Rainbow Rare Earths Ltd (LON:RBW) expects run-of-mine (ROM) ore production at its Gasagwe asset will be in the range of 3,000 to 4,000 tonnes.
The production guidance was issued alongside the company's results for the year to the end of June.
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Rainbow said the ore produced is expected to generate some 2,250 to 3,000 tonnes of mineral concentrate for sale; previously, the expectation had been for 3,338 tonnes of run-of-mine ore would generate 2,503 tonnes of concentrate.
The revised guidance compares extremely favourably to this estimate, which encompasses a time period of only 14 months since first activities at Gasagwe or just over nine months from the commencement of ore extraction, Rainbow said.
The company is currently assessing a number of different approaches to extraction of ROM ore that will affect the contained level of dilution, as a result of which there is a relatively large range in the ROM ore tonnage figure anticipated.
Rainbow's production plan involves all ROM ore being processed into rare earth mineral concentrate by its processing plant located in the Kabezi region, some 20 kilometres (km) from the mining areas and about 13km south of Burundi's capital city, Bujumbura.
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The completion of construction and commissioning of the plant is expected in the coming weeks, which should allow Rainbow to meet its target of shipping the first concentrate before the end of the year.
The profit & loss ledger is not especially relevant for a pre-revenue mining company such as Rainbow, particularly in a year when the company had to absorb the costs of floating on the stock exchange in January. But for the record, it reported a loss before tax of US$1.40mln, versus a loss of US$1.2mln the year before.
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“The current financial year is likely to be even more momentous for Rainbow than the last and should see the first sales of our rare earth concentrate through thyssenkrupp Raw Materials in Q4 2017, with production and sales then ramping up on a steady basis through 2018," said Martin Eales, chief executive officer of Rainbow.
“We have seen increases in prices of the various rare earth elements in the oxide and metal forms over the course of 2017, with our 'basket price' for Gasagwe concentrate increasing by around 70% in 2017 so far, which bodes very well for the future returns from the Gakara Project as we seek to develop one of the very few non-Chinese sources of rare earths,” he added.
Shares in Rainbow were up 0.8% at 11.09p in the first hour of trading.