Last checked at 29 Jun 2021 16:14
Rainbow Rare Earths Limited
("Rainbow" or the "Company")
(LSE: RBW)
29 June 2021
Market Update
In anticipation of the commencement of negotiations with the Government of Burundi next week, Rainbow Rare Earths Ltd has received notification from the Government of Burundi of a temporary suspension of trial mining and processing operations at its Gakara Project in Burundi ("the Project") whilst these negotiations continue. The notification was received by Rainbow's operating subsidiary, Rainbow Mining Burundi SM ('RMB'), from the Ministry of Hydraulics, Energy and Mines of the Republic of Burundi ("the Ministry") on 29 June 2021.
George Bennett, CEO, is due to arrive in Burundi on Monday 5 July 2021 for discussions with the Ministry relating to the suspension of exports and the mining convention currently in place between the Government of Burundi and RMB.
Due to the nature of the trial mining operations at the Project this is not expected to have a material impact on the Company's short term cash flow projections, which envisage an ongoing investment program in Burundi. The majority of local staff have been placed on furlough and short-term cash requirements in Burundi minimised. RMB currently holds approximately 420t of concentrate available for export which is expected to provide funding for the re-commencement of operations once permitted.
George Bennett, CEO, said: "I am looking forward to returning to Burundi to undertake constructive discussions with the Ministry and other stakeholders to resolve this issue and allow both operations and exports to recommence and achieve a win-win outcome for all stakeholders. The temporary suspension of mining operations does not increase the expected near term cash outflows for the business. Rainbow's Phalaborwa Project in South Africa remains on track and we continue to make good progress."
**ENDS**
For further information, please contact:
Rainbow Rare Earths Ltd | Company | George Bennett Pete Gardner | +27 82 652 8526
|
SP Angel Corporate Finance LLP | Broker | Ewan Leggat Charlie Bouverat | +44 (0) 20 3470 0470 |
Flagstaff Strategic and Investor Communications | Tim Thompson Fergus Mellon | +44 (0) 207 129 1474 rainbowrareearths@flagstaffcomms.com |
Notes to Editors:
Rainbow's strategy is to become a globally-significant producer of rare earth metals. NdPr are vital components of the strongest permanent magnets used for the motors and turbines driving the green technology revolution. Analysts are predicting demand for magnet rare earth oxides will grow substantially over the coming years, driven by increasing adoption of green technology, pushing the overall market for NdPr into deficit.
The Phalaborwa Rare Earths Project, located in South Africa, comprises an Inferred Mineral Resource Estimate of 38.3Mt at 0.43% TREO contained within gypsum tailings stacked in unconsolidated dumps derived from historic phosphate hard rock mining. High value NdPr oxide represent 29.1% of the total contained rare earth oxides, with economic Dysprosium and Terbium oxide credits enhancing the overall value of the rare earth basket contained in the stacks. The rare earths are contained in chemical form in the gypsum dumps, which is expected to deliver a higher-value rare earth carbonate, with lower operating costs than a typical rare earth mineral project.
The Company's Gakara Project in Burundi produces one of the highest-grade concentrates in the world (typically 54% total rare earths oxides ("TREO")) through trial mining operations. The Gakara basket is weighted heavily towards NdPr, which account for over approximately 19.5% of the contained TREO and 85% of the value of the concentrate.