REG - Rainbow Rare Earths - Production of Mixed Rare Earth Sulphate

Rainbow Rare EarthsAnnouncement

05/09/2023 07:00

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RNS Number : 3397L  Rainbow Rare Earths Limited  05 September 2023

5 September 2023

Rainbow Rare Earths Limited

("Rainbow" or "the Company")

LSE: RBW

 

Rainbow's Process Flow Sheet successfully produces mixed rare earth sulphate

at the Phalaborwa front-end pilot plant in South Africa

 

·    First production of mixed rare earth sulphate achieved at Phalaborwa
front-end pilot plant

·    Validates Rainbow's successful development of a process flow sheet to
recover rare earths from phosphogypsum

·    Mixed rare earth sulphate is of expected purity and grade and
includes all four of the critical 'magnet' rare earths, including Neodymium
and Praseodymium (together "NdPr") and the heavies Dysprosium ("Dy") and
Terbium ("Tb"); it is a commercial product that could be a standalone revenue
stream for Rainbow

·    Front-end pilot plant reagent consumption and overall recoveries of
ca. 65% are in line with the expectations of the Preliminary Economic
Assessment

·    Mixed rare earth sulphate will be used as feed for the back-end pilot
plant built at K-Tech facilities in Florida for final processing into
separated rare earth oxides

·    Front-end pilot plant will run for an additional quarter to further
optimise recoveries and cost-base

NEWS RELEASE

Rainbow Rare Earths is pleased to announce that the front end of the
Phalaborwa pilot plant in South Africa has successfully produced its first
batch of mixed rare earth sulphate, totalling ca. 3 kg.

This major milestone has been achieved on time and within the expectations of
the Preliminary Economic Assessment ("PEA") in terms of reagent
consumption/costs and recoveries.

The front-end pilot plant has produced a 58% mixed rare earth sulphate product
with a ca. 65% overall recovery in line with the PEA.  The final sulphate
includes all four of the most economically important rare earth elements
(NdPr, Dy and Tb) in economic quantities in line with the Phalaborwa mineral
resource. These are known as the "magnet rare earths" as they are used to make
the permanent magnets essential to decarbonisation via their use in electric
vehicles and wind turbines.

Photos of the mixed rare earth sulphate can be viewed at
https://www.rainbowrareearths.com/projects/gallery/
(https://www.rainbowrareearths.com/projects/gallery/)

The mixed rare earth sulphate produced by the Phalaborwa pilot plant is a
commercial product that could be a standalone revenue stream for Rainbow, with
an estimated ca. 60% payability of the global price for the contained
separated rare earth oxides.

 

The Phalaborwa front-end pilot plant is situated at the Johannesburg
facilities of the Council for Mineral Technology ("Mintek"), a global leader
in mineral processing, extractive metallurgy, and related fields, and is
running for ca. four months treating ca. 35t of phosphogypsum feed from the
Phalaborwa project stacks to produce ca. 350kg of mixed rare earth sulphate.
 During this period, further optimisation of recoveries and reagent
consumptions/costs are expected to be achieved.

The first batch of mixed rare earth sulphate will be shipped to the back-end
pilot plant, situated at K-Technologies, Inc. ("K-Tech") in Lakeland, Florida,
USA, for separation into rare earth oxides, with the first batch of separated
rare earth oxides expected early in Q4 2023.

As previously announced, Rainbow is currently exploring the option of
establishing its back-end rare earth oxide separation process in the USA and
has identified a potential site for a commercial scale plant. This would
establish the Company as one of the only producers of the four permanent
magnet separated rare earth oxides in the USA.

Rainbow, through its proprietary flow sheet, expects to be able to produce
separated rare earth oxide products at >99.5% purity that can be sold
directly to metal and alloy manufacturing capacity (which in turn feed
permanent magnet manufacturing plants) currently being developed in the USA
and aligned countries, highlighting Rainbow's unique position within the
magnet rare earth supply chain.

 

George Bennett, CEO, commented: "The production of mixed rare earth sulphate
from the front-end pilot plant is a major milestone for the Phalaborwa project
and validates Rainbow's strategy to recover rare earth elements from
phosphogypsum stacks. This achievement not only de-risks Phalaborwa, it also
opens up exciting opportunities for the Company to apply the proprietary
technology to other similar phosphogypsum resources globally, including at the
Mosaic Uberaba stack in Brazil.

We look forward to our final de-risking step, producing separated rare earth
oxides in early Q4 2023 at the back-end pilot plant situated at K-Tech's
facilities in the USA. This will enable Rainbow to capture the full uplift in
value by taking our product all the way through to separated rare earth
oxides, with the overall positive impact on the Company's future revenue
streams and profitability.

Given the importance of Phalaborwa, we are delighted to have recently
increased our stake in the project to 85% and have a clear path to owning 100%
in the near-term, as we believe this will be highly value accretive to
shareholders over time.

The USA and aligned countries are looking to establish an independent and
ethical supply chain of the rare earth elements that are essential to
decarbonisation, defence and other strategic products vital to the 21(st)
century global economy, and we are expecting Rainbow to be able to play a
significant role in meeting that objective."

 

For further information, please contact:

 

 Rainbow Rare Earths Ltd   Company  George Bennett     +27 82 652 8526

                                    Pete Gardner
                                    Cathy Malins (IR)  +44 7876 796 629

                                                       cathym@rainbowrareearths.com (mailto:cathym@rainbowrareearths.com)
 Berenberg                 Broker   Matthew Armitt     +44 (0) 20 3207 7800

                                    Jennifer Lee
 Tavistock Communications  PR/IR    Charles Vivian     +44 (0) 20 7920 3150

                                    Tara Vivian-Neal   rainbowrareearths@tavistock.co.uk

 

Notes to Editors:

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 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 rare earth elements
neodymium and praseodymium, dysprosium and terbium.

The Company is focused on the development of the Phalaborwa Rare Earths
Project in South Africa and the earlier stage Uberaba Project in Brazil. Both
projects entail the recovery of rare earths from phosphogypsum stacks that
occur as the by-product of phosphoric acid production, with the original
source rock for both deposits being a hardrock carbonatite. Rainbow will use a
proprietary separation technique developed by and in conjunction with its
partner K-Technologies, Inc., which simplifies the process of producing
separated rare earth oxides (versus traditional solvent extraction), leading
to cost benefits, as well as being more environmentally friendly.

The Phalaborwa Preliminary Economic Assessment has confirmed strong base line
economics for the project, which has a base case NPV(10) of US$627 million 1 ,
an average EBITDA operating margin of 75% and a payback period of < two
years. Pilot plant operations commenced in 2023, with the project expected to
reach commercial production in 2026, just five years after work began on the
project by Rainbow.

More information on the company is available at www.rainbowrareearths.com
(http://www.rainbowrareearths.com/) .

 

 1  Net present value using a 10% forward discount rate

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