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CS - That’s a fair point to raise, but it mixes three different issues that need to be looked at separately: ownership, funding risk, and project economics.

-38.2% of future capex/opex:

Yes, in principle a 38.2% partner at Sable level should shoulder its pro‑rata share of future funding and operating exposure, and that does reduce the financing burden and risk for Pensana PLC holders. The question is on what terms – cost‑sharing is good, but if the price for that is a permanently lower economic interest at the asset level, the trade‑off needs to be very clearly set out so shareholders can decide if it’s worth it.

-“Pie” growing from US$1.6bn to US$2.87bn:

Those numbers are not in any RNS I’ve seen; they look like scenario assumptions rather than disclosed base‑case economics. Higher recoveries and circuit optimisation can absolutely improve NPV, but we shouldn’t just accept a claimed +80% uplift without seeing: updated mine plan, capex/opex, metal price deck, discount rate, and the sensitivity tables. Until the company publishes a revised technical/economic case, plugging a bigger “pie” into the argument is just illustrative, not evidence.

-Time to cash‑positive:

Shifting from two years to one year to cash‑positive is also a model output that depends on a lot of assumptions (ramp‑up curve, realised prices, actual costs, tax, working capital). It might turn out to be right with more capital and better plant performance, but again, that needs to come from a formal update, not from back‑of‑an‑envelope optimism.

So I’m not dismissing the idea that bringing Cascade in could both de‑risk funding and improve project performance – that’s the bull case. What I’m saying is that before we celebrate a smaller but “bigger pie” 42% stake, the board needs to show:

– the final look‑through ownership after all deals,

– a transparent, updated NPV/IRR based on realistic assumptions

– how much of that enhanced NPV actually accrues to each PRE share.

Without that, we’re being asked to accept real, hard‑number dilution today in exchange for very theoretical upside tomorrow.

Oscar - Your maths on the current look‑through is solid as a *static* snapshot, but I think the conclusion you draw from it is too absolute. You’re correctly using the RNS numbers: Pensana at 68.4% of Ozango after the FSDEA tranche, and then 61.8% of Sable after the 38.2% sale to Cascade, which gives the 42.27% look‑through to Longonjo.

Treating Cascade’s US$150m as consideration for an effective 26.13% of Ozango does indeed imply c.US$574m for 100% and c.US$243m for Pensana’s 42.27%. On that very narrow arithmetic, today’s £330m‑ish market cap looks rich versus that implied asset value.

But there are at least three big caveats:

1) The company has already said the 68.4% is not necessarily the end‑state and that Pensana’s effective ownership is “expected to increase” once the full strategic investment structure is implemented, so 42.27% is likely not the final number we should be modelling.

2) You’re implicitly assuming that the Cascade price equals a clean, arm’s‑length “fair value” for 100% of Longonjo, whereas in reality a negotiated deal like this will usually carry control, country and structure discounts that don’t translate 1:1 into a headline asset valuation.

3) You’re comparing that single asset‑level deal price with the entire equity market cap, which also wraps in any option value the market is still ascribing to downstream, future expansion and “platform” potential – whether we personally agree with that or not.

For me the key investor ask now isn’t to argue over whether US$574m is the “right” number, but to get the board to lay out a simple, post‑transaction table: after FSDEA and Cascade are fully implemented, what exact % of Longonjo, Sable and any mid‑stream sits with Pensana plc, and how are cashflows and protections structured for minority PLC holders? Once we can see the final percentages and the shareholder agreements, we can decide whether the dilution and pricing are acceptable – or whether the governance and value transfer really do justify calling this a “much worse deal.”

I’d treat the HS post as a checklist of questions for Monday’s update (if you are going and get the opportunity for questions) rather than a conclusion at this stage:

-Clarify who controls Cascade (high‑level ownership profile, jurisdiction, any related‑party links).

-Ask for a clear look‑through table: after FSDEA and Cascade fundings, what % of Longonjo economics does Pensana Plc ultimately hold versus other parties?

-Ask whether future mid‑stream/down‑stream projects will also sit in partially‑owned private subs and how minority protections and distributions to Pensana Plc will work (dividend policies, shareholder agreements, anti‑dilution).

If the board refuses to give any meaningful comfort on those points, then the post’s last line (“PI’s are not welcome here”) becomes a much more credible interpretation and would justify a higher governance discount in any valuation you run.

Example revenue range from Envipro‑linked Japan scrapAs a working assumption, a mature Envipro collaboration might channel perhaps 300–900 tonnes of NdFeB‑containing scrap per year into HPMS flows; with high HPMS yields, that could produce roughly 260–790 tonnes of finished NdFeB magnets annually if fully processed into magnets rather than oxides.

Applying NdFeB product pricing in the 50–80 USD/kg range (roughly aligned with Mkango’s “55 USD/kg” weighted current price with some upside), that volume would equate to about

13–63 million USD per year of gross product value

before considering how that is split among tolling, alloy/magnet sales, and partners

Interesting or not mka tsx is 56p to buy. Up today so far

You expect an RNS to confirm each stage? Personally, i would like a plant commissioned and production underway ramping up over the next 6 months to 10tpm or similar.

However, i also think something monumental is going on behind the scenes and all RNS other than essential e.g. SPAC are held. Just a hunch

If we were sat in April, I would agree. We are however in Q1 still.

@Jimzi - console yourself in the 1 year chart

Right – that’s exactly the sort of look‑through I’ve been trying to surface - my core point.

If ISR is ~81% at the Ozango level, and PRE will own 61.8% of Sable, then PRE shareholders are effectively sitting on something like ~50% of the project cash flows once you multiply those through. Whether it’s 49% or 51% is less important than the direction of travel: every layer (FSDEA, bridge loan pieces, now Cascade at Sable) chips away at PRE’s share of Longonjo. My concern, given that, is whether a ~£330m market cap still leaves enough risk‑adjusted upside for that ~50% look‑through slice, once you overlay the remaining funding, build and ramp‑up risk and the fact that Cascade’s US$150m was struck on better terms and rights than anything available to ordinary holders.

SP - Fair point, I was simplifying at the Sable level. You’re right that PRE was already below 100% look‑through on the project before Cascade, once you factor in FSDEA and the bridge‑loan related interests at Ozango level.

My point isn’t that we’ve gone from 100% of Longonjo to 61.8% in one step; it’s that the Cascade deal further reduces PRE’s economic share of project cash flows (via 38.2% of Sable), on top of the dilution that was already there. The question I’m focused on is: given that layered structure (FSDEA, bridge‑loan conversions, now Cascade at Sable), how much of the project’s NPV is really left for PRE shareholders at a ~£330m market cap, and does that still look attractive once you haircut for execution and funding risk?

Have any NPV figures been shared since the restructure?

CT - Fair correction on the legal structure – I should have been clearer. PRE goes from 100% to 61.8% of Sable, and Cascade takes 38.2% of Sable; FSDEA sits alongside Ozango directly rather than in Sable’s cap table.

That doesn’t change the economic question I’m trying to get at, which is:

– What is PRE’s look‑through percentage of Longonjo after you combine Sable’s stake in Ozango with FSDEA’s direct interest?

– How does that compare to the implied valuation from Cascade’s US$150m for 38.2% of Sable, and to the ~£330m+ equity value the market is currently putting on PRE?

I’m happy to use the precise legal structure (PRE 61.8% of Sable, FSDEA at Ozango level)

-the core issue for me remains how much of the project’s future cash flow ultimately accrues to PRE shareholders at today’s price.

CS - I think we’re actually closer than it looks/feels. Yes, Sable goes from 100% PRE to 61.8% PRE post‑deal, with Cascade and FSDEA sharing the rest, that’s exactly the dilution I’m focused on. And I agree the market seems to be looking only at PRE equity and not fully reflecting the 150m going into Sable, or attributing much enterprise value to Longonjo yet. But if that’s right, it cuts both ways:-

– On the upside, there’s optional re‑rating if/when the project is de‑risked.

– On the downside, you can’t claim shareholders “lose almost nothing” on the structure, because the market also isn’t yet paying up for the project value that’s being partly sold to Cascade.

My whole point is to keep those two things in view at the same time: how much of Longonjo PRE still owns (61.8%), and how much of that look‑through value is already in the current £330m+ market cap, given that the 150m at Sable level and the project risk still sit in front of the company.

CS - I get what you’re saying on the pure capital‑structure sensitivity, if you fix the net revenue line and all operating assumptions, you can absolutely move debt/equity around and see how that affects net profit per share.

My point is upstream of that, before you even get to that sensitivity, you need to ask

(a) how big the equity slice is at project level after selling 38.2% of Sable

(b) what share of that slice accrues to PRE vs Cascade and FSDEA

(c) how aggressively the current £330m+ market cap is valuing that look‑through exposure versus the Cascade‑implied project value.

Your framework is useful for “given a project and capital stack, what’s the best mix?”, whereas I’m trying to test whether today’s share price already assumes a very bullish outcome for that project and the downstream plan.

CS - it doesn't take long to descend into personal point scoring, not my game, just debate. Suddenly im Tbows mate because I don't agree with your model that you won't share?

The algebra isn’t what I’m questioning – we’ll both get 2×2=4. Where models diverge is in the assumptions you plug into those formulas: REO prices, capex/opex, ramp‑up curve, discount rate, and now the split between plc/Sable/Ozango and future dilution. Two people can use identical maths and end up with very different “fair values” depending on those inputs.

My concern is that, if you anchor on the Cascade‑implied project value and Pensana’s 61.8% look‑through, the current £330m+ market cap already bakes in a very optimistic success case on Longonjo and the downstream strategy. That’s the discussion I’m trying to have – not whether A+B=C, but whether the assumptions behind A and B are realistic for existing shareholders.

Im sure the model has inevitable bias unfortunately.

On face value (what we know today)....

The market (mcap) is currently ascribing roughly £170–£200m of extra value to:-

-Additional optionality (U.S. mine‑to‑magnet, other downstream).

-Confidence that Longonjo will exceed the simple Cascade‑implied valuation.

-Or just speculative enthusiasm.

Given the execution and financing risks that remain, that looks like a meaningful premium to the value implied directly by the Cascade terms.

I can see why the subscription price was 80p for the new shares. 20% discount was likely warranted.

Anyway, good luck all. I think those who have been in from the penny share days are all good. New investors today, slightly different picture.

Create your models, DYOR but consider future geo and dilution risk.

CS - Saying Cascade “takes 26.13% of the forward Ozango debt” makes it sound like Pensana’s own obligations are reduced mechanically.In reality, Pensana’s economic share of project cash flow and any shareholder‑level support is reduced because it now owns a smaller slice of Sable/Ozango, but lenders’ claims and covenants likely still sit where they were agreed (senior debt at Ozango/Sable, plus whatever guarantees the group has offered)

Still feels like large buy orders at 53p so reluctance to raise

The spread is a joke

CS ' Your comment suggests a “reduction of Pensana's debt and interest liability”, but the RNS says the 165m equity is alongside the proposed 160m ABSA/EXIM debt facility; it does not say the equity replaces a big chunk of that debt. Unless and until Pensana publishes a clear, updated funding bridge (project capex vs: ABSA debt, Cascade equity, FSDEA and any other equity), you cannot assume a large net reduction in future interest burden; the facility remains in place in principle.

Saying shareholders “lose almost nothing” ignores that 38.2% of Longonjo’s economic interest is now owned directly by Cascade, and that’s where much of the future cash flow sits.

I will resign to MKA board. Interesting read through to their MKAR plans.

What has actually changed vs the original messaging:-

-Size and mix of the “US$165m”Only US$15m goes into Pensana plc via equity at 80p for 13.55m shares (3.8%).

-Fully US$150m goes into the private subsidiary Sable (which owns most of Ozango/Longonjo) for 38.2% of Sable.

-So most of the strategic capital is project‑level, not parent‑level, and Cascade ends up with a big, influence‑able stake in the Longonjo vehicle rather than the listed company you own.

Use of existing share authorities

-They now say the board has “sufficient authority to issue the 13.55m ordinary shares… free of pre‑emption rights”, so they can do the 80p plc share issue without asking you.

-As a result, they are effectively cancelling/adjourn­ing the GM “sine die” and not putting the previous resolutions to a vote.

-That is a clear change in governance tone: what was previously framed as something you had to approve is now largely within the board’s gift.

Relationship to the ABSA/US‑EXIM debt

-They now explicitly package the ABSA US$160m debt plus this US$165m equity as covering Longonjo construction, the new drill/HREE programme, early downstream initiatives and NASDAQ‑listing/corporate costs.

-But there is still no line‑by‑line funding bridge against updated capex, so you cannot see if this combo genuinely fully funds through to first production or just gets them “a long way there”.

There are positives here, but the look isn't great.

On a binary basis (deal vs no deal), this still improves the project’s chances of being built and reduces catastrophic downside risk.

However, on a fairness and upside basis for existing PRE shareholders, it is clearly less attractive than early indications: most of the money and influence sits in Sable, and you’re being diluted both at plc and at project level without a clear, quantified “fully funded to 2027” bridge.