Rainbow Rare Earths Limited (AIM: RBW) saw a surge in shares on Tuesday following the announcement that it had signed an agreement on the joint development of the Phalaborwa Rarearths Project in South Africa along with Bosveld Rosphates Limited.
The company says the project consists of about 35 million tons of gypsum and, based on previous sampling campaigns, the rare earth oxide concentration grade is 0.6% rare earth oxide. On the scale of this grade and project, the company said it shows the presence of approximately 210,000 tons of rare earth oxides with neodymium and praseodymium (a key ingredient in renewable power and electric vehicle batteries).
The company adds that the “unique” nature of the gypsum stack is due to the historic concentration of rare earths during Foskor’s flotation process and further upgrades in Hosacid plants in Sasol, leading to a form that “enables simpler onward processing.”
It states that the initial report suggests a low level of radioactive elements, similar to what is seen in the Gakara project in Burundi. Additionally, the group said that reprocessing gypsum stacks has environmental benefits. In other words, it states that redepositing “clean benign plaster” could potentially be used in the construction and fertilizer industries.
Rainbow Rare Earths added that the Phalaborwa project is currently fully permitted and the environmental impact assessment has been completed. Following a 35-day due diligence process, Bossveld will pay US$750,000 in cash and shares over the course of a year. Also, once the feasibility study is completed in advance, Rainbow Rare Earths owns 70% of the project and 30% of Bosveld, and the company’s JV ownership mechanism allows ownership to vary between 60% and 85%.
Commenting on the important joint venture agreement, CEO George Bennett said:
“This joint venture represents an important and exciting step in Rainbow’s strategy to benefit from the expected growth of the global demand for rare earth metals. The substantial amount of historic testing work done so far, along with positive initial assays and successful pilot plant operations, demonstrates that this opportunity, along with the company’s high-quality Gakara project, will enable us to become a very important producer of NDPR to promote the green revolution.”
“The joint venture positions Rainbow as the only REE producer with both national and project diversification.”
Following the news, the company’s shares rose between 20 and 25%, reaching 6.20 points at lunch on Tuesday, November 20th, 03. This price is the company’s highest ever high since the start of the year, but it’s a record shortfall of 23.10p in April 2018.
