Rainbow Rare Earths Ltd (RBWRF) (FY 2024) Earnings Call Highlights: Strategic Funding and ...

GuruFocus News
4 min read

In This Article:

  • Strategic Equity Funding: $50 million committed by the US government's DFC via Tech Met for the Palabora project.

  • Private Placement: $5.5 million raised, supported by board and management.

  • Royalty Agreement and Share Placement: $10 million raised through an 8.5% royalty agreement with Cora.

  • Resource Update: Resource increased by 15% to approximately 35 million tons, extending project life from 14 to 16 years.

  • Project Valuation: Valued at $7.3 billion at spot prices.

  • Production Timeline: Forecasted production start in 2027.

  • EBITDA Projection: Estimated $190 million EBITDA at spot pricing with an operating margin over 75%.

  • Current Basket Price: $78.46 per kg, with current NDP R pricing at $60 per kg.

  • Recovery Rate: Targeting 66% recovery of rare earth elements from feedstock.

Release Date: October 22, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Rainbow Rare Earths Ltd (RBWRF) achieved the first commercial recovery of rare earth elements from phosphogypsum, a significant milestone in the industry.

  • The company has developed a unique flow sheet using proven technologies, which is more environmentally friendly and cost-effective than traditional methods.

  • Secured strategic equity funding of $50 million from the US government's DFC, providing strong financial backing and third-party validation.

  • Successfully produced two saleable products from their pilot plant, including a separated rare earth oxide with 96-97% purity.

  • Entered into strategic partnerships and MOUs with companies like LCM and Mosaic, expanding their market reach and potential for future projects.

Negative Points

  • There is a delay in the definitive feasibility study (DFS), pushing the expected production start to 2027.

  • The current purity level of rare earth oxides is 96-97%, which may not meet the 99% target, potentially affecting marketability and pricing.

  • The company faces challenges in optimizing the flow sheet, requiring additional time and resources to achieve desired purity levels.

  • Rainbow Rare Earths Ltd (RBWRF) has not yet decided on patenting their technology, which could expose them to competitive risks.

  • The Burundi project remains uncertain due to government-imposed suspensions, limiting its contribution to the company's growth.

Q & A Highlights

Q: Is the rare element product from the pilot plant able to be sold? A: George Bennett, CEO: The product from the pilot plant is not intended for sale as it is used for marketing and discussions with potential offtake partners. However, if needed, the product at 96-97% purity could be sold, but the focus is on optimizing purity levels further.

Recommended Stories