Ann: Presentation - Jane Morgan Broker Briefing, page-25

The writing was on the wall, when Appian sold their 19.9% stake to Shenge. I wrote a number of posts on HC back in February 2022 pointing out some of the problems that this would raise, and indeed these have come to pass.

Shenge now have a member on the board, and their 19.9% stake gives them plenty of clout when it comes to management, and the direction the company will take. What really needs pointing out, is the hold that the PRC have over rare earths, their mining and their processing and their use. China has approximately 90% of the refining capabilities for RE's, is restricting or planning to restrict the export of raw RE's and retaining the metals for their own domestic consumption for incorporation into manufactured products, for home consumption or for export.

China is the largest manufacturer in the world by number of electric vehicles, and in 2022 manufactured 5.9 million units. Allowing an average of 2Kg of NdPr per unit, that is 13,800 metric tonnes. That's not all, China is a huge investor in wind turbines. I only have figures for the year 2021, but during that period, they installed wind turbines with a generating capacity of 328,480 MW. Allowing 180kg of NdPr per MW that is over 59,000 metric tonnes. I will accept that not all wind turbines use NdPr, but this does give the scale of consumption in China alone.

So in summary we can see the problems that Peak has, in selling the greater part of Ngualla's output to China, at prices basically fixed by China, and for consumption, largely in China.

I certainly don't want to see Peak fail. I have a quite reasonable shareholding now worth only 38% of what I paid for them. Furthermore, Peak were originally planning to process the Ngualla ore in the UK at Wilton Park, on Teeside, creating a substantial number of jobs. This is now a dead duck, so far as I can establish. What I would like to see, having strong connections with Australia, is some plan for the company that would benefit retail shareholders in Australasia and around the Western World. Has anyone got any suggestions?