Pensana Rare Earths in discussions with China Great Wall for development of Longonjo project in Angola

Posted by Paul Moore on 20th July 2020

Pensana Rare Earths PLC has announced that it has entered into a heads of agreement with China Great Wall Industry Corporation (CGWIC) for the purposes of co-operating together for the Company’s rare earths Longonjo Project in Angola. CGWIC is a company with expertise and experience in international engineering which is actively engaged in a range of engineering projects in Africa.

The company intends to proceed with an engineering, procurement, construction and financing (EPCF) model for the development of its Longonjo Project to ensure that the design and construction of the processing plant and associated infrastructure is funded through a single arrangement.

“The heads of agreement establishes the framework for the company and CGWIC to work together to negotiate and engage in discussions for CGWIC to be engaged as the contractor for the purposes of the engineering, procurement and construction works for the Longonjo Project and for the company to procure financing for these project works.”

The heads of agreement contemplates that the company will seek the proposed debt financing component of the EPCF to be obtained from commercial banks in China with credit insurance from SINOSURE. The company will seek to obtain such finance on the following indicative terms:

  • Debt funding to cover no more than 85% of project development costs (Company to be responsible for funding the remainder); and
  • The term of the facility will depend on the particular terms from commercial banks and the life cycle of the project, but is not expected to exceed  8-10 years.

Pensana Chairman Paul Atherley commented: “We are delighted to enter into this heads of agreement with CGWIC. With Angolan Presidential approval and backing from the Angola sovereign wealth fund, Pensana is rapidly developing Longonjo as the first major rare earths mine to be brought online in over a decade to help meet the rapidly growing demand for the magnet metals critical for electric vehicles and offshore wind turbines and a range of other applications important for the transition towards a green economy. CGWIC brings to the project a successful track record in major project development in Angola and funding from China. We are very much looking forward to working harmoniously with CGWIC and achieving important outcomes for Angola, CGWIC and Pensana’s shareholders.”

SRK Consulting has provided an inferred Mineral Resource estimate of 240 Mt at 1.60% REO including 0.35% NdPr (neodymium and praesodymium) for 3,850,000 t of REO including 840,000 t of NdPr. Pensana’s initial focus will be on the source occurring within a cut-off of around 0.65% NdPr. This resource totals 22.9 Mt at 4.16% REO and 0.86% NdPr containing around 953,000 t of REO including 197,000 t of NdPr.