Rainbow Rare Earths Share Discussion Threads

[magicmayhem] 31/10/2018 09:32

Well, I've averaged down this morning. The share price doesn't want to move even though all the trades seem to be buys?

[loganair] 30/10/2018 20:11

The most positive part of the statement - 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.

[goodgrief] 30/10/2018 17:58

Another example of the failing educational system...

[sleveen] 30/10/2018 17:44

It was a play on the name Napoleon.

I don't like seeing peeps lose their money, but there are only perhaps 20-30 AIM shares that are investible, its finding them that's the difficult bit.

Strategic withdrawal (= sell at a loss) rather than meeting your Waterloo (= complete loss)?

[mp79] 30/10/2018 17:41

Sorry just googled it and found out what it means

[mp79] 30/10/2018 17:38

I'm sorry would you please clarify what you mean to say it went all over my head....must be a market jargon I guess...

[sleveen] 30/10/2018 17:26

Strategic withdrawal rather than meeting your Waterloo?

[napoleon 14th] 30/10/2018 15:24

Gutted by the fall in the last 6 months - how the targets have slipped...
Like many other shares, some even less understandable like AMER, there's no point selling IMO.

This analysis is interesting & not so pessimistic, but progress has been knocked on the head even if the upside is met.

hxxps://www.directorstalk.net/rainbow-rare-earths-positive-progress-has-been-made-in-the-quarter/

[mp79] 30/10/2018 14:54

I am thinking of averaging it down once dust settles

[magicmayhem] 30/10/2018 14:16

Just interested in everyone's opinion. Are you selling up and moving on or will you sit it out?

[podgyted] 30/10/2018 11:07

Arden have cut their TP to 9p. Forecasts cut - first profit in 2020 - ominously it cut its forecast for cash at end of FY 2019 to $0.5m from $2.6m giving risk of a further fundraising.

[napoleon 14th] 30/10/2018 09:33

I fear this has become another "jam tomorrow" story....
All time lows for now are the only reward.

Still, something of value can happen once it is ebitda positive.
Such is the nature of mining!

[sleveen] 30/10/2018 07:22

Not an inspiring RNS today.

A new low today?

[meanreverter] 28/10/2018 19:52

China is restricting rare-earth production:

[napoleon 14th] 09/10/2018 19:12

And new all time lows...

[napoleon 14th] 05/10/2018 18:13

That's an interesting article but doesn't address the subject of the sales price RBW achieve on their product, which is my main concern, and a major one in anyone's book.

"Rainbow’s medium-term production targets of 5,000 tonnes by the end of this year, and 6,000 tonnes in the following years looks eminently achievable. The company’s contracted customer, ThyssenKrupp, has rights to buy all output up to the 10,000 tonnes mark, so there’s optimism all around."

No mention of any price/ton......
"$10k/t basket price, concentrate discounted to Thyssenkrupp over 10 year deal"

So, what is the truth?
I've sold half of my holding until this is ascertained.
At $10k/t I'll buy back, but for now the share is below the price at the fundraising.

[bigboyblue] 27/9/2018 14:19

From Proactive Investors
INVESTMENT OVERVIEW
Rainbow Rare Earths about to break even and profitability at Gakara
10:27 27 Sep 2018
Rainbow's Gakara project is one of the highest grade rare earths operations in the world
Rainbow Rare Earths about to break even and profitability at Gakara
INVESTMENT
OVERVIEW: RBW
THE BIG
PICTURE
The Gakara mine in Burundi is now nearing breakeven
“We’ve built a mine,” says Martin Eales of Rainbow Rare Earths Ltd (LON:RBW).

That much is certainly true, and by the look of the grades coming out of the Gakara rare-earths project in Burundi, a good one too. As far as can be ascertained, Gakara is the highest grade rare-earths project anywhere in the world.

READ: Rainbow Rare Earths looks to build production as Burundi operation hits stride
That being said, Rainbow’s financial results haven’t quite caught up to this attractive reality.

“The numbers are not reflective of where we expect to be in the coming year,” says Eales.

The reason the company posted a pre-tax loss of around US$2.6m in the year to June 2018 is straightforward enough: production is still ramping up and there was a US$700,000 non-cash accounting charge for share options].

At the beginning of the period, production was zero and had only really begun to gather pace towards the summer, building up from when the first tonnes of concentrate was produced in December 2017, halfway through the financial year.

Even now, the final stages of the ramp up are ongoing.

That meant the company was only able to book revenues of US$1mln, and as far as the company’s auditors were concerned at least, that didn’t actually amount to “commercial221; production, so revenue and production costs were booked to the balance sheet rather than the income statement.

But in the coming year, it will be very different.

Margins
Many of the costs associated with the mining operation at Gakara are fixed, not least the sunk costs, so with every incremental increase in production, margins are likely to rise exponentially.

Accordingly, as the ramp-up continues, Eales expects Rainbow Rare Earths to reach breakeven point at the end of this year, and to turn profitable early next year.

“We should make healthy profits in the first half of the next calendar year,” he says.

And there’s more. As part of the ramp-up at Gakara Eales expects Rainbow to be opening up further new mining areas.

The first new area, at Murambi, is likely to come on stream by the end of the fourth quarter, and more will follow.

“Murambi had a lead time of six-to-nine months,” says Eales. “And our processing plant has the capacity to take more ore.”

Accordingly Rainbow is also looking at progressing development at Kiyenzi too, an area which is geologically different to the narrow, high-grade veins that have so far been the focus of Rainbow’s efforts.

“Kiyenzi is a breccia, or a dispersed vein, covering a much larger area, so there’s lots more mineralised ore than the veins we currently mine and this may be more amenable to mechanised mining,” says Eales.

With all that in mind, Rainbow’s medium-term production targets of 5,000 tonnes by the end of this year, and 6,000 tonnes in the following years looks eminently achievable. The company’s contracted customer, ThyssenKrupp, has rights to buy all output up to the 10,000 tonnes mark, so there’s optimism all around.

Price
And the rare-earths price continues to strengthen too, despite the uncertainties around President Trump’s trade policies. Eales isn’t concerned about tariff wars, though. He prefers to focus on the fundamentals of the global economy which look set to create increased demand for rare-earths over a considerable period of time, particularly as production rates for electric vehicles rise.

How then can Rainbow Rare Earths capitalise further on this opportunity?

After all, at the moment it’s still a relatively small operation, albeit that with the exception of Lynas’s plant in Malaysia, which is potentially facing a review, it’s the only listed rare-earths production project outside of China.

The first answer to that question is that a new JORC resource is due shortly. That will put a floor on the company’s resource base and give it a solid foundation for growth. Exploration work will continue, the aim of which is to uncover near-term production tonnes and to add to the JORC resource figure.

But separately, Rainbow Rare Earths is also planning to become more involved in processing its own product, and thereby capturing more of the value.

At the moment concentrate is shipped out to customers, with very little processing. This is because it is high grade. But if in the future Rainbow Rare Earths can undertake for itself some of the processing that customers undertake, then the premiums will be all the greater.

Rainbow announced in August that it had formed a partnership with TechMet Limited, a technology metals investment company, whereby it would be carried on a full definitive feasibility study for a downstream processing solution, although it might be a while before we see the results.

In the meantime, the cash will keep coming in, margins will keep growing, and Rainbow Rare Earths will continue to produce and sell some of the key elements required by the 21st Century’s technical revolution.

[napoleon 14th] 21/9/2018 12:39

"Indicative forecasts: 5000t/a initial production capability, ~ $10k/t basket price, concentrate discounted to Thyssenkrupp over 10 year deal, $810/t op costs, $280/t transport costs.($200/t transport, plus $80/t made up of 3.5% marketing and 4% royalties)"
What happened to that? & why?
Currently, sales price achieved at approx. 75% discount to the above.

[napoleon 14th] 21/9/2018 12:34

hxxps://www.directorstalk.net/interview-rainbow-rare-earths-ltd-2018-a-year-of-transformation/

[podgyted] 19/9/2018 16:53

Looking at the final accounts, I have no idea why the price has held up so well today. They are going backwards.

Thankfully, having watched for a while I've never jumped in having being tempted several times.

When their own broker can only set a TP of 16p based on them being taken over, I think the writing is well and truly on the wall.

[novicetrade68] 17/9/2018 16:26

If I may add, the incredible discount RBW sells their 'rare' earths for is genuinely amazing imo. In other words, RBW is hardly going to benefit even with serious rises in the basket price.

[mp79] 09/9/2018 01:06

I have exited after loosing my on-paper gain but this is where we stand I think. This is not one to one comparative reply though but those who have studied last two-three quarterly results will get it...

1. Company has messed up account presentation I guess. CAPEX and OPEX should have been clear and separate whereas they have mixed it up and that is the reason why OPEX seems high with loss in Q2.
2. Company appears to have adjusted production numbers as latest numbers do not match with last presentation.
3. Goalpost i.e. next production area targets changed atleast 3 times in last 6 months.
4. Management appears in infancy and learns as they go digging.
5. Production numbers i.e. run rate ramp up is slower than expected. Four drill areas returned with nothing.
6. Fund raising should have been done when share price was 18+..I dont understand the reason why it was delayed till share price dropped to 12.
7. Few other points I don't remember now but I think Adinos and Martin can clear up this initial mess in a year or so and will steer the company with share price back to 20+ but that is now quite a long way from here (may be over a year until we see some visibility on profits).
8. Only positive point in last few months was Company did not have any trouble with raising from market in just couple of hours second time as well.
9. It seems at the moment that TK is just money making marketing agent facilitating concentrate sells to Chinese as company do not have refining unit.
10. Q3/Q4 Production surprise and Final drill results with JORC may turn share price quickly up in short span though but this stock has lost its initial charm.

I am watching it.

[daim1] 08/9/2018 16:49

This is where we thought we were in May

How doe we compare now?

thanks Maccamcd.

May 2018 presentation popped-up on company website in last few days i guess.

1. Brokers are now only Arden Partners (Hannam dropped)
2. Next update is in June
3. Gasagwe will run for 2 years
4. Kiyenji appears to be more than 150 m tall mountain next to small Gasagwe hill? (a hugh potential of high grade REE?) where they drilled only till 32 m.
5. Still four other areas to be drilled.
6. To me, it seems this year will be defining year for rainbow in term of what it holds.
7. I notice from May 2018 presentation on company website that Miton and L&G have not sold or bought any since Feb. Their holding almost remains same. So if we wonder reasons for steep rise from 14 to 18 and then 18 to 24 (then back to 19 - 20) in last two months, it can be either entirely driven by general public or there is/are other institutional investor(s) (with <5% share) that we don't know of.
8. Very puzzling pleasant positive moment this morning but the fact is this share can be pulled up or down by pushing extremely short numbers into play (Again this confirms that this is very tightly held share).

[shareideas1] 29/8/2018 09:24

See the press release of 8th August in which they placed 13m odd shares (at 12.5p) to raise c.2m