Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF) has posted full-year results highlighting the recent completion of its robust preliminary economic assessment (PEA) for the Phalaborwa rare earths project in South Africa.
During the period, the company noted that it made significant progress on its Phalaborwa asset. This included the recent publication of the PEA, which detailed robust economics and the significant opportunity provided by this project to provide near-term production of rare earth oxides.
The base case scenario of the PEA establishes a net present value (NPV) of US$627mln, an internal rate ot return of 40%, an average operating margin of 75% and a two-year payback period.
Using 2022 year-to-date average rare earth prices, the PEA metrics would deliver an NPV of close to US$1bn, an average operating margin of over 80%, an IRR of 51% and a payback of 1.7 years.
Meanwhile, Rainbow said it is also continuing to work with all stakeholders at Gakara in Burundi to find a resolution to allow operations to recommence.
“This has been a year of notable progress for Rainbow, enabling us to unlock a valuable, near-term source of the rare earth permanent magnet metals required so urgently to drive the global green energy revolution,” said the company's chief executive George Bennett in the results statement.
“This has involved carrying out a programme of detailed test work at Phalaborwa to better understand the exciting opportunity presented by this asset, leading to the development of an economic flowsheet and the recent publication of the preliminary economic assessment," he added.
The company booked a loss before tax of US$3.98mln in the year to 30 June 2022, while cash at that date stood at US$4.13mln.