Share Name Share Symbol Market Type Share ISIN Share Description
Rainbow Rare Earths Limited LSE:RBW London Ordinary Share GG00BD59ZW98 ORD NPV
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.0% 2.85 20,012 08:00:00
Bid Price Offer Price High Price Low Price Open Price
2.70 3.00 2.85 2.85 2.85
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining 0.99 -2.52 -0.02 11
Last Trade Time Trade Type Trade Size Trade Price Currency
13:42:13 O 15,000 2.745 GBX

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Date Time Title Posts
14/10/201920:53Rainbow Rare Earths Limited1,887
01/5/201811:25Interview: Rainbow Rare Earths1
26/4/201809:46Rainbow Rare Earths Q&A and Interview-
24/11/201712:49Rainbow Rare Earths INTERVIEW with CEO Martin Eales-
21/11/201711:21Rainbow Rare Earths INTERVIEW with Arden Partners1

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Rainbow Rare Earths Daily Update: Rainbow Rare Earths Limited is listed in the Mining sector of the London Stock Exchange with ticker RBW. The last closing price for Rainbow Rare Earths was 2.85p.
Rainbow Rare Earths Limited has a 4 week average price of 2.40p and a 12 week average price of 2.40p.
The 1 year high share price is 9.75p while the 1 year low share price is currently 1.50p.
There are currently 380,314,884 shares in issue and the average daily traded volume is 204,657 shares. The market capitalisation of Rainbow Rare Earths Limited is £10,838,974.19.
under the radar: 3/4] 3. Thoughts on Current Share Price The company IPOd at 10p, giving it a market cap of about £15m. The share price is currently 3p, but with extra shares in issue the market cap is £12m, 20% below IPO levels. The 3p level is understandable, because it's the price of the most recent placing. In the absence of further positive news, the share price could have been expected to drift down to the previous placing level. The placing was at 3p because the price had already drifted, and 3p only presented a small discount. What knocked the share price from 10p to c. 5p was the annual results in Oct 2018 when it was clear the high expected production levels were not going to be sustained. Since then it's drifted lower to the 3p level we now have. In May this year, the price spiked up to 7.5p. That was because of the growing geo-political tensions between the US and China. I suspected that would not be sustained, as the bottom-up fundamentals still needed addressing, and sure enough the price has since drifted back down. However, I think this is now oversold, and the current 3p level is one where it deserves another look. Basically, I think the 20% drop in market cap is unwarranted. Why? Yes, production levels did not remain at the 350 tonnes per quarter level. However at IPO the company was not in production at all. We are now producing. Another negative is that, at IPO, the company had a mining license and an exploration license. The exploration license lapsed without being pursued further into a second mining area. However, since then the extent of deposits within the existing mining license area are known, and are extensive. Furthermore, proper quantification has been done, whereas the IPO prospectus stressed clearly that there was a huge risk because this had not been possible at that point. The company has more than enough areas to mine within the existing area, so the lack of a second mining license is not a drawback given what we know. When you look at the uncertainties at the time of IPO, I'd say things are in a much better shape now, even if it's taking longer than expected to ramp up production to profitable levels.
under the radar: [1/4] I've been researching Rainbow for a little while, so I'll summarise what I've found and how I see things, in the hope it helps others. Then let's talk about this. I'll split this into four posts, because I like to distinguish two ways of looking at this one, then I have some thoughts on the current share price, then some thoughts on the annual results due shortly. 1. From a top-down perspective, the prospects are excellent, although not perfect. The rare earth market will continue to expand; demand has been well researched as due to rise considerably, globally. Geopolitical fears mean that countries are looking for sources other than China. In terms of competition, the biggest producer outside of China is in Australia. This is one of very few others, but the increased interest in rare earth mining is seeing other companies try to enter the fray. They have three things that set us apart: (i) They are actually producing. For example, Kavango announced recently that they've discovered geological anomalies that warrant a test-drill. But they're well ahead of that. (ii) The quality of the ore at Gakara is exceptional and unique, with very high percentages of concentrate. (iii) They're a UK owned company, the only one in rare earths as far as I know, so if the UK government was to look to secure its sources, this would be a good place for them to start.
norfolk enchance: Yes it did, the share price had already drifted from its spike from 8.5p to around 4p, when that rns dropped it fell further to just over 3p and drifted to 2.75. The fund has taken a stake as it sees possible long term potential and not a pump and dump, but just because a fund has taken a position doesn't guarantee a share price to go up. RBW need to address these issues in the short term.What facts?
74tom: Norfolk, full year production results to the 30th June are already known and were announced in the placing RNS, also the last Broker update from Arden Partners on May 7th adjusted estimated 2020 production down to 2k... Hence my opinion that there is considerable upside available if RBW can get production to even 200TPM by December 19. They may not be profitable at present, but now they are fully funded and have a year of experience, they simply have to execute their strategy to resolve this. Downside risk is of course present, as they could execute slower than expected. However, with the current market cap of £12.6m and the fact they have £4m+ in the bank, upside significantly outweighs downside IMO. Remember that the market cap was around £30m prior to them starting to mine in 2018, a return to this would see a share price of just under 8p
74tom: Regardless of what Lind do with their 25m shares, I’m intrigued as to which existing or institutional investors participated in the recent £4.3m placing. Should be some TR1’s coming given that the new shares represent 37% of shares in issue. If Techmet participated that would really get the markets talking, given that they announced they were in active discussions with the US government over funding for rare metals at the end of April... As a heads up to new investors, Techmet invested $500k last August @12p, so held just over 3m shares prior to the raise. Given the fall in share price since last year, and development of the trade war, it would surprise me if they hadn’t. It would also explain why the death spiral convertible loan with Lind was suspended on 7th May (Techmet article in the Telegraph was dated 22nd April). Techmet were looking to close an $80m funding round in the spring, there is no news on whether they have completed it but this could be to keep things under the radar re. China. hxxps:// “The firm has interests so far in a range of tin and tungsten mines in Rwanda, a nickel project in Brazil, a Canadian lithium recycling plant, and a rare earth concentrates partnership in Bundi. Menell is in the process of raising an $80 million round, and says his conservative estimate is that TechMet will be worth $1 billion in five years time, when he plans an IPO.” So they have BIG ambitions, and RBW are central to their plans...things could get very interesting here very quickly.
74tom: A couple of months old but very relevant still, imagine what the news of an export ban would do to the RBW share price! Martin Eales, the CEO of Rainbow Rare Earths, believes Beijing could afford to take the plunge, however, because rare-earth exports make up a relatively small amount of China's export balance with the US. "I'm sure it is quite possible for China to do this as part of a wider series of actions linked to any trade war with the US," he told Business Insider. The US imported $160 million worth of rare-earth materials in 2018, according to the US Geological Survey. Eighty percent of such imports came from China from 2014 to 2017, the USGS noted, meaning that the US most likely imported about $128 million worth of rare earth from China last year. That would be just 0.024% of the $526 billion that the US imported from China in 2017, the most recent data available per World Bank statistics. "This is certainly a relatively insignificant sum to China in the context of overall trade," Eales said.
glasswala: So RBW current share price is at the same price as before the share price spike a few weeks even though a placing raised more funds than was initially requested in the fund raise. Why then is the price stuck below the placing price and why would new investor want to invest at a price that they can obtain in the open market. Am I missing something here!!
pwhite73: There was a big seller here this morning. It may have been Miton. If they're gone or have stopped selling the share price should start climbing again. The company should be looking to support the share price after all the recent talk about rare earths. The price is still well down on the listing price of 10p in January 2017. How have the recent rise in REEs prices impacted on the company? Have they received interest for joint venture partnerships recently?
tidy 2: Notes the seriousness of the situation with the people now involved and notes the RBW share price movement.
eadwig: sian, I've re-read your comments with regards to the future aspirations of RBW and its potential. You haven't added anything that I wasn't already aware of in terms of what the company has told us, and its hopes for the Gakara project, we just seem to have a different perception drawn from mostly the same information over the use of the term 'scale'. I think the best response if for me to run through my own reasoning then if you disagree or dispute anything I've said, or still don't think I'm seeing the bigger picture, you can highlight it. Given the whole nature of the deposit, assumptions surrounding future market demand and the opaque nature of the REE market place, it is not surprising that the company warns investors in the IPO that the Gakara project is "essentially an exploration exercise and the company is still in the exploration phase of the life-cycle of a typical mining company" and that the company will only be able to assess the economic viability of the Gakara project towards the end of the project, with the stated aim to determine if a) the deposit veins can support a profitable mining operation and/or b) can be quantified to report an Ore Reserve or Mineral Resource under the JORC code. If the latter can be achieved, that would give a very large boost to the share price, I believe. However, the deposit is such that it may not be feasible to do so and that assuming on-going profitable operations are determined as feasible, they may all progress under the JORC heading of 'Exploration Results and Exploration Targets'. I'm perhaps too wary of anticipating too much beyond the CPR (Competent Person's Report). I know that such a report has to be conservative by its nature and it can only define Gakara as an 'Exploration Target' of 20-80,000 tonnes according to the JORC code. Then again, the JORC code is there specifically to ensure a fair representation of a mineral resource in a given area in terms of grade and quantity, including all details an investor may reasonably expect to be made aware of by an independent accredited expert including the absence of any relative details. Rainbow’s technical team has declared a mineral inventory estimate at Gakara of: 256,500t of ore with an in-situ grade of 54.3% on average TREO 141,853t of contained TREO (Total Rare Earth Oxide). Again, probably a conservative estimate, with the potential for new discoveries to add to those totals. "Rainbow has identified extensive deposits within the Mining Licence that have been incorporated into the mine plan for the first five years", it states on the web site, but the IPO document looks forward no more than 3 years that I can tell and the Trial Mining Project is just over 27 months. The trial mining project needs to reveal commercial viability well before its scheduled project completion, otherwise it will run out of ore to process while a decision to mine any further is made. That scenario doesn't seem likely to me, therefore I expect a declaration of anticipated commerciality relatively early, and the addition of at least one more production site from around 12-18 months in (Apr 2018-Oct 2018). Possibly the first site will produce more REO than expected in which case that decision point may slip back. If so, we will have already had a statement about production targets being exceeded, so either situation is a win. The beauty of this from an investment point of view, beside the guaranteed offtake for the product (if the expected 54% quality is achieved, and no rel doubts there), is the frequency of positive newsflow we can expect. As a standard listing, RBW aren't required to give us all of it, ironically, but I'm trusting that they will. The JORC codes also seem to indicate that a quarterly update on production and current deposit estimates are required. Rainbow's strategy is based on the assumption that the trial mining project proves the deposit is commercially viable, even so commercial mining levels mentioned are 5,000t p.a. rising to 10,000t p.a. of concentrate with no need for further expenditure on existing processing capacity. Even though the latter figures are a little confused, I think they may well have capacity to produce in excess of 10,000t p.a, but may be restricted by how much REO they can extract from each site opened up and the costs associated with doing so. Those figures are pretty small scale in my book, which does not mean unprofitable. There is a heightened risk associated with the choice of each new mining site as the initial two sites become played out. That risk sounds like it may be lessened by recent discoveries in 2016, three especially in the Gomvyi Centre, Kivungwe 1 and Kiyenzi target blocks where boulders of REE veins weighing in excess of 100 kg were encountered suggest that the width of REE veins can locally be up to 50 cm. The longer RBW can stay producing at commercial levels the greater the chance of discovering more commercial concentrations within the license area. There is only one other non-Chinese productive mine to go by, Lynas Corporation Limited and its Western Australian Mt. Weld mine that has been discussed on this board. It has a defined Mineral Resource (not an exploration target) of approx 2,100,000 tonnes. Just to be clear, to put it in the same terms as the RBW technical team's figures above, that is based on: c. 32,000,000t of ore with an in-situ grade 7.5%-10.8% TREO c. 2,1000,000t of contained TREO. These figures based on a mix of 'Mineral Reserves' and 'Mineral Resources' per the JORC code. RBW's figures are to the lesser standard of an 'Exploration Target'. Lynas anticipate 22,000t p.a. production as of late 2015, I'm unsure if that refers to REO (Rare Earth Oxides) or REE (Rare Earth Elements) or a mixture of both. I think its REO concentrate of approx 40% (Lynas have their own plant in Malaysia to process concentrate into REEs). Perhaps our friend who has invested in them previously can chip in and tell us if I am correct? Their very latest figures from Feb appear to indicate record output to date in 2017, perhaps approaching 'Ready for Sale Volume' of 16,000t inc. 'Ready for Sale Volume NdPr' 5,300t. It could be that the Lynas Malaysian separation plant ends up being one of the ultimate customers for Gakara concentrate via tk Raw Materials. As we know from the RBW documents, there are at least six other rare earth projects expecting to start production in 2017-19. I haven't yet looked into any of them or how much they expect to produce. I have heard of projects underway in Russia, Vietnam, Malawi, USA. Greenland, India and Chile. How many of these overlap with the projects RBW mention I do not know. Some of them appear to be on a very large scale judging by their Cap Ex, however scale doesn't necessarily equate to profitability and competitiveness, and Martin Eales remains confident that RBW can compete in terms of cost with RBW in the lowest quartile of production costs compared with all other world production. This encourages me that RBW can relatively quickly turn an operating profit which will in turn soon repay cap-ex costs, them being so low due to Rainbow's low-tech and low cost approach. So much for operations and competitors who are also external to China, so have that same competitive advantage as RBW. We must also take into account the markets, especially where the product is basically a commodity and therefore subject to the usual swings and cycles associated with global commodities. The rare earths market is less than straightforward though. There are rare earth elements and rare earth oxides, and the latter are often sold as concentrates in various bands, or through negotiation and prices for concentrate are much reduced compared to REEs themselves: Prices 31 Dec 2016 (I've only illustrated the main Gakara production elements) Lanthanum metal =>99% 7 US$/kg Lanthanum Oxide =>99.5% 2 US$/kg Cerium metal =>99% 7 US$/kg Cerium Oxide =>99.5% 2 US$/kg Praseodymium metal =>99% 85 US$/kg Praseodymium Ox =>99.5% 52 US$/kg Neodymium metal =>99.5% 60 US$/kg Neodymium Oxide =>99.5% 42 US$/kg Prices have remained depressed and continued to fall through 2016, since the upsurge in 2010 when China threatened to curb exports, although Lynas reported a slight uptick in prices in Q1 2017. Even so, prices achieved were pretty woeful based on the 2011 estimates that many projections were based on for production. Lynas itself has cut price expectations by 50% which has had a small impact on how it approaches its deposit. Gakara's deposits are small and concentrated. It could be that Rainbow can be relatively flexible, perhaps enough to choose the most profitable area to go for next. A mine the size of the Lynas deposit is going to pretty much remove everything anyway, some of which may no longer be economically viable. It may be fanciful, but there is the possibility of an edge there for this type of small scale, high grade, low tech operation. China has talked of limiting exports to 140,000t p.a. but more importantly it has stated that a programme to shut down 'unofficial production' is now underway and should complete around 2020. It is estimated unofficial production feeds up to one third of global demand and is thus the greatest single contributor to keeping prices flat. Tentatively I would suggest that leaves a hole in supply of around 70,000t p.a. but I really need to do some further research on that - if at all possible - to be certain. This should help support prices, as I have previously discussed, through the cutting of supply and thus giving an opportunity for projects external to China to remain economically viable. Gobal demand for all REEs remains muted with just a 2.2% global compounded growth rate, more akin to a mature market than the fresh and exciting one that might be expected with so many REEs required for desired 'green' power efficiency. There is always the possibility of a further clampdown on exports by the Chinese, despite WTO efforts. This possibility is arguably heightened by the US Trump administration's economic 'saber rattling' over protectionist policies to protect its own industries. There is a distinct possibility the Chinese could use the strategic nature of REEs as a bargaining chip and a consequence of that could easily be a return to the price heights of 2011. The danger for RBW in the above is that a prolonged situation of uncertainty of supply that threatens the medium-long term plans of huge global commercial interests will see them seeking alternatives to REEs in their production materials. There's always the possibility of other minerals or REEs being found (I believe there was E.g. tin in the area), REEs are almost always found alongside metal ore deposits. All the REE types mentioned so far are from the same group in the periodic table and I don't know if there is any reason to expect others (the high value per kg ones) to be found in the same geographic area. Another definite plus for Gakara are the low levels of Thorium and Uranium radiation so far detected. These are often high among REE deposits and are obviously of environmental concern and potentially costly to deal with. Hopefully they remain low which will only increase RBW's competitiveness compared to some other producers. To sum up, I see every chance of Rainbow successfully implementing a profitable, if relatively small scale, mining operation. Global factors beyond its control could boost prices for its concentrate greatly, and the share price will surely respond accordingly. Such a situation is unlikely to last in my view, and if it did it could become detrimental, but it seems unlikely. Rainbow appear to have the backing of the Burundi government and local populace with all the required permits and agreements for Gakara in place for 25 years. [Strangely I haven't been able to turn up any references in the Burundi press to the project. As the only mine in the country one would expect it to make the news!]. They have excellent experience of mining operations in Africa on the board. If the encouraging deposits play out and more can be found, there is every chance of Rainbow establishing Gakara as a profitable going concern. From an investors point of view, there is the chance of external factors causing a huge bubble in the share price at some point in the future which could give the potential for a substantial 'killing'. Even if that doesn't happen, the short term nature of the project between IPO and production and production and first sales (5,000t p.a. of concentrate >54% with a further 5,000t p.a. almost certain to be taken up by the agreement with tk Raw Materials over the next 10 years), as well as other factors mentioned above, promises a positive news flow which will support the share price with every chance of a substantial yield through dividends being gained at a relatively very early stage. A STRONG BUY in my opinion, before the positive news flows start to move the share price upwards (first production expected in April should generate the next one). Don't miss the boat is my advice to anyone reading.
Rainbow Rare Earths share price data is direct from the London Stock Exchange
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