Member Info for TigerByTheTail

Hi Ironic!
Preceisely, Rainbow are digging up tiny amounts of almost pure bastnasite and monozite by hand, driving it 25km down a muddy track, grinding it up, and using simple gravity separation to brush off some dust / extraneous particles. They are then bagging their concentrate up in 1 tonne bags and sending it off to Mombassa in Kenya (a six day drive) in 25t containers, from where it is shipped off to China, where it is processed.
Rainbow have to sell their concentrate at an enormous discount to TREO prices (70%+) as it is not processed.
Read RBWs RNSs to see how they have missed their production targets time and time again. They are a country mile away from achieving even operational breakeven. Truly, it's a hopeless cause.
As I said, I've got no complaints about RBW's management. RBW isn't some AIM scam where the directors got rich at shareholders' expense. No, the directors were paid modestly, and they invested heavily, and they lost a lot of money along with everybody else. Fair enough.
But I also find it beyond crazy, deep into the realms of clinical insanity, that RBWs mcap is 1.5 times that of MKA right now. Especially considering that MKA have so much cash in hand.

Trust me, I know.
RBW's tonnage stats are somewhat misleading, unless read with considerable background knowledge.
Most of the apparent tonnage comes from Kiyenzi. This is breccia type material, probably from a carbonatite pipe source, and it grades at roughly the same as Songwe Hill. This can not be mined using Rainbow's current methods, but requires different plant and methods (and lots of capex).
(FYI, Kiyenzi is where we thought for a while we had hit the geological jackpot, with a large lopolith of high grade bastnasite / monozite, but the ground gravity and other circumstantial evidence we were excited about turned out to be something much less valuable.)
The other sites at Gakara are narrow vein material. It's almost impossible to JORC this material without drilling a huge number of holes. But actual experience of mining these veins has shown that they twist and turn and run out in unexpected ways, and that they are simply not commercially viable. In Martin Eales' own words, it's teaspoon mining. And it just produces far too small quantities to pay its way.
And, no, it's not strong to say Rainbow has no future as it is. The directors (40% shareholders) themselves said it when they turned to Lind, and were willing to accept massive dilution for pitifully small amounts of new cash.

Hi Moneyhawk, 34degSth and all!
No, I haven't managed to put together a financial model for the fine chrome operation that I'm happy with yet.
(34degSth, many thanks for your help in your posts today!)
But this I'm already confident to say: if the fine chrome process works as trailed, then it is revolutionary for the chrome processing and chrome mining industries. The market hasn't understood this yet, but it will in time.
(Oh, and if anybody is holding shares in any chromite miners, my advice would be to sell now. Twice the chrome concentrate from the same amount of ore = too much production, and a fight to the death to acquire access to Jubilee's IP).

Hi Moneyhawk!
I'll call Shard next week and ask if they could make a market in the warrants. As I said, I'd be a buyer at the right price. It could make an interesting leveraged play on the upside.
(I.e. I'd happily pay 1p now to buy one 6.12p warrant, in the belief that Jubilee's shares will increase in value to over 10p over the next 18 months, thus making me a nice profit.)
Hi Ipad!
Yes, you can buy and sell warrants, if somebody is prepared to make a market in them.

Hi Ironic!
No, Rainbow do not have radiation issues. That's why they can transport their concentrate in ordinary containers under normal shipping rules.
I believe the same is true of Mkango.
It is most emphatically NOT true of many rare earth deposits - even otherwise good ones like Steelenkamp in South Africa. The presence of elements like thorium, radium, and uranium vastly increases these projects' costs, essentially making them not commercially viable.
BUT, that said, I do firmly believe that Rainbow has no commercial future - at least in the near and medium term - and its shares (shorn of all the hype) are nearly worthless.
I have two reasons for this belief:
1. Burundi is one of most violent and unstable countries in the world - inter-ethnic conflict and even genocide are only ever a moment away. That makes investing there very very risky. (Malawi is incomparably safer and more law-abiding).
2. The narrow veins that Rainbow are mining are very narrow indeed - about a finger's width in many cases. This means that they require an enormous amount of stripping by hand to extract, resulting in Rainbow constantly missing their own production targets. They are also very inconsistent. Rainbow have completely failed to hit their own production targets over the last 18 months, and their mining operation is heavily loss making. It would be at almost any rare earth price. IMO, it has no future, and Rainbow's directors (who then owned 40% of the shares) admitted as much when they turned to Lind for death spiral finance at the end of last year.
I am a former long term investor in Rainbow. I have no gripe against Rainbow's management, who have behaved honourably throughout. We all knew we were taking a big risk, and for a moment it seemed like we had indeed hit the geological jackpot (hence the spike in the shares to 24p a year ago). But we were wrong, and the true value of the company now is negligible. (It must have some value as an exploration play, those narrow veins have a source yet to be discovered. But it has none as a mining operation).
IMO, it's completely insane that RBW currently has a market cap of about 15m pounds, and MKA has one of 10m pounds. Firstly, MKA shares are backed by about 7.7p of cash each. Secondly, Mkango's deposit can be bulk mined and should be commercially viable; and Rainbow's simply isn't.
To be honest, if I were RBW CEO Martin Eales, I'd be very tempted to do an equity placing now the share price is high, and to then use the money to go exploring for the carbonatite piipe source of the narrow veins. Finding that might offer the company the long term future that otherwise it doesn't have.

It's this expertise with complex chemical plants that gave Wesfarmers enough confidence to build for Lynas, which operates a rather troubled rare earth processing plant in Malaysia.
There are a couple of things always worth bearing in mind with rare earths:
1. Rare earths are often found in conjunction with the radioactive elements thorium, radium and uranium. Occasionally, mining promoters will try and sell this as a good thing ("They're a by-product credit!"). It really isn't; radioactivity hugely complicates processing and increases capex. Mkango, like Rainbow, are lucky not to have this problem.
2. Rare earths separation and processing (not mining) is complex and highly polluting. That's why the last rare earth processing plant in the US was closed down and they left the entire market to China - thus creating today's geo-political issue.

Hi Moneyhawk!
On the off chance, you don't know if there is a broker who makes a market in JLP warrants, do you?
I'd take the chance and buy some of the 6.12p warrants if I could (at the right price). It could be an interesting and lucrative leveraged bet on the future share price movement here.

Hi McSpaff!
I haven't a clue if the Twitter rumours about Mkango are true or not.
But Wesfarmers are not just "someone". They are a massive Australian mining conglomerate with revenues of 68bn AUD. And they did make an opportunistic lowball bid for fellow Ozzie rare earth miner and processor Lynas a couple of months ago (which was knocked back).
Buying Mkango would be small change for them.

I added first thing this morning at 9.4p.
Given that the company is holding about 7.7p per share in cash (yes, really!), I suppose you could say I paid 1.7p per share for its part of the Songwe Hill rare earths project.
I'm not quite sure how it will play out with the 6.6p warrants, but they expire in only one week's time (June 15th) and there really aren't all that many of them, so if they hold the share price down, it won't be for long.

I agree with you on that, Supercharger. The smoke will only clear when the deadline for any Barrick improved offer (June 18th, I think) has passed.
I'm not sure how serious Crispin Odey is about buying Acacia's pre-emption right over any future Barrick investments in Africa. But now we know it exists, and perhaps that was the point of yesterday's FT article. It strengthens the position of Acacia's minority shareholders.
Barrick (especially Mark Bristow) really do need to be more aware of the possible legal consequences of their words and actions. They seem quite reckless to me.

By the way, if anybody wants to know why they should be buying MKA rather than RBW, maybe this helps...
I don't claim to be an expert on MKA, but I do know RBW very well. As a producing company, the very pure bastnasite and monazite narrow veins RBW are mining are a genuine geological curiosity, but they are not a commercial deposit - at any REO price. The last year's failure to produce any more than a negligible amount consistently has proved that, and the board (who owned 40% of the stock then) more or less gave up on the company when they invited in death spiral financiers Lind.
RBW might be interesting as a exploration play. There can be little doubt that the narrow veins have a carbonatite pipe source (just like MKA's deposit). RBW haven't yet tracked down this source fully, let alone drilled it out, so we are talking very early stage for that.
On top of that, you must consider the risks of investing in Burundi, one of the world's most unstable and violent countries.
MKA are in fact much closer to meaningful amounts of rare earth production than RBW. And Malawi is a whole lot safer, too!

Many thanks for the help, CristalBall.
I'm really not quite sure why the share price has just flash crashed on that RNS.
Anyway, I managed to get a few more at a cheaper price than I paid this morning, so all good!

A question for the long term holders here...
How important are Metalysis to Mkango? What do you think their failing into administration means for Mkango?

Where is that Section 20 approval for bulk sampling / trial mining at Thorny River? I'm assuming that it would be RNSed if it were issued. It's taking an age.
It would be nice to see some developments concerning Maibwe as well!

Now 26% up...
Surely Mkango are going to have to issue an RNS in response to the Reuters story? If they confirm, or even non-deny, that will push the SP up even further.
IMO, this could do 100% today - especially when U.S. and Canadian markets open.

Thanks for posting that link, CristalBall.
Yes, that's absolutely massive news for Mkango. I'm in.
I know things are complicated by the warrants (due to expire June 15th), but Mkango should fly over the next month.

By the way, does anybody know a website where I can find a simple tracker on standardized chromite prices over time? All the information on the web I can find is about one-off pricing deals.

Hi Moneyhawk!
Yes, Jubilee should now have a strong position in negotiations with Hernic's new owners.
Frankly, it is going to be an alarming time to be a chromite miner over the next couple of years. Almost double the output from the same amount of ore equals some weaker mines going to the wall. If you want to stay in the chrome business, you're going to need to either talk to Jubilee, or invest heavily in developing a similar process as quickly as you can. And that's not an easy task.

Jubilee issued a very positive intraday RNS today.
As regards Kabwe / Sable, they are progressing the final approval and ordering the long lead items. They hope to be in production in Q4 2019.

Hi Moneyhawk!
Star Zinc is 25km from Sable, so I think you could say that is "in the region". Kashitu, of course, is just over the fence.
But note the plural suppliers. The implication is that JLP are not talking to only GLR, but to at least one other potential supplier as well. I've got no idea who that could be, though.
Also, I'd note that the last time we got one of these "clear the decks" intraday general updates, it was the prelude to the announcement of the Sable deal the next day. Leon trailed a possible copper / cobalt deal in Zambia very heavily in the last interview. Could it be completed already?!?