REG - Rainbow Rare Earths - Interim Results for six months to 31 December 2025
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RNS Number : 8147Y Rainbow Rare Earths Limited 31 March 2026
31 March 2026
Rainbow Rare Earths Limited
("Rainbow" or "the Company")
LSE: RBW
Interim Results for the six months ended 31 December 2025
Rainbow Rare Earths is pleased to announce its unaudited results for the six
months ended 31 December 2025 ("the Period").
Highlights
· Rare earth elements ("REE") remain a critical strategic commodity, with
ongoing global priorities to develop secure, alternative supply chains of
these critical minerals.
· Rainbow is pioneering the recovery of REE from phosphogypsum, a waste
product from phosphoric acid production, with the aim of unlocking a low-cost,
low capital intensity and responsible source of the magnet REE crucial to
decarbonisation, defence and future-facing industries.
· The Company has successfully established its flagship Phalaborwa
project in South Africa as a proven producer of REE, with a large-scale pilot
plant currently running the optimised primary flowsheet in Johannesburg and
producing a high-grade mixed rare earth product ("MREP").
· The Company is evaluating opportunities using third party commercially
proven solvent extraction separation processes ("SX") to capture additional
value by refining the MREP into a combined neodymium and praseodymium ("NdPr")
oxide and a samarium, europium and gadolinium plus ("SEG+") product that is
rich in medium and heavy REE including Dysprosium ("Dy") and Terbium ("Tb"),
each at >99.5% purity.
· As a chemical processing operation, Rainbow's flagship Phalaborwa
project in South Africa eliminates many of the costs, risks and timescales
associated with traditional REE mining projects and it is expected to be one
of the highest margin REE projects in development today.
· The project is recognised as a strategic and near-term source of both
light and heavy REE by the U.S. Government, with a US$50 million funding
option in place from the U.S. International Development Finance Corporation
("DFC") via strategic shareholder TechMet Limited ("TechMet"), and it is also
the REE investment of choice for critical minerals royalty and streaming
company Ecora Royalties PLC ("Ecora").
· The Company is well advanced with all work streams to conclude the
project's Definitive Feasibility Study ("DFS"), which will be published later
this year. The DFS will update the economics of the Interim Economic Study
released in December 2024 that presented a post-tax NPV(10) of US$611 million,
a post-tax IRR of 38%, average EBITDA of US$180 million per annum over a 16
year project life, and a pay-back of 2.0 years for the US$326 million capital
requirements; it is expected that optimisation initiatives will help to
counter inflationary impacts since this time.
· An Economic Assessment ("EA") has confirmed the Uberaba project in
Brazil as a second major opportunity for Rainbow, with the project expected to
be a long-life, high-margin producer of both light and heavy REE. Using a 10%
discount rate and rare earth pricing reported by Argus Media Limited ("Argus")
at 5 March 2026, the Uberaba EA post-tax NPV(10) estimated at US$916 million,
with a post-tax IRR of 45%, average forecast EBITDA of US$217 million per
annum over a 30 year project life, and an estimated pay-back of 1.7 years for
the US$279 million estimated capital requirements.
· Equity subscription completed 31 March 2026 at £0.20 per share
raises c. US$14.6 million from strategic investors, providing the funds to
complete the Phalaborwa DFS, Uberaba PFS and for general working purposes
beyond the end of Q2 2027.
· Pricing for both light and heavy REE increased significantly during
the Period, with NdPr rising from c. US$60/kg in June 2025 to c. US$110/kg in
December 2025. Export controls placed on certain heavy REE by China has led to
a bifurcation in pricing, with the EU and USA prices quoted at three to four
times those quoted in China.
George Bennett, CEO, commented:
"I am proud that Phalaborwa has successfully been confirmed as a producer of
REE, with the pilot plant in Johannesburg delivering increasing quantities of
a high-grade MREP, which is a commercial product. We look forward to updating
the market on our progress as we work towards publication of the DFS later in
the year.
We are equally excited about prospects for the Uberaba project in Brazil, with
the EA published in March confirming this as a second major opportunity to
develop a long term, high-margin producer of both light and heavy rare earth
elements based in a favourable jurisdiction.
It is gratifying that the pricing for REE has started to respond positively,
in line with true market dynamics and reflecting the longer-term demand for
these minerals that are critical to both everyday and advanced technologies.
Both Phalaborwa and Uberaba are expected to be robust throughout the pricing
cycle, providing an exciting opportunity for a independent diversified supply
of these critical minerals."
Investor Meet Company Presentation - Wednesday 8 April 2026
Rainbow is pleased to announce that CEO George Bennett will provide a live
presentation via Investor Meet Company on 8 April 2026 at 10:00 BST.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard up until 7
April 2026 at 9.00 BST or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet
RAINBOW RARE EARTHS LIMITED via:
https://www.investormeetcompany.com/rainbow-rare-earths-limited/register-investor
(https://www.investormeetcompany.com/rainbow-rare-earths-limited/register-investor)
Investors who already follow RAINBOW RARE EARTHS LIMITED on the Investor Meet
Company platform will automatically be invited.
Market Abuse Regulation ("MAR") Disclosure
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.
For further information, please contact:
Rainbow Rare Earths Ltd Company George Bennett +27 82 652 8526
Pete Gardner
IR Cathy Malins +44 7876 796 629
cathym@rainbowrareearths.com
Tavistock Communications PR/IR Charles Vivian +44 (0) 20 7920 3150
Eliza Logan rainbowrareearths@tavistock.co.uk
Berenberg Broker Matthew Armitt +44 (0) 20 3207 7800
Jennifer Lee
Notes to Editors:
About Rainbow:
Rainbow Rare Earths aims to be a forerunner in the establishment of an
independent and ethical supply chain of the rare earth elements that are
driving the green energy transition. It is doing this by developing projects
that recover rare earth elements from phosphogypsum, a by-product of
fertilizer production. This approach avoids traditional mining and allows
projects to be advanced more quickly and at lower cost. The Company is
progressing two projects: Phalaborwa in South Africa and Uberaba in Brazil,
and these projects are expected to produce critical materials for a wide range
of industrial, energy, and defence applications. More information is available
at www.rainbowrareearths.com (http://www.rainbowrareearths.com/) or by
visiting the Rainbow Rare Earths Curation Showcase at: Curation Connect -
Rainbow Rare Earths Showcase
(https://app.curationconnect.com/company/Rainbow-Rare-Earths-90903?utm_source=media&utm_campaign=media&utm_id=media)
or https://app.curationconnect.com/company/Rainbow-Rare-Earths-90903
(https://app.curationconnect.com/company/Rainbow-Rare-Earths-90903) .
CEO Review
I am pleased to present Rainbow Rare Earths' interim results for H1 2026. This
has been an important period for the Company, marked by significant technical
advancements at our flagship Phalaborwa project in South Africa, set against a
supportive backdrop of rising REE prices and increasing global focus on
secure, ethical supply chains. As the world accelerates its transition to
clean energy and advanced technologies, Rainbow is well-positioned to become a
key Western supplier of critical magnet rare earths, including NdPr, Dy, Tb,
and other strategic REE, including yttrium ("Y").
Market Context
Following a period of low pricing, magnet rare earth prices strengthened
throughout the Period, with Nd and Pr prices reported by Argus rising from c.
US$60/kg in June 2025 to c. US$110/kg in December 2025. Since Q2 2023 prices
had been below the average cost of production in China, as reported by market
analysts. The renewed price strength is underpinned in the West by the floor
price of US$110/kg agreed between MP Materials and the US Government announced
in July 2025, which is also footprinted in the recently announced supply deal
agreed by the Japanese Government with Lynas Rare Earths. The US$110/kg floor
price is in-line with the base case prices used by Rainbow in presenting the
economics of the Phalaborwa project.
Export controls imposed by China have had a marked impact on heavy rare earth
prices, including Dy, Tb and Y. This has led to a marked bifurcation of prices
reported in Europe and the US, albeit at smaller volumes, compared to China.
Prices for Dy and Tb assessed by Argus have been up to 3.5 times higher than
Chinese equivalents, whilst prices for Y have recently risen to a 25 times
multiple, reflecting the difficulty in securing supply.
Overall, analysts continue to predict long-term rising global rare earth
prices, driven by continued demand growth. Traditional sectors, such as
electric vehicles and offshore wind, are expected to continue to drive demand
for rare earth permanent magnets. In addition, new demand drivers are
increasingly being forecast in new sectors such as defence, advanced robotics
and drones/advanced air mobility. Whilst it is not known if the EU/US price
premium for heavy rare earths will endure, analysts report that prices for
heavy rare earths are likely to continue to outperform light rare earths due
to ongoing supply constraints.
Importantly for Rainbow global efforts to diversify REE supply chains away
from China are continuing, including concerted efforts from the US, the EU,
Australia, Japan and others to invest in new supply, build out the missing
parts of the magnet supply chain, as well as to establish offtake and
strategic stockpiles, amongst other initiatives. These actions underscore the
strategic importance of projects like Phalaborwa, which can be a near-term
source of both light and heavy REE.
Operational Review
Our primary focus during the Period remained on de-risking and optimising the
Phalaborwa project, which benefits from its unique position as a low-cost,
near-term production opportunity through the reprocessing of existing
phosphogypsum stacks. The project is based on the processing of 2.2 Mtpa of
phosphogypsum to recover c. 10,000 tpa MREP that can be further refined to
deliver c. 1,800 tpa of NdPr oxide, and c. 60 tpa of Dy, c. 20 tpa of Tb and
c. 140 tpa of Y as part of an SEG+ mixed product.
A major breakthrough has been achieved by Rainbow in terms of confirming an
economic process to extract REE from phosphogypsum, with the Company
succeeding where previous attempts over the last c. 40+ years have failed.
This flowsheet is being demonstrated now with the large-scale pilot plant in
Johannesburg producing ever-increasing quantities of high grade MREP including
economic quantities of all four magnet rare earths: Nd, Pr, Dy and Tb. This
success establishes Phalaborwa as a producer of REE.
Rainbow is evaluating opportunities using third party commercially proven SX
separation processes to capture additional value by refining the MREP into a
combined NdPr oxide and a SEG+ product. Separation can be carried out on site
at Phalaborwa or in a third-party location, where additional funding support
may be available. The separation capacity may be developed alongside the
initial project, or in a staged manner following a similar path to many other
global rare earth development projects. The evaluation will be informed by a
comprehensive economic assessment, considering financing availability, costs,
project timelines, and overall economics, as well as the input from potential
offtake partners.
Continued optimisation of the primary flowsheet
As previously announced, Rainbow has made a number of important changes and
optimisations to the Phalaborwa primary flowsheet in order to drive project
efficiencies using intellectual property ("IP") developed by the Company. This
part of the flowsheet prior to separation represents the majority of the
project's cost base.
The leach process was fully optimised via large-scale locked cycle tests that
yielded several benefits expected to reduce cost in the primary leaching
circuit, including:
· the leach process has been reduced from three stages to two;
· the residence time has been reduced from 32 hours to eight; and
· leach heating requirements have been significantly reduced.
Rainbow's in-house team has developed a rare earth recovery and purification
process from the pregnant leach solution combining continuous ion exchange
("CIX") and precipitation steps. This combined process rejects a large volume
of impurities and delivers a high grade MREP which can be sold or used as a
high-grade feed stream for separation. The results have been confirmed at
bench scale through extensive lock-cycle testing with solution recycle, used
to simulate a continuous circuit.
Rainbow has determined that SX, as the industry standard, represents the
optimal route for separation of the MREP, representing a commercially proven
path to delivering Rainbow's proposed NdPr and SEG+ products. The reduction in
feed volume due to the CIX and precipitation process results in a
smaller-than-typical SX plant, minimising the expected plant footprint,
operating and capital cost requirements.
A number of trade-off studies were also pursued and progressed positively in
2025, the most notable of which are:
· Mechanical reclamation has been selected to replace hydraulic
reclamation. This provides more flexibility around reclamation planning,
simplifies the plant feed process, and reduces the environmental risk of
reclaiming with acidic water as originally anticipated.
· An on-site sulphuric acid plant is expected to derisk and simplify
the supply of sulphuric acid from external sources and provide on-site power
generation for use in the leaching process, reducing external power costs.
Together with the optimisation measures noted above, these initiatives are
expected to positively impact power, reagent, labour and capital costs for the
project.
Operation of Large-Scale Pilot Plant
Post Period-end, the Company has commenced pilot scale operations as the final
phase of process test work for Phalaborwa. The large-scale pilot operation is
currently running the optimised leach process producing sufficient volumes of
pregnant leach solution to allow for optimisation of the CIX and impurity
removal processes. It will provide the data that underpins the DFS, including
mass balance, equipment sizing and capital and operating costs, and will be
used as the basis for third-party validation for project finance.
The pilot-plant initially produced a 55% total rare earth oxides ("TREO")
high-purity mixed rare earth hydroxide. Subsequent improvements have delivered
a higher grade 78% TREO product, which Rainbow expects to confirm as a
suitable feedstock for some SX separation processes. Further purification
steps have also been undertaken to deliver a higher grade mixed rare earth
oxide with sufficiently low levels of impurities to be suitable for any third
party SX separation process. In-house assays have been generated and are being
verified by duplicate tests and a third-party referee analysis process.
The pilot plant mixed rare earth products will be used for validation with
potential off-take partners as well as feedstock for SX test work.
Project Economics and Timeline
The Phalaborwa updated Interim Study published in December 2024 confirmed
strong base line economics for the project, which has a base case NPV(10) of
US$611 million, a post-tax IRR of 38% and a payback of less than two years.
The economics were published using base case rare earth prices of US$110/kg Nd
oxide, US$112.5/kt Pr oxide, US$340/kg Dy oxide and US$1,875/kg Tb oxide.
The DFS, to be published later this year, will update the economics of the
project. It is expected that the cost optimisation initiatives completed will
help to counter inflationary impacts since December 2024. The economic
analysis will compare the expected returns from selling the high grade MREP,
which is expected to have a 70%-75% overall payability, to the additional
value that is expected to be generated from producing the NdPr and SEG+
products via SX. The opportunity to realise higher prices than the Chinese
benchmark for the heavy rare earths contained in the SEG+ product will also be
explored, which could materially improve the economics of the project.
Upon completion of the DFS, finalisation of the project permitting will run in
parallel with the project finance process to allow construction to commence by
the end of 2027.
Environmental
Phalaborwa is founded on the principles of circularity, reprocessing
phosphogypsum which is the by-product of historic phosphoric acid production
to produce the critical rare earths required for global decarbonisation. The
Company has the potential to use local waste streams, sulphuric acid and
silica, as reagents for its operations.
The operations will serve to clean up the legacy environmental issue of acid
water associated with the historic unlined gypsum stacks, using this water in
the closed-circuit plant process rather than drawing on an external water
source for the processing plant. The clean-up of acid water is expected to
improve groundwater quality which is impacted by the stack water emanating
from the base of the unlined stacks.
The clean gypsum by-product will be stored on new lined stacks designed in
accordance with IFC Performance Standards and the Equator Principles, before
being sold down over time to local agricultural and industrial users. This is
expected to allow, over time, for a full circle rehabilitation of the site.
Rainbow plans to establish a low cost, low-carbon energy source for the
project. The Company continues to assess renewable energy power options, with
the aim that this could provide the project's power requirements not
self-generated in the planned sulphuric acid plant.
Uberaba - Brazil
The Uberaba project in Brazil is the subject of a Joint Project Development
Agreement between Rainbow and the Mosaic Company ("Mosaic"), (NYSE: MOS), the
world- leading American producer and marketer of concentrated phosphate and
potash crop nutrients based in Tampa, Florida. The project is similar to
Phalaborwa in that it will entail the processing of phosphogypsum, a waste
residue from Mosaic's phosphoric acid production, using Rainbow's intellectual
property to economically extract REE.
In March 2026, Rainbow published the results of an Economic Assessment ("EA")
for Uberaba that confirmed the project as a second major opportunity for
Rainbow, with the potential to be a long-life, high-margin and near-term
producer of both light and heavy REE. The EA does not meet the standards for a
scoping study under the JORC Code as it is not based on a formally designated
resource.
The EA results, reported using rare earth pricing sourced from Argus Media
Limited (Argus) on 5 March 2026, delivered a post-tax NPV(10) of US$916
million, a post-tax IRR of 45%, average EBITDA of US$217 million per annum
over a 30 year life-of-mine, and a pay-back of 1.7 years.
Rainbow and Mosaic have signed a Joint Project Development Agreement to
progress a Pre-Feasibility Study ("PFS") for Uberaba. On completion of a
positive PFS and a decision to proceed with a DFS, the parties currently
intend to establish a joint venture, with Mosaic holding 51% and Rainbow 49%,
subject to negotiation of final Heads of Terms.
Other Opportunities
Rainbow's technology can unlock a global opportunity for a low-cost and
responsible supply of REE from phosphogypsum. The Company continues to
evaluate other strategic opportunities globally where its IP could be
appropriately utilised. Rainbow's Gakara project in Burundi remains on care
and maintenance with a limited holding cost for the Company.
Financial Review
During the Period the Company spent US$394k at the laboratory facility in
Johannesburg including both research costs and associated capital expenditure.
A further US$366k was incurred for technical work at Phalaborwa, bringing the
total capitalised costs to date for the project to US$17.7 million. Business
development costs of US$121k were incurred, mainly focused on the Uberaba EA.
The Company continues to manage its overheads, with total cost of US$1,626k in
the Period excluding business development costs. The income statement was
dominated by a US$3,879k change in the fair value of the royalty liability
driven by stronger forecast rare earth prices, with a recognised liability of
US$11.1 million at 31 December. This reversed a fall in fair value recognised
at 30 June 2025 due to low forecast rare earth prices.
The total cash outflow in the Period was US$2.5 million, leaving a cash
balance of US$1.4 million at 31 December 2025. On 31 March 2026 the Company
raised US$14.6 million from strategic investors at £0.20 per share via the
issue of 55.4 million new Ordinary Shares. Including these proceeds, based on
the Group's forecasts the directors are of the opinion that the Group has
sufficient working capital for its present requirements, that is for at least
the next 12 months from the date of publication of this document.
Cautionary Statement:
The business review and certain other sections of this interim report contain
forward looking statements that have been made by the Directors in good faith
based on the information available to them up to the time of their approval of
this report. However, they should be treated with caution due to inherent
uncertainties, including both economic and business risk factors, underlying
any such forward-looking information and no statement should be construed as a
profit forecast.
Directors' Responsibility Statement
We confirm that to the best of our knowledge:
a) the Condensed set of Interim Financial Statements has been prepared in
accordance with IAS 34 'Interim Financial Reporting';
b) the interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six
months and description of principal risks and uncertainties for the remaining
six months of the year);
c) the interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions and
changes therein); and
d) the condensed set of interim financial statements, which has been
prepared in accordance with the applicable set of accounting standards, gives
a true and fair view of the assets, liabilities, financial position and profit
or loss of the issuer, or the undertakings included in the consolidation as a
whole as required by DTR 4.2.4R.
This Interim Report has been approved by the Board and signed on its behalf
by:
George Bennett
Chief Executive Officer
31 March 2026
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 31 December 2025
6 months ended 6 months ended
31 December 2025
31 December 2024
Notes US$'000 US$'000
Unaudited Unaudited
Research costs 3 (184) -
Administration expenses 3 (1,747) (1,707)
Loss from operating activities (1,931) (1,707)
Finance income 129 49
Finance costs (227) (405)
Change in fair value of royalty financing liability 9 (3,879) -
Loss before tax (5,908) (2,063)
Income tax expense - -
Total loss after tax and comprehensive expense for the period (5,908) (2,063)
Total loss after tax and comprehensive expense for the period is attributable
to:
Non-controlling interest 1 (5)
Owners of parent (5,909) (2,058)
(5,908) (2,063)
Loss per share (cents)
Basic 4 (0.92) (0.32)
Diluted 4 (0.92) (0.32)
The results of each period are derived from continuing operations.
Condensed Consolidated Statement of Financial Position
As at 31 December 2025
As at As at As at
31 December 2025
30 June
31 December 2024
2025
Notes US$'000 US$'000 US$'000
Unaudited Audited Unaudited
Non-current assets
Exploration and evaluation assets 5 17,729 17,363 17,068
Property, plant and equipment 6 534 460 459
Right of use assets 222 251 53
Total non-current assets 18,485 18,074 17,580
Current assets
Inventory 1 1 1
Trade and other receivables 377 403 371
Cash and cash equivalents 1,438 3,933 6,078
Total current assets 1,816 4,337 6,450
Total assets 20,301 22,411 24,030
Current liabilities
Trade and other payables 7 (926) (1,203) (1,097)
Borrowings 8 (474) (340) (294)
Lease liabilities (86) (89) (36)
Total current liabilities (1,486) (1,632) (1,427)
Non-current liabilities
Borrowings 8 (30) (85) (138)
Royalty liability 9 (11,163) (7,284) (8,435)
Lease liabilities (151) (173) (23)
Provisions (55) (55) (55)
Total non-current liabilities (11,399) (7,597) (8,651)
Total Liabilities (12,885) (9,229) (10,078)
NET ASSETS 7,416 13,182 13,952
Equity
Share capital 10 58,150 58,150 58,150
Share based payment reserve 2,290 2,217 2,189
Retained loss (52,905) (47,065) (44,373)
Equity attributable to the parent 7,535 13,302 15,966
Non-controlling interest (119) (120) (2,014)
TOTAL EQUITY 7,416 13,182 13,952
Condensed Consolidated Cash Flow Statement
For the six months ended 31 December 2025
6 months ended 6 months ended
31 December 2025
31 December 2024 (1)
US$'000 US$'000
Unaudited Unaudited
Cash flow from operating activities
Loss from operating activities (1,931) (1,707)
Adjustments for:
Depreciation 186 37
Share-based payment charge 142 386
Share settled bonus - 341
Operating loss before working capital changes (1,603) (943)
Net decrease in trade and other receivables 26 1
Net decrease in trade and other payables (293) (583)
Cash used by operations (1,870) (1,525)
16
Realised foreign exchange (losses)/gains 75 (2)
Net cash used in operating activities (1,795) (1,527)
Cash flow from investing activities
Purchase of property, plant & equipment (171) (426)
Exploration and evaluation costs (407) (1,552)
Finance income 22 7
Net cash used in investing activities (556) (1,971)
Cash flow from financing activities
Proceeds of royalty financing - 8,500
Costs of royalty financing - (360)
Repayment of borrowings (85) (43)
Interest payments on borrowings (32) (23)
Payment of leases (46) (24)
Proceeds from the issuance of ordinary shares - 1,500
Transaction costs of issuing new equity - (53)
Net cash generated by financing activities (163) (9,497)
Net increase in cash and cash equivalents (2,514) 5,999
Cash & cash equivalents at the beginning of the period 3,933 79
Foreign exchange (loss)/gain on cash & cash equivalents 19 -
Cash & cash equivalents at the end of the period 1,438 6,078
1. The prior year cash flow statement has been restated to reflect
finance income as an investing cashflow and interest on borrowings as a
financing cashflow.
Condensed Consolidated Statement of Changes in Equity
For the six months ended 31 December 2025
Share capital Share- based Payments Accumulated losses Attributable Non-controlling interest Total
to the
parent
Note US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 July 2024 (audited) 56,362 1,839 (42,351) 15,850 (2,009) 13,841
Total comprehensive expense
Total comprehensive loss - - (2,058) (2,058) (5) (2,063)
Transactions with owners
Issue of shares during the period for cash 10 1,500 - - 1,500 - 1,500
Non-cash issue of shares 10 341 - - 341 - 341
Share issue costs 10 (53) - - (53) - (53)
Fair value of employee share options in the period - 386 - 386 - 386
Shares issued in the period under Restricted Share Unit scheme - (36) 36 - - -
Balance at 31 December 2024 (unaudited) 58,150 2,189 (44,373) 15,966 (2,014) 13,952
Total comprehensive expense
Total comprehensive loss - - (1,078) (1,078) (13) (1,091)
Transactions with owners
Fair value of employee share options in the period - 321 - 321 - 321
Share incentives cancelled in the year - (293) 293 - - -
Impact of recapitalisation of subsidiary - - (1,907) (1,907) 1,907 -
Balance at 30 June 2025 (audited) 58,150 2,217 (47,065) 13,302 (120) 13,182
Total comprehensive expense
Total comprehensive loss (5,909) (5,909) 1 (5,908)
Transactions with owners
Fair value of employee share options in the period - 142 - 142 - 142
Shares issued in the period under Restricted Share Unit scheme - (69) 69 - - -
Balance at 31 December 2025 (unaudited) 58,150 2,290 (52,905) 7,535 (119) 7,416
Notes to the Condensed Financial Statements
For the six months ended 31 December 2025
1. General information
Rainbow Rare Earths Limited (the "Company" or "Rainbow", together with its
subsidiaries the "Group"), is a company limited by shares registered in
Guernsey, incorporated on 5 August 2011 with company registration number
53831. The Company's registered office is Connaught House, St Julian's
Avenue, St Peter Port, Guernsey. The nature of the Group's operations and
its principal activities are set out in the CEO and Financial Reviews.
The financial information for the period ended 31 December 2025 does not
constitute the audited statutory accounts but the comparative information has
been extracted from those accounts. The report of the auditors on those
accounts was unqualified.
This Interim Report has not been audited or reviewed.
A copy of this Half Yearly Report has been published and may be found on the
Company's website at www.rainbowrareearths.com
(http://www.rainbowrareearths.com)
2. Basis of preparation
These condensed consolidated interim financial statements for the 6 months
ended 31 December 2025 have been prepared in accordance with IAS 34 'Interim
Financial Reporting'. They do not include disclosures that would otherwise be
required in a complete set of financial statements and should be read in
conjunction with the 2024 Annual Report and Accounts.
The same accounting policies and methods of computation are followed in the
condensed interim financial statements as were followed in the most recent
annual financial statements of the Group, which were published on 27 October
2025. There are no newly effective IFRS Standards which have had an impact
on the financial statements.
(a) Going concern
The Directors have continued to use the going concern basis in preparing these
condensed financial statements. The Group's business activities, together
with the factors likely to affect future development, performance and position
are set out in the CEO Statement. The financial position of the Group, its
cash flow and liquidity position are described in the Financial Review.
The Group's cash balance at 31 December 2025 was US$1.4 million (30 June 2025:
US$3.9 million). The Board has reviewed the Group's latest cash flow
forecasts for the period to 30 June 2027, including reasonably possible
downside scenarios. This has included the following assumptions:
· Forecast expenditure of US$4.2 million for ongoing general and
administrative costs of the Group over the 18-month period from 1 January 2026
to 30 June 2027, based on the current administrative cost base.
· Total expenditure of US$5.6 million for Phalaborwa. This includes
US$4.5 million to finalise the DFS in 2026 including technical, environmental
and permitting workstreams including a 10% contingency. A further US$1.0
million is forecast for Rainbow's technical team and associated costs. The
forecast includes a further US$0.1 million expected to be incurred in 2027
once Rainbow takes control of the Phalaborwa site. Due to the nature of the
work, actual costs and the timing of expenditure may differ to estimates.
· A continuation of care and maintenance for the Group's Gakara project
in Burundi at a total cost of US$0.2 million for the 18-month period from 1
January 2026 to 30 June 2027, based on the current administrative cost base.
· Research costs totalling US$0.6 million for the cost of Rainbow's
research facility in Johannesburg including the pilot work being undertaken.
· Business development costs totalling US$0.8 million to cover the PFS
study phase at the Uberaba project in Brazil and ad hoc work for other
development opportunities.
Management's reasonably possible downside scenario has a total forecast cash
outflow of US$12.5 million which includes a further 10% contingency across the
full forecast for unexpected costs.
On 31 March 2026 the Company raised US$14.6 million from strategic investors
at £0.20 per share via the issue of 55.4 million new Ordinary Shares.
Including these proceeds, based on the Group's forecasts, the directors are of
the opinion that the Group has sufficient working capital for its present
requirements, that is for at least the next 12 months from the date of
publication of this document.
(b) Dividend
The Directors do not recommend the payment of a dividend for the period (six
months ended 31 December 2025: US$Nil).
(c) Principal Risks and uncertainties
There are a number of potential risks and uncertainties inherent in the mining
and metals sector which could have a material impact on the long-term
performance of the Company, and which could cause the actual results to differ
materially from expected and historical results. The Company has taken
reasonable steps to mitigate these where possible. Full details are disclosed
on pages 44-47 of the Annual Report for the year ended 30 June 2025. The
risks and uncertainties are summarised below:
· Phalaborwa project definition risk (High business impact):
- At Phalaborwa, the updated Interim Study was published in December
2024 further to changes to the primary flowsheet to recover REE from the
phosphogypsum stacks. The result was an economic outcome similar to the
original PEA published in October 2022, with low capital and operating costs
driving strong returns at forecast rare earth prices
- Following the Interim Study, a series of ongoing trade-off studies have
been undertaken to optimise the proposed processing flow sheet. Test work is
ongoing to maximise rare earth recovery and impurity rejection via continuous
ion exchange and impurity precipitation to deliver a high grade MREP. A pilot
scale operation is ongoing to optimise the parameters for the most efficient
production of the MREP product.
- Rainbow is evaluating opportunities using third party commercially
proven SX separation processes to capture additional value by refining the
MREP into a combined NdPr oxide and a SEG+ product. The evaluation will also
define if the project can be developed in a staged manner allowing the MREP to
be sold prior to further investment in separation capacity, following a
similar path to many other global rare earth development projects. The
evaluation will be informed by a comprehensive economic assessment,
considering financing availability, costs, project timelines, and overall
economics, as well as the input from potential offtake partners
- As a result of the ongoing test work, other changes may be required to
the proposed processing flowsheet which could have a detrimental impact on the
economics of the project set out in the Interim Study.
- A DFS is expected to be completed in 2026, the timing of which will
be dependent on the outcome of the test work underway. The DFS is expected to
provide sufficient confidence for project development, including financing,
but may not deliver results in line with the Interim Study
· Permitting risk (High business impact):
- New and updated permits and licences will be required to develop the
Phalaborwa project including, but not limited to, a water use licence, waste
management licence and air emissions licence. Rainbow is working with
specialist consultants to compile the technical reports required for the
permitting process and is aiming to make the relevant applications in parallel
with work on the DFS.
- Whilst the timeframe for the issuance of permits is difficult to predict,
the Phalaborwa project will clean up legacy environmental issues at the site,
including treating the acid water currently associated with the unlined gypsum
stacks and re-stacking the processed gypsum on new lined stacks designed in
accordance with IFC Performance Standards and the Equator Principles.
Accordingly, the Group is confident that the relevant permits will be issued
to allow the project to proceed.
· Financing risk (High business impact):
- The Group's ability to continue to develop the Phalaborwa project and
other new business opportunities will rely upon its continued ability to
access financing, both at the corporate and project level.
- The financing of Phalaborwa will be dependent on the outcome of the
DFS, which will be impacted by a number of factors beyond the Company's
control including but not limited to commodity prices, the outcome of
processing test work including the ongoing programme of work for rare earth
separation, the issue of relevant permits, and the ability to resolve site
access and environmental matters set out separately below.
- Management maintains strong relationships with key sources of finance.
Rainbow has a history of securing funding required for the Group's growth
plans, including support from its cornerstone investors, and management
expects to be able to secure additional funding as required.
· Rare earth prices (High business impact):
- Rainbow is focused on the identification and development of secondary
rare earth deposits that can be brought into production quicker and at a lower
cost than traditional hard rock mining projects, with a focus on the permanent
magnet REE neodymium and praseodymium, dysprosium and terbium.
- Following a period of low pricing, magnet rare earth prices strengthened
throughout the Period. Whilst analysts are predicting strong growth in demand
for rare earths, prices have been volatile in the past and have traded for
extended periods at levels below the base case set out in the Phalaborwa
Interim Study. Whilst the Phalaborwa Interim Study confirmed a low-cost
operation that has resilient economics in lower rare earth price environments,
reduced long term rare earth prices could impact the long-term profitability
of the project and impact the commercial viability of any development.
- Rainbow intends to produce separated NdPr oxide at 99.5% purity, for
which pricing is available from independent sources and a mixed SEG+ product.
Rainbow may sell an alternative mixed rare earth product. A mixed rare earth
product will have lower payability than 99.5% pure separated rare earth
oxides. Rainbow's engagement with potential purchasers of these products have
not defined the ultimate payability, which will be dependent on the final
specifications of the product sold.
· Site access (Medium business impact):
- The proposed site layout for Phalaborwa incorporates an area of land
within the fenced area of the Bosveld industrial complex for which the surface
rights are owned by the South Africa Department of Public Works and
Infrastructure. A failure to obtain a lease to allow use of this land will
require the proposed site layout to be amended, which could impact both the
timing and cost of the proposed Phalaborwa development.
· Environmental (Medium business impact):
- The gypsum stacks that comprise the resource for the Phalaborwa project
represent an environmental disturbance that requires remediation representing
an environmental liability as described in the Phalaborwa PEA. On transfer of
the gypsum stacks to the Phalaborwa operating company, the liability
associated with the remediation of historic disturbance will not transfer to
the Group. Under South African law the responsibility for a pre-existing
decommissioning liability remains with the historic owners of the site on
transfer to a new owner. In addition, Bosveld have provided Rainbow with a
contractual indemnity against pre-existing environmental liabilities
associated with the site. However, on transfer the Group will take on
responsibility for the day to day management of the stacks, including the
associated polluted water. Failure to manage the stacks in a responsible
manner to prevent further pollution to the surrounding area could result in
the Group being liable for any resulting liabilities. Events outside Rainbow's
control could impact the cost of managing the stacks in a responsible manner,
which could have an adverse impact on the overall cost base of the Group.
· Co-development risk (Medium business impact):
- The Group's assets include projects that will be conducted in joint
arrangements or with associates, which reduces the Group's ability to control
and manage risk and places reliance on partners not controlled by the Group.
- At Phalaborwa, Bosveld has a 15% interest in the project and, as current
owner of the site, their assistance is required to ensure the assets necessary
for the project development are transferred at the necessary time into the
joint venture vehicle. Rainbow has the option to acquire the 15% minority
interest from Bosveld by issuing 38,873,663 new ordinary shares at any time up
to 30 June 2027, and Bosveld has a right to sell its 15% stake under the same
terms subject to the transfer of the assets for the project having been
completed.
- The Uberaba property in Brazil is subject due to a Joint Development
Agreement has with the Mosaic Company, but the full legal framework for the
development of a commercial operation for Uberaba has not been fully defined
and terms may not be agreed with Mosaic to allow a development to occur.
· Country and Political (Medium business impact):
- Rainbow's development projects are located in South Africa, Brazil and
Burundi. Emerging market economies are generally subject to greater risks,
including legal, regulatory, tax, economic and political risks, and these
risks are potentially subject to rapid change.
- On 12 April 2021, the Government of Burundi suspended the export of
concentrate produced at Gakara. This was followed on 29 June 2021 with a
suspension of all mining and exploration activity. All operations remain on
care and maintenance. Management assesses that the actions of the Government
of Burundi, which have not been in accordance with the legally binding mining
convention in place, create a situation where the re-start of operations in
the near term cannot be reasonably assumed. With the exception of cash and VAT
recoverable the assets of the Gakara cash generating unit have been impaired
to nil. The VAT recoverable is not considered to be impaired as it is directly
related to a recognised liability for VAT payable and, whilst there is no
legal right to net settlement, it is expected that the liability will only be
settled in a negotiated off-set against the recoverable asset.
3. Segmental information
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The chief
operating decision maker has been identified as the Chief Executive Officer.
It is considered that the Group has two reportable segments:
· Phalaborwa - a gypsum stack re-treatment project for the recovery
of rare earths in South Africa.
· Gakara - a rare-earth project in Burundi.
Unallocated costs include corporate costs, which are not reported by entity to
the Board.
Six months ended 31 December 2025:
Phalaborwa Gakara Unallocated Total
US$'000 US$'000 US$'000 US$'000
Research costs - - (184) (184)
Administration expenses - (54) (1,507) (1,561)
Depreciation - (3) (183) (186)
Loss from operating activities - (57) (1,874) (1,931)
Finance income - 89 40 129
Finance costs - (24) (203) (227)
Change in fair value of royalty financing liability - - (3,879) (3,879)
Profit / (Loss) before tax - 8 (5,916) (5,908)
Income tax expense - - - -
Loss after tax - 8 (5,916) (5,908)
Segmental assets 17,729 152 2,420 20,301
Exploration and evaluation assets 17,729 - - 17,729
Property, plant and equipment - - 534 534
Right of use assets - 7 215 222
Current assets - 145 1,671 1,816
Segmental liabilities (11,261) (828) (796) (12,885)
Capital expenditure 366 - 212 578
Six months ended 31 December 2024:
Phalaborwa Gakara Unallocated Total
US$'000 US$'000 US$'000 US$'000
Administration expenses - (126) (1,543) (1,669)
Depreciation - (10) (28) (38)
Loss from operating activities - (136) (1,571) (1,707)
Finance income - 40 9 49
Finance costs - (21) (384) (405)
Loss before tax - (117) (1,946) (2,063)
Income tax expense - - - -
Loss after tax - (117) (1,946) (2,063)
Segmental assets 17,509 172 6,349 24,030
Exploration and evaluation assets 17,068 - - 17,068
Property, plant and equipment 441 - 19 460
Right of use assets - 6 46 52
Current assets - 166 6,284 6,450
Segmental liabilities (446) (832) (8,800) (10,078)
Capital expenditure 1,806 - 2 1,808
4. Loss per ordinary share
Loss per ordinary share is calculated by dividing the net loss for the period
attributable to ordinary equity holders of the parent by the weighted average
number of ordinary shares outstanding during the period.
The Company was loss making for all periods presented, therefore the dilutive
effect of share options has not been taken account of in the calculation of
diluted earnings per share, since this would decrease the loss per share for
each of the period reported.
The calculation of the basic loss per share is based on the following data:
6 months ended 6 months ended
31 December 2025
31 December 2024
US$'000 US$'000
Unaudited Unaudited
The loss for the period attributable to ordinary equity holders of the parent (5,909) (2,058)
company
Number Number
'000 '000
Weighted average number of Ordinary shares for the purposes of basic and 644,252 642,176
diluted loss per share
Loss per Ordinary share Cents Cents
Basic and diluted (0.92) (0.32)
5. Exploration and evaluation assets
Phalaborwa
US$'000
At 1 July 2024 (audited) 15,716
Additions 1,352
At 31 December 2024(unaudited) 17,068
Additions 295
At 30 June 2025 (audited) 17,363
Additions 366
At 31 December 2025 (unaudited) 17,729
Costs capitalised relate to the Phalaborwa project in South Africa.
6. Property, plant and equipment
US$'000 Mine development costs Plant & machinery Laboratory Equipment Vehicles Office Equipment Leasehold Improvements Total
Cost
At 1 July 2024 (audited) 183 2,889 - 1,606 49 - 4,727
Additions - - 454 - 2 - 456
At 31 December 2024 (unaudited) 183 2,889 454 1,606 51 - 5,183
Additions - - 33 - - 16 49
At 30 June 2025 (audited) 183 2,889 487 1,606 51 16 5,232
Additions - - 204 - 2 6 212
At 31 December 2025 (unaudited) 183 2,889 691 1,606 53 22 5,444
Depreciation
At 1 July 2024 (audited) 183 2,889 - 1,587 47 - 4,706
Charge for period - - 14 3 1 - 18
At 31 December 2024 (unaudited) 183 2,889 14 1,590 48 - 4,724
Charge for period - - 44 2 - 2 48
At 30 June 2025 (audited) 183 2,889 58 1,592 48 2 4,772
Charge for period - - 126 5 3 4 138
At 31 December 2025 (unaudited) 183 2,889 184 1,597 51 6 4,910
Net Book Value at 31 December 2025 (unaudited) - - 507 9 2 16 534
Net Book Value at 30 June 2025 (audited) - - 429 14 3 14 460
Net Book Value at 31 December 2024 (unaudited) - - 440 16 3 - 459
7. Trade and other payables
As at As at As at
31 December
30 June
31 December 2024
2025
2025
US$'000 US$'000 US$'000
Unaudited Audited Unaudited
Trade payable 72 52 246
Accrued expenses 164 375 247
Taxes and social security 363 356 354
Burundi land taxes and community contributions payable 290 290 240
Amounts due to staff and management 12 20 10
Other payables 25 110 -
Total trade and other payables 926 1,203 1,097
The Directors consider the carrying value of trade and other payables
approximate to their fair value.
8. Borrowings
As at As at As at
31 December 2025
30 June
31 December 2024
2025
US$'000 US$'000 US$'000
Unaudited Audited Unaudited
Finbank Loan 148 249 231
Warrant liability 356 176 201
Total borrowings 504 425 432
Payable within 12 months 474 340 294
Payable after more than 12 months 30 85 138
504 425 432
FinBank Loan
The FinBank loan facility in Burundi is expressed in Burundian Franc ("BIF")
and carries an interest rate of 15%. The loan principal plus interest is
being paid at a rate of BIF30 million per month until April 2027 on a reducing
balance basis. Under the terms of this loan, FinBank has security over the
fixed and floating assets of RMB, the shares of RMB, and the cash held in
RMB's FinBank bank accounts. Interest on the loan amounted to US$32k (2024:
US$19k).
Warrant Liability
On 21 February 2020, 2,000,000 warrants with an exercise price of 4.55 pence
per warrant were issued to Pipestone Capital Inc, in which George Bennett, the
Company's CEO, has a beneficial interest. The warrants were issued in lieu
of interest on a US$1 million bridging loan provided to the Company, which was
repaid in full in December 2021. The Pipestone warrants are recognised as a
financial liability at fair value through profit and loss with changes in
value included in finance income. The warrants are exercisable at any time
until 20 July 2026.
9. Royalty Liability
As at As at As at
31 December 2025
30 June
31 December 2024
2025
US$'000 US$'000 US$'000
Unaudited Audited Unaudited
Ecora royalty liability 11,163 7,284 8,435
On 1 July 2024 the Group entered into a royalty funding agreement with Ecora
Resources PLC ("Ecora") securing gross proceeds of US$8.5 million in exchange
for a royalty payable on all future sales from the Phalaborwa Project in South
Africa. The royalty rate of 0.85% increases to 0.95% if commercial production
is reached after 30 September 2027 and 1.10% if commercial production is
reached after 30 June 2028.
The royalty is recognised as a financial liability at fair value through
profit and loss. This liability is subject to material change driven by
multiple factors including, but not limited to, forecast rare earth prices,
risk adjusted cost of capital, and the development timeline for the Phalaborwa
project.
At initial recognition the royalty liability was measured at fair value of
US$8.5 million. At 31 December 2025 the fair value of the royalty liability
has been updated in line with the methodology set out in the June 2025
consolidated financial statements using updated rare earth price forecasts
published in October 2025, an 18.69% discount rate and reflecting updated
guidance on the expected commencement of commercial production at Phalaborwa
resulting in an expected royalty rate of 1.1%. The increase in fair value of
the liability results primarily from higher rare earth price forecasts and is
also impacted by a lower discount rate calculated, a later start to the
expected timing of production, and the resulting higher overall royalty rate
expected.
10. Share capital
As at As at As at
31 December 2025
30 June
31 December
2025 2024
Unaudited Audited Unaudited
Issued share capital (nil par value) US$'000 58,150 58,150 58,150
Number of shares in issue ('000) 644,271 643,688 643,688
The table below shows a reconciliation of share capital movements:
Number of shares US$'000
At 1 July 2024 630,316,656 56,362
July 2024 - Share placing (cash receipts) 10,442,427 1,500
September 2024 - Share based remuneration: Short term incentive plan 2,595,735 341
September 2024 - Share based remuneration: Long term incentive plan 333,332 -
Costs associated with share issues - (53)
At 31 December 2024 and 30 June 2025 643,688,150 58,150
July 2025 - RSU shares 583,332 -
At 31 December 2025 644,271,482 58,150
On 4 July 2024, the company issues 583,332 ordinary shares with no par value
for nil consideration pursuant to the vesting of restricted stock units.
During the prior year:
· In July 2024 the Company issued 10,442,427 new ordinary shares of
no par value to Ecora Resources plc at a price of 11.3652p to raise gross cash
proceeds of US$1.5 million.
· On 6 September 2024 the Company issued 2,120,967 new ordinary
shares of no par value to Directors and management pursuant to the Company's
Short Term and Long Term Incentive Plans as follows:
· Short term incentive plan: 1,697,852 shares were issued to George
Bennett, CEO, and 897,883 shares were issued to Pete Gardner, CFO, at a fair
value of 10 pence per share, representing bonuses awarded in the year ended 30
June 2024.
· Long term incentive plan: 333,332 shares were issued to
Non-Executive Directors as a replacement of options that had been due to vest
on 19 May 2024 which had been cancelled to comply with s.409A of the United
States Internal Revenue Code.
11. Related party transactions
*Restated
US$'000 Six months to 31 Dec 2025 Six months to 31 Dec 2024
Charged in period Settled in period Closing Balance Charged in period Settled in period Closing Balance
MPD Consulting Limited(1) - - - 6 (4) 2
Hague House Management Limited(2) 12 (12) - 11 (11) -
Kinsella Consulting Limited(3) - - - 4 (4) -
12 (12) - 21 (19) 2
The above table does not include remuneration of Directors and senior
management.
1. MPD Consulting Limited, in which Pete Gardner, the Company's CFO,
has a beneficial interest, recharged certain costs in the prior period
relating to UK support incurred on behalf of the Group.
2. George Bennett, the Company's CEO, has been reimbursed via expenses
for costs incurred from Hague House Management Limited, a company in which he
has a beneficial interest, related to accommodation incurred on business
travel to the UK. Hague House Management Limited owns a number of properties
across London which are available for short term business rental via a number
of commercially available booking platforms including Airbnb. These costs were
not previously disclosed in the interim financial statements. The Board has
reviewed the underlying transactions and is satisfied that they have been
concluded on a third-party arms-length basis at or below market rates for such
accommodation. All payments have been made in line with the Board approved
expense policy.
3. Kinsella Consulting Limited, in which Adonis Pouroulis, the
non-executive Chairman of the Board of Directors, has a beneficial interest,
recharged travel cost incurred on behalf of the Group in the prior period.
12. Post balance sheet events
On 31 March 2026, the Company announced the successful completion of a
subscription raising £11.1 million (approximately US$14.6 million) via the
issue of 55.4 million new Ordinary Shares of no par value at an issue price of
£0.20 per share. The new Ordinary Shares are expected to be admitted to
trading on 9 April 2026.
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