Update on Longonjo Financing and Development

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Pensana Plc

("Pensana" or the "Company")

Pensana Plc (LSE: PRE) is pleased to provide details of a revised financing and development strategy which will see the Longonjo operation fully funded into production.

A revised execution plan allows for staged mine development which will reduce the upfront Capex to US$200 million with US$105 million deferred until year three.

Major shareholder FSDEA to provide an immediate US$15 million loan facility as part of a broader US$80 million investment (subject to due diligence and the finalisation of investment terms) to facilitate the development of the mine and to provide the equity component for the proposed project debt facility.

ABSA Bank has been mandated to arrange a US$120 million project debt facility which together with the US$80 million funding will fund the mine and processing facilities into production.

The mine will employ around 650 people during construction and will create 420 permanent high value jobs.

At full production, once the staged development is complete, Longonjo will target production of 38,000 tonnes per annum of mixed rare earth sulphate, containing 14,000 tonnes of TREO and 4,400 tonnes of NdPr oxide, representing around 5% of world production, for downstream processing or sold on the international market.

Adamas Intelligence forecasts that due to demand from the electric vehicle and wind power sectors the value of NdPr oxide consumed will increase eleven-fold by 2035. Prices are forecast to rise from current levels of US$67,000 per tonne to US$100,000 per tonne by 2025, increasing steadily to over US$200,000 per tonne by 2035.

Following discussions with its major shareholders, FSDEA (Angola Sovereign Wealth Fund) and M&G, supported by Angola's Ministry of Mineral Resources, Petroleum & Gas (MIREMPET), a detailed review was undertaken by the Longonjo engineering team to reflect the strong desire of all parties to bring the Longonjo operation into production as soon as practical.

The revised execution plan is based on a staged development of the mine and processing facilities with a reduced upfront capital cost of US$200 million, with circa US$105 million, related largely to the national power grid connection, rail spur and subsequent expansion costs, deferred until year three following commissioning.

Subsequent to the engineering redesign the Angolan Government has announced a US$83.6 million funding for the extension of the hydroelectric power line to Huambo. This has the potential to reduce the capital funding requirement for the project by US$36 million thereby potentially reducing the capex in year three to around US$70 million.

FSDEA has agreed to provide an initial US$15 million loan facility as part of a US$80 million investment (which is subject to due diligence and the finalisation of investment terms) and which will be repaid out of the larger facility, for the US$200 million staged development.

The purpose of the proposed investment is to facilitate the immediate development of the Longonjo mine and to provide the necessary support for the proposed project debt facility.

The Company has also mandated ABSA Bank to arrange a US$120 million project loan which together with the potential US$80 million investment represents the funding required to develop the mine and processing facilities.

The funds are required to be put in place between now and the end of the calendar year in order to meet the proposed construction and commissioning schedule with first production targeted in 2025.

FSDEA's commitment towards funding has allowed for the continuation of onsite activities for which the earthworks contractor (Grupo Nov) and Electrical contractor (Elektra) have already been mobilised.

During peak construction activity the site will employ over 650 personnel and contractors and will create over 420 full time jobs.

Wood MacKenzie, CRU and Adamas Intelligence have all forecast strong demand for NdPr oxide over the next twenty years. Adamas forecasts that due to demand from electric vehicles and wind power sectors the market for NdPr oxide will increase five-fold by 2040 leading to an undersupply of 90,000 tonnes per annum.

NdPr oxide consumption by value is expected to increase by 11-fold by 2035. Prices are forecast to increase at CAGR of 3.3% to 5.2% over the same period rising from current levels of US$67,000 per tonne to US$100,000 per tonne by 2025 and increasing steadily to over US$200,000 per tonne by 2035.

Pensana Chairman, Paul Atherley commented:

"We are delighted with the ongoing support from the Government of Angola, FSDEA, ABSA and others for the development of this important project. Longonjo is one of the world's largest undeveloped rare earth projects which benefits from a high-grade near surface orebody, with low-cost hydroelectricity and direct access to the Lobito Corridor rail and port infrastructure.

The engineering review and the staged development has resulted in a significantly lower up front capital cost which greatly enhances the projects' ability to be financed.

This immediate funding from FSDEA will allow CEO Tim George and the team to accelerate the work on the ground with a view to commencing main construction later in the year with a view to achieving first production in 2025."

About Longonjo

Longonjo hosts one of the world's largest undeveloped rare earth deposits with an initial 20-year mine life and with considerable exploration potential to extend the resource base both immediately below the existing orebody as well as at the recent discovery on the Coola exploration licence.

Longonjo Proved and Probable Ore Reserve September 2022 reported using a 0.3% NdPrO (approx.) cut-off

Classification	NdPrO cut-off (%)	Tonnes (Mdt)	NdPrO (%)	TREO (%)	NdPrO (t)	TREO (t)
Proved	0.3-0.4	13.3	0.67	3.19	89,300	424,000
Probable	0.3-0.4	16.8	0.46	2.05	77,000	323,000
Total	0.3-0.4	30.1	0.55	2.55	166,000	767,000

Notes:

Million tonnes are dry and rounded to one decimal place. Grades are rounded to three significant figures.
No fixed cut-off is applied to the rare earths NdPrO, the cut-off varies between 0.3% NdPrO and 0.4% NdPrO.
The variable NdPrO cut-off reflects the block cash flow positive method used to determine the economically viable portion of the resource.
NdPrO tonnes and grade is inclusive of the TREO and not additional to it.

The near surface, deeply weathered orebody, has an average depth of less than 30 metres, with an average mine grade of 3.73% TREO and 0.79% NdPr over the first five years.

The process routes and key equipment required for beneficiation of the mined material at Longonjo are those commonly used in the broader minerals processing industry.

Following comminution and flotation, the rare earth mineral concentrate is subjected to acid roast, leaching and selective precipitation to produce a mixed rare earth double sulphate (MREDS) or mixed rare earth carbonate (MREC) providing customers with a clean, radionuclide-free product available for export via the recently refurbished Port of Lobito.

The Longonjo operation is located close to major existing infrastructure in the form of the recently upgraded Benguela railway line, linking the project to the Atlantic Port of Lobito, (the Lobito Corridor) and hydro-power infrastructure.

The US International Development Finance Corporation is currently performing due diligence for a potential US$250 million investment to finance the Lobito Atlantic Railway Corridor to connect the DRC Copperbelt with the Port of Lobito. The Lobito Corridor is anticipated to become one of most important rail transport infrastructure systems within the South African Development Community (SADC) region over the next 25 years.

This follows the award of a US$450 million contract by the Angolan Ministry of Transport to a consortium of Trafigura, Mota-Engil and Vecturis to operate and maintain the Benguela railway through to the DRC Copperbelt on a private concession basis, as part of the Lobito Corridor development.

This is expected to have a positive impact on the transport logistics during the construction period and for reagent and product transport during operations.

At full production, after completing the phased development, the mine will target production of up to 38,000 tonnes per year of MREDS or mixed rare earth carbonate (MREC) containing 14,000 tonnes of TREO and up to 4,400 tonnes of NdPr oxide, equating to around 5% of the global annual production of NdPr oxides for downstream processing or sold on the international market.

The Longonjo Ore Reserve estimate was prepared by Snowden Optiro in August 2022 as part of the Longonjo Project Feasibility Study, using the guidelines of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012 Edition).

The Competent Person's statement for Longonjo Ore Reserves was released on 23 September 2022 and is available on the Company's website www.pensana.co.uk/company-reports

About Angola

The Angolan government has implemented a modern mining code with an attractive fiscal regime and a range of investment incentives including tax exemptions and customs duty exemptions.

Over the past decade it has also made significant investments in business-critical infrastructure such as railways, ports, bridges, and roads.

Angola's economic profile has improved significantly over recent years, with the country's public debt falling from 131% of gross domestic product in 2020 to 66% in 2022. The IMF has projected that the economy will grow by 3.5% in 2023.

Angola's annual inflation rate slowed further to a seven year low of 10.8% in Q1 2023 and marks the 14th consecutive decline in headline inflation, amid a stable currency.

Following an upgrade by Moody's in late 2021, all three major rating agencies raised their credit assessment of the country's sovereign debt in 2022, with Fitch and Moody's upgrading the country outlook from neutral to stable in the second half of the year.

The information contained within this announcement is considered by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No.596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information will be considered to be in the public domain. The person responsible for arranging for the release of this announcement on behalf of the Company is Paul Atherley, Chairman.

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For further information, please contact:

Shareholder/analyst enquiries:

Pensana Plc

Paul Atherley, Chairman IR@pensana.co.uk

Tim George, Chief Executive Officer

Rob Kaplan, Chief Financial Officer