AMN - BURUNDI: Gakara REE sales by end of year

Rainbow Rare Earths, a rare earth element (REE) mining company, is targeting first production and sales of rare earth concentrate from the Gakara project in Burundi by the end of this year. The company has raised $8 million following a successful IPO on the London Stock Exchange.

Gakara is one of the highest grade (47-67% TREO) rare earths projects globally.

Preparation for mining at Gakara is under way at the company’s first production site, Gasagwe, with haulage and access road construction a primary focus as well as establishment of the basic infrastructure for the mine site.

Alongside a number of managerial roles, a local labour force has 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, 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 EPCM contract with Obsideo Consulting of South Africa for the design, supply and construction of its ore processing plant with a capital equipment value of approximately $1.5 million with the agreed commissioning and handover date of the plant being in Q4 2017.

This will enable Rainbow to meet its 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. Rainbow has a ten-year distribution and offtake agreement with tk Raw Materials secured for the sale of at least 5000 t/y of concentrate produced.

Martin Eales, CEO of Rainbow, said: “It has been a very busy period since completion of the $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.”

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

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.

www.rainbowrareearths.com

News courtesy of International Mining