REG - Rainbow Rare Earths - Rainbow’s 70% share in Phalaborwa confirmed

Rainbow Rare EarthsAnnouncement

19/01/2022 07:05

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220119:nRSS8641Ya&default-theme=true

RNS Number : 8641Y  Rainbow Rare Earths Limited  19 January 2022

 

 

19 January 2022

 

Rainbow Rare Earths Limited

("Rainbow" or "the Company")

LSE: RBW

 

Rainbow's 70% share in Phalaborwa confirmed

 

Rainbow Rare Earths, the rare earths company with assets in South Africa and
Burundi, today announces an amendment to the Agreement for Co-Development (the
"Agreement") of the 38.3Mt Phalaborwa Rare Earths Project (the "Project" or
"Joint Venture") with Bosveld Phosphates (Pty) Ltd ("Bosveld").

 

When the Joint Venture was announced in November 2020, a mechanism was
included in the Agreement to allow for Rainbow's Joint Venture ownership to
vary from 60% to 85%, dependent on results of the Pre-Feasibility Study. The
amended agreement, signed on 18 January 2022, confirms Rainbow's shareholding
in the Joint Venture at 70%, with the remaining 30% held by Bosveld. This
amendment removes any downside uncertainty concerning the potential to dilute
the Company's share within the Joint Venture, as well as assuring Rainbow's
material share in future revenue.

 

Technical work carried out to date has confirmed an Inferred Mineral Resource
Estimate at Phalaborwa of 38.3 million tonnes at 0.43% total rare earth oxides
("TREOs") contained within gypsum tailings stacked in unconsolidated dumps,
derived from historic phosphate hard rock mining. High-value Neodymium ("Nd")
and Praseodymium ("Pr") (together "NdPr") oxide represent 29.1% of the total
contained rare earth oxides, with economic Dysprosium and Terbium oxide
credits enhancing the overall value of the rare earth basket contained in the
stacks 1  (#_ftn1) .

 

Metallurgical test work has confirmed that the phosphogypsum at Phalaborwa is
amenable to direct leaching with acid to extract the contained rare earths.
Utilising the technology exclusively licenced to the Company for Southern
Africa from K-Technologies Inc. 2  (#_ftn2) Rainbow plans to deliver separated
rare earth oxides at the Phalaborwa site, allowing the full value of the
contained rare earth oxides to be realised for the benefit of shareholders.

 

Rainbow Rare Earths CEO, George Bennett, commented:

"This amendment serves to underscore our belief in the significant potential
of the Phalaborwa rare earths Project and removes any uncertainty surrounding
the benefit derived by Rainbow by fixing our majority shareholding at 70%. We
are therefore delighted to have been able to cement the terms of our Joint
Venture with Bosveld and together remain enormously encouraged by test-work
carried out  to date, which further underpin our confidence in achieving
positive results from the Project.

Test work has indicated that the project has the capacity to be developed as a
low capital, low operating cost asset with high yields, reaching producing
stage on an accelerated timeline. This is due to the unique nature of the
Project, with the rare earths contained in a 'cracked' chemical form in the
phosphogypsum, requiring no significant costs associated with mining, crushing
and grinding, or chemical cracking of the underlying rare earth minerals,
which tend to form the majority of the cost base for traditional hard rock
rare earth mining projects. The amendment reflects our confidence in the
Project and is the next step in Rainbow's overarching strategy to become a
globally significant producer of NdPr and Rare Earth Elements."

Market Abuse Regulation

This announcement contains inside information as defined in the Market Abuse
Regulation (EU) No. 596/2014, as amended, as it forms part of UK law by virtue
of the European Union (Withdrawal) Act 2018.

 

**ENDS**

 

For further information, please contact:

 

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

                                                           Pete Gardner
 SP Angel Corporate Finance LLP                   Broker   Ewan Leggat        +44 (0) 20 3470 0470

                                                           Charlie Bouverat
 Flagstaff Strategic and Investor Communications           Tim Thompson       +44 (0) 207 129 1474

                                                           Fergus Mellon      rainbowrareearths@flagstaffcomms.com
                                                                              (mailto:rainbowrareearths@flagstaffcomms.com)

 

Notes to Editors:

Rainbow Rare Earth's strategy is to become a globally significant producer of
rare earth metals. Nd/Pr are vital components of the strongest permanent
magnets used for the motors and turbines driving the green technology
revolution. Analysts are predicting demand for magnet rare earth oxides will
grow substantially over the coming years, driven by accelerating the adoption
of green technology, pushing the overall market for Nd/Pr into deficit.

 

The Phalaborwa Rare Earths Project, located in South Africa, comprises an
Inferred Mineral Resource Estimate of 38.3Mt at 0.43% total rare earths oxides
("TREO") contained within gypsum tailings stacked in unconsolidated dumps
derived from historic phosphate hard rock mining.  High value Nd/Pr oxide
represent 29.1% of the total contained rare earth oxides, with economic
Dysprosium and Terbium oxide credits enhancing the overall value of the rare
earth basket contained in the stacks.  The rare earths are contained in
chemical form in the gypsum dumps, which is expected to deliver a higher-value
rare earth carbonate, with lower operating costs than a typical rare earth
mineral project.

 

The Company's Gakara Project in Burundi has produced one of the highest-grade
concentrates in the world (typically 54% TREO) through trial mining
operations. The Gakara basket is weighted heavily towards Nd/Pr, which account
for over approximately 19.5% of the contained TREO and 85% of the value of the
concentrate.

 1  (#_ftnref1) Further information concerning the Inferred Mineral Resource
Estimate is contained in the Company's announcement of 17 June 2021.

 2  (#_ftnref2) Further information concerning the Exclusive licence for the
SADC region granted to the Company by K-Technologies Inc. of Florida, USA, is
contained in the Company's announcement of 20 September 2021.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  AGRBKFBBABKDCDD