TIDMRBW
RNS Number : 6999H
Rainbow Rare Earths Limited
05 August 2021
Rainbow Rare Earths Limited
("Rainbow" or the "Company")
(LSE: RBW)
5 August 2021
Market Update
Further to the update on 29 June 2021 regarding the temporary
suspension of trial mining operations from the Gakara Project in
Burundi, Rainbow continues to engage with the Government of Burundi
(the "Government") to allow operations and exports to re-start.
During this Government mandated suspension, operating costs in
Burundi have been minimised, with the vast majority of staff placed
on suspension, such that the ongoing situation is not having a
significant impact on the Company's cash flow forecasts.
Due to the visits of George Bennett, CEO, to Burundi in April,
June, and July 2021, the Company understands that the primary
concerns of the Government relate to the pricing of the rare earth
mineral concentrate sold by Rainbow Mining Burundi SM, the local
operating entity. Rainbow notes that this was addressed
comprehensively in an independent report, dated 26 July 2019, that
was commissioned by the World Bank at the request of the Government
and compiled by SRK Consulting . This report, accepted by the
Government in 2020 , concluded that:
-- The price paid by ThyssenKrupp, the multinational industrial
group, for the Gakara rare earth mineral concentrate, which is
established on the basis of internationally recognised pricing, is
commercial and forms a reliable foundation for the computation of
royalties payable to the Government.
-- The export grades of each shipment are independently verified
as accurate by two internationally recognised laboratories (ALS
Laboratories in Canada and Baotou Research Institute of Rare Earths
in China) and have been correctly reported to the Government for
each shipment from Gakara to date.
-- That Rainbow is a "model company for new market entrants".
Rainbow notes that the ongoing suspension contravenes Burundi
law and has been imposed without due and proper process. For
example, the Government has never provided credible, data-based
alternative prices for the concentrate exported or any alternative
credible third-party analysis of grades from the samples they hold
for each batch exported to date.
The Company has asked the Government to lift the suspension as
soon as possible to allow trial mining to resume, local staff to
return to work and exports to restart thereby generating
significant employment, revenue, royalties and taxes for
Burundi.
George Bennett, CEO, said: "Whilst the situation facing Rainbow
in Burundi is disappointing, it has allowed our team to focus on
the substantially larger opportunity presented for near term
development of Phalaborwa, which we see as the immediate catalyst
of Rainbow's business model and the asset that will enable the
Company to become a significant producer of rare earths to drive
the green revolution. With the opportunity to fast track the
project's development, I expect Phalaborwa to be a sizable,
commercial scale producer of separated rare earth oxides,
substantially surpassing the trial mining activities at Gakara.
Rainbow remains committed to the positive contributions we are
able to make as a Company within our countries of operation and
communities through the payment of taxes and royalties, the
provision of employment, local investment and the support of local
supply chains."
Market Abuse Regulation ("MAR") Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
For further information, please contact
Rainbow Rare George Bennett
Earths Ltd Company Pete Gardner +27 82 652 8526
SP Angel Corporate Ewan Leggat
Finance LLP Broker Charlie Bouverat +44 (0) 20 3470 0470
--------- ------------------- --------------------------------------
Flagstaff Strategic Tim Thompson +44 (0) 207 129 1474
and Investor Fergus Mellon rainbowrareearths@flagstaffcomms.com
Communications
------------------ --------------------------------------
Notes to Editors:
Rainbow's strategy is to become a globally-significant producer
of rare earth metals. NdPr are vital components of the strongest
permanent magnets used for the motors and turbines driving the
green technology revolution. Analysts are predicting demand for
magnet rare earth oxides will grow substantially over the coming
years, driven by increasing adoption of green technology, pushing
the overall market for NdPr into deficit.
The Phalaborwa Rare Earths Project, located in South Africa,
comprises an Inferred Mineral Resource Estimate of 38.3Mt at 0.43%
TREO contained within gypsum tailings stacked in unconsolidated
dumps derived from historic phosphate hard rock mining. High value
NdPr oxide represent 29.1% of the total contained rare earth
oxides, with economic Dysprosium and Terbium oxide credits
enhancing the overall value of the rare earth basket contained in
the stacks. The rare earths are contained in chemical form in the
gypsum dumps, which is expected to deliver a higher-value rare
earth carbonate, with lower operating costs than a typical rare
earth mineral project.
The Company's Gakara Project in Burundi, which produces one of
the highest-grade concentrates in the world (typically 54% total
rare earths oxides ("TREO")) through ongoing trial mining
operations, is currently the only African producer of rare earths.
The Gakara basket is weighted heavily towards NdPr, which account
for over approximately 19.5% of the contained TREO and 85% of the
value of the concentrate.
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END
MSCDKPBPFBKKQFK
(END) Dow Jones Newswires
August 05, 2021 04:56 ET (08:56 GMT)
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