The electrification of motive power is the biggest energy transformation in history But it’s not just EVs. It‘s also wind turbines, all forms of transport, domestic appliances, military $300bn equipment and a growing universe of clean energy applications. EV boom underway Source: Reuters BNEF
Co Li Which metal is going to be the Ni Mn biggest beneficiary? Sn V An EV is essentially two or four axial electric motors powered by a large Li-ion battery. Most of these electric motors need powerful rare earth magnets. CLUE: It’s not one of the battery metals
Neodymium is the magnet metal NdPr magnets Their compact size and higher efficiency favour them for most automotive traction applications. The main benefits for the vehicle owner is fuel efficiency (for hybrid vehicles) and fuel efficiency and extended range (for electric vehicles). Electric motor Controller Battery Charger Source: Dr. Bruno Lequesne, E-Motors Consulting, LLC
But we have a problem Russia 1% China 87% Chinese companies India Vietnam control 87% of the world’s 1% Longonjo ?% <1% magnet metal production. Thailand 1% Brazil Their view is that there are the Malaysia 1% Australia 9% 60-70 rare earth projects around <1% the world and that for one reason or another few are likely to succeed. Source: Various public domain reports
So we asked them what they wanted They explained that rare earth processing is very complex and highly capital intensive …they were not interested in supporting a new project that was going to become a competitor. However they are under pressure from international EV customers to diversify their supply chain away from China and so they wanted to know can we supply them with an NdPr concentrate?
North Angola Hydro Power Interconnection Yes we can... Longonjo is located adjacent Lobito to the Chinese-built US$1.8 billion Benguela RAIL LINE Atlantic rail line. Port International Airport This rail line links the project with the Atlantic port of Lobito Huambo and onto customers in China. LONGONJO PROJECT Gove Hydro Dam Source: Port of Lobito E P
Fenite Carbonatite Longonjo ranks as one of the world’s largest and highest grade NdPr deposits. Open Open Infill drilling area Open Highly respected international mining industry consultants SRK has Open reported an Inferred Mineral Resource estimate of: 240 million tonnes at 1.60% REO including 0.35% NdPr for 3,850,000 tonnes of REO including 840,000 tonnes of NdPr Open *NdPr = neodymium+praseodymium oxide. REO = total rare earth oxides. A 0.1% NdPr cut is applied. ASX Announcement 19 February 2019, there has been no N Open change to the estimate. 500m NdPr % Completed holes Plan view of Mineral Resource block model coloured by maximum NdPr grade over simplified geology of > 0.8 Previously reported the Longonjo Carbonatite. Drill holes are shown as black dots. The limit of the previous Mineral 0.6 to 0.8 Diamond (geotech) Resource is shown as the black outline. 0.4 to 0.6 Diamond (multipurpose)
Thick blanket of high-grade NdPr mineralisation extending over 1.5 kilometres 523400 523600 523800 524000 524200 524400 524600 524800 18m at 1.04% NdPr 22m at 1.02% NdPr (4.88% REO) (4.68% REO) 4m at 0.62% NdPr 16m at 0.65% NdPr (2.93% REO) (3.05% REO) 12m at 0.55% NdPr 1580m 16m at 1.06% NdPr (2.71% REO) (5.36% REO) 6m at 0.60% NdPr 14m at 0.57% NdPr (2.98% REO) 10m at 0.93% NdPr (2.81% REO) (4.78% REO) 1540m 30m 37m 40m 22m at 0.87% NdPr 28m at 0.85% NdPr (4.86% REO) (4.08% REO) 32m 35m 37m 45m 51m 12m at 0.97% NdPr 40m at 0.43% NdPr (6.38% REO) 6m at 0.50% NdPr (2.14% REO) 53m 24m at 0.69% NdPr (2.34% REO) 45m (3.05% REO) 1500m 50m 50m 50m 60m 60m 10m 22m at 0.72% NdPr 400m (4.07% REO) 100m 0 100 Source ASX announcement: “First drill results extend NdPr mineralisation at Longonjo” of 31 October 2018
Open Open Diamond drilling infill programme has reported spectacular intersections and has opened up the fresh rock potential. LRC136 The surprise has been the high grade LRC127 mineralisation over a large area in the fresh rock immediately below the LRC112 LRC113 LJD018 500m weathered zone. LJD015 “This fresh rock mineralisation adds a whole new dimension to the project 150m and is something we are now factoring into our development studies.” Dave Hammond COO N 150m End of hole NdPr % in fresh rock Plan view of Mineral Resource block model coloured by maximum NdPr grade over simplified geology of > 0.4 0 – 0.1 the Longonjo Carbonatite. Drill holes are shown as black dots. The limit of the previous Mineral 0.2 - 0.4 Weathered eoh Resource is shown as the black outline. 0.1 – 0.2 2017 DD hole
WOOD Group Pre-Feasibility Study due mid October expected to position Longonjo as the world’s next major rare earth mine Low Capital and Operating Cost Rail Loading Based on mining near surface Open Pit Flotation Plant material and producing an NdPr rich concentrate for export to China taking advantage of the excellent transport and power infrastructure. Source: ASX announcement 6 December 2017
What interests us is the indicative concentrate revenue Revenue US$/tonne 2000 NdPr CIF China 1500 Dalian Tianjin Cu 1000 Pb Li Zn 500 0 Metal/Li2O/ $2,000 $6,000 $45,000 $2,500 $15,000 NdPr US$/tonne Source: Various ASX announcements, Analysts reports and Conrad Partners Hong Kong
Strong news flow: Wood Group to report Pre-Feasibility Study mid- October 2019. Looking at low Capex and Operating cost with fast track development. In discussion with Chinese customers for concentrate offtake agreements. Discussions commenced with Financiers for term sheet for main finance Working with advisors to list on the London Stock Exchange by the end of 2019. Source: ASX announcement 19 February 2019
Building a great team Pensana has been operating in the country since 2013 and has established mutually respectful working relationships with the Ministry of Mineral Resources and Petroleum and our state-owned partner Ferrangol. We are actively engaged with the local communities and administrations of the city of Huambo and the town of Longonjo.
Profile David Hammond Mark Hohnen Neil MacLachlan Paul Atherley Chief Operating Officer Non Executive Director Non Executive Director Chairman Geologist with over 25 years international Founding Executive Chairman of Internationally experienced Investment Mr Atherley London based experience. Kalahari Resources Plc listed on AIM in Banker, Funds Manager and Public senior resources executive. 2006 for £15million and subject to a Company Director. Previously Executive Director HSBC. 7 years as Technical Director with Peak £651million takeover in 2012. Resources Ngualla Rare Earth Project, Director of Kalahari Minerals Plc Wide media experience commentator BBC, Tanzania. and also Extract Resources which was also CCTV. Chairman British Chamber of subject to a takeover, Commerce in China. Vice Chairman for US$2.2billion in 2012 of the China Britain Business Council. Market Capitalisation Cash as at 30 June 2019 Major shareholders Listing Management ~ 18% A$35 million A$4.7 million ASX:PM8 Fidelity 10% As at 3 September 2019 Top 100 ~ 74%
Investment Summary - the world’s next major rare earth mine The NdPr concentrate export strategy Longonjo ranks as one of the world’s largest avoids the excessive capital cost of and highest grade NdPr deposits. downstream processing. Experienced board and management team PFS by WOOD due in October expected to with strong track record in delivering highlight the benefits of the Chinese funded significant shareholder returns on mining infrastructure. investments at this stage of development. High grade NdPr deposit, low mining costs Plan to list on the London Stock Exchange simple flotation operation with favourable to take advantage of strong institutional transport and power infrastructure - low investor interest from Fidelity and others. capital and operating cost .
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