REG - Rainbow Rare Earths - Updated Mineral Resource Estimate for Phalaborwa

Rainbow Rare EarthsAnnouncement

11/09/2024 07:00

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RNS Number : 6490D  Rainbow Rare Earths Limited  11 September 2024

11 September 2024

 

Rainbow Rare Earths Limited

("Rainbow" or "the Company")

LSE: RBW

 

Updated JORC-compliant Mineral Resource Estimate ("MRE") for Phalaborwa

 

·    Updated MRE confirms a 15% increase in the overall size of the
Phalaborwa Resource, adding an additional two years to the project life.

·    Total Measured, Indicated and Inferred Resource of 35.0 Mt at 0.44%
TREO, with a near doubling in the material now classified as Measured.

·    The light rare earth elements ("REEs") neodymium ("Nd") and
praseodymium ("Pd") represent 29% and the heavy REEs dysprosium ("Dy") and
terbium ("Tb") represent 1% and 0.3% respectively - all four of these REEs are
considered critical minerals essential to the green energy transition.

·    The MRE now reports the full range of recoverable REEs that may have
economic value for Rainbow in the future, being the SEG group (samarium,
europium and gadolinium), lanthanum ("La") and cerium ("Ce").

·    At spot pricing, including Nd/Pr at ca. US$62.5/kg 1  (#_ftn1) , the
MRE has an in-situ metal oxide value of ca. US$3.7 billion REEs, with
considerable upside based on the forecast strong demand outlook for permanent
magnet REEs.

 

NEWS RELEASE

Further to the Resource Update released on 26 February 2024, today's
announcement reflects the publication of a new MRE for Phalaborwa prepared in
accordance with the guidelines of the JORC Code (2012 Edition) ("JORC"). The
full MRE can be accessed at
https://www.rainbowrareearths.com/project/phalaborwa/
(https://www.rainbowrareearths.com/project/phalaborwa/) .

As indicated in the February announcement, the application of updated bulk
density estimates and additional drilling for the Phalaborwa phosphogypsum
stacks has led to an increase in the Resource by 15% from 30.4 Mt to 35.0 Mt,
reported at a 0.2% TREO cut-off grade. At projected production rates, this has
extended the project life from 14 years to 16 years.

George Bennett, CEO of Rainbow, commented: "The publication of an updated
JORC-compliant Resource for Phalaborwa reaffirms the huge value intrinsic to
this project, which contains economic quantities of all four of the critical
magnet REEs. It also points to the potential for value from other recoverable
REEs, which are currently not included in our project economics, and the MRE
has an in-situ metal oxide value of ca. US$3.7 billion even at today's lower
spot prices. It's worth noting that this is a very different type of Resource
to that of a hard rock mining project, sitting at surface with a relatively
homogenous distribution in the phosphogypsum stacks. Therefore, we intend to
process the entirety of the stacks, allowing us to generate value from the
full 35 Mt Resource."

The four most economically important REEs, being Nd, Pr, Dy and Tb, together
represent over 30% of the basket by volume at Phalaborwa and 96% by value.
These REEs have been designated globally as critical minerals for the green
energy transition due to their use in the permanent magnets essential for
electric vehicles and wind turbines. Furthermore, they are considered to be
among those critical minerals most at risk in terms of supply chain
vulnerabilities.

For the first time, the MRE now includes the full range of recoverable REEs
that may have economic value for Rainbow in the future, being the SEG group,
La and Ce. At spot prices, the MRE including these ancillary REEs has an
in-situ metal oxide value of ca. US$3.7 billion. We have also confirmed that
the process residue gypsum is a saleable product, allowing Rainbow to realise
further value from the Resource.

The updated MRE confirms very low levels of radioactive elements, further
attesting to the 'green' credentials of this project, which will recover REEs
from a waste product and rehabilitate an industrial site over time. Uranium is
estimated at 1.8 ppm and thorium is estimated at 48ppm, at which levels they
can be considered trace elements.

Measured, Indicated and Inferred Mineral Resource Estimate

The MRE is located in two adjacent historically processed phosphogypsum stacks
(termed Stack A and Stack B) on the Phalaborwa project site. The MRE update
was completed in July 2024 and is based on additional drilling and sampling
completed during 2023. Samples were initially sent to Ardaman and Associates,
Inc., a Tetra Tech Company ("Ardaman"), in the USA for bulk density
calculations before being shipped back to SGS in South Africa for grade
assays.

Notes:

1.    TREO = Total Rare Earth Oxide; ppm = parts per million

2.    Resource figures are reported gross; Rainbow owns an 85% interest in
the Phalaborwa project, with an option to increase ownership to 100%

3.    The Mineral Resource is reported at a nominal 0.2% TREO cut-off grade

4.    No constraining shell is required as stacks are above ground level
and no selective reclamation is required

5.    Mineral resources are not mineral reserves and do not have
demonstrated economic viability

6.    The 'Total' rows do not always tally due to rounding

7.    The full Resource tables are set out in the Appendix

 

The MRE is classified as Measured, Indicated and Inferred Mineral Resources of
46%, 43% and 11% deposit tonnage respectively (July 2023 Resource: Measured,
Indicated and Inferred Mineral Resources of 24%, 53% and 23% deposit tonnage
respectively), representing increased confidence as a result of recent infill
drilling.

The MRE is noted as being relatively homogenous in nature, with no selective
reclamation of the stacks required as 99.7% of the phosphogypsum tonnage is
above the 0.2% TREO cut-off. Due to the nature of the Resource sitting at
surface and the associated water limiting drill accessibility, Rainbow is not
planning to do further infill drilling and the Inferred portion will be
included in the project's forthcoming Definitive Feasibility Study. It is
anticipated that the full Resource will be processed as part of the project
life.

Competent Persons Statement

The information in this report that relates to the Mineral Resources for the
Phalaborwa project is based on, and fairly represents, information compiled or
reviewed by Mr Malcolm Titley, a Competent Person who is a Member of the
Australasian Institute of Mining and Metallurgy and the Australian Institute
of Geoscientists. Mr Titley is employed by Maja Mining Limited, an independent
consulting company.

Mr Titley has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the
2012 Edition of the "Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves". Mr Titley consents to the inclusion of
information from this report in Rainbow public releases using his information
in the form and context in which it appears.

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 that occurs as
the by-product of phosphoric acid production, with the original source rock
for both deposits being a hardrock carbonatite.

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) .

Appendix

MRE - REE Proportions

 JORC 2012    Stack    Mt    TREO %  Nd    Pr   NdPr  Dy   Tb   Eu   Sm   Gd   La    Ce    LREO  HREO  SEGO  Ga  F    Th    U    Dry BD  Moisture
 Measured     Stack A  10.8  0.4     23.6  5.7  29.3  1.0  0.3  0.8  4.0  3.0  17.4  41.6  92.2  5.5   7.8   10  0.8  48.6  1.7  1.37    25
              Stack B  5.2   0.5     23.3  5.9  29.1  0.9  0.3  0.8  3.9  2.9  17.4  42.2  92.5  5.4   7.6   9   0.7  45.0  2.1  1.33    27
              Total    16.0  0.5     23.5  5.7  29.2  1.0  0.3  0.8  4.0  3.0  17.4  41.8  92.3  5.4   7.7   10  0.7  47.4  1.8  1.36    26
 Indicated    Stack A  11.0  0.4     23.3  5.5  28.8  1.0  0.3  0.8  3.9  2.9  17.2  42.2  92.2  5.4   7.6   11  0.6  47.7  1.8  1.46    22
              Stack B  3.9   0.5     23.2  5.7  28.8  1.0  0.3  0.8  3.9  2.8  17.6  42.4  92.7  5.2   7.5   10  0.7  42.9  2.0  1.31    27
              Rubble/  0.4   0.3     25.3  5.4  30.7  1.0  0.3  0.8  4.5  2.8  16.4  40.5  92.2  5.3   8.1   6   1.3  28.5  1.9  1.42    27

              Mixed
              Total    15.2  0.4     23.3  5.6  28.9  1.0  0.3  0.8  3.9  2.9  17.3  42.2  92.3  5.4   7.6   11  0.7  46.0  1.9  1.42    24
 Inferred     Stack A  1.7   0.4     23.4  5.5  28.9  1.0  0.3  0.8  3.9  2.8  17.0  42.5  92.3  5.3   7.5   9   0.6  46.0  2.1  1.48    21
              Stack B  1.6   0.4     23.2  5.5  28.7  1.0  0.3  0.8  4.0  2.8  17.7  42.1  92.5  5.3   7.7   11  0.7  40.2  2.0  1.33    27
              Rubble/  0.6   0.3     24.3  5.8  30.1  0.9  0.3  0.8  4.6  2.7  17.3  40.5  92.5  5.2   8.2   5   1.1  31.1  1.5  1.42    25

              Mixed
              Total    3.8   0.4     23.4  5.6  29.0  1.0  0.3  0.8  4.0  2.8  17.3  42.1  92.4  5.3   7.7   9   0.7  41.4  2.0  1.40    24
 Grand Total           35.0  0.4     23.4  5.6  29.0  1.0  0.3  0.8  4.0  2.9  17.3  42.0  92.3  5.4   7.7   10  0.7  46.1  1.8  1.39    25

 

Notes

1.     TREO = Total Rare Earth Oxide, HREO = Heavy Rare Earth Oxide, LREO
= Light Rare Earth Oxide, SEGO = SEG Oxide

2.     The Mineral Resource is reported at a 0.2% TREO cut-off grade

3.     The individual REEs set out in the table refer to the following
oxides, set out as % proportions of TREO; Nd2O3, Pr6O11, Dy2O3, Tb4O7, Eu2O3,
Sm2O3, Gd2O3, La2O3, Ce2O3, Ce2O3

4.     NdPr, LREO, HREO and SEGO are set out as % proportions of TREO

5.     Ga, Th, U are shown as parts per million (ppm),  F is shown as %

6.     Moisture content is set out as %

7.     No constraining shell is required as stacks are above ground level

8.     Adequate initial metallurgical testwork and financial analysis has
been completed to satisfy reasonable prospects for economic evaluation

9.     The favoured mineral processing route uses a continuous ion
exchange (to remove impurities) followed by REE leach and REE refining to
produce three saleable products: neodymium/praseodymium oxide, dysprosium
oxide, and terbium oxide; all processing is expected to be on-site at the
Phalaborwa Mining Complex adjacent to the phosphogypsum stacks

10.  Tonnages are rounded to the nearest 100,000 tonnes to reflect this as an
estimate

 

MRE - REE Grades

 JORC 2012    Stack    Mt    TREO  LREO  HREO  SEGO  F    Th    U     Nd2O3  Pr6O11  Dy2O3  Tb4O7  Sm2O3  Eu2O3  Gd2O3  La2O3  Ce2O3  Dry BD  Moisture

                             %     %     %     %     %    ppm   ppm   %      %       %      %      %      %      %      %      %
 Measured     Stack A  10.8  0.44  0.41  0.02  0.03  0.8  49    1.7   0.104  0.025   0.004  0.001  0.018  0.004  0.013  0.077  0.184  1.37    25
              Stack B  5.2   0.47  0.43  0.02  0.04  0.7  45    2.1   0.109  0.028   0.004  0.002  0.018  0.004  0.014  0.081  0.198  1.33    27
              Total    16.0  0.45  0.42  0.02  0.03  0.7  47    1.8   0.106  0.026   0.004  0.001  0.018  0.004  0.013  0.078  0.188  1.36    26
 Indicated    Stack A  11.0  0.42  0.39  0.02  0.03  0.6  48    1.8   0.098  0.023   0.004  0.001  0.016  0.003  0.012  0.072  0.177  1.46    22
              Stack B  3.9   0.46  0.42  0.02  0.03  0.7  43    2.0   0.106  0.026   0.004  0.001  0.018  0.004  0.013  0.080  0.193  1.31    27
              Rubble/  0.4   0.30  0.28  0.02  0.02  1.3  29    1.9   0.075  0.016   0.003  0.001  0.013  0.002  0.008  0.050  0.123  1.42    27

              Mixed
              Total    15.2  0.43  0.39  0.02  0.03  0.7  46    1.9   0.099  0.024   0.004  0.001  0.017  0.003  0.012  0.074  0.180  1.42    24
 Inferred     Stack A  1.7   0.41  0.38  0.02  0.03  0.6  46    2.1   0.097  0.023   0.004  0.001  0.016  0.003  0.012  0.071  0.176  1.48    21
              Stack B  1.6   0.44  0.41  0.02  0.03  0.7  40    2.0   0.103  0.025   0.004  0.001  0.018  0.004  0.013  0.079  0.188  1.33    27
              Rubble/  0.6   0.31  0.28  0.02  0.02  1.1  31    1.5   0.074  0.018   0.003  0.001  0.014  0.003  0.008  0.053  0.125  1.42    25

              Mixed
              Total    3.8   0.41  0.38  0.02  0.03  0.7  41    2.0   0.096  0.023   0.004  0.001  0.016  0.003  0.012  0.071  0.173  1.40    24
 Grand Total           35.0  0.44  0.40  0.02  0.03  0.7  46.0  1.8   0.102  0.025   0.004  0.001  0.017  0.003  0.013  0.075  0.183  1.39    25

 

Notes

1.     TREO = Total Rare Earth Oxide, HREO = Heavy Rare Earth Oxide, LREO
= Light Rare Earth Oxide, SEGO = SEG Oxide

2.     The Mineral Resource is reported at a 0.2% TREO cut-off grade

3.     Moisture content is set out as %

4.     No constraining shell is required as stacks are above ground level

5.     Adequate initial metallurgical testwork and financial analysis has
been completed to satisfy reasonable prospects for economic evaluation

6.     The favoured mineral processing route uses a continuous ion
exchange (to remove impurities) followed by REE leach and REE refining to
produce three saleable products: neodymium/praseodymium oxide, dysprosium
oxide, and terbium oxide; all processing is expected to be on-site at the
Phalaborwa Mining Complex adjacent to the phosphogypsum stacks

7.     Tonnages are rounded to the nearest 100,000 tonnes to reflect this
as an estimate

 

 

MRE - Contained Metal

                                  Contained Metal (tonnes)
 JORC 2012    Stack         Mt    Nd2O3   Pr6O11  Dy2O3  Tb4O7  Sm2O3  Eu2O3  Gd2O3  La2O3   Ce2O3   Dry BD  Moisture
 Measured     Stack A       10.8  11,214  2,704   466    152    1,896  379    14     8,272   19,831  1.37    25
              Stack B       5.2   5,721   1,439   228    79     953    198    7      4,261   10,345  1.33    27
              Total         16.0  16,935  4,143   695    230    2,849  577    21     12,533  30,176  1.36    26
 Indicated    Stack A       11.0  10,724  2,545   455    145    1,797  371    13     7,929   19,436  1.46    22
              Stack B       3.9   4,109   1,009   168    54     693    142    5      3,115   7,515   1.31    27
              Rubble/Mixed  0.4   275     60      11     4      50     9      0      183     453     1.42    27
              Total         15.2  15,109  3,615   634    202    2,540  521    19     11,227  27,404  1.42    24
 Inferred     Stack A       1.7   1,602   379     66     20     264    55     2      1,169   2,920   1.48    21
              Stack B       1.6   1,624   388     68     22     280    58     2      1,241   2,953   1.33    27
              Rubble/Mixed  0.6   420     100     16     6      80     15     0      299     708     1.42    25
              Total         3.8   3,646   867     151    48     624    127    4      2,710   6,580   1.40    24
 Grand Total                35.0  35,689  8,624   1,479  480    6,012  1,225  44     26,469  64,161  1.39    25

 

Notes

1.     The Mineral Resource is reported at a 0.2% TREO cut-off grade

2.     Metal Content is quoted to the nearest ton

3.     Moisture content is set out as %

4.     No constraining shell is required as stacks are above ground level

5.     Adequate initial metallurgical testwork and financial analysis has
been completed to satisfy reasonable prospects for economic evaluation

6.     The favoured mineral processing route uses a continuous ion
exchange (to remove impurities) followed by REE leach and REE refining to
produce three saleable products: neodymium/praseodymium oxide, dysprosium
oxide, and terbium oxide; all processing is expected to be on-site at the
Phalaborwa Mining Complex adjacent to the phosphogypsum stacks

7.     Tonnages are rounded to the nearest 100,000 tonnes to reflect this
as an estimate

 

 1  (#_ftnref1) As at 6 September 2024

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