Stonegate Capital Partners Initiates Coverage on Pensana PLC, Highlighting Strategic Position in Western Rare Earth Supply Chain

Stonegate Capital Partners has initiated coverage on Pensana PLC (LSE: PRE), highlighting the company's strategic position as one of the few developers outside China pursuing a full mine-to-magnet model that captures value across the entire rare earth supply chain. Unlike traditional "dig-and-ship" approaches, Pensana is advancing a U.S.-facing downstream strategy that aligns directly with Western supply chain security goals, positioning the company at the forefront of critical mineral independence efforts.

The company's memorandum of understanding with ReElement Technologies provides a direct pathway for Longonjo feedstock to be refined and separated in the United States, creating a direct link between production and magnet manufacturing. This strategic partnership demonstrates Pensana's commitment to establishing a secure Western supply chain for rare earth elements, which are essential for numerous advanced technologies. Offtake agreements and memoranda of understanding already cover multiples of Stage 1 capacity, indicating strong market demand for Pensana's high-specification products.

Pensana stands out as one of the rare exceptions among non-China rare earth projects by having secured full construction financing. The company has raised $268 million from prominent financial institutions including the Angolan Sovereign Wealth Fund (FSDEA), the African Finance Corporation, and Absa Bank. This substantial financial backing places the Longonjo project among the very limited number of fully funded rare earth mines currently in construction worldwide. With a modest Stage 1 capital expenditure of $217 million, Pensana benefits from low capital intensity, further supported by existing Lobito Corridor rail and hydroelectric infrastructure.

The significance of Pensana's operations extends beyond financial metrics to address critical global supply chain vulnerabilities. Neodymium-praseodymium (NdPr) is indispensable for permanent magnets used in electric vehicles, offshore wind turbines, robotics, drones, and defense technologies. Demand growth projections remain robust, with electric vehicle sales expected to exceed 40 million annually by 2030 and offshore wind capacity projected to increase more than sevenfold by 2050. Given that rare earths underpin over $3 trillion in industrial applications globally, Western governments have prioritized securing reliable supply chains outside Chinese dominance.

Pensana's Longonjo project in Angola ranks among the highest-grade undeveloped NdPr deposits globally, with Stage 1 production expected to deliver approximately 5% of global NdPr supply. Construction is progressing according to schedule with contractors mobilized on site, supported by a 20-year mine life. The company also controls the Coola license and Sulima West prospect, where drilling has identified strong mineralization and metallurgical testing confirms potential as supplemental feedstock. The Coola project, similar in scale to Longonjo, provides strategic optionality for mine-life extension, grade optimization, and future expansion, reinforcing Pensana's ability to scale production and maintain long-term relevance in the global supply chain.

Looking forward, Pensana's investment case rests on three key pillars: successful delivery of Longonjo as one of the lowest-capital-intensity NdPr projects globally, expansion through Coola and Sulima West to extend mine life and resource scale, and strategic alignment with U.S. and allied downstream strategies that reduce reliance on China's near-total dominance in rare earth refining. With production scheduled ahead of the U.S. Department of Defense's 2027 China-free supply chain target, Pensana is strategically positioned to emerge as a cornerstone Western supplier in the global magnet metals industry. The company's board is evaluating a potential Nasdaq uplisting and has proposed a share consolidation to meet U.S. listing thresholds, which could broaden institutional access and improve trading liquidity over time.

Stonegate Capital Partners' valuation analysis applies an enterprise value to reserves methodology, resulting in a valuation range of $3.34 to $6.68 with a midpoint of $5.01. The firm views this valuation as temporary, expecting significant re-ratings as Pensana executes its comprehensive mine-to-magnet strategy and establishes itself as a critical supplier in the Western rare earth ecosystem. For more information about Stonegate Capital Partners, visit https://www.stonegatecp.com.