Kendrick

The Clock is Ticking.

Good Morning Team.

The investment case at Teufelskuppe has always rested on three things: exceptional grade, the right elements and a management team that knows how to build and sell assets.

None of that has changed. What’s changed is that this story got a deadline.

Two RNS announcements in 48 hours.

The Grade, Briefly

For anyone coming to this fresh: Teufelskuppe is a carbonatite rare earth deposit in southwest Namibia, optioned by Kendrick Resources earlier this year for a 70% interest at an entry cost that was embarrassing relative to what the ground data was suggesting.

The peer-reviewed historical data showed average grades of 3.12 wt% total rare earth oxide across 295 whole-rock samples. Two drill holes have since confirmed everything the surface data suggested — the first returning 8.14 wt% TREO over 21 metres, the second hitting peak grades of 14.8 wt% on a separate carbonatite body entirely.

Of course, the element that matters most in rare earths is not the headline TREO number but how much of that total is neodymium and praseodymium — the elements that go into permanent magnets for EV motors and wind turbines, the ones every western government has specifically identified as a supply chain vulnerability.

At Teufelskuppe, Nd and Pr account for approximately 25% of the rare earth pool, contributing around 1.0 wt% combined NdPr oxide. That grade matches Mountain Pass in California — the only significant rare earth mine in the western hemisphere, currently valued at circa $12 billion.

Kendrick’s market capitalisation is a rounding error by comparison.

Project Update

The project update published on Tuesday formalises what has been building for months. The company has completed an internal review of all historic and current work and confirmed an unaudited in-house NPV of $400 million for the above-ground TK resource alone.

That number is now on the regulatory record.

Yes, unaudited and internally derived — but disclosed in an RNS with the methodology stated: current TREO spot prices, capital costs benchmarked against comparable processing facilities, and southern African labour and mining costs.

A defensible framework - and a figure that’s not exactly hard to work out for yourself from scratch.

Critically, the $400 million covers only verified above-ground carbonatite. Two boreholes have already confirmed geological continuity to depths of 80 to 115 metres.

The technical team’s interpretation is that the exposed carbonatite hills represent a shallow cap of a substantially larger intrusive system. The first drill hole ended in mineralisation at 6.09 wt% — the drill ran out of hole before the mineralisation ran out of grade.

The subsurface story is not in the $400 million. The neighbouring Kieshöhe licence, which hosts multiple carbonatite structures averaging above 2.0 wt% TREO with a slightly higher NdPr contribution than Teufelskuppe, is not in the $400 million either.

Save The Date

Colin Bird has committed to a maiden JORC-compliant Mineral Resource Estimate by the end of Q3 2026.

That is the single most important near-term catalyst.

Right now, $400 million is an internal estimate attached to an above-ground inventory figure. When the JORC resource lands, grade gets married to compliant tonnage for the first time.

That opens the door to institutional coverage and to the kind of scrutiny that re-rates junior mining stocks when they survive it.

If it comes, you ain’t seen nothing yet.

Bird has been in this industry for four decades. He knows from bitter experience what a missed deadline does to market confidence.

The digital elevation model is complete. Two rigs are active across all seven carbonatite bodies at Teufelskuppe simultaneously. And Kieshöhe drilling is underway.

The Money and Who Brought It

The fundraising announcement is where most readers will stop after the headline number — £1.76 million, not transformational in isolation.

But the composition is worth examining.

The raise was done at 7p, at a sliught premium. Directors participated personally — Bird and Churchouse each subscribed £20,000 of their own money.

More interesting is who else came in. A US managed fund and a US family office are among the participants.

American institutional capital does not typically find its way into AIM penny stocks without a reason.

Well, they find their way into my AIM penny stocks, but that’s another story.

The United States has spent three years making its rare earth anxiety explicit through legislation, executive orders and direct government investment into supply chain security. Every major western policy framework has identified NdPr as a priority.

A peer-reviewed deposit in a stable southern African democracy, 65 kilometres from a deepwater port, with NdPr grades that benchmark against Mountain Pass — that’s a profile attracting strategic attention right now.

The company has previously confirmed that discussions with potential counterparties, both private sector and sovereign, are ongoing. The US money arriving via a fundraising at market price is consistent with that picture.

Where Things Stand

The asset was overlooked because the commodity was in a bear market and nobody was watching. The geology was in the public domain the entire time.

The commodity has turned. The drill bit has confirmed the grade at depth on two separate carbonatite bodies. The internal valuation is now on the regulatory record. US capital has arrived. And the JORC resource — the moment grade becomes resource and a resource becomes a conventional valuation framework — has a deadline of September.

Bird has done this before. The question, as it has always been, is one of scale and timing.