London-listed Rainbow Rare Earths, which owns the Gakara project, in Burundi, has secured a $700 000 loan from its biggest shareholder, Pella Ventures, to support Rainbow’s development and operations.
The loan is to be applied towards general working capital purposes.
“The funding agreement with Pella provides working capital while the company finalises its short-term plans to finance the company’s planned investment for growth,” Rainbow CEO Martin Eales commented in a statement.
He highlighted that Pella was the company’s founder and that it was committed to supporting the company to achieve its long-term aims.
“Our project is exceptional and is one of the highest-grade mines of its type in the world.
“We have been working hard at developing a short-term strategy to maximise concentrate production from the high-grade veins through the acquisition of new fit-for-purpose mining vehicles and the development of multiple mining areas; develop the upside potential of the large lower-grade resource at Kiyenzi for future mining; and progress our investigation into the feasibility of further processing our concentrate, in order to significantly increase our economic participation in the rare earth value chain in the future,” Eales added.
“Rare earths mining and processing remains one of the most significant medium-term opportunities in producing commodities for the future and, in the last two years, Rainbow has proven that Gakara is a very special project which is deserving of continued support to enable it to achieve long-term sustainable positive cashflow at even the currently low basket price,” noted Rainbow chairperson Adonis Pouroulis.
Rainbow continues to believe in the prospects for the Gakara project and the company is confident that investment in new mining machinery and new pits will serve as the foundation for a sustainable and profitable operation, while the potential upside in the project will be obtained through further exploration, metallurgical testwork and investigation of downstream processing of Rainbow’s concentrate remain in place.
The company on Tuesday said the rare earths sector had seen considerable interest in recent weeks following an unsolicited bid for Australian company, Lynas Corporation, which is currently the only other listed rare earths mining company producing commercially outside of China, illustrating the global strategic importance of non-Chinese sources of rare earths.
Subject to the planned investment in new fleet and pits, the company anticipates that both Kiyenzi and Gomvyi Centre will start contributing ore tonnes in the second half of this year and take the company to at least breakeven production following their ramp up.
Concentrate production for the next three to six months will remain dependent on tonnages from the existing pits, Gasagwe and Murambi, and therefore the company expects full-year concentrate production for the year to June, prior to the impact of any of the improvements mentioned above, will be 800 t to 900 t.