REG-Pensana Plc: Update on Longonjo Finance

PensanaAnnouncement

23/01/2025 07:15

THIS ANNOUNCEMENT CONTAINS INSIDER INFORMATION

Pensana Plc

("Pensana" or the "Company")

Update on Longonjo Finance

Pensana Plc (PRE.LSE) (the "Company") is pleased to provide the following
update on the debt finance component of the Longonjo rare earth project:
* Leading Pan-African bank Absa Bank Limited, acting through its Corporate and
Investment Banking Division ("Absa"), has conditionally approved a credit term
sheet for its 50% participation in an approximately US$160 million syndicated
loan facility ("the Facility"), subject to the conclusion of definitive loan
documentation and the fulfilment of conditions precedent contained therein as
well as obtaining political and commercial risk insurance cover from a
reputable political risk insurer on Absa's exposure under the Facility.
* The Facility will provide senior funding for the Phase 1 development of the
Company's Longonjo rare earth mine ("Longonjo") in Angola through its 84%
owned subsidiary Ozango Minerais SA ("Ozango"). 
* The debt financing will look to deliver approximately 60% of all project
funding for Longonjo with the balance (40%) funded through equity provided at
the Ozango level.
Pensana Chairman, Paul Atherley, commented:

"We are grateful for the work undertaken by the Absa team in providing the
Longonjo project with a conditional commitment to its share of the US$160
million debt funding requirement for the Longonjo project.

This is an important step towards finalising funding for a project which will
have a major positive impact on the community, creating over 600 high value
jobs of which over 50% are expected to be allocated to young people as well as
supporting local businesses and farmers.

Once in full production the project will create an estimated 2,400 direct and
indirect jobs and will produce around 5% of the world's magnet metal rare
earths used for wind turbines and electric vehicles"

The agreed term sheet follows the successful completion of a detailed
technical, marketing, environmental and fiscal due diligence process and
conditional approval of the loan by Absa's credit committee, with the legal
due diligence process to be finalised.

About Longonjo

Pensana has spent over US$70 million over the past six years on exploration,
technical and environmental studies on the Longonjo rare earth project in the
Huambo district of Angola approximately 350 kilometres Southeast of the
capital Luanda.

 

The company has successfully delineated one of the world's largest undeveloped
magnet metal rare earth deposits.

 

The electrification of motive power is arguably the biggest energy transition
in history and needs rare earths for permanent magnets.

 

Once in full production the mine will produce ~5% of the world's production in
the form of a high value mixed rare earth carbonate, capable of being
converted into permanent magnets for electric vehicles and offshore wind
turbines.

 

The project will cost over US$325 million to bring into full production and
over its 20 year life we will spend over US$2.3 billion in operating
expenditure, much of it spent locally. The project will generate over US$6
billion in export revenue and importantly will contribute over US$1 billion of
tax to regional and national treasuries.

The project will create over 600 high value jobs of which over 50% are
expected to be allocated to young people. Once in full production the
investment will create an estimated 2,400 direct and indirect jobs and will
support local businesses and farmers.

We are committed to developing the mine to the very best international
standards with the highest level of community engagement and have published a
blueprint for sustainable rare earth development which is available on our
website. Pensana_Blueprint_for_Sustainable_Rare_Earths.pdf
(https://pensana.co.uk/wp-content/uploads/2022/09/Pensana_Blueprint_for_Sustainable_Rare_Earths.pdf)

 

The team's efforts were recognised in 2022 when we received an award by S&P
Green Bond Rating Agency CICERO and more recently, we were awarded a Gold
Medal by EcoVadis, a leading sustainability ratings provider, placing it among
the top 5% of the companies assessed.

 

It has been independently estimated that the mine, which is powered by
hydroelectricity and has direct access to the Atlantic Port of Lobito via the
Lobito Corridor rail line will save over 4 million tonnes of CO2 emissions -
the carbon equivalent of replacing 1.5 GW of fossil fuel electricity
generation.

The information contained within this announcement is considered by the
Company to constitute inside information as stipulated under the Market Abuse
Regulations (EU) No.596/2014. Upon the publication of this announcement via a
Regulatory Information Service, this inside information will be considered to
be in the public domain. The person responsible for arranging for the release
of this announcement on behalf of the Company is Paul Atherley, Chairman.

-      ENDS -

For further information, please contact:

 

Shareholder/analyst enquiries:

Pensana Plc 

Paul Atherley, Chairman IR@pensana.co.uk 

Tim George, Chief Executive Officer

Rob Kaplan, Chief Financial Officer

 



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