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Rainbow Rare Earths' CEO believes plan in place take miner’s financial performance to break-even and beyond

In an operations update for the three months to 31 December 2018, Martin Eales said: "We have learned a huge amount about our mining operation from the first full year of production"
Rare earths
Rainbow Rare Earths said production costs of US$2,827 per tonne were slightly lower than first quarter costs of US$2,851 per tonne

Rainbow Rare Earths Ltd’s (LON:RBW) CEO Martin Eales believes the miner now has a plan in place take its financial performance to break-even and beyond.

In an operations update for the three months to 31 December 2018, Eales commented: "We have learned a huge amount about our mining operation from the first full year of production and, given the natural fluctuations within the veins in each mining area, it makes sense to further de-risk our project and improve production consistency by adding additional mining faces.”

WATCH: Rainbow Rare Earths looking at break-even and beyond from second half 2019

He said: “This will put us in a strong position to take advantage of the extremely strong current demand for our mineral concentrate, allowing us to capitalise on our status as one of only two listed commercial REE (rare earth element) producers outside of China.”

The company said production from its Gakara Project in Burundi in its second-quarter measured in terms of exported concentrate remained in line with the adjusted previous quarter at 275 tonnes. 

It added that 300 tonnes of concentrate were sold in the quarter versus 350 tonnes in the previous quarter, while average grade decreased slightly from 59% to 56% TREO (Total Rare Earth Oxide).

Rainbow Rare Earths said production costs of US$2,827 per tonne were slightly lower than first quarter costs of US$2,851 per tonne, but remain significantly higher than expected.

It said this is due to modest levels of ore produced in the quarter from the existing pits at Gasagwe and Murambi. and high costs for rented mining equipment, which the company is now proposing to purchase outright, subject to financing. 

The company added that it anticipates that its expansion to development at Kiyenzi and Gomvyi Centre will start contributing ore tonnes in the second half of calendar 2019 and take the company to at least breakeven production.

However, it added, concentrate production for the next six months is dependent on tonnages from Gasagwe and Murambi.

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