REG-Pensana Plc: Unaudited Interim results for the six months ended 31 December 2024
21/03/2025 07:15
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.
1. 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.
1. 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.
1. 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.
1. 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.
1. 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) (3,461,420)
Impairment gains/(losses) on financial assets 59,075 (46,543)
Foreign currency exchange (losses)/gains 5 (409,504) 50,471
Loss from operations (2,896,340) (3,457,492)
Finance costs - -
Loss before income tax (2,896,340) (3,457,492)
Income tax 6 -
Total loss for the period (2,896,340) (3,457,492)
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss
Foreign currency translation (295,360) (200,347)
Total comprehensive loss for the period (3,191,700) (3,657,839)
Net loss for the period is attributable to:
Owners of Pensana Plc (2,896,340) (3,457,492)
Total comprehensive loss is attributable to:
Owners of Pensana Plc (3,191,700) (3,657,839)
Loss per share attributable to owners of Pensana Plc:
Basic (cents per share) 17 (1,00) (1.21)
Diluted (cents per share) 17 (1,00) (1.21)
Notes to the interim financial statements are included on pages 14 to 29.
Condensed Consolidated Statement of Financial Position
as at 31 December 2024
Unaudited As at 31 December 2024 As at 30 June 2024
Note US$ US$
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 10 60,114,213 57,354,414
Intangible assets 9 13,624,992 13,612,261
TOTAL NON-CURRENT ASSETS 73,739,205 70,966,675
CURRENT ASSETS
Cash and cash equivalents 7 40,133 1,515,378
Trade and other receivables 8 1,976,533 2,089,554
TOTAL CURRENT ASSETS 2,016,666 3,604,932
TOTAL ASSETS 75,755,871 74,571,607
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 11 12,110,357 12,826,210
Loans and borrowings 12 15,386,210 10,789,583
TOTAL CURRENT LIABILITIES 27,496,567 23,615,793
TOTAL LIABILITIES 27,496,567 23,615,793
NET ASSETS 48,259,304 50,955,814
EQUITY
Issued capital 13 360,922 361,440
Share premium 71,147,070 70,826,007
Reserves 45,608,483 45,729,198
Accumulated losses (68,857,171) (65,960,831)
TOTAL EQUITY 48,259,304 50,955,814
Notes to the interim financial statements are included on pages 14 to 29.
Condensed Consolidated Statement of Changes in Equity
for the six months ended 31 December 2024
Fully paid ordinary shares Share premium Accumulated Losses Merger Reserve Foreign Exchange Reserve Share based Payments Reserve Equity Reserve Total
Unaudited US$ US$ US$ US$ US$ US$ US$ US$
Balance at 1 July 2024 361,440 70,826,007 (65,960,831) 45,748,045 (1,198,621) 1,679,774 (500,000) 50,955,814
Loss for the period - - (2,896,340) - - - - (2,896,340)
Other comprehensive loss - - - - (295,360) - - (295,360)
Total comprehensive loss for the period (2,896,340) (295,360) - - (3,191,700)
Issue of shares (note 13) (518) 321,063 320,545
Share based payments 174,645 174,645
Balance at 31 December 2024 360,922 71,147,070 (68,857,171) 45,748,045 (1,493,981) 1,854,419 (500,000) 48,259,304
Fully paid ordinary shares Share premium Accumulated Losses Merger Reserve Foreign Exchange Reserve Share based Payments Reserve Equity Reserve Total
Unaudited US$ US$ US$ US$ US$ US$ US$ US$
Balance at 1 July 2023 356,898 70,826,007 (60,944,496) 45,748,045 (198,038) 1,472,186 (500,000) 56,760,602
Loss for the period - - (3,457,492) - - - - (3,457,492)
Other comprehensive loss - - - - (200,347) - - (200,347)
Total comprehensive loss for the period - - (3,457,492) - (200,347) - - (3,657,839)
Share based payments - - - - - 709,751 - 709,751
Balance at 31 December 2023 356,898 70,826,007 (64,401,988) 45,748,045 (398,385) 2,181,937 (500,000) 53,812,514
Notes to the interim financial statements are included on pages 14 to 29.
Condensed Consolidated Statement of Cash Flows
for the six months ended 31 December 2024
Unaudited 31 December 2024 Unaudited 31 December 2023
Note US$ US$
Cash flows from operating activities
Operating cash flows 19 (2,393,764) (3,223,494)
Net cash used in operating activities (2,393,764) (3,223,494)
Cash flows from investing activities
R&D tax credit 509,503 1,598,061
Technical assistance government grant received 340,000 -
Payments for property, plant and equipment and intangibles 19 (4,369,954) (10,425,893)
Net cash used in investing activities (3,520,451) (8,827,832)
Cash flows from financing activities
Proceeds from short-term debt 4,118,468 4,784,851
Net proceeds from issues of equity securities 13 320,544 -
Net cash provided by financing activities 4,439,012 4,784,851
Net decrease in cash and cash equivalents (1,475,203) (7,266,475)
Cash and cash equivalents at beginning of the period 1,515,378 9,695,491
Effects of exchange rate changes on the balance of cash held in foreign currencies (42) 18,681
Cash and cash equivalents at the end of the period 7 40,133 2,447,697
Notes to the interim financial statements are included on pages 14 to 29.
Notes to the financial statements
1. General information
The consolidated financial statements present the financial information of
Pensana Plc and its subsidiaries (collectively, the group) for the six months
ended 31 December 2024 in United States dollars (US$). Pensana Plc (the
company or the parent) is a public company limited by shares listed on the
Main Market of the London Stock Exchange (LSE) and incorporated in England &
Wales on 13 September 2019. The registered office is located at 107 Cheapside,
Second Floor, London, EC2V 6DN, United Kingdom.
The company is focused on rare earth exploration, mining and processing, 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.
In early 2020, Pensana Metals Ltd redomiciled the group to the UK pursuant to
a scheme of arrangement in which Pensana Metals Limited became a wholly owned
subsidiary of Pensana Plc. Prior to the transaction, the company was
incorporated on 13 September 2019 and was a wholly owned subsidiary of Pensana
Metals Limited.
2. New accounting standards and interpretations
(a) Changes in accounting policies and disclosures
From 1 July 2024, the Group has adopted the following Standards and
Interpretations, mandatory for annual periods beginning on or prior to 1
January 2024.
Standard Description Effective date
Amendment to IAS 1 Classification of Liabilities as Current or Non-Current – Amendments to IAS 1 Presentation of Financial Statements 1 January 2024
Amendments to IAS 1 Non-current liabilities with covenants – Amendments to IAS 1 Presentation of Financial Statements 1 January 2024
Amendments to IFRS 16 Lease liability in sale and leaseback – Amendments to IFRS 16 1 January 2024
Amendments to IAS 7 Supplier Finance Arrangements – Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures 1 January 2024
The application of these standards has not had a material impact on the
financial statements.
(b) Accounting standards and interpretations issued but not yet effective:
There are several standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the group has decided not to adopt early.
Standard Description Effective date
Amendments to IAS 21 Lack of Exchangeability – Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates 1 January 2025
Management has reviewed and considered these new standards and interpretations
and none of these are expected to have a material effect on the reported
results or financial position of the Group.
3. Material accounting policies and Going Concern
Basis of preparation
The condensed interim report, which is unaudited, has been prepared in
accordance with UK-adopted International Accounting Standard 34 Interim
Financial Reporting and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom’s Financial Conduct Authority. This
condensed interim report does not include all the notes of the type normally
included in an annual financial report. This condensed interim report is to be
read in conjunction with the annual report for the year ended 30 June 2024,
and any public announcements made by the group during the interim reporting
period. The comparative financial information for the year ended 30 June 2024
in this interim report does not constitute statutory accounts for that year.
The statutory accounts for 30 June 2024 have been delivered to the Registrar
of Companies.
The auditors' report on those accounts was unqualified but drew attention to a
material uncertainty in relation to going concern. It did not contain a
statement under 498(2) or 498(3) of the Companies Act 2006. The financial
report for the six months ended 31 December 2024 was prepared in accordance
with the annual financial statements of the group and are prepared in
accordance with UK adopted International Accounting Standards (IFRSs).
The accounting policies applied in this condensed interim report are
consistent with the polices applied in the annual financial statements for the
year ended 30 June 2024 and were prepared in accordance with UK adopted
International Financial Reporting Standards (IFRSs).
As disclosed in the 30 June 2024 Annual Report, the company was incorporated
on 13 September 2019 as a wholly owned subsidiary of Pensana Metals Limited.
The company subsequently acquired 100% of the share capital of Pensana Metals
Limited and its subsidiary companies for the effective issuance of 152,973,315
shares to the shareholders of Pensana Metals further to the scheme of
arrangement approved on 22 January 2020 and completed on 5 February 2020.
The shares issued to the former shareholders of Pensana Metals Limited
comprised 50,000,000 shares with a nominal value of £0.001 per share
subscribed for incorporation of the company by Pensana Metals Ltd which were
transferred to CHESS Depositary Nominees Pty Ltd (a subsidiary of the
Australian Securities Exchange (ASX)) for use in the scheme of arrangement and
102,973,314 shares with a nominal value of £0.001 per share additionally
issued by the company to CHESS Depositary Nominees Pty Ltd for use in the
scheme of arrangement. CHESS Depositary Nominees Ltd subsequently issued CHESS
Depositary Instruments in proportion to the interests the former shareholders
of Pensana Metals held in that company for trading on the ASX with 152,973,315
CHESS Depositary Instruments issued for trading. The transaction represented a
group reconstruction and common control transaction.
The accounting for common control transactions is scoped out of IFRS 3 and,
accordingly the Group has developed an accounting policy with reference to
methods applied in alternative generally accepted accounting principles
(GAAPs). Consequently, the consolidated financial statements are presented as
if the company has always been the holding company for the group and the group
has elected to apply merger accounting principles. Under this policy, the
company and its subsidiaries are treated as if they had always been a group.
The results are included from the date the subsidiaries joined the group and
the comparatives reflect the results of the company and its subsidiaries. No
fair value adjustments occur as a result of the transaction, and the assets
and liabilities are incorporated at their predecessor carrying values.
The policies have been consistently applied to all the periods presented,
unless otherwise stated.
Going Concern
The group financial statements have been prepared on a going concern basis.
The directors are of the opinion that the group will be able to meet their
obligations as and when they fall due for a period of at least 12 months from
the date of approval of the financial statements.
As at 31 December 2024, the group was in a net asset position of US$48,259,304
(June 2024: US$50,955,814) and net current liabilities position of
US$25,479,901 (June 2024: US$20,010,861). In addition, the group reported a
net loss after income tax of US$2,896,340 (2023: US$3,457,492) and experienced
cumulative net cash outflows from operating and investing activities of
US$5,914,215 (2023: US$12,051,326).
Cash and cash equivalents totalled US$40,133 at the year-end (June 2024:
US$1,515,378). Cash and cash equivalents as at the date of approval of these
financial statements amounted to US$286,255, including subsequent final
drawdowns against the FSDEA loan. The Company further has access to a £3.0
million term loan facility with an accredited UK based investment house in
addition to the Directors loan facility highlighted below.
The directors have prepared a cash flow forecast for the period ending June
2026.
In the prior period, the company’s chairman, Mr Paul Atherley and the CEO,
Mr Tim George made available a loan Facility of £2 million to the company to
meet the underlying operating costs for the UK as required over the coming
months, excluding the existing UK contractor balances and capital development
costs. In July 2024, the chairman sold 1,500,000 of his ordinary shares in the
company and used the proceeds to make £250,000 available to the parent
company under the Facility as working capital support, while the group
finalises its main fundraising for the Longonjo Project. To avoid incurring
interest costs, the parent company settled the £250,000 under the Facility by
the issue to the chairman of 1,500,000 ordinary shares being equal to the
number sold by the chairman, at an effective price of 16.666 pence per
ordinary share. 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, with a maturity date of 31 July 2025.
During the prior year, in Angola, the group secured a US$15 million loan
facility, secured over the indirect shareholding in the group’s Angolan
subsidiary. The loan is directly linked to the main finance structuring
currently being contemplated by the group, and the loan facility is part of
the broader US$108 million equity investment to facilitate the development of
the Longonjo Project. The undrawn balance as at 31 December 2024 of US$447,393
is expected to be sufficient to cover ongoing costs at Longonjo until main
financing is concluded. The loan was repayable on 30 September 2024. While the
loan has not been formally extended, the directors have been in discussions
with the lenders not to recall the loan. The directors have no current
expectation that the loan will be called. In March 2025, the group received
approvals for the full financing totalling circa US$268 million for the
Longonjo rare earth project subject to conclusion of definitive documentation
and the fulfilment of conditions precedent contained therein. The approved
funding will enable the restructuring of the FSDEA loan, and provide funds for
the wider Longonjo project development.
In addition to ongoing traction in Angola, in September 2024, Pensana also
secured a US$3.4 million of Technical Assistance grant funding secured from
the US International Development Finance Corporation (DFC) which will support
feasibility studies for increased processing capacity at Longonjo, downstream
refining opportunities in Angola as well as test work for the development of
the Coola project orebodies. The initial 10% mobilisation request has been
received during the period, with workstreams and subsequent drawdowns ongoing.
The board notes that alternative sources of funding will be required in the
event that the grant funding is delayed, or the conditions are not met.
The forecast indicates that immediate 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 loan 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.
In assessing the going concern basis of preparation, the directors have also
considered the availability of funding and its impact on the progression of
the Longonjo Project in Angola and the Saltend Project in the UK. Similarly,
the directors have also considered the impact of the ongoing geopolitical
landscape, including ongoing global wars and elections as it relates to costs,
marketability of our product and the potential volatility in the debt and
equity markets.
The directors have continued to actively engage with institutional investors
and financing institutions in the UK, Europe and Africa to discuss
opportunities around potential future financing in anticipation of a final
investment decision being taken to initiate main project development. Such
additional funding, including the option to utilise existing director loan
facilities, 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.
Despite the ongoing engagements, the directors note that the required funding
outlined above has not been secured at the date of approval of these financial
statements and the availability of such funding on terms that would be
acceptable is not guaranteed. Similarly, settlement of the FSDEA loan is
dependent on the fulfilment of main financing.
The group is therefore dependent on securing additional funding; contractors
support of existing project-related contractor balances until the additional
funding is secured; and on conclusion of Longonjo Project main financing
definitive documentation and the fulfilment of conditions precedent contained
therein, which includes appropriate restructuring of the FSDEA loan and if not
successful, will lead to a refinance of the FSDEA loan. These are not
guaranteed. These circumstances indicate the existence of material
uncertainties which may cast significant doubt on the group’s ability to
continue as going concern. Therefore, the group may be unable to realise their
assets and discharge their liabilities in the normal course of business.
On the back of the recent approvals the directors have increased confidence
that the required funding will be secured; contractors support of existing
project-related contractor balances will be obtained; and that the Longonjo
Project main financing definitive documentation and the fulfilment of
conditions precedent contained therein which includes appropriate
restructuring of the FSDEA loan will be finalised. Therefore, the directors
continue to adopt the going concern basis of accounting in preparing the
financial statements of the parent company and the group.
The group and the parent company financial statements do not include the
adjustments that would result if the group and the parent company were unable
to continue as going concerns.
Critical accounting judgements and key sources of estimation uncertainty
In applying the Group’s accounting policies, management continually
evaluates judgements, estimates and assumptions based on experience and other
factors, including expectations of future events that may have an impact on
the group. All judgments, estimates and assumptions made are believed to be
reasonable based on the most current set of circumstances available to
management. Actual results may differ from the judgements, estimates and
assumptions.
Significant judgements, estimates and assumptions made by management in the
preparation of these financial statements are outlined below:
(i) Significant accounting judgements
Impairment indicator assessment of development assets
The ultimate recovery of the value of the group’s development assets as at
31 December 2024 is dependent on the successful development and commercial
exploitation, or alternatively, the sale of the Longonjo Project. Judgement
was exercised in assessing the extent to which impairment indicators existed
as at 31 December 2024 in respect of the Longonjo Project and associated
balances. In forming this assessment, internal and external factors were
evaluated.
Management considered the company’s market capitalisation relative to the
group’s net asset value, the progression of the Longonjo and Saltend
Projects and the financial life of mine plan, feasibility study equivalent
assessments and the associated Ore Reserve Statement and the competent
person’s report covering the Longonjo and Saltend Projects. The underlying
financial life of asset involves estimates regarding commodity prices,
production and reserves, operating costs and capital development together with
discount rates which demonstrates significant headroom.
After performing in-depth reviews, including sensitivities around key value
drivers, management determined that no impairment existed.
Climate change
Management has considered the impact of climate change in preparing these
consolidated financial statements. These considerations, which are integral to
the group’s strategy and operations, were considered in the following areas:
• The judgements involved in the evaluation of indicators of
impairment for the group’s development assets and assets under
construction);
• The judgements used in the evaluation of the group’s
exploration and evaluation assets for impairment; and
• The evaluation of the residual values and economic useful
lives of property, plant and equipment.
The effects of climate-related strategic decisions are incorporated into
management’s judgements and estimates, as these relate to the future cash
flow projections underpinning the recoverable amounts of mining interests,
when the decisions have been approved by the board, and the implementation of
these is likely to occur. The considerations with respect to climate change
did not have a material impact on the key accounting judgements and estimates
noted above in the current year, however, the emphasis on climate-related
strategic decisions, such as a focus on decarbonisation, further
electrification and sourcing of renewable power may have a significant impact
in future periods.
(ii) Significant accounting estimates and
assumptions
Share-based payment transactions
The group measures the cost of equity-settled transactions with directors and
others by reference to the fair value of the equity instruments at the date on
which they are granted. The fair value is determined using a stochastic model
to value awards with market-based conditions and a Black-Scholes valuation
model for awards that are not subject to market-based performance conditions.
These models require estimates for inputs such as share price volatility and
total shareholder return. The share-based payment arrangements are expensed on
a straight-line basis over the vesting period, based on the group’s estimate
of shares that will eventually vest. At each reporting date, vesting
assumptions are reviewed to ensure they reflect current expectations and
immediately recognise any impact of the revision to original estimates.
Judgement is required as to the likelihood of the vesting conditions being
met, such as the progress of financing of various projects, the lost time
injury frequency rate, progress of construction of the projects, etc. If fully
vested share options are not exercised and expire, then the accumulated
expense in respect of these is reclassified to accumulated losses.
Impairment assessment of Saltend intangibles
The ultimate recovery of the value of the Saltend intangibles as at 30 June
2024 is dependent on the successful development and commercial exploitation of
the Saltend facility or the sale thereof. An impairment assessment is
performed annually. Judgement was exercised in assessing the extent to which
impairment existed as at 31 December 2024 in respect of the Saltend Project
and associated balances. In forming this assessment, internal and external
factors were evaluated, including those that applied last year. Management
determined that no impairment existed having considered the company’s market
capitalisation relative to the group’s net asset value, and the contemplated
staged development of Saltend. The underlying financial life of asset involves
estimates regarding commodity prices, production and reserves, operating costs
and capital development together with discount rates and demonstrates
significant headroom.
4. Operating Segments
Description of segments
The group has identified its operating segments based on the internal reports
that are used by the chief operating decision maker in assessing performance
and determining the allocation of resources.
The group has identified that it has two operating segments being related to
the activities in Angola and Saltend (UK), on the basis that the assets in
Tanzania are fully impaired as at 31 December 2023 and 30 June 2023.
Corporate relates to operations in Australia and Portugal which consist of
corporate and head office-related costs.
31 December 2024 Angola US$ UK US$ Corporate US$ Total US$
Non-current assets – opening balance 53,039,521 17,927,154 - 70,966,675
Non-current assets – additions/movements 2,699,430 73,100 2,772,530
Non-current assets – closing balance 55,738,951 18,000,254 - 73,739,205
Current assets 853,952 881,907 280,807 2,016,666
Current and non-current liabilities (834,622) (25,118,120) (1,543,825) (27,496,567)
Cash and cash equivalents 8,881 15,074 16,178 40,133
Six months ended 31 December 2024
Administration expenses (837,410) (1,601,266) (107,235) (2,545,911)
Operating loss (3,579,949) (762,152) 1,445,761 (2,896,340)
Depreciation (16,952) (2,045) - (18,997)
Loss before tax (3,579,949) (762,152) 1,445,761 (2,896,340)
Loss for the period (3,579,949) (762,152) 1,445,761 (2,896,340)
30 June 2024 Angola US$ UK US$ Corporate US$ Total US$
Non-current assets – opening balance 43,846,788 17,942,784 – 61,789,572
Non-current assets – additions 9,192,733 (15,630) – 9,177,103
Non-current assets – closing balance 53,039,521 17,927,154 - 70,966,675
Current assets 782,157 1,463,964 1,358,811 3,604,932
Current and non-current liabilities (1,371,948) (20,698,799) (1,545,046) (23,615,793)
Cash and cash equivalents 35,532 126,585 1,353,261 1,515,378
Six months ended 31 December 2023
Administration expenses (880,515) (2,908,816) (255,493) (4,044,824)
Operating loss (682,645) (3,123,432) (397,256) (4,203,333)
Depreciation (23,716) (2,955) - (26,671)
Loss before tax (682,645) (3,123,432) (397,256) (4,203,333)
Loss for the period (682,645) (3,123,432) (397,256) (4,203,333)
Non-current assets consist mainly of development assets, assets under
construction and intangible assets. Additions and depreciation of property,
plant and equipment are disclosed in note 10 and movements in intangible
assets are disclosed in note 9.
5. Other Expenses
Six months ended 31 December 2024 US $ Six months ended 31 December 2023 US $
Administration expenses
General administration costs 568,118 702,820
Audit and non-audit fees 93,906 123,996
Consultant Fees 194,701 115,444
Travel expenses 85,012 63,180
Legal fees 2,411 35,101
Operating lease rental expenses:
Lease payments (short-life leases) 47,460 80,433
Depreciation on non-current assets:
Property, plant and equipment 18,997 21,603
Employee Benefits
Performance rights and options granted to directors, officers and employees 174,645 709,751
Directors’ fees and employee benefits 1,282,053 1,513,705
Social security costs 78,608 95,387
Total administration expenses 2,545,911 3,461,420
Foreign currency exchange gains/losses:
Foreign exchange loss of $409,504 (2023: $50,471 gain) comprises realised
foreign exchange movements on retranslation of monetary balances and
unrealised foreign exchange movements on intercompany loans which are
considered repayable in the foreseeable future.
6. Income Taxes
Consolidated
6 months ending 31 December 6 months ending 31 December
2024 US $ 2023 US $
Current taxation
Current tax charge/ (credit) - -
No Liability to corporation tax arose in ordinary activities for the half year
ended 31 December 2024 or 31 December 2023.
The tax assessed for the year utilised the standard rate of tax in the UK of
25% (2023: 25%).
Tax rate reconciliation:
Six months ended 31 December 2024 US $ Six months ended 31 December 2023 US $
Loss from continuing operations before tax (2,896,340) (3,457,492)
Loss on continuing activities multiplied by the rate of corporation tax in the UK of 25% (2023:25%) (724,085) (864,373)
Tax effects of:
Different tax rates in overseas jurisdictions 2,539 571
Amounts which are not deductible 46,928 177,965
Deferred tax assets not recognised 674,618 685,837
Total tax charge/(credit) - -
7. Cash and Cash Equivalents
As at 31 December 2024 As at 30 June 2024
US$ US$
Cash at bank and on hand 40,133 1,515,378
40,133 1,515,378
8. Trade and Other Receivables
As at 31 December 2024 As at 30 June 2024
US$ US$
Trade receivables 36,413 39,817
Prepayments 50,916 51,052
R&D tax receivables 242,793 509,503
VAT receivables 1,327,596 1,204,665
Other receivables 318,815 284,517
1,976,533 2,089,554
9. Intangible assets
As at 31 December 2024 US$ As at 30 June 2024 US$
Saltend intangible assets
Carrying value
Balance at the beginning of the year 13,215,564 13,577,069
Additions 110,953 176,971
R&D government grant deferred - (509,503)
Adjustment on currency translation (130,839) (28,973)
Balance at the end of the period 13,195,678 13,215,564
Coola exploration and evaluation expenditure
Carrying value
Balance at the beginning of the year 396,697 243,249
Additions 32,617 153,448
Balance at the end of the period 429,314 396,697
Total intangibles 13,624,992 13,612,261
10. Property, plant and equipment
Buildings Plant and equipment Development asset Assets under construction Motor vehicles Office equipment Computer equipment Total
US$ US$ US$ US$ US$ US$ US$ US$
Cost
Balance at 1 July 2024 38,526 38,467 52,912,614 4,269,553 214,239 7,983 38,298 57,519,680
Additions - 1,517 4,153,873 - 2,155 - 2,989 4,160,534
R&D government grant deferred - - (242,793) 1 - - - - (242,793)
Technical assistance grant received - - (340,000) - - - - (340,000)
Adjustment on currency translation - - (756,230) (42,270) - - (817) (799,317)
Balance at 31 December 2024 38,526 39,984 55,727,464 4,227,283 216,394 7,983 40,470 60,298,104
Depreciation
Balance at 1 July 2024 8,304 13,969 - - 113,366 4,386 25,241 165,266
Charge for the year 891 1,920 12,187 349 3,650 18,997
Adjustment on currency translation - - - - - - (372) (372)
Balance at 31 December 2024 9,195 15,889 - - 125,553 4,735 28,519 183,891
Net Book Value
At 1 July 2024 30,222 24,498 52,912,614 4,269,553 100,873 3,597 13,057 57,354,414
At 31 December 2024 29,331 24,095 55,727,464 4,227,283 90,841 3,248 11,951 60,114,213
1The R&D grant deferred during the six months ending 31 December 2023 was
$560,725.
11. Trade and other Payables
As at 31 December 2024 US$ As at 30 June 2024 US$
Trade and other payables 10,531,199 10,571,451
Accrued expenses 1,533,315 2,210,275
Statutory liabilities 45,843 44,484
12,110,357 12,826,210
12. Loans and borrowings
As at 31 December 2024 US$ As at 30 June 2024 US$
Interest bearing liabilities (current)
Bridging loan facility 15,386,210 10,789,583
Total 15,386,210 10,789,583
Net cash and borrowings
Cash and cash equivalents 40,133 1,515,378
Borrowings (15,386,210) (10,789,583)
(15,346,077) (9,274,205)
Borrowings US$ Cash US$ Total US$
Net (borrowings)/cash at 1 July 2024 (10,789,583) 1,515,378 (9,274,205)
Net cash used in operating activities - (2,393,764) (2,384,891)
Net cash used in investing activities - (3,520,451) (3,529,324)
Net proceeds from loans and borrowings (4,118,468) 4,118,468 -
Capitalisation of interest on borrowings (478,159) - (478,159)
Proceeds from issues of equity securities - 320,544 320,544
Foreign exchange movements - (42) (42)
Net (borrowings)/cash at 31 December 2024 (15,386,210) 40,133 (15,346,077)-
The FSDEA facility is currently under review as part of the main financing for
Longonjo, which will include the appropriate restructuring of the FSDEA loan.
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.
By 31 December 2024, $14.6 million of the facility was drawn down and the
average interest rate incurred during the period was 6.95%.
13. Issued Capital
As at 31 December As at 31 December As at 30 June As at 30 June
2024 No. 2024 US$ 2024 No. 2024 US$
Fully paid ordinary shares
Balance at 1 July 288,772,873 361,440 285,180,873 356,898
Shares issued - conversion of performance rights - -
Share Placement 1,500,000 1,938 2,250,000 2,845
Correction - (2,456) - -
Share Placement - - 1,342,000 1,697
Balance at period end 290,272,873 360,922 288,772,873 361,440
Placements during half year ending 31 December 2024:
On 26 July 2024, the company issued 1,500,000 fully paid ordinary shares to
the Chairman at a price of £0.16 per share and raised US$323,000. This was
part of the funding facilitated by the chairman under the £2 million working
capital Facility made available to the company on 28 March 2024. Refer to
note 20 for further information.
There were no shares issued during the half year ending 31 December 2023.
Share options on issue
As at 31 December 2024, there were nil shares under option (31 December 2023:
nil).
Performance rights on issue
There are no performance rights outstanding as at period end.
14. Commitments for Expenditure
The group has certain obligations to perform exploration work and expend
minimum amounts of money on mineral exploration tenements.
No provision is required for minimum expenditure requirements in respect of
tenements.
(i) Exploration Commitments
There were no commitments for payments under exploration permits and mineral
leases in existence at the reporting date, but not recognised as liabilities
payable, as well as at 30 June 2024.
(ii) Capital Commitments
Capital expenditure contracted for at the reporting date but not yet incurred
was as follows:
As at 31 December 2024 US$ As at 30 June 2024 US$
Capital expenditure 1,888,937 1,006,698
The expenditure relates primarily to the Longonjo Project in Angola, as well
as the Saltend Project in the UK.
15. Contingent Liabilities and Contingent Assets
The Directors are not aware of any other contingent liabilities or contingent
assets that are likely to have a material effect on the results of the Group
as disclosed in these financial statements.
16. Share-based Payments
Half year ended 31 December 2024
During the period, no share awards and no short-term bonus share awards were
issued to directors, senior management and employees.
No legacy awards remained to vest during the period.
Half year ended 31 December 2023
During the period 3,050,000 share awards were issued to directors, senior
management and employees.
During the period 1,342,000 short-term bonus share awards were also issued to
directors, senior management and employees.
US$709,751 was charged to the statement of comprehensive income relating to
these new awards, as well as to existing share awards.
During the period, the remainder of the 750,000 legacy awards vested.
17. Loss per share
2024 cents per share 2023 cents per share
Basic loss per share
From continuing operations 1.00 1.21
Total basic loss per share 1.00 1.21
Diluted loss per share
From continuing operations 1.00 1.21
Total diluted loss per share 1.00 1.21
Basic loss per share
The net loss and weighted average number of ordinary shares used in the
calculation of basic loss per share are as follows:
Unaudited As at 31 December 2024 US$ Unaudited As at 31 December 2023 US$
Net loss (2,896,340) (3,457,492)
Losses used in the calculation of basic loss per share from continuing operations (2,896,340) (3,457,492)
Losses used in the calculation of diluted loss per share attributable to ordinary shareholders (2,896,340) (3,457,492)
As at 31 December 2024 No. As at 31 December
2023 No.
Weighted average number of ordinary shares for the purposes of calculating basic loss per share and diluted loss per share 290,125,332 285,180,873
No options (31 December 2023: nil) or performance rights (31 December 2023:
nil) have been included in the diluted earnings per share calculations.
18. Related party transactions
During the period, Mr Kaplan settled an amount of £30,000 against advances
made to him previously, and in addition provided funding of £32,521 to the
company under the Facility. The net amount owing to Mr Kaplan as at 31
December 2024 was £12,050 (30 June 2024: £49,913).
19. Notes to the Consolidated Statement of Cashflows
Reconciliation of loss for the period to net cash flows from operating
activities
Six months ended 31 December Six months ended 31 December 2023 US$
2024 US$
Net loss (2,896,340) (3,457,492)
Add/less non-cash items
Depreciation 18,997 21,603
Share based payments 174,645 709,751
Impairment (gains)/losses on financial assets (59,075) 46,543
Foreign exchange losses /(gains) 409,504 (50,471)
Changes in Trade and other receivables (94,614) (646,467)
Changes in Trade and other payables 53,119 153,039
Net cash used in operating activities (2,393,764) (3,223,494)
Reconciliation of additions to property, plant and equipment and intangibles
to payments for property, plant and equipment and intangibles used in
investing activities
Six months ended 31 December Six months ended 31 December 2023 US$
2024 US$
Additions to property, plant and equipment 10 (4,160,534) (5,531,583)
Additions to Saltend intangible assets Additions to exploration and evaluation 9 (110,953) (32,617) (311,255) (117,435)
Total additions (4,304,104) (5,960,273)
Capital items included in working capital 1 (65,850) (4,465,620)
Payments for property, plant and equipment and intangibles (cash flow investing activities) (4,369,954) (10,425,893)
1 Include interest capitalised of $478,159 (31 Dec 2023: $82,259).
20. Subsequent events
In January 2025, Mr Kaplan settled an amount of £19,000 against advances made
to him previously. In February 2025 Mr Kaplan also provided additional funding
of £74,907 to the company under the Facility, whilst the Company finalised
its main fundraising for the Longonjo project, which was partially settled
through the issue of shares amounting to £52,376. The net amount owing to Mr
Kaplan was £53,576 and the balance available under the Facility reduced to
£1.64 million at the date of this report.
In February 2025, the company issued a total of 2,098,223 new ordinary shares
of £0.001 each. The issue relates to the settlement of contractor balances of
US$ 550,000 (1,850,723 ordinary shares) and partial settlement of amounts due
to Mr Rob Kaplan under the Facility of £ 52,376 (247,500 ordinary shares.).
Following this issue, the Company's issued share capital consists of
292,371,096 Ordinary Shares.
In March 2025, the company received approvals for the full financing totalling
circa US$268 million for the Longonjo rare earth project, subject to
conclusion of definitive documentation and the fulfilment of conditions
precedent contained therein.
In March 2025 the Company entered into a 12-month term loan agreement with an
accredited UK based investment house.
No other matters or circumstances have arisen since 31 December 2024 that have
significantly affected, or may significantly affect:
* The Group’s operations in future financial years; or
* The results of those operations in future financial years; or
* The Group’s state of affairs in future financial years.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge: a. the Condensed Interim Report
have been prepared in accordance with IAS 34 Interim Financial Reporting and
give a true and fair view of the assets, liabilities, financial position and
profit of the Group; and b. the Interim Management Report includes a fair
review of the information required by FCA’s Disclosure and Transparency
Rules (DTR 4.2.7 R and 4.2.8 R).
By order of the Board
Mr Paul Atherley
21 March 2025
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