be mad to miss his big chance.

Not that I'm expecting great things here, but Mighty Joe is winging his way into Luanda Airport on Air Force 1 right now.

First item on the agenda for his Magical Mystery Tour of Angola - meet & greet his embassy staff at 5:15pm GMT.

Tomorrow should bring some real news.

Well, I'm sure Theo/AS1971/Decimal/Dumpunter/SmartPunter won't have missed PRE is 100% up in less than 2 months. Suprised they're not posting congrats - maybe they are just too busy writing Christmas cards?

Come on lads - we need to be reminded that PRE are still 100% down on the 1 Apr 2023 price or we might get over-excited here.

Come on LSE. GaAs isn't obscene! **** holes.

Valuation - sorry but LSE filtered all upper-case letters to lower case in last post. Not my fault - fix your user interface you guys!

china's restrictions on gallium and germanium came in nearly 18 months ago and nothing much has fallen over in the west since.

the us military has stockpiles of germanium, sufficient for them not to worry, while they rebuild alternative supply chains. the us has its own substantial gallium ore reserves and years ago used to refine it's own metal production. there's a number of countries which already have the tech and non-china mineral supplies and produce high purity gallium/gallium ****nide - japan, belgium, germany, canada and the us itself, which may revert to refining its own supplies, given time - especially now they are re-shoring semiconductor fabs back to us, in place of taiwanese fab suppliers.

that's not to say noboby cared about the china ge/ga restrictions, obvously metal market prices (set by china....) went up 40% for gallium and 70% for germanium to date, but it wasn't long before the us slapped china round the face by introducing their own advanced semiconductor fabrrication technology embargo, which knocked china's ambitions to become a world-class domestic producer of the latest generation of chip designs and break it's dependence on us and korean and japanese supply chains, for six.

the us simply instructed asml - (the dutch-owned company is one of only two in the world who design and manufacture the advanced chip foundry machines and processes for the latest generation of multi-layer sub 14 nm pathway chips) - not to supply (or allow supplies from any other countries) of their advanced chip fab machines or tech to china. japan is also very active behind the scenes in establishing non-china critical minerals supply chains and promptly accelerated its investment in this tactic following the china export controls on ge/ga in june 2023.

things went quiet then...... but taiwan got even more worried about its neighbour.

Valuation-it-is, I doubt if China will suspend or restrict exports of RE metals for magnets and RE magnets as a response to Trump imposing new tariffs. They have too much to lose.

For a start they have deftly bypassed a number of other nations' China EV vehicle tariffs by building their own factories within those nation's borders. Same with EV batteries. Same with turbine construction plants. Then they have also changed their critical mineral supply chains, so that instead of China-owned mines in Africa, Malaysia, S America shipping their raw mine extract to China for refining and exporting back to the West, they do all that back at source through things like the Belt & Road initiatives. Bottom line is - China gets the money anyway plus the added bonus of increasing Chinese foot-fall, presence and ownership of infrastructure and national debt all around the world

The thing is - the Chinese are adaptive and when they see a looming issue they take action. China imports of rare earths have been dropping for years to today's 60% of world mined output, but it's still increasing it's domination of critical supply chains everywhere. Additionally, in the last two years they have hugely over-produced most of the refined critical minerals and also the end-products they are in - EV's, wind turbine drive trains, solar panels - you name it, they have vast stocks to dump on western markets and they aren't about to shoot themselves in both feet by imposing export ban/restrictions on their own producers.

Lastly, China's not the only major power to have a choke-hold over world supplies of vital critical minerals. It's not widely known, but the US is the only high-volume extractor/refiner of extremely high purity quartz anywhere in the world, and China relies on it for 70% of its most advanced silicon semiconductor fabrication, despite having tried desperately for years to find it's own high purity quartz mineral deposits and researching refining techniques to get out of this choke hold.

Between the US and Japan - life would be made pretty uncomfortable, pretty quickly for China if they tried to embargo US critical minerals and metals supplies - but we know they're much smarter than that.

Mumbles - I share your concern about increasing abuse of social platforms by 'bad agents' applying AI for their own nefarious ends. AI generative stuff is fast morphing into the 'tool-of-choice' for scammers and the work-shy - no doubt about that.

In that context, I've been thinking about modelling the dynamics of a public company's share register recently in order to get a fuller picture of where all of its shares really are, where they've been and where they're going. I thought maybe a starting point would be Venn Logic Diagrams, so I went online with a generative chatbot to explore the idea. I gave it 11 agencies which can hold or transfer shares in a single company and asked it to do a Venn diagram or graphic showing the relationships and overlaps between them.

Have a look here to see what came up - on the left is the only known generic Venn diagram layout for 11 sets (created by mathematicians), and on the right what the generative AI produced: https://imgur.com/a/Mx3jbq5

I particularly liked the 2-headed Share Borking agent at 6 o'clock! I think we might be safe for a while yet.......

Not everyone who trades PRE, reads or posts here (obviously), so why the current agitation here over occasional ramping and de-ramping posts, whether AI generated or not?

If you believe these posts make any difference to PREs day to day trading and share price, the evidence is - they don't.

I've tracked the daily total buy/sell trading volumes for PRE since Aug 1 this year and there are some surprising underlying trends.

Have a look at the growth trend chart here:

https://imgur.com/a/suUckCl

Key points:

- before anyone kicks off - yes I do understand that for every buy trade there has to be an equivalent sell trade, but that doesn't mean total buys = total sells every day - there are any number of intermediators in the market. However we can readily check the number of shares changing hands each day.

- since Aug 1 there were 44 of the 73 trading days, when more PRE shares were bought than sold

- and only 29 days when PRE sells exceeded buys

- in every single month - Aug, Sep, Oct and Nov - net PRE trading was positive - 1.5m, 1.2m, 4.2m and 1.0m (Nov to date) respectively

- over these 73 days of trading, a total of 34 million PRE shares were bought, 26 million sold, so the net change is 7.9 million shares.

- sometime in the 3rd week of September, both the SP and buy volumes up-ticked markedly

- net buy-sell volume trend remains 'positive improving', suggesting investors have an increasingly favourable attitude to PRE.

I'm hopeful we are seeing a sustained improvement, after a what has been a grindingly tedious doldrum - and maybe somewhat less worried that although patience is a virtue, it's not if you're on quicksand....

Not a single AT trade today - post-Budget blues maybe - all that cap gains tax - bound to affect the poor day traders... ahhh...

The Japan Organization for Metals and Energy Security (JOGMEC) is quietly increasing its presence in rare earth metals in Africa and other countries (eg: Australia - where Jogmec and Japan Australia Rare Earth (JARE) in September invested $9mn in Lynas' expansion project to increase its mining capacity in Western Australia to 12,000 t/yr from 7,000 t/yr by 2024 to meet growing demand).

See here for a (translated) article on how Japan is well-advanced on other non-China RE supply chains expansion (Pensana is mentioned):

https://www-agenceecofin-com.translate.goog/actualites/2010-122627-le-japon-la-puissance-qui-accroit-en-douce-sa-presence-dans-les-metaux-en-afrique?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en-GB

Japan is the world's second largest importer of RE materials at 15% of world output, vs. China at 45% in 2022.

Since they were embargoed by China in 2010, Japan has invested in rare earth mines overseas, helping to reduce its reliance on China from 90% at the time down to 60% in recent years. The Japanese government aims for China to account for less than 50% of its rare earth imports by 2025. It has already made substantial progress by investments to secure Australian RE exports (mainly Lynas), but is now ramping up its ambitions in Africa. Interest is currently focused on Namibia and its northern neighbour Angola.

In Namibia’s case, JOGMEC has already been present in the country for several years, in partnership with Canada’s Namibia Critical Metals on the Lofdal rare earths project. Under an agreement reached in January 2020, JOGMEC can obtain up to a 51% interest in the project, by investing at least CAD$25 million ($18 million) in exploration work.

For Pensana investors the most significant news here is:

"Japan does not rule out supporting this process, as evidenced by the memorandum of understanding signed last year with Namibia. It includes studies on the possibility of making the country " a hub for the rare earth industry in Namibia and neighboring countries, by considering the creation of a concentration and separation facility in Namibia for ore extracted in Namibia and neighboring countries ."

Could Saltend end up being built much sooner than we expect in Namibia ,in parallel with Longonjo mine establishment?

It's not beyond the realms of possibility, given the existing trade relations between USA and Namibia already a minerals supplier to the States:

https://www.csis.org/analysis/resource-nationalism-not-united-states-biggest-minerals-problem

It's temporary holdoff the trip, to do with hurricane Milton threats. He's still going to Germany and Angola though:

"Biden had promised to visit Africa during his term in office, which ends in January. He said Tuesday that he still intends to make the journey.

“I’m still planning on visiting all the places I said I’d be and all the conferences I said I’d participate in,” he said."

Trump never visited Africa, saying African nations were “sh#thole countries” back in 2018. In fact, no US leader has taken any interest in Angola since 2015. So why Is Biden's swansong appearance there? His trip comes after the UN General Assembly meeting in Sep and before US elections on 5 Nov.

In Nov 23, Biden hosted Angolan President João Lourenço at the White House. Then in May 24, Angola and the US signed an agreement to finance 3 major infrastructure projects in the Lobito Corridor totalling over US$1.3 billion to support the US and EU bid to secure a non-China supplyies of critical raw materials and valuable minerals - basically by shipping minerals out of Africa from a West coast port.

See this

https://www.eenews.net/articles/us-and-its-partners-unveil-plans-for-financing-minerals-projects/

Biden created the Mineral Security Partnership (MSP) - a partnership of US, S Korea, Japan, Australia, UK, Europe, Canada and 8 other country govts to secure non-China materials supply chains for EVs, renewable energy technologies and defence applications. This got some teeth 2 days ago with the announcement of MSP's "MINVEST" Finance Network of all the finance institutions & export credit agencies of the partner governments, to spur investment in strategic mining, processing, and recycling opportunities with high ESG standards.

See here for the MINVEST launch statement on Pensana:

https://www.state.gov/joint-statement-on-establishment-of-the-minerals-security-partnership-finance-network/

"Pensana Rare Earths: The U.S. International Development Finance Corporation (DFC) approved a $3.4 million technical assistance grant for the Pensana Rare Earths project in Angola that will support feasibility studies and testing for expansion of a rare earth elements (REE) mine, as well as feasibility studies for REE refining facilities in Angola along the Lobito Corridor".

So why now for Biden's visit? IMHO:

- maybe the US thought Pensana's Longonjo output was too small to be useful - but perhaps if Pensana could be encouraged to up their game?...

- Angola's ministries do not want the country to be bit players in the minerals supply chain - the higher up the value chain their mineral exports the better - hence the interest in building refineries along the Lobito corridor

- so where does that leave Saltend - out on a limb from the primary flow - mine > refine > Lobito > USA - where's the added value in lugging it up to a Hull refinery that will take years to build?

- Joe Biden will want to bow out and hang his legacy on some kind of high note, so could this personal trip to meet the Angolan president end with handshakes on major deals?

- Pensana may now be seen by the US as a low-hanging fruit, already well-advanced on the road to extraction and enrichment, - so it could be an immediate "win" for Joe, and a significant goal for the MSP to show it is serious about African support and secure non-China critical minera

The Penana MOU is similar to another Hanwa critical mineral MOU deal close to Atherley's heart - lithium.

At end-Mar 2022 , Hanwa agreed a similar non-binding MOU with Lake Resources (an Autralian lithium developer) for lithium carbonate take-off. Hanwa's investing strategy is strongly driven by ESG principles and restoring non-China supply chains for critical minerals in Japan, and there are many interesting parallels with the new Pensana MOU:

See: https://lakeresources.com.au/wp-content/uploads/2022/03/lke_hanwa-mou_29-mar-22.pdf

The last bullet point is very significant for Pensana - if its MOU goes binding, then the uplift effect of Hanwa's A/A- credit rating will de-risk Longonjo project financing and bring in investors.

"The Japan-based trading company Hanwa Co., Ltd agreed a non-binding MoU to negotiate for offtake up to 25,000tpa and develop a long-term partnership with Lake Resources.

• Offtake proposal for up to 25,000 tonnes per annum (tpa) lithium carbonate (+/- hydroxide) at market prices from the Kachi project in a non-binding agreement with the major Japanese partner.

• Hanwa intends to co-operate with Lake not only in marketing and distribution in Asian market but also in coordinating a strategic and sustainable supply chain with its potential customers in battery industry.

• Hanwa is considering a meaningful equity investment in order to build a solid and sustainable partnership with Lake Resources as well as other potential financial supports, such as a prepayment on offtake, trade financial facilities and project development supports.

• Intention to establish a strategic collaboration between Hanwa and Lake to develop a Clean Lithium Supply Chain to meet the environmental demands for Electric Vehicle, Stationary Battery and Cathodes’ / Precursors’ Manufacturers and their end customers.

• A successful outcome to negotiations will secure an “A-” credit rated offtake partner further de-risks the project for financiers and investors".

Mumbles - I hesitate to recommend anything the Rare Earth Observer claims, but the latest update makes very interesting reading:

https://treo.substack.com/p/on-rare-earth-prices-flawed-price

They say that price-rigging by the two largest China RE companies you mentioned is a thing of the past. It had to go because it distorted not only the world market, but disadvantaged the other domestic RE producers. The Chinese government had to evolve new laws and restrictions from 2015 onwards, so that they could bring in RE concentrate imports at sustainable prices for non-China producers, because they realised that China could not meet it's future RE needs from domestic extraction without entirely depleting its reserves, which breaks their 5/10/15 year economic plan.

REO also suggests that it is the refining of dysprosium and terbium for RE magnet doping which regulates how much Nd and Pr has to be refined from the RE concentrates. To meet targets for the first two, the complex separation process necessarily results in over-production of Nd Pr.

They also show a very interesting chart of RE concentrate pricing versus Nd Pr refined metal pricing. It is clear from the chart (if you accept its accuracy) that for 2 years from 2021, there was in fact no slump in RE concentrate prices levels, which stayed at or near the 2021 peak all the way through to Dec 2023, before falling somewhat. BUT the concentrate price fall has been much less than the refined metal price and still remains historically high at 100% over average pre-2022 prices. Nd Pr metal prices recently dropped below their 2017 levels in stark contrast.

As the timing of Pensana entering the refined Nd Pr market is clearly a number of years ahead and magnet production even further out, why the significance of Nd Pr prices to Pensana's investment? Well, China has huge dominance of the Neo magnet market, with only Japan, Gemany, S Korea and US as minor bit part players. There is consequently a relatively small world market for refined Nd Pr metals - not really enough to sway investment decisions. An early move by the US to slap 20% tariffs on Neo magnet imports looks unlikely to get the desired results. But, If China has been stockpiling surplus NdPr over the last two years - they will continue to subsidise their domestic magnet producers to benefit from rock-bottom magnet materials prices and flood the world with cheap EVs and wind turbines.

Their aim is to deter any Western independent supply chains at every level - RE concentrate production, RE metals refining, NEO magnet manufacture and all finished goods with significant NEO magnet components.