THE ONLY RARE EARTHS MINE IN AFRICA - March 2019 - Rainbow Rare Earths
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THE ONLY RARE EARTHS MINE
IN AFRICA
March 2019
DISCLAIMER These Presentation Materials are for information purposes only and must not be used or relied upon for the purpose of making any investment decision or engaging in any investment activity and should not be construed as, an offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities of Rainbow Rare Earths Limited (the “Company”). Whilst the information contained herein has been prepared in good faith, neither the Company, its subsidiaries (together, the “Group”) nor any of the Group’s directors, officers, employees, agents or advisers makes any representation or warranty in respect of the fairness, accuracy or completeness of the information or opinions contained in this presentation and no responsibility or liability will be accepted in connection with the same. The information contained herein is provided as at the date of this presentation and is subject to updating, completion, revision, verification and further amendment without notice. These Presentation Materials contain forward-looking statements in relation to the Group. By its very nature, such forward-looking information requires the Company to make assumptions that may not materialise or that may not be accurate. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this presentation should be construed as a profit forecast. Past share performance cannot be relied on as a guide to future performance. Rainbow Rare Earths Ltd. 1
STRONG FUNDAMENTALS
THE FUNDAMENTALS OF THE GAKARA PROJECT REMAIN STRONG –
FROM START UP IN LATE 2017 TO TARGETED BREAKEVEN IN LATE 2019
Grade RE demand set to increase Potential world-class deposit
With veins averaging a TREO of • Demand for magnet REs (NdPr) • Maiden JORC Resource
47-67%, Gakara is by far the set to rise in response to increase announced Dec 2018
highest-grade mine in the world in production of EVs • Over 12,000 tonnes high grade
• Limited production capacity in Resources from just 3 of 28
market medium-term, particularly prospects and over 1 million tonnes
outside China of lower grade (2.2% TREO)
Resource at Kiyenzi
Asset in production Downstream separation Environmentally sound
Only producing mine in Africa, one planned with TechMet • Demand growth for RE ‘green
of only two listed RE companies Will significantly reduce discount to technologies’ yet most sources of RE
that are producing commercially basket price and improve margins are environmentally damaging
outside China • Gakara uses no chemicals/reagents
and utilises local workforce
Rainbow Rare Earths Ltd. 2
WHY RARE EARTHS?
ND & PR REPRESENT THE MOST SIGNIFICANT ELEMENTS IN THE LANTHANIDE GROUP BY VALUE
Magnet Rare Earths are critical in these key booming markets amongst others
Electric vehicles: Smart phones : Wind turbines:
Forecast demand growth for NdPr is Neodymium gives your phone the power NdFeB magnets have allowed wind
primarily driven by the anticipated uptake to vibrate. 2.87 billion smartphone users turbines to reduce costs and increase
of EVs as well as growth in all electric worldwide predicted by 2020 efficiencies
motor usage
NdPr market balance
NdFeB demand
Source: Citic Securities via SMM Source: Citic Securities via SMM
Rainbow Rare Earths Ltd. 3
GAKARA PROJECT OVERVIEW
PRODUCTION OF HIGH-GRADE RARE EARTH CONCENTRATE
FROM THE ONLY PRODUCING RARE EARTHS MINE IN AFRICA
Key Facts
Location Processing
Mining Areas: 35km by road from Simple efficient gravity separation
Bujumbura, Burundi’s capital city processing facility
Processing Plant: 13km South of
Bujumbura by road
Sales
Interest
650t in six month period to 31 Dec
90% with a non-dilutable 10% owned 2018
by the Republic of Burundi
Offtake Partner
Mining Licence
10-year offtake agreement signed with
Granted March 2015; valid for 25 years thyssenKruup Materials Trading for
and renewable thereafter 5ktpa of concentrate, and right of first
refusal for additional 5ktpa
Infrastructure
JORC Resource
Good road links to Dar es Salaam,
Tanzania and Mombasa, Kenya JORC Resource outlined 12k high
grade veins (TREO 55%), as well as
Product 1.2m tonnes lower grade (TREO 2.2%)
deposit at Kiyenzi
High Grade Rare Earth Minerals
Concentrate (47-67% TREO) Exploration upside
Production Rate High Grade – 25 additional targets
identified
550 tonnes exported in H1 FY19 Low Grade – more exploration work
targeted for Kiyenzi and other areas
Rainbow Rare Earths Ltd. 4
ACHIEVEMENTS SO FAR
KEY CHALLENGES HAVE BEEN SUCCESSFULLY ADDRESSED IN THE FIRST 18
MONTHS OF OPERATIONS
Develop 1st Recruit and Build Complete Secure access
Embed safe Commence Export
and 2nd mining train local processing sales to cash to sales
practices mining concentrate
areas workforce plant cycle proceeds
ACHIEVED ACHIEVED ACHIEVED ACHIEVED ACHIEVED ACHIEVED ACHIEVED ACHIEVED
JORC Increase production Further increases to
Resource Open 2 new mining areas
to break-even Resource base
Announced ONGOING
Dec 2018 Expected H2 2019 During 2019 ONGOING
Rainbow Rare Earths Ltd. 5
THE GAKARA RARE EARTHS PROJECT Rainbow Rare Earths Ltd. 6
GASAGWE & MURAMBI MINING AREAS
GASAGWE
▶ Initial mining area (commenced 2017) has
contributed the bulk of ore tonnes to date and
served to provide strong foundation for proof of
concept
▶ Very high grade vein stockwork structure allows
tight control of tonnes to be processed
▶ Likely to cease later in 2019 as initially planned,
although new vein discoveries continually being
made
MURAMBI
▶ Vein structure very similar to Gasagwe
▶ Trenching suggests vein extension may be up to
200m, approximately twice the length at Gasagwe
▶ First tonnes delivered Q2 18-19, now increasing to
full production following construction of haul road
and waste dump
Rainbow Rare Earths Ltd. Gakara Mining Licence perimeter, mining areas and RE discoveries 7
GASAGWE & MURAMBI MINING AREAS SMALL MECHANICAL FLEET SUPPORTS MANUAL EXTRACTION OF HIGH GRADE VEINS Rainbow Rare Earths Ltd. 8
AERIAL VIEW OF MURAMBI MINING AREA Rainbow Rare Earths Ltd. 9
ADDITIONAL MINING AREAS FOR 2019
NEW PITS PLANNED AT KIYENZI AND GOMVYI TO
PROVIDE SCALE AND CONSISTENCY
▶ Experience so far justifies expansion to multiple pit
strategy
▶ Greater scale of operations caters for inevitable
variability of ore tonnes from each site and KIYENZI
therefore adds more consistency to production
▶ Exploration work already underway on Kiyenzi and
Gomvyi suggests that both areas can be mined GOMVYI
▶ Both new pits expected to be in operation in H2 of
calendar 2019, following necessary permitting and
compensation process recently successfully
undertaken for Murambi
▶ With multiple pits in operation the business is
expected to reach breakeven and profitability in the
second half of 2019
Rainbow Rare Earths Ltd. Gakara Mining Licence perimeter, mining areas and RE discoveries 10FUNDAMENTAL GROWTH AND VALUE STRATEGY
THREE ELEMENTS: NEAR-TERM PRODUCTION; RESOURCE GROWTH; AND
DOWNSTREAM EXPANSION
Develop separation capability
Investigate separation capability for Gakara
3
▶
concentrate with feasibility study to be
Develop downstream completed with additional funding from TechMet
separation ▶ Capex will depend on scale and technique but
may beOPERATIONS UPDATE: Q2 2018-2019
BROADLY CONSISTENT PRODUCTION JUSTIFIES EXPANSION INTO NEW AREAS
300
▶ 275t Concentrate exported and 300t sold – 250
broadly consistent with prior periods
Tonnes exported
200
▶ Marginal fall in grade and commodity prices 150
over the quarter gave lower sales price per 100
tonne
50
▶ Strong demand from customers justifies
0
increase in producing areas Q2 2017- Q3 2017- Q4 2017- Q1 2018- Q2 2018-
2018 2018 2018 2019 2019
▶ Cash flow breakeven/profitability expected in
H2 calendar 2019
400
▶ Flexible equity funding agreement with Lind 350
Partners announced for up to US$7.75 million, 300
Tonnes sold
allows investment for growth when required 250
200
150
100
50
0
Q2 2017- Q3 2017- Q4 2017- Q1 2018- Q2 2018-
2018 2018 2018 2019 2019
Rainbow Rare Earths Ltd. 12KABEZI PROCESSING PLANT
A SIMPLE EFFICIENT GRAVITY SEPARATION
PROCESSING FACILITY
Fully operational Capacity Located next to Sufficient
and available to asphalt road throughput
commissioned increase providing ease of capacity for
production access for substantial
throughput container trucks production
without further increases
capex
Rainbow Rare Earths Ltd. 13CONCENTRATE PRODUCTION
RAINBOW’S PLANT FULLY COMMISSIONED WITH CAPACITY FOR INCREASED THROUGHPUT
▶ Rainbow processing plant located c. 13km south of Bujumbura at Kabezi and approximately
20km from mining areas
▶ Loading, sealing and sampling process working efficiently with Govt of Burundi officials prior to
export by container truck to port
▶ Bulk of revenue from thyssenkrupp Materials Trading received by Rainbow upon delivery at port
for each export
▶ Reliable and consistent TREO grade maintained in concentrate produced at an average of 56%
in H1 2018-19
Concentrate in production Final Concentrate Concentrate loaded and ready
for export
Rainbow Rare Earths Ltd. 14RAINBOW – SALES AND MARKETING
ORE VALUE STRONGLY WEIGHTED TOWARDS MAGNET RARE EARTHS
Basket composition Value in Nd and Pr
Based on average grades of REOs within Gasagwe in situ vein samples and market prices of
2%
▶ Based on Rainbow’s typical concentrate sales,
15% magnet REEs account for approximately
31% 19% of the contained REOs within the ore,
4%
representing an average of over 80% of the
By REO Content
contained value of REOs at current market
prices
48%
▶ thyssenkrupp Materials Trading handles all
sales negotiations and logistics
separated REOs on China FOB basis as at Nov 2018
Lanthanum Cerium Praseodymium Neodymium Other
▶ Customer demand extremely strong
Rainbow Basket Price 2018 - 19 ▶ Bulk of Rainbow sales revenue received from
14.5
TK upon transfer of title at Mombasa port
14
▶ Current basket price US$11.51/kg (as at
13.5
25/01/19)
US$/Kg
13
12.5
12
11.5
11
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019
Rainbow Rare Earths Ltd. 15COOPERATION AGREEMENT WITH TECHMET
DEAL ENABLES RAPID ACCELERATION OF DOWNSTREAM BUSINESS INVESTIGATION
▶ JV agreement whereby TechMet will fund up to US$3m for a full
Definitive Feasibility Study (“DFS”) for a downstream rare earth
separation business, with the aim of processing Rainbow’s high TechMet Ltd
grade concentrate into separated rare earths
▶ A private company investing in projects producing,
▶ Separated rare earth oxides sell for a significantly higher price processing and recycling strategic “technology metals”
than Rainbow’s concentrate product, which typically includes a
▶ Led by prominent mining industry CEO Brian Menell
processing discount of approximately 70% on metal content
▶ Interests in producing or development assets covering
▶ The agreement enables Rainbow to benefit from TechMet’s
lithium, tin, nickel, cobalt and tungsten with projects
extensive network of contacts and access to financing as well
as rapidly accelerating plans to commence downstream across a number of African countries and in North and
processing of Rainbow’s concentrate South America
Rainbow Rare Earths Ltd. 16EXPLORATION SUCCESS
Maiden JORC Resource declared in December 2018 confirms
potential world class deposit, with near term Resources from
additional high grade veins that could be augmented by a
substantial lower grade zone at Kiyenzi
Company photo of Kiyenzi (left) and Gasagwe (right)
Rainbow Rare Earths Ltd. 17MAIDEN JORC RESOURCE – DECEMBER 2018
UP TO 2 YEARS’ HIGH GRADE FEEDSTOCK AND HUGE POTENTIAL AT KIYENZI
▶ Total Maiden JORC compliant Resource of over 1.2 million tonnes of ore covering a
small fraction of the Gakara Project
▶ Three areas (Gasagwe, Murambi South and Gomvyi Centre) are very high grade vein
stockwork deposits – totalling 12,491 tonnes of Total Mineral Resource at an average
TREO grade of 55%
▶ Kiyenzi is a very large, lower grade mineralised deposit with nearly 1.2 million tonnes
Mineral Resource at an average grade of 2.2% TREO employing a cut-off of 1% TREO
▶ The Mineral Resource is based on only four out of the 28 mineralised prospects across
Rainbow’s existing Mining Licence – indicating significant further upside for future
exploration
Measure Indicated Inferred Total Ore TREO Contained
Deposit name
d (t) (t) (t) (t) Grade % TREO (t)
Gasagwe 153 273 570 996 58.7 585
Murambi South 972 2,917 4,480 8,369 54.8 4,586
Gomvyi Centre - 861 2,265 3,126 54.0 1,688
Total high grade deposits 1,125 4,051 7,315 12,491 54.9 6,859
Kiyenzi 58,671 297,274 837,033 1,192,978 2.2 26,570
Total 59,796 301,325 844,348 1,205,469 2.8 33,429
Rainbow Rare Earths Ltd. Photos: August 2018 drilling at Kiyenzi; and drill core showing the REE containing brecchia 1824 MONTH OBJECTIVES
NEAR-TERM OPTIONS INTENDED TO DRIVE VALUE FOR
SHAREHOLDERS FOLLOWING INITIAL SUCCESS
Targeting near- Expanded Progressive Completion of
term positive exploration increases in DFS for
EBITDA strategy and production from downstream
drilling new mining processing via
campaign areas Techmet-funded
JV
Rainbow Rare Earths Ltd. 19CONTACT
Martin Eales
Rainbow Rare Earths
29 Lincoln’s Inn Fields
London, WC2A 3EG
info@rainbowrareearths.com
T +44 (0) 20 3910 4550
Rainbow Rare Earths Ltd.
20KEY DATA
SHARES
TICKER MARKET MARKET CAP SHARE PRICE BROKERS
IN ISSUE
RBW.L LSE £5.39m 2.9p 195.4m ARDEN PARTNERS
As at 25.02.19
BOARD & MANAGEMENT SHARE PRICE
SHAREHOLDER HOLDING 30
Adonis Pouroulis 24.49%
25
Shawn McCormick 4.38%
20
Alexander Lowrie 2.54%
Robert Sinclair 2.18% 15
Martin Eales 1.20%
10
Atul Bali 0.80%
5
Cesare Morelli 0.64%
Gilbert Midende 0.58% 0
Jim Wynn 0.09%
Total 38.37%
Rainbow Rare Earths Ltd. 21BOARD
A BLEND OF CORPORATE, AFRICAN, RARE EARTH & PROJECT DEVELOPMENT EXPERIENCE
Adonis Pouroulis • Mining engineer: an entrepreneur whose expertise lies in the discovery, exploration and
Non-Executive development of natural resources across Africa including diamonds, precious/base metals, coal and
Chairman oil and gas.
• Founder and Chairman of Petra Diamonds (LSE:PDL); Founder and Director of Chariot Oil & Gas
(AIM:CHAR) and Founder of Pella Resources Limited
Martin Eales • 15 years’ broking and investment banking expertise specialising in the resources sector
CEO • Previously Managing Director at RBC Capital Markets in London. Was long-term adviser to
numerous London-listed resource companies
• Qualified Chartered Accountant
Shawn • International affairs specialist
McCormick • Over 25 years of political and extractive industries sector experience having served in The White
Non-Executive Director House as Director for African Affairs on the National Security Council (Washington)
• Previously Political Affairs Director of BP (London) and VP of TNK-BP (Moscow)
Robert Sinclair • Chartered Accountant with over 38 years’ experience in finance & accountancy
Non-Executive Director • Managing Director of Artemis Trustees Limited
• Fellow of the Institute of Chartered Accountants in England and Wales
Alexander Lowrie • Investment banker with 13 years’ experience and previous director roles at Deutsche Bank and RBS
Non-Executive Director • Co-founder of Telemark Capital LLP
• Significant market experience: IPOs and primary and secondary equity offerings
Atul Bali
Non-Executive Director • Corporate CEO with extensive experience in tech, government contracting and regulated industries
• Currently Chairman of Meridian Gaming
• Previously held divisional CEO or President positions with IGT (NYSE), Aristocrat (ASX), and Real
Networks (NASDAQ), as well as a venture capital firm
Rainbow Rare Earths Ltd. 22RARE EARTH ELEMENTS AND THEIR USES
APPLICATION RARE EARTHS DEMAND DRIVERS
Automotive, Wind turbines, Drives for computers, mobile
Nd, Pr, Sm, Tb, phones, mp3 players, cameras, Voice coil motors.
Magnets
Dy Hybrid and Electric vehicles, Cordless power tools,
Sensors, Medical imaging (MRIs)
LaNiH Hybrid vehicle batteries. Hydrogen absorption alloys for
La, Ce, Pr, Nd re-chargeable batteries
Batteries
Eu, Y, Tb, La, Dy, Ce, LCDs, PDPs, LEDs. Energy efficient
Phosphors
Pr, Gd fluorescent lights/lamps
Fluid
Petroleum production – greater consumption by ‘heavy’
Cracking La, Ce, Pr, Nd oils and tar sands
Catalysts
Mechano-chemical polishing powders for TVs, monitors,
Polishing
Scandium (Sc) Europium (Eu) Ce, La, Nd tablets, mirrors and (in nano-particulate form) silicon
Powders chips
Yttrium (Y) Gadolinium (Gd)
Lanthanum (La) Terbium (Tb) Tighter NOx and SO2 standards – platinum is re-cycled,
Auto
Cerium (Ce) Dysprosium (Dy) Ce, La, Nd but for rare
Praseodymium (Pr) Holmium (Ho) Catalysts earths it is not economic
Neodymium (Nd) Erbium (Er) Cerium cuts down transmission of UV light. La increases
Glass
Promethium (Pm) Thulium (Tm) Ce, La, Nd, Er glass refractive
Samarium (Sm) Ytterbium (Yb) Additive index for digital camera lens
Lutetium (Lu)
Fibre Optics Er, Y, Tb, Eu Signal amplification
Rainbow Rare Earths Ltd. 23You can also read
