Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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“The Company is pleased to announce that, having completed technical DD, it is now in advanced discussions with the shortlisted two potential equity partners with a view to agreeing terms of investment. For the avoidance of doubt, any equity investment forthcoming will be at the Project level and not at the Company level. Post investment, the Company will retain a minority stake in the Project and will be involved in the construction and on-going operations of the facility post construction. It is the Company's intention to negotiate a management contract for the construction of the facility potentially providing an income stream in late 2019. The Company undertook discussions with potential debt providers during Q3/Q4 2018. The Company is pleased to announce that it has now received indicative terms from two banks. Additionally, the potential equity partners have also discussed providing a portion or all of the debt requirements of the Project. Subject to terms that are satisfactory, bringing the combined equity and debt requirements under one roof would reduce the time taken to reach Final Investment Decision (FID). The Company believes that is now in a strong position to negotiate the most optimum financing structure between the potential equity partners and debt providers. Offtake discussions During 2018, The Company had interest from six parties seeking storage capacity of the Project. Since then, the Company has had numerous discussions with all six and has now narrowed the field down to three potential offtake partners. The decision to focus on three offtake partners is predicated upon the synergies that the Company believes it has between itself and the potential offtake partners. These synergies include, inter alia, the length of the offtake agreement and the capacity charge that each potential offtake partner would be willing to pay during the life of the offtake agreement. The Company's decision to focus on the three potential offtake partners has also been driven by counterparty requirements of the potential equity partners. The Company is pleased to report that it is now in an advanced stage of contract negotiations with all three potential offtake partners, with a view to agreeing definitive terms in conjunction with agreeing terms of investment with potential equity partners soon.”
So basically, we are stuck in a Mexican standoff that is " driven by counterparty requirements".
Once agreement can be reached that suits all parties then it all should fall into place.
Meanwhile.... we wait.