Interim Results for the six months ended 31 December 2023

Rainbow Rare Earths is pleased to announce its unaudited results for the six months ended 31 December 2023 (“the Period”).

Highlights

• Global net zero greenhouse gas (“GHG”) emissions will require unprecedented levels of critical minerals, including rare earth elements (“REEs”).
• Phalaborwa expected to be the highest margin REE project in development today due to its fundamentally different capital and operating cost profile compared to traditional projects. The project remains highly cash generative even at lower rare earth prices.
• Phalaborwa to produce all four of the high-value magnet rare earths: neodymium and praseodymium (“NdPr”), dysprosium (“Dy”) and terbium (“Tb”). Forecast CAGR of ca. 10% for rare earth permanent magnets from 2022 to 2033[1] driven by their use in electric vehicles and wind turbines.
• Project backed by U.S. Government, with a US$50 million funding commitment from the U.S. International Development Finance Corporation (“DFC”) announced at COP28, to be invested via strategic shareholder TechMet Limited (“TechMet”).
• Successful production of ca. 35kg of mixed rare earth carbonate at the front-end pilot plant in South Africa; this material is being used as feed for the back-end pilot plant in Florida, USA to produce separated rare earth oxides expected in Q2 2024.
• Phalaborwa offers environmental advantages due to the clean-up of legacy issues and the opportunity to fully rehabilitate the site over time. The use of continuous ion exchange (“CIX”) and continuous ion chromatography (“CIC”) to produce separated rare earth oxides also provides cost and environmental benefits over traditional solvent exchange methods.
• Updated bulk density calculations have increased the Phalaborwa project tonnage by ca. 16% and added over two years to project life; an update to the JORC-compliant Resource is expected in Q2 2024.
• Letter of Intent entered into for an off-take agreement to sell ca. 400-600,000 tonnes of Phalaborwa’s gypsum by-product per annum into the South African domestic and surrounding markets, which are anticipating supply shortages of gypsum, thereby providing an additional revenue stream to Rainbow.
• Strategic supply agreement entered into with Less Common Metals (“LCM”), the only rare earth metal and alloy manufacturing facility in the UK and one of the only facilities in the Western world.
• Memorandum of understanding (“MOU”) entered into with The Mosaic Company (“Mosaic”) with regards to the Uberaba phosphogypsum project in Brazil. Uberaba represents an exciting opportunity to potentially replicate Phalaborwa at a larger scale and initial test-work to date is promising.

George Bennett, CEO, commented: “Phalaborwa is a unique project in the rare earths space. Due to the fact that it is focused on the reprocessing of phosphogypsum stacks to recover rare earths, it has a fundamentally different cost profile to traditional mining projects and it is therefore expected to be the highest margin rare earth project in development today. Its potential to offer exceptional financial returns, its ability to go further down the supply chain to produce separated rare earth oxides, and its strong environmental credentials have seen the project backed by the U.S. Government during the Period, with a US$50 million funding commitment from the DFC announced at COP28, to be invested via TechMet.

We are also excited about the prospects for the Uberaba phosphogypsum project in Brazil, which is being developed in partnership with Mosaic. Initial test-work to date has been encouraging and the project is of a significantly larger scale than Phalaborwa. Furthermore, the addition of Uberaba adds geographical diversification to our portfolio and is in line with our aspiration to be a forerunner in the establishment of an independent and ethical supply chain of the rare earth elements that are driving the green energy transition.”

We caught up with CEO George Bennett at  the Mining Indaba conference in Cape Town. He provided an update on Rainbow’s operations, but also tells about the many uses of rare earths and why they are so important in the global energy transition