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George Bennett, CEO of Rainbow Rare Earths Ltd (LSE:REW), recently provided an update on the company’s JORC-compliant mineral resource estimate for the Phalaborwa project during a discussion with Proactive. This latest update has extended the projected operational life of the mine from 14 to 16 years and increased the resource estimate from 32 million tonnes to 35 million tonnes. Bennett noted that this enhancement in the resource estimate is attributed to improvements in categorisation under JORC standards, which have bolstered confidence in the figures.
The project is set with a cut-off grade of 2.2%, which allows for the processing of nearly the entire resource, thereby aiming to extract the maximum value. Bennett highlighted the critical importance of four rare earth elements in the project—neodymium, praseodymium, dysprosium, and terbium. These elements are essential for the production of consumer electronics, electric vehicles, and wind turbines, making them highly valuable in the current market.
Rainbow Rare Earths distinguishes itself as a low-cost producer, which provides a competitive advantage. Even amidst potential market price fluctuations, the company is poised to sustain profitability due to its efficient cost structure. The estimated in-situ value of the rare earth oxides in the project stands at $3.7 billion, with a recovery rate of 66%. This robust economic profile underscores the project’s potential for significant financial returns.
Looking ahead, Bennett outlined the company’s plans to release a Definitive Feasibility Study (DFS) by early 2025, with a preliminary update expected in November 2024. These upcoming reports are anticipated to offer deeper insights into the project’s profitability and its overall value potential. The DFS will play a crucial role in validating the project's economic viability and strategic direction, further informing stakeholders about the project's future prospects.
