Operations Update

RNS Number : 9989Z

Rainbow Rare Earths Limited

21 March 2017

 

FOR IMMEDIATE RELEASE

21 March 2017

Rainbow Rare Earths Ltd ('Rainbow' or 'the Company')

Operations Update

Rainbow, the rare earth element mining company, is pleased to announce an update on its high grade Gakara Rare Earth Project in Burundi ('Gakara') following its US$8 million fundraising and successful IPO on the London Stock Exchange on 30 January 2017.  Gakara is one of the highest grade (47-67% Total Rare Earth Oxide) rare earths projects globally and the Company is targeting first production and sales of rare earth concentrate by YE 2017.

Highlights

·    Activity commenced at fully permitted Gakara project ahead of trial mining with local labour force recruited

·    EPCM contract signed for Gakara ore processing plant

·    Initial extraction of run of mine ore from the high-grade veins commencing shortly

·    First sales to commence by YE 2017 through multinational sales and distribution partner, tk Raw Materials, part of the Thyssenkrupp Group

·    Rainbow is now debt free following the full and final settlement of its loan facility post-IPO

Martin Eales, CEO of Rainbow, commented: "It has been a very busy period since completion of the US$8 million fundraise and IPO, and as a result Rainbow has made great progress in delivering on the strategy we presented to investors, namely bringing our Gakara project to production and sales within nine months.  I am delighted that work has already started on our first mining area and we will be working closely with our newly appointed plant contractors to ensure that we are ready to achieve our stated target of first rare earth concentrate sales this year.  I look forward to updating shareholders with our progress in the coming months."

Full Details

Preparation for mining at Gakara is already underway at the Company's first production site, Gasagwe, with haulage and access road construction being a primary focus as well as the establishment of the basic infrastructure for the mine site.  Alongside a number of managerial roles, a local labour force has already been recruited and initial extraction of run of mine ("ROM") ore from the high-grade veins will commence shortly, increasing in quantity once the Company has taken delivery of its first fleet of mining machinery around the end of April.  As set out in the Company's IPO Prospectus dated 25 January 2017 ("Prospectus"), production of ROM ore will be stockpiled for approximately six months prior to commissioning of the ore processing plant.

The Company has participated in well attended public meetings in areas close to the Gasagwe mining area and has received strong support from all levels of the community and local and national administration.

Rainbow has also signed a full Engineering, Procurement and Construction Management ('EPCM') contract with Obsideo Consulting Pty Limited of South Africa for the design, supply and construction of its ore processing plant with a capital equipment value of approximately US$1.5 million with the agreed commissioning and handover date of the plant being in Q4 2017, in order to meet Rainbow's stated objective of making its first sales of rare earth concentrate, through its sales and distribution partner tk Raw Materials, before the end of 2017.

Following the IPO and as disclosed in the Prospectus, Rainbow elected to repay Pala Investments Limited US$1.7 million in full and final settlement of the outstanding loan facility and the Company is now debt free.

**ENDS**

For further information, please contact:

Rainbow Rare Earths Ltd	Martin Eales	Tel: [phone]
St Brides Partners Ltd	Lottie Brocklehurst Susie Geliher	Tel: [phone]

Notes to Editors

Rainbow's focus is the Gakara Project in Burundi, one of the highest-grade (47%-67% Total Rare Earth Oxide) rare earths projects globally.  The Company has raised US$8 million to fast-track the fully permitted Gakara Project to production ahead of targeted first sales of concentrate by the end of 2017.  Rainbow has a ten-year distribution and offtake agreement with multinational tk Raw Materials secured for the sale of at least 5,000 tpa of concentrate produced.  The Gakara basket is weighted heavily towards the magnet rare earths, including neodymium and praseodymium, which are driving demand accounting for 70% of annual global REE sales due to their use in vital components in motors, generators, wind turbines and electric vehicles.

 

END

 

 

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