Rainbow Rare Earths Ltd (LON:RBW) Chief Executive Officer Martin Eales caught up with DirectorsTalk for an exclusive interview to discuss their Q1 Production and Operations update.
Q1: We saw Rainbow Rare Earth’s announcement this morning, can you talk us through what was announced?
A1: Yes, of course. Well, I’m pleased to say that we have released our very first complete quarter production results, as you may recall, we only announced in December, at the end of last year, that we had commenced production. So, what we’ve put out today are the numbers from the first quarter of operations from 1st January to 31st March this year.
Q2: So, what are the key points of the update that investors should note?
A2: The really important point to note is that we’re producing rare earth concentrate of a constantly high grade, averaging 62%, and we are selling this product now so those are the key points, that we’ve got this project into production, we’re producing a high-grade product for which there is a market.
In the quarter, we produce 279 tonnes of finished concentrate, now it is the first quarter, so I stress we fully envisage our production numbers increasing steadily from here. Because of the relatively low base, the cost numbers are spread over fewer tonnes, as it were, so they look a bit high but that will come down consistently over the rest of the year as we increase production.
Q3: How is the rare earths market performing at the moment?
A3: Well, we put a little note in there to give people guidance on what’s happening on prices. Over the period, our basket price which correlated pretty well with overall rare earth prices, increased consistently 11%/12% over the quarter itself and we averaged over $2,300 per tonne of our concentrate sold which is giving us a very reasonable return on production.
We are strong believers, still, that the fundamentals of the market will see demand for rare earth materials increasing linked to the rise of electric vehicles and there’s very limited short-term supply of new rare earths coming on stream from new projects. So, we’re playing into a strengthening market.
Q4: What can you tell us about the recent drilling campaign?
A4: We put a little note in the announcement this morning for shareholders to expect the first update from Phase I next week. Just to refresh people’s memories, we targeted a number of airborne-identified anomalies which could be a carbonatite source of our rare earth veins and we’re also focussing our efforts on an area within the mining licence, a hill called Kiyenzi within which we had identified a gravity anomaly, that looked very interesting. So, shareholders should expect some news on that next week.
Q5: Talking about news, what is on the agenda for the rest of 2018 for Rainbow Rare Earths?
A5: For the rest of the year, we want to focus on increasing our tonnages so quarter on quarter or month on month and then quarter on quarter such that we hit our target of 400 tonnes a month of concentrate by the end of this year. So, if you look at this first quarter, we’ve done about 100 tonnes a month, we want to increase that steadily to 400 tonnes a month, if we can, by the end of this year. We do envisage that will come from multiple areas of the mining license so where we’re mining at the moment will be one source of tonnes and we’ll have additional sources of production on stream before the end of the year to hit that target.
So, that’s the real focus on production but we will continue the exploration campaign and look forward to updating people with the first news from the drilling next week and what we plan to do for the remainder of the year as well.