Rainbow Rare Earths Share Discussion Threads

[dumbpunter] 07/10/2023 07:01

43p is risked 0.5NAV isn't it?
My understanding is that the price is cut by 50% to account for the risk it isn't built and operating.

[marktime1231] 06/10/2023 13:45

Exactly macca, it would be pretty easy to produce research saying RBW is worth twice as much again. RBW doing business in diverse places would be a source of comfort.

[goodday1] 06/10/2023 11:49

Rainbow Rare Earth's George Bennett on the latest fundraiser and potential gypsum money-spinnerPublished: 09:20 06 Oct 2023, Written by: Ian LyallhTTps://www.proactiveinvestors.co.uk/companies/news/1028952/rainbow-rare-george-bennett-on-the-latest-fundraiser-and-potential-gypsum-money-spinner-1028952.html5-minute interview with George Bennett.Gl all

[napoleon 14th] 05/10/2023 15:15

Very interesting, maccamcd.
Yes, a BASE CASE of 43p, but they leave themselves an escape clause,
valuing Mosaic at zero (still a single site project - Mosaic have several)
and not even mentioning the others in the world, some having signed MOUs.

If it's 43p or 50p by 2025. that's fine, but if I get G Bennett's idea right,
a year or two later RBW could be paying 16.5p/year as a dividend per share.

Wishful thinking, some might argue, but far from impossible, which is why
so much of the fundraise has been from current holders and management.

[maccamcd] 05/10/2023 15:12

Nope.. Just with what's in front of them now

[marktime1231] 05/10/2023 14:55

Good to see a stronger share price even when announcing a stock dilution.

Only 43p? Does that include the prospects of Mosaic - type deals around the world.

[maccamcd] 05/10/2023 14:47

Berenberg put out 'Future 10 baggers'Rainbow Rare Earths (Mcap EUR 91m, Buy, TP GBp 43, Richard Hatch) – Magnetic attraction... Rainbow's Phalaborwa is a rare earths business and its project in South Africa is very attractive for a number of reasons. First, it sources its ore from gypsum stacks, a waste deposit; this plays nicely into the circular economy theme of creating value from waste. Second, the stacks have already been chemically "cracked", making the separation process simpler than in traditional mining projects, translating into lower costs and the ability to separate higher-value rare earth oxides. Third, the mineral assemblage of Phalaborwa is attractive, with the USD/kg value of contained rare earths the highest of any development project globally. Fourth, strong revenue per kilo and low costs translate into a high-margin project, offering EBITDA margins of 75% in the long term. Due to a complex recovery process, China dominates the production of refined metal, at c90% of global supply but, owing to a mixture of significant demand growth and strategic uses in EVs and wind turbines, users are increasingly searching for non-Chinese sources of metal which creates a supply deficit. We forecast a supply-unconstrained CAGR (2022-30) of 13% for neodymium, 12% for praseodymium, 12% for dysprosium and 14% for terbium across these two key uses. Valuation... Shares trade on 0.35x NAV.Bagger potential: In our base case NAV we value the company at USD489m which translates to GBp43/share. Under a blue skies we could see this surpass cUSD600m if we assume a 20% higher commodity price and 15% weakening of the ZAR. Being an early stage developer the shares trade on a significant 0.25x discount to its base case NAV however as it approaches production over the next several years, a rerating inline with producers would be expected. If shares rerate to even 1x NAV in our base case we have a PT of GBp43 and in a blue sky that could reach over GBp50. That offers a c3x and c4x respective upside to the current share price. Furthermore while we current value the joint project with Mosaic in Brazil to be worth zero, if we see development on this, further upside is available

[napoleon 14th] 05/10/2023 14:02

Burundi politicians have neither western know-how nor finance, so their ideas
are wishful thinking. Without businesses like RBW, let alone the majors,
Gakara is no more than dirt in the dirt.If RBW can get some real money for it,
rather than trillions of Mugabwe Zimbabwe dollars or a Jacob Zuma type of deal,
then I hope it's "good riddance" to a time waster. 'Nuf said.

Very pleased with the follow-up to the fundraise and LOI off take for Phalaborwa.
IMHO salient points are :
1. The product is saleable, bringing in cash.
2. Proves there is a valid business waiting to be built.
3. High management participation backing their own plan.
4. Alternative to Chinese supply is highly desirable.
5. Other projects will come right and are piling up; Mosaic, Morrocco and two others
in S. Africa, let alone the unidentifieds elsewhere.
6. We have the most competitive refinement technology worldwide and thus the lowest
production costs, so relative immunity to market forces due to unequalled low OPEX.

What's not to like? All we need is time...

[dumbpunter] 29/9/2023 06:41

Burundi politicians are under the impression that the rare earths are extremely valuable when dug up from the ground. Much like 90% of investors, in fact. They cannot handle the reality that RE mining is barely profitable.
I doubt the other resource miners will be viable either, Burundi is now a hostile investment location.

[snowyflake] 28/9/2023 21:32

One can only assume that the leaders think that there is a wealthy local who will buy into the Gakara project. As Napoleon pointed out yesterday, one needs the know-how plus the capital to monetise a mineral resource and a market for the product; I guess the wealthy local who the leaders have in mind has the ability and can find a market.

[dumbpunter] 28/9/2023 20:23

english.abpinfo.bi/2023/06/29/towards-the-establishment-of-a-new-mining-code-in-burundi/#:~:text=ByWebmaster&text=GITEGA%20June%2029th%20(ABP,the%20mining%20code%20of%20Burundi.

Doesn't look as if Burundi would be remotely feasible with those requirements. 25& state ownership plus royalty share plus local processing. Last one is impossible with the terrible transport infrastructure. It was borderline before.

[napoleon 14th] 27/9/2023 12:26

RBW is obviously in safe, steady and experienced hands. This RNS is further proof,
tho' that's not needed anyway... Interesting LTBH for me.

I was talking to a guy from Mauritius on Monday who was virulent about
the white man's exploitation of Africa... I didn't mention Gakara, nor my few shares in SAVE, both a good example of the risks in investing there in the first place.
Then comes the know-how of monetising those sorts of mineral resources and capital
required plus the existance of a market for them, none of which are in Africa.
Let someone else waste time on Gakara, if they're daft enough!

[perfect choice] 27/9/2023 10:38

I too recall there was some ore left stockpiled at Gakara but I also recall GB saying the plan was for the revenue from selling it, would fund the recommencement of production there.

So if Gakara is completely finished and RBW can get that ore shipped out there is income, but suspect what the government has done would not even allow it to be shipped out.

For now they keep the licence I assume just in case the government changes its view again.

[lewis winthorpe] 27/9/2023 09:13

The current price of REE will be a factor.

[luffness] 27/9/2023 08:47

New mining code was passed in Burundi in June. I assume from today's comment as it currently stands it is unworkable for RBW. Can't see revisions of it happening quickly...I vaguely recall that there was a quantity of ore 5m? ready for shipping - maybe they can do something with that at some point. Or am I just imagining that

[luffness] 27/9/2023 08:27

Always nice to see senior mgt putting their hands in their pockets too

[lewis winthorpe] 27/9/2023 08:24

They will sell burundi once the South Africa project is in full swing. No rush, all in burundis hands on reengaging but no one will care from rainbow side.

[themaxhunter] 27/9/2023 08:03

Sticks a nice floor under the share price Shame about Gakara, illogical how Burundi has behaved, other forces at work, maybe belt and road.

[perfect choice] 27/9/2023 07:37

Yep, no open market fund raise which keeps those new shares held with more strategic investors.

Was wondering about the financial situation after they paid $5M for the extra 15% of Phalaborwa in June, after raising £7.52M only a month before in the previous private placement in May, so a good chunk of that previous placement was used up straight away to secure the extra 15% of Phalaborwa. Now back to BAU and cover to beyond Q1 2024 as stated.

There will be some additional capex to come when they build the first stage pilot plant for the Uberaba project in Brazil, as the majority of the current first stage pilot plant equipment is owned by Mintek. However that will also be a 50/50 spend as well with Mosaic I expect, so less expenditure for RBW.

Also notice a formal impairment review for the Gakara project in Burundi will be undertaken for the June 2023 annual report. Clearly going nowhere with the government so time to focus on the real projects for RBW.

[maccamcd] 27/9/2023 07:10

Perfect!£4.5m raised at 15p in a private placement = no sell side short term Stag punters. Sticky money only. Tightly held as we progress and derisk is so bullish for how the stock should behave on good news going forward.

[lewis winthorpe] 20/9/2023 14:51

Annually, the estimated generation of phosphogypsum worldwide is 100 to 280 million metric tonsEstimated 70 stacks worldwide. Rbw looking only at 3 so far

[lewis winthorpe] 20/9/2023 07:17

https://youtu.be/YCVj_7pCFjo?si=T6XeOjBKlmx6bUbF

[perfect choice] 13/9/2023 10:58

Interesting, article indicates LCM will be taking 40% of Phalaborwa output if they finalise an offtake agreement in due course.

Also noted only other company outside of China with LCM expertise is Vietnam Rare Earth and that is partly owned by the Chinese as well.

[maccamcd] 13/9/2023 07:44

Less common metals in the FTUK rare earth producer pivots to EU and US - https://on.ft.com/4641saF via @FT