In an exclusive interview with Thomas Warner, Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF)'s CEO George Bennett talks about the recent successful share placing and a potential landmark green deal with NEXUS Intertrade.
Thomas Warner: (TW): Let's delve into the significant news from the past week. You've announced a share placement and the signing of a Letter of Intent for an offtake agreement for some of your gypsum. Could you elaborate on the share placing?
George Bennett: Certainly. We're extremely pleased with the placement. It was conducted at a negligible discount to the market price, which is particularly noteworthy for a junior mining company in the current market conditions. The placement essentially replenishes the funds that we had initially expended to secure full ownership of the Phalaborwa project a few months ago. The total deal value was ten million US dollars, and we paid five million in cash as part of that transaction.
TW: That's quite an investment. Are there any hidden complexities about the placement that our audience should be aware of?
GB: Not really. The key takeaway is that the placement replenishes our treasury, enabling us to complete our pilot plant and proceed to the completion of our GFS (Geological Feasibility Study), which is slated for the second quarter of 2024.
TW: Excellent. Now, let's shift our focus to the Letter of Intent with NEXUS Intertrade. Could you provide us with a comprehensive overview?
GB: Absolutely. The Letter of Intent is a cornerstone in our strategy to make Rainbow an environmentally responsible source of rare earths. We are taking on the task of cleaning up waste gypsum, which has detrimental acid water associated with it. Our process neutralises this acid water, and we are able to utilise it in a closed circuit in our operations.
TW: That sounds like a win-win situation. How does this initiative align with market needs, especially in South Africa?
GB: The timing couldn't be better. South Africa is currently facing a gypsum shortage, and by 2026-2027, the country's gypsum deposits are expected to be completely depleted. This aligns perfectly with when our Phalaborwa project comes online. We anticipate selling between 40,000 and 100,000 tonnes of gypsum per annum, which will not only reduce our deposition costs but also add a new revenue stream. This could potentially contribute between three and a half to five and a half million US dollars to our bottom line.
TW: That's quite significant. Could you elaborate on the long-term sustainability and environmental impact of this project?
GB: Certainly. Over the life of the project, the gypsum stacks will be completely levelled. This will not only support the local community but also leave a completely rehabilitated site available for future use. It's a sustainable approach that aligns with our commitment to environmental responsibility.