Production from Rainbow Rare Earths’ Gakara mine, in Burundi – measured in terms of exported concentrate – remained flat at 275 t for the second quarter ended December 31, 2018.
The average grade decreased, from 59% total rare earth oxide (TREO) in the first quarter, to 56% TREO.
Further, the company sold 300 t of concentrate in the second quarter, compared with the 350 t sold in the first quarter of the 2019 financial year.
Nevertheless, Rainbow on Thursday said its partnership with thyssenkrupp Materials Trading (TK) for the sale of concentrate was working successfully and that demand for Rainbow’s concentrate product was considerably higher than the current production.
Meanwhile, the gross sales price decreased by about 9% quarter-on-quarter to $1 884/t, mainly as a result of a decrease in market prices for rare earths and the reduction in the average TREO grade.
Final permitting for Murambi, the company’s newest mining area, was received in early December, which was later than planned and, therefore, delayed the creation of a haul road and waste dump until the New Year, resulting in an impact on the rate of extraction from the site.
The current quarter is expected to provide significantly more tonnes of ore from this area as Murambi reaches full-scale operation.
In addition, the concentrate yield from Murambi ore has improved, as more tonnes have been processed, and suggests that this deposit will approach similar yield levels to that of the Gasagwe pit.
Rainbow previously reported that production from the Gasagwe pit had delivered at lower rates than had been initially anticipated owing to variations in vein structure and, consequently, the company has adjusted its production planning to incorporate recent experience and better reflect the likely output of each mining area on an average quarterly basis.
While the company has achieved successes, so far, in developing the Gakara project and demonstrating that it can consistently produce and sell rare earth concentrate, the revised production expectations for Gasagwe and Murambi demonstrate that the company needs to be operating additional mining areas in order to de-risk the fluctuations and uncertainty caused by operating at a limited scale and to deliver profitability.
“Production in the quarter was broadly flat compared to the prior period; however, we have now put in place a plan to rapidly increase our scale of mining operations by opening two further areas before the end of 2019, which is expected to transform our overall production profile and financial performance to take us to breakeven and beyond,” commented Rainbow CEO Martin Eales.
The company is swiftly moving to develop mining operations at the Kiyenzi and Gomvyi Centre areas and expects both areas to be in operation in the latter half of the 2019 calendar year.
Another new mining area is planned to be in operation in early 2020, to replace Gasagwe which, as planned, will reach the end of its life in late 2019.
“We have learned a huge amount about our mining operation from the first full year of production and, given the natural fluctuations within the veins in each mining area, it makes sense to further de-risk our project and improve production consistency by adding additional mining faces.
“This will put us in a strong position to take advantage of the extremely strong current demand for our mineral concentrate, allowing us to capitalise on our status as one of only two listed commercial rare earth element producers outside of China,” Eales added.