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Rainbow Rare Earths (RBW)

Proselenes
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Rainbow Rare Earths (RBW)

#321317

Postby Proselenes » June 25th, 2020, 10:57 am

Web site : http://rainbowrareearths.com/

Rainbow Rare Earths is a mining company focussed on production from, and expansion of, the high grade Gakara Rare Earth Project in Burundi, East Africa.

With in-situ grades in the range of 47-67% Total Rare Earth Oxide (TREO), Gakara is one of the world’s richest rare earth deposits. First production and sales to Rainbow’s offtake partner, thyssenkrupp Materials Trading, commenced in Q4 2017.


Jan 2020 Presentation : http://rainbowrareearths.com/wp-content/uploads/2019/10/Rainbow-indaba-2020-FINAL-for-website-v1.pdf

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Proselenes
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Re: Rainbow Rare Earths (RBW)

#321320

Postby Proselenes » June 25th, 2020, 10:59 am

Interested in this one after the Directors threw quite a bit of money in, in the recent 3p placing.

https://www.investegate.co.uk/rainbow-rare-earths--rbw-/rns/placing-to-raise--1-25m/202006221551336956Q/

So I thought I would follow the directors money and also took a lump at 3p.


Maiden JORC resource statement due in July, which should generate some excitement one presumes.


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Re: Rainbow Rare Earths (RBW)

#321360

Postby Proselenes » June 25th, 2020, 12:43 pm

Latest Broker Update : https://ufile.io/zfil0zz4


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Re: Rainbow Rare Earths (RBW)

#322657

Postby IronPyrites » June 29th, 2020, 9:30 pm

Hi Pro

Many thanks for highlighting Rainbow Rare Earths.
Interesting both from the aspect of the potential for the rare earth metals in the modern world and also as this micro-cap would seem to be at an early pivotal point in its development.

The macro argument that there is going to be increasing demand for these metals which are not actually rare but are difficult to extract economically is convincing. Electric vehicles, batteries and motors, wind turbines, drones and robots all need these metals and would seem to be the way things are going.

It is also interesting to note that China controls 90-95% of their production and US and China trade wars worry the market.
China is the major producer of these metals for a reason. They can extract them at less cost because environmental and other concerns are currently not a priority in China. This I believe will change but perhaps not for some time.

However China’s position is probably not as great a risk as the market seems to think as this article in Scientific American proposes:
https://www.scientificamerican.com/arti ... -elements/

However the market is not always rational and market perceived risk will push up the price of these metals.
Rare earth metal are currently near a 10 year low. The underlying pressure should be upwards.

At the weekend I listened to a Piworld interview by David Stevenson and his approach to investing.
https://www.piworld.co.uk/2020/06/05/pi ... investing/

I highlight it not because I particularly agree with him but because he did strongly advocate coming out of energy investing and in particular avoiding gas and oil as it was ‘doomed’ (or words to that effect).
Eventually this may well be the case but I suspect he is a little premature but if you believe him rare earth metals will be needed as part of the transition to renewables.

The future for these rare earth metals looks bright but the big question is how far in the future?

Turning to Rainbow Rare Earths who own licences in Africa that are rich in these metals.
They are course are keen to point out how rich their main resource at Gakara is:
https://www.miningreview.com/top-storie ... hs-gakara/

Despite this they have not been able to produce from this mine at a profit from day one in 2017.

Here are updates in July 2018 and December 2019

https://roskill.com/news/rare-earths-ra ... m-burundi/
July 2018
The ramp up in production at Gakara has increased the cost of production from US$2,315/t in Q1 to US$2,534/t in Q2. Including cost of sales (US$517/t) and a declining realised sales price (US$2,229/t), results in a loss of US$822/t on produced concentrate for Rainbow during the second quarter.


https://www.proactiveinvestors.co.uk/co ... 04478.html
December 2019
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.

In the recent placing:
https://www.investegate.co.uk/rainbow-r ... 51336956Q/
It is stated:
To date, Rainbow has produced and shipped 1,600 tonnes of high-grade concentrate from the Gakara Project with an average grade of 57% total rare earth oxides of which over 19% represents high value Neodymium and Praseodymium oxide used for the manufacture of permanent magnets.

Which is true but this production has been at a loss.

However changes have at last been made.
This started with a change in management late last year:

https://www.investegate.co.uk/rainbow-r ... 00043302K/

The appointment of George Bennett to the Board as Chief Executive Officer, with immediate effect.

The interim results from March 2020 were honest:

https://www.investegate.co.uk/rainbow-r ... 00079482H/

Fall in production reflected the operational challenges at Gakara that had been experienced since late 2018, and which has led to a revision to the operating strategy in the period.

Achieving break-even profitability at production level represents a considerable downgrading of expectations from the existing production set-up, however reflects a realistic assessment of the productive capacities of current operations.

The mining of ore since the commencement of operations at the mine in early 2017 had consisted of the extraction of almost pure vein materials using hand tools, with the removal of waste being undertaken using a small fleet of largely rented mining equipment.  
Tonnages of ore mined declined from the advent of the rainy season in September 2018, despite two pits being operated in parallel, and highlighted the limitations of this initial approach.
In particular, the rented equipment struggled to perform in wet conditions, resulting in significant periods of downtime following each rain event. In addition, the lack of geological information on the ore-body meant that ore tonnages were unpredictable, with veins seen at surface pinching and swelling, or even proving discontinuous, as mining descended. 


So now haul trucks have been purchased and rented vehicles reduced to 6. An excavator, grader and TLBs were added to the fleet.

As a result, the total ore tonnage mined in the period increased to 3,900 tonnes (compared with 580 tonnes in the six months to 30 June 2019), albeit at much lower grades (typically between below 5%).
Production levels cannot be stated with certainty, however once a mine plan has been drawn up, based on reliable geological data, and utilising the new mining equipment, concentrate production is expected to increase to more than 100 tonnes per month, which is expected to cover the production costs following recent cost saving measures.
The near-term production strategy seeks to satisfy the Company's in-country social obligations, thus keeping the mining permit in good order, while eliminating production losses as soon as practicable.
However, the ultimate strategy of the Company remains the design of a much larger operation, capable of producing in excess of 20k tonnes of concentrate at 54% TREO per annum for at least 10 years (ideally up to 20 years or more).


As they sell the ore unprocessed there is a considerable price to pay:
http://rainbowrareearths.com/wp-content ... .03.19.pdf

And then we negotiate, with the customers, a discount to reflect the fact that the material needs processing. So, it’s very simple to get from the basket price to the selling price. And we have announced that roughly 70% is the discount we negotiate with customers, which is why our $11,500 per tonne, or $11.5 per kilo, comes down to roughly $2,000 a tonne that we sell.
However plans are afoot to address this:
We announced, in August, our partnership with TechMet. And over the last six months or so, since we’ve been working with the, we’ve been pleased at the progress it’s made. We’ve conducted a scoping study to review technologies available to us first for processing our ore. And then we intend to move on to the full definitive feasibility study, which TechMet will fund, to fully calculate the economics of moving into building our own plant for separation of our ore, or further processing and then potentially separation, to sell a much higher value product.
So, if we catch some or all of that 70%, the economics could be extremely attractive.


The Bull case is:
1. Increasing demand as we move from carbon based fuels.
2. Market paranoia regarding China’s dominance in the rare earth market.
3. RBW own licences on an extremely rich source.
4. Management at RBW has a better focused strategy to deliver value from their assets.
5. Directors have bought in at a significant level at a recent placement that was at a slight premium to the share price. Putting money where their mouth is.
6. A revised JORC resource classification is imminent (weeks) and this is likely to upgrade the potential.

The Bear case:
1. Realistically significant production is some way off even if all goes to plan.
2. They are currently loss making with interims to December 2019 stating - ‘Total loss after tax was US$1.9 million’.
3. A loan of $1m US dollars in February 2020 has had its repayment extended until December 2021 and ‘It is intended that the loan be repaid out of the proceeds of a future fund-raise’ .
4. After the recent placement I calculate they have around $2m in cash about the same as the 6 month loss to December 2019.
5. There is bound to be a future fund-raise both to pay off the debt and finance their future developments.

My opinion:
I do believe the imminent JORC will be positive and there will be some uplift from the recent placement price of 3p. However I don’t believe this will be sustained and the share price is likely to slip back again in the coming months.
In the end if management can fulfill its strategy there could be a decent re-rating but I think we are talking years not week or months.

Regards
Iron

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Re: Rainbow Rare Earths (RBW)

#324484

Postby Proselenes » July 8th, 2020, 3:14 am

Thanks for an excellent summary of your thoughts.

Pansana Rare Earths listed today, some news coverage, highlights the massive demand coming for the magnet rare earths of Rainbow Rare Earths as well.

This is of course the question ahead, will the Covid-19 stimulus funds find their way into offshore wind and EV's etc.. and so push the demand for rare earths significantly higher.

Video of the interview in the link below.

https://twitter.com/i/status/1280512728453591052

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Re: Rainbow Rare Earths (RBW)

#332102

Postby Proselenes » August 10th, 2020, 10:24 am

On a chart breakout now, one assumes news on the JORC must be close then ?

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Re: Rainbow Rare Earths (RBW)

#340568

Postby Dynamo1 » September 16th, 2020, 9:50 am

Pensana (PRE) is the Rare Earth mining stock to follow. The management are delivering on their timetable, unlike RBW who's JORC delay is a joke.

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Re: Rainbow Rare Earths (RBW)

#387163

Postby spasmodicus » February 16th, 2021, 10:54 am

Dynamo1 wrote:Pensana (PRE) is the Rare Earth mining stock to follow. The management are delivering on their timetable, unlike RBW who's JORC delay is a joke.


Unfortunately, Pensana are still prevaricating over release of their business plan to get into production at their UK plant in Saltend, Yorkshire sotheir share price has not responded much to the announcement
https://www.ft.com/content/d3ed83f4-19bc-4d16-b510-415749c032c1
that China wants to exert pressure on the USA via rare earths export curbs.

Meanwhile, Rainbow Rare Earths RBW found a metaphorical pot of gold at the end of theirs by striking a deal, the "Phalaborwa Rare Earths Project", last year with Sasol/Bosveld Phosphates Pty in S. Africa. This involves the reprocessing of rare earth rich mine dumps "gypsum stacks", left over from phosphate extraction, to obtain high quality Nd/Pr feedstock. In November 2020 they said
"Importantly, the material contained in the gypsum stacks has already been cracked, suggesting lower opex and capex for the processing required to deliver a high value product. This value of the mixed rare earth carbonate will not only be higher than a traditional rare earth mineral concentrate due to the chemical form of the material in the stacks, but also on account of the underlying value of the rare earths basket, which at 30% NdPr, compares very favourably with other rare earth projects globally."

More recently, assays have been carried out with encouraging results which have boosted the SP of RBW considerably.
https://www.investegate.co.uk/rainbow-rare-earths--rbw-/rns/phalaborwa-high-grade-assay-results/202102120700048709O/

Importantly, the stacks are low in radioactive minerals, which can be a problem with some otherwise high grade rare earth ores. It's hard to say how all this is going to play out, as it's one thing to have access to a big pile of minerals and entirely another thing for a small cap company like RBW to get the goods to market.

For an interesting read on the whole global rare earth supply chain see
https://www-pub.iaea.org/iaeameetings/cn216pn/Thursday/Session10/079-Kennedy.pdf

Rare earths are basically not all that rare and current shortfalls are due to supply chain issues. RBW and PRE, both of which I hold, had better get their skates on if they and their shareholders are to benefit from the current market imbalance.

regards
S

edited bad URL

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Re: Rainbow Rare Earths (RBW)

#387179

Postby Dynamo1 » February 16th, 2021, 12:13 pm

I agree spasmodicus. RBW have two pots of gold. But, they (and rare earth companies in general) have to make hay whilst the sun shines and RBW have to figure out how they are going to develop their assets and get them to market in sufficient quantity. That's where the JORC comes in. The potential is decent, but will need financing. If RBW receives financial backing (soonish) then it will be good news all round.
PRE planning at Saltend looks like a shoe-in, nearly everyone is in favour. Business Plan / BFS should be out end of month providing a pathway to funding the project.

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Re: Rainbow Rare Earths (RBW)

#387391

Postby Dynamo1 » February 17th, 2021, 10:01 am

https://www.standard.co.uk/business/the ... 20036.html

Article from the Standard that outlines where the UK rare earth companies are at. It's a basic information job but it's good to see some recognition in our press.

Companies mentioned: Rainbow, Mkango and Pensana

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Re: Rainbow Rare Earths (RBW)

#389130

Postby spasmodicus » February 23rd, 2021, 12:21 pm

a bit more info on Gakara

https://www.stockmarketwire.com/article/7194848/Rainbow-Rare-Earths-says-Gakara-processing-plant-to-cost-35-point-2m.html

They talk the talk, but we still don't really know where the money is going to come from.

S

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Re: Rainbow Rare Earths (RBW)

#393855

Postby spasmodicus » March 9th, 2021, 12:07 pm

still nothing happening at Rainbow. I came across this the other day
https://www.forbes.com/sites/timtreadgold/2021/03/02/china-shoots-itself-in-the-rare-earth-foot-again/?sh=58310cc61db0
which for holders of both RBW and PRE might dampen some of the gung-ho optimism which prevails on bulletin boards such as LSE and ADVFN, although not of course in the more calm and measured deliberations that prevail here.

In Australia, Amanda Lacaze, chief executive of Lynas Corporation, that country’s biggest rare earth producer warned last week that there was a risk of “overbuilding” mines and processing facilities because of the concern about a Chinese export embargo

not much chance of that here, if the rate that both RBW and PRE are moving towards getting themselves proper finance is anything to go by. Maybe what they need is a good dose of Aussie entrepreneurism? cf
https://www.greensill.com/news/meet-lex-greensill-and-the-fintech-thats-australias-newest-2b-unicorn/

Setting my stop losses accordingly,
S

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Re: Rainbow Rare Earths (RBW)

#398824

Postby spasmodicus » March 25th, 2021, 9:40 am

CFO share purchase

RNS Number : 3251T
Rainbow Rare Earths Limited
24 March 2021
FOR IMMEDIATE RELEASE
24 MARCH 2021
Rainbow Rare Earths Limited
("Rainbow" or the "Company") (LSE: RBW)
Notification and public disclosure of transactions by PDMR and persons closely associated with them
The Company announces that Pete Gardner, CFO of the Company, has on 24th March 2021 purchased 200,000 ordinary shares of no par value each in the Company ("Ordinary Shares") at an aggregate price of 15.23 pence per share.

the CFO should be in as good a position as anyone to know what's going on. Maybe?

S

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Re: Rainbow Rare Earths (RBW)

#414548

Postby spasmodicus » May 24th, 2021, 11:00 am

RNS on Initial Metallurgical results for Phalaborwa, which is RBW's project in S. Africa to extract rare earth feedstock from phosphogypsum tailings dumps resulting from SASOL's phosphate mining operations

https://www.londonstockexchange.com/news-article/RBW/initial-metallurgical-results-for-phalaborwa/14987935

.....Initial recoveries of rare earths of greater than 70% have been achieved within 24 hours, which will be improved through further optimisations.

The phosphogypsum contains exceptionally low levels of radioactive elements uranium and thorium when compared to other rare earth projects

....supports the expectations that a simplified processing flow sheet can be developed and optimised from the original Sasol flow sheet to recover the rare earths without the high cost, energy and reagent intensive mining, crushing, milling, primary beneficiation, cracking and uranium/thorium removal costs associated with a typical rare earth project

Further work is planned to confirm the leach characteristic variability of the stacks to support a preliminary economic assessment for the Phalaborwa project. Further optimisation and processing development work will then be undertaken prior to the completion of a full feasibility study.....


not quite there yet, but making progress. I topped up a little this morning at 15p

S

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Re: Rainbow Rare Earths (RBW)

#420152

Postby spasmodicus » June 17th, 2021, 12:28 pm

An update on RBW's Phalaborwa project this morning

https://www.lse.co.uk/rns/RBW/resource-estimate-for-phalaborwa-project-jscgjx3oqjysryi.html

Inferred Mineral Resource Estimate of 38.3Mt at 0.43% TREO is larger than the original 35Mt expected from the gypsum stacks

share price up a little as a result. Not much seems to be happening in their Burundi project, where a disagreement with the government seems to have put things on hold.

S


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