Rainbow Rare Earths

Financials:

Primary ticker: LSE:RBW
Stage of development: Development
Primary minerals: Rare Earths
Project to promote: Phalaborwa and Uberaba
Project location: South Africa, Brazil
Website: www.rainbowrareearths.com

Rainbow Rare Earths aims 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. It is doing this successfully via the identification and development of secondary rare earth deposits that can be brought into production quicker and at a lower cost than traditional hard rock mining projects, with a focus on the permanent magnet rare earth elements neodymium and praseodymium, dysprosium and terbium.

The Company is focused on the development of the Phalaborwa Rare Earths Project in South Africa and the earlier stage Uberaba Project in Brazil. Both projects entail the recovery of rare earths from phosphogypsum stacks that occur as the by-product of phosphoric acid production, with the original source rock for both deposits being a hardrock carbonatite. Rainbow intends to use a proprietary separation technique developed by and in conjunction with its partner K-Technologies, Inc., which simplifies the process of producing separated rare earth oxides (versus traditional solvent extraction), leading to cost and environmental benefits.

The Phalaborwa Preliminary Economic Assessment has confirmed strong base line economics for the project, which has a base case NPV10 of US$627 million, an average EBITDA operating margin of 75% and a payback period of < two years. Pilot plant operations commenced in 2023, with the project expected to reach commercial production in 2026, just five years after work began on the project by Rainbow.

Cash: GBP$8.1

Major shareholders:
A. Pouroulis – 14.0%
TechMet – 11.9%
G. Bennett – 6.2%
Caden Holdings – 5.9%
Management Ownership – 21%

Management Profile

GEORGE BENNETT – CEO
• 25 years in finance and management, including as a partner in numbdr of leading stockbroking/advisory firms in SA
• Former CEO of Shanta Gold Ltd, successfully listed on LSE in 2005
• CEO and Founder of MDM Engineering, listed on LSE in 2008; responsible for building 22 process plants and completing over 60 feasibility studies – sold after 8 years to Foster Wheeler for US$120 million
• Seed-funded and raised initial capital for OreCorp Ltd, now ASX listed

PETER GARDNER – CHIEF FINANCIAL OFFICER
• Qualified Chartered Accountant
• 15 years’ experience in mining industry leading finance teams across Africa and developing nations
• Former CFO of Amara Mining plc (up to acquisition by Perseus Mining Ltd), Chaarat Gold, Piran Resources and Alexander Mining

What is your rationale for taking part in 121 Mining Investment?

Investor relations to further increase, broaden and diversify our investor base.

What recent news would you like to highlight to investors attending?

TechMet Option to invest US$50m in Phalaborwa – 8 November 2023
Supply agreement with Less Common Metals – 11 September 2023
Production of mixed rare earth sulphate – 5 September 2023
MOU signed with Mosaic on Uberaba in Brazil – 17 July 2023
Phalaborwa preliminary economic assessment – 3 October 2022

What are your key goals for the next 3, 6 and 12 months?

3 Months:
Continued successful results from pilot plant process to produce separated rare earth oxides
Resource update at Phalaborwa

6 Months:
Progression of Phalaborwa Definitive Feasibility Study
Progression of permitting process for Phalaborwa
Continued assessment of the Uberaba project in Brazil

12 Months:
Completion of Phalaborwa Definitive Feasibility Study
Commencement of project finance for Phalaborwa

What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?

Management has a high level of confidence in the technology
Permitting in South Africa is a factor – we are running the various workstreams required already, alongside or incorporated with the DFS requirements. The fact that Phalaborwa is cleaning up a legacy environmental issue is expected to aid the speed of permitting
Financing for smaller companies is not easy at the moment, but TechMet has already put forward $50m of the overall $295m capital required. We expect Phalaborwa to continue to be of interest to strategic investors, especially since it will produce all four of the critical rare earths for permanent magnets

What do you think makes your company such a compelling investment?

The escalating urgency to tackle climate change is revealing a number of challenges, including a supply shortage of the raw materials required to drive the clean energy transition. With our near-term development opportunity at Phalaborwa in South Africa, as well as other opportunities to produce rare earth oxides from secondary sources, we believe Rainbow is well positioned to contribute to this global effort by providing a responsible, Western source of separated rare earth oxides, critical minerals for the permanent magnets used in offshore wind generation and electric vehicles. Uberaba in Brazil is an exciting opportunity as the resource is potentially much larger than at Phalaborwa.

What are the top 3 key investor takeaways?

• There is a growing supply/demand imbalance and mounting pressure from Governments and investors to secure, independent, ethical, conflict-free rare earth mineral supply, with significant growth in demand expected for NdPr, Dy and Tb to power the green revolution.
• Rainbow expected to become one of the only producers of all four separated magnet rare earth oxides outside of Asia.
• Phalaborwa is expected to be one of the lowest cost producers of rare earths globally and the project is expected to be highly cash generative across the rare earth pricing cycle.