REG - Rainbow Rare Earths - Resource Update

Rainbow Rare EarthsAnnouncement

26/02/2024 07:00

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RNS Number : 3533E  Rainbow Rare Earths Limited  26 February 2024

 

 

26 February 2024

Rainbow Rare Earths Limited

("Rainbow" or "the Company")

LSE: RBW

 

Updated Bulk Density Calculations increase Phalaborwa Resource tonnage by ca.
16%

·    Bulk density estimate for the Phalaborwa Resource has been confirmed
by a drilling campaign to increase with depth

·    This has resulted in a significant increase of ca. 16% in the
Resource tonnes from 30.4 Mt to 35.1 Mt, extending the operating life by over
two years

 

News Release

Rainbow Rare Earths is pleased to announce that updated bulk density estimates
for the Phalaborwa Resource has confirmed a ca. 16% increase in overall
expected tonnages. This should lead to an increase in the project life from
the current 14 years in the Preliminary Economic Assessment by over two years.

As previously announced, Rainbow's technical team has been focused on
evaluation of the density at depth of the two phosphogypsum stacks that make
up the Resource at the Phalaborwa rare earth development project in South
Africa.

To this end, the Company has been advised by US-based global gypsum experts
Ardaman and Associates, Inc., a Tetra Tech Company ("Ardaman"), who have been
tasked with the design of the new gypsum stack for the ongoing Definitive
Feasibility Study at Phalaborwa. Ardaman gave Rainbow a revised drilling
technique for the current gypsum stacks based on their experience of over 100
gypsum stacks worldwide, and it was expected that the in-situ dry density for
the stacks would increase at depth compared to the conservative bulk density
estimate of 1.2 t/m(3) used in the Phalaborwa Mineral Resource Estimate.

A drilling campaign was carried out at Phalaborwa in H2 FY 2023 to provide
representative samples from the stacks and samples from this campaign were
submitted to Ardaman for comprehensive bulk density testing at their
laboratory in Orlando, USA. Ardaman has provided the results of these tests,
which reveal a clear corelation of higher bulk density with increasing depth
as shown in the graphics at the end of this announcement.

The increased bulk density reported by Ardaman has resulted in a significant
increase of ca. 16% in the Resource tonnes from 30.4 Mt to 35.1 Mt, extending
the operating life by over two years.

Samples from the drill campaign will now be assayed for grade by SGS in South
Africa in order to allow for an updated JORC compliant Mineral Resource
Estimate. This work is also expected to upgrade the Inferred Resources to the
Measured and Indicated categories.

George Bennett, CEO of Rainbow, commented: "The improvement in the Resource
tonnage at Phalaborwa is extremely positive. While we await the assay results
and the JORC compliant Resource classification upgrade, it is clear that the
growth in tonnages will lead to an increase in the life of the project by over
two years in due course."

Bulk Density Calculations for Phalaborwa Stack A and Stack B

 

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)
 Berenberg                 Broker   Matthew Armitt         +44 (0) 20 3207 7800

                                    Jennifer Lee

 Stifel                    Broker   Ashton Clanfield       +44 20 7710 7600

                                    Varun Talwar

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

                                    Tara Vivian-Neal       rainbowrareearths@tavistock.co.uk (mailto:rainbowrareearths@tavistock.co.uk)

 

 

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 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 intends to
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 and environmental benefits.

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 is available at www.rainbowrareearths.com
(http://www.rainbowrareearths.com/) .

 

 1  Net present value using a 10% forward discount rate

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