LONDON (Alliance News) - Rainbow Rare Earths Ltd said Tuesday that in the three months to March 31 its Gakara project in Burundi produced 279 tonnes of rare earth conentrate in its first full quarter of production.
The mine produced 75 tonnes of rare concentrate in December 2017 after it commenced production but now that it is up and running Rainbow expects "production levels to increase steadily over the rest of the year". Rainbow are targeting about 400 tonnes per months.
the average grade of concentrate produced was 62% total rare earth oxide. Rainbow said that the grades were consistent during the quarter falling between 61% and 64%. Rainbow claim its Gakara project is " one of the highest grade rare earth element mining projects globally".
The mine had high production costs - USD2,068 per month - but they were "expected" and Rainbow is predicting the costs will reduce "significantly" as production rates increase and fixed costs are spread over larger tonnages.
Including transport, shipment costs, a 3.5% marketing and handling fee to Thyssenkrupp Raw Materials and 4% government royalties, the sale cost per tonne of concentrate sold was USD646. The average realised sale price was USD2,357 per tonne, based on 125 tonees of concentrate sold.
CEO Martin Eales said: "Following completion of our first full quarter of production we are still on track to ramp up operations to our target of approximately 400 tonnes per month of rare earth concentrate by the end of the calendar year. Going forward this increased productivity will enable us to reduce our production costs per tonne significantly. Furthermore, I'm pleased with the consistent exceptionally high grades of the concentrate produced during these first months of mining at Gakara which is the only producing rare earths mine in Africa and one of the few outside of China.
"During this busy quarter we also embarked on our maiden drilling campaign to explore the anomalies identified towards the end on 2017. I look forward to providing initial drill results in the near future."
Shares in Rainbow were down 2.6% Tuesday to 18.90 pence each.
Rainbow Rare Earths (RBW)