Pensana significant progress over the period

Pensana plc

Pensana plc (LON:PRE) has announced the interim results (unaudited) for the six months ended 31 December 2020.


·      Successful listing on main board of London Stock Exchange.

·      Ongoing support from the Angolan Sovereign Wealth Fund via the issue of equity to raise US$8.6 million.

·      Mineral resource upgrade to 313 million tonnes. Initial focus on 33.9 tonnes for business plan.

·      Total comprehensive loss for the period US1,717,491 (31 December 2019: US$2,231,386).

·      Completion of flotation pilot test work programme.

·      Successful generation of high purity mixed rare earth carbonate (“MREC”) from flotation concentrate.

·      Ongoing detailed design towards early works programme and construction at Longonjo and establishment of the Saltend rare earth separation plant.

·      High grade rare earths in soil samples confirmed at the Coola exploration project located 16 kilometres north of the flagship Longonjo project.

·      Liberum appointed as joint broker to the Company.

·      Appointment of Baroness Northover PC in Nov 2020 and Sandra Bates in August 2020 as Non-Executive Directors of the Company.

Post period end

·      Delisting from the ASX and company rebranded to Pensana Plc in February 2021.

·      Planning application submitted for the establishment of a rare earth oxide separation facility at the Saltend Chemicals Park, Humber, Yorkshire. Award of Freeport status to the Humber, home to the world-class Saltend Chemicals Park where Pensana proposes to build its magnet metals separation facility.

·      Appointment, post period end of world renowned rare earth specialist, Rocky Smith, as Chief Operating Officer.

·      Appointment of Dr Jeremy Beeton in March 2021 as Non-Executive Director.

CEO’s review


I would firstly like to express my sincere gratitude to my team at Pensana, the Angolan Sovereign Wealth Fund (“ASF”), the UK and Angolan Governments and our key technical advisors for navigating their way through this period together and ensuring the ongoing momentum as we looked to insert ourselves further downstream in the magnet metal supply stream whilst maintaining the safety and well-being of our employees.

The team has made significant progress over the period despite the ongoing challenges of Covid. With an LSE listing and a third placing with our key shareholder the ASF we were able to progress with the key metallurgical testing workstreams in Australia, complete the production of an MREC, upgrade our mineral resource at Longonjo, initiate our Coola exploration programme and make a stepped changed in the Company’s direction by progressing key scoping studies into the Saltend refinery.

UK rare earth processing study

During the Period, 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 Period-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 Saltend 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.


Longonjo Mineral Resource estimate upgraded

In September a substantial upgrade to the Mineral Resource estimate for the Longonjo Project was announced.

International mining industry consultants SRK Consulting has reported an upgraded Measured, Indicated and Inferred Mineral Resource estimate of:

–       313 million tonnes at 1.43% REO including 0.32% NdPr for 4,470,000 tonnes of REO including 990,000 tonnes of NdPr.

The upgraded estimate contains more than 2.3 times the previous estimate of the Measured and Indicated resources announced on the ASX on 15 November 2019, has increased the proportion of the resources reported in the Measured and Indicated categories from 31% to 68% and has increased the overall contained NdPr by 35%.

Successful development of Mixed Rare Earth salt flow sheet

In October the Company reported on the successful production of an NdPr rich mixed rare earth carbonate (MREC) from the testwork currently underway on mineralisation from its Longonjo rare earth project. This was further developed to produce a mixed rare earth sulphate (“MRES”) as a feedstock to the Saltend refinery.

Downstream process pilot 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 over the Period 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.

The pilot plant programme to enable completion of detailed design for the expanded downstream processing through to the Saltend refinery is well advanced.

High grade rare earths confirmed at Coola

On 21 December 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 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.

The 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.


London Stock Exchange Listing

On 6 July 2020, the Company completed its listing on the main board (Standard segment) of the London Stock Exchange under ticker code “PRE”. The Company further appointed SI Capital and Mirabaud as brokers to the Company shortly after listing.

Appointment of London broker Liberum

On 23 November 2020 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

On 24 February 2021 the Company announced that it had officially delisted from the Australian Securities Exchange whilst maintaining its primary listing under the stock code PRE on the main board of the London Stock Exchange. This is part of the Group’s ongoing strategy of focussing on the UK and European markets.

Equity placings

On 1 July 2020 the Company issued 16,508,633 fully paid ordinary shares to the Angolan Sovereign Wealth fund. This was the balance of the shares to be allotted out of a total of 25,808,633 fully paid ordinary shares that formed part of their second equity placing in the Company of US$ 5million as announced on 11 June 2020.

On 12 August 2020, the Company announced the conversion of 500,000 performance rights into fully paid ordinary shares on Listing on the London Stock Exchange.

On 12 August 2020, the Company issued 821,157 fully paid ordinary shares to third party service providers.

On 25 September 2020 the Group announced the raising an additional US$8.6million via the placing of 13,500,000 fully paid ordinary shares with the ASF.

Group Restructuring

Pursuant to the scheme of arrangement which saw the re-domiciliation of the Group to the UK the shares in the wholly owned subsidiaries, Sable Minerals GmbH and Sable Rare Earths GmbH were acquired directly by Pensana Plc during the period. This was part of an ongoing internal group restructure that will see the removal of redundant holding companies and streamlining of the Group structure.

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On 21 September 2020, as part of the Group’s restructuring and divesting from non-core assets, the Company announced that its responsibilities in the Miyabi exploration gold project in Tanzania would be assumed with immediate effect by Drillcraft Limited, a private company based in Mauritius with an established gold operational base in Tanzania. As a result of Covid-19, completion of the transaction was delayed and the Miyabi assets continue to be shown as held for sale in the statement of financial position as at the period end. The Company is in ongoing discussions with the buyer and expects the transaction to complete. The transaction will comprise the receipt of net cash proceeds by Pensana of approximately US$0.4 million payable alongside a five-year, 2% royalty participation agreement over the existing mineral resource estimate of approximately 0.5 million ounces of gold. Operations were initially forecast to commence in mid-2021 but this process has been delayed due to Covid-19.


Post period end, on 8 March 2021, the Company announced the appointment of Rocky Smith as Chief Operating Officer. Rocky is a highly experienced Chemical Engineer with 35 years’ rare earths experience. He was Managing Director of Molycorp’s Mountain Pass rare earth project in California, US, which is now owned by New York Stock Exchange listed MP Materials.  Rocky is one of the few western mining executives with in-depth knowledge of the rare earth industry, including the supply chain, operational start-up and running complex chemical processes.  

In 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, after three years of significant service in bringing the Longonjo carbonatite to its current resource status as a world class deposit.

During this time the Company welcomed the appointment of Mr Grant Hayward as Exploration Manager. 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.

New Board appointments

On 10 August 2020, Ms Sandra Bates was appointed as a Non-Executive Director to the Board of Pensana plc. Ms Bates is an international lawyer with over 20 years’ experience advising listed and private companies in the natural resources sector on complex commercial negotiations and Environmental, Social and Governance (ESG) engagement.

Ms Bates is a Partner at Keystone Law, the London based law firm, a Non-Executive Director of LSE listed Adriatic Metals Plc and a member of Women in Mining UK.

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 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).

Further enhancements to the Boards skill set was announced post period end on 2 March 2021 with the appointment of Dr Jeremy Beeton as a Non-Executive Director of the Company. Jeremy has extensive international experience in project management over complex multi-site, multiple project operations’ portfolios for government, as well as public and private companies. He was Director General of the £9 billion London 2012 Olympic and Paralympic Games, an Advisory Board member of PricewaterhouseCoopers until October 2018, and an Independent Non-Executive Director of SSE plc until July 2018.

Operating and Financial Review

The Group’s interim results have been presented in the presentational currency of US Dollars. Prior period figures have been retranslated from the previously reported Pensana Metals Limited presentational currency, being Australian Dollar to the new presentational currency of US Dollars.

In addition, as a result of the Scheme of Arrangement in January 2020 in which the Company was initially incorporated as a wholly owned subsidiary of Pensana Metals and then acquired 100% of that company’s shares, the merger accounting principles have been applied in preparing these financial statements as detailed in note 10.  Under the accounting policy, the Group is presented as if it had always been in existence in its current form with comparatives provided. The assets and liabilities of the former group are recorded at their book values and share capital reflected at the nominal value of the shares issued as part of the Scheme of Arrangement with the difference between the two recorded as a merger reserve.

During the period the consolidated entity incurred a comprehensive loss for the period of $1,717,491 (31 December 2019: $2,231,386).

Administration expenses decreased to $973,415 (2019: $1,110,724) due in main to the once off costs incurred in the prior period as part of the group restructuring and scheme of arrangement which saw the company re-domicile to the UK under the newly incorporated parent entity Pensana Plc in January 2020..

Corporate expenses of $944,518 increased from $891,076 in the prior period due primarily to share based award charges associated with the granting of new performance rights, issued in January 2020, and the additional fees associated with the addition of new employees and Board members.

Other expenditure of $92,383 (2019: $nil) relates to expenditure in the period for preparatory works associated the Saltend planning and application process.

The foreign currency exchange loss relates to the retranslation of the Group’s Sterling and Australian dollar bank balances at period end into US Dollars for reporting purposes.

Group net assets increased in the period to $22,071,185 from $14,861,184. This was primarily driven by the capitalisation to the Longonjo Project of exploration and evaluation expenditure for the period of $3,412,945 and an increase in cash and cash equivalents of $3,446,420 on the back of the ASF equity placings. The Group’s movement in share capital for the period comprised the equity placings detailed below and the settlement of trade creditors through the issue of shares.

Pensana experienced net cash outflows from operating and investing activities of $5,144,116 (31 December 2019: $2,384,252).  Net cash outflows from operating activities of $1,971,930 increased from $1,071,206 due to operating losses partially offset by an increase in trade and other payables. Investing cash flows of $3,172,409 (2019: $1,313,046) related to exploration expenditure predominantly at Longonjo and early stage Coola exploration. Proceeds from the issuance of equity before share issue costs in the amount of $8,693,305 (31 December 2019: $nil) was the source of financing to facilitate the exploration spend over the Period. Cash and cash equivalents totalled $7,552,741 (31 December 2019: $860,503) at period end.

The Directors have prepared a cash flow forecast for the period ended 30 June 2022. The forecast indicates that whilst the Group has sufficient funding to meet its corporate and general operating costs, the Group will require additional funding over the next twelve months to meet its committed and planned exploration and development expenditure and operating costs related to the Saltend and Longonjo Projects. Please refer note 3 to the financial statements for more detail on the going concern statement.

Accordingly the Directors have resolved to undertake certain mitigating actions including actively engaging with institutional investors and financing institutions in the United Kingdom and Europe to discuss opportunities around potential future financing in anticipation of key project investment milestones as part of the business plan being reached and the associated funding requirements attached thereto. Such additional funding will be required to meet the Group’s committed and planned development expenditure across the forthcoming year.

The ability of the Group to continue as a going concern is dependent on securing such additional funding given its forecast expenditure above. These conditions indicate a material uncertainty which may cast significant doubt as to the Group’s ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business.


The Group is exposed to a number of risks and uncertainties which could have a material impact on its long-term development, and performance and management of these risks is an integral part of the management of the Group. An overview of the key risks which could affect the Group’s operational and financial performance was included in the Company’s 2020 Annual Report, which can be accessed at These may impact the Group over the medium to long term; however, the following key risks have been identified which may impact the Group over the short term.

Financing and liquidity

The Company is of the opinion that the Group does not have sufficient funding to meet expected liabilities and commitments as they fall due based on its committed and planned exploration and development expenditures and operating costs related to the Longonjo Project and Saltend Project for at least the next 12 months. The Group has no history of NdPr oxide production at its planned Saltend facility nor mineral production at the Longonjo Project and accordingly has no revenues from operations and negative cash flows and will require additional future capital in the short term to continue its exploration activities and if it decides to commence development of the Saltend and Longonjo Project.

COVID-19 pandemic

The outbreak of the COVID-19 pandemic has had an impact on the Group’s businesses. The current government lockdown in Angola led to a temporary suspension of work at the Longonjo Project albeit that work has now resumed. Further escalation of the COVID-19 pandemic, and the implementation of any additional government-regulated restrictions which delays the Group in carrying out its business activities at the Longonjo and Saltend Projects (such as preparatory works) ultimately delays the Group’s ability to reach production and start to generate cash and so could have a material adverse impact on the Group’s operations and financial results. Additionally, COVID-19 has created increased uncertainty and volatility in debt and equity markets which may make the requisite funding for the Longonjo and Saltend Projects more difficult to secure or affect the terms available.

Mr. Tim George

Chief Executive Officer

29 March 2021

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