Last checked at 29 Jan 2021 07:00
Quarterly Activities Report for the Period Ended
31 December 2020
Pensana Rare Earths Plc (LSE: PRE; ASX: PM8) (the Company or Pensana) is pleased to present its quarterly activities report for the period ended 31 December 2020.
Highlights
· Planning application submitted to establish rare earth oxide separation facility at the Saltend Chemicals Park, Humber, Yorkshire
· Business plan for the establishment of the world's first sustainable mine to magnet metal supply chain well advanced and expected to be reported in the next few weeks
· Arrangements for the delisting from the ASX and a notice of meeting for a proposed name change to Pensana Plc sent to shareholders
· Liberum appointed as joint broker to the Company
· Appointment of Baroness Northover PC as Non-Executive Director of the Company
· High grade rare earths in soil samples confirmed at the Coola exploration project located 16 kilometres north of the flagship Longonjo project
UK rare earth processing study
During the Quarter, the Company announced that it had appointed Wood Group to undertake a study into the establishment of an integrated rare earth processing facility in the UK with a view to creating the world's first sustainable magnet metal supply chain.
Having progressed the design of the Longonjo project to include the production of a mixed rare earth sulphate, Pensana had the unique opportunity to explore the potential to make one further step downstream and to create additional value by establishing a rare earth oxide production facility in the UK.
This was followed by the announcement on 8 December 2020 that the Saltend Chemicals Park in the Humber Local Enterprise Partnership, Yorkshire, had been selected as the proposed site to build the UK's first rare earth processing facility.
Post Quarter-end on 25 January 2021, the Company announced it had progressed further with the submission of a planning application for the proposed facility.
The US$125 million facility is anticipated to generate around 100 direct jobs once constructed and in operation. It is being designed by Wood Group to become one of the world's largest producers of rare earth oxides, crucial components in the manufacture of powerful permanent magnets which are used in a range of growing advanced industries including electric vehicles and offshore wind turbines.
The application, which is expected to take up to three months to review, supports Pensana's commitment to establish the world's first fully sustainable mine to magnet metal supply chain in the UK.
The Saltend Chemicals Park is a cluster of world-class chemicals and renewable energy businesses including BP Chemicals, Ineos, Nippon Gohsei and Air Products. It is strategically located on the Humber estuary, a gateway to Europe and the UK's busiest ports complex.
The 370-acre site has had £500 million of investment over recent years and is managed by px Group, a leading provider of services in complex industrial sectors.
The site provides 'plug and play' services with ready access to the port, a wide range of utilities, power, chemical supply, logistics and a large pool of skilled personnel with experience in the chemicals industry.
GEOLOGY AND EXPLORATION
High grade rare earths confirmed at Coola
On 21 Dec 2020, the Company reported high grade rare earths in soils from the first sampling programmes completed at its 7,500 square kilometre Coola Project, located 16 kilometres north of its flagship Longonjo project in Angola.
The Coola Project
The Company reported having identified several carbonatite and alkaline complexes within Coola with geological prospectivity for critical technology metal commodities that could complement future NdPr rare earth production from Longonjo.
Systematic soil sampling and geological mapping programmes were completed over two geological targets in October and assay results from the first, the Coola Carbonatite itself, were received.
Assay results received from the soil sampling programme show that a high tenor rare earth in soils anomaly extends over a wide area.
Soils contain up to 4.69% REO over an outcropping carbonatite ring dyke system that forms part of the 1.2 kilometre diameter Coola Carbonatite. The central part of this circular volcanic structure lies entirely beneath thick soil cover. Several 3 metre deep pits were excavated in the central area but failed to reach bedrock, so the potential for additional prospective carbonatite and the mineralisation potential remains unknown. Assay results from vertical channel samples of the pits are still awaited.
Outcropping fluorspar mineralisation was located within the Coola complex during the geological mapping. As well as being listed as a critical commodity and having direct economic potential in its own right, fluorspar is also a positive indicator of the potential for additional technology metals in this geological setting. Assay results from rock samples of fluorspar mineralisation are also awaited.
As at Longonjo, the carbonatite associated rare earth anomalism at Coola is also accompanied by highly elevated levels of phosphorous, barium, iron, manganese, niobium, strontium and zinc.
An additional soil sampling programme has been completed over the Monte Verde alkali, and carbonatite complex and assay results are expected shortly. Geological mapping and sampling of the large, twin centre Sulima alkali complex is planned for early 2021. A stream sediment sampling programme and geological reconnaissance of a series of geophysical anomalies has commenced and will continue.
Grant Hayward appointed Exploration Manager
The Company welcomed the appointment of Mr Grant Hayward as Exploration Manager during the Quarter.
Grant is an accomplished economic geologist and manager with extensive experience in the exploration for and evaluation of rare earth and associated commodities including phosphate, fluorspar and niobium. He has been involved with the evaluation of carbonatites in South Africa, Malawi, Namibia, Mozambique, Uganda, Zimbabwe and Tanzania as well as in a range of other commodities and geological styles including platinum, gold, base metals, graphite and industrial minerals. He has lead several resource definition programmes to NI43-101 compliant resources including the Zandskopdrift rare earth carbonatite project in South Africa.
Grant was on site at Longonjo recently to supervise the bulk sample drilling programme and is exceptionally well qualified to lead the geological team on its Longonjo development works and Coola exploration going forward.
Longonjo bulk sample drilling programme
Technical programmes to support the feasibility and detailed engineering studies for the development of Longonjo and a UK based rare earth refinery continued on site with a large diameter drilling programme concluded in early December.
Drilling was completed to provide feed for further optimisation and pilot plant programmes, supporting the Company's expanded strategy of mining and processing operations in Angola and a UK refinery.
A total of 15 drill holes were completed using a specialised large diameter drill rig to provide representative bulk samples of weathered zone mineralisation from surface to 24 metres in depth.
100 tonnes of mineralisation from the areas of proposed first mining is being shipped from site through the port of Lobito to the Company's test facilities in Perth, Australia.
Corporate
Departure of Dave Hammond
On 9 October 2020 the company announced the departure of Dave Hammond who stepped down in his role as Chief Operating Officer and director of the Company.
New Board appointment
On 2 November the Company announced the appointment of Rt Hon Baroness Lindsay Northover PC as a Non-Executive Director of the Company. Baroness Northover (66) was the UK Prime Minister's Trade Envoy to Angola (2016-2020) and Zambia (2017-2020) and Africa Minister for the Department for International Development ("DFID") (November 2014 - May 2015). She joined the Pensana Board as one of four independent Non-Executive Directors.
Appointment of London broker Liberum
On 23 November the Company reported the engagement of Liberum to work alongside the Company's existing advisors and brokers, with the brief to provide advice on how best to meet the growing demands from investors for sustainable investments.
ASX Delisting
Post quarter end, on 20 January, the Company announced that it had applied to the Australian Securities Exchange to be removed from the official list pursuant to ASX Listing Rule 17.11 while maintaining its primary listing under the stock code PRE on the main board of the London Stock Exchange.
Payments to related parties of the entity and their associates
During the quarter, the Company made payments of A$0.259 million to related parties and their associates. These payments relate to executive director remuneration, non-executive director fees, superannuation contributions and consulting fees.
Visual representations of the work above can be found in the release on the Pensana website under the following link: https://pensana.co.uk/lse-announcements/
Authorised by the board of Pensana Rare Earths Plc.
For Further information:
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Pensana Rare Earths Plc |
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Website: Paul Atherley Chairman / Tim George, CEO | www.pensana.co.uk contact@pensana.co.uk
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Buchanan (UK Financial PR) Bobby Morse/ Augustine Chipungu /James Husband | +44 (0) 207 466 5000 pensana@buchanan.uk.com |
Competent Persons Statements
The information in this report that relates to Geology and Exploration results is based on information compiled and/or reviewed by Grant Hayward, who is a registered Geological Scientist with the South African Council for Natural Scientific Professions (Pr.Sci.Nat # 400044/97) and is a Fellow of the Geological Society of South Africa. Grant Hayward is the Exploration Manager of the Company. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and the activity which he is undertaking to qualify as a Competent Person in terms of the 2012 Edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012 edition). Grant Hayward consents to the inclusion in the report of the matters based on his information in the form and contest in which it appears.
Appendix 5B
Mining exploration entity or oil and gas exploration entityquarterly cash flow report
Name of entity | ||
Pensana Rare Earths Plc | ||
ARBN |
| Quarter ended ("current quarter") |
637 105 410 |
| 31 December 2020 |
Consolidated statement of cash flows | Current quarter$USD'000 | Year to date (6 months)$USD'000 | |
1. | Cash flows from operating activities |
|
|
1.1 | Receipts from customers | ||
1.2 | Payments for | - | - |
| (a) exploration & evaluation (if expensed) | ||
| (b) development | - | - |
| (c) production | - | - |
| (d) staff costs | (421) | (897) |
| (e) administration and corporate costs | (729) | (1,222) |
1.3 | Dividends received (see note 3) | - | - |
1.4 | Interest received | - | - |
1.5 | Interest and other costs of finance paid | - | - |
1.6 | Income taxes paid | - | - |
1.7 | Government grants and tax incentives | - | - |
1.8 | Other - London Stock Exchange listing | - | (337) |
1.9 | Net cash from / (used in) operating activities | (1,150) | (2,456) |
| |||
2. | Cash flows from investing activities | - | - |
2.1 | Payments to acquire: | ||
| (a) entities | ||
| (b) tenements | - | - |
| (c) property, plant and equipment | - | - |
| (d) exploration & evaluation (if capitalised) | (2082) | (2,745) |
| (e) investments | - | - |
| (f) other non-current assets | - | - |
2.2 | Proceeds from the disposal of: | - | - |
| (a) entities | ||
| (b) tenements | - | - |
| (c) property, plant and equipment | - | - |
| (d) investments | - | - |
| (e) other non-current assets | - | - |
2.3 | Cash flows from loans to other entities | - | - |
2.4 | Dividends received (see note 3) | - | - |
2.5 | Other (provide details if material) | - | - |
2.6 | Net cash from / (used in) investing activities | (2,082) | (2,745) |
| |||
3. | Cash flows from financing activities | 8,645 | 8,645 |
3.1 | Proceeds from issues of equity securities (excluding convertible debt securities) | ||
3.2 | Proceeds from issue of convertible debt securities | - | - |
3.3 | Proceeds from exercise of options | - | - |
3.4 | Transaction costs related to issues of equity securities or convertible debt securities | - | (82) |
3.5 | Proceeds from borrowings | - | - |
3.6 | Repayment of borrowings | - | - |
3.7 | Transaction costs related to loans and borrowings | - | - |
3.8 | Dividends paid | - | - |
3.9 | Other (provide details if material) | - |
|
3.10 | Net cash from / (used in) financing activities | 8,645 | 8,563 |
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4. | Net increase / (decrease) in cash and cash equivalents for the period |
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4.1 | Cash and cash equivalents at beginning of period | 2,121 | 4,106 |
4.2 | Net cash from / (used in) operating activities (item 1.9 above) | (1,150) | (2,456) |
4.3 | Net cash from / (used in) investing activities (item 2.6 above) | (2,082) | (2,745) |
4.4 | Net cash from / (used in) financing activities (item 3.10 above) | 8,645 | 8,563 |
4.5 | Effect of movement in exchange rates on cash held | 80 | 146 |
4.6 | Cash and cash equivalents at end of period | 7,614 | 7,614 |
5. | Reconciliation of cash and cash equivalentsat the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts | Current quarter$USD'000 | Previous quarter$USD'000 |
5.1 | Bank balances | 7,537 | 2,044 |
5.2 | Call deposits | 77 | 77 |
5.3 | Bank overdrafts | - | - |
5.4 | Other (provide details) | - | - |
5.5 | Cash and cash equivalents at end of quarter (should equal item 4.6 above) | 7,614 | 2,121 |
6. | Payments to related parties of the entity and their associates | Current quarter$USD'000 |
6.1 | Aggregate amount of payments to related parties and their associates included in item 1 | 259 |
6.2 | Aggregate amount of payments to related parties and their associates included in item 2 | - |
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments | ||
7. | Financing facilitiesNote: the term "facility' includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. | Total facility amount at quarter end$USD'000 | Amount drawn at quarter end$USD'000 |
7.1 | Loan facilities | - | - |
7.2 | Credit standby arrangements | - | - |
7.3 | Other (please specify) | - | - |
7.4 | Total financing facilities | - | - |
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|
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7.5 | Unused financing facilities available at quarter end | - | |
7.6 | Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well. | ||
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8. | Estimated cash available for future operating activities | $USD'000 |
8.1 | Net cash from / (used in) operating activities (Item 1.9) | (1,150) |
8.2 | Capitalised exploration & evaluation (Item 2.1(d)) | (2,082) |
8.3 | Total relevant outgoings (Item 8.1 + Item 8.2) | (3,232) |
8.4 | Cash and cash equivalents at quarter end (Item 4.6) | 7,614 |
8.5 | Unused finance facilities available at quarter end (Item 7.5) | - |
8.6 | Total available funding (Item 8.4 + Item 8.5) | 7,614 |
8.7 | Estimated quarters of funding available (Item 8.6 divided by Item 8.3) | 2.36 |
8.8 | If Item 8.7 is less than 2 quarters, please provide answers to the following questions: | |
| 1. Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not? | |
| Answer: N/A | |
| 2. Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful? | |
| Answer: N/A | |
| 3. Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis? | |
| Answer: N/A | |
Compliance statement
1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Date: 29 January 2021
Authorised by the Board
Notes
1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.
3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.
4. If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee - eg Audit and Risk Committee]". If it has been authorised for release to the market by a disclosure committee, you can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectiv