Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF) reported interim results showing it had US$2.1mln of cash at the end of December 2022 and said discussions with strategic investors to secure the funding required to allow the next steps to be delivered at the Phalaborwa rare earths project in South Africa are "progressing well".
During the period the company published the preliminary economic assessment of the project, which presented a base case NPV10 (net present value at a 10% discount rate) of US$627mln, with a payback period of only two years, and a full NPV10 of over US$1bn based on long-term rare earth price forecasts provided by Argus Media.
Earlier this month, Rainbow revealed it had begun workstreams to advance the project to the definitive feasibility study stage. The pilot plant design and set-up are progressing in line with expectations, with commissioning to commence in the second quarter of 2023.
Alongside the results, Rainbow chief executive George Bennett hailed the “significant progress” in the period, including bolstering the team with rare earths experts with a combined 100 feasibility studies and construction 80 processing plants under their belts, including for three other rare earth projects in Africa.
He said that “we are now paving the way for near-term production of separated rare earth oxides from Phalaborwa”, adding that the project remained on track to begin production in 2026, with the pace of development having made the company “of interest to global strategic investors, with whom financing discussions are progressing well”.
After the Gakara rare earth project was placed on care and maintenance in June 2021 at the request of the government of Burundi, Bennett noted that the company is continuing to engage with the government in order to come to an agreement to restart the project.