21 March 2025 LSE: PRE

Pensana Plc

(“Pensana”, “the company” or “the group”)

 

Unaudited Interim results for the six months ended 31 December 2024

 

The board is pleased to present its review of Pensana Plc, the rare earth exploration, mining and processing group, whose flagship development assets are the Longonjo NdPr Project and the Coola exploration project in Angola alongside the Saltend rare earth processing hub in the UK.

 

Half Year Highlights

Completion of the Longonjo early construction works, including construction and development of the civil works for the camp, accommodation units and facilities, the rehabilitation of the access road to Longonjo camp and the agricultural demonstration plots under the Livelihood Restoration Plan (LRP). Further offtake and co-operation agreement signed with a major Japanese partner, Hanwa Co. Ltd. US$3.4 million technical assistance grant funding secured from the United States (US) International Development Finance Corporation (DFC), America’s development finance institution for secure investment in emerging economies. Achievement of the EcoVadis gold medal indicating environmental, social and governance (ESG) performance among the top 5% of companies assessed. United Kingdom (UK) Minister for Africa Lord Collins accompanied by UK Ambassador to Angola Mr Roger Stringer inspected the ongoing development and works at Pensana’s Longonjo Project.

Post period-end

In March 2025, the company received approvals for the full financing totalling circa US$268 million for the Longonjo rare earth project. In addition to the US$15.0 million bridging loan already provided by FSDEA, the funding approvals received include equity financed by FSDEA of US$38.0 million comprising equity and a convertible loan, as well as US$54.9 million from AFC in the form of a convertible loan. The debt funding, which comprises approximately 60% of Phase 1 project funding for Longonjo, includes participation by AFC of US$81.2 million and ABSA of US$78.8 million, all at a subsidiary level.

 

CEO’s Review

Dear Pensana Shareholders,

Having prepared the Longonjo site for main construction over the period our attention was predominantly focussed on any additional due diligence workstreams the Lender group required as they progressed through the multiple stages of their credit approval processes. At the time of writing this report I am delighted to confirm that both ABSA Bank Limited (“ABSA”) and the Africa Finance Corporation (“AFC”), alongside our highly supportive and largest shareholder, the Angolan Sovereign Wealth fund (“FSDEA”), have now completed their requisite credit approval processes thereby allowing the team to initiate the move to main construction on the Longonjo Project.

In the build up to this key financing event, FSDEA’s US$15 million bridging facility continued to provide the impetus on-site over this period. Having now fully deployed these funds I am pleased to confirm completion of the accommodation camp (including all underground and surface infrastructure encompassing electrical reticulation, water supply, effluent services and storm water management), the upgrade of the access road to the Longonjo railway station, contractor laydown areas and the agricultural demonstration plots under the Land Restitution Programme.

We are particularly pleased with the progress by the management of the Lobito Atlantic Rail Consortium (LARC) who now have assumed full operational control of the freight services along the rail corridor to the port. Serving as the primary route for inbound materials and reagents, and the export of ultra-clean Mixed Rare Earth Carbonate product (“MREC”), LARC’s management is a further de-risking of the logistics chain that will serve the mine site.

We have a strong owners team supporting the main construction led by Kevin Botha, with supervision of all project deliverables by Mining Consultancy Company Limited (MCC), a veteran project management team with a track record of delivering projects across Africa, including Angola. The engineering team is supported by ADP Group and ProProcess, both being African minerals specialists in the detailed design, construction and commissioning of modular mineral processing plants with extensive development experience in Angola. Additionally, our team within Angola continue to develop and progress in their careers with internal merit-based promotions of Angolan nationals to management positions in the roles of country manager (Geraldine Tchimbali) and site manager (Benedito Dumbo) during the past year. Stakeholder engagement continues apace with regular meetings taking place over the period between the project team and key stakeholders. This includes local, provincial and national authorities, transitional leadership, project-affected people, training institutions and more. This is supported by the continued operation of an active community grievance mechanism.

 

Strategic partnering continued on the offtake front with Pensana signing a non-binding Memorandum of Understanding with major Japanese trading group Hanwa. Key terms included an Offtake for up to 20,000tpa of ultra-clean Mixed Rare Earth Carbonate from the Longonjo mine over 5 years. Additionally, both parties agreed to co-operate on global marketing and distribution and on developing a strategic and sustainable supply chain for magnet metal materials.

Hanwa is also investigating a deeper co-operation with Pensana, including an investment in both upstream and downstream projects with the aim to deliver low embedded carbon magnet metal materials to Hanwa’s customers and future partners.

Hanwa is also currently considering providing financial support and to jointly study support opportunities from Japanese governmental and financial institutions for the various Pensana projects, including potential Coola expansion, the separation facilities and metallisation project, thereby ensuring that high quality magnet metal products with leading ESG benefits are available to Hanwa’s Global customers in the long-term.

With the increased focus on the Lobito Corridor as a supply and processing chain for critical minerals to the West, Pensana’s ongoing engagement with the US International Development Finance Corporation was rewarded with a US$3.4million Technical Assistance Grant.

The grant will fund studies into the proposed US$100 million expansion of the Longonjo operations (Stage 2), doubling the capacity to 40,000 tonnes per year of MREC containing 4200 tonnes of NdPr.

The grant will also fund studies into development of the recently discovered Coola deposits and the potential for downstream processing in Angola in due course.

The Technical Assistance program is part of the US Better Utilization of Investments Leading to Development (BUILD) Act, which is used to provide advice and financial assistance and prepare future deals for the DFC to offer further financial support stimulating development. The Grant Funds have been earmarked for specific projects in and around Longonjo which have the potential to receive later DFC loan funding for any necessary capital, contingent on the successful completion of associated feasibility studies.

In having now reached a key inflection point in the Company’s history I need to express my sincere gratitude for the assistance rendered by the special task team appointed by H.E. Diamantino Azevedo, Minister of Mineral Resources, Petroleum and Gas to accelerate the development of the Longonjo Project. This task team is led by H. E. Dr Jânio da Rosa Corrêa Victor, the Secretary of State for Mines, alongside Eng. Paulo Tanghana to navigate any issues which may affect the project execution.

I am also thankful for the ongoing collaborative efforts of Eng. Jacinto Rocha, Chair of the National Agency for Mineral Resources, and H.E. Periera Alfredo, Governor of Huambo, alongside the support from the Longonjo municipality.

I also wish to thank the Angolan Sovereign Wealth Fund for their ongoing financial support, in the form of an interim US$15 million facility, towards maintaining project momentum at Longonjo and their commitment to further investment in the Longonjo Project with additional equity investment.

The above engagements are recognition of the quality of the Longonjo Project, the Angolan environment as a preferred country of choice and the loyal support within the state organisations of Angola for the speedy development of Longonjo as a demonstration project for the stated policy of diversification of the Angolan economy.

I conclude that this new chapter in this significant project is articulated clearly by the Chairpersons of both FSDEA and AFC: 

“The Longonjo Mining Project holds strategic significance for the Angolan Sovereign Wealth Fund as part of its commitment to advancing the national mining sector. Beyond its substantial economic impact—such as job creation and tax revenues—the project plays a crucial role in establishing in Angola a key segment of the value chain for an industry essential to the global energy transition. As a key investor, FSDEA has been instrumental in demonstrating the untapped potential of Angola’s mining sector, which remains a critical driver of economic diversification. With the support of ABSA and AFC, this initiative represents a concerted effort to foster sustainable growth, enhance local capabilities, and reinforce Angola’s position in the international mining landscape”. Armando Manuel, FSDEA Chairman.

“With approximately one-third of the world’s rare earth mineral reserves, Africa is poised to become a cornerstone of the global clean energy revolution. These minerals are essential for high-tech industries, from semiconductors to advanced batteries and renewable energy solutions. At AFC, we recognize the immense strategic value of Africa’s resources—not just for our economic transformation but for securing diversified, sustainable supply chains for the future. Our partnership with Pensana and FSDEA on the Longonjo project reflects our unwavering commitment to unlocking Africa’s mineral potential through local value addition, industrial growth, and responsible mining. By investing in Africa’s rare earth sector, we are not only accelerating regional development but also strengthening global energy security in line with the aspirations of the Mineral Security Partnership.” Samaila Zubairu, President & CEO of Africa Finance Corporation,

 

Principle activities

Pensana’s operations are centred around rare earth exploration, mining and processing. Its flagship development assets are the Longonjo Neodymium and Praseodymium (NdPr) Project and the Coola Exploration Project in Angola alongside the Saltend rare earth processing hub in the UK.

The current year focused on the advancement of the Longonjo Project while continuing to explore the development of the Coola exploration property and downstream processing opportunities. The timing around the development of these assets is largely dependent on strategic sequencing in line with the relevant financing frameworks being secured and evidence of ongoing support from the relevant governments and associated development agencies.

Activities conducted in the current period was centred around the finalisation of financing workstreams following the revised Longonjo feasibility study and execution plan allowing for the staged mine development through a reduced capital envelope which was supported by a full technical due diligence review on the revised feasibility study. This resulted in approvals of the full financing totalling circa US$ 268 million for the Longonjo rare earth project, for the 84% owned subsidiary Ozango which owns 100% of the Longonjo Project.

Pensana has continued its focus on securing offtake for the first phase of the project by successfully signing a memorandum of understanding (MOU) with Hanwa. This MOU, in addition to existing MOUs with other potential offtake partners, is for 100% of the ultra-clean MREC produced from the Longonjo asset but can convert to offtake for the metal products once the downstream activities are complete. Pensana has continued to evaluate the downstream market and continue our relationships with the magnet producers and has successfully been awarded several grant funding opportunities including a US$3.4 million grant from the DFC and €877,000 from the EU to pursue these developments.

Exploration activities mainly revolve around mineralogical studies to confirm processing potential of the rare earth host minerals at the Coola carbonatite and Sulima West exploration targets with future plans to advance metallurgical testwork programmes on the Coola concession orebodies and initial focus on the surface Sulima West laterite deposit to accelerate plans to use this as additional feedstock for the Longonjo processing plant.

Downstream beneficiation includes the development of a REE separation plant through the establishment of the Saltend refinery as an independent, sustainable supplier of key magnet metal oxides to a growing market, fuelled in part by the green energy transition, which is currently dominated by China. The Saltend facility is being designed to produce circa 12,500t per annum of rare earth oxides, of which 4,500t will be NdPr, representing around 5% of the global market.

Operating and Financial Review

During the period ended 31 December 2024, the consolidated total comprehensive loss amounted to US$3,191,700 (2023: US$3,657,839), comprising mainly of administration expenses of US$2,545,911 (2023: US$3,461,420) and foreign exchange losses of US$409,504 (2023: US$50,471 gain). The decrease in total losses for the year of US$466,139 (-13%) compared to the prior period mainly consisted of the following key variances:

Lower administration costs of US$915,509 (-26%) largely driven by reduced employee benefit costs as a result of no short-term share performance awards in the current period compared to allocations made in prior years (-US$535,106), lower Directors fees due to a reduction in board members (-US$231,652), as well as lower overall general expenditure (-US$148,751); These costs were partially offset by higher foreign exchange losses of US$459,975. These gains and losses arise from the settlement of invoices in currencies other than the functional currencies (US$, £, AUD, AOA), as well as the translation of balances denominated in foreign currency.

Net assets for the period ended 31 December 2024 amounted to US$48,259,304 (30 June 2024: US$50,955,814), mainly consisting of fixed assets capitalised as part of developing the Longonjo and Saltend Projects. The decrease in net assets of US$2,696,510 (-5%) compared to 30 June 2024 is a result of cash outflows to support ongoing operations (-US$1,475,245) combined with credits included in property, plant and equipment relating to grant funding and foreign currency translations (-US$1,382,110). Also included in net assets is a gross increase in property, plant and equipment of US$4,160,534 as part of early construction at Longonjo which was facilitated by a drawdown on the FSDEA bridging loan (US$4.596,627 increase on the bridging loan facility).

Cash generation remains a focus, with a decrease in cash for the period of US$1,475,245. Cash outflows during the period ended 31 December 2024 were mainly utilised in operating activities in the form of corporate costs incurred to support the development of the projects of US$2,393,764 (2023: US$3,223,494) and payments towards property, plant and equipment as part of early construction activities at Longonjo of US$4,369,954 (2023: US$10,425,893). Financing activities for the period consisted of proceeds from the FSDEA loan facility drawn of US$4,118,468 (2023: US$4,784,851,total facility value of US$15,000,000 of which US$447,393 was undrawn at period end). Other cash inflows include R&D credits and DFC grant funding received to the total value of US$849,503 (2023: US$1,598,061 R&D credits), combined with proceeds from directors’ loans settled through equity shares issued (US$320,544).

In July 2024, the company issued 1,500,000 ordinary shares to the chairman at an effective price of 16.666 pence per ordinary share to serve as repayment of the £250,000 loan proceeds under the directors’ loan facility (the “Facility”). Subsequently, Mr Rob Kaplan was added as an assignee to the loan and made available £32,521 in December 2024. Following the various drawdowns, the balance available under the Facility reduced to £1.72 million at period end.

Going concern

The directors have prepared a cash flow forecast for the period ending 30 June 2026 to support the going concern assessment, including estimated timing and sources of funds to support ongoing operations and project development.

The forecast indicates that immediate funding is not required to provide working capital to the group, as the Company has access to a £3.0 million term loan facility with an accredited UK-based investment house. This is in addition to the £1.72 million available under the Facility. . Engagement with existing project-related contractors in the UK has continued over the Period and the support of these contractors will be required until the group has secured this required funding and then remain as the group subsequently moves towards main financing in the normal course of project development.

Additionally, the group would need to refinance the FSDEA facility in the event that the main financing at Longonjo Project level, which will include the appropriate restructuring of the FSDEA loan, is not achieved. Given the support provided by the Angolan Government for the Longonjo Project to date, along with recent approvals received for Longonjo main financing, the directors anticipate such a restructuring to be successfully concluded.

It is anticipated that the contemplated financing across the group may include further issues of equity, export credit-backed debt financing and issuing a green bond. The ability of the company and group to continue as a going concern is dependent on securing such additional funding given the forecast expenditure.

Although conditions regarding the financing and cash flow mentioned above indicate a material uncertainty which may result in the Group being unable to realise its assets and discharge its liabilities in the normal course of business, the recent approvals received from the Lender consortium on the Project Longonjo financing have provided comfort to the Board of the Group’s ability to continue as a going concern and work towards raising the requisite funding as outlined above.

Refer to note 3 to the financial statements for more details on the going concern statement.

Update on construction activities at Longonjo

Early construction activities at Longonjo continued during the current period to ensure project momentum and the advancement of critical workstream ahead of main construction. This follows the revised execution plan, based on a staged development of the mine and processing facilities with a reduced upfront capital cost of US$217 million.

Key activities completed to date include the camp installation, comprising of civil works for the camp, establishing fence and access control, installation of 350 person accommodation units and facilities and installation of effluent lines and power distribution; as well as ground preparation and backfilling for contractors laydown area; rehabilitation of the access road to Longonjo camp; construction of water drainage and sewer systems; and completion of agricultural demonstration plots under the Livelihood Restoration Programme (LRP).

With various engineering contractors and Longonjo staff now working on-site in preparation for the commencement of main construction, there has been a very positive reaction to the activities on-site among the local community, in particular, with the creation of well-paid jobs and the successful implementation of the first phase of the LRP.

Over the period, the early-stage development activities on the Longonjo Project continued to be funded via a US$15 million bridging loan provided by FSDEA ahead of the main finance.

During March 2025, the company received approvals for the full financing totalling circa US$268 million for the Longonjo rare earth project. The funding structure includes debt funding of US$160 million, with participation of US$81.2 million from AFC and US$78.8 million from ABSA, comprising approximately 60% of Phase 1 project funding for Longonjo. In addition to the US$15.0 million bridging loan already provided by the Angolan Sovereign Wealth Fund, the balance of Phase 1 funding will be provided through equity, with FSDEA having approved an investment of US$38 million in the form of equity and a convertible loan, and the AFC having approved an investment of US$54.9 million in the form of a convertible loan. The equity investments will be at subsidiary level.

The approval for main financing is a key milestone and now allows for the full commencement of main construction activities at Longonjo.

Partnerships and collaborations

During September 2024, the company signed a non-binding MOU with major Japanese trading group Hanwa. This includes an offtake arrangement for 20,000tpa of ultra-clean MREC from the Longonjo Mine over five years. The MOU also allows for co-operation in marketing and distribution of products globally and the opportunity for Hanwa to consider investment into downstream projects. This MOU is in addition to existing MOUs that cover more than 200% of the stage 1 production of the Longonjo Project.

The Hanwa partnership will cater for the offtake of the initially produced MREC but also allows for the conversion to the oxide or metal products once the downstream facilities are available.

In January 2024, the company was nominated by the UK government to be considered as one of the strategic projects under the Minerals Security Partnership (MSP) programme. This is a collaboration of 14 countries and the EU to catalyse public and private investment in responsible critical minerals supply chains globally. The MSP submission is to cover the Longonjo mining and beneficiation facilities and downstream processing in the UK, including the metallisation plant providing some of the lowest embedded carbon products to our downstream customers.

The company has also received grant funding under the HORIZON-CL4-2024-RESILIENCE-01-08 Initiative to develop a small-scale pilot facility to demonstrate the sustainable electrochemical production of rare earth metal. The total value of the project is €1.2 million of which 70% is grant funded by the European Horizon project.

Geopolitical landscape

During the period, the board considered the outcome of various global elections, in particular the UK general elections and more recent United States of America (US) elections to ensure the impact of any policy changes is considered as part of the strategic positioning of the company and to understand the impact on the global marketability of our product.

In January 2025, the newly elected US Trump administration reemphasised the importance of Critical Minerals, including Rare Earths and NdFeB magnets, as well as the global drive to derisk supply chains and the reliance on China for the supply of these critical goods. This was done through US tariffs of 10% on all China imports along with a proposed 25% tariff on permanent magnets, noting that the US market is amongst the largest NdFeB magnet consumers. This means that a US-based magnet maker, or any other country outside of China, selling at a ~35% premium to China-priced materials could become a cost-competitive alternative to China at least until (if ever) the US landscape becomes oversaturated with supply.

We believe that the developments in the US, along with the increased global focus on Rare Earth metals, will benefit the company as part of production ramp-up at Longonjo, including the finalisation of binding offtake agreements, to deliver on our strategy of becoming one of the largest independent suppliers of NdPr metals.

The board also continues to consider the impact of ongoing wars and their potential impact on the company and the industry. The board is continuously monitoring supply chains, labour availability and future energy supply and is strategically positioning the group to mitigate any potential negative impact of these wars.

Environment Social Governance (ESG)

The business continues to ensure ESG is at the heart of its activities with the core business strategy focused on providing a source of sustainable rare earths to the market.

From a health, safety and environment (HSE) view the business embeds HSE into its operating culture and has had zero recordable injuries and zero environmental incidents in the period. The main risk, as with every rainy season in Angola, continues to be malaria contraction at our Longonjo project. The company continues to deliver a targeted malaria awareness campaign and holds weekly HSE meetings attended by senior management from Pensana Plc. and Ozango Minerais S.A.

In the period the Longonjo project continued to work collaboratively with the local communities, authorities and other relevant stakeholders. The project is further engaging with the community through a representative community advisory committee and continues to hold regular sessions with each of the affected communities. Regular dialogue is maintained with authorities on a regional, provincial and national level along with traditional leadership. After the completion of phase one of the resettlement action plan (RAP) in October 2022, 28 project affected households continue to receive transitional support food packages to supplement their temporary loss of livelihood.

Focus continues to be made towards developing local procurement and local employment where it is feasible and practical do so.

Furthermore, the project has continued to invest in its agricultural test and demonstration plots to further investigate the most effective techniques and crops for optimal yield. In this period this work has expanded into testing the most effective method for the development of a site tree line, which is a requirement of the sites environmental licence.

The business has continued with a focus on utilising innovative research to support its sustainability activities. This has included the continuation in the period of an Innovate UK supported project to consider how socio-economic modelling can be used to assess the value to society of rare earth projects. This research project is being delivered alongside University of Leeds, University of Hull, Route2 and Polestar. The business has also supported a PhD studentship at the university of Leeds through the White Rose Doctoral Partnership to study the social impacts of the Longonjo project. Pensana also continues to work alongside Polestar on its ambitious Polestar0 project which aims to produce a truly carbon-neutral car by 2030.

Exploration

The Coola Exploration Project licence is located in Angola, approximately 160km east of the Port of Lobito. Pensana, through Coola Mining LDA in which Pensana holds a 90% interest, was granted the Coola exploration licence in May 2020 and has since completed multiple field programmes.

The Coola licence covered an initial area of 7,456km2 which was reduced to 824km2 following three years of intensive prospecting.

Systematic phased exploration of the licence over the past four years has led to the identification of two highly prospective REE-bearing complexes namely the Sulima West alkaline complex and the Coola carbonatite, 90km and 40km north of Longonjo, respectively. Recent exploration and evaluation have been focused on these two highly prospective, REE-bearing complexes.

Ground geophysical surveys were completed at both targets in 2023 which helped to better define known areas of mineralization and added additional exploration targets. Drilling of the geophysical targets was postponed to 2025. Still the most compelling exploration target is the Coola carbonatite central sand covered diatreme magnetic anomaly which may represent a deeply weathered supergene enriched carbonatite and will be drill tested in the second half of 2025.

Early results indicate the potential for low-cost physical beneficiation of the rare earth minerals and production of a high-grade REE concentrate at site which will then feed into the Longonjo processing plant.

Recent testwork conducted and significant findings for the six months ending 31 December 2025 are summarised below.

Sulima West

Metallurgical testwork on the monazite rich Sulima West laterite and the bastnaesite bearing dolomitic carbonatite at Coola carbonatite continued during the latter half of 2024 at BluSky Mining in South Africa. The primary aim of this work is to explore physical separation techniques on the mineralised lithologies (gravity and/or magnetics) with the aim of producing a REE concentrate of > 35% TREO on site that would be trucked to the Longonjo plant for further processing and final extraction of rare earth elements.

The Sulima West laterite consisted mainly of Goethite and Psilomelane, Monazite and Bastnaesite. The sample had a TREO of 8.4%. The liberation of Monazite is good throughout the total sample, after milling to 80% passing 150µm. A milled sample was subjected to dry and wet magnetic separation testwork and gravity separation testwork. The results show that the magnetic separation testwork was more successful in beneficiating the TREO when compared to the gravity testwork.

Processing this material at a medium to high magnetic field intensity is recommended to generate a relatively low TREO magnetic fraction, which can be considered tailings. The TREO is upgraded to the nonmagnetic fraction. The results indicate that this may generate a nonmagnetic stream of circa 25% TREO at a >40% TREO recovery. Further testwork is currently underway on a more representative bulk sample grading 2.6% TREO. The extent of the laterite will be determined by drilling in 2025 should this second round of testwork show encouraging TREO concentrate grades are attainable from the lower grade, more representative sample.

Coola

The Coola carbonatite sample consisted mainly of Dolomite and Ankerite with minor gangue minerals comprising Fe-oxides, Barite and Quartz. The main REE minerals is Bastnaesite (3.98%), with minor Monazite and Florencite. The sample had a TREO of 3.98%. The sample was milled to 80% passing 150µm and subjected to mineralogy. The Ce was mostly associated with Dolomite in the +45µm fractions, indicating that the Bastnaesite was locked with Dolomite.

A sample was milled to 80% passing 75µm and testwork was completed. This included magnetic and enhanced gravity separation test work. The sample was not amenable to either magnetic or enhanced gravity separation beneficiation. This is mainly attributed to disseminated REE minerals that are included in the dolomite matrix. As a result of the poor physical separation characteristics of this material, chemical intervention (floatation) is being investigated to see if this can improve Bastnaesite recovery.

Principal Business Risks

The Group is exposed to several risks and uncertainties which could have a material impact on its long-term development and performance, management of these risks is an integral part of the management of the Group. An overview of the key risks, and risk management procedures, which could affect the Group’s operational and financial performance was included in the company’s 2024 Annual Report, which can be accessed at www.pensana.co.uk. 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 notes that, alternative sources of funding will be required in the event that contemplated grant funding is delayed, or the conditions are not met. Additional funding is required to settle existing project-related contractor balances in the UK and to also provide working capital to the group. Continuing support of these contractors will be required until the group has secured this required funding and then remain as the group subsequently moves towards main financing in the normal course of project development. Additionally, the group would need to refinance the FSDEA facility in the event that the main financing, which will include the appropriate restructuring of the FSDEA loan, is not achieved. Given the support provided by the Angolan Government for the Longonjo Project to date along with recent approvals received for Longonjo main financing, the directors anticipate such a restructuring to be successfully concluded.

 

It is anticipated that the contemplated financing across the group may include further issues of equity, export credit-backed debt financing and issuing a green bond. The ability of the company and group to continue as a going concern is dependent on securing additional funding given the forecast expenditure.

 

The group is in pre-production phase and therefore has no revenues from operations currently. There is a risk that funding may not be available and/or the cost of financing may be higher than expected.

 

Development of the Longonjo and Saltend Projects

The group’s operations are at an early stage of construction development and future success will depend on the group’s ability to manage the Longonjo and Saltend Projects (the projects) and the production of NdPr-rich mixed rare earth product at Longonjo for export to the Saltend processing plant and further processing into a rare earth oxide. In particular, the group’s success is dependent upon the directors’ ability to develop the projects by commencing and maintaining production at the sites, including the conclusion of definitive documentation and the fulfilment of conditions precedent to funding approvals received. Development of the projects could be delayed or could experience interruptions or increased costs as a result of supply chain or inflationary pressures or may not be completed at all due to a number of factors.

 

There can therefore be no assurance that the group will complete the various stages of development necessary to begin generating revenue for the group at both the Longonjo and Saltend Projects, and any of

these factors may have a material adverse effect on the group’s business, results of operations and activities, financial condition and prospects.

 

Logistical challenges and delays

Global supply chain challenges could result in logistical risks relating to availability, potential delays and increased costs of equipment and material both for the project and operations phase.

 

Commodity price and market supply concentration

If the group is able to develop the Longonjo and Saltend Projects and/or the Coola Project for production and the market price of rare earth oxide decreases significantly for an extended period of time, the ability for the group to continue to attract finance, meet debt service requirements and ultimately generate profits could be adversely affected.

 

Currently, China is the dominant producer of the world’s rare earth magnets. China could manipulate market prices of rare earth oxides to control the number of new entrants into the market.

 

Attracting skilled employees

The group’s ability to compete in the competitive natural resources and specialist rare earth chemical processing sectors depends upon its ability to retain and attract highly qualified management, geological and technical personnel.

 

The loss of key management and/or technical personnel could delay the development of the Longonjo Project, exploration at the Longonjo Project and the Coola Project and development and commissioning of the Saltend refinery thereby negatively impacting on the ability of the group to compete in the resources and chemical processing sectors.

 

In addition, the group will need to recruit key personnel to develop its business as and when it moves to construction and ultimately operation of a mine, each of which requires additional skills.

 

 

 

Mr. Tim George

Chief Executive Officer

21 March 2025

 

 

Condensed Consolidated Statement of Comprehensive Income for the six months ended 31 December 2024

 

 

 

 

 

 

 

Unaudited

31 December 2024

Unaudited

31 December 2023

 

Note

US$

US$

Administration expenses

5

(2,545,911)