Member Info for Tornadotony

How these things work.

Expression of Interests on a fund of £1000M usually attract shed loads of applications. The EoI rejection rate is likely to be absolutely huge. The effort to work through a full proposals are significant. The programme management and commissioning group will know that on full proposals that it requires an adequate success rate as industry and academia would demand government to release that figure after the process has completed. The programme is designed to operate efficiently as it uses so much resources to carry out due diligence and it is also finite. A Chairperson will point out the metrics to programme managers and those making the decisions. The EoL phase is therefore utterly ruthless and hence why it has repeat calls and only the best in the class get an invite. The probability of full proposal support is therefore likely to have a target of 35-50% of being approved and receiving support.

As for what is being proposed by Pensana is a direction of travel of how it would be a self sustaining business and it powers the entire industry. Pensana has held discussions with the automotive industry and I dare say making vehicles uses a lot of power off the National Grid. If the committee rejects the Pensana proposal it would need to be as a result of showing the UK could obtain magnets sustainable from another source. So far that does not exist. The second reason would be that they are convinced the public would fully accept an alternative to magnet technology that would not sacrifice any on-going market efficiency by such a substitution. So would the UK like to go and frack gas or build more nuclear power. If the National Grid can not supply enough electrical energy to recharge all the EV that will have a big impact on transport. The National Grid may need new windfarms and other sources to achieve it and the prospect of windfarms not operating without the magnets would be based on a hope and a prayer. I therefore see the Pensana application as highly relevant. It does not matter if the magnet is in an EV car or not although the public may want cars that do so, but they sure do not want blackouts hitting the country and all of us locked down at our homes with nothing working. Tony

Quite often the Chinese market is dead on the last trading of the month in the Shanghai market and its heavy buying in the first two days of the month. In fact volumes were only 61% of levels earlier in the week for pure gold bars. So the decision to make is whether to be on the front foot for London open at 8am. For that reason I added to AAZ this afternoon. I will find out on monday how clever or not it will be. The probability of higher Shanghai volumes in the past gave an 85% chance of higher precious metal prices the following trading day (Monday).

David

The original PEA was to complete by end of Q3. An addition of one step could add 4 to 6 weeks so mid-November. Precisely timing things depends on tests being analysed and returned and then to study them and decide what to do. Also needs a proper costing. Tony

The data we have not received is the recovery rate and whether it was above 70%. If someone has a good connection with the company can they get a response?

https://www.ukconstructionmedia.co.uk/market_leads/automotive-transformation-fund-round-8/

Tony

Could be on its way to Shanta.

Going back down to close gap. Gold also with gap in the charts. Looks like an early morning bull trap.

Same appears on MKa to have formed a bottom and I suspect Pensana with announcement of Green bonds today has a bottom in. Just maybe all 3 are turning again. Last rally was 67% for the 3 shares.

The NHS are on their knees with staff depletion and future workloads. The Government will need £75M plus to spend on every broad anti-viral medication causing hospitalisation they can lay their hands on as the public are not going to stomach another lockdown.

If it does go down (share price) remember to top up.

https://asiatimes.com/2021/07/china-gaining-near-monopoly-on-rare-earths-chomsky/

I agree the company can not negotiate via press statements. George has employed Pham to do the negotiation. The Burundi workers need to be factored into all this.

Gkb47

It is unsustainable to run national vaccine programmes. The vaccines are a bridge to therapies for those worse affected by the virus. The Government assumes that everyone responds the same to vaccination. Around 10% are non-responders. Around 1 in 5,000 have adverse responses so so severe they can not have a second dose and are probably doublely protected than someone having two jabs. The stupidity and mis-messaging from the government is unhelpful. It is intended to divide society so they can hide other issues and problems.

Bardo

The situation is getting resolved. The fact it has moved from the Prime Minister and now delegated to the responsible Minister who has made it clear (It was 10% contract deal that was taken advantageous or akin to theft) tey want a better deal. The new deal can be factored in many different ways. The best deal for Burundi is 48% profit share after costs with no other tax constraints other than the 2% Royalties. The second deal is 25% profit share and they have some equity to give a share/dividend on upstream profits that give a similar end result. Rainbow takes out a bank loan to fund the South Africa operation. It was always going to read badly using profits in Burundi to deliver SA development. The new options remove those sensitivities and keeps profits earned in Burundi.

The SP between MKa, Rainbow and Pensana has done the following.
1. Pensana led the charge up from July 2020 until 4 October 2020. MKa and Rainbow began their rally on that day.
2. Pensana then flat lined (with some daily fluctuations) and Rainbow and MKa caught up with Pensana on 13 December 2020.
3. On 24th January 2021 all the shares were in the same place again with Pensana on 88p, MKa 16p and Rainbow was on 12p.
4. On 11 February they were also aligned altogether and they all rallied to 3 March. Pensana on 147p, MKa 25.5p and Rainbow on 20p all with 60%-67% gains.
5. Pensana again led the way and was the first to put in a really sharp peak achieved on 15th March. As Pensana declined off its peak on 1 April both MKa and Rainbow realigned and caught up with Pensana as it retreated.
6. They all declined together up to 29th April 2021. Pensana is now back down to 149p losing all its re-rating, MKA 20.5p, and Rainbow 17.75p.
7. MKa was then re-rated and put in a top on 18 May at 34.25p. Pensana dropped to 132p and Rainbow was on 14p.
8. MKa and Pensana then declined from 18 May 2021 and have fell in line with each other in a direct correlation. MKa tonight has lost all the rerated gains and is back to 21.5 and Pensana on 92.6p. Rainbow was avoiding a sharp decline, but has rapidly retreated from 8 July with a slightly less of a drop and so may not join a rally as extensively as MKa and Pensana as they probably all realign together again.

All the above tells us that these shares without much news all follow a similar pattern. Most of that pattern is rare metal prices, but sometimes it is not. I should stress that all 3 companies are very different, but what they share is being in a pot called rare earth metal miners. So whatever we think about these companies there is a body of investors who just like price, charts or whatever and their fundamentals stop at the trading door. Whether it is to buy or sell.

Thanks DP.

In fact it supports the view if the situation in Burundi is no longer Rainbow being accused as stealing assets and the Minister of mines is just wanting a better deal than 10% on the original contract then it makes little sense to drag things out and just negotiate a deal using other national arrangements as a template in mining for precious metals. They can stage the model over a timeframe for Rainbow to clear debts and put in extra on higher market prices. I suspect a deal is now being worked on. Hopefully its resolved when Burundi is fully back to dry weather seasons.

An error in the previous. Worked on REO prices without concentrating up the NdPr content giving a value carbonate price so the profitability is higher after South African processing by 140%. I wonder if its best to run Burundi mine at cost (allowing AiSC for sustainability and decommissioning) and all the profit on South Africa processing.

If the final product out of a South Africa plant is $5,000 per tonne for a 39% NdPr concentrate and the cost is $1,300 say to process plus all the mining in Burindi is say $1,200 with transport as a rough estimate to SA and debt plus depreciation costs say is $1,000, the profit per tonne is $1,500. Whatever Burundi wants on feed, South Africa wants some on processing. So it has to be a profit share with the company otherwise its not worth doing for a low net margin. Overall it leaves Burundi and South Africa and the company sharing $15M total income a year on a 10,000 tonnes a year for Burundi feedstock processing. This was always going to be a marginal operation. The Burundi Government has to decide that the hassle with dealing with it is worth it. If $1.5M was regarded as inadequate is $4M or $5M adequate. For the company is it worth the hassle to earn $7 M or so a year from the Burundi asset. It is so marginal compared to getting on with developments in South Africa. The best thing to do with the Burundi asset is to mothball the operation and see if the economics several years down the road work out better than they do today.

Sundrum

Be aware that certain individuals were not beneficiary when Pensana chose Saltend to build their proposed facilities. The losing team(s) have attacked Pensana in every way they could do so as a result. It appears that most of these individuals are based in the Northwest in England. The best option is to use the filter button for that cohort.

A second group is fixated on two solitary articles published by a single publication source that continually promotes Chinese rare earth producers and criticises emerging operations that are developing in the UK or Africa. Again its a case of filtering the garbage in brigade.

Tony

Last time HZM pulled back to 5.xp it was not there for long and readjusted back up to 7.Xp. I suspect one party sells some stock in the deal and buys it back cheaper and the share rallies without their sells in the way as they add more stock back. It usually proceeds some kind of placing where they get diluted back to where they were before as they do not buy at the placing higher price. Just a hunch, but we could bounce back soon.

For those who remember June 2019. End of Q2 average sale price for the quarter on gold is $1307 and the AISC is $925 on 117,000 ounces produced. A better second half was to look forward to but they had $236M in the bank. The recent report $1822 gold sold on 97,000 ounces at $1290 costs with say $312M if memory is correct in the bank. $44.69M above AISC in 2019 versus $51.6M. $76M more in the bank is worth 6p on the share price. The big difference is reserves and resources. Once those figures come through on the update in H2 and go the way management expects then Centamin corrects higher.