PNN - requested to brief Ambassador ahead of Trump-Albanese meeting

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 7,186,000 PNN Shares and 3,675,500 PNN Options at the time of publishing this article. Some shares and options are subject to shareholder approval. The Company has been engaged by PNN to share our commentary on the progress of our Investment in PNN over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs.

What is going on...

That makes three companies in our Portfolio this week that have been requested to brief the Australian Ambassador to the USA, His Excellency, The Hon Dr Kevin Rudd AC.

This briefing comes ahead of Monday’s meeting between US President Donald Trump and Australian Prime Minister Anthony Albanese.

Yesterday it was one of our newer USA rare earths exploration Investments - Power Minerals (ASX:PNN) who got the invitation.

Earlier in the week our other Investments also got the invite:

• Sun Silver was the first to announce on Monday morning - SS1’s share price is up from ~50% since then.
• Resolution Minerals announced it on Monday after market - RML’s share price is up by over 100% since then.

(The past performance is not an indicator of future performance)

What will Trump and Albanese talk about on Monday?

Increased collaboration on critical minerals and rare earths, and how to break China’s dominance, is expected to be near the top of the agenda (source).

At a company level, this could involve the fast tracking of permitting, and access to federal funding programs.

So the Australian Ambassador Kevin Rudd, wants a status update on PNN’s rare earths project in California, USA.

(Source)

As far as we have seen, PNN is probably the earliest stage company to be asked for a briefing by the Ambassador.

One reason for this could be because PNN’s new USA project is prospective for HEAVY rare earths which are rarer, more valuable, and are used in high-temperature magnets and defense.

PNN’s new asset sits ~195km (a couple of hours drive) from the only rare earths mine and aspiring rare earths magnets producer in the USA, the $20BN MP Materials.

MP Materials is currently producing mostly LIGHT rare earths.

The Wall Street Journal has reported that “as MP scales up magnet production it will need to acquire more heavy rare earths than are available”:

(For anyone who isn't following US critical minerals macro thematic, MP Materials is the only rare earths producer in the USA, The Pentagon and Apple did deals with MP materials earlier in the year sending its share price from US $30 to touching US $100 this week)

(Source)

A genuine new heavy rare earth dominant discovery in the USA could be of interest to MP (and to the US government).

Which may be why PNN was asked to “provide an update on the status and details of the Gamma Project as part of Australia’s strategic engagement with the US”.

PNN is at an early exploration stage, with only just acquiring an option over the ground...

But urgency in critical minerals is clearly increasing at the highest ranks of politics in the US...

... And Australia wants to put its best (and complete) foot forward on everything the Australian mining industry is doing over in the US.

The macro news after we Invested in PNN has been about as good as we could have hoped for.

Aside from getting solicited to brief the Ambassador ahead of the Trump - Albanese meeting...

Five days after we Invested in PNN, China announced further “dramatic” export restrictions on rare earths.

Then the US responded with tariff threats and its own export controls on things critical to China (like advanced software).

Then a few days later, the largest bank in the USA, JP Morgan, said it would put US$1.5 trillion to work in industries deemed “critical to US national interest”.

(Source)(Source)(Source)

That JP Morgan news was completely unexpected and was definitely the biggest headline number we have seen in any US related macro commentary...

It all started when the US government took an equity stake in MP Materials - but that JP Morgan news seems to have lit a fire under the macro thematic again...

And it feels like we are only just getting started with the US government committing to spend on stockpiles and more equity positions in critical mineral companies.

(Source)(Source)(Source)

We also got pretty lucky with PNN and the Brazil rare earths macro...

In addition to the US rare earths asset, another reason why we are Invested in PNN is for its Brazilian rare earth asset.

In our initiation note we said the following:

(Source)

And then this week (5 days after our PNN Investment) SGQ came out of a trading halt having raised $72.5M with a cornerstone commitment from Gina Rinehart’s Hancock Prospecting for $22.5M...

Last Friday it was reported by the AFR that SGQ was only looking to raise $40M... so demand for the raise must have been very strong (which was pretty clear in the way it traded up to an 18c high this week following the 10c equity raising).

So in under a week - all of those investors who we said would have had a win in SGQ - should theoretically be sitting on bigger wins now.

SGQ is still one of our biggest Portfolio positions and has been one of our best performers this year (up 480% from our Initial Entry Price), and we continue to be big long term holders of SGQ.

(Source)

Past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

What’s good for SGQ is good for other Brazilian rare earth stocks... like PNN.

PNN owns a Brazilian rare earth project that the company is drilling right now.

PNN’s theory is that it has similar geology to what SGQ’s project sits on (hard rock carbonatite).

Hard rock carbonatites are the same host structures that host $20BN MP Materials’ project, $19.5BN Lynas Rare Earths core asset and our Investment SGQ’s...

PNN is drilling on that Brazilian rare earths project right now - so we could see some results in the coming weeks.

IF PNN can prove its Brazil project sits on a similar structure and has high enough grades, it could be “game on” for its Brazilian rare earths asset.

It is early days on the project and as always with exploration there is no guarantee PNN’s theory is proven to be correct.

There are a few minor similarities between the two projects, albeit SGQ is much more advanced.

SGQ owns a section of a carbonatite complex (next door to the biggest niobium mine in the world owned by the giant (and private) CBMM, who owns most of the complex).

(Source)

PNN owns an entire complex - so if it can confirm that the rare earths sit inside a big carbonatite it could be a game changer for the company.

(Source)

At the moment, shallow holes near the surface show rare earths and PNN just recently said that its theory of a hard rock intrusion has been “validated”.

(Source)

Anything is possible here, and in 12 months time we could be looking at a project that is potentially valued as much as SGQ’s (one of our favourite Investments right now)...

Of course there is no guarantee that happens, mineral exploration is risky and PNN’s theory might not be proven - or it might not lead to an economic discovery.

We should know a lot more within the next 12 months though.

10 reasons why we Invested in PNN

We Invested in PNN last Wednesday (8th of October), here is the 10 reasons we published on that date, with any updates that have happened since:

Read our full initiation note here: Our New Investment: Power Minerals Ltd (ASX: PNN)

Here is a list of the 10 reasons why we Invested in PNN.

1. PNN has a US critical minerals project

PNN’s US project is 195km away from A$20BN MP Materials. More importantly, it's got heavy rare earth exploration potential (the less common and more valuable type of the rare earth materials). Both types of rare earth are needed for advanced magnet production the USA is seeking to onshore.

2. Strong macro theme #1: Capital is flowing into US critical metals macro thematic

We think PNN’s US rare earths project could attract increased capital flows into PNN.

We have seen this play out in other stocks where they list on the OTC, attract US attention and eventually capital.

🚨UPDATE:

The largest bank in the USA, JP Morgan announced a US$1.5 trillion funding package that it wants to allocate to “industries that are critical to the US national interest”.

JP explicitly mentioned critical minerals in that announcement... (Source)

3. PNN has a Brazil REE project

PNN also has a rare earths asset in Brazil that we think could mirror a project that the market is really liking right now (SGQ’s project)

4. Strong macro theme #2: Capital is flowing into Brazilian rare earths projects looking for “the next SGQ”

We have had success with Brazilian rare earths assets before with SGQ which is up 500% in the last 9 months, and there will be investors who have made cash (and ones who missed SGQ) looking for “the next SGQ”. We think some of this cash could come into PNN.

(the past performance is not an indicator of future performance)

🚨UPDATE:

A few days after we Invested in PNN, SGQ raised $72.5M and brought Gina Rinehart’s Hancock Prospecting on to its register for $22.5M as a cornerstone investor. (Source)

5. IF PNN attracts capital and re-rates to a valuation high enough it could acquire more advanced assets

IF PNN can attract enough capital with its current portfolio of assets, it can use its re-rated valuation to acquire more advanced assets.

6. We are Investing alongside Tribeca Investment Partners

Tribeca has come into three of our recent Investments - LKY (up 626% at its peak), AVM (up 250% at its peak) and RCM (up 151% at its peak).

We like their approach to resources investing and they have deep pockets.

The past performance is not an indicator of future performance.

7. We think it's the right time in the bull market cycle to get some exposure to exploration stocks

We think it's the right time to get set in junior explorers with new assets.

We think the next 6-9 months will see institutional capital finally coming back into the exploration sector after years of a capital drought.

We expect those capital inflows to increase the valuation of explorers with projects in the right commodities and the right parts of the world (like rare earths in the US or Brazil).

8. PNN also has advanced assets in an out of favour sector

PNN has advanced lithium projects in Argentina with one of them even having a Preliminary Economic Assessment done that shows an after-tax Net Present Value of US$308.8M.

We think that IF sentiment improves in the lithium sector these assets could justify PNN’s current valuation.

9. Uranium free kick on the new US project

All of the old exploration was focused on uranium - mind you that old drilling found uranium over at least 2km with grades as high as 1.3% in drilling and 1.786% in rock chips.

10. Gold free kick on the new US project

PNN’s new US asset was initially explored for gold. We could see PNN go back and look at the gold potential of the project.

Ultimately, we want to see PNN achieve our Big Bet which is as follows:

Our PNN Big Bet:

“PNN makes an economic discovery on either of its US or Brazilian rare earths projects and re-rates 1,000% from our Initial Entry Price”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including development risk, country risk and commodity price risk - just some of which we list in our PNN Investment Memo.

Success will require a significant amount of luck. Past performance is not an indicator of future performance.

What’s next for PNN?

🔄 Acquisition of US rare earths project

We want to see PNN complete the acquisition of its US rare earths projects so that it can start exploration on the project.

After the project acquisition is complete we want to see PNN sample, map and run geophysics on its US asset to identify priority drill targets:

Milestones:

🔲 Mapping and sampling (soil and rock chips)

🔲 Geophysics

🔲 Drill targets confirmed

🔄 Drill results from the Brazilian rare earths project

We want to see PNN drill out and define a maiden JORC resource estimate in Brazil to enable comparison to peers.

PNN recently said “drilling was underway” so we could see some drill results from the company in the coming weeks too:

Milestones:

🔲 Geophysics/Geochemistry work

🔄 Drilling starts

🔄 Drilling results

🔲 Maiden JORC resource estimate

What are the risks?

PNN has drill results coming from its Brazilian rare earths project so a key risk in the short term is “exploration risk”.

There is no guarantee the drill results come back positive and if that were to happen PNN’s share price could re-rate lower.

Another risk is “market risk” because rare earths stocks are currently in favour.

There is a risk that a deal gets done between China and the US in the short term which eases the trade restrictions and momentum comes out of rare earths stocks.

If that were to happen PNN’s share price could be impacted negatively, especially because its projects are in the early exploration stages.

Market risk

Broader market sentiment could deteriorate, and shares as an investment class trade lower, taking PNN’s share price with it. Alternatively, there could be further sector specific pain ahead where junior explorers suffer a lot more than the broader market.

Source: “what could go wrong” - PNN Investment Memo 08-Oct-2025

Other risks

PNN is an early-stage explorer with projects in the USA, Brazil, and Argentina. None are producing, and there is no certainty exploration will lead to an economic discovery.

The company’s value is highly exposed to sentiment in the rare earths and lithium markets. Prolonged weakness in these commodities could affect funding access and share price performance.

As a pre-revenue small cap, PNN depends on capital raisings to advance its projects. Any new equity issues may dilute existing shareholders, and financing may not always be available on favourable terms.

Multi-jurisdiction operations bring permitting and regulatory risks, including possible delays or policy changes that could affect project timelines.

Finally, general market or sector downturns could impact PNN’s share price regardless of company progress.

Investors should consider these risks carefully and seek professional advice before investing.

Our PNN Investment Memo:

Our Investment Memo provides a short, high-level summary of our reasons for Investing.

We use this memo to track the progress of all our Investments over time.

Click here to read our PNN Investment Memo where you will find:

• What does PNN do?
• The macro theme for PNN
• Our PNN Big Bet
• What we want to see PNN achieve
• Why we are Invested in PNN
• The key risks to our Investment Thesis
• Our Investment Plan