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RBW Rainbow Rare Earths Limited

0.00 (0.00%)
Last Updated: 08:00:00
Delayed by 15 minutes
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 0.00% 10.75 68,213 08:00:00
Bid Price Offer Price High Price Low Price Open Price
10.50 11.00 10.75 10.75 10.75
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Chem,fertlizer Minrl Mng,nec USD USD -11.98M USD -0.0192 -5.60 67.15M
Last Trade Time Trade Type Trade Size Trade Price Currency
10:01:04 O 342 10.80 GBX

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Date Time Title Posts
20/5/202413:23Rainbow Rare Earths Limited4,203
04/9/202309:13Problem With The Figures?14
17/10/202109:50RBW only producer out side China 🇨🇳 6
08/12/202012:51Yamaha/Toyota mass production motor needs RRE ! -

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Posted at 23/5/2024 09:20 by Rainbow Rare Earths Daily Update
Rainbow Rare Earths Limited is listed in the Chem,fertlizer Minrl Mng,nec sector of the London Stock Exchange with ticker RBW. The last closing price for Rainbow Rare Earths was 10.75p.
Rainbow Rare Earths currently has 624,645,196 shares in issue. The market capitalisation of Rainbow Rare Earths is £67,149,359.
Rainbow Rare Earths has a price to earnings ratio (PE ratio) of -5.60.
This morning RBW shares opened at 10.75p
Posted at 21/4/2024 21:23 by odsjp
I don't subscribe to the FT but can read the article so it must be outside their paywall and available to everyone.

Great article, well done FT and George. Seems to hit the nail on the head...

Harry Dempsey in Phalaborwa 16 HOURS AGO
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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

A site close to Kruger National Park in South Africa is becoming a testing ground for US attempts to fight China’s global dominance in critical minerals.

Washington has committed to finance a little-known London-listed miner hoping to extract rare earths — a set of 17 minerals key to clean energy technologies — from the chalky stacks outside the safari park, as the US seeks to challenge China’s runaway lead in accessing the metals globally.

But a 63 per cent drop in rare earth prices since the start of 2022 has called into question the project’s ability to raise funding. The fate of the $300mn mine at Phalaborwa may echo that of others aiming to extract critical minerals for the west, and raises the question of whether US support is sufficient to build up a counterweight to Beijing.

The project, whose site is visited by kudus, springboks and buffaloes, is close to completing a feasibility study on the economics of extracting minerals from gypsum waste generated by old phosphate mines — but it still needs to raise another $250mn.

“The question is ‘given the basket price for rare earths, does it make sense to move ahead?’,”; said Andrew Breichmanas, analyst at Stifel.

For the White House, tackling Chinese dominance is a strategic priority: China is home to 70 per cent of rare earths mining and 90 per cent of processing capacity, according to the International Energy Agency.

That gives Beijing a near-monopoly on permanent magnets used in electric vehicles, wind turbines and fighter jets. China also controls the supply of other clean energy resources such as graphite, cobalt and nickel.

Washington has been seeking to invest in its own future supply. The US International Development Finance Corporation (DFC) has invested $105mn into TechMet, a $1bn critical minerals fund, which has pledged $50mn of equity for Rainbow Rare Earths, the company behind the mine, when it is ready to start raising finance to build the plant later this year.

Nisha Biswal, DFC deputy chief executive, said the state entity expected to increase investments in African critical minerals, with this year’s total likely to exceed last year’s $700mn. “This is just the start,” she added.

A key element of that is financing projects such as the Lobito Corridor railway to connect a port in Angola with copper mines in the region. And beyond the DFC, Washington is providing incentives for the construction of US processing plants through the Inflation Reduction Act.

Yet recent price slumps in lithium, cobalt, nickel and graphite — all ingredients in electric vehicle batteries — have prompted western producers to shut mines, cut production and reduce expansion plans. Among major miners, BHP is considering closing Nickel West in Western Australia; Albemarle, the world’s largest lithium producer, has cut back spending plans; and Glencore is reducing cobalt output.

Analysts say these projects are at risk from price fluctuations because western efforts to support the sector remain piecemeal and flawed against China’s multi-decade lead.

Rainbow Rare Earths says projects such as its own will be vital to western energy security © Rainbow Rare Earths
Chinese producers are often integrated with industrial activities or receive state-backed financing, enabling them to power ahead even in commodity downturns.

Rainbow Rare Earths argues projects such as its own will be crucial to western energy security. “Your green energy, wind turbines, electric cars, drones and handheld cell phones all have rare earth elements in them,” said George Bennett, chief executive. “Sources outside of China to give the west some kind of independence are very important.”

Amos Hochstein, the US government’s chief energy security adviser, said the future energy market could fall into similar traps to those seen with fossil fuels.

“My concern is that the worst of the 20th-century energy architecture will be repeated in the 21st century,” Hochstein said. “It would maybe be worse because, instead of a group of countries that control the supply, there’ll be a single point of failure or a single point of ability to manipulate global supply and prices.”

In particular, investors fear China may flood the rare earths market as it has done periodically since the 1980s. Beijing influences supply and prices through tax policies, quota systems and export restrictions, but denies exerting control to damage competitors.

Beijing’s foreign ministry said: “The so-called claim that China controls market prices through dumping and other means is completely unfounded. In the era of globalisation, the interests of various countries are deeply integrated.”

It added that global supply chains reflected the “functioning of economic laws” while China “always adheres to the principles of openness, co-ordination, and sharing, playing a positive role in the security and stability of the global critical mineral resources production and supply chain”.

Still, prices have been volatile. Prices for neodymium-praseodymium oxide, a compound of two of the most important rare earths for permanent magnets — for which China is both the largest supplier and consumer — are hovering just above $53,000 per tonne, after hitting the lowest level in more than three years in March, according to Argus, a data provider.

Such pricing “seriously jeopardises non-Chinese producers and exploration projects”, said Ellie Saklatvala, head of non-ferrous pricing at Argus.


Rare earths
Mining billionaire Gina Rinehart builds rare-earth stakes in push for non-Chinese supply

Rainbow’s Bennett argues Washington needs to consider stockpiling rare earths and other critical minerals by guaranteeing a minimum price for producers through long-term supply contracts. He would be willing to sign such a deal despite it also placing a ceiling on the prices that the mine could receive.

Some other western miners have secured supply purchase deals with companies: Australia’s Lynas, which received concessional financing from Japanese government entities, reached one with Japan’s Sojitz conglomerate, while MP Materials in the US signed a deal with General Motors.

This month Gina Rinehart, Australia’s richest person, revealed she had taken minority stakes in Lynas and MP Materials, fuelling speculation that merger talks between the two largest rare earth groups outside China, which ended in February, could be rekindled.

Stifel’s Breichmanas said the Phalaborwa project “warrants̶1; development but “supply purchase agreements are going to be really, really important”.

“The US government needs to become the buyer of last resort,” said Bennett. “It’s a chicken and egg [problem]. You can’t build [manufacturing] capability because you don’t have reliable supply. You can’t create a reliable supply unless you’ve got a buyer of it.”

That would also solve another strategic problem for the US, Bennett said. The country has no rare earth alloy producers or magnet manufacturers, but any downstream producers would need reliable supplies of affordable material to secure their own funding.

The US International Development Finance Corporation has invested $105mn into TechMet, which has pledged $50mn of equity for Rainbow Rare Earths © Rainbow Rare Earths
For its part, Beijing is no stranger to stockpiling during market gluts, making record purchases of cobalt last year for its strategic reserve.

The US Department of Defense stores critical minerals in the National Defense Stockpile, but its value has dropped from $9bn in 1989 to less than $1bn, or below 0.3 per cent of annual demand globally, as of March 2023.

“For the American and European supply chains to be built, you need a surety built by the government,” said Matthew Ashley, senior cobalt trader at Traxys, a Luxembourg-based trading house.

Brian Menell, chief executive of TechMet, said that despite the efforts of funds like his, “the problem of future shortages and Chinese control is growing day by day”.

He added: “It’s the product of manipulation and the short-term view of western markets.”

Additional reporting by Wenjie Ding
Posted at 28/3/2024 12:58 by perfect choice
As with any non-revenue generating company, equity raising will occur as required until the Company is revenue earning. That $9.2M for for next 15 months (presumably to get to project finance) plus additional funds for progressing Uberaba (but I'm expecting that to be a 50/50 share so not the same as Phalaborwa), I would agree would probably be at 2 stages and likelihood the price will be at a premium against today's price for sure as has been repeatedly achieved before. The last was was actually at a small 3% discount, see Corporate section where this was mentioned. That last raise was on the 27th September 2023 at 15p versus a mid price of 15.5p. The previous raise before that was on the 9th May 23 at 10.377p and a 28% premium. So against 10p buy today I definitely expect a premium for the next one and it to be tied to an announcement like the 99.5% purity for RE Oxide being achieved which is a major viability milestone and i suspect would unlock USA investor interest as confirmation 2nd stage is viable and to be base din the USA so the interest..

One other factor today could just be timescales. I note the Phalaborwa DFS is stated for completion "last quarter of 2024/early 2025". I would have to check other announcement to be sure of this as not done, but thought it was still end 2024 before, so some slight movement into 2025 there. RBW/K-Tech and partners are developing a novel process here, its not an exact science and always chance timescales cannot be absolutely certain.

However the recent interviews do confirm the case is even more compelling for RBW's prospects, not just Phalaborwa but the "excitement" on Uberaba (looking forward to that PEA being published). But as always, a case off actually getting the results out with those RNS statements and its all work in progress for RBW right now. Little more patience required IMHO

Will be interested to see what GB says on specifics on the Interim Results presentation on the 3rd April at 11am (mentioned at bottom of RNS and you can register). I will not be able to make that so hopefully I will be able to catch up afterwards on what is said.
Posted at 26/2/2024 11:19 by cp42kx07

I suspect you're right - the concept of a 2 year investment timeframe would fry the "brains" of most modern investors who are herd / meme driven (currently AI) from day to day!

RBW certainly continues to enhance its future prospects with today's Phalaborwa resource update. I look forward to the DFS later this year.

Perfect Choice:

I assume that process refinements to the required level(s) will take some time (and indeed will be ongoing) so I'm not expecting anything definitive for many months. I'm not aware of any target dates announced for this part of the project timeline.

I'm hoping for an eventual 40-60p share price based on Phalaborwa but Uberaba has such amazing potential that once the process has been validated for that site and an agreement signed we could be looking at multiples higher again (although this too may take longer than we'd all like!).
Posted at 25/2/2024 20:21 by perfect choice
Yep could well be right on the buy rumour sell news game, in that case we should be getting close to the next rumour as well.

RBW are getting on with the job but it does take time and validating at pilot will include refinements as they progress.

See 2 key catalysts on the way. The first in the confirmation they have reached the 99.5% RE Oxide output at a commercial processing rate. The second is the announcement of a JV with Mosaic for Uberaba where GB stated "when announced" in that 8th Feb Video.

There's other news as well on the way like the Phalaborwa resource upgrade which I don't expect to have a big impact on the share price, but at least underpins further Phalaborwa.

Personally I am with the article maccamcd posted above saying "We continue to believe that Rainbow Rare Earths’ share price is completely mispriced by the market". But its a confidence threshold that is required to convert RBWs "potential" value to "expected" value. The 2 catalysts I mentioned above are the confidence thresholds IMHO. But as it is, some more patience required!
Posted at 13/2/2024 08:07 by maccamcd
The Miner Details: Rainbow offers huge opportunity ? Theme of the week – Rainbow offers huge opportunity: We continue to believe that Rainbow Rare Earths' share price is completely mispriced by the market. The story receives the usual pushbacks from the market – such as market capitalisation, liquidity, and Chinese dominance and manipulation within the rare earths space – but we continue to believe that patient investors will return multiples of their investment in this equity. One point that really hit home during our recent site visit to the project, which is located c420km north-east of Johannesburg, is that it is at an established industrial site, with access to all of the key items that generally can prove a headwind for new projects – such as power, water and consumables – with sulphuric acid expected to be sourced from the nearby Palabora copper mine and other consumables, such as lime, also expected to be sourced nearby, using well-developed local transport links. Further, it is important to note that the rehabilitation liability on the Phalaborwa phosphogypsum stacks is fully funded by Sasol, which is another positive. We also believe that management, with broad experience in the construction of multiple projects across Africa, has the requisite expertise to deliver the project, and our expectation is that capex will be in line with the preliminary economic assessment (PEA) estimate of USD295.5m, while multiple opex savings opportunities are likely to further enhance NPV. Rare earth prices have been weak but, if we take a step back, we think this project will be one of the highest-margin rare earths projects globally, if not the highest-margin, offering through-the-cycle FCF generation. A key question among some investors concerns the continuous ion exchange/continuous ion chromatography (CIX/CIC) process to produce separated rare earth oxides; management is confident that it has undertaken the test work to successfully deliver this, and we expect confirmation of production of separated rare earth oxides at the targeted quality and recovery rate in the near term. We also expect a resource increase, adding project life (also near term), and expect multiple further developments on Phalaborwa, which is backed by the US International Development Finance Corporation through its investment in TechMet. In our view, this stock has near-term and medium-term (the Uberaba joint venture in Brazil with Mosaic) catalysts, and we reiterate our Buy recommendation, with the shares offering meaningful upside.
Posted at 01/2/2024 21:59 by perfect choice
Yes that looks like John Meyer's handiwork to me and I hold little credibility to his words theses days after his history promoting BlueJay Mining, a share down 97% from its peak. Actually don't think that much of share price Angel generally, they may know and focus on the resource market but it's equally important to consider what they don't say or bother to properly investigate to find out.

That said always worthwhile to consider risks in any stock and company strategy. RE prices are clearly a factor in profitability and lower prices will impact on project economics. But in Phalaborwa we are talking of the lowest operating cost project available short term based on PEA capex and opex costs. As stated in that short article anyway, "low operating costs indicate the project is not overly sensitive to +/- 10% capex or opex changes".

But also consider the strategic need for the West. If this didn't happen then where would they go for RE metals, more expensive projects or keep buying from China? Don't underestimate the politics involved here as well as economics.

Increases in power and labour costs costs are also mentioned but as already stated Phalaborwa is not overly sensitive to such increases. Also on the power side that is a minor cost of planned opex as RBW have stated and the project is due to include local solar power generation as well, giving a more fixed cost element to power. There is a previous video Q&A specifically on this point.

Comment on K-Tech maybe needing a larger pilot plant validation before funding is secured is a possibility of course. But considering John has been nowhere near K-Tech I suspect, I think he needs to see the pilot facility and talk to potential USA investors first, especially Techmet. I recall a comment GB made on a video about the Mintek pilot facility being larger than a typical pilot set-up, cannot comment on K-Tech though. But there is no mention from RBW or K-Tech of a larger mid stage pilot being needed before full financing, however can never say never in this game and we have already had one "unplanned" change, in the form of RE Sulphate being changed to RE Carbonate as the feedstock to the K-tech facility. This is not a first time perfect science game here and there could yet be further changes under the guise of "optimisation".

The last comment about South Africa could be applied to the whole mining business in South Africa in terms of risk of impact and accusations are just that. Business is business unless you are in state of war I would say, so that last comment just doesn't stack up in my books.

Expecting several pieces of decent news from RBW in next few months as has been stated on video in January. I would also recommending downloaded that presentation from the latest site visit. It is noticeably different to the more general past presentation with some good detail on the RE market and supply sources. Also further detail on Phalaborwa like the historical metallurgical test work which is new detail in the presentation. The flowsheet diagram on slide 12 is also more specific on the stages if you compare against the flowsheet in the September 23 presentation (slide 28). Also interesting to see on slide 24 all the partners involved in the current DFS work. Looking forward to that being published in H2 this year.
Posted at 05/12/2023 17:20 by archie222
COP 28 - Public / private partnerships for critical minerals video.

Features Scott Nathan (DFC) & Brian Menell (TechMet)

Both CEOs are key for RBWs future.

Brian seems to have the ear of the US and via TechMets investment in RBW adds huge political heft in enabling RBW to grow. RBW seems to be ticking all the ESG and critical mineral boxes for support.

DFC have the powers to invest US capital into private equity as well as to provide loans & loan guarantees / risk insurance/ & other assistance (all useful to RBW).

First fifth of video of most interest.

Specific RBW mentions @ 6:57
Posted at 26/11/2023 18:04 by perfect choice
Well it would be ideal to issue an RNS on the RE Oxide K-tech pilot output for that award but very late if announcing on the 30th. But fingers crossed anyway for RBW.

Looking back at fisherman16's question, its always worth considering all different types of risks to a stock value. The focus sounds more technically orientated where there is some level of confirmation already and we are waiting to hear more.

First let's consider Phalaborwa. From a technical basis, this is now deemed a commercially viable project based on the acceptable outcome of the RE Sulphate pilot plant based at Mintek. This will be for RE Sulphate production only so for those limited customers who can take RE Sulphates instead of RE Oxides. Several interested parties are known including customer(s) in Japan for example, as this has been mentioned previously. But RE Sulphate output would only generate 60% of the intended total revenue from Phalaborwa, but with reduced Capex as well, its deemed commercially attractive still. Even with only this validated stage, Phalaborwa construction would proceed. The pilot plant is still running to optimise the production process, may only gain a few more percent efficiency but every bit counts here. So in a technical sense I am confident of Phalaborwa happening. However there may be other risks though which I'll cover below.

The second stage of Phalaborwa production is conversion of RE Sulphate to RE Oxide output, which is currently under pilot testing at K-Tech's facility in the USA. We are patiently waiting an RNS on how that has gone, currently due by end of this year.

Now if there a risk this stage could fail in so far its not commercially viable? It has to be considered a risk, but a risk for the optimum revenue route for Phalaborwa, not the fundamental feasibility of Phalaborwa happening, as a RE Sulphate production facility at least is deemed viable.

Now RBW with K-Tech have stated this stage of the process "works" but that is based on the initial lab testing done. Scaling up to volume is the question the pilot needs to validate and a minimum level or efficiency of output has to be achieved to be commercially viable. We wait to see if that is achieved with the pilot plant at K-Tech. I expect RBW will not issue an RNS until they have achieved that minimum level but if successful this will be a major de-risk and potentially value changing milestone for RBW. But if for some reason this 2nd stage may work but at volume, it just doesn't reach the efficiency required to be commercially viable, expect a knock back on the RBW price. But it will not kill off Phalaborwa as the RE Sulphate production option is already there.

Moving onto the Uberaba area of Minas Gerais in Brazil and the 50/50 MOU RBW has with The Mosaic Company. Plenty of stages to go through so it's probably going to take a year to get to the really interesting news here. First task underway is confirming the mineralogy and as stated in the RNS "Rainbow expects the Uberaba stack to have a similar grade and rare earth element make-up as those at Phalaborwa due to the similarities of the feedstock" So that still needs to be proven and announced, a key factor being the concentration of Rare Earths following the previous production process which created the stacks.

So if that is confirmed (and we wait to find out), they will then develop the process flowsheet required for the first Uberaba stack including lab tests, as was done for Phalaborwa. The hope here is that it will be similar to what was developed for Phalborwa, but another stage to overcome. At this stage I expect a 50/50 JV to be announced with equal funding and ultimately revenue will be on a 50/50 basis as well. No certainty of the outcome of this stage, that's my guess.

If compatible mineralogy/RE concentration and successful lab tests of the draft process flowsheet is confirmed, then we reach pilot stage at Uberaba as well. That will require a new pilot facility to be located in Brazil I expect, as the majority of the current RE Sulphate pilot facility at Mintek is using Mintek owned equipment. But it will be a 50/50 investment for RBW/Mosaic unless some other agreement is reached between both parties (e.g. Mosaic fully fund but recover 50% from initial revenues?).

So plenty of technical and commercial hoops to jump through on Uberaba, however it is certainly in the interest of Mosaic to achieve as their previous attempt to address the stack failed I read somewhere. There are also 3 stacks to ultimately address, so overall is much larger than Phalaborwa.

So those are the more technically orientated risks I see for both Phalaborwa and Uberaba. What are other risks which are not technical that could disrupt the above plans?

Well for Phalaborwa being in South Africa, there could be political or legislation changes that could disrupt plans.

The next general election in South Africa is next year 2024, if the ANC do not achieve 50% support (current poll ratings are 38% to above 50%) they will have to to go into coalition with another party and there are some left wing parties which are very anti-business we would not want them influencing policy.

Risks could include changing taxation arrangements, enforcing all production facilities remain "in-country" (so no K-tech USA facility for 2nd stage output from Phalaborwa), etc. While all this is unlikely as South Africa needs its miners income (know this is strictly NOT mining), it's an election, so who knows what could happen?

Other risks for share holders could also involve an early takeover of RBW which while beneficial, could lose the opportunity for higher gains. However the structure of RBW now and TechMet's holding in particular will limit this risk.

So actually a wide range of risks to consider here. FYI I have a significant holding in RBW, already have a nice profit and expect much more in due course. But one thing I've learnt over time, is that in the field of investing in non-revenue companies, there is always the chance of an unexpected surprise, so risks should always be considered no matter how confident you may feel with your investment.
Posted at 08/11/2023 22:38 by perfect choice
There will be no change in shareholdings. For a start this is a future option yet to be invoked but now available to TechMet. The period to invoke the option is time bound and the RNS states "dependent on the net present value set out in the definitive feasibility study for the project" and "is executable for three months following receipt of a credit approved term sheet for construction debt". So that means the option can be applied when the DFS is completed (currently stated by the end of H2 CY 2024) and the funding requirements are fully defined ready for investment sources to secure that funding.

What TechMet are getting for this option is a direct holding of Phalaborwa itself, not shares in RBW , as per statement "US$50 million to take direct stake in the Phalaborwa project in South Africa"

That $50M is roughly half of the total equity element for funding construction of Phalaborwa, the equity element being around a third of total investment cost required, the rest being debt based funding to be paid back to financial providers from revenues gained, as is typical. GB states this in the brief interview you can see at where at 4 minutes into the video, he states debt will be "60 odd percent of the project, circa two thirds debt and the balance would be equity" for which TechMet in invoking this option would provide half of what is required (the $50M representing 16% of total $295M capital expenditure).

So with this option assumed to be invoked when the time comes to secure all project funding, RBW is only now looking for a further £50M, or about that, equity based funding, plus project debt financing (usually from banks, major financial provider, etc) for the balance.

Normally such equity based element of project funding may be through shares issued for that part of funding, but in this case it does not apply as TechMet are effectively buying part of Phalaborwa (so they will receive a future proportion of income as a result).

However there are 2 benefits, one being lower volume of further shares to be issued to get Phalaborwa underway, the other being it is only Phalaborwa, so other future RBW projects (like Uberaba in Brazil and the % of that RBW could own, I'm expecting 50%) do not feed into what TechMet will own.

Saying that, there is an option for TechMet to change direct ownership to shares, as the RNS states "Rainbow has also granted TechMet a put option to exchange the direct stake in the project for shares in the listed entity at the fair market value of the underlying Phalaborwa stake for a period of two years from the commercial completion of the Phalaborwa project, or at any time in the event of a change in control of Rainbow".

So multiple options here, but unusual to be around a year away from DFS and securing option commitments already for project funding, for what should be half of the equity part of the funding required.

That is just the financials, the strategic benefit of this is very significant and hugely de-risks Phalaborwa. I remain convinced RBW's plan is to set up in-country RE Sulphate production facilities, then ship output to a central RE Oxide facility, at a yet to be chosen location in the USA, which will be very strategic for RBW and for Western World Rare Earth metal supply. GB has as good as said this in his interviews and statements.
Posted at 08/9/2023 07:24 by maccamcd
From Berenberg this morning.If anyone wants a full copy it's posted on the RBW telegram groupA cheap, rare earth gem with catalysts ? Rainbow Rare Earths' (Rainbow's) share price performance this week has confused us. The company announced the successful production of a mixed rare earth sulphate product, which we believe is a major de-risking event for its Phalaborwa project in South Africa – both in terms of technical and financial risk. The stock closed down 4.5% on the day of the announcement and we had expected a 10% positive move. Part of this may be selling into recent strength (the stock has rallied 18% over the past month and is up 62% ytd); however, at 0.36x our risked NAV, we see even more upside in the stock this year. In our view, there are four key operational/business development catalysts that we think will play out over the near to medium term and offer more upside for the shares. These are: (i) the production of a higher-value separated rare earth oxide product in Q423; (ii) an eventual resource upgrade due to more accurate density measurements below the water table, adding life of mine; (iii) a definitive feasibility study, which we expect in H124, and – potentially ahead of this – an updated feasibility study that highlights the project economics if the front end and back end of the plant are separated (a further de-risking event); and (iv) further business development activities, as well as progress at the Uberaba phosphogypsum stack in Brazil (a joint venture (JV) with Mosaic). ? Lots to like; NAV discount to unwind: We continue to think that Phalaborwa is one of the best undeveloped rare earths projects globally. It is brownfield and the nature of the deposit means that much of the processing effort and cost of traditional hard rock rare earths projects does not apply here, reducing costs and supporting a c75% operational EBITDA margin, making this, in our view, a Tier 1 asset. The strategic nature of rare earths is key for the long-term thesis and, given the link with K-Tech in the US, this offers a compelling strategic angle for the stock, with Rainbow able to deliver separated rare earths into the US market, avoiding reliance on China. Considering the importance of provenance, this is key. We also think that the company's business development opportunities offer scope to build a meaningful, diversified, multinational rare earths business that we think will be a compelling investment opportunity. ? Investment conclusion: There is a lot to like about Rainbow's investment case. The stock is trading on 0.36x NAV and we think that this unwinds with the demonstrable catalysts that we list above; we see further share price upside from current levels, with our risked NAV standing at GBp43 per share (de-risked: GBp57 per share).
Rainbow Rare Earths share price data is direct from the London Stock Exchange

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