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SP

The real missile came from Jeremy Hunt when he decided not to follow the EU and USA in subsiding project development. Instead he bailed out University spin offs instead and believes that future growth lies there. It has then placed Pensana at the back of the funding queue as all other companies will have a significant off set which de-risks their projects. This situation has been made clear during this April month. Does not matter how good the management are when they are based in the UK and want to manufacture products in competition with China. AWF must be fuming after all the post Brexit clap trap and global opportunities. What can the Pensana management say to AWF and any African funding source after what is going on here. The Chinese must be delighted that Jeremy has a Chinese wife and they probably will give them lovely presents when they next visit Beijing.

Important to build up free carry in a stock and one that requires funding like this one should be in the 2-8% range in a portfolio. So if you build 2% free carry it could be a higher percentage in that scale. A 3-4% hit becomes recoverable within the financial year. I think its now a bridge to far for Pensana. For those taking a hit in non-ISA accounts it can be used to off-set capital gains tax elsewhere.

In the meantime, China is high grading its own mining resources on par with the fracking industry fiascos State side a few years back. Oil prices now 50% higher and I suspect for rare earth prices will be a lot higher by 2026. The timing for Rainbow could prove ideal. We also may be out of a recession by then.

Hi Angelis

There is a big difference in paper gold and physical gold. Paper gold trades on the futures markets are traded at high leverage levels. They are responsible for very large moves in the gold prices that happen in seconds and minutes on the futures market. They rarely if ever take physical deliveries. A lot of antics in the past are played out in the paper gold markets and we see a lot of activity when the FED does whatever. Physical gold has quite high premiums attached to it. If you buy physical gold you would appreciate the point I am making and of course you would be either taking a delivery or storing it in the vault of the organisation that you bought from.

Like it or not the jewellery market is a significant element of the entire physical market and bear in mind that miners rely in their physical supply. Central bank buying and investment coin and bar buyers are a lessor percentage although they create outsize moves that move up the gold prices on physical deliveries. The peaks of gold physical demand buying happen when jewellery makers buy up stock within the India market and when China has physical buyers before the Chinese New Year. If you look over the years we get peaks in physical buying January-March and we often see it again late summer to early October. Most frequently the lower purchasing months are May/June and November/ December. It does not happen every year. Physical buying by central banks is only visible later on and may arise in the quieter months and so it is not a perfect annual fit.

The point about my messaging is that we were losing a useful tailwind on the physical buying side. In addition, if a recession finally arrives with negative data in USA, then gold quite often gets sold off at the start both on paper and physical deliveries. The first indication of emergence from a recession is a strong move up in gold prices both in physical deliveries to replace what was sold at the start and paper based contracts. Another source of physical selling in a recession are those having to do so to cover other needs and some of those will want to re-acquire gold as well at better times.

I hope this helps put things into context.

Noel was correct for the intermediate term for those who want to trade Shanta. The fall back is partly seasonal in gold, it has also to do with a bet on those who anticipate dollar rising and gold pulling back along with sentiment indicators.

A range of other investors are correct for the long term say at 12 months with material growth in production, external acquisition interests growing and the chance of a new high developing in gold in early 2024. Eric has implied himself seeing Shanta value be much higher after he leaves six months from now.

So lets have some good will here on all sides and respect the fact that we are all managing our own money and the risks that go with it. That is a quality we all share and can take an element of pride in.

Tony

Did not expect to see the 7 handle. Well down on this one.

https://www.msn.com/en-us/money/news/the-u-s-wants-a-rare-earths-supply-chain-here-s-why-it-won-t-come-easily/ar-AA1aiBKJ

I feel like filtering the lot of you except for a couple who actually do write useful stuff.
At least be honest enough and say that you are writing as much garbage as possible as to decimate the share price to deliver everybody a terrific average down opportunity.

Of course folks are out there.

They see China collapsing NdPr prices to the point of being absurd.
They see only 0.5% shares of Pensana have got sold off in April so far and is little difference to the rest of the equity market this week.
They see more protests about climate protection.
They hear of well paid central bankers making serious mistakes and also say that anything to do with climate protection is not their job ( J Powell) and has nothing to do with economic models they use which are supposedly cutting edge.
They hear how are supply chains can be cut off and the vulnerabilities the UK economy.
They are aware of how rare earths influence large swathes of UK business and the importance and our capability of remaining a free democratic society and the importance as an island state that we have supply chain security.

Finally, we have recently seen how academics University start up companies were protected and we ask why this should not be extended to essential UK manufacturing enterprises like Pensana.

We await to see what happens.

bankrupty, you may like to hear the HZM presentation given earlier this afternoon. It will soon be in my top 4.

Small top for ISA and the non-ISA account.

Theo, the volume of trades is very low here and has been like it for awhile. A lot of PIs are waiting for lower prices to accumulate and the major investors will have an eye out for a recession hit in equity markets in general and so I do not seem them adding at this time. Any movement is likely to be from a distressed PI having to sell gains on HZM to cover problems elsewhere in their portfolio. The chart has been a flatliner and we have no signals to go on.

hope instead of how!

Eric has done a great job especially with the new Singida mine. I liked how he helped create a vision, took opportunities to grow the company and be what I call a builder. I also liked how he delivered news flow to investors. I just how anyone replacing him maintains those qualities.

The one thing gold miners can not control is gold price. It is a factor that can still result a Shanta retreating a little. The upside from the growth picture looks great from early summer as debt begins to ease off enterprise value. I believe sub-11p is in the rear view mirror ,but 11.5-13p is not fully behind us until we have a clear picture of what gold may do as we come into the slow physical buying season for jewellery in Q2. Shanta remains my number one share and is a dominant leader in my own portfolio.

The company has $65M in convertible notes in relation to the Vermelho Royalty and $88,060.100 special warrants as written in the 2021 annual report. They also have $25M royalty to pay on first 426,000 tonnes of nickel produced and $346.2M of bank debt. I am assuming Vermelho arrangement stays put as it was intended to be a longer term project which is following its own development pathway. I therefore assume the dilution is around 23% so at the current share price it would dilute the share value to 109p regarding special warrants if all converted. Without the 2022 annual report I am not sure of other warrants were created and can not be sure how many were already called in for cash. The company also carried out a dilution before initial draw downs on debt and I am not sure how this affected the warrants. A lot will depend on the future nickel price as the company metrics were based on $16,000 per tonne which it is now $24,000 and how inflation has impacted on that original figure.

Hence my logic of having my average well below 140p and ensuring an element of free carry from some earlier trades. If we get a recessionary impact in the next 3 months, I hope it will provide a very good chance to add in funds. Longer term. many people see HZM as being like Fresnillo in its early years (when it was 100-200p share price and then evolved into a much bigger miner with a corresponding higher share price as seen today).

It looks like Theorist and I are on the same side for a change. Contrarian is our prepare to buy signal. He did help it down to 90p a few months back and I did quite well out of it. More than happy for him to have his short on and try and deliver more wonderful entry points. HZM currently 6th place in my portfolio with healthy profit position. Plan to move it up to third place in a few months time with more HZM buying. Presentation 1400hrs on Monday.

USD is getting stronger.
Keeping my CEY ISA positions on hold. Holding enough cash to buy back all of my 2022 Centamin positions.

Shanta holding flat, HOC and Hummingbird are up and everywhere else is heading down in gold sector. Not sure how they can sell or buy anything above 150,000 here and must be a broker to broker call.

https://www.marketvector.com/indices/hard-asset/mvis-global-rare-earth-strategic-metals

So far the gold mining indexes have hardly moved and recovered 0.5% or half of what they lost yesterday. HUI ARCA looks like a top formation is in. Confirmation should arise over the next week or so. Gold ETFs giving a similar picture.