viewRainbow Rare Earths Limited

Rainbow Rare Earths ready to up game at Gakara


“We have been able to learn a lot about our project in the year, and are now adapting the way we operate."

Rainbow Rare Earths Limited -

Quick facts: Rainbow Rare Earths Limited

Price: 3.3 GBX

Market: LSE
Market Cap: £13.93 m
  • Rainbow Rare Earths operates the Gakara mine in Burundi

  • Aim to get production up to 10,000t per year

  • Rare earths are essential components in a growing range of modern products


What it owns

Gakara, Burundi

In July, Rainbow Rare Earths Limited (LON:RBW) published a Competent Person's Report (CPR) from MSA that raised the high-grade rare earth vein tonnages by 30% at the mid-point of the range, even taking into account depletion from recent mining production.

MSA also increased its estimation of the high-grade rare earth vein tonnages classified by JORC as an Exploration Target to 27,000-103,200 tonnes.

Rainbow Rare Earths said, however, MSA is of the view that some additional work is required before it could translate its calculations for the Exploration Target into a Resource. 

It noted: “Specifically for the high-grade deposits, it suggests more extensive use of laboratory testing of channel samples (rather than hand held Niton XRF data which Rainbow has used for a number of years) and additional computerised vein modelling; and for the lower grade deposits such as Kiyenzi a comprehensive laboratory sampling of all existing drill core from the 2018 drilling campaign plus additional drilling and metallurgical testing, all of which is planned by Rainbow in the coming months.”

In November,  Rainbow released results from a historic drilling programme at Kiyenzi.

Two boreholes were analysed and among the highlights were 13.87 metres grading at an average of 4.85% total rare earth oxides and 11.64 metres at an average of 3.86% TREO.

A further 1,000 metres of drill core has been sent for analysis to enable rapid evaluation and formulation of comprehensive resource statement.

Rainbow has historically focused on the areas of Gasagwe and Murambi for its production of rare earth elements from Burundi, but undertook drilling at Kiyenzi in 2018.

How it’s doing

Revenue for the year to June was US$1.5mln, a 35% growth y-o-y, while adjusted underlying loss was US$3.3mln, a 39% contraction y-o-y, as the firm encountered operating problems during the rainy season.

Net losses were US$12.3mln.

Cash at the end of the period was US$119,000, though in July it raised a further US$4.2mln through an equity placing.

In November, it secured 10 new mining claims covering 12.6 square kilometres in Northern Zimbabwe.

The miner said it will immediately begin an exploration programme on the claims that will include geological mapping, sampling and assaying.

Rainbow is aiming to conclude an interpretation report that will evaluate the new claims for rare earth elements such as cerium, yttrium, lanthanum and neodymium.

George Bennet, Rainbow’s chief executive, said the new claims were “a great opportunity to diversify the portfolio, with low risk and minimal capital outlay”.

What the boss says: George Bennett


What the broker says: SP Angel 

"In our opinion, the strategy of the new management team at Rainbow Rare Earths in concentrating on establishing long term resources, sustainable mechanised mining at a higher rate, and improved processing through the addition of a pre-concentration stage to produce 10,000tpa of rare-earths concentrate product, establishes a sustainable plan to optimise the development of its Burundi rare-earths project.

"We look forward to the results of the assaying from the historic drilling and the continuing exploration programme as well as the benefits of the implementation of mechanised mining."

Inflexion points

  • Recent drilling results from Kiyenzi contained “greater widths of mineralisation” than initially expected
  • Test work and further exploration to define whether the mine’s reserves can support the new target for a ten-year operating life.
  • Gakara has the highest grades of any rare earths project in the world
  • Prove potential at Kiyenzi.and in Zimbabwe

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