Ann: Cabinda Phosphate Fertilizer Project Funding Update, page-256

It's good to see that the Angolan Sovereign Wealth Fund is backing Pensana despite the sp falling 92% from its peak and showing no sign of a turnaround. Pensana's share price performance does make Minbos look pretty good by comparison.

Pensana is at an all time low on the weekly chart shown below. MNB is still well off its 2021 peak but it is up 240% over 5 years from 2c to 6.8c. MNB is also up 39% from its 4.9c low earlier this month as it moves closer to completing its funding. MNB's share price is very volatile but its 200 day moving average is rising reasonably steadily. The sp is climbing back up towards that moving average which is currently at 10c. The sp has sat well above the 200 day moving average for most of the last three years. I think it will return to sitting well above that moving average when finance is locked in.

While both have suffered from this unusually deep and long small cap bear market, Minbos has some big advantages that I believe explain its outperformance. Both are in Angola and both projects are based on mining. Market caps are similar but the similarities end there.

Pensana's project is rare earths and that is a sector that is very difficult to compete in for non-Chinese companies. Very few have succeeded.
Minbos did well to diversify its rare earths project and focus on phosphate fertiliser for the local market.
Minbos will probably have a monopoly in Angola supplying a very simple to produce, free digging, simple crush, simple process, competitively priced fertiliser for the local market that desperately needs phosphate.
Pensana capital cost requirement is US$217mill. What will be the working capital requirements between now and first production?
Minbos total capital cost was US$40mill with a significant part of that already paid from cash on hand, a further US$14mill credit approved by the IDC and only US$10mill of that original capex remaining to be sourced, plus another US$10mill for working capital.

Minbos has already had credit approval from the South African IDC for US$14mill. The IDC did not receive any credit guarantee from Angola and it did not have any quota to reach. Minbos has applied for a term loan from Angola's largest bank which will receive a government credit guarantee and that bank does have a quota to fill. It also has the precedence of the IDC approving credit to Minbos after a lengthy due diligence. The odds of that loan being approved must be much better than the IDC approving its loan - which it did. Assuming Minbos gets the Angolan bank loan, that leaves just the Angolan Sovereign Wealth fund to complete the relatively small funding to see production begin next year. If the Angolan SWF is backing Pensana, it's difficult to imagine that they won't support Minbos.
IMO the funding will be secured soon and it appears the market is also beginning to believe. This share price rally is very early stage and I expect it has a very long way to go.


Pensana



MINBOS