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Rainbow Rare Earths ready to up game at Gakara

Snapshot

“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: 2.85 GBX

LSE:RBW
Market: LSE
Market Cap: £10.84 m
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  • 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.”

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.

What the boss says: George Bennett

“While production was challenging, it would be more correct to characterise our operating methods in the year as trial mining,” said new chief executive George Bennett.

“We have been able to learn a lot about our project in the year, and are now adapting the way we operate, and while we will continue the trial mining at Gakara, we are moving to a more mechanised, efficient operation.”

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

  • RRE is targeting production of 10,000 tonnes per annum of rare earth concentrate from Gakara
  • That would be a ten-fold boost from the 850 tonnes produced in the year to 30 June, itself a 44% increase year-on-year.
  • 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
  • Placing in July raised US$4.2mln

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Rainbow Rare Earths hits reset button as it moves towards more efficient ...

Proactive London's Andrew Scott sits down with the new CEO of Rainbow Rare Earths Ltd (LON:RBW) George Bennett. He describes the 12 months to June 2019 as a 'tough year' for Rainbow but have been able to learn a lot about the project and are now adapting the way they operate. Bennett adds...

1 week, 2 days ago

3 min read