Release Date: October 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Rainbow Rare Earths Ltd (RBWRF, Financial) achieved the first commercial recovery of rare earth elements from phosphogypsum, a significant milestone in the industry.
- The company has developed a unique flow sheet using proven technologies, which is more environmentally friendly and cost-effective than traditional methods.
- Secured strategic equity funding of $50 million from the US government's DFC, providing strong financial backing and third-party validation.
- Successfully produced two saleable products from their pilot plant, including a separated rare earth oxide with 96-97% purity.
- Entered into strategic partnerships and MOUs with companies like LCM and Mosaic, expanding their market reach and potential for future projects.
Negative Points
- There is a delay in the definitive feasibility study (DFS), pushing the expected production start to 2027.
- The current purity level of rare earth oxides is 96-97%, which may not meet the 99% target, potentially affecting marketability and pricing.
- The company faces challenges in optimizing the flow sheet, requiring additional time and resources to achieve desired purity levels.
- Rainbow Rare Earths Ltd (RBWRF) has not yet decided on patenting their technology, which could expose them to competitive risks.
- The Burundi project remains uncertain due to government-imposed suspensions, limiting its contribution to the company's growth.
Q & A Highlights
Q: Is the rare element product from the pilot plant able to be sold?
A: George Bennett, CEO: The product from the pilot plant is not intended for sale as it is used for marketing and discussions with potential offtake partners. However, if needed, the product at 96-97% purity could be sold, but the focus is on optimizing purity levels further.
Q: Can you provide an update on the situation in Burundi?
A: George Bennett, CEO: Discussions with the Burundi government are ongoing. A World Bank report recognized Rainbow as a responsible miner. The government has invited Rainbow back for negotiations, which is a positive sign, but Burundi remains a small part of Rainbow's future focus.
Q: How long will the current cash position last, and is the DFS delay covered?
A: George Bennett, CEO: The DFS is fully funded despite the delay, and the company is well-funded into the fourth quarter of 2025.
Q: Why hasn't 99% purity for NDP been achieved, and how confident are you in reaching it?
A: George Bennett, CEO: Achieving 99% purity involves optimizing the flow sheet and removing impurities. The team is confident in reaching this target by introducing additional purification steps if necessary.
Q: Would Rainbow consider a joint venture with Chinese companies given their expertise?
A: George Bennett, CEO: No, Rainbow aims to support Western supply chains, a condition of the $50 million equity financing from the DFC, which excludes partnerships with Chinese entities.
Q: Is it feasible to extract rare earths from sedimentary Phospho Gypsum stacks in the next 10 years?
A: George Bennett, CEO: While current focus is on carbonatite sources, the company sees potential in sedimentary sources as a long-term option, particularly through the OCP MOU.
Q: Has the patent application for the frontend flow sheet been submitted?
A: George Bennett, CEO: No, the patent application has not been submitted as the flow sheet is still being optimized. The company is considering whether patenting is the best approach, given the need to disclose detailed IP.
Q: When will the $50 million from TechMet be available to Rainbow?
A: George Bennett, CEO: The funds will be available upon the publication of the definitive feasibility study and securing a financing term sheet.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
