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Rainbow Rare Earths boosts rare earths exports from high grade Gakara mine

Rainbow is continuing to drive towards a production rate of 400 tonnes per month
Rainbow Rare Earths boosts rare earths exports from high grade Gakara mine
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The Gakara mine

Rainbow Rare Earths LTD (LON:RBW) exported 350 tonnes of rare-earths concentrate in the three months to 30 September 2018, an increase of 27%.

The grade per tonne of concentrate sold and exported ran at a very healthy 59% total rare earth elements, confirming once again the status of the company’s Gakara mine in Burundi as one of the highest grade rare earth projects anywhere in the world.

WATCH: Rainbow Rare Earths looking ahead to increased production and maiden resource

"A lot of positive progress has been made in the quarter, particularly with regard to an increase in exported tonnes and total ore mined from Gasagwe, the development of our next mining area at Murambi and the conclusion of the drilling programme at Kiyenzi which means we are still on track to deliver our maiden JORC Resource before the end of 2018,” said Martin Eales, Rainbow’s chief executive.

"Whilst initiatives have been put in place to allow more predictable extraction going forward the geological environment has been challenging more recently. In view of these uncertainties and the limited lead time to start up Murambi, the company believes that the targeted 400 tonnes per month run rate will be delayed into 2019, dependent on further mining areas being opened. The Company's focus is on increasing production and sales to a level of 250-300 tonnes per month in the near term at which level the business will be EBITDA positive."  

 A slight decline in rare earth prices, particularly for neodymium and praseodymium) in the quarter led to a reduction of 3.6% in the realised sales price, which fell from US$2,229 to US$2,147 per tonne. Rainbow's indicative basket price fell 7% from US$12.87 per kilogrammes to US$11.91.

Transport, shipping and handling costs all fell, as the company continues to streamline what is still a relatively new operation.

However, production costs per exported tonne increased, reflecting an increase in the scale of the mining fleet in particular, both at Gasagwe and at the new site Murambi, where preparatory work had to be undertaken in advance of the first production in the coming quarter and was expensed rather than capitalised.

As production levels increase, average costs per tonne are expected to decrease due to a large proportion of monthly costs being relatively fixed in nature.


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