Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF) agreement with Mosaic for Brazil rare earths project “offers significant upside potential for Rainbow” according to Berenberg.
Mosaic is a major producer of phosphoric acid in Brazil and the broker expects the Uberaba project to be larger than the Phalaborwa project in scale, which Berenberg believes to be “one of the best, highest-margin undeveloped rare-earth projects globally.”
Berenberg set a 43p target price for Rainbow with a buy recommendation on the stock.
Earlier today, Rainbow Rare Earths announced the tie-up which it described as a major opportunity to advance a project.
A memorandum of understanding sets out a potential collaboration to jointly develop a process flowsheet to extract the rare earth elements from the Uberaba project, in the Minas Gerais region.
The Uberaba phosphogypsum material is similar to Rainbow's Phalaborwa project in South Africa, Rainbow explained in a statement.
The company elaborated that like Rainbow’s Phalaborwa, the Uberaba project is based on a hardrock carbonatite phosphate deposit, that initially produces a phosphate slurry feed which is then processed into phosphoric acid – whilst the hardrock initially does not contain rare earths in sufficient quantities the processing plant concentrates the quantity of rare earths.
Together the two companies expect to collaborate on the production of a preliminary economic assessment of the opportunity to extract rare earths.
Separately, Rainbow Rare Earths chief executive George Bennett spoke with Thomas Warner in the Proactive studio in London, highlighting that the company now had "two world-class rare earth projects on two different continents/"
