Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF) said "rapid progress" is being made at its Phalaborwa phosphogypsum project in South Africa.
Separated rare earth oxides produced in the back-end pilot plant are the most important milestone to date, it added.
Basing the oxide separation process in the US as a result is a possibility under consideration, it added in a statement alongside its annual results for the year to end June 2023.
Work is also continuing on the environmental and social impact assessment (ESIA) and the publication of a definitive feasibility study (DFS) is scheduled for end of fiscal 2024.
Phalaborwa is being developed in conjunction with partner K-Tech using pioneering tailings processing technology.
Rainbow RE added it expects Phalaborwa to be of interest to strategic investors as it will produce all four of the critical rare earths for permanent magnets, currently in short supply.
Elsewhere, studies are on the mineralogy of the Uberaba stack, another gypsum-based source of rare earths, in Brazil, ahead of a flow sheet.
Uberaba is an opportunity to replicate Phalaborwa at a potentially larger scale, said the statement.
Losses for the year to end June were US$12.8 million (US$3.9 million), which included a US$9.6 million impairment for its Gakara project.
At end June, cash was US$8.1 million with a further US$5.5 million raised in September to pay for an increase in Rainbow’s Phalaborwa stake to 85% plus an option for full control.