Member Info for TigerByTheTail

Sorry about that - my mistake. It slipped my mind. Incidentally, I'd count being on the main market and not on AIM as a positive!

My guess is that there is an institution slowly building a stake here. We had a regular buyer through most of January. I think they're back again. Also, in the last interview, Martin Eales mentioned Miton as an institutional investor in Rainbow, as well as Legal & General. That was news to me. Perhaps it's them? All told this is a strange little mining company - at least, by AIM standards. The BoD / management own about 40% of the stock, the CEO has repeatedly bought shares on the open market, and major institutions have taken stakes. Oh, and they are actually mining something, not just promising jam tomorrow!

Hi MinorMiner! As I was writing that post you just had the same idea!

Officially, we should get news of the results of the current drilling campaign in April, and also a production report on Q1. So it should be several weeks until the next significant news here. But the drilling is ongoing. I accept that the carbonatite pipe drill cores will need expert analysis and interpretation before their significance is clear. However, it will be possible even for a layman to see at a ten second glance if the Kiyenzi lopolith cores are a bastnasite / monazite mix or something else entirely. And that is extremely price sensitive information. How on earth does the company keep that information secret for so long? It can't blindfold the drill crew!

OK. Here goes. The other four targets currently being drilled are suspected carbonatite pipes - the presumed source of the narrow veins of very high grade rare earth mineralization that are currently being mined. The carbonatite pipes won't grade as high as the narrow veins, but they are very large. The biggest is c. 2,700 metres in diameter. So the total amount of rare earths they contain could be very large.

There's absolutely no point in pursuing a Chinese company through Chinese courts - no more than there is any point in pursuing a Russian company through Russian courts. They're both absolutely hopeless endeavours. Honestly, it's best to just move on from this mess. Hard to be impressed with management right now, but Bacanora will survive.

That should read one year's entire WORLD production of rare earths...

For any newcomers, here are a couple of useful links. One is a CEO interview from earlier this month; the other is an article from January: http://www.iii.co.uk/brr-media/483270/121-mining-cape-town-rainbow-rare-earths-presentation http://www.proactiveinvestors.co.uk/companies/amp/news/190226?__twitter_impression=true Rainbow is already mining and exporting, but pay attention to the exploration drilling news due in April. Especially, the possible discovery of a 500,000 ton solid lump of high grade rare earth mineralisation ("the lopolith"). If that confirms up, it's roughly equivalent to one year's entire production of rare earths. On a bag of a fag packet basis, I make the profit it would bring to the company to be more than $400m - or more than 10x current market cap. All IMO and DYOR.

Not exactly heavy trading today, but almost entirely one-way traffic. I think only 7,000 shares were sold today, against over 120,000 bought. The MMs will have to raise the bid soon. Hopefully, we should see a nice steady rise into the April drilling results.

IMO, that analysis is right on the money. All in all, country risk is the biggest risk facing Rainbow. All other factors - the resource, the management etc. - seem very strong here. Anyway, let's hope for peace and prosperity for all!

Many thanks for posting the Steenkamp memorandum / website. They actually make a good investment case for themselves; not many projects can boast of an IRR of over 50%. But, reading through their memorandum, you also get a good sense of the greater potential of Rainbow - higher grades of TREO, 90% ownership of deposit compared to 74%, no radiation to deal with, surface mining not underground, and probably (when all is said and done) a much bigger resource. As investors, we're operating half-blind here, because of Rainbow's "mine first drilling and JORC second" strategy. But from what I can make out, this could become a hugely profitable operation.

Thanks for the interesting replies. I think we can all agree that rare earths are an interesting investment proposition now. And if a trade war should break out between the U.S. and China, then any near term rare earth production outside China will suddenly become very valuable and even strategically important. I also concede that Burundi (Rainbow) is a riskier investment proposition than Malawi (Mkango). I agree that having Talaxis on board is a big plus for Mkango. But that can be balanced by Rainbow having Legal & General and Miton on their shareholder register, and ThyssenKrupp as an offtake partner. (And 40% of Rainbow is owned by the BoD, so they clearly believe in what they're doing). For me, the key difference between the two projects is in the rocks themselves. There's nothing wrong with Mkango's geology - average grades for rare earths worldwide range between 1% and 5%, and Mkango's rocks fit in that bracket comfortably. But Rainbow has these incredible narrow veins that they are currently mining that grade between 47% and 67% TREO. It's these grades that make their unique "mine first and explore for more later" operation feasible. Rainbow should also have drill results from 4 large carbonatite pipe targets coming up in April, and also results from drilling a large anomaly which may be a huge solid lump of very high grade rare earth mineralisation equal to one year of the world's entire rare earth production. (For the technically minded, the structure is called a lopolith). I hope you don't mind this post on here. Very interested to hear any counter arguments to mine. We're all here to make money, if we can!

Full disclosure: I'm already invested in Rainbow Rare Earths (RBW), and I accept the argument that magnet rare earths will only increase in price over the next few years. In a spirit of curiosity, I've just been through Mkango's website presentation and recent RNSs. I've also read some old articles on Mkango on guerrilla investing and share prophets. Can I ask a straight question of the posters on this board? Why do you prefer Mkango to Rainbow? Yes, Malawi is a little more stable than Burundi. But, apart from that, why? Am I missing something here?

No, it's not a first. I have a Glint MasterCard sitting on my desk, which allows me to use gold to pay for things, just as if it were money. However, I'm not happy with the company's service standards, and I'm about to chop the card up with a pair of scissors.

No, it's not a first. I have a Glint MasterCard sitting on my desk, which allows me to use gold to pay for things, just as if it were money. However, I'm not happy with the company's service standards, and I'm about to chop the card up with a pair of scissors.

Hazrat - I agree. IMO, there will be one last placing to fund phase 2 of the drilling campaign + (possibly) ramp-up working capital requirements in May / June this year. If the drill results are as good as I think they will be, this placing should be at a substantial premium to the current share price; possibly even at a multiple of it. Then, once Rainbow have a JORC on the resource, they can probably borrow money to fund the next phase(s) of mine expansion. Given the BoD own such a high percentage of the company, I'm sure they will want to keep shareholder dilution down to an absolute minimum.

Hi Eddie! You could start your research by watching the two videos posted a few posts down, and by looking at the presentation on the company website. IMO, the biggest risk here is country risk (Burundi). The potential returns - well, who really knows? But I've got a hunch that Gakara is the world's best rare earth deposit, and possibly (once it is fully explored) a very large one as well. Certainly, Rainbow is far far more prospective than the rampers' favourite Mkango Resources. But don't post this comment on their bulletin board, otherwise the trolls will descend here.

I agree that at the moment we just can't tell how profitable the current mining operation is / will be. But I take some comfort from the fact that the BoD and NED own 40% of the company, the (highly competent) CEO has been buying shares on the open market, and Legal & General and Miton are on board as institutional investors. And, yes, I'd agree that if they report a major discovery in April, they will probably place more shares to raise money to exploit it. But, all in all, I think that is OK.

Just found this Rainbow presentation on the iii website. It's from the mining Indaba in Cape Town a couple of weeks ago: http://www.iii.co.uk/brr-media/483270/121-mining-cape-town-rainbow-rare-earths-presentation FWIW, towards the end of the presentation, Martin Eales quotes the possible weight of the lopolith as 500,000 tonnes - or, put another way, equivalent to the world's total annual production for one year. So my guesstimate yesterday wasn't all that far off. Results of first drilling due in April.

One of Rainbow's current drilling targets is a possible lopolith - essentially a solid lump of pooled and solidified igneous material. The company was led to this rock formation by breakaway boulders of high grade rare earth containing material found downslope, which they followed up with a ground gravity survey. It is discussed in in this article from January: http://www.proactiveinvestors.co.uk/companies/amp/news/190226?__twitter_impression=true Based on the additional information from today's interim report, here are my revised (and very rough) calculations regarding the lopolith's potential value: Elliptical object @ 100m x 80m = approx 6283 square metres surface area. Depth of object estimated from ground gravity survey to be roughly 20m. Therefore, the "lopolith" contains roughly 125,000 cubic metres of rock.. From ground gravity survey we know that the object is extremely dense. Boulders downslope are made up of rare earth containing minerals bastnasite and monazite, which are both extremely dense. (Each weigh approx. 5 tonnes per cubic metre (i.e. twice as much as common sandstone)). Therefore, entire "lopolith" theoretically weighs around 625,000 tonnes. It's reasonable to assume that the breakaway boulders found at surface and the "lopolith" grade similarly. The boulders at surface are described as high grade - given the average grades at Gankara overall that likely means around 50%. Therefore, the "lopolith" could contain approx. 312,000 tonnes of high grade rare earth concentrate. New basket sales price from interim report of approx. $13 per kg. Theoretical value of lopolith (if all these assumptions correct) = about $4bn Less 70% discount for off taker ThyssenKrupp = $1.2bn Allow 6% royalty, 30% costs to extract material, and 30% profit tax = $552m net profit to Rainbow from digging up this single rock? (More if offtake renegotiated to more favourable terms). Contrast this figure to Rainbow's current mcap of 24m pounds = approx. $35m