REG - Rainbow Rare Earths - Pilot Plant Update

Rainbow Rare EarthsAnnouncement

19/06/2024 07:00

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RNS Number : 9511S  Rainbow Rare Earths Limited  19 June 2024

19 June 2024

Rainbow Rare Earths Limited

("Rainbow" or "the Company")

LSE: RBW

 

Pilot Plant Update

Latest results support expectation that Phalaborwa will be one of the lowest
cost magnet rare earth projects in development today

·   Primary pilot plant campaign in South Africa ran for an extended
period allowing for key optimisation opportunities, with expected resultant
benefits to capital and operating costs

·   Separation pilot plant campaign in USA is ongoing - separation of
Nd/Pr has now reached over 95% purity via an optimised first stage
chromatography step, with the process expected to reach the targeted purity of
99.5%

·   Piloting campaign to date supports our expectation that Phalaborwa
will be a low-cost producer of separated rare earth oxides in comparison to
the global peer group

·    As part of the work to deliver the DFS in H1 2025, Rainbow plans to
release an interim report in H2 2024 to update the economics of the Phalaborwa
project reflecting the optimisations delivered from the pilot test work
campaigns, footprinted against the Preliminary Economic Assessment ("PEA"),
and to allow for commencement of project financing

 

NEWS RELEASE

Rainbow is pleased to announce an update with regards to the pilot plant
operations for the Phalaborwa rare earths development project in South Africa.

The project's pilot plant incorporates the primary campaign, which processes
the material to produce a mixed rare earth carbonate ("MREC"), based at the
Johannesburg facilities of the Council for Mineral Technology ("Mintek"), a
global leader in mineral processing, extractive metallurgy, and related
fields. The final separation stage pilot plant refines the material further
into separated rare earth oxides; this work is ongoing in Florida, USA.

Primary pilot plant - Johannesburg, South Africa

Excellent results have been achieved on the large scale, continuous pilot
plant at Mintek, serving to confirm the basic process flowsheet originally set
out in the PEA.

The primary pilot plant campaign was extended to run for 70 days in order to
take advantage of key optimisation opportunities that became evident during
the operation.

The key findings from the primary pilot plant campaign are:

·    The overall recovery of rare earths was 66% versus 65% used in the
PEA.

·   A leach temperature of 30(o)C was employed compared to 40(o)C set out
in the PEA, resulting in a 50% reduction in the expected heating energy
requirement.

·    The first-stage impurity leach readily controlled the impurities to
the desired level.  Approximately 23% of the recovered rare earths reported
to the impurity leach solution.

·    The subsequent rare earths leach has been reduced from three stages
in the PEA to two stages.

·   A continuous ion exchange ("CIX") pilot plant operation was conducted
at Mintek to recover the rare earths in the impurity leach solution. This CIX
pilot plant delivered excellent recovery, impurity rejection and rare earths
upgrading with the resulting product being suitable for feed directly to the
final continuous ion chromatography ("CIC") separation process.

·    Solid:liquid separation tests conducted on samples from the primary
pilot plant operation yielded excellent thickening and filtration results,
which allows for the removal of six CCL (Counter Current Leach) thickeners out
of 12 from the circuit.

·    Very positive results were achieved in a materials of construction
study where a variety of potential acid-proof steels and alloys have been
tested in static conditions and in the continuous primary pilot plant
operation. These have shown that lower cost alloys out-perform the high cost
Hastelloy materials assumed for the construction of the plant in the PEA.

Separation pilot plant - Lakeland, USA

In parallel with the work at Mintek, test work is ongoing at K-Technologies,
Inc. ("K-Tech") premises in Florida, USA, to deliver separated magnet rare
earth oxides, with the initial focus on the separation and purification of
neodymium and praseodymium ("Nd/Pr") via ion chromatography in three stages to
an expected 99.5% oxide purity. This represents ca. 20% of the total
processing footprint.

As previously announced on 5 February 2024, the initial first-stage ion
chromatography step achieved good separation of Nd/Pr at ca. 68% purity, with
good separation of the samarium/europium/gadolinium ("SEG") group of rare
earths at a grade of ca. 63% and considerable upgrading of the concentration
of the dysprosium and terbium ("Dy/Tb") from a combined feed grade of 0.9% to
14.6%.

The initial 68% Nd/Pr purity stream has been passed through a second ion
chromatography stage, resulting in an upgraded solution of over 96% Nd/Pr
purity.

Optimisation of the first stage ion chromatography step has been carried out
in parallel, resulting in an excellent Nd/Pr grade of over 95% purity.

The separation test programme in Florida is taking longer than anticipated,
primarily due to problems with the in-house analytical equipment at K-Tech's
premises. This has resulted in the need for the material to be independently
analysed by the Florida Institute of Phosphate Research ("FIPR"), which has
required a long turnaround for each set of assays (two to three weeks versus
the anticipated one to two days if doing this work in-house). This issue is
being remediated, but there is benefit to the extra level of verification that
these independent analyses provide to the rare earth separation work.

Dave Dodd, Technical Director, commented: "We are very pleased with the
results of the completed primary pilot plant campaign that has produced a high
grade MREC for the separation pilot plant in the USA. The significant results,
including lower leach temperatures, the reduced number of stages in the main
rare earth leach, reduced thickener requirements and lower cost materials of
construction, are expected to deliver capital and operating cost benefits
compared to the base case scenario for these processes set out in the PEA.

The excellent performance of the pilot CIX plant at Mintek, coupled with the
very good rare earth group separation and 95% Nd/Pr purity achieved by the
optimised first pass of ion chromatography work in US, auger well for the
finalisation of the CIX/CIC process and validate Rainbow's use of CIX/CIC as
our chosen rare earth recovery method. Based on the recoveries to date, we
also do not anticipate any material changes to the capital and operating costs
for the back-end plant process."

George Bennett, CEO, commented: "Whilst the pilot test work has taken longer
to complete than originally planned, the positives of the additional time
invested, in pursuing the optimisation opportunities identified on the primary
pilot plant, cannot be underestimated from the point of view of confirming
capital and operating costs for the Definitive Feasibility Study ("DFS")
within the PEA guidelines.

We feel these results go a long way to confirming that Phalaborwa will be one
of the highest margin and lowest cost rare earth producers in the world, which
gives the project excellent resilience versus pricing volatility, in contrast
to the global peer group. These results confirm and vindicate the time
invested in the process optimisation to the benefit of the project."

Next steps

Work is continuing in both South Africa and the USA to finalise the pilot
testing and optimisation opportunities resulting therefrom.

South Africa

·    Initial acid baking of the rare earths precipitate, conducted in a
standard muffle furnace, required a bake time of six to seven hours.
Subsequent ongoing testing of a continuous infra-red furnace indicates
excellent results which should reduce baking time to less than one hour.

·    Optimisation work is being undertaken in relation to the two key
reagents for the process: sulphuric acid consumption and lime addition for
neutralisation.

USA

·    Nd/Pr separation work via CIC is continuing, focused initially on
delivering the expected 99.5% purity Nd/Pr oxide.

·    Once the Nd/Pr separation is confirmed, CIC work focused on the Dy/Tb
streams will progress as well as further work on the SEG group separation
where Rainbow saw positive results in the first pass through the ion
chromatography phase.

Following completion of the piloting testwork, as part of the work to deliver
the DFS in H1 2025, Rainbow plans to release an interim report in H2 2024 to
update the economics of the Phalaborwa project reflecting the optimisations
delivered from the pilot test work campaigns, footprinted against the PEA.
This is expected to demonstrate the resilience of the project economics in a
variety of rare earth pricing scenarios and allow for the commencement of the
financing process for the project.

 

For further information, please contact:

 

 Rainbow Rare Earths Ltd   Company  George Bennett         +27 82 652 8526

                                    Pete Gardner
                           IR       Cathy Malins           +44 7876 796 629

                                                           cathym@rainbowrareearths.com (mailto:cathym@rainbowrareearths.com)
 Berenberg                 Broker   Matthew Armitt         +44 (0) 20 3207 7800

                                    Jennifer Lee

 Stifel                    Broker   Ashton Clanfield       +44 20 7710 7600

                                    Varun Talwar

 Tavistock Communications  PR/IR    Charles Vivian         +44 (0) 20 7920 3150

                                    Tara Vivian-Neal       rainbowrareearths@tavistock.co.uk (mailto:rainbowrareearths@tavistock.co.uk)

 

 

Notes to Editors:

About Rainbow:

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 continuous ion exchange / continuous ion chromatography separation
technique, 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.

More information is available at www.rainbowrareearths.com
(http://www.rainbowrareearths.com) .

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