REG - Rainbow Rare Earths - Preliminary Results for Year-end 30 June 2025
27/10/2025 07:00
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RNS Number : 8282E Rainbow Rare Earths Limited 27 October 2025
27 October 2025
Rainbow Rare Earths Limited
("Rainbow" or "the Company")
Preliminary Results for the Year ended 30 June 2025
Rainbow Rare Earths is pleased to announce its preliminary results for the
year ended 30 June 2025 ("FY 2025" or the "Year"). The financial information
in this release does not constitute the Financial Statements. The Group's
Annual Report, which includes the audit report and audited Financial
Statements for the year ended 30 June 2025, will be available on the Company's
website at www.rainbowrareearths.com (http://www.rainbowrareearths.com) .
Highlights
· Rare earth elements ("REE") are vital to both economic resilience and
national security. The imposition of export controls by China in April 2025,
followed by further tightening proposed in October 2025, has galvanised the
West to act to secure independent and responsible supply of these critical
minerals.
· Rainbow is at the forefront of addressing these challenges, with the
Phalaborwa project in South Africa recognised as a near-term and strategic
source of both the light and heavy rare earths that are indispensable to the
green energy transition, defence and many other daily and advanced
technologies.
· Strong project backing from the United States International
Development Finance Corporation ("DFC"), which is an indirect shareholder via
TechMet Limited ("TechMet") and has also committed US$50 million in project
equity funding, as well as backing by Ecora Resources PLC ("Ecora"), which
chose Phalaborwa as its first royalty in the REE space.
· Our world-class laboratory in Johannesburg, one of the most the most
sophisticated mineral analysis facilities on the continent, is perfecting the
process to extract REE from phosphogypsum. This technology offers unique
environmental and social benefits by transforming legacy waste into critical
inputs for society.
· As a chemical processing operation, with no mining, hauling or
stockpiling required, Phalaborwa is positioned right at the lowest end of the
global industry cost curve and is expected to be one of the highest margin
projects in development today.
· Excellent technical progress made with the production of a
high-purity, mixed rare earth product ("MREP"), which significantly exceeds
average industry standards. An evaluation is underway to define the optimal
route to separation, with the final products expected to be a separated NdPr
oxide and a SEG+ product combining the full suite of medium and heavy rare
earths.
· Rainbow will now run a pilot scale plant to validate the updated
primary flowsheet parameters, as well as incorporating and demonstrating the
expected capital and operating cost savings from ongoing trade-off studies.
· Phalaborwa's Definitive Feasibility Study ("DFS") is expected to be
finalised in 2026; upon its completion, finalisation of the permitting process
will run in parallel with the project finance process, which is expected to
enable construction to commence in 2027.
· The Uberaba project in Brazil represents an exciting opportunity to
replicate Phalaborwa at a potentially larger size and Rainbow is working with
partner the Mosaic Company ("Mosaic") to rapidly complete an Economic
Assessment ("EA") of this phosphogypsum project.
· Longer term, the Company expects that the technology to recover
critical REE from phosphogypsum will provide opportunities to develop a
scalable and sustainable business. To this end, we are currently evaluating
strategic partnerships in Saudi Arabia, Morocco and Canada, along with a
number of other prospects globally.
· Responsible production is at the heart of Rainbow's business model
and the Company continues to embed environmental, social and governance
("ESG") standards and practices within its corporate and project development.
Investor Meet Company Presentation - Wednesday 29 October 2025
Rainbow is pleased to announce that CEO George Bennett will provide a live
presentation via Investor Meet Company on 29 October 2025 at 10:00 GMT.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard 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.
Certain information contained in this announcement would have been deemed
inside information for the purposes of Article 7 of Market Abuse Regulation
(EU) No 596/2014 ("MAR") which has been incorporated into UK law by the
European Union (Withdrawal) Act 2018 until the release of this announcement.
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 (mailto:cathym@rainbowrareearths.com)
Tavistock Communications PR/IR Charles Vivian +44 (0) 20 7920 3150
Eliza Logan rainbowrareearths@tavistock.co.uk (mailto:rainbowrareearths@tavistock.co.uk)
Berenberg Broker Matthew Armitt +44 (0) 20 3207 7800
Jennifer Lee
Stifel Broker Ashton Clanfield +44 20 7710 7600
Varun Talwar
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 successfully via
pioneering the first commercial recovery of rare earth elements from
phosphogypsum that occurs as the by-product of phosphoric acid production.
These projects eliminate the cost and risk of typical rare earth projects,
which involve mining and the production of a rare earth concentrate that must
be chemically cracked to form a mixed rare earth carbonate before further
downstream processing. As such, Rainbow's projects can be brought into
production quicker and at a lower cost than traditional hard rock mining
projects.
The Company is focused on the development of the Phalaborwa Project in South
Africa and the earlier stage Uberaba Project in Brazil. Rainbow's process will
deliver separated rare earth oxides through a single hydrometallurgical plant
on site, with a focus on the recovery of neodymium, praseodymium, dysprosium
and terbium. These are critical components of the high-performance permanent
magnets used in electric vehicles, wind turbines, defence and exciting new
markets such as robotics and advanced air mobility.
The Phalaborwa updated interim economic study released in December 2024 has
confirmed strong base line economics for the project, which has a base case
NPV(10) of US$611 million. Given Phalaborwa is a chemical processing
operation, with its resource sitting at surface in a chemically cracked form,
it has a much lower operating cost than traditional rare earth mining
projects, and it is therefore estimated to be one of the highest margin rare
earth projects in development today outside of China.
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)
www.curationconnect.com (http://curationconnect.com)
Chairman's Statement
Dear Shareholder,
FY 2025 has been a pivotal year for Rainbow Rare Earths and the global REE
industry generally, with REE having firmly entered the global consciousness as
materials critical to both national security and economic resilience.
These elements are indispensable in the electronic and household products we
rely on daily, as well as in emerging technologies driving the future, from
electric vehicles to defence systems and robotics.
REE are known as 'industrial vitamins', as they enable a huge variety of
technological functions. While they may only be used in tiny quantities and
therefore only account for a fraction of a product's cost, they are often
responsible for 100% of its functionality.
However, the Year highlighted the vulnerabilities in the global REE supply
chain, particularly following China's imposition of export controls in April
2025 on certain medium and heavy rare earth elements and the rare earth
permanent magnets ("REPM") that contain them. These restrictions caused
immediate and significant disruptions, with some industries such as automotive
facing temporary factory shutdowns due to shortages of high-performance REPM.
Post Year end, China has proposed tighter controls on REPM and related
technologies.
China's dominance across all stages of the REE supply chain has been starkly
exposed as a major threat to global industries, galvanising the West to act
decisively to establish independent and diversified supply chains.
A landmark development occurred in July 2025, when the U.S. Government entered
into an unprecedented public-private partnership with MP Materials, a U.S.
producer of REE. This initiative to help build out a domestic REPM supply
chain incorporated a neodymium / praseodymium ("NdPr") offtake floor price of
US$110/kg, significantly higher than the spot price of ca. US$63/kg at the
time.
Since the announcement of this deal, NdPr prices have rallied to ca. US$80/kg,
fuelled by improved sentiment and rising demand for REPM. Additionally, a
clear price bifurcation has emerged stemming from China's export controls,
with ex-China heavy REE prices significantly higher than those in the Chinese
domestic market.
As long advocated by Rainbow, the need for an NdPr floor price above current
levels to incentivise new sources of supply outside of China appears to have
been accepted by Western Governments. The U.S., Australia, and the EU have
suggested a willingness to develop strategic stockpiles of key critical
minerals such as REE, further supporting this shift.
Rainbow Rare Earths is at the forefront of addressing these challenges, and I
am proud to report that our Phalaborwa project in South Africa has garnered
significant support, including backing from the DFC via our strategic
shareholder TechMet. This recognition underscores Phalaborwa's potential to
deliver a near-term, responsible supply of both the light and heavy magnet
REE.
Our innovative processing technology, developed in-house, is rewriting the
economics of REE production by eliminating the costs and risks associated with
traditional mining. While China has sought to further extend its control on
the market by banning the export of REE processing technology, Rainbow has
established market-leading expertise, positioning us as a pioneer in this
space.
Our world-class laboratory in Johannesburg, one of the most sophisticated
mineral analysis facilities on the continent, is perfecting the process to
extract REE from phosphogypsum and separate them into rare earth oxides
("REO") and we have made excellent progress in recent months; read more in the
CEO's Statement to follow.
The ability to recover critical REE from phosphogypsum stacks sitting at
surface not only delivers economic advantages over traditional REE mining
projects, but also offers unique environmental and social benefits by
transforming legacy waste into critical inputs for green and other advanced
technologies.
Phalaborwa's position in the lowest cost quartile establishes it as one of the
highest margin REE projects in development today and its status as a stand-out
project in the space is evidenced by the quality of our stakeholders,
including the support from TechMet and the DFC, as well as our royalty
agreement with Ecora.
Our goal is to advance the technology for extracting REE from phosphogypsum at
our Phalaborwa project, creating a worldwide opportunity for cost-effective
and sustainable REE production from comparable secondary sources, such as our
collaboration with Mosaic at Uberaba in Brazil.
In so doing, we expect to unlock a low-cost and responsible supply of REE
globally, allowing Rainbow to capitalise on the expected rise in REE demand
from the green energy, defence and technology industries, fostering a
resilient and enduring business model.
As we move forward, Rainbow Rare Earths remains committed to delivering value
for our stakeholders while contributing to a more secure and sustainable
global REE supply chain. I extend my gratitude to our team, partners, and
investors for their continued support as we navigate this transformative
period for the industry.
Adonis Pouroulis
Non-Executive Chairman
CEO's Statement
Dear Shareholder,
2025 has been a transformative year for Rainbow Rare Earths, with our
pioneering technical advancements positioning the Phalaborwa project as one of
the world's lowest-cost producers of REE. This achievement underscores
Phalaborwa's critical role in establishing a responsible and independent REE
supply chain, addressing the growing global demand for these essential
materials.
Our primary technical challenge was to economically recover magnet REE from
phosphogypsum, a feat we have successfully accomplished in record time. This
breakthrough fundamentally de-risks the project, as previous attempts over the
last ca. 40 years by others to extract REE from phosphogypsum did not prove
commercially viable.
The project's robust economics were outlined in the Interim Economic Study
published in December 2024 (the "Interim Study"). Ongoing trade-off studies
are expected to further optimise both capital and operating costs for the
primary leaching circuit, which represents ca. 85% of the expected total cost
base for the project, with results to be shared once finalised.
Our second major milestone was developing a high-purity, mixed rare earth
product suitable for cost-effective separation. Utilising continuous ion
exchange ("CIX"), a technology commonly applied in uranium and gold processing
but innovative for REE, our team has produced an exceptionally pure MREP,
equivalent to a mixed rare earth carbonate ("MREC") averaging over 55% total
rare earth oxides ("TREO") across multiple test campaigns. This exceeds the
industry's typical refinery specification of 42 to 44% TREO, positioning
Phalaborwa's MREP among the highest-grade products globally.
We have further enhanced this MREP by incorporating a cerium ("Ce") depletion
step into the Phalaborwa process which has lowered the Ce content by ca. 65%,
reducing the metal content for separation which is expected to deliver a
positive impact on capital and operating costs for the downstream flowsheet.
This groundbreaking work has been achieved in-house, which allowed the
impurity removal optimisation to be carried out rapidly and efficiently by our
dedicated technical team using our own newly commissioned laboratory
facilities in Johannesburg. There we have assembled world-class expertise and
equipment, including a cutting-edge ICP-MS (Inductively Coupled Plasma Mass
Spectrometer), which enables the immediate reporting of assays of sample
grades, ranging from low parts per billion to high purity. Rainbow is the
first company in Africa to own and operate such advanced equipment.
At the time of writing, the laboratory is being prepared to run a pilot scale
plant to validate the updated primary flowsheet parameters and MREP, as well
as incorporating and demonstrating the expected capital and operating cost
savings from the ongoing trade-off studies.
An evaluation has commenced to define the optimal route to separation of the
MREP, comparing the well-known solvent extraction technology ("SX") with the
continuous ion chromatography ("CIC") separation technology envisaged in the
Interim Study. This will deliver the final route for production of a 99.5%
purity mixed NdPr oxide, suitable for metal and alloy manufacturing to supply
further downstream magnet manufacturing, and a high value SEG+ product,
containing the medium and heavy REE including our high value dysprosium ("Dy")
and terbium ("Tb"). 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. Our decision will be informed by a
comprehensive economic assessment, considering financing availability, costs,
project timelines, and overall economics.
The proposed pilot plant work and important findings from the trade-off
studies will be incorporated into the DFS for Phalaborwa, which we expect to
be finalised in 2026, the timing of which will be dependent on the outcome of
the various trade-off studies and separation evaluation work underway. Whilst
this is later than originally planned, the delay is expected to enable the
results of the trade-off studies to benefit Rainbow by delivering a robust,
technically proven flowsheet, with lower capital and operating costs. This
optimisation work will therefore result in the most economically attractive
project, enhancing shareholder value over the long term. It will also ensure
that Phalaborwa retains its attractive position right at the lowest end of the
global industry cost curve. Upon completion of the DFS, finalisation of the
permitting process will run in parallel with the project finance process,
which is expected to enable construction to commence in 2027.
The work at Phalaborwa offers a scalable model that can be applied to our
Uberaba project in Brazil, where we have partnered with Mosaic to conduct an
EA at an unprecedented pace. Uberaba offers the potential for large-scale REE
recovery from phosphogypsum with a significantly longer project life, further
strengthening our portfolio.
Longer term, the Company expects that the technology to recover critical REE
from phosphogypsum will provide opportunities to develop a scalable and
sustainable business. To this end, we are currently evaluating strategic
partnerships in Saudi Arabia, Morocco and Canada, along with a number of other
prospects globally.
Interest in offtake agreements has increased significantly, driven by industry
recognition that the combined output from Phalaborwa and Uberaba could
position Rainbow as a significant global supplier of responsibly sourced light
and heavy REE. The proposed SEG+ product is particularly sought after,
addressing the critical bottleneck in heavy REE supply, a key vulnerability in
Western supply chains.
As we advance our projects, Rainbow remains committed to maintaining low
corporate overheads, ensuring financial resources are appropriately directed
toward project definition.
The Gakara project in Burundi has remained on care and maintenance throughout
the Year at the request of the Government of Burundi. As noted in last year's
Annual Report, the asset has been fully written down, except for cash and
recoverable VAT. Costs associated with Gakara have been minimised until a
resolution with the Government is found.
I extend my deepest appreciation to our stakeholders for their steadfast
support and to our exceptional technical team, whose dedication has propelled
Phalaborwa to its current stage. Their expertise in recovering REE from
phosphogypsum positions Rainbow to build a sustainable, long-term business as
demand for these critical materials accelerates.
George Bennett
Chief Executive Officer
Financial Review
Rainbow's strategic focus is to identify and develop secondary rare earth
deposits that can be brought into production quicker and at a lower cost than
traditional hard rock mining projects. As a developer, Rainbow capitalises the
costs of exploration and evaluation for each identifiable project once the
legal right to the project has been secured. The Board and management focus on
maintaining a tight control of costs, including corporate overheads, ensuring
that most of the funds raised will go directly towards building value across
our portfolio.
During FY 2025 the Group invested US$2.1 million to progress the Phalaborwa
project in South Africa. Costs associated with the laboratory facility set up
to develop the Group's IP for the recovery of REE from phosphogypsum totalled
US$0.8 million including US$0.5 million for tangible fixed asset additions and
US$0.3 million recognised as research costs. A further US$0.2 million of
business development costs were incurred relating to progressing the Uberaba
opportunity in Brazil and broadening the Group's international pipeline of
phosphogypsum opportunities. General and administrative costs, including costs
relating to the Gakara asset in Burundi, represented to a cash outflow of
US$2.9 million.
In FY 2025 the Group raised US$10 million of finance from Ecora, including
US$1.5 million via an equity placing and US$8.5 million proceeds from the sale
of a royalty over gross revenue from the future development of the Phalaborwa
project.
Profit and loss account
The Group reported a loss of US$3.3 million for FY 2025 (FY 2024: US$4.3
million). The reduced loss was driven by a fair value gain of US$1.2 million
arising from the first-time revaluation of the Ecora royalty liability,
offsetting the costs associated with that financing transaction, and the
non-recurrence of the US$0.7 million impairment costs for the Gakara project
in Burundi recognised in FY 2024. The gain arising on the revaluation of the
Ecora royalty liability was caused by a fall in forecast rare earth prices at
30 June 2025 compared to the forecasts available on 1 July 2024 when the
royalty agreement was entered into. In Q3 2025 rare earth prices rose
strongly, mirroring the early forecasts, suggesting that this gain will be
reversed in FY 2026.
Costs associated with the Group's rare earth laboratory in Johannesburg,
totalling US$0.3 million, were recognised in the income statement as research
costs as they are considered to be incurred developing the Group's knowledge
for the recovery of REE from phosphogypsum that will be applicable on a global
basis, and are not solely related to the Phalaborwa asset.
Within administration expenses, costs totalling US$0.2 million (FY 2024:
US$0.1 million) were incurred on the Group's business development
opportunities. Costs associated with maintaining the Gakara project on care
and maintenance totalled US$0.3 million (FY 2024: US$0.4 million). The Group
continues to focus on minimising costs associated with the asset whilst
considering all options to try to realise the value associated with the REE
mineral opportunity. The Group's other corporate costs totalled US$3.2 million
(FY 2024: US$3.0 million), dominated by staff costs of US$2.0 million (FY
2024: US$1.9 million).
Net finance income was US$819k (FY 2024: income of US$22k) driven primarily by
the US$1.2 million recognised gain on revaluation of the Ecora royalty
liability, offsetting the US$0.4 million costs associated with that financing.
Balance Sheet
The Group assets are dominated by the cumulative US$17.4 million relating to
the Phalaborwa asset which have been capitalised as an intangible asset in
accordance with IFRS 6, of which US$1.6 million was incurred in FY 2025. At
the balance sheet date, the Group has tangible fixed assets of US$0.5 million
relating primarily to the laboratory facilities in Johannesburg.
The Group's liabilities are dominated by the Ecora royalty liability, valued
at US$7.3 million at FY 2025. In addition, the Group has a US$0.2 million loan
with FinBank in Burundi, denominated in Burundi Francs, which is due to be
repaid on a reducing balance basis by April 2027. There are no other
significant borrowings or long-term cash settled liabilities. With the
exception of indirect taxes and contributions payable under the Gakara mining
convention, which are not being settled during the ongoing suspension of the
Gakara operations, the Group continues to pay all trading liabilities as they
fall due.
For FY 2025, the Group had a recognised environmental liability of US$0.1
million relating to the Gakara asset in Burundi. There are no obligations for
environmental closure at the Phalaborwa project site as the Group does not yet
have legal ownership of the project site.
Going Concern
At 30 June 2025, the Group had US$3.9 million of cash. The base case forecast
includes a total cash outflow for the 18 month period ending 31 December 2026
of US$8.8 million. Management's reasonably plausible downside scenario
includes a total cash outflow of US$11.5 million. The forecast confirms that
the Group will need to raise additional funds before 31 December 2026 under
all scenarios, the timing of which is dependent primarily on the speed at
which the Phalaborwa DFS is completed, which is within management's control.
In addition, further funds may be required to progress the Uberaba opportunity
in Brazil dependent on the outcome of the initial EA and negotiations for a
definitive agreement for the project with Mosaic.
The Board is confident that this funding will be secured, based on its history
of successful fundraising. However, it also acknowledges that this funding is
not, at the present time, in place. Accordingly, the Board acknowledges that
the need for additional funding represents a material uncertainty which may
cast significant doubt on the ability of the Group to continue as a going
concern and, therefore, that it may be unable to realise its assets and
discharge its liabilities in the normal course of business. The financial
statements do not include any adjustments that would result if the Group was
unable to continue as a going concern.
Pete Gardner
Chief Financial Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2025
Year ended Year ended
30 June 30 June
Notes 2025 2024
US$'000 US$'000
Administration expenses (3,827) (3,567)
Research costs (260) -
Impairment of Gakara assets - (717)
Loss from operating activities (4,087) (4,284)
Finance income 168 141
Finance costs (451) (119)
Change in fair value of royalty financing liability 1,216 -
Loss before tax (3,154) (4,262)
Income tax expense - -
Total loss after tax and comprehensive expense for the year (3,154) (4,262)
Total loss after tax and comprehensive expense for the year is attributable
to:
Non-controlling interest (18) (87)
Owners of parent (3,136) (4,175)
(3,154) (4,262)
The results of each year are derived from continuing operations
Loss per share (cents)
Basic 3 (0.49) (0.67)
Diluted 3 (0.49) (0.67)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2025
Year ended Year ended
Notes 30 June 30 June
2025 2024
US$'000 US$'000
Non-current assets
Exploration and evaluation assets 4 17,363 15,716
Property, plant and equipment 460 21
Right of use assets 251 84
Total non-current assets 18,074 15,821
Current assets
Inventory 1 1
Trade and other receivables 403 374
Cash and cash equivalents 3,933 79
Total current assets 4,337 454
Total assets 22,411 16,275
Current liabilities
Trade and other payables (1,203) (1,850)
Borrowings (340) (245)
Lease liabilities (89) (48)
Total current liabilities (1,632) (2,143)
Non-current liabilities
Borrowings (85) (192)
Royalty finance liability (7,284) -
Lease liabilities (173) (44)
Provisions (55) (55)
Total non-current liabilities (7,597) (291)
Total liabilities (9,229) (2,434)
NET ASSETS 13,182 13,841
Equity
Share capital 5 58,150 56,362
Share-based payment reserve 2,217 1,839
Retained loss (47,065) (42,351)
Equity attributable to the parent 13,302 15,850
Non-controlling interest (120) (2,009)
TOTAL EQUITY 13,182 13,841
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2025
Share capital Share- based Payments Accumulated losses Attributable Non-controlling interest Total
to the
parent
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 July 2023 50,937 1,719 (38,483) 14,173 (1,922) 12,251
Total comprehensive loss
Loss and total comprehensive loss for year - - (4,175) (4,175) (87) (4,262)
Transactions with owners
Shares issued during the year: cash consideration 5,501 - - 5,501 - 5,501
Share issue costs (76) - - (76) - (76)
Fair value of employee share incentives in year - 427 - 427 - 427
Share incentives cancelled in the year - (106) 106 - - -
Share incentives issued in the year, net of costs - (201) 201 - - -
Balance at 30 June 2024 56,362 1,839 (42,351) 15,850 (2,009) 13,841
Total comprehensive loss
Loss and total comprehensive loss for year - - (3,136) (3,136) (18) (3,154)
Transactions with owners
Shares issued during the year: cash consideration 1,500 - - 1,500 - 1,500
Shares issued during the year: non-cash consideration 341 - - 341 341
Share issue costs (53) - - (53) - (53)
Fair value of employee share incentives in year - 707 - 707 - 707
Share incentives cancelled in the year (293) 293 - - -
Share incentives issued in the year, net of costs - (36) 36 - - -
Impact of recapitalisation of subsidiary - - (1,907) (1,907) 1,907 -
Balance at 30 June 2025 58,150 2,217 (47,065) 13,302 (120) 13,182
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 June 2025
For year ended For year ended
30 June 30 June
2025 2024
US$'000 US$'000
Cash flow from operating activities
Loss from operating activities (4,087) (4,284)
Adjustments for non-cash transactions:
Depreciation 139 52
Impairment - 717
Share-based payment charge 707 427
Operating loss before working capital changes (3,241) (3,088)
Net increase in trade and other receivables (31) (45)
Net increase in trade and other payables 138 372
Cash used by operations (3,241) (2,761)
Realised foreign exchange gains 117 123
Net cash used in operating activities (3,134) (2,638)
Cash flow from investing activities
Purchase of property, plant & equipment (505) -
Exploration and evaluation costs (2,124 (10,637)
Net cash used in investing activities (2,629) (10,637)
Cash flow from financing activities
Proceeds from royalty financing 8,500 -
Costs of royalty financing (360) -
Repayment of borrowings (42) (77)
Interest payments on borrowings (20) (49)
Interest received 40 5
Payment of leases (70) (53)
Proceeds from the issuance of ordinary shares 1,500 5,501
Transaction costs of issuing new equity (53) (76)
Net cash generated by financing activities 9,495 5,251
Net increase in cash and cash equivalents 3,849 (8,024)
Cash & cash equivalents at the beginning of the year 79 8,107
Foreign exchange gain / (loss) on cash and cash equivalents 5 (4)
Cash & cash equivalents at the end of the year 3,933 79
NOTES
1. BASIS OF PREPARATION
The Financial Statements of the Company and its subsidiaries (the "Group") are
prepared in accordance with International Financial Reporting Standards
("IFRS") (IFRS and IFRIC Interpretations) issued by the International
Accounting Standards Board ('IASB'), as adopted by the European Union.
The consolidated financial statements have been prepared on a historical cost
basis, except for financial instruments measured at fair value through profit
or loss. Given the development status of the Group's assets, management do not
consider sustainability and climate change as key risks requiring significant
judgement for the Year. The Group has prepared sustainability disclosures on
pages 20 to 31 of its 2025 Annual Report in line with the requirements set out
in the UK Listing Rules to the extent relevant for a Group without producing
assets.
2. GOING CONCERN
As at 30 June 2025, the Group had total cash of US$3.9 million. The Board have
reviewed a range of potential cash flow forecasts for the period to 31
December 2026, including reasonable possible downside scenarios. The base case
forecast includes US$8.8 million expected costs for the Group over the
18-month period from 1 July 2025 to 31 December 2026 (the "Period") as
follows:
· Corporate costs of US$4.2 million based on the current
administrative costs of the Group, including US$0.3 million in respect of
pursuing new business opportunities.
· US$2.9 million for the workstreams to complete the Phalaborwa
DFS, inclusive of a 10% contingency. This includes all costs associated with
Rainbow's technical team, although some work undertaken by the team relates to
new business opportunities and is not capitalised against the Phalaborwa
project.
· US$0.8 million for the management of the Phalaborwa project site
from Q3 2026 and associated permitting and environmental management
workstreams.
· Research costs of US$0.8 million associated with Rainbow's
in-house laboratory in Johannesburg, including US$0.2 million of salary and
consultancy costs for the laboratory team.
· US$0.1 million for ongoing care and maintenance at the Gakara
project in Burundi. This excludes amounts payable under the FinBank loan
facility due to the suspension of the RMB bank account by the Burundi
Government.
The forecast is based on the Phalaborwa DFS being completed in Q1 2026
following one quarter of pilot testing to confirm the proposed processing flow
sheet, which reflects the likely timing for a phased development approach
commencing with the development of a leaching and recovery circuit for a
saleable mixed rare earth product prior to investment in separation capacity.
The forecast includes costs for a trade-off study to investigate the economic
impact of using proven solvent extraction technology to produce separated NdPr
oxide and a mixed SEG+ product at Phalaborwa rather than selling the mixed
rare earth product envisaged in the base case or using CIC technology to
produce separated rare earth products envisaged in early economic studies.
Should Rainbow elect to complete a DFS incorporating a CIC or SX separation
circuit, additional piloting test work will be required and the DFS will take
longer to complete.
Management's reasonably plausible downside scenario includes a total cash
outflow of US$11.5 million, which also includes:
· US$0.4 million representing a 10% contingency for corporate costs
excluding business development costs.
· A further US$0.4 million for business development costs.
· US$0.4 million representing a 10% contingency on all costs
associated with the Phalaborwa project and the Group's research activities.
· A further US$1.4 million of cost associated with enhanced pilot
test work and developing a DFS for Phalaborwa incorporating a SX circuit.
· A further US$0.1 million to service the FinBank loan in Burundi
on the assumption that this can be achieved despite the suspension of the RMB
bank account.
The Group has determined that no additional cash outflows will be incurred on
Gakara until the export ban and mining suspension has been lifted. Any
re-start of operations would be conditional on the Gakara project not
requiring additional financial support from Rainbow Rare Earths Limited at
then current rare earth prices.
As set out in the operations review of the 2025 Annual Report, the opportunity
relating to Mosaic's phosphogypsum stack in Uberaba, Brazil is considered to
present an opportunity to replicate Phalaborwa at a potentially larger scale.
The forecast includes, within administrative costs, Rainbow's US$125k share of
the funding to deliver an initial economic assessment for Uberaba. In the
event that the economic assessment is successful Rainbow intend to negotiate a
definitive agreement with Mosaic to enable the development of Uberaba to be
further advanced to PFS and DFS level studies. The signing of a definitive
agreement will trigger the payment of a finder's fee comprising four annual
payments of US$75k each. A budget for the PFS and DFS work can only be defined
once the initial economic assessment is complete. Management's reasonably
plausible downside scenario does not include a budget for the finder's fee,
PFS or BFS to be completed. Further funding may be required to allow the
Uberaba opportunity to be de-risked, the timing of which cannot be accurately
predicted at this time.
At 30 June 2025 the Group had US$3.9 million of cash. The base case forecast
includes a total cash outflow over the Period of US$8.8 million. Management's
reasonably plausible downside scenario includes a total cash outflow of
US$11.5 million. The forecast indicates that the Group will need to raise
additional funds before 31 December 2026 under all scenarios, with funding
expected to be required in Q1 2026, the timing of which is dependent primarily
on the speed at which the Phalaborwa DFS is completed, which is within
management's control. In addition, further funds may be required to progress
the Uberaba opportunity in Brazil dependent on the outcome of the initial
economic assessment and negotiations for a definitive agreement for the
project with Mosaic.
The Group is reliant on securing additional funding which is not guaranteed.
Accordingly, the Board acknowledges that the need for additional funding
indicates the existence of a material uncertainty which may cast significant
doubt on the ability of the Group to continue as a going concern and,
therefore, it may be unable to realise its assets and discharge its
liabilities in the normal course of business. The financial statements do not
include any adjustments that would result if the Group was unable to continue
as a going concern. The Board is confident that this funding will be secured,
based on its history of successful fundraising. On this basis, the Directors'
have concluded that the use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
3. LOSS PER SHARE
The earnings per share calculations for 30 June 2025 reflect the changes to
the number of ordinary shares during the Year.
At the start of the Year, 630,316,656 shares were in issue. During the Year, a
total of 13,371,494 new shares were allotted and on 30 June 2024, 643,688,150
were in issue. The weighted average of shares in issue in the Year was
643,034,257.
The loss per share has been calculated using the weighted average number of
ordinary shares in issue. The Group was loss making for all periods presented,
therefore the dilutive effect of share options has not been accounted for in
the calculation of diluted earnings per share, since this would decrease the
loss per share for each reporting period.
Basic and diluted
2025 2024
Loss for the year (US$'000) attributable to ordinary equity holders (3,136) (4,175)
Weighted average number of ordinary shares in issue during the Year 643,034,257 621,094,938
Loss per share (cents) (0.49) (0.67)
4. EXPLORATION AND EVALUATION ASSETS
Phalaborwa
US$'000
At 1 July 2023 4,830
10,886
Additions
At 30 June 2024 15,716
1,647
Additions
At 30 June 2025 17,363
Costs capitalised relate to the Phalaborwa Project in South Africa.
5. SHARE CAPITAL
Year Ended Year Ended
30 June 2025 30 June 2024
US$'000 US$'000
Share Capital 58,150 56,362
Issued Share Capital 58,150 56,362
The table below shows a reconciliation of share capital movements:
Number of shares US$'000
At 30 June 2023 598,858,656 50,937
October 2023 - Share placing (cash receipts) 25,786,541 4,699
December 2023 - Share placing (cash receipts) 4,213,459 802
December 2023 - Exercise of share options (nil value) 1,458,000 -
Costs associated with share issues - (76)
At 30 June 2024 630,316,656 56,362
July 2024 - Share placing (cash receipts) 10,442,427 1,500
September 2024 - share settled management bonus 2,929,067 341
Costs associated with share issues - (53)
At 30 June 2025 643,688,150 58,150
During the Year:
· On 1 July 2024, 10,442,427 shares were issued at a price of
11.3652 pence per share, raising US$1.5 million (before costs of US$32k).
· On 6 September 2024, the following shares were issued to settle
the management bonus for the year ended 30 June 2023:
o 1,697,852 shares were issued to George Bennet at a price of 10 pence per
share.
o 897,883 shares were issued to Pete Gardner at a price of 10 pence per
share.
Costs relating to this share issue were US$21k.
During the prior year:
· On 5 October 2023, 25,786,541 shares were issued at a price of 15
pence per share, raising US$4.7 million (before costs of US$57k).
· The issue of additional shares without pre-emption rights was
authorised by the shareholders at the annual general meeting in November 2024.
Subsequently, a further 5,671,459 shares were issued on 5 December 2023 of
which:
o 4,213,459 shares were issued for cash proceeds of US$802k at a price of
15p per share.
o 1,458,000 shares were issued for no value, representing the exercise of
nil value share options.
Costs relating to these issued shares, were US$19k.
6. POST BALANCE SHEET EVENTS
There were no post balance sheet events.
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