Rainbow Rare Earths production update from one of the highest grade rare earth element mining projects globally

Martin Eales, CEO of Rainbow, 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.”

 

Rainbow, the rare earth element mining company LON:RBW, this morning announced its first quarterly operations update from its Gakara Project in Burundi since commencing production in December 2017. Gakara is one of the highest grade rare earth element mining projects globally, with an estimated in situ grade of 47-67% Total Rare Earth Oxide (‘TREO’), and the Company is targeting a production rate of 5,000tpa by the end of 2018.

Results for the Three Months to 31 March 2018

 
 Quarter ended                                    31 March 2018 
 Concentrate tonnes produced                                279 
 Grade TREO per tonne concentrate                           62% 
 Realised sales price achieved (US$ per tonne)            2,357 
 Production cost per tonne (US$ per tonne)                2,068 
 Cost of sales (US$ per tonne)                              646 
 Lost Time Injury Frequency Ratio ('LTIFR')                0.00 

 

Production update for period to 31 March 2018

As announced in December 2017, Rainbow successfully produced and exported its first 25 tonne batch of high grade rare earth concentrate and commenced commissioning of its gravity processing plant.

The processing plant at Kabezi was fully commissioned and handed over during the quarter, and the ramp-up to full production has now begun. 279 tonnes of concentrate were produced in the three months to 31 March 2018 following 75 tonnes produced in December 2017, however now that construction and commissioning has been completed, production levels are expected to increase steadily over the rest of the year, as mining and processing methodologies are tested and optimised.

The average grade of concentrate produced was 62% TREO, as assessed by a third party accredited laboratory on Rainbow’s behalf. The grades were consistent during the period, reporting in a range of 61-64%.

All run of mine ore (‘ROM’) processed into concentrate during the quarter by the plant at Kabezi was sourced from the Gasagwe pit. Rainbow is now developing highly attractive additional sources of ROM ore within the Gakara Mining Licence area in order to reach its target run rate of 5,000 tonnes per annum (approximately 400 tonnes per month) by the end of 2018. These areas are now expected to be in operation in advance of Gashirwe, the originally planned second mining area, due to their vein prospectivity and speed of development. Further information on these new mining areas will be provided in the quarterly report to 30 June 2018.

Production costs

Production costs (including Burundi support costs) of US$2,068 per tonne of concentrate produced were relatively high, as expected, and will reduce significantly as production rates increase and the element of fixed costs is spread over larger tonnages.

Sales costs

Sales costs in the period amount to US$646 per tonne of concentrate sold. These consisted of transport and shipment costs, the 3.5% marketing and handling fee payable to thyssenkrupp Raw Materials (‘TK’), and government royalties of 4%.

Realised Sales Price

The average realised sales price was US$2,357 per tonne during the period, based on 125 tonnes of concentrate sold. Rainbow sells its concentrate to TK at port in Africa (currently Mombasa), and TK concluded sales with two separate end customers in the quarter.

Shipment and clearance of these initial deliveries took longer to process, as anticipated, however no problems were encountered, and subsequent sales cycles are likely to be considerably quicker.

The market for magnet rare earths (in particular Neodymium and Praseodymium which make up approximately 19% of the TREO within Rainbow’s concentrate) remains buoyant, and there are strong indications of customer demand for all of Rainbow’s planned production increases.

As previously announced, selling prices for Rainbow’s concentrate are negotiated with reference to TREO grade and published prices for separated rare earth oxides and applying a customer discount for processing costs. The average sales price of concentrate realised during the Period of US$2,357 per tonne compares with Rainbow’s average ‘basket price’ during the quarter of US$13,360 per tonne on a 100% TREO basis. The difference reflects both the average TREO grade in the period (62%), and the negotiated discount for downstream separation costs.

Rare earth oxide prices strengthened considerably during the quarter after dipping towards the end of 2017, with Rainbow’s basket increasing 11% from US$12,270 per tonne (US$12.27/kg) as at 31 December 2017 to US$13,570 per tonne (US$13.57/kg) as at 31 March 2018.

Operational Health & Safety

Rainbow maintained a LTIFR of 0.00 during the Quarter and as at the end of the Quarter had achieved over 750,000 man hours free from Lost Time Injury since commencement of operations in April 2017.

Exploration

Rainbow’s maiden drilling campaign commenced during the quarter, targeting a gravity anomaly identified at Kiyenzi and a number of magnetic anomalies identified by an airborne survey undertaken in 2017. The Company expects to announce first results from the Phase 1 drilling around the end of April.

Click to view all articles for the EPIC:
Or click to view the full company profile:
    Facebook
    Twitter
    LinkedIn
    Rainbow Rare Earths Plc

    More articles like this

    Rainbow Rare Earths Plc

    UK rare-earth firm buys 10 Zim mining claims

    It’s a group of minerals used in everything from LCD TVs to batteries and defence technology, but rare earth elements (REE) have barely had a mention in any talks about Zimbabwe’s mineral potential. Now the acquisition

    Rainbow Rare Earths Plc

    Rainbow Rare Earths provides Kiyenzi update

    Rainbow Rare Earths (LON:RBW), the Rare Earth Element mining company, has provided the following update on its exploration and mine development programme. Highlights – 2 borehole samples analysed – including sections of 13.87m @4.85% Total Rare Earth

    Rainbow Rare Earths Plc

    Rainbow Rare Earths acquire Zimbabwe Rare Earth licenses

    Rainbow Rare Earths (LON:RBW), the Rare Earth Element mining company, has provided the following update. To view the announcement with the illustrative maps and diagrams, please use the following link: http://www.rns-pdf.londonstockexchange.com/rns/3902U_1-2019-11-22.pdf  Highlights: – 10 Mining Claims covering a

    Rainbow Rare Earths Plc

    Metal Events conference focusses on the magnet supply chain

    In the midst of the China-USA trade war, supply sustainability remained a key topic of conversation at the 16th International Rare Earth Conference, held in Kuala Lumpur this month. The specific attention for rare earths continues

    Rainbow Rare Earths Plc

    5 of Africa’s hottest mining projects

    Gakara mine – Burundi With battery and electric vehicle technology quickly becoming the global standard for transportation, Africa’s rare earth metals are in hot demand. Projects like the Gakara mine are becoming star attractions, putting mineral

    Rainbow Rare Earths Plc

    Rare Earth Elements

    Found in the Earth’s crust, rare earths are critical elements used in cars, consumer electronics, computers, communications, clean energy and defense systems. There are 17 elements that are considered to be rare earth elements (REE). Fifteen

    Rainbow Rare Earths Plc

    Rainbow Rare Earths publish Annual Report and Accounts

    Rainbow Rare Earths (LON:RBW), the rare earth mining company, has published its Annual Report and Accounts for the year ended 30 June 2019 on the Company’s website at www.rainbowrareearths.com. The Annual Report and Accounts will also be mailed to

    Rainbow Rare Earths Plc

    Rainbow Rare Earths update on Gakara project in Burundi

    Rainbow Rare Earths (LON:RBW), the Rare Earth Element mining company, provided the following operational update with regards to the Gakara Project in Burundi. Highlights: –  REE shipments continued post financial year-end; a further 100 tonnes of concentrate grading c.56%

    Rainbow Rare Earths Plc

    What are rare earth elements, and why are they important?

    The rare earth elements (REE) are a set of seventeen metallic elements. These include the fifteen lanthanides on the periodic table plus scandium and yttrium. Rare earth elements are an essential part of many high-tech devices. The U.S. Geological Survey news

    Rainbow Rare Earths Plc

    Nine countries join U.S. strategic minerals initiative

    The United States on Thursday said nine countries have joined its initiative to help discover and develop reserves of minerals used to make electric vehicles, part of an effort to cut the world’s reliance on China

    Rainbow Rare Earths Plc

    Into Africa: the US’ drive for African rare earth minerals

    The international mineral trade is becoming increasingly fractured. An escalating trade war between the US and China is threatening to deprive the former of a number of key commodities, including scandium, graphite and gallium, all of

    Rainbow Rare Earths Plc

    Rare earth prices extend increases on bullish sentiment

    Prices of light rare-earth oxides continued to climb from a week ago as top miner China Northern Rare Earth marking up its listed prices for September boosted market sentiment, SMM surveyed as of Monday September 16.  SMM assessments showed that

    Rainbow Rare Earths Plc

    Burundi rare earths mine targets 20-fold output boost

    George Bennett, the new chief executive of Rainbow Rare Earths, is aiming for a near 20-fold production boost at Africa’s only active rare earths mine that would make it the second-largest outside China. Mr Bennett, a