Member Info for Tornadotony

China,

The BOD have changed their minds on quite a few things in the last 7 weeks. Therefore we do not know if they will change their minds on other issues between now and of January.

The company are only seeking tenders for items in January which is a start but not actual build. In the 2019 annual report it clearly states that it will take 14 months to construct and commission the mine plant and all the entire production circuit. The commissioning process of any new mine is between 2-3 months alone. What they build needs to last and they need to meet all environmental standards and pass inspections. A surface mine with pre-stripping and have all the components delivered and passed through importers and assembled would typically take 10 months to a year. These projects do take several weeks to build up momentum on the ground as a lot of staff get employed and need to be managed carefully on site. I am not sure if Angola has seasonal weather issues as I have not looked into it. The annual report timetable is what I quoted from.

As for NdPr prices we could both be correct at different times. Sometimes a pre-producer does not follow uplift in production companies and sometimes it does depending on what hedge funds like to do. What I am saying is that we should not just expect it to automatically follow which it has not done in the last month. Furthermore the NAV in the ground price does not change every day and it is probably fixed over time and gets re-rated at some time in the future perhaps annually. Also the host government may want more of the value as NdPr prices go up and it will depend what is stated in the exploitation/development/licence contract. So I hope my further comments better explain what I mean in my original comment.

I read in one of the recent company communications they had free cash flow for all of 2020 and for only part of Q1 2021. They will be looking for cash in February. The more I think about a huge placing when funders are wanting to invest in projects like this instead of years of paying bank debt, the more I like it. If the company wants to move really fast that is one way to do it. Waiting for hand outs and bank approvals takes ages and time for their due diligence. Covid-19 restrictions in UK will slow it down further.

All the best Tony

I can confirm that Tullow Oil is now moving very tightly in line with RDSB. They are both out performing BP. Sharing observations can create trading gain opportunities if one has the skills to do it. I made just under £500 from using the Exxon and Tullow moves for a bit of fun. So I banked my pony.

Next week the USA market is off on Thursday and Friday. China often pulls back on commodities in the last two days of most months so that includes next Friday and Monday the 30th. The setting is then set for what is often referred as a bit of a Santa rally, although this year it could be affected by Covid-19/Sars2.

The chart perspective I hope to see next week is for Pensana to set up a double bottom in the chart, which matches 38% FIB retracement from the high and where strong support exists both in London and Australia markets. This area falls in the 58-60p sell-buy range. I am hoping the RSI which is at 45 falls back to 30 or below at that point and slow stochastics are near to zero (currently around 15 to 20% area). The Bollinger bands are starting to fall but they are wide and I am hoping they narrow around the double bottom. It would be ideal if Pensana arrived at that point next Friday as we head into December. I am then hoping the share rallies on chart technical in the absence of news and goes up on all boats rising sort of move and we get a good run up.

A lot of optimism is garnished on these boards, but a few realities need to be mentioned. The first is the company is going through cash. Its not earning anything as a producer and so is unlikely to follow NdPr prices at this time. It has sold some of the asset to Angola Government for them to have a 23% stake. The company is spending those monies on a lot of work programmes to add value sometime in the future. The company discovered more assets in the ground and if 2.3 x LSE opening a price range gives 48-60p range. The company is not going to be worth less than its undeveloped reserves and resources at the in the ground price unless it amasses lots of debt before a BFS gets finalised. This should not happen if timetables are met in January.

Another issue that should be put on the table is the financing. The company will have a choice. Will it wait months for banks to actually provide the funds whatever the company says on what is now an expansive project. They could do so but the 14 months of mine building might start in October next year instead of April. The second option is they do not hang around and in late January they do a major placing. The company after the BFS dilutes shares by 200% and has the entire project cash in February to build the mine, the processing plants, the UK refiner and be in production by April 2022. The company has no debt. Loads of institutions with hedge funds looking to buy shares in the green agenda pile in. The share and company becomes much bigger knowing they could be FTSE 250 in 2023.

The link broke with Exxon on Thursday morning with Tullow out performing the Exxon marker that had ran for a whole week. I suspect it has performed more in line with RDSB (Shell).

Closed on 1.18 which is 65 sell 66 buy.

Thanks Siko

So last night it was taken to a 50% FIB retracement at $1.14 (63p). The down trend created a new resistance line at $1.19. The chart has very strong support at $1.05 which is 58p sell and 59p buy in the London chart. It is also very near the 38% FIB retracement line. I therefore see that area as a bottom and Pensana rallies back up from there. The second resistance point at 1.24 (68p).

Does anyone have a map of the 29 blocks awarded in the eastern desert and which one is Centamin's.

Up to 1206 at least

To be back filled later.

China

Eventually JPM will buy along with other fund managers. They will all insist on proper risk management assessment procedures and quality systems especially to managed consultancy contracts. Otherwise the road to hell is paved with good intentions. Tony

NdPR45 and other readers especially down under in land of Oz,

Your quite possibly right on medium and long term. Short term is certainly quite messy. The line in the sand could be mid 50's. The Angola Government last entry position is possibly, in my opinion, to be a well defended position in London markets. This is where more institutional interests and other banks might start coming in like JP Morgan and Citi Bank which are well connected in London and New York for that matter. They certainly love a bargain buy.

The company has given no news deadline until late January. We therefore might have ASX short day traders having a few runs. If they know where the floor is they could support runs to another ceiling and we see a lot of wash and repeat cycle runs in both directions for awhile. We shall soon see if a win win mentality operates if this share can work through several weeks of up and down consolidation as the news eventually arrives. So we shall await to see how low down ASX take the share and when it gets pumped back up again setting out some kind of range of values.

The company in the meantime needs to share risk assessments and identify who in the company is doing them and publish with their mitigation steps. They should provide us with some bench marking data where they can to help enable us to have sensible judgements on our own investment risk and we can match them to Lynas and others in the sector in certain respects. We should not have to wait nine weeks to get that kind of information as it should in theory some elements should be immediately accessible in a well run company. We should also know if the consultants employed and this company are working to management ISO standards or what quality control measures are in place on documents and how evidence is assessed and is not seduced by particular research methodologies (For example two individuals may collect 50% of the evidence each and a third person combines to reduce single individual bias and this has relevance in some areas of the Wood study).

As for tonight ASX is opening the show for tomorrow. They got little resistance in London today. What we do hope for is that at some time a run to 76p or thereabouts may happen and the London charts get a nice clean up. It would be nice if it got done before Christmas.

All the best to Pensana and PM8 investors.

Carrib all fair points from you as well.

Hi Caribs

What we know is they have $9.2M left and they did say it was enough to last them until late January or so in the end of October RNS.

Risk number one is Boris Johnson who exaggerates everything and is really poor on delivery. We have lengthy delays and uncertainty about HS2 railway and Heathrow airport runway decisions as example as what that guy is likeas he flip flops and dithers.
Risk number 2 is Brexit deal or no deal with EU. It is a set back for this project if everything between EU and UK is mired in tariffs.
The third risk is they are building a refinery and the mine at the same time with both projects in different countries with Covid-19 still not resolved, with economic downturn still on-going as a risk and do they have the skills and experience to do both of those and what happens if the consultancies miss something and would they spot it before its to late. The bigger the project the greater a chance of a set back.
The fourth risk is that the finances to deliver all of it are far greater and it may be far more than 15% to be sought from investors, especially as Boris Johnson proclaims that it will be industry that will pay for most of the green agenda which implies governments are taking far less risk and putting on to someone else.
The fifth risk is that sovereign governments are in so much debt what happens if they don't honour the future procurement they promise and will they allow a proper commercial rate for electricity or will the consumer be subsidised by a tough regulator to minimise an pay back on investment that feeds back on the whole supply chain.
The sixth risk is what happens if Angola blocks the raw supply from the mine to the UK that has a costly refiner and instead wants to supply China in a future government administration after they have imitated the UK in refiner production. An alternative risk is a mine wall collapses and the refiner suddenly does not receive material to meet orders and so one problem magnifies down to the chain.

I am sure some of those risks can be minimised on contractual terms and so forth but we do not have the BFS, we do not have a risk assessment, we do not know if the company comes up with more ideas and we get more delays and more expense with consultants. Yes there are many good points with the project but will it lose focus, will it be overtaken by other competitors who are speeding forward. All of the above is my being the devils advocate in trying to see what could wrong.

Regards Tony

your did not get deleted in previous.

Carribean2029

I agree with your vertical and being adaptive point. The company is on a high capital burn as all those consultancies add their expertise and contributions. I suspect we could see an SP decline being delivered by ASX every morning, which is then followed through with a liquidity drain to put capital back into ASX to meet your more of their selling in the London market. It then begin to hit stop loss positions like at 66.6p this morning reducing liquidity further here in London. This stock is heading for a placing as it will need to deal with the liquidity problem with both in its finances for Pensana /PM8 and with the market maker having to drop the share price to find buyers in order to recover stock sells which are running at 3:1 ratio as the project complexity looks high risk.

Chinasydrome

ASX could take this all the way down to 53-54p where the Angola Government bought in. There is nothing anybody can do about it unless they want to join the shorters. The market makers have next to no liquidity in the UK. A 10,000 sell can take 1p off the stock price.

Tony

Again UK has zero liquidity on the stock and it falls on a day of high NdPr prices and a new green agenda programme being announced in the UK. The stock is completely controlled by ASX. London investors have no real impact on the direction of the stock here. I have other equities with dual listings where London leads. First time that London is inferior to another market and just follows that indice. When London tries to lead its heavily shorted by ASX traders.

Hopefully now in and we edge up.

BP up, Shell up and yes Exxon Mobil up. Open looks like 25.3 for Tullow with an hour to ago on USA trading and after recalibrating on Tullow closed price as sterling has been stronger of late.

It could have another go at 25.8p. If it fails to break we get a modest retreat and the RSI cools off to build strength for another day.