Stonegate Capital Partners Initiates Coverage on Pensana PLC as Rare Earth Miner Advances Western Supply Chain Strategy

Stonegate Capital Partners has initiated coverage on Pensana PLC (LSE: PRE), highlighting the company's unique position as one of the few developers outside China pursuing a complete mine-to-magnet business model. This approach captures value across the entire rare earth supply chain rather than relying on traditional "dig-and-ship" methods that leave Western markets dependent on Chinese processing capabilities.

The significance of Pensana's strategy lies in its alignment with Western supply chain security priorities, particularly for the United States and allied nations. A 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 African production and Western magnet manufacturing. This integration comes at a critical time when offtake agreements and memoranda of understanding already cover multiples of Stage 1 capacity, demonstrating robust demand for Pensana's high-specification products.

Pensana stands out in the rare earth sector as one of the very few non-China projects that has secured full construction financing. The company has raised $268 million from the Angolan Sovereign Wealth Fund (FSDEA), the African Finance Corporation, and Absa Bank, placing its Longonjo project among the limited number of rare earth mines worldwide that are fully funded and actively under construction. With a modest Stage 1 capital expenditure of $217 million, Pensana benefits from low capital intensity supported by existing Lobito Corridor rail and hydroelectric infrastructure.

The importance of rare earth elements, particularly neodymium-praseodymium (NdPr), cannot be overstated in the context of global energy transition and technological advancement. These materials are indispensable for permanent magnets used in electric vehicles, offshore wind turbines, robotics, drones, and defense technologies. Demand growth projections remain strong, with electric vehicle sales expected to exceed 40 million annually by 2030 and offshore wind capacity projected to increase more than sevenfold by 2050. Rare earths currently underpin over $3 trillion in industrial applications globally.

Pensana's Longonjo project in Angola ranks among the highest-grade undeveloped NdPr deposits worldwide, with Stage 1 production expected to deliver approximately 5% of global NdPr supply. Construction is progressing on 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. Coola, similar in scale to Longonjo, provides optionality for mine-life extension, grade optimization, and future expansion.

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 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. Such a move could broaden institutional access, improve trading liquidity, and support valuation over time. Stonegate Capital Partners applies an enterprise value to reserves valuation method with a multiple range of 1.5x to 3.0x, resulting in a valuation range of $3.34 to $6.68 with a midpoint of $5.01, though they view this as temporary and expect significant re-ratings as Pensana executes its mine-to-magnet strategy.